Kanzhun Limited (ticker: BZ), the company behind the BOSS Zhipin app, has reported significant growth in its fourth quarter and fiscal year 2023 financial results. The company saw a 61% year-over-year increase in Q4 calculated cash billings and a 46% rise in GAAP revenue. For the full year, cash billings and revenue were up by 45% and 32%, respectively.
Kanzhun also reported a substantial increase in its average verified monthly active users (MAUs) and announced a new share repurchase plan valued at $200 million.
Key Takeaways
- Q4 calculated cash billings reached RMB1.78 billion, a 61% increase year-over-year.
- Full-year calculated cash billings stood at RMB6.69 billion, up 45% from the previous year.
- GAAP revenue for Q4 was RMB1.58 billion, while full-year revenue reached RMB5.95 billion.
- The BOSS Zhipin app's average verified MAUs grew by 33% year-over-year to 41.2 million.
- Adjusted net income for the full year hit RMB2.16 billion.
- A new share repurchase plan of up to $200 million was announced.
Company Outlook
- Q1 2024 expected calculated cash billings to increase by at least 12% sequentially.
- Q1 2024 revenue forecasted to be between RMB1.64 billion and RMB1.67 billion.
- The company plans to maintain user growth and marketing expenses at or below 2023 levels.
- Gross margin expected to remain flat in Q1 but improve throughout the full year of 2024.
- Operating margin and profitability projected to continue their upward trend.
Bearish Highlights
- Cost of revenues increased by 36% year-over-year to RMB275 million in Q4.
- General and administrative expenses increased by 13% year-over-year to RMB812 million in 2023.
Bullish Highlights
- Sales and marketing expenses decreased by 36% year-over-year to RMB433 million in Q4.
- Adjusted operating margin improved significantly, from 12.5% in 2022 to 27.5% in 2023.
- The blue-collar business segment showed healthy growth, with revenue up by 32% year-over-year.
Misses
- There were no specific misses reported in the earnings call.
Q&A Highlights
- The company emphasized its commitment to increasing the paying ratio and average revenue per user (ARPU).
- Plans for overseas expansion focus on mature markets with clear legal frameworks and a strong customer base.
- Kanzhun Limited highlighted its cash allocation priorities, with future development and shareholder returns at the forefront.
- The importance of AI investment was discussed as a means to enhance the recruiting process.
Kanzhun Limited's robust financial performance in the fourth quarter and the fiscal year 2023 demonstrates the company's strong market position and operational efficiency. With a clear strategy for growth and shareholder returns, Kanzhun is poised to maintain its momentum in the coming quarters. The company's focus on AI investment and international expansion, particularly in the blue-collar sector, indicates a forward-thinking approach that could further solidify its competitive edge. As Kanzhun continues to execute its strategies, investors and stakeholders can anticipate the company's sustained commitment to delivering value.
Full transcript - Boise Inc (BZ) Q4 2023:
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Kanzhun Limited Fourth Quarter and Fiscal Year 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Wenbei Wang, Head of Investor Relations. Please go ahead, ma'am.
Wenbei Wang: Thank you, operator. Good evening, and good morning, everyone. Welcome to our fourth quarter and full year 2023 earnings conference call. Joining me today are our Founder, Chairman and CEO, Mr. Jonathan Peng Zhao; and our Director and CFO, Mr. Phil Yu Zhang. Before we start, we would like to remind you that today's discussion may contain forward-looking statements, which are based on management's current expectations and observations that involve known and unknown risks, uncertainties and other factors not under the company's control, which may cause actual results, performance or achievements of the company to be materially different. The Company cautions you not to place undue reliance on forward-looking statements and do not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and the reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. In addition, a webcast replay of this conference call will be available on our website at ir.zhipin.com. With that, I will now turn the call to Jonathan, our Founder, Chairman and CEO.
Jonathan Peng Zhao: [Foreign Language] Hello, everyone. Welcome to our fourth quarter and full year 2023 earnings conference call. On behalf of the company and our employees, management team and the Board of Directors, I would like to express our sincere gratitude to our users and investors, who trust and support us. [Foreign Language] First, I would like to share our performance with you. In the fourth quarter, the company achieved our calculated cash billings of RMB1.78 billion, up 61% year-on-year and 9% quarter-on-quarter. Our GAAP revenue reached RMB1.58 billion, up 46% year-on-year and remained flattish with last quarter. Our adjusted net income, which excludes share-based compensation expenses was RMB630 million. [Foreign Language] In the fourth quarter, the average verified MAU of the BOSS Zhipin app reached 41.2 million, representing a 33% year-on-year increase. In the fourth quarter, we noted an improving ratio between the demands from active enterprise users and supplies from job seekers. We also noticed continued steady recovery of medium and the large scale enterprises since the third quarter. All of which contributing to our cash billings, GAAP revenues and profit levels in the fourth quarter to exceed our expectations. [Foreign Language] Let's take a look for the full year of 2023. The Company achieved calculated cash billings of RMB6.69 billion, up by 45% year-on-year, and the GAAP revenue of RMB5.95 billion, up by 32% year-on-year. Excluding share based compensation expenses, the adjusted net income for the year reached RMB2.16 billion. [Foreign Language] Furthermore, excluding other income, such as wealth management income, adjusted operating income for 2023 was RMB1.64 billion, reflecting our remarkable 191% year-on-year increase. This resulted in a 27.5% adjusted operating margin underscoring the company's robust profitability capability. [Foreign Language] In 2023, we attracted more than 49 million newly added verified users, representing the largest annual growth in user base since the company's inception. This year, the number of users we serve has increased by nearly half of 100 million and we are being able to help them with our products, which we are quite deeply proud of. [Foreign Language] As of December 31st, 2023, the Company has served a total of over 178 million individual users and 13.3 million enterprises. The average verified MAU on the BOSS Zhipin app was 42.27 million in 2023, representing a year-on-year increase of 47%. Approximately 1.5 billion mutual achievements between job seekers and recruiters has been accomplished on our platforms throughout the year. [Foreign Language] In 2023, the number of paid enterprise customers increased by 44% year-on-year to 5.2 million. Moreover, both the number of paid enterprise users and the paying ratio of active users continued to achieve record high. [Foreign Language] As the company continues to expand our user coverage, both the user and revenue structure undergoes constant evolution, highlighted by the following key points. First, in 2023, the scale of newly added blue-collar users matched sales of the white collar users with revenue contribution of the whole year from blue-collar users exceeding 34%. Second, revenue contribution from second and the lower tier cities exceeded 50%, a five percentage point increase year-on-year. Third, revenue contribution from enterprises with less than 100 employees also increased by more than five percentage points year-on-year. [Foreign Language] All these changes further demonstrated that we are confident that our product can serve different users and also our service can cover different kind of users. [Foreign Language] This is mainly based on the down to earth research on actual detailed needs from different kind of users and our continuous efforts in technology investments. [Foreign Language] In January this year, our company's proprietary big model, which we named it big large language model, which is believed to be the first large language model designed specifically for the recruitment industry, has successfully completed its online registration for generative artificial intelligence. The effect of this model has reached the industry leading level on some public benchmarks and has gradually been applied in some recruiting and job seeking scenarios. For example, for those young entrepreneurs, who are starting up their companies, we provide them with rapid job posting function and for those young people or fresh graduates, job seekers we provide we provide them with resume polishing functions, et cetera. [Foreign Language] The company's investment in AIGC mainly focus on two principles. First, we keep track of the cutting-edge technology to avoid generational gaps in knowledge. Second, focus on industrial implementation and not make big investments blindly. [Foreign Language] Next, we will briefly update the situation for this spring. Following the spring festival, the Company's various user metrics continue to hit historical highs with the peak DAU on the BOSS Zhipin app approaching 70 million, for example. From those data, we also identified several characteristics, which are notably different from the same period last year, including the following keywords. [Foreign Language] First recruiters, since the Spring Festival, the daily average number of newly posted job positions and active job positions have both reached historical highs compared with the same period in the previous years. The daily average number of active job positions increased by 20% year-on-year. [Foreign Language] The second keyword is large enterprises. Since Spring Festival, the average daily active position from enterprises with more than 10,000 employees increased by 24% compared with the same period of 2023. [Foreign Language] The third keyword is industry. The daily average number of newly added job positions and active job positions across all industries has shown positive growth since this year's spring festival compared with the same period of 2023, among which the blue-collar industry has once again reached a new record high, driven by the continuous expansion of urban service sector. [Foreign Language] Additionally, the manufacturing and the supply chain logistics sectors have shown accelerated year-on-year growth rate. [Foreign Language] Within the white-collar industry, sectors such as consumer goods, medical equipment, automotive and advertising, and media are leading the growth. [Foreign Language] The fourth keyword is business. There has been a noticeable shift in the types of job positions compared with last year. The positions focusing on the development and growth of the enterprise business such as sales guides, human resource services, finance and related positions have experienced a clear rebound in growth rate. [Foreign Language] So we anticipate our quarter-on-quarter increase in both cash billing and debt revenue for the fourth quarter. [Foreign Language] I'm pleased to announce the company's Board of Directors approved a new share repurchase plan today upsizing to repurchase up to $200 million of the company's shares over the next 12 months. This marks our third share repurchase plan alongside the $80 million special cash dividend issued in last November, demonstrating the management's commitment and sincerity towards long-term shareholder returns. [Foreign Language] That concluded my part of the call. I will now turn it over to our CFO, Phil, for the review of our financials. Thank you.
Phil Yu Zhang: Thanks, Jonathan. Hello, everyone. Now let me walk through the details of our financial results of the fourth quarter and full year of 2023. We are pleased to deliver a strong set of results for the fourth quarter and the full year 2023. For the fourth quarter, our calculated cash billings reached a historical high of RMB1.8 billion, grew by 61% year-over-year, and notably, 9% quarter-on-quarter, beating our expectations. Revenues increased by 46% to RMB1.6 billion compared to the same period last year and stayed relatively stable sequentially due to the lower seasonality confirmed our observation of a gradual recovery, especially at medium and large size companies, revenue contribution from key accounts and their ARPU also recovered sequentially in this quarter. For the full year of 2023, our calculated cash billings and revenues increased by 45% and 32%, respectively. Number of paid enterprise customers reached $5.2 million in 2023, up by 44% year-over-year, marking another new high level of paying ratio among active enterprise users and demonstrated our ample space and flexibility in monetization. Moving to the cost side, total operating costs and expenses decreased by 4% year-over-year to RMB1.4 billion in the fourth quarter and increased by 16% year-on-year to RMB5.4 billion in 2023. This year we managed to achieve a robust user growth while still seeing margin expansion. The annual adjusted operating margin improved from 12.5% in 2022 to a record level of 27.5% in 2023, up by 15 percentage points. Cost of revenues increased by 36% year-over-year to RMB275 million in the fourth quarter, and 40% year-over-year to RMB1.1 billion in 2023. This increase was primarily driven by increased server and bandwidth costs and payment processing costs, in line with the growth of user engagement and transactional gross volume. Our sales and marketing expenses decreased by 36% year-over-year to RMB433 million in the fourth quarter as we didn't have similar marketing campaigns like 2022's FIFA World Cup sponsorship in the year and remained stable with last year at RMB2.0 billion for the full year of 2023. Even excluding the World Cup sponsored fees, adjusted sales and marketing expenses as a percentage of revenue went down by seven percentage points this year compared to 2022. When at that time, we could only have a user growth of half of the year. This proved the effectiveness of our marketing strategy, which emphasizes more towards branding campaigns. Our R&D expenses increased by 46% year-over-year to RMB430 million in the fourth quarter and 31% year-over-year to RMB1.5 billion in 2023. Excluding share-based compensation expenses, adjusted R&D expenses increased by 62% year-over-year to RMB316 million in the fourth quarter and 25% year-over-year to RMB1.1 billion in 2023. This increase was mainly driven by our further investments in talents and AI technology developments, which incurred AI-related server and cloud service fees. Our G&A expenses decreased by 9% year-over-year to RMB225 million in the first quarter, and increased by 13% year-over-year to RMB812 million in 2023. Excluding share-based compensation expenses, adjusted G&A expenses decreased by 32% year-over-year to RMB122 million in the first quarter and 8% year-over-year to RMB482 million in 2023, mainly due to decreased professional service fees. Our net income was RMB331 million in the fourth quarter and RMB1.1 billion in 2023 full year. Adjusted net income increased from RMB59 million in the first quarter of 2022 to RMB629 million and increased from RMB799 million in 2022 full year to RMB2.2 billion for full year 2023, representing a significant year-over-year increase. Adjusted net margin for the full year of 2023 reached a record high of 36.2%, up by 18.5 percentage points. Net cash provided by operating activities was RMB927 million for the fourth quarter and RMB 3.0 billion for the full year of 2023. As of December 31st, 2023, our cash and cash equivalents, time deposits and short-term investments totaled RMB12.9 billion and long-term investments in fixed rate notes and wealth management products were RMB2.3 billion. With our commitment to share our success with shareholders and supported by our robust cash reserve, we paid a cash dividend of RMB563 million in December 2023. Additionally, our Board has repurchased program over the next 12 months and upsized the program to $200 million, demonstrating our strong commitment to shareholder returns. And now for our business outlook. We have seen encouraging trend of recovered recruitment demand post-Chinese New Year and we are confident to deliver better than expected results for the current quarter. In the first quarter of 2024, we expect our calculated cash billings to increase sequentially by at least 12% and revenues to be between RMB1.64 billion and RMB 1.67 billion with a year-over-year increase of 28.3% to 30.7%. With that, that concludes our prepared remarks. And now we would like to answer questions. Operator, please go ahead with questions.
Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Eddy Wang from Morgan Stanley (NYSE:MS). Please go ahead.
Eddy Wang: [Foreign Language] Thank you for taking my question. My first question is about this recruitment demand situation after the Chinese New Year. Can you give us more details in terms of the different sub-industries by different enterprise sizes, this supply demand situation compared with last year? And my second question is, what's your forecast or expectation for the revenue growth of the company for this year? Thank you.
Jonathan Peng Zhao: [Foreign Language] Thank you for your question. Regarding the first question, we are not supposed to comment on the entire job market, but we -- as a platform, we have our own data, and as one of the players, we would like to share with you our observations. First is about the enterprise side, which we have witnessed year-on-year growth from the enterprise side higher compared to the job seekers side, which result in the ratio between job seekers and enterprise users continued to improve. I have been within this industry for quite a long time and any -- within any detailed industries, the ratio between enterprise users and job seekers -- its relative balance has been quite significant to me. Since the Spring Festival this year, my observation is that the ratio between enterprise users and job seekers, it has been balancing -- rebalancing towards a relatively normal situation. [Foreign Language] Regarding whether the enterprises have restored the confidence for the markets and for the future, the data we just mentioned is that both newly posted jobs and online active jobs have reached record new high and very significant year-on-year growth. [Foreign Language] And to share with you some detailed trend on particular sectors. For example, for manufacturing workers, logistics, urban service related blue-collar sectors have recovered quite well after the Spring Festival. [Foreign Language] Another angle is that, for those cities along the sea, which is more externally related economics shows better user growth after the Spring Festival. So which implies the manufacturing related to export have been performing quite well recently. [Foreign Language] Another observation we shared, we discussed about last spring is that the small and micro companies recovered much better after the Spring Festival last year. However, this year, the larger companies they have postponed a recovery trend. However, this year, as we just said, enterprises with more than 10,000 companies, employees grow much better compared to those medium-sized enterprises. And this situation has been started since August last year and continued after the Spring Festival, which shows the continuity of the white-collar recovery. [Foreign Language] Regarding your second question for our outlook for this year, I would -- starting with reviewing for the performance for last year. So since the beginning of 2023, what we witnessed is that we have seen improvement sequentially from Q1 to Q4 until Q1 this year for the consecutive five quarters. [Foreign Language] And that observation has been proved by our quarter-on-quarter sequential growth data. And we hope that the trend can continue within this year. And for the first quarter this year, as Phil just discussed, we are expecting our calculated cash billings have at least 12% of quarter-over-quarter growth compared to the fourth quarter last year. [Foreign Language] And given my experience and observations for the operation, I'm pretty sure that in the second quarter, we will continue to have sequential growth. [Foreign Language] And that concludes my answer to your questions. Thank you.
Eddy Wang: [Foreign Language]
Operator: Thank you for the questions. Our next question comes from Timothy Zhao from Goldman Sachs (NYSE:GS). Please go ahead.
Timothy Zhao: [Foreign Language] Thank you management for taking my questions and congrats on the very strong results. I have two questions here. First, we noticed that some of our competitors have increased marketing spending post-Chinese New Year. Could management share your strategy for this year's user growth and marketing campaigns? Have you observed any incremental change in the competitive landscape? And second question is your outlook regarding this year's operating expenses as well as profitability margin? Thank you.
Jonathan Peng Zhao: [Foreign Language] Thank you for your question. Regarding the competitive landscape, yes, we have noticed that the newly published third-party data and we are quite aware of our own data, which we -- the conclusion is that we don't notice any fundamental changes regarding the competitive landscape. And for some of our peers, who increased their investment in marketing after Spring Festival this year, because some of them are not public companies, we cannot have their data. But I have been within this industry for a long term, so I know that because there are some signs of improvement from the revenue side, then people are willing or more willing to invest in the marketing to spend more, which I believe is a reasonable explanation and also conquered and echoed by our own data. So this is actually a positive sign for me because not only us, but the whole industry is recovering or moving up. So we are not the only duck within a warming water. And for our user growth target, we are still targeting for at least 40 million newly verified users this year, because as you said, our peers have increased their investment or marketing. So I will not discuss too much on the details. But I can guarantee you that we will still spend money reasonably. I don't have the feeling to increase a lot of our marketing expenses. It's not actually necessary. So we will spend reasonably -- in a reasonable range. But at the same time, we will maintain our strong competitive edge in terms of user penetration, in terms of market share and the whole leading position. And that's the answer to your first question.
Phil Yu Zhang: So regarding the user acquisition, so definitely there will be expenses. So simply speaking, we would like to keep our user growth at still at a quick or fast pace, but meanwhile, we would like to keep selling marketing as a percentage of revenue at the most flat or in better scenario would be slightly lower than 2023. So this selling marketing percentage of revenue. So regarding the gross margin trend, in short-term, due to seasonality, Q4 is low quarter. So gross margin was affected slightly. So, Q1, the gross margin to be flat. And this is mainly because of the high online revenue contribution, which involves higher payment processing fees in the short term. But for the full year of 2024, we would like to see gross margin improvement mainly due to the leverage from personnel costs backed by quick revenue growth. So basically, simply speaking, gross margin to be further improving in 2024, as I just mentioned, selling and marketing expenses. So rest of other items like R&D and G&A, we won't expect to increase these expenses aggressively. So operating margin on bottom line to continue seeing uptrends. So basically, we would like to keep our -- most of the costs or expenses lines in a self-disciplined manner. So therefore we can leverage, driven by our faster business or revenue growth for the full year.
Jonathan Peng Zhao: [Foreign Language] And that concludes our answer to the questions. Operator, let's proceed to the next question.
Operator: Thank you. One moment for the next question. Our next question comes from the line of Yang Bai from CICC. Please go ahead.
Yang Bai: [Foreign Language] My first question is, what's the company's strategy of commercialization this year? And what are the expected trends in the payment ratio at ARPU? My second question is what's the progress of the company's blue-collar business? And what are the future planning directions for the blue-collar sector? Thank you.
Phil Yu Zhang: Okay. So I'll answer the first question regarding the monetization or commercialization for our business. So we just reported that for the latest quarter, there was 5.2 million trailing 12 months paid enterprise customers. So this was a historical high. Regarding our commercialization, there were two components. One is payment ratio another is ARPU. So we expect that the paying -- in terms of the paid enterprise customers, in 2024, so we would like to continue to see the growth of the paid enterprise customers sequentially. And in terms of their ARPU, the blended ARPU in the last quarter looked dropped a little bit. This is mainly because of the contribution from small and medium-sized enterprises. Their revenue contribution is bigger because of the fast growth from SME companies. And the blended effect makes the blended ARPU dropped a little bit. But if you look at small and medium-sized accounts and the key accounts separately, you would like to see both of them, their ARPU increased in the last quarter. So their ARPU are all increased respectively. And in terms of the paying ratio, compared with 2023, the overall paying ratio increased by three percentage points. At this moment, the paying ratio for the platform is still at a low level. So we believe there would be still a good room to grow. So it will take several years to gradually increase the paying ratio for us. And in short term, the paid enterprise customers growth mainly comes from the user growth. And as we just mentioned, our marketing strategy, so basically, in this year, we will still continue to acquire users and at a very quick or faster pace. So basically that will contribute us with new users, new business users, new enterprise -- paid enterprise customers. And for the longer term, we expect paying ratio to continue to grow. And the recovery from large enterprises, as Jonathan just mentioned, definitely will increase their ARPU. So paying ratio increase and ARPU increase, those two parts have good potentials -- will support our long-term growth with our commercialization.
Jonathan Peng Zhao: [Foreign Language] I will briefly talk about the blue-collar business. So our blue-collar business has experienced continued healthy growth. So a data point to support that, which is our revenue grew by 32% year-on-year. However, the revenue contribution from blue-collars goes up by 66 percentage points from 28% to 34%, which is a very powerful demonstration of the good performance of our blue-collar business. And there are four detailed sectors within blue-collars, which are urban service, manufacturing, construction and warehousing and logistics. Every subsector numbers of users have is less than white collars. However, combined together, they are quite considerable amount. So we need to better serve them. Within urban service sector, we have been doing well. We have good recognition and reputation. So we also made some money from there. Within manufacturing, we are still under very hard exploration, which actually it has been going for a while. We talked about there are four players within manufacturing equipment business, which are the factories, which is employers, the workers, the agents, the offline agents, which -- who have been playing there for a long time. And the last one is the platform. So the game is that in a considerable long term -- longer term, within those four parties, among two or three of them, there have been contradictory situations. So actually it's a zero-sum game. But we have been the hard sorting -- exploring for quite a long time and we made some progress. And also the industry situation for manufacturing in the past two or three years has been quite different from the previous period, so we will continue to work on that area. So that's my update on our progress on blue-collar business. And that concludes our question for CICC. And operator, let's move to the next question.
Operator: Certainly. The next question comes from the line of Robin Zhu of Bernstein. Please go ahead.
Robin Zhu: [Foreign Language] So two questions please. One, it's good to see management raised the buyback for the coming year. I was hoping that you could share some thoughts on capital return policy going forward and the monthly pace of buybacks. Given there's almost $2 billion of cash on the balance sheet, will the company commit to a systematic capital return program going forward as revenue and cash flows grow? Second, I'm keen to hear management talk about future product development and specific ways the company could leverage AI to capture more value and profit in the recruiting process. Also, love an update on overseas expansion if management has any new thoughts or concrete plans. Thank you.
Jonathan Peng Zhao: [Foreign Language] Okay. Thank you for your question. So regarding the cash allocation, so it's actually to make the best arrangement, optimize the allocation of company's capital and continue to increase shareholder return is a duty for any public company, any management of the public company and the CEO of any public company, our pursuer and our duty. And we have roughly, as you said, RMB15 billion cash on hand. So for me, the priority to use this cash, there are priorities, the top priority will always be, we will use our money for future development, for user growth, to expand our advanced model to more user groups, to more industries, areas and countries to initiate our business. [Foreign Language] And the second priority is to provide shareholder return. We are currently exploring possibilities following our initial special cash dividend last year to pay cash dividend continuously in the future. [Foreign Language] And the last one from share repurchase perspective, so we just approved $200 million new repurchase program. So we -- that's what we have been doing and we will continue to do. So we want to utilize this share buyback program to guarantee our shareholders -- their shareholding percentage. And in the future, we will coordinate between all these several methods or several ways to provide the best return to our shareholders. [Foreign Language] And from the AI investment, our policy, like we just discussed, first is to keep up with our latest leading technology and teams to avoid any knowledge gap generational gap compared with the first-tier teams. And secondly is, we will continue to pursue the industrial implementation and not to blindly investment to compete with chips, compete with spending of electricity powers, which is not worthwhile. We will spend our money cleverly. [Foreign Language] Regarding the opportunity that AI has brought about for our company and for our industry, I would like to share with you one of my understandings, which is, if something, if development cannot proceed without artificial intelligence, without AI, then we need to invest that. So if something can function quite well even without AI then we should be very cautious on the investment. That's the distinguish between whether we should spending more from an industrial perspective. [Foreign Language] And about the overseas business, which many of the investors may concern, our policies are also quite clear. First is we will go overseas to make money. Second, so we want to make money from wealthy people. Third, the recruitment and job-seeking business is quite serious. It's regarding the power and protection of job seekers, so which has quite high requirement for the local labor law. And fourth, yeah, so based on those requirements and considerations, we will invest in the top like five or six GDP countries or areas, where the legal environment are quite clear and mature and the enterprises are used to pay for services. And all those traditional business models can make good money. So those are quite clear. We all go to mature market, ancient players, good laws and wealthy people. So that's our strategies for overseas business. [Foreign Language] And for the reference and that wraps up our answers for those questions. And due to the time constraint, that will be the last question. So operator?
Operator: Thank you. At this time, I will turn the conference back to Wenbei for any additional or closing remarks.
Wenbei Wang: Okay. Thank you once again for joining us today. If you have any further questions, please contact our team directly and thank you.
Operator: That does concludes today's conference call. Thank you for participating. You may now disconnect your lines.
Wenbei Wang: Thank you. Bye, bye.
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