Remark Holdings Inc (MARK) 2017 Q4 法說會逐字稿

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release announcing our results for the fourth quarter and 12 months ended December 31, 2017, a copy of which is available in the Investor Relations section of our website.

As I have always consistently said, every quarter is transformational for Remark Holdings. As such, Quarter 4 of 2017 was no different, and moving into Quarter 1 2018, we are proud to not only continue this fast pace, but accelerate it to the path towards executing the vision set over 3 years ago.

2018 is another transformational year for Remark Holdings. But first, I'd like to point out several highlights from fourth quarter of 2017, in particular as it relates to our artificial intelligence platform, KanKan, the core of Remark Holdings. We are invited by the Cyberspace Administration of China for the first time to speak at the Fourth World Internet Conference as a keynote speaker. This conference is universally recognized as the undisputed highest-level gathering of government officials and businesses around the world that conduct Internet-related businesses in China. We were in very good company. Other keynote speakers included Jack Ma, the Chairman of Alibaba Group, and Pony Ma, the Chairman of Tencent Holdings. Remark Holdings was 1 of 3 U.S. publicly listed companies invited to speak alongside both the CEO of Apple and Google. These are 2 companies that are valued in the hundreds of billions in terms of market capitalization. Yet, why were we invited to present with these companies? We were invited due to the uniqueness of the artificial intelligence platform that we set out the vision to build 3 years ago and continue to not only surpass the technological milestones set ahead of us, but even more importantly, show the ability to monetize quickly. Our algorithms form a very high entry barrier and has allowed us to build ecosystems around our partners. One such partner, for example, we announced this past December, is a strategic investment from CP Group from Thailand out of the Chairman's office.

CP Group has been in business for over 90 years. It was the first foreign investor in China. And as one of the largest companies in the world, CP Group is a market leader in agriculture, telecom, retail, consumer, financial services and more. In addition, they are the largest shareholder of Ping An Insurance, top 3 in the world in terms of market capitalization for an insurance company. They are the largest shareholder after the Chinese government in CITIC Group, the large conglomerate recently ranked 156 on the Fortune 500 list and doing revenues in excess of USD 60 billion. They are the largest shareholder in ITOCHU, one of Japan's largest conglomerates that do in excess of about USD 145 billion in revenue annually.

These deep and wide breadth of relationships have added to our already strong foundation built through KanKan.

As we continue to develop and build our AI platform into a stronger, more powerful engine, our ability to enter into new verticals and create monetizable products only increases more rapidly. And with this partnership, our speed into market only becomes much faster.

After completing a great Q4, during which KanKan brought in over USD 2.8 million revenue and finished 2017 with revenue over USD 5.8 million. KanKan, our artificial intelligence platform, enters into 2018 with even stronger momentum. With the current deals and deals in the pipeline, we are very optimistic in far surpassing our USD 30 million guidance for 2018.

As I've always said, being into AI business means that your business is changing and adapting every month. Ours is no different. Our guidance provided in the last quarter's conference call was based primarily off of our FinTech business. Since then, our business has expanded rapidly in scope and scale, which allows us to conservatively increase our guidance to USD 50 million. More importantly, the direction is clear on KanKan, achieving a revenue target of $150 million revenue by the end of 2019.

And here is how we will achieve it. First of all, let us take a look at our FinTech business. As of Q4 2017, with our quality lead acquisition product, we have already helped our financing customers loan out over RMB 600 million or roughly USD 100 million, with a less than 1% default rate. Several other customers have started testing our product, and initial results look very promising, and we're expecting to grow the loan amount by 2x to 3x over the course of 2018.

For our social credit and risk management business, other than the banks we have announced in our press releases, we are currently signing up more banking customers, who have been testing our credit scoring system for several months, and we are expecting our volume to double starting in Q2 of 2018. Our value-added AI platform allows us to charge a gross fee of approximately 5% of every loan amount issued.

Secondly, due to the strength and scalability of our AI technologies, we have been successful in expanding into new verticals. For example, our most recent facial recognition accuracy test, based on the universal standard, LFW, otherwise known as Labeled Faces in the Wild, resulted in a 99.83% score -- accuracy score, and puts us #2 in the world. With numerous rounds of testing and competition, the KanKan brand is now recognized in various markets, including Greater China, Japan, Thailand, the UAE and the United States, to be more specific.

But to be clear, our focus is primarily on the massive Chinese market, where AI adoption has already begun and expanding rapidly, whereas other countries are still trying to understand what AI is and how it will help their businesses. To put things in perspective, the top 20 cities in China are equal to the size of countries around the world. The city of Wuhan's GDP, which just ranks #9 in China, has a GDP larger than Israel. The cities of Beijing and Tianjin region's GDP combined is larger than Australia. This is why our focus from a business monetization standpoint is in China.

For 2018, KanKan's AI team will focus on the following industries and provide the solutions and services to our customers: Public -- number one, public safety and workplace safety fields. KanKan will apply its unique real-time recognition technologies and big data analysis expertise to help governments and businesses to enforce safety rules and regulations. In addition to the previously announced restaurant food safety enforcement products in Shanghai, we are entering into construction site safety, campus safety and traffic safety businesses. We are expecting several large-scale safety projects to commence in Q2 and to be completed by the end of 2018.

To better help understand how we monetize this tremendous opportunity in this public safety and surveillance market, in the case of the food and beverage industry, we will charge a fixed implementation fees based on a number of cameras plus an annual service fees for kitchen. We are currently in the process of rolling out our AI systems to 2,000 restaurants in Shanghai. Typically, we charge between USD 3,000 to USD 5,000 per AI box. Each restaurant will order between 3 to 5 boxes, depending on size. While we're initially implementing this product to 2,000 restaurants, as previously mentioned, there are 200,000 restaurants throughout Shanghai and approximately 8 million restaurants in China. This is our immediate target market. These revenue numbers will not be onetime, as we will provide AI services and charge monthly subscription fees.

Other opportunities in front of us are, for example, 1 large construction company in China that has more than 2 million construction workers, every day working on their sites. 1 education -- 1 educational company has over 1 million students in Shanghai alone. Revenue model will be charged based on per worker or student.

Number two, facial recognition devices. As mentioned earlier, our facial recognition ranks one of the best in the world. Most recently, we scored 99.83% based off the universal standard, LFW, Labeled Faces in the Wild. But what makes our facial recognition applications more unique is the high degree of accuracy of identifying people irrespective of race, color and sex. KanKan's first facial recognition device will soon be launched in the market, price ranging from $250 to $600.

While there are many competitive facial recognition products already in the market, our technology distinguishes itself due to our unique structure light-based facial recognition that addresses image/ video tech, extreme environment conditions, for example, low-light, dusty environments, and privacy-protection issues, which other competitors, in our opinion, are far behind. We are expecting over 10,000 units to be sold in 2018.

Part 3, retail. Especially in large retail and food -- fast-food chains, KanKan will build and deploy AI-based retail-management products that will be deployed to tens of thousands of retail stores, supermarkets, super brand malls and fast-food chains. It is not a secret, as it relates to the vast consumption power in Asia. Our AI platform will be utilized to enhance both the front-end experience for the customers and back-end operational efficiency and productivity for the stores themselves.

To avoid any confusion, the scope of the business opportunities are exponentially greater than the ones that we just mentioned. As a result, we have to be careful and sensitive to the implementation and execution of our efforts in this area.

Part 4. As for KanKan's data business, we have completed the first war room product in Q1 of 2018. That is far one of the best futuristic war room systems, based on real-time big data analysis, voice recognition and 3D holographic display system. We have 6 other large war room systems to build for the rest of 2018.

Finally, KanKan continues to expand and to distinguish itself in research and development. As of now, we have 22 filed patents, 17 being filed and 15 in the pipeline. We are expecting over 100 AI patents filed in 2018, both in Asia and U.S. We are continuing to grow our AI development team to over 150 people through 2018, while establishing research centers in Beijing and San Francisco in partnership with distinguished universities in the field of artificial intelligence.

Now moving to Vegas.com. Vegas.com show-ticket sales continue to increase at a rapid pace, and the business is performing phenomenally well. In fact, one of the top 20 show-ticket sales days in Vegas.com's history, all 20 have occurred since November 24, 2017. And if it sounds like you've heard that metric before, it is because you probably have in some form. Each month of sales have been consistently better than the last ever since Remark purchased Vegas.com back in September 2015. And we're anticipating additional increases, as we improve our show and hotel features. Vegas.com experienced the largest and best improvement in site conversion in the history of the company. This improvement in our conversion percentage drove the Vegas.com business to its single-best converting quarter in the history of the business.

Transactions on mobile devices in the fourth quarter grew at 46% versus Q4 of 2016. Vegas.com saw more consumed show tickets, which means people who actually went to the show versus booking a show for a future date in the fourth quarter than in any other quarter in the history of the business. December was the single-best month for show-ticket consumption in the history of the business, where generally, this is a slow time of the year.

To that end, we're excited to introduce 2 new features that have been the most requested from our customers and that we expect to deploy by the second half of 2018. First, VDC users will soon have the ability to access digital tickets sent straight to their phones, eliminating an old pain point that required you to have to pick up your tickets in person before the show. And second, you'll soon be able to choose your exact seating location, which is something a lot of people have been asking about. We expect both of these upgrades to be very positively received, and we look forward to rolling them out in the coming months.

We're really focused on improving this already popular product in Vegas.com, because we believe this will be the key to a long-term growth of our ticket sales and revenues, scaling to even greater heights than we already have in 2017. As it relates to this year's guidance, Doug will be able to elaborate on these exact numbers for 2018 when he comes on in a minute.

Finally, a brief update on Sharecare. As most of you know, Remark Holdings helped cofound sharecare.com back in 2009 by creating the technology for the original platform's development. Remark also currently holds a roughly 5% ownership interest in the company. Today, Sharecare is the leading digital resource that allows people to aggregate, manage and navigate all of their personal health care information from one central place. As we highlighted on our last call, Sharecare was recently listed among the fastest-growing companies in North America on Deloitte's 2017 technology list, ranking 242 among the public and private technology companies on the Fast 500.

The company has increased its revenue by nearly 400% between 2013 and '16, and has been one of the featured private companies at the J.P. Morgan's Healthcare Conference 5 consecutive years.

Overall, in light of all the recent announcements and new initiatives in health, we are confident that this is a very strong market for the digital health business and that Sharecare presents Remark with a significant monetization opportunity, if and when that should occur in the future.

Now before we turn the call over to questions, I'd like to hand the call over to our CFO, Doug Osrow, who'll walk us through the financial results for the quarter and year. Doug?

Thanks, Shing, and good morning, everyone. Before I dive into our financial results for the quarter and the 12 months ended December 31, 2017, and briefly walk you through 2018 guidance, I'd like to take a few minutes to address a few housekeeping items to the recently fielded questions from investors. By this Monday premarket, our 10-K will be filed. Rather than wait until the 10-K is released, I thought it would be helpful to partly address the increase in the number of shares outstanding over the prior quarter, since I know investors are keenly focused on this topic. This increase was partly the result of the accretive private placement agreement we announced with CP Group that Shing mentioned earlier for approximately 833,000 common shares. Additionally, and I know many of you have been following us since we purchased Vegas.com in September 2015, there seems to be some confusion around the warrants issued in this transaction, and I thought it will be helpful to spend a minute to better explain. As part of the transaction, we issued 8.7 million cashless warrants with a $9 strike price. We added an interesting provision to the warrant. If our share price closed above $14, Remark in its sole discretion could force conversion into common equity, and we did, resulting in a favorable situation for Remark. Essentially, the 8.7 million warrants were converted into approximately 3 million shares, representing, as I just mentioned, a favorable position from a dilution perspective.

Now to our results. Our net revenue for the fourth quarter of 2017 increased 24% to $18.6 million from $15 million in Q4 of last year. Of this amount, revenue from our artificial intelligence subsidiary, KanKan, accounted for $2.5 million of the fourth quarter in 2017 in comparison to nominal revenue from KanKan in Q4 of last year.

For the full year, our net revenue increased 19% to $70.6 million from $59.3 million in the same period last year. KanKan revenue accounted for $5.7 million of our total net revenue in 2017 in comparison to nominal revenue from KanKan in 2016.

Turning to our expenses. Our total cost and expense for the fourth quarter of 2017 was $40 million, which is up from $24.7 million in Q4 of last year. For the 12-month period, our total cost and expense was $108 million compared to $81.9 million in the same period last year.

Our operating loss for the fourth quarter was $21.4 million, which compares to $9.7 million in the fourth quarter of last year. For the 12-month period, our operating loss was $37.4 million, which was an increase from $22.6 million in 2016. Operating loss for 2017 included a $14.6 million noncash charge related to the impairment of goodwill and other intangible assets purchased from China Branding Group Limited, which included FansTang, in September of 2016.

Our net loss for the fourth quarter of 2017 totaled $89.2 million or $3.47 per diluted share. This compares to a net loss of $8.6 million or $0.40 per diluted share in Q4 of last year. And finally, for the 12-month period, our net loss totaled $106.7 million or $4.49 per diluted share compared to $31.7 million or $1.54 per diluted share. In the same period last year, as mentioned earlier, net loss for 2017 included a $64.1 million noncash charge related to the change in the fair value of the company's warrant liability compared to a $5.8 million gain recorded for 2016.

Now turning to our balance sheet. Our cash position remains strong at $22.6 million with an additional $11.7 million of restricted cash, bringing our combined cash position to $34.3 million at December 31, 2017. This compares to a combined cash position of $18.5 million at December 31, 2016.

Shifting gears, for our outlook to 2018. Starting with our travel and entertainment division, we are increasing our expectations for Vegas.com, or as we commonly referred to it, VDC, to generate gross revenue of approximately $375 million and net revenue between $70 million to $80 million. We anticipate that our EBITDA margins for this division will range between 12% and 15% of net revenue for fiscal 2018. For our KanKan division, or our technology and data intelligence segment, as it will be labeled in our 10-K, we expect to generate more than $50 million, as Shing discussed earlier, in revenue for fiscal 2018. In total, we expect to generate consolidated net revenue in excess of $120 million with KanKan's artificial intelligence platform as a primary driver of growth, as its revenue rapidly increases during the course of 2018.

This completes my financial summary. And with that, I'll turn the call back to Shing for any closing remarks.

Thanks, Doug. We're now ready to open the call for your questions. Operator?

(Operator Instructions) And we will take our first question from Darren Aftahi from Roth Capital Partners.

Just a few questions, if I may. First, on your 7-Eleven deal. Can you just talk about kind of the business model that's going to be employed, and then just sort of the timing for a rollout on that deal?

Yes. I mean, as it relates to 7-Eleven, they're a -- we're, obviously, a public company as well as they are, so there are a number of the details that we can't go into because of confidentiality agreements. But as you can imagine, 7-Eleven is a business in Thailand that has 11,000 stores nationwide, 10 million people that walk through in it daily. They're a business that does over $15 billion in sales. And then they themselves are a $25 billion market cap company. So the scope of what we're doing, as I said in our earnings release or just -- what I just said, is handles a multitude, probably, 20 to 30 different aspects where AI can come into play to help the front-end experience in addition to making their back-office operations more efficient. As it -- as there are 11,000 stores, a rollout like this, certainly, will take some time. And we'll -- as we continue to fine-tune that implementation plan, we'll update it -- update investors on the next quarter's call.

Great. Then this on your FinTech product, I know in the past, the fees you've talked about have been, I think, maybe a little bit lower than the 5%. But I'm just curious like as you had a year of this under your belt, how have default rates on that product performed relative to what initial expectations are? And has that given you any kind of leverage in terms of renegotiation or future negotiations with current and potential partners?

It's performed much better than when we set out a target of above -- of performing under 3% default rate. And we're right now running this product at around 1%. So clearly, our AI-based product is working, and we'll continue to look to expand our product with the larger banks. And I differentiate this with the peer-to-peer lenders who have their own product. But this is an industry where the -- because they're operating without licenses, the government has been cracking down on them, as we see in the newspaper articles. So we're working alongside these large banks who are -- who we're working with, and we'll continue to roll out new products as quickly as they'll give them to us.

And Darren, it's worth noting in our financials, as we report -- we do report net, so we -- in addition, there is, obviously, a reserve for the loan defaults. Even though our default rate has been quite good, we still just take conservatively, and as is industry standard, have a reserve for the loan defaults. And for the full year, it was a little less than USD 400,000.

Great. And then just, Shing, can we just talk about big picture, appreciate, given the out-year, your kind of KanKan revenue, but as we think about mix, you talked a lot about the AI box, when does the recurring component sort of come into play for your business? I know it's early. And then, is this applicable to all the kind of vertical use cases you talked about or the specific cases where it's just hardware and others where it's hardware and a mix of service?

The way -- when we feel that the recurring -- I think it's our first objective is to get our product within the -- whatever customer that we're working with, right. And then I wouldn't expect to -- I would see the -- some form of revenue in the first year. But the main jump will be coming after the first 12 to 18 months in terms of our recurring revenue.

And then just last one from me. On the sort of retail/restaurant area, you mentioned just fast, casual sort of quick-serve restaurants, I'm just curious, outside of China, like are there any areas -- and I appreciate the difference in terms of adoption of AI in different parts of the world -- but are there any areas in the western world where verticals are actually looking at your solution maybe more so than others?

I think, across a lot of verticals, I mean, particularly in the U.S. When we have showcased our technology, we've been at trade shows or just -- or industry journals that write about what we've been doing, we've been approached from a lot of different verticals, primarily from the U.S. But -- so that's a process of getting companies in the U.S. to better understand the use of AI and how it will change things for the better. So that's kind of a process, but we're definitely not suffering from a lack of business leads in a number of different countries.

And Darren, just to follow-up on that, as we've always said, one of our most difficult decisions is how we allocate our time and the opportunities are sort of just vast in Asia Pacific that, that's where the -- and from -- that's where the majority of the opportunities are today from a scale and scope and implementation perspective. But we're sure, with time, things will, obviously, change as we grow our team.

(Operator Instructions) And we will take our next question from Matthew Nussbaum from L & S Advisors.

But one of the things I wanted to ask about was related to the 7-Eleven that you mentioned you'd provide an update on the next quarter's call. But in rolling this out to 11,000 7-Eleven's, how are these hardware costs going to be allocated? I would assume 7-Eleven would need some kind of camera or hardware installation in order for the platform to be working.

Yes. I mean, I'll address it by two ways. One is, again, as Darren just had asked a question, we have to respect the fact that the 7-Eleven, CP, all are a public company. So we're -- obviously, have to be protective of the information that's given. But in general, the uniqueness of our technology is the fact that we work with all kinds of cameras. So clearly, we wouldn't look to have any company replace all their cameras just to use our AI box. This is dating back to what we won the award back in March of 2017 as the #1 breakthrough technology award given by Alibaba Group. And when we won that at the end of April, we've translated that technology into a monetizable product, and a big part of that is offering AI to all kinds of customers, not just large customers.

Okay. And then, also, with the facial recognition, 10,000 units sold. But -- and you mentioned a jump in recurring revenue in 18 months -- how does it -- how does this jump occur from -- between selling the units and then having this revenue recurring 1.5 year later?

Okay. I think you're confusing 2 different products. The facial recognition product, we plan to sell 10,000 in 2018, that's a separate product from what we mentioned before in terms of with the restaurants. The restaurants that we're rolling out, we're selling them our AI box as well as the recurring software package. As it relates to the facial recognition, we plan on, upon introduction, selling 10,000, but each one will be coming. It's not just the hardware though, be it the software component part of it as well. But that's still early on. And as the quarter -- as Q2 kind of comes through, we'll have much more details about that.

And we will take our next question from David Rose from Granahan Investment.

Could you just clarify the guidance you gave on KanKan's revenue for 2019? You threw out a $150 million number. Was that a number that you're expecting to achieve for the year or a kind of end-of-year run rate?

We -- that's our revenue target for our AI business by the end of 2019. The reason why we gave the details in helping everyone model what our potential performance is. For example, if we use the restaurant business that we just mentioned, if we're using the low-end numbers of selling a box for roughly $3,000, each restaurant is adding 3 boxes per restaurant right now, where -- and then adding the rollout to 2,000 restaurants through Shanghai, you have a number around in the mid-$20 million number of revenue. We expect that implementation to expand beyond the 2,000 restaurants as well as into the other cities in addition to offering this product to the construction sites, school safety and whatnot. So that's -- we're just trying to help people, investors be able to model on how we would get to that $150 million number by the end of 2019. I thought that was a -- the restaurant would be one strong example for that in addition to the FinTech business that we mentioned in the beginning. And then lastly, the other initiatives that we haven't provided details on, but we will over the course of the next 3 to 6 months.

I guess, though, I'm confused by your language of saying by the end of 2019. Does that mean cumulative revenues of $150 million, or is that -- could you explain, because it's a little confusing what that means?

David, this is Doug for a second. I totally understand the nature of your question. Part of the issue that we have is the KanKan product that's being unveiled and has been introduced to 7-Eleven, the implementation, the timing, a lot of that is beyond our control. So what Shing wanted to do in the earlier presentation, not to put words in Shing's mouth, was we -- he basically just wanted to frame how large the opportunity is. We're not really ready to talk about exact revenues for 2019 is -- our revenues -- we've exceeded our initial expectations several months into this year. So it's a little bit early to really go out to '19. We were just trying to really set a framework, where if you do just some basic arithmetic, you can see how large the scale and scope of the opportunity is. And we'll continue to update on future earnings calls where we think things stand. Hopefully, they'll continue to go in our favor, as implementation moves forward and our team scales in size. Not sure if that exactly answered your question, but it's really meant to give a framework.

It sort of sounds like it's more of a cumulative number at this point. The other question I have for you is, obviously, to get the $50 million of revenue in 2018 for KanKan, starting from a base of $2.5 million, it's going to have to ramp pretty big and pretty quickly. Do you -- can you give us any visibility as to how Q1 is looking, because basically, it's over today, just to help us understand if the ramp is actually already occurring?

I will say, Q1, traditionally in Asia, is slower due to Chinese New Year, the Lunar New Year. But as we said, moving to Q2, our -- the -- a lot of the momentum that we started in the end of Q4, Q1, is all -- we're beginning to see that already.

Can I just expand on that?

Sure.

Yes, if you look at the -- and Dave, I know you know our numbers quite well from 2017. But if you look at the way the revenue progressed this year, it went from $100,000 in Q1 to $900,000 in Q2 to $2.2 million in Q3 to $2.5 million in Q4. And as many of you have asked and very acutely picked up on, our covenants were changed in Q4 of this year that enabled us to move -- quite honestly, move more money to China, which relaxed our covenants and which was inhibiting our growth there. But so you could expect not quite the dramatic curve that there was in 2017, but a similar curve in 2018 for revenue ramp, especially as many of these project are implementation-based.

It sounds like Q2 is going to have the biggest kind of step function and then continue growth from there.

That's a definite -- that's a fair assessment, for sure.

And we will take our next question from Andrew Boone from Quantum Capital.

Just 2 really quickly. I'm just trying to also understand what is in a box. And then can that, over time, move to the cloud or is that a necessary thing? And then just on -- back to the camera question. Do you guys need feet on the street to set up those cameras? Or how does kind of the implementation process work, as you guys go about establishing a relationship with a specific restaurant?

So thank you for your question. The part one -- our AI box is roughly the size of an iPhone. And our -- what kind of -- actually, the uniqueness is the fact that we're able to provide our AI technologies not in the cloud, right. So a lot of businesses today, especially with all the things that you read in the news, they don't want to upload their faces into the cloud, because who knows what happens, or their data into the cloud. So the -- what we won the award for back in the spring of 2017, is providing the AI box -- AI technologies and solutions on a private network, right. This way, your data is kept safe, okay. So the second part is that the implementation is not done through us. It's done through a third-party vendor.

And then just to quickly follow-up on that. And I'm not sure how much you guys can disclose there, given what you've already said, but is that then your responsibility or is that the responsibility of the restaurant?

I mean, we -- I mean, I don't -- I wouldn't see -- I wouldn't -- technically, it's the responsibility of the restaurant. But we certainly want to see successful implementation. So we're very hands-on and want to make sure that everything is being implemented correctly. So we'll certainly be involved in it.

Andrew, this is Doug. We'll send our people into the field to make sure, obviously, if we're not getting the results we expect to receive. But in general, if you think about it, if you will, a project is assigned and then as it -- to someone that manages the entire project, and we're part of -- we're just, sometimes, a large piece, but sometimes, a small piece of the overall project. It's like, as I look out here in Vegas, and you think about the stadium being built, as a general contractor who hires a lot of different people, and -- but ultimately, they're responsible for making sure everything gets built accordingly.

And we will take our next question from George Kafkarkou, a Private Investor.

How do you think about the KanKan FinTech business? If I understood properly, the 5 focus areas for 2018 for KanKan did not include FinTech. How do you see FinTech -- KanKan FinTech as a percentage, for example, of KanKan revenues in 2018? And does it continue to be a focus?

Just to be clear, the 5 new areas that we mentioned are 5 new areas of focus. That's not 5 thing -- we just mentioned the new areas that we're getting into rather than -- so that certainly does not mean that we're neglecting the FinTech business, which is a very important part of our business. You're seeing -- just to be clear on that. As far as the business mix, business in China, as you know, it changes all the time. So we have to adapt accordingly. But obviously, FinTech is certainly one of the biggest industries in the world, and fortunately, we have a very strong place. We're in a strong position to capitalize on the massive loan growth that's happening in China. So we certainly will not give up that opportunity.

(Operator Instructions) And I'll turn the call back over to Shing Tao for any closing or additional remarks.

Thanks, again, for -- everyone, for joining us on our call today. We appreciate your continued support and look forward to speaking with you on our next earnings conference call. Operator?

And this concludes today's conference. Thank you for your participation, and you may now disconnect.