Hollysys Automation Technologies Ltd (HOLI) 2010 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to the Hollysys Automation fiscal 2010 third quarter ended March 31, 2010 earnings conference call. (Operator Instructions). Please be advised that this conference is being recorded today, May 13, 2010. I would now like to hand the conference over to Ms. Serena Wu, the Investor Relations Manager of Hollysys Automation Technologies. Thank you. Please go ahead Ms. Wu.

Thank you. Good day to everyone and thank you for joining us. Our speaker today will be Dr. Changli Wang, the CEO of Hollysys Automation Technologies, Mr. Peter Li, the CFO of Hollysys, and myself, the IR Manager of Hollysys.

Before we get started I would like to remind everyone that this conference call may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements are statements are not historical facts, including statements relating to the expected growth of Hollysys, future product introductions, the mix of products in future periods and future operating results. Such forward looking statements, based upon the current beliefs and expectations of Hollysys management, are subject to risk and uncertainty which could cause actual results to differ from the forward looking statements.

The following factors, among others, could cause actual results to differ from those set forth in these statements. Business conditions in China and in Southeast Asia, continued compliance with government regulations, legislation or regulatory environment, requirements or changes adversely affecting the business in which Hollysys is engaged, revision or changes in government incentive programs, potential trade barriers affecting international expansion.

Fluctuations in customer demand, management or revenue growth and transitions to new markets, intensity of competition from or introduction of new and superior products by other providers of automation and control system technology, timing approval and market acceptance of new product introductions, general economic conditions, geopolitical events and regulatory changes, as well as other relevant risks detailed in Hollysys' filings with the Securities and Exchange Commission.

The information set forth herein should be read in light of such risks. Hollysys does not assume any obligations to update information discussed in this conference call or in its filings.

On today's call the CEO of Hollysys, Dr. Changli Wang, will provide a general overview for the third quarter of fiscal year 2010 and then the CFO of Hollysys, Mr. Peter, Li, will discuss our quarterly results from financial perspective. Both Changli and Peter will be available for the q and a session afterwards. Please note that all amounts noted in this conference call will be in US dollars unless otherwise noted. And now I would like to turn the call over to the CEO. Please go ahead Dr. Wang.

Thank you Serena and good morning or good evening to everyone. We are pleased to report another strong quarter with solid financial and operational results. Our financials were significantly improved on the year over year basis and our operational status and sales pipeline remains solid. I would like to take this opportunity to discuss some key events took place during this quarter.

We are excited to report that during the March quarter we signed a $2.26m high speed rail signal contract to supply on-ground control TCC for the Changchun to Jilin intercity high speed railway line. This high speed rail line is 108.16 kilometers with five railway stations designed with travelling speed of 200 kilometers per hour. And it is expected to be commissioned by the end of the year 2010. We will continue to leverage our solid positioning in China fast speed rail signal market to capture our fair share in the aggressive national high speed railway network expansion.

Also in the March quarter, we signed a follow on contract to supply our proprietary subway SCADA system for Phase Two of the Beijing Subway Line 10 with a contract size of $17.2m. This project is pursuant to our successful SCADA system implementation for the Phase One portion of the same line. The Phase Two of Subway Line 10 is 32.44 kilometers in length and 24 stops.

This follow on contract win with Beijing Subway Authority is further validation of Hollysys well established brand name in China's fast growing subway automation market. We believe this strong track record will continue to lay solid ground for the Company to gain quick market acceptance for its future subway automation products offerings such as safety critical subway signal systems.

In the March quarter, we have successfully completed the minority interest buyout in acquiring 24.11% of the minority interest in Beijing Hollysys, one of the operating subsidiaries of the listing entity. Hollysys Automation Technologies Limited now owns 100% of Beijing Hollysys which mainly engages in high speed rail, subway and nuclear automation businesses.

As these national high growth infrastructure sectors continue its momentum Beijing Hollysys will contribute its earnings growth in the years to come. The total consideration of the transaction is in line with management's estimates around $59m to $61m with approximately 4.4m new shares issued and CNY67.6m paid out at the end of March.

Before I conclude, I would like to take note on one of the exciting nuclear automation breakthroughs achieved by our nuclear joint venture with China Guangdong Nuclear Power Holding Group, China Technology Corporation. On March 26, 2010 our JV technology received China's first ever permit to design and manufacture its proprietary China made nuclear automation and control systems. This permit was granted by National Nuclear Safety Administration of China which signifies the near future, near term future China will achieve 100% localization of automation and control for nuclear stations. This will place proprietary technologies players like Hollysys and its JV at the dominant leading position in China's fast growing nuclear industry.

With that I would like to turn the call over to our CFO Peter Li who will discuss in great details our financial results. Okay Peter.

Thank you Dr. Wang and hello to everyone. In a nutshell, Hollysys' financial and operational result for the third quarter of fiscal 2010 ended on March 31, 2010, the Company reported a strong quarter with solid operational results. For the third quarter we reported another record breaking backlog level at $242m, revenues at $33.4m as compared to $22.9m year over year and non-GAAP net income of $5.2m as compared to $2.1m year over year.

Let's take a closer look into the quarterly numbers. For the quarter, total revenues amounted to $33.4m, increased by $10.5m, or 45.7% compared to $22.9m year over year. Of the total revenues, revenue from integrated contracts amounted to $31.3m with the following segment breakdown, $16.4m or 52.5% from Industrial Automation, Rail and Subway was $14m or 44.7%, of which $6m or 19% from High Speed Rail and $8m or 25.7% from Subway, and $0.9m or 2.8% from Nuclear.

While we are pleased with 45.7% year over year growth for the quarter, the nine month year to date revenue only showed an approximate 5.7% growth year over year, mainly contributed by stronger than expected growth of approximately 12% in Industrial Automation while Rail and Subway still recorded a contraction of 9.2% year over year. This slower than expected nine month year to date revenue growth will inevitably make us come out to revise our guidance for the whole fiscal 2010 which will be addressed in greater details at the end of my speech.

The quarterly gross margin was 37.2% as compared to 36.5% for the same period of last year. Recall what I said about gross margin fluctuation in the previous earning calls. Gross margin could be fluctuating quarter over quarter due to different products and different products with different margin profile recognized in the reporting period, which could swing our margins slightly within or out of the range of 30% to 35%.

While this quarter margin fluctuated to the upper side, we should be mindful that this higher than normal gross margin of 37.2% may not be a good indicator of continuous margin expansion for the future quarters. Over the longer term, with our high margin businesses taking a higher percentage of our revenues and with more proprietary products utilized in product implementation, it will result in our gross margin expansion going forward from both sector margin profile and corporate blended margin perspective.

For the quarter, selling expenses $2.7m compared to $2.3m year over year. The increase in selling expenses was mainly due to the Company's increased marketing activities. Q&A (sic - see press release) expenses excluding non-cash share compensation expenses were $2.4m or 7.3% of total revenues of the quarter compared to $2.5m or 10.9% for the same period of the prior year. R&D expenses were $3m for the quarter, a 39.3% increase as compared to $2.1m for the same period of the prior year. The increase was mainly due to increased R&D activities.

The quarterly non-GAAP net income excluding non-cash share compensation expenses was $5.2m or $0.10 per diluted based on approximately 51.5m shares outstanding as compared to $2.1m or $0.05 per share based on approximately 46m shares outstanding reported in the prior year period.

Hollysys generated operating cash flow of $0.4m during the quarter. Including the investing and financing activities, the total net cash outflow for the quarter was $19m.

Hollysys' backlog as of March 31, 2010 was $242.3m compared to $219.3m at December 31, '09. The detailed breakdown for the backlog by segment is as followings. $115m or 47.4% of the total backlog from Subway business, $62.7m or 25.9% from Industrial Automation, $53.8m or 22.2% from High Speed Rail, $10.8m or 4.5% from Nuclear and other miscellaneous contracts.

With respect to the backlog reported in this quarter I would like to bring a few highlights to your attention. Recall I have emphasized the quarter over quarter lumpiness of our backlog balance due to the timing of contract signing in the previous earning calls. We shall remain mindful of this nature of our business. The last record breaking backlog balance was $220m reported as of December 31, '09. The continuous record breaking backlog reported two quarters in a row is a clear indication of stronger business momentum going into the coming quarters.

Secondly, $10.8m of Nuclear related backlog is also a record breaking balance reported on quarterly basis, while the second highest balance was reported at $6.7m back to June quarter of 2008. With China's ambitious plan to have 100 reactors in operation by the year of 2020 and Hollysys being the only proven local automation system providers to the nuclear industry in China, we believe this Nuclear backlog record will be broken again in the near future.

Moving to the balance sheet. Hollysys' cash and cash equivalents were $119.9m compared to $138.9m December 31, '09. DSO were 192 days as compared to 250 days year over year. Inventory turnover were 94 days compared to 136 days year over year.

Due to the delay of a few Subway projects because of external factors and unexpected delay of new product rampings for High Speed Rail, we are revising communicated revenue guidance of $185.9m to $192.2m down to $173.3m to $181.1m. And non-GAAP net income guidance of $30.3m and $31.4m down to $28.3m to $29.6m respectively.

All in all the management is very pleased to have reported a strong third quarter result with a decent nine months year to date number given the unexpected negative factors we encountered over the past nine months. With the record breaking backlog we just reported, strong sales pipeline we are working on, especially in High Speed Rail and Subway businesses, the management is confident to deliver our superb financial performance for the quarters to come. Thank you.

Thank you Peter. At this time we would like to open up for the Q&A session. Please note that for Chinese speaking participants we can also do the Q&A in Mandarin and then we'll provide a translation. (Spoken in foreign language). Operator please.

We now begin our question and answer session. (Operator instructions). Your first questions come from Mark Tobin of Roth Capital. Please ask your question.

Hi. Good evening Peter, Dr. Wang. My first question, with the buyout of the remaining minority interest of Beijing Hollysys, can you remind us what activities are included within that subsidiary? Is that mostly your rail, high speed rail business?

Yes, Mark. Good morning. Yes, Beijing Hollysys mainly engages in high growth, high margin businesses such as high speed rail, subway and nuclear. This 24% minority interest buyout has been on our priority list for the past few years. Management, especially Dr. Wang, is very pleased to eventually achieve this target. So going forward means we, the listing entity of Hollysys Automation Technologies will enjoy 100% of the earning power of this fast growing business unit of the Group.

Okay, that's helpful. And then as far as you had discussed some delays on existing, I think on subway projects and then also as far as the new contracts on high speed rail. Can you give us some more --- I guess some more detail on what specifically you're seeing and what your expectations are for those to finally come through?

Right, right Mark. For those project delays in the Subway businesses, which is very disappointing to us over the past nine months, it's nothing related to financing reasons. As you probably know, the nature of our SCADA system really comes at very end of the whole project implementation right before the systems goes live. So any of the external issues resulting in project delays would subsequently impact or delay our SCADA system implementation. So that's the nature of the Subway project delays of Hollysys.

In terms of going forward, opportunities we see in High Speed Rail areas, we are working on bidding a few sizable projects in High Speed Rail areas both in the areas of 300 to 350 kilometer power segment and also 200 to 250 kilometer power segment. As a matter of fact, we have won, already won some of the biddings. We're just in the process of negotiating the commercial terms. So at the time the contracts signed, we will definitely disclose it to the US public in terms of the contract wins. For now, what I can share with you is that those High Speed contract or biddings we are working on include both TCC, which is on-ground control, and also the ATP is really done onboard control systems.

Okay and then finally your Industrial Automation business looks like it's recovering certainly from last year. Can you give us a sense of what end markets are driving the growth there?

Yes, I think there are a couple of factors here driving the Industrial DCS growth. One is we are seeing really the catching up effects of the previously delayed projects due to the economic uncertainties of the market for the past 12 to 18 months. We are benefiting from that from the recovered economic momentum so we currently experiencing in China. We are seeing some of the power plants, chemical plants are rushing to the commercial operation. So before they do the commercial operation, they need our DCS to be installed to control their manufacturing processes. So this is one of the factors.

The second factor we are seeing is, as you probably know, the cost of labor in China has been going up over the past six months especially. And we are seeing some of the manufacturers are implementing automation functionalities coming to Hollysys for solutions trying to seek or trying to achieve the lower labor costs and higher efficiencies going forward.

Okay, that's helpful. I'll jump back in the queue. Thanks Peter.

The next questions come from [Walter Salo] of [Tim Berry Capital]. Please ask your question.

Yes, would you be able to give some estimates for calendar 2010 and then fiscal 2011? I'm talking about estimates in the way of revenues and net income.

As you probably know, the corporate policy of Hollysys is to provide annual guidance on both revenue and net income at the beginning of the fiscal year. So for the timeframe you just asked for, which is really the fiscal 2011, the management will be ready to provide the guidance in the June quarter earnings call, which is expected for the middle of August.

Okay. And then would you be able to comment on your win ratio for the contracts that you're bidding on? Is -- basically I'm trying to get a sense on is the delay in these contracts, is it merely just a timing issue or is it because you're not getting the win ratio that you thought you were going to get?

For the High Speed Rail businesses it's nothing to do with the win ratio. As you probably know, for the higher speed bracket businesses of 300 to 350 kilometer power segment, we haven't seen any new contracts being granted over the past nine months literally speaking. Regionally, Ministry of Rail has been sort of holding off granting those contracts because they want to see the testing result of the pilot lines, the first two pilot lines in China.

The first pilot line of Wuhan to Guangzhou which went into commercial operation on December 26. The second pilot line for higher speed bracket is between Zhengzhou to Xian. That line was being commissioned by Hollysys. That went into commercial operation on February 6. So both the first two pilot lines went through the whole Chinese New Year, National Rail peak time. All really performed on a very smooth basis since then.

So we are working on bidding some of the both ATP and TCC projects for the 300 to 350 kilometer power segment, but we haven't heard anything otherwise as of now. We are expecting to hear something definitive before the end of June, especially for the ATP project side.

And then given the fact that the Chinese government seems to be at this point a little bit more concerned with inflation and economic growth, are you concerned at all that that might impact your business?

Not at all. Not at all. First of all, high speed rail project is a national priority which is now almost becoming a national pride now with so many foreign countries, including the US, including your President Obama, a lot of people showed strong interest in working with China on China's high speed rail experience.

Secondly, our signaling system in terms of nature is really back-end loaded. So with all these lines already halfway through the construction or three-quarters through the construction, it's really, it's very close or it's already in a later part of the whole project implementation. So with our signaling system to be implemented, the line will become commercial operating. So over the next six to 18 months we expect to see a lot of those high speed rail lines become commercial operation.

And last question, in terms of looking outside of China, how do things stand in that way?

Are you referring to High Speed Rail opportunities?

Yes, yes.

Right. I think a lot of press has published, publicized articles talking about this opportunity. I think the opportunity is very real and is very huge. China already got a line in Venezuela for roughly about 300, 400 kilometer line and a couple of foreign countries expressed strong interests, including US and Malaysia, Vietnam, Saudi Arabia, Turkey, these countries. I think Hollysys now, being one of the only two Chinese local high speed rail signaling system providers, we already have our proprietary 200 to 250 kilometer power segment ATP product certified under the most stringent European standards. We are making ourselves ready to piggyback on China's efforts to build and sell those high speed rail lines overseas.

Okay and then I guess one final question. Comparing to let's say where you were say three months, six months ago, in terms of high speed rail within China, are you more optimistic or less optimistic than you were say like three, six months ago?

Can you repeat your question, sorry?

Sure. I mean given that you're experiencing these delays right now and hopefully these are just going to be temporary delays and that the business eventually is going to come through, but are you more or less optimistic than you were say six months ago?

Yes, I got your question now. Yes, we definitely more optimistic than six months or nine months ago. Back then our first 300 to 350 kilometer power pilot line was still in last crunching hours. Now nine months or six months later, as of today, our first ever commissioned signaling project for 300 to 350 kilometer power lines has been smoothly operating since February 6. And we are very pleased to see our product has gone through the traditional Chinese New Year real traffic peak time and experienced no technical issues whatsoever. Our internal R&D people are also working on upgrading some of the software platform for the product.

So in terms of technological capabilities, in terms of product and system reliability and performance, we are definitely more optimistic than six and nine months ago. And as we stand today we are bidding on a couple of the projects for 300 to 350 kilometer power segment. We are very confident we will win our fair share in this vast explosive market in China.

And I would like to add a couple of sentence on this as well. Since the high speed rail systems composed of mainly two segments. One is the 300 and above kilometers high speed rail and the other is 200 and 250. In fact, the 200 and 250 has much more opportunities in the future. And also we have implemented a few lines with a very short time requirement and our system has fully demonstrated its reliability. And also our working efficiency has improved a lot with our engineers becoming more familiar with the field and also we have pipelined our -- streamlined our manufacture systems. So the efficiency of assembling is also much faster than before. So with this we become more confident in the future to earn more contracts as well.

Okay, thank you very much.

Thank you.

Thank you.

The next questions come from Jack Silver of SIAR Capital. Please ask your question.

Good evening gentlemen. Changli, I would like to --

Hi.

How are you?

Hi, and thank you Jack.

Nice to talk to you. I would like to address, as I often do on these calls, other opportunities that go beyond the core business opportunity. Nuclear obviously is very intriguing in terms of not only what's going on in China but what's going on in the world. I would like you to give us a better understanding of how the Company is positioned in relation to the nuclear opportunity in China both in terms of its competitive position as well as from a practical point of view when, because obviously just like in the rail business you come on at a certain point in time, in the nuclear business again you come on in terms of your contractual opportunity of doing business come on at a certain point.

Can you be -- clarify for us where you are in terms of the nuclear opportunity and as well as when we expect to really see the business that I'm sure is already because they're building nuclear plants?

Okay Jack. In fact, in the nuclear part we become more and more mature for the business. First of all, our first project, that's the Huanghua 1 gigawatt nuclear power plant project, now it's under implementation in the field. That's a very important milestone for the systems. And then the system hardware and software has been fully accepted by the factories, by the customers and they have already shipped to the field and now they are under implementation. In the near future they are going to be under test and then put into operation. So, so far, I should say so far so good. Everything is just okay.

The second is we have got fully recognition and support from the government because as I just mentioned that our government authorities, the Nuclear Safety Authority, just issued us a permit to supply the safety systems for the reactor protector in the near future. This permission in fact is very highly recognition and fully believed us we can supply the reliable systems to the customers. Thus our capabilities are fully agreed by the authorities. So this can give us more space in the expansion of the business and also improved our competitive capabilities in the future.

Not only in the China, but also in the world because before we can only supply the non-safety systems to be commissioned our island control and the nuclear island control, but not the protection of the reactor. So in that case, if we want to do business abroad outside of China, we cannot supply the full system so that we have to find some alliances or consulting with some other companies in the world. But that makes the business very difficult maybe. But now we have these capabilities and in the near future we are going to get the real opportunity from our customers and our partner. In fact, that's going to nuclear. They are planning, they are waiting and also they are planning for on which time they are going to award us real contract for the system.

So this makes it more -- how to say? We are in a kind of very solid ground for the nuclear business. And also, in fact we are not only we have -- so far we have locked up all the projects from Guangdong Nuclear, which is about half of the market share of the Chinese nuclear constructions. But we are looking for some other opportunities from other constructions as well. But so far we are working on it. I cannot give more detailed information now. Maybe in the future we can give that about it. So that's the nuclear. We are in a very good position now still.

So just let me --- I appreciate that very robust answer. Just to put it in perspective, again, because the businesses that you're involved in involve deep sensitivities towards safety and other issues which government reviews in a very close manner. So it's my sense, in terms of what you just said, both in nuclear as well as what you previously said in the rail, high speed rail, that you have passed some of these major tests okay.

And that already, although you've gotten some very decent business in rail, is it your expectation, and I think you may have already answered this, that again there should be an acceleration associated with the good performance associated with the two pilot lines and what you just said in nuclear that there should be some expectation that the nuclear business in fiscal '11, which we are beginning to approach, based upon the fact that again you have passed certain tests - you talk about real opportunities in the near future - that nuclear will begin to contribute perhaps in a meaningful way in the next fiscal year?

Yes, because if you look at the backlog, just Peter has mentioned the share of nuclear backlog has been improved and also our subsidiary companies in fact they are working on 10 nuclear reactor systems. And this year we are expecting some more projects. So with this backlog building up, but maybe you didn't count that backlog in our Company otherwise that number it would be very big, much bigger than the $240m backlog.

Right, right.

So with these projects building up -- in fact we have, as I said, we have just implemented the one reactor and we have nine signed contracts there waiting. And in the next year maybe there are two or four reactors, systems, where we into preparation for the implementation. So gradually the volume will build up. You understand Jack?

Totally. You're being very clear. Now also Peter has said, and of course we've been involved with the Company for a long time and it's been our understanding all along, as you are moving towards these more proprietary business opportunities than the Company historically has been associated with, Peter has indicated that he hopes that the overall gross margins will move higher.

Should we assume, and of course again he has alluded to this already, particularly in nuclear, since the Company has a very dominant market share and is extremely -- is from a competitive point of view, is extremely well positioned because there are so few others that really can compete, that we would expect the incremental business opportunity associated with these nine additional reactors to generally enjoy higher margins historically than the business has enjoyed in the industrial automation business?

Hi Jack, it's Peter. Hi, how are you?

How are you? Good.

I think the current Nuclear business of Hollysys already enjoys a pretty high gross margin profile of roughly about 60%.

60%.

Yes, 60%. Six, zero. So this is the highest margin business sectors for Hollysys and we are not expecting this high margin business to go any higher than 60% going forward.

60% is fabulous, but the point is, is that as that 60% becomes a more significant factor in the overall mix of the backlog and the overall mix of the revenues, then the overall gross margins should move up simply because it's going to become a more significant factor.

Absolutely, absolutely. Like I mentioned earlier, if the higher margin businesses take up more percentage of the total revenue, the corporate blended gross margin definitely will trend up.

So as it relates to the nuclear backlog which I think was $10m of the, I think of the $220m and that represents one reactor. Is there a relationship with the potential -- is there a linear relationship to the expectation associated with the additional nine reactors of which several of them may become a part of your business next year? I mean are we talking about somewhere in the area of between $8m and $10m per reactor? Is that something for the purposes of modeling that we potentially can use?

No. I think we still stick to the model we have been communicating to the street. Basically there are two revenue streams or earning streams for Hollysys in this business. For the revenue side, for each nuclear reactor Hollysys would get roughly about $3.6m or CNY25m per reactor in terms of the product sales for the automation control product for the conventional island. This sale is to our JV with China's most leading nuclear station builder and operator, namely China Guangdong Nuclear Power Holding Corp., okay?

Right, so the $3m to $6m would be going to the --

And the second earnings stream, the second earnings stream - Jack, sorry - is that we will also share 50% of the earnings of the JV with China Guangdong Nuclear Power Holdings Corp.

Okay, good.

So we currently still have this business model in terms of revenue model going forward. But please keep in mind that with our JV in place with the most leading nuclear builder and operator in China, we are basically assured about 50% market share of nuclear business in China. Because there are only three government approved nuclear station builders and operators in China and China Guangdong is the most leading one.

Actually who is your 50% partner in that JV?

Yes, 50%.

That's right, 50% JV partner.

Who is the other side of that partnership?

Guangdong Nuclear.

Guangdong Nuclear. Is Guangdong Nuclear an affiliate? Is it a government owned organization?

Yes, fully.

Fully government owned, okay. So lastly Changli, on the wind business, again over the last year you have begun to develop the wind business and again all of these businesses take time to build up and to do what they need to do in order to become contributors. Can you give us just an update on where you are in relation to again making that business a commercial success?

Okay, Jack, I feel so sorry that it's been slower than I expected, the progress. Anyway, we have fully demonstrated our controller in the real field for the winter and now it has finished the test and in the real field has been finished and we are looking for some real opportunities in the future. And also I'm glad to tell you that the pitch controller, which is the larger part of the control systems, has also finished the designing and the development of the prototype systems. And we have manufactured a few and we started just another customer who is willing to testing the systems now with us.

So we have just implemented the system on the real field and in the future we are confident that that will pass the test anyway. We have been testing in our house, in our factory for many times and we are expecting still out of these testing, we are, still I'm quite confident this year, this calendar year, we are looking for some real opportunities to pilot this into the real market.

Okay, so the business was slower to perform in terms of having a fully developed product. But I think what you're saying is, is that now that it has been fully demonstrated, that you're expecting within the calendar year some, the beginnings of some business that hopefully will recognize the technical developments that you've achieved.

Yes. We are going to -- I'm aware -- so far I'm quite optimistic in penetrating the market this year.

Okay. I want to thank both of you again for the time and effort that you put into not only the business but into these calls and I'll let someone else pick up the questioning. Thank you again.

Thank you Jack.

If there are no more questions, due to the time constraint, we will now conclude the call. So thank you everyone for joining us on the call today. If you haven't got the change to raise your questions, we will be very happy to answer them through the follow up contacts. And we look forward to speaking with you again in the near future. Thank you.

Thank you, bye.

Thank you.

That does conclude our conference for today. Thank you for participating. You may all disconnect.