Yeahka Ltd
HKEX:9923
Earnings Call Analysis
Q4-2023 Analysis
Yeahka Ltd
2023 marked a critical year for the company, bolstered by China's economic recovery and the revival of small and medium-sized enterprises. A renewed emphasis on independent and scalable ecosystems led to significant growth across three primary business lines, nearly tripling non-IFRS profit measures. Domestically, the company's Mainland China business thrived, attaining solid growth in GPV, merchant numbers, and daily transaction volume, reinforcing its industry leadership and strategizing on providing SaaS solutions along with digital marketing values to merchants.
Operational strategies in 2023, including loss narrowing and the adoption of an aggregated multi-traffic platform, have underscored the potential of the in-store e-commerce services to become a force for profitability through comprehensive digital marketing capabilities and AI-powered tools. Merchant solutions played a pivotal role in improving commercial capabilities, reflected in a growing number of active merchants and innovative marketing strategies like the launch of the metaverse game Y-Verse to retain users.
International expansion saw the establishment of strategic partnerships and the launch of acquiring services in strategic markets within Southeast Asia and mature markets such as the U.S. and Japan. This laid a solid foundation for future growth through integrated payment scenarios and building alliances with international card organizations and regional banks. Simultaneously, significant R&D progress has helped reduce costs, such as adopting private clouds and rolling out proprietary AI applications, including automated content generation and AI-powered customer service kits.
The company reported 29.2% year-on-year growth in GPV, with revenue from One-Store Payment Services increasing by 26.5%. This expansion is propelled by a growing channel network, strategic bank partnerships, and a focus on high-value customers like KA merchants, pushing towards break-even in 2024.
The gross profit margin improved to 80.3% in 2023 from 67.3% in 2022, attributed to enhanced operational efficiency and a notable GMV increase of 30%. Total revenue saw a 15.6% year-on-year rise, though a decrease in overall gross profit was reported, dropping to RMB 728 million in 2023 from RMB 1,031 million in 2022. The adjusted EBITDA grew significantly by 160.6% year-on-year, mainly due to the increase in GPV and fee rate of one-stop payment services.
The company has effectively utilized AI technologies to decrease costs and enhance user experiences, with over 50% of in-store e-commerce content generated by AI. Year-on-year improvements in one-stop payment performances, monetization of Merchant Solutions, and a drastic 80% narrowing of in-store e-commerce losses contributed to the adjusted EBITDA growth, reflecting a strong commitment to business strategy and execution ability.
Targeting small merchants in less macro-sensitive sectors like catering and retail led to nearly 30% year-on-year GPV growth, alongside an increase in the merchant count by 13.3% and expansion of distribution channels. Strategic partnerships, particularly with banks, bolstered this growth trajectory.
The company's growth strategy is bifurcated between domestic and overseas operations, with plans to maintain market leadership in China and explore new fintech avenues through a Hong Kong-based hub for other regions. Commitment to ESG remains strong, with management believing this focus will contribute to long-term sustainability and overall community development.
Having secured payment licenses in Singapore and Hong Kong, the company is actively targeting local merchant acquisition and cross-border transactions in Southeast Asia, already serving over 5,000 merchants and generating significant GMV through sustainable business models.
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Ladies and gentlemen, good day, and welcome to Yeahka Limited's 2023 Annual Results Announcement Call. [Operator Instructions]. Please be advised that today's conference is being recorded.
I will now pass the call to Mr. Ben Zhao, Board Secretary and General Manager of Corporate Development and Capital Markets for the company. Please go ahead, sir.
Hello, everyone. Welcome to Yeahka's 2023 Annual Results Conference Call. Before we start, we would like to remind you that this presentation includes forward-looking statements that involve a number of risks and uncertainties. Information on general market conditions come from a variety of sources outside of Yeahka.
Now let me introduce the management team on today's call. First, Luke Liu, our Founder, Chairman and Chief Executive Officer, will kick off with an overview of our business. I will then go through our business review. John Yao, Chief Financial Officer, will conclude with a financial review before we open up the floor for questions. And Derek Lai, our Director of Finance, will translate for John.
I will now turn the call over to Luke.
Thank you, Ben. Good evening, and good morning, everyone. 2023 was a pivotal year, reflecting China's economic recovery and the rebound of the domestic, small and medium economy. Our commitment to independent and scalable ecosystem that is a foundation for driving growth across our 3 business lines, which yielded commendable top line growth and almost tripled profit on non-IFRS measures. Due to the resilience of small and medium-sized off-line merchants, our Mainland China business remained strong, while our international efforts started to show results.
Now I'll highlight the progress we have achieved in 2023. First, our one-stop payment services continued to perform well in the domestic market throughout 2023. The consistent growth in GPV, merchants and the daily transaction comps, emphasized our leading position in the industry, representing a stellar performance that has surpassed the industry's growth. Through constant innovation and channel expansion, we have solidified our presence across diversity verticals. Following the continuous expansion of our business scale, we also expanded our joint merchant acquiring services with the commercial banks to include in-depth cross-selling of SaaS solutions and digital marketing and enhanced our developments in the Digital Currency Electronic Payment initiatives.
As we look ahead, our focus remains on increasing commercialization efforts, maintaining strict compliance management, growing market share and upholding our strategy by providing SaaS digitalized solutions and the digital marketing values to our merchants.
Second, the significant narrowing of losses and a successful implementation of our aggregated multi-traffic platform operation strategy in 2023 demonstrated the impressive resilience and potential of our in-store e-commerce services. We grew our know-how, enabling us to provide comprehensive digital marketing capabilities to merchants, offer concessions to counter short-term market turbulence, leverage AI-powered tools to reduce cost and improve efficiency, refine operations for specific verticals and integrate our payment solutions. All of this underscores our commitment to sustainable growth, which underlines our dedication to making this business segment strong and profitable.
Third, our merchant solutions have enhanced our commercialization capability in 2023 as reflected by the increasing number of active merchants. Furthermore, we rolled out the metaverse game Y-Verse to both the merchant engagement and drive user retention rates, thanks to our commitment to both innovation and customer centricity. Moving forward, we'll continue to innovate and expand our portfolio of our merchant solutions in order to grow the business line and sustainably create value.
Turning to overseas market, our rapid progress in 2023 underscores our global ambitions and strategic foresight. By expanding collaborations with international partners and launching acquiring services in key markets such as Hong Kong SAR and Singapore, we have laid a solid foundation for our global expansion includes Southeast Asian markets where integrated payment services and SaaS has still underdeveloped, allowing for opportunities for penetration and monetization. But over mature markets such as U.S. and Japan are also considered.
We have established Yeahpay Singapore and Yeahpay America. In Singapore alone, we have served over 5,000 merchants of well-known names, such as Rolex Pullman, MCM, TWG Tea, Bose, Arabica Singapore and so on. We have also served brands such as Starbucks, Bread Talk, and Pizza Hut by providing our SaaS solutions through overseas company we invested in.
As we navigate to 2024, we are focusing on creating integrated payment scenarios in different local markets overseas, accelerating market localization and build strategic alliance with international card organizations, local regional banks and local enterprise to capture opportunities in overseas, local and cross-border transaction scenarios.
Looking back at 2023, we have made significant progress in R&D. In technology infrastructure, private clouds have adopted company wide, saving considerable cost, compared with the traditional physical hosting in data centers and opening up for our payment partners to use. More importantly, we have used our self-developed generative AI technology in automated programming, intelligent customer services and in-store e-commerce business, which enhanced efficiency by over 20%, a major improvement.
Looking ahead, we are focused on the adoption of large model applications in various business lines and our technology infrastructures. We are confident in using this technology to further reduce cost, increase the efficiency and explore new business models. Thank you.
With that, I will now hand the call over to Ben who will give a detailed business review.
Thank you, Luke. Good evening, and good morning, everyone. As Luke has discussed, our strategic focus on small- and medium-sized off-line merchants drove steady growth in 2023 amid China's rebound. Significant year-on-year increases were seen in one-stop payment services GPV and active merchants. Growth in in-store e-commerce services and merchant solutions, along with efficiency improvements leading to a narrowing of in-store e-commerce losses substantially boosted our profitability.
On net adjusted EBITDA level we nearly tripled compared with 2022. Our AI applications are progressively being utilized across our daily operations and achieve meaningful efficiency improvements.
We have talked about AI in the past few earnings calls. As a tech first company, I wanted to spend more time to share some of the latest progresses. Leveraging cutting-edge open source libraries for transformers and GNNs, our AI lab has fine-tuned the foundation model to handle our extensive payment-related data, leading to several proprietary applications. These innovations include a unique facial recognition system for merchant KYC and a specialized generated AI for e-commerce that automates the creation of promotional materials, such as text and graphs. The latter has dramatically reduced content production costs by over 90% and boosted creation efficiency by 70%.
Additionally, our custom GPT adoption for an automatic coding assistance has increased the AI-generated code adoption rate to 10%. And the AI-powered customer service kit has increased the customer self-assistance rate by 30%. Our newly introduced in-house translation solutions can come in handy as our overseas expansion efforts continue.
We are extremely passionate and ambitious about AI as it enables unprecedented scalability and personalization in services, optimizes operations and opens new revenue streams. We will accordingly update as more progresses unveil.
I will now share more information about each business line's progress in 2023, starting with Payment Services, which serves as a foundation for our ecosystem. In 2023, benefiting from the recovery in off-line consumption and other positive developments, we leveraged our leading position in one-stop payment services to achieve a tremendous 29.2% year-on-year growth in GPV, reaching RMB 2.9 trillion, of which 71.2% was app-based payment services.
We outperformed the industry with over 9.2 million active payment service merchants representing a 13.3% increase year-on-year while achieving a peak daily total of almost 60 million app-based payment transactions.
In addition, revenue from our One-Store Payment Services in 2023 increased by 26.5% year-on-year despite being partially offset by approximately RMB 344 million in netting off payments related to interchange fee rate adjustments from revenue for the period.
Excluding these nonrecurring items, our fee rate grew to 13.3 basis points last year from 12.3 basis points in 2022, reflecting the robust growth in our one-stop payment services and our industry-leading position.
Throughout the reporting period, our nonstop focus on expansion led to an increasingly diverse channel network of nearly 19,000 independent sales agents, and almost 5,000 SaaS partners across 300 cities, deepening our leading positions in retail and restaurant sector while expanding our coverages in the leisure and hospitality segment.
We have also initiated our efforts to serve the KA customers such as [Wanyoo Internet Cafe, CHAGEE] etc., leveraging our expansive offering in the SaaS and in-store e-commerce services.
On bank partnerships, we have integrated our merchant discount packages from our in-store e-commerce business into bank loyalty programs. In addition, we have provided SaaS interactive gaming, marketing in merchant solutions to the banks, further helping the banks to activate and expand their user base while increasing our differentiated competitive edge against our peers and further enhancing the synergy of the 3 major business lines of Yeahka. As a result, strategic partnerships with over 150 commercial banks doubled the corresponding joint merchant acquiring GPV last year.
In addition, we become one of the MasterCard NUCC's first partners and obtained Visa membership, allowing us to help our merchants to accept overseas card payments in China.
Entering the international markets, we solidified collaborations with leading e-wallet, joined forces with MasterCard and Visa. Our acquiring services was successfully launched in Hong Kong and Singapore based on the MSO license and the MPI license. We have also obtained MSB license in the States to further expand our cross-border payment acceptance business. As we move through 2024, we are extending our overseas product metrics and strategic footprint with plans to implement merchant acquiring, global acceptance and remittance, currency exchange and settlement services.
Turning to in-store e-commerce services. We not only achieved a remarkable year-on-year GMV increase of 30%, surpassing RMB 4.3 billion, but also significantly improve the bottom line. Due to our improved operational efficiency, the gross profit margin increased to 80.3% in 2023 from 67.3% in 2022, and the net loss decreased by 79.4% to RMB 43.5 million.
In 2023, we expanded our partnerships with multiple traffic platforms, implemented our co-op model and provided merchants with technical concessions in response to increased short-term market competition. We continued to strengthen merchants all traffic digital marketing capabilities, fine-tuning midstream operational processes and foster synergies with other businesses. The ongoing implementation of our all traffic digital marketing strategy enabled merchants to conduct one-stop digital operations across multiple platforms, including Douyin, Meituan, Kuaishou, Xiaohongshu et cetera. While our standardized midstream tools allowed the merchant to accurately target consumer groups, efficiently generate promotional contents and respond to the growing digitalization trends across local lifestyle services.
As we look ahead to 2024, our all traffic digital marketing strategy will be a pivotal growth driver for in-store e-commerce services. The strategy will effectively strengthen the deep bond with our merchants and reduce the impact of market competition and policy changes on a single traffic platform. We'll progress industry-specific strategies for verticals of our strength such as restaurants and leisure. We will then also deepen the integration of payment and merchant solutions, utilizing AI and cross-platform mid-wear systems to continue to improve overall operational capabilities and efficiency.
Last but not least, our Merchant Solutions Services, which achieved a robust performance last year. Our active merchants exceeded 1.6 million, representing an increase of 30.8%. Revenue from Merchant Solutions rose by 17.2% in 2023 to RMB 363 million, providing our improved product commercialization and the increasing willingness of off-line merchants to pay. In 2023, we introduced the groundbreaking metaverse game, Y-Verse, enabling merchants to create immerse metaverse spaces and delve into private traffic domain. After the games launched, merchants experienced a remarkable increase in the weekly activity rate of private domain communities, rising from 12% to 37%, while the user retention rate rose from 30% to 70%. This innovative approach marks our commitment to pushing the boundaries of engagement and providing solutions to shift our merchant partners with enhancing their monetization capabilities.
Lastly, our ESG and sustainable development efforts prospered in 2023. We scored 54 in the S&P Global ESG ratings and A- in Hang Seng Corporate Sustainability indices leading the industry. In addition, we were recognized in the S&P Global 2023 Sustainability Yearbook. For example, last year, we have established an ESG Committee responsible for the supervision and execution of company affairs. To show our social responsibilities, we organized small merchant power program and published small and micro merchant assistant policy to support merchants in our business ecosystem. In terms of internal control and management, we have issued and strictly followed a range of ESG internal guidance, such as the risk management, internal control system, internal audit system and Yeahka Green Office Manua continuously strengthening the construction of the quality management system. Thank you, everyone. With that, I will now pass the call over to John, our CFO, to review our financial results. Our Director of Finance, Derek will provide the translation.
[Foreign Language]
[Interpreted] Well, thank you, Ben. Let me briefly go through the highlights of our financial results for the full year of 2023.
[Foreign Language]
[Interpreted] Our total revenue reached RMB 3,951 million in 2023 from RMB 3,418 million in 2022, representing a year-on-year increase of 15.6%, mainly attributable to our one-stop payment services.
[Foreign Language]
[Interpreted] Gross profit decreased by 28.4% year-on-year to RMB 728 million in 2023 from RMB 1,031 million in 2022.
[Foreign Language]
[Interpreted] Of which gross profit of one-stop payment services accounted for 45.8% and fell to RMB 338 million in 2023 from RMB 532 million in 2022, a year-on-year decline of 36.4%.
[Foreign Language]
[Interpreted] Gross profit margin decreased from 30.2% to 18.7%.
[Foreign Language]
[Interpreted] Of which the gross profit margin of one-stop payment services declined to 9.7% in 2023 from 19.3% in 2022. And the gross profit margin of in-store e-commerce services improved to 80.3% in 2023 from 67.3% in 2022.
[Foreign Language]
[Interpreted] Our Research and Development expenses remained relatively stable at RMB 266 million in 2023 from RMB 270 million in 2022.
[Foreign Language]
[Interpreted] Our adjusted EBITDA grew by 160.6% year-on-year to RMB 556 million in 2023 from RMB 213 million in 2022.
[Foreign Language]
[Interpreted] The year-on-year improvement of adjusted EBITDA was mainly due to the substantial increase in GPV and fee rate of one-stop payment services and a significant narrowing of losses of in-store e-commerce to RMB 44 million in 2023 from RMB 211 million in 2022.
[Foreign Language]
[Interpreted] Looking ahead, we will continue to foster a healthy platform ecosystem, creating long-term sustainable value for our stakeholders.
And now we can open up the floor for questions.
[Operator Instructions] The first question comes from the line of Vicky Wei from Citi.
[Foreign Language] Would you please share some details of in-store e-commerce or digital marketing strategy? And how should we think of traffic platform policy changes affect in-store e-commerce business?
Thank you, Vicky, for your questions. I'll address these 2 questions one by one. For the first question, as everyone can see, today, the offline merchants have overwhelming options to gain traffic and to increase brand awareness. So each of these platforms, they actually require a very different, very complex operating strategies. And this is exactly where we come in. So as a result, instead of positioning as a service provider for a specific platform, we have actually repositioned ourselves as an all traffic merchant service provider, which actually enables merchants to conduct one-stop digital operations across multiple platforms, whether it's in Douyin, whether it's in Meituan, Kuaishou, Xiaohongshu or WeChat video. And our standardized midstream tools can actually allow the merchant to accurately target different consumer groups in different platforms. It efficiently also to generate promotional content, whether it's short video, whether it's text, whether it's live streaming format in order to respond to the growing digitalization trends across these different local lifestyle services.
So this way, we can actually further the strong relationships built on our payment and merchant solutions, and it will actually also strengthen the entry barrier for customer acquisition. And our charge model is actually upgrading to an upfront fixed quarterly or annual service fee with a GMV commission, if we facilitate the transaction online, of course.
And for us, we can focus on building digital marketing capabilities for merchants across these multiple traffic platforms, and we can utilize AI to further reduce cost and expenses as we scale up. And we can also cross-sell to our payment and merchant solutions.
So that's basically how we see ourselves in the new era as we take a more merchant-focused approach rather than a platform-focused approach. So that actually naturally flowing to our second answer, which is how the policy changes will have an impact on us.
So specifically, we see there's a licensing requirement for Douyin, which should ease the competitiveness in a lot of markets and keep the business more sustainable. Regardless, going forward, our new positioning should make us more robust as we take this merchant approach. Because our comprehensive branding and marketing capabilities are exactly what each platform wants and what each merchant they want, and what we need to do is we need to sign the contract, sign a long-lasting and sustainable contract with the merchant, helping them to operate across 4 different platforms. And that way, we are more like a merchant service provider instead of a platform service provider.
And as also mentioned, based on the above, we actually plan to improve our fee model in 2024, which had led to increase the upfront fee charges. And also, we'll also look for expand the coverages to KA merchants. And we are obviously in the progress of achieving breakeven in 2024 as well.
Our next question comes from the line of Claire Ouyang from Goldman Sachs.
[Foreign Language] How has the AI technology improved your business operations? And what is the future plan regarding using AI technology?
My second question is what are the main drivers of adjusted EBITDA growth, which almost tripled?
Sure. Our CEO, Luke will answer the first one, and I'll address the second one.
Yes. And I think generative AI is a very important technology for all the IT companies. So we do 2 things in this area. First, we use technology to build the co-pilots for the daily coding work. So it decreased almost 10% to 20% -- I mean, work, if we compare, we use traditional method to program.
Second, we use our large model technology to generate content for our in-store e-commerce business. So currently, I think more than 50% content in our in-store e-commerce products are made by the AI automatically.
So for us, I think it's too early to say we can use the technology to generate revenue. I think we -- currently, we are focused to decrease the cost and optimize user experience of our product. In future, I think the technology is still developing. And when we have more insight on this, we still want to try to seek out what we can do on the business.
Yes. Thank you, Luke. And on the second question on adjusted EBITDA growth compared to 2022. So on the business level, it is mainly due to the improvements in the one-stop payment performances and also the improvements in monetization of Merchant Solutions and very notably the significant narrowing of losses for our in-store e-commerce business.
As you can see, the total revenue increased by 15.6% year-on-year to close to RMB 4 billion of which the growth rate of the payment business revenue reached 26%. And also, as Luke has mentioned, we have used AI technologies in a lot of aspects across our business lines. So that effectively controlled our expenses and costs.
So overall, the expense to revenue percentages decreased by 10 percentage points year-on-year to around 18.5%, and also our net loss on the in-store business narrowed by about 80% year-on-year in 2023.
So these above measures at operational level have mainly driven the significant increase in adjusted EBITDA levels, which reflects our firm commitment to our business strategy and also the execution ability.
Our next question comes from the line of Hang Su from CICC.
[Foreign Language] So I have 2 questions. The first is about what are the growth drivers of payment business and what is Yeahka's competitive advantage and how you grow payment business in the next 2 years?
And the second is about the ESG. So what benefits can ESG management bring to Yeahka and what are your future plans regarding ESG?
Thank you for the question. On the first one on payments. So very notably, our GPV actually increased by close to 30% year-on-year. And there are a couple of reasons to that. So a lot of the target merchants of Yeahka are small merchants. And these merchants are concentrated in industries such as catering and retail, which are less impacted by macro environment and uncertainties. For example, last year, there is an important component of the total retail sales of consumer goods. Catering industry actually increased by 20.4%, which is really pretty high compared to other components.
And the second reason to that is on the distribution channel network, which is constantly expanding. We now have over 19,000 [indiscernible]. And we have actually also doubled the joint merchant acquiring GPV by partnering with over 150 banks. We are actually partnering with banks in a number of aspects and areas, including SaaS services to the banks to help them to activate the bank's customers.
And also, the number of merchants also increased by 13.3% year-on-year, and that's also a historical high to 9.2 million. And also in terms of monetization last year, you can also see that the comprehensive rate for the entire year, it has increased from 12.3 basis points in 2022, to roughly around 13.3 basis points. And the QR code and fee rate actually has increased further from around 13.9 basis points to 14.6 basis points, and that has really reflected our pricing ability in the third-party payment market. And also concurrently that traditional payment fee rate has also increased from around 8.8 basis points to more than 10 basis points, which is also in line with the industry trend.
So going forward, we -- our focus in the payment field can actually be divided into 2 aspects, in China domestically and overseas. So in China, we'll continue to maintain our leading market position and we'll pay more attention to the improvement of revenue and profits. And Overseas, we will use Hong Kong as a global hub and for that to springboard and expand our businesses in Southeast Asia and North America, grow our local merchant acquiring remittance and currency exchange businesses and also explore the latest payment and fintech technology and opportunities. So that's for the first question on the payment.
And on ESG, in fact the capital market is increasingly focusing on ESG as well as more and more asset managers use ESG factors as an important long-term nonfinancial indicators to measure asset value. So we have actually taken a very strong approach in the past 3 years to boost our ESG governance. And it has actually gained pretty strong market recognition last year, which we have scored 54 in S&P Global ESG ratings and A- in Hang Seng Corporate Indices. And as mentioned before, we were also recognized in the S&P Sustainability Year Book last year, which is all leading the industry.
Specifically, we have actually established ESG Committee to supervise and oversee the company ESG affairs. And there are also a couple of programs we have set up to support the merchants in our business ecosystem. And for -- as a company as a whole, we strongly believe a good ESG management will actually contribute to a long-term and sustainable development and enhance the business community as a whole.
Our next question will come from the line of Yuxuan Chen from Huatai Securities.
[Foreign Language] I have got 2 questions. The first one is what is the plan for our international business strategy in 2024, any future plans to expand into new business sectors and the markets going forward? The second question is what are the growth drivers of our Merchant Solutions business in 2023? And what's our growth strategy for 2024?
This is the Investor Relations Director of Yeahka. My name is [Arnold Yang]. So for the overseas market expansion, we have actually planned that into our standard of growth -- in 2023, we've actually activated the Southeast Asia market with obtained related payment licenses in Singapore, Hong Kong and sometimes we cooperate with Indonesian companies to expand business there as well.
Now in Southeast Asia, our focus is to expand into the local merchant acquisition market as well as the cross-border transactions in relation to different countries cross-border transactions. Now in 2023, we've actually served for over 5,000 merchants locally. Brand names such as Pullman, Rolex and other luxury brands and consumer goods brands are all our clients. Now in Singapore alone, we've already generated over RMB 200 million in GMV. We've also connected and created sustainable business models and chains through Singapore and Hong Kong.
Altogether, we're serving local consumers and serving local merchants as well as Chinese outbound merchants who can do cross-border transactions when we collect Singapore dollars and U.S. dollars and in exchange for the offshore RMB and then remit back to China. So we have the capabilities of doing local merchant acquisition and cross-border transactions in the Southeast Asian markets. And we are constantly looking for other region expansions now that already includes North America, and we're looking into other regions such as -- such as Africa and Middle East. And that concludes the answer to the question.
Now for the Merchant Solutions. Now in 2023, we focused more on the user penetration of the Merchant Solutions because all of our Merchant Solutions users comes from our payment business. Out of the 9 -- over 9 million payment merchants, we've actually penetrated 1.6 million merchants, and they are all now paid users of our Merchant Solutions business.
Now we've constantly developed new modules, innovative modules that can help our merchants to retain and create repeat customers and repeat purchases on our platforms. Now in 2023, our biggest growth driver is the number of merchants growth. Now relatively speaking, in 2022 when merchants were less willing to pay for extra value in 2023, they've actually become more willing to pay for more value-add services, which is a good catalyst for us. And going into future in 2024, we will focus more on the commercialization and increase the penetration of our merchants. And at the same time, according to market conditions, adjust our fee structures to possibly increase our per merchant revenue contribution. And that concludes it.
Thank you. And that concludes the question-and-answer session. Now I'd like to turn the conference back over to management for any additional or closing remarks.
Well, thank you once again for joining us today. If you have any further questions, please feel free to contact us directly at Yeahka. Our contact information can be found on our IR website. Thank you for your time.
[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]