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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, thank you for standing by, and welcome to Hua Hong Semiconductor's Fourth Quarter 2021 Earnings Conference Call. Today's call is hosted by Mr. Junjun Tang, President and Executive Director; and Mr. Daniel Wang, Executive Vice President and Chief Financial Officer. [Operator Instructions] The earnings press release and fourth quarter 2021 summary slides are available to download at our company's website, www.huahonggrace.com.
Without further ado, I would like to introduce you to Mr. Daniel Wang, Executive Vice President and Chief Financial Officer. Thank you.
Good afternoon, everyone. Thank you all for joining our Fourth Quarter 2021 Earnings Conference. Today, we will first have Mr. Tang, our Executive Director and President, make some remarks on our fourth quarter performance. President Tang will address in Chinese and Kathy Chien, our Deputy Director of Investor Relations, will be the translator. After that, I will discuss our financial results and provide guidance for the next quarter. This will be followed by our question-and-answer session. The call will be conducted in English. So please ask your question in English. I'll now turn the call over to Mr. Tang.
[Foreign Language]
[Interpreted] Good afternoon, everyone. Thank you for joining our earnings call.
[Foreign Language]
[Interpreted] Hua Hong Semiconductor's performance in Q4 '21 was admirable, breaking sales record for 6 consecutive quarters. Q4 '21 revenue reached USD 528.3 million, an increase of 88.6% compared to Q4 '20 and 17% compared to Q3 '21.
[Foreign Language]
[Interpreted] Net profit and annualized ROE both hit all-time highs. Gross profit margin steadily increased to 29.3%, 3.5 percentage points higher year-on-year and a 2.2 percentage points higher quarter-on-quarter. Gross margin for the 8-inch fabs reached 40% for the first half. These outstanding statements are new milestones and a successful conclusion to 2021.
[Foreign Language]
[Interpreted] In 2021, total monthly production capacity of 8-inch wafer equivalent increased by about 40% compared to 2020, and the revenue increased by nearly 70% to USD 1.63 billion. All segments were double-digit growth, especially Flash and power discrete.
In 2021, 12-inch wafer fab capacity expanded significantly with a corresponding increase in depreciation expense, thanks to a steady increase in average selling price and a consistently high utilization rate. Gross profit margin achieving an increase of 2.3 percentage points year-on-year and net profit increased by more than 4x compared to 2020.
[Foreign Language]
[Interpreted] The company was able to capitalize on market opportunities with its timely accelerated expansion. These encouraging results confirm our strategy and are the reward for our relentless pursuit of growth and profitability.
[Foreign Language]
[Interpreted] Looking forward to 2022, we will accelerate the pace of expansion for our 12-inch production line to reach 94,500 monthly capacity. The extra capacity is expected to be released gradually in Q4 2022. The company will continue to seize market opportunities to further strengthen our positions in specialty technologies accumulated over the years, optimize our business structure and offer more products in high value added markets. I'm confident that the company will reach a new height in 2022.
[Foreign Language]
[Interpreted] Upon accompanying of the Lunar New Year, we congrats all the friends online a very happy year [indiscernible].
[Foreign Language].
[Interpreted] now I would like to hand the call over to our CFO, Mr. Daniel Wang, for his comments.
Thank you, Mr. Tang for the inspiring remarks. Now let me begin with a summary of our financial performance for the fourth quarter and a recap of the whole year 2021 followed by an outlook of revenue and margin for the first quarter of 2022. And then we will move on to the question-and-answer session.
First, let me summarize financial performance as of the fourth quarter. Revenue hitting an all-time high of $528.3 million, 88.6% over the prior year and 17% above the prior quarter.
Cost of sales was $373.8 million, 79.8% over Q4 2020 and 13.5% above Q3 2021, mainly due to increased wafer shipments.
Gross margin was 29.3%, 3.5 percentage points over Q4 2020 and 2.2 percentage points above Q3 2021, mainly due to improved average selling price and product mix.
Operating expenses were $78.1 million, 27.8% over Q4 2020 mainly due to decreased government grants for research and development, partially offset by decreased engineering wafer costs and 8.1% over Q3 2021, mainly due to impairment provision for property, plant, and equipment.
Other income net was $27.5 million, 12.1% over Q4 2020, primarily due to increased foreign exchange gains, partially offset by decreased share of profit of associates and 266.9% over Q3 2021, mainly due to foreign exchange gains versus foreign exchange losses in the previous period.
Income tax expenses was $15.7 million, 111% over Q4 2020, primarily due to increased taxable profit from the Hua Hong 8-inch fabs.
Profit for the period was $88.2 million, 212.8% over Q4 2020 and 147.7% above Q3 2021.
Net profit attributable to shareholders of the parent company was $84.1 million, 92.9% over Q4 2020 and 65.6% above Q3 2021.
Basic earnings per share was $0.065, $0.031 over Q4 2020 and $0.026 above Q3 2021.
Annualized ROE was 12.4%, 5.2 percentage points over Q4 2020 and a 4.8 percentage points above Q3 2021.
Now I will discuss the operating results for both Hua Hong 8-inch wafer fabs and Hua Hong 12-inch wafer fab.
First, let's have a look at the Hua Hong 8-inch wafer fabs. Revenue was $322.6 million, 32% over Q4 2020 and 2.5% above Q3 2021.
Gross margin was 40%, 11.4 percentage points over Q4 2020 and a 4.8 percentage points above Q3 2021, primarily due to improved average selling price and product mix.
Operating expenses were $43.3 million, 171% over Q4 2020, primarily due to decreased government grants for research and development and increased labor expenses.
Profit before tax was $93.2 million, 39% over Q4 2020 and 14.3% above Q3 2021.
Now let's have a look at the performance of the Hua Hong Wuxi wafer fab. Revenue was $205.7 million, 4.7x over Q4 2020 and 50.5% above Q3 2021. Gross margin was 12.4%, 3.9 percentage points above Q3 2021, mainly due to improved average selling price.
Operating expenses were $34.8 million, 22.9% lower than Q4 2020, mainly due to decreased engineering wafer costs, partially offset by decreased government grants for research and development and 17.2% above Q3 2021 primarily due to increased R&D expenses.
EBITDA was $79 million, 163.8% over Q3 2021, mainly due to increased gross profit and foreign exchange gains versus foreign exchange losses in the previous period.
Now I will provide more details in our revenue from Q4 2021. From geographical perspective, revenue from China was $398.9 million, contributing 75.5% of total revenue and an increase of 102.4% over Q4 2020, mainly due to increased demand for our technology platforms.
Revenue from United States was $53.5 million, an increase of 88.6% over Q4 2020, mainly due to increased demand for other power management IC products.
Revenue from Asia was $50.5 million, an increase of 50.4% over Q4 2020, mainly due to increased demand for general MOSFET, MCU and logic products.
Revenue from Europe was $18.6 million, an increase of 29.2% compared to Q4 2020, mainly due to increased demand for general MOSFET product, partially offset by decreased shipments for smart card ICs.
Revenue from Japan was $6.8 million, flat compared to Q4 2020.
With respect to technology platforms, revenue from embedded non-volatile memory was $134.5 million, an increase of 38.6% over Q4 2020, mainly due to increased demand for MCU and smart card ICs.
Revenue from Standalone non-volatile memory was $39 million, an increase of 1,239.7% over Q4 2020, primarily due to increased demand for NOR Flash products.
Revenue from Discrete was $175.5 million, an increase of 86.3% over Q4 2020, mainly due to increased demand for general MOSFET, IGBT and super junction products.
Revenue from Logic & RF was $85.1 million, an increase of 85.5% over Q4 2020, mainly due to increased demand for logic and CIS products.
Revenue from Analog and Power management IC was $93.6 million, an increase of 137% over Q4 2020, mainly due to increased demand for other Power Management IC products.
Now let's take a look at the cash flow statement. Net cash flows generated from operating activities was $224.5 million in Q4 2021, 165.8% over Q4 2020, primarily due to increased revenue, partially offset by increased payments for materials and.
Capital expenditures were $382.2 million in Q4 2021, including $352.5 million for the Wuxi fab and $29.7 million for the Hua Hong 8-inch fabs.
Other cash flow generated from investing activities was $67.5 million in Q4 2021 and including $65.8 million of receipts of government grants for equipment and $1.6 million of interest income.
Net cash flows generated from financing activities was $242.2 million in Q4 2021, including $275 million proceeds from bank borrowings and $400,000 from share option exercise, partially offset by $26.1 million of repayment of bank borrowings, $6.5 million of interest expenses for bank borrowings and $0.6 million of lease payments.
Now let's move to the balance sheet. Cash and cash equivalents was $1,610.1 million on December 31, 2021, compared to $1,444.3 million on September 30, 2021.
Inventories increased from $395.8 million on September 30, 2021, to $433.7 million on December 31, 2021, primarily due to increased customer demand.
Property, plants and equipment was $3,116.5 million on December 31, 2021 compared to $3,026 million on September 30, 2021.
Total assets increased from $5,874.6 million on September 30, 2021, to $6,203.4 million on December 30, 2021.
Our total bank borrowings increased to $1,585.4 million on December 31, 2021 from $1,340.3 million on September 2021.
Total liabilities increased to $2,567.6 million on December 31, 2021 from $2,389 million on September 30, 2021, primarily due to increased bank borrowings. That ratio increased to 41.4% on September 31, 2021, from 40.7% on September 30, 2021. Now I would like to give you a recap of our performance for the entire year of 2021. Revenue was $1,630.8 million, an all-time high, an increase of 69.6% over the prior year. Cost of sales was $1,169.1 million, 64.6% over 2020, primarily due to increased wafer shipments and increased depreciation costs.
Gross margin was 26.7%, 2.3 percentage points over 2020, mainly due to improved average selling price, capacity utilization and product mix, partially offset by increased depreciation expenses.
Operating expenses were $255.9 million, 5% lower than 2020, largely due to decreased engineering wafer costs, partially offset by decreased government grants for research and development and increased labor expenses.
Other income net was $54 [ billion ] 33% lower than 2020, primarily due to decreased share of profit of associates and increased finance costs, partially offset by increased foreign exchange gains.
Net profit was $181.9 million, 446.1% over 2020. Net profit attributable to shareholders of the parent company was $212.1 million, 113.3% over 2020.
Basic earnings per share was $0.163, $0.086 over 2020.
ROE was 7.9%, 3.7 percentage points over 2020.
Finally, let me give you a high-level outlook for the first quarter 2022. We expect revenue to be approximately $560 million, and our gross margin to be between 28% and 29%.
This concludes my financial remarks. Now we would like to start the question-and-answer session. Operator, please assist. Thank you.
[Operator Instructions] This first question comes from the line of Randy Abrams from Credit Suisse.
Okay. Yes. A great result. The first question I wanted to ask on, just to start with the guidance for the 6% growth. If you could discuss how much of that growth is coming from the Wuxi going up to 65,000 versus some of the moves you're making up?
Randy, thank you. Very good question. I think I would say we would continue to see -- I think, overall for the 3-inch fabs, I think we will continue to find some efficiencies and also [indiscernible] improvement, okay? The volume probably won't be up that much, but there will be -- it will be up at some degree, okay? But most of that will come from -- the additional revenue mostly would come from Wuxi.
Right. And then as we go through the year, you're getting close to the first phase build-out, can Wuxi run, like 8-inch has been running 110%. Can you run over 100%? Or as you look at the next few quarters, is most of the growth from mix and pricing? I'm just curious if you can squeeze capacity before the next phase comes on.
For Wuxi or for...
Yes, actually [ in a way both ], I mean you answered the last question, you can get efficiency in 8-inch. So maybe if you could talk about both for 8-inch and 12-inch after first quarter, if there's much you can get from shipments until the new phase comes on. And then -- and if you could comment on how you see the like-for-like and blended pricing trending as we go through 2022.
[Foreign Language]
[Interpreted] Randy, thanks for your question. So through the 1 year's time, our capacity utilization rates keep at a very high level, no matter 8-inch or 12-inch. As for the 8-inch fab, we take more potentials and optimize the product mix. So we keep the utilization rate above, around 109%. As for Wuxi fab, because of our specialty technology privileges and market acceptance along with the capacity release, we pushed up the utilization rates quickly, very quickly and keep it above 100%. It's already reflected in our CFO's report.
[Foreign Language]
[Interpreted] So at a such high level utilization rate, we actually still keep optimizing our 8-inch product mix. And can -- how to say, find a stable capacity mix and improve our utilization rate.
[Foreign Language]
[Interpreted] As for the 12-inch fab, actually, we have a Phase 2 capacity expansion this year from 65,000 to 94,500. As long for the gradually capacity release, we will still work for the [indiscernible] utilization rate. Of course, we need a perfect market and capacity match. We already work on that. And from last year to now, we believe that our strategy is very reasonable, rational. So we -- I believe our capacity utilization rate will still keep around [indiscernible]above 100%.
[Foreign Language]
[Interpreted] So of course, we need to thank all our customers to -- for their confidence and support for our specialty technologies.
[Foreign Language]
Thank you.
And just one last question. It looks like tone of business is strong right now. As you go through the application customer base, is it strength across the board? I'm just curious if there's any areas you're seeing. Any weakness or inventory that's built up? Or is it your view -- I mean, if you -- could go through your view on how the customer profile looks [indiscernible] strength sustaining and continue to keep that capacity.
Randy, good question. Thank you. The demand continues to be very, very strong. You see our Q1 guidance is -- this has reflected in our Q1 guidance. We don't get any slightest idea that there is any weakness at this point, okay? I would just give you a very, very high-level over look -- outlook of 2022, I think it's going to be another very, very strong year for Hua Hong Semiconductor. I think all our cylinders are going to be running full, okay? So we'll-continue to keep the utilization rate at above 100%.
The -- just to add some comments on your prior question, currently, for the Wuxi fab, it is running at wafer in at 65,000 wafers per month, the out currently at maybe 56,000, 57,000. Pretty much by Q1 and Q2 it is going to be the out -- basically wafer out will be at the same level of wafer in. So I'm talking about 65,000 even go beyond that. And then this will eventually transition to the next phase, which is the 95,000, okay? So we expect all the corridors are very, very strong, manufacturing corridors are going to be very, very full. And all the [indiscernible] technology platforms are going to be -- at this point, they're going to be basically showing strong demand.
In particular, for the next year, it's going to be for MCU power discrete. It's just in general power discrete, but I would expect IGBT will continue to be a very, very strong year. Again, the medium-voltage well is going to be strong as well. We're not going to have enough capacity; continue to be short of capacity for all our customers.
And one last question on the Wuxi for the 94,000 [indiscernible] or 95,000, when -- would that actually be available for wafer? And then for wafer out, is it --- do you see a pretty steep ramp-up to 95,000 as we go through the first half of 2023?
[Foreign Language]
[Interpreted] For the first tool will be moved in March this year, and we expect we can move in about 95% of all tools by the end of this year. So, along with the tools moving and installation fine-tuning, so we will release our capacity gradually and reach the 94,500 wafer capacity, monthly capacity by the end of this year.
[Foreign Language]
[Interpreted] We know that we have a longer lead time of the tools nowadays. But along with our development in these 2 years, we have very strong relationship with the vendors. We will keep an eye on that and get the tools as soon as possible.
[Foreign Language]
[Interpreted] So our technology platforms will release the capacity gradually along with the moving status of the tools. There will be a breakthrough of the capacity by the end of the year, but a process, a gradually process along with the moving progress of the tools. Thank you.
The next question comes from the line of Leping Huang from Huatai.
The first question is about the, since your Wuxi fab is already full end of last year, so why your capacity, new capacity will be only released at the end of this year? So is this due to the -- your more cautious view on the market? Or is it due to the [indiscernible] difficulty on the equipment sourcing?
[Foreign Language]
[Interpreted] It's a very good question. Thank you. Actually, we started with 65,000 capacity from the beginning of last year. And in some tools moving, the earliest tools will be moving in December 2020. So overall, we spent about 10 months for the tools moving for the 65,000, along with more fab [indiscernible] built in China nowadays, the lead time of the tools are longer than that time. But we still need some time for the tools moving and qualification, but we are confident that the overall process will not be longer than the 55,000.
[Foreign Language]
[Interpreted] We are continuing to expand our capacity [indiscernible] over the last 2 years. So along with the progress, our technicians' ability and our technology platform's maturity, our customer support, we have already completed a positive cycle, and I'm confident and along with the 94,500 wafer capacity expansion progress, the ability will be further strengthened.
[Foreign Language]
[Interpreted] The 94,500 capacity expansion has a very solid base because we already have a full utilization of the 65,000 along with the tools moving and technology performance growth, the capacity will be released gradually just like what I mentioned in last question.
[Foreign Language]
[Interpreted] We will put more efforts on that and release the capacity as soon as possible to satisfy both domestic and international customers.
Okay. Second question. The second question is about the -- I think we asked this question a few times. So considering the recent, I think, we see some mixed signals on this [indiscernible] already some companies say, there is no shortage issue for smartphone, but like auto chip, still complain they there are in serious shortage. Considering this situation when you do this additional 35,000 expansion? So what will be your latest plan on this additional 35,000 orders? And what's your view on this market supply/demand for this year?
[Foreign Language]
[Interpreted] So just like our CFO just mentioned in his report, most -- almost all of the -- eventually, all the technology platforms such as eFlash, power discrete and analog saw double-digit growth and especially very strong double-digit growth, [indiscernible] plus percent. And so from our demand on hand, our 94,500 capacity is far below customers' demand. We will continue to expand all our [indiscernible]43:01 mature specialty technology platforms, and I believe this capacity expansion will just like our 65,000 capacity expansion, will have a very good estimate.
[Foreign Language]
[Interpreted] Actually, many friends here have already worked with us for many years. We experienced a down cycle of the industry together. And also now we enjoy the market demand upcycle together now. And no matter on the whatever conditions, we can see the market demand for our specialty technologies are strong, and market acceptance is very good. Along with application growth, the application areas would also grow. So the market demand is very strong -- still very strong.
[Foreign Language]
[Interpreted] Along with our efforts in R&D, our -- some high-end technologies such as e-Flash, IGBT, BCD, [ high v ] have made a great performance progress and well accepted by the market. So this demand is growing very rapidly, and it's a very solid insurance for our next-step capacity expansion.
[Foreign Language]
[Interpreted] Thank you.
The next question comes from the line of Szeho Ng, China Renaissance.
My first question regarding the 8-inch gross margin, we did an excellent job in getting the 40% gross margin. Should we expect more upside? Or how should I see the steady-state gross margin for the 8-inch business going forward?
Szeho, that was excellent question. I mean, as you know, we have talked about this in the past. We have certainly done a lot of work. I think this is a very important milestone. From my perspective, we will have to do everything to make sure we protect this number, make sure that will continue to grow based on that number. So I -- we're doing everything we can to make sure this year, our gross margin will maintain at this level for 8-inch -- for the 8-inch business and even make it better.
Yes. And after the 94,500 capacity expansion, will we take a pause in terms of capacity expansion? Or how should I think about the next round of expansion on the 12-inch?
[Foreign Language]
[Interpreted] Thank you for your question. The 94,500 capacity expansion project is a very important job this year. But for our company's growth, we think we all know from the communication this year, we all know that the Wuxi area of our Hua Hong plant can offer 3 fabs altogether. So we can still have space for 2 more fabs.
[Foreign Language]
[Interpreted] So we are actually planning for our next step development and go through our internal process now. We will share with you -- with all our investors after we have a consensus.
I see. Okay. All right. Yes. So and my next question is regarding the stand-alone and nonvolatile memory. That line of business actually grew pretty nicely last year. So I just wonder how we should model that line of business into 2022 and '23.
Szeho, very, very good question. So that is a new business line for us. We used to do small NOR Flash business, but because of the capacity, we had very little limited capacity basically for some very close customers. But since we start this new 12-inch fab, that become a very important business for us. That capacity can be shared between embedded and NOR basically, that manufacturing corridor. So [indiscernible] with effect that will continue, the NOR Flash, well, currently has this together have somewhere about 20,000 eventually with additional 30,000 wafer capacity, we're going to have more capacity allocated to this segment. So I would say, potentially, we can do right now, I would say, 7,000 to 10,000, but eventually cap to 20,000 wafers capacity for this business, even more once we have the second fab.
Fantastic. Yes. And ASP is actually better than the average, right, for the 12-inch.
Absolutely. It's one of the best ASP products in the 12-inch business.
Yes. And maybe last question from me. For the [indiscernible] portfolio could you share with us again the mix between, let's say, IGBT, MOS and super junction in the last quarter?
Yes, sure, absolutely. So for discrete for Q4 2021, discrete accounts for 33%, about 1/3 of the overall revenue, okay? So out of that, IGBT was particularly 7%, 7 percentage points. Super junction was about 8 point -- slightly above 8%, 8 percentage points. And then you have this split-gate trench, it's a medium-voltage application. It is about close to 9 percentage points, and there you have the low MOS, the regular DMOS, low-voltage business, which is about over 9%. So together, I mean, it is 33% of the overall revenue.
The last question comes from the line of Sunny Lin from UBS.
Congrats on the very strong performance. So I just have one question on the Wuxi fab. So for Q4 last year, could you give us a breakdown of the revenue by application? And going to second half of the year, how would the product mix evolve? And what's the implication to the overall for the ASP?
Sunny, let me try to understand your question. So you're saying that you want to know revenue by technology platform for the 12-inch fab?
That's right.
Okay. So overall, the revenue is about $205 million, okay? So out of that, embedded nonvolatile memory was 10.6%, okay. smart card was 8 percentage points. MCU was 2. I mean, as we said, it's mostly smart cards, we migrate all the smart cards from 8-inch to 12. But MCU [ started ] , so it has about 2 percentage points.
The standard stand-alone nonvolatile memory, that NOR Flash, it was 17%, the overall revenue from the 12-inch fab. Discrete was 24%, okay, 24%. And within that, IGBT is 8 percentage points. Super junction is 5. Split-gate trench is 5. Regular DMOS, the low voltage is 6 percentage points. Logic, RF, it is 29% of the overall. Of that Logic & RF is 12% -- 12 percentage points. And the CIS is 17 percentage points. When you add the 2 together, it's 29, basically, 9 percentage points of the overall revenue. And then analog and power management IC, it's 19%, okay? It's mostly for power management IC okay, 19%. So this adds up to -- all these add up to 100%.
Thank you very much. That, very helpful. So how will this product mix evolve going to second half this year as you expand capacity?
Well, Sunny, I mean, it is -- we're going to continue. It's going to continue. I think the second half, while it is going to be running basically at close to 60,000 to 65,000 wafers capacity in terms of wafer out. I think with that, it's going to be mostly -- it's going to be -- CIS will continue to be very, very strong. NOR Flash will be strong, power discrete will definitely going to be close to 1/3, 30%, okay? And then the rest goes to Logic & RF and BCD.
Got it. So if I look at your Q4 12-inch plan, ASP was roughly 1,143. How would be this ASP improving going to second half of this year? Would it be possible that you get to your target of 1,300 anytime, sir?
Sunny, that was excellent question. I mean 1,300, yes, that's the number that I've been talking a lot lately. That is definitely a target, okay? I think it is not something unrealistic, okay? This will no -- if we can do quickly to get to the level at 1,300, with I said, power discrete somewhere around 1,000, and the rest should be anywhere 1,500 to 1,800. That is certainly the goal -- but while let me tell you, we're moving towards that direction, okay? I'm very positive. I think we Szeho mentioned earlier, we're going to have a very, very strong 2020, I think that each business will continue to perform at a very strong gross margin even getting better. And I'm hoping that the 12-inch fab will also be improving quarter-over-quarter.
It is not easy because the depreciation expenses are going to be huge. It's huge, okay? But you know what, we're making a lot of progress with the price, with the price improvement. So I expect you're going to continue to see price improvement coming out of both the 8-inch fabs and 12-inch fab. So we have a model there. We want to get to there, 1,300.
Maybe one last follow-up on your depreciation. So any guidance for this year?
Sorry, I missed the question.
Sorry, I want to ask about depreciation for this year.
Okay. Okay. All right. So depreciation expense. While we expect discrete 12-inch fabs will be, last year, it was about $147 million, okay? I think that number will probably be slightly lower. It would be slightly lower. It would be around $140 million, $130 million to $140 million. And depending on our new year investment, but I expect if it's anything, it would be around there, it should be pretty much flat or slightly lower, okay? And the depreciation expense for the Wuxi fab will be around, I would say, $380 million, okay? It'd be up by $180 million. Last year, it was very close to about $200 million. But this year, it's going to be about $383 million, $380 million in that figure. That's pretty much the plan. Yes.
Ladies and gentlemen, that's all the time we have for questions. I will now hand back to the management for closing remarks.
So I want to thank you all for joining us today and asking all the wonderful questions. We hope you will join us again next quarter. Please continue to stay safe and healthy. I wish all of you and your loved ones have a very, very happy Chinese New Year.
[Foreign Language]
Happy New Year.
Happy New Year.
Ladies and gentlemen, thank you for your attendance. You may now disconnect.