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The9 Limited (NASDAQ:NCTY)

Q3 2009 Earnings Call

November 23, 2009 8:00 pm ET

Executives

Phyllis Sai - IR

Xiaowei Chen - President

George Lai - CFO

Lingdong Huang - VP, Product Department

Analysts

Andrey Glukhov - Brean Murray

Dick Wei - J.P. Morgan

Analyst for Eddie Leung - Banc of America

Max Choi - Citigroup

Atul Bagga - Thinkequity

Eric Wang - Main First

Operator

Good day, ladies and gentlemen, and welcome to The9 Limited third quarter 2009 financial results conference call. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now turn the presentation over to your host for today’s conference, Ms. Phyllis Sai, IR Manager of The9. Please proceed, Madam.

Phyllis Sai

Thanks, Operator. Hello, everyone, and thank you for joining us today for The9's third quarter year 2009 financial results conference call. The management with me today are Ms. Xiaowei Chen, President, and Mr. George Lai, Chief Financial Officer. Before management begins their prepared remarks, I would like to read you the Safe Harbor Statements in connection with today's call.

During the course of today’s call, certain projections or forward-looking statements may be made regarding The9's future financial performance or future events. We wish to caution you that such statements or predictions are based on current information and expectations and actual results may differ materially from those projected in the forward-looking statements.

We would also like to refer you to the documents that the company filed with the United States Securities and Exchange Commission. Those documents contain additional information concerning factors that could cause actual results to differ materially from those contained in the management’s projection or forward-looking statements.

Now, we would like to begin with our President, Ms. Xiaowei Chen, who will give you an overview of our financial results and operational reports for the quarter, followed by our CFO, Mr. George Lai, who will give a detailed discussion of our financials. Xiaowei.

Xiaowei Chen

Thank you, Phyllis. Good day and evening, ladies and gentlemen. Thank you for participating in our discussion of The9's third quarter 2009 results.

As we mentioned in the previous quarter, we ceased the World of Warcraft, or WoW operation, upon expiration of the license in June and we had cautioned you that our revenue had significantly declined since the cease of WoW operations. In the third quarter of 2009, our net revenue decreased by 91% quarter over quarter and 94% year over year to $3.7 million, due to the cease of WoW operations. Although our revenue cannot be recovered from the loss of WoW within a short period of time, it is encouraging to see that there has been a 55% increase from last quarter in net revenue attributable to our current gain. This is achieved due to the enhancement of our game portfolio diversification and we will continue our intense efforts in turnaround.

In the third quarter, we had Soul of the Ultimate Nation, or SUN, Granado Espada, or GE, EA Sports FIFA Online 2, or FIFA Online 2, Atlantica, and Jiu Zhou Zhan Ji, generating revenues. On a combined basis, our commercialized games had aggregate active users of 3.4 million in the the third quarter, of which 108,000 were active paying accounts, compared with 3.2 million and 73,000 respectively in the second quarter. The quarterly ARPU of these games was RMB241, increasing from RMB221 in the previous quarter. The increased active users and active paying accounts were mainly contributed by Jiu Zhou Zhan Ji and SUN World Edition.

Now let me go over some highlights of our game development and operations during the third quarter. On the research and development side, we continued to increase our investments in R&D for our own proprietary gains. As of the end of third quarter, we had 330 headcounts in The9 development center, or TDC, representing a 10% increase from the previous quarter. We expect this number will continue to grow to 350 by the end of this year. While we are actively extending our internal R&D team, we have also outsourced part of our R&D work to talented external developers, which we believe is an efficient way to accelerate the pace of our game development.

During the third quarter, Jiu Zhou Zhan Ji, our first web based card playing game under the background of the spring and autumn warring period in Ancient China, continued to perform well within the web based game sector. Currently, we have 18 official service sites for this game on our own and 20 other service sites by partnership, compared with seven official service sites and 15 partnership service sites in the previous quarter. We will continue to open new service sites for this game.

Also, we have cooperated with a local game operator to operate a web-based game named Business Tycoon, since September 18th. Currently, four server sites have been opened for this game and we expect it can start to generate revenue in the fourth quarter. We will continue to explore business opportunities to cooperate with other web-based game operators. Besides Jiu Zhou Zhan Ji I mentioned above, we now have a number of proprietary games, including Road Fighter, Tiny Tribe, Miracles Ultimate X, Monster of War, and other MMORPGs, casual games, and web-based games in our development pipeline.

For Road Fighter, our first in-house developed 2D action MMORPG with the historical background with the historical background of the three kingdoms, we have the third round internal alpha testing during August 10th to September 14th and the next round closed beta testing was just started yesterday. We now continue to work on polishing the game to prepare for its open beta testing.

Miracles Ultimate X is our first in-house developed 3D MMORPG with three years of dedicated work. Miracles Ultimate X creates a fantasy world with high quality graphics and fluid movements. We conducted an internal alpha testing on September 14th which lasted for three weeks and currently we are enriching the game content by expanding maps and increasing missions. We expect to conduct further testing in order to create the best game quality before its rollout.

We also made progress recently in another proprietary game, Tiny Tribe, or [inaudible]. We started our internal alpha testing on October 28th and which ended successfully on November 11th. Tiny Tribe is a casual action game with adventures and puzzles in a fantasy world, an integrated avatar system allows the players to buy virtual items to decorate their characters and customize their own unique outlook. Moreover, an embedded map DIY system allows game players to create their own game maps to add to the playability of the game. We are now preparing for its closed beta testing.

Monster of War, a 3D realtime strategic RTS online casual game is currently under preparation for server construction. It combines elements of Chinese chess and realtime strategy console game. The internal beta testing will soon be conducted.

Other than the above in-house developed games, we are continuing investments into game studios with the aim of strengthening our game pipeline. Besides our [Hungzho] and [Nanjing] game studios, we made two more investments in game studios located in Shenzhen and [Chengdu] during the third quarter.

All our four game studios, including [Hungzho], [Nanjing], Shenzhen and [Chengdu] are working on 2.5D to 3D MMORPG projects. The development teams of these game studios all have solid background and experience in game development fields.

Let's move to our license games. Stimulated by the launch of SUN World Edition on June 22nd, and the opening of new servers, SUN experienced a performance rebound in the third quarter, increasing virtual items and various in-game campaigns boosted the number of SUN's paying users and thus enhanced its revenue in the third quarter. Furthermore, we released a content upgrade and a [inaudible] security system for SUN on September 23rd. Also, another new server site was opened on September 29th. Currently, SUN has 9 server sites in total.

For GE, content upgrade V3.14 was released on September 10th. We opened registration service for GE subscription based server sites with RMB61 monthly packages on September 14th and this new server site has entered its commercialization since October 26th. Up to date, GE has three categories of servers, including subscription based, item based, and [free charge] service where players can experience different game patterns ranging from its simplified mode, localized version to the latest updated content synchronized with the version in Korea.

For FIFA Online 2, we are currently organizing various campus campaigns and holding a large scale game champion tournament to gain more student players. To further enhance stickiness of the game and increase the interaction between individual players, a content upgrade was released on September 3rd which allows players to team up as leagues to score on the built-in billboard and work out their own champion league. Another content upgrade which introduces certain Chinese soccer stars into the game is now under preparation and is expected to be launched by the end of this year. We believe the continuous marketing activities and content updates will increase its growth in 2010, year of the next World Cup.

For Atlantica, we released a content upgrade named Expedition to North America with new maps, virtual items, and missions on September 9th. A large scale expansion pack was released on September 28th, increasing three advanced mercenaries, dungeons, and missions. Currently, we are closely working with a Korean developer to further improve Atlantica's operating system by lowering its hardware requirement and we believe that it will help us to promote this game in lower tier cities.

Last but not least, our two important licensed games in the pipeline, Audition 2 and Kingdom Heroes 2 Online, the 3D MMORPG we licensed from User Joy in July this year, are both in good progress for preparation and localization.

Given our more and more mature R&D capability through our continuous effort in proprietary game development and investments in talented game studios, along with our strong licensed game operation experience and pipeline, we strongly believe The9 will recover from the challenging time and continue to bring the best game titles to Chinese game players.

Now let me turn over the call to George, our CFO. George will provide you with a more detailed discussion on our third quarter financial results. George.

George Lai

Thank you and hi, everyone. I will now take you through an overview of our third quarter 2009 financial results.

For the third quarter of 2009, our total net revenues were $3.7 million), which decreased by 91% compared to $42.2 million in the second quarter of 2009 and decreased by 94% compared to $59.8 million in the third quarter of 2008. The decrease was mainly due to the expiration of our license agreement to on June 7, 2009 and no revenue was generated from WoW during the third quarter.

In the third quarter of 2009, net revenues attributable to the operations of non-WoW games increased by 55% quarter-over-quarter in the third quarter of 2009. The sequential increase was mainly due to the increase in SUN's revenue after the launch of new content upgrade and a theft-proof security system, and a complete quarter revenue contribution from FIFA Online 2, Atlantica and our first web-based game, Jiu Zhou Zhan Ji.

Aggregate active users increased by 6% to 3.4 million quarter-over-quarter in the third quarter, which was contributed by Jiu Zhou Zhan Ji. The aggregate active paying accounts increased by 48% to 108,000 quarter-over-quarter in the third quarter, which was mainly contributed by SUN's improved performance this quarter. The quarterly ARPU ser was RMB240, compared with RMB221 in the previous quarter.

Gross loss for the third quarter of 2009 was $1.2 million, compared to gross profit of $9.4 million in the second quarter of 2009 and gross profit of $23.9 million in the third quarter of 2008. The gross loss in this quarter was mainly because the revenue scale in the third quarter was not sufficient to cover the fixed components in costs of services, including server depreciation, license fee amortization and payroll.

For the third quarter of 2009, operating expenses were $16 million, representing a 28% decrease from $22.3 million in the second quarter of 2009 and a 6% increase from $15.1 million in the third quarter of 2008. The quarter-over-quarter decrease is mainly due to the decrease of sales and marketing expenses in the third quarter because no new games were launched during the third quarter, and a slight decrease in product development costs due to the netting-off effect of the restructuring of our Beijing team and increased headcount in our team in Shanghai, partly offset by an increase in general and administrative expenses, which was mainly due to the increase in share-based compensation expenses in relation to a modification of stock option exercise price and an increase in legal fees.

The year-over-year increase in operating expenses was mainly due to an increase in product development costs caused by the expansion of our research and development team and an increase in general and administrative expenses caused by the increased share-based compensation.

Interest income for the third quarter of 2009 was $1.1 million, compared to $1.0 million in the second quarter of 2009 and $2.3 million in the third quarter of 2008. The year-over-year decrease was mainly due to a reduction in bank interest rates and a decrease in cash balances compared with the same period last year.

Other income for the third quarter of 2009 was $8.2 million, compared to other income of $0.02 million in the second quarter of 2009 and other income of $1.6 million in the third quarter of 2008. The quarter-over-quarter increase of other income was primarily due to a one-off government subsidy amounting to $7.9 million received in the third quarter of 2009, while no such income was received in the second quarter of 2009. The year-over-year increase was mainly due to an increase in government subsidy of $6.2 million.

Income tax expense for the third quarter of 2009 was $0.7 million, mainly representing the tax effect of the one-off government subsidy received during the third quarter, compared to income tax expenses of nil in the previous quarter and income tax expenses of $0.9 million in the third quarter of 2008.

In the third quarter of 2009, we recognized an impairment loss on investment of $1.8 million, while there were no such impairment losses in the previous quarter or in the third quarter of last year. The impairment loss was recognized after an impairment review on our equity investment in a Singapore online game operator. This investment has been marked down to its estimated fair value as of the quarter end.

For the third quarter of 2009, net loss attributable to ordinary shareholders was $10.8 million, which decreased by 7% from net loss attributable to ordinary shareholders of $11.6 million in the second quarter of 2009 and compared with net income attributable to ordinary shareholders of $11.8 million in the third quarter of 2008. The change in net income was a result of the cumulative effect of the foregoing factors.

Fully diluted loss per share and per ADS for the third quarter of 2009 was $0.43, compared with fully diluted losses per share of $0.46 in the second quarter of 2009 and fully diluted earnings per share of $0.43 in the third quarter of 2008.

For the third quarter of 2009, non-GAAP adjusted net loss was $4.3 million compared with non-GAAP net income of $0.5 million for the previous quarter and $26 million for the same period of last year. Fully diluted non-GAAP adjusted net income per share was $0.17, compared with fully diluted non-GAAP adjusted net income per share of $0.02 for the second quarter of 2009 and $0.94 in the third quarter of 2008.

So thank you for listening to our presentation today. At this point, we will take questions. Thanks, Operator.

Question-and-Answer Session

Operator

(Operator Instructions) Andrey Glukhov, Brean Murray.

Andrey Glukhov - Brean Murray

I guess two questions -- first, as far as some of the high profile titles in your pipeline, like Edition 2, like Miracle Ultimate X, can you guys give us a little bit more I guess color and precision as to the sort of exact launching dates that you expect for them next year?

Xiaowei Chen

Thanks for your question. We would caution against using any dates as a benchmark because especially for MUX, which is developed by our own R&D team -- at the same time that our entire team is striving to make the game as early as possible and as ready as possible, we do not want to give any specific dates. Let me just say that we are now preparing for its first internal beta testing, or alpha beta testing.

Audition 2, we believe our Korean partner, T3, is preparing for its own rollout in Korea and based on the timing of the Korean rollout, we will schedule our Chinese alpha testing and beta testing according to their schedule.

Andrey Glukhov - Brean Murray

And then George, do you have a cash flow from operations number for us for this quarter?

George Lai

Net cash outflow from normal operating expenses for this quarter was $14.6 million.

Andrey Glukhov - Brean Murray

Okay, is that a reasonably good proxy for cash flow for the next couple of quarters?

George Lai

We do not provide a cash flow forecast going forward.

Andrey Glukhov - Brean Murray

Thank you.

Operator

Your next question comes from the line of Dick Wei with J.P. Morgan.

Dick Wei - J.P. Morgan

First question is can you rank the revenue size for each game against -- for the third quarter, which is the biggest and if you can rank that, that would be great. Thanks.

Xiaowei Chen

Thank you for your question. At this point, we do not break out revenue and quite frankly, the revenue for this quarter is very low. We are striving towards increasing the revenue by A, launching more new games in the coming quarter successfully and B, increasing the performance of our current games. So at this point, I think we should focus on that and we regret again not breaking out our revenue by individual games.

Dick Wei - J.P. Morgan

And then what about I guess Kingdom of Heroes Online 2 -- any update on the launch date?

Xiaowei Chen

For Kingdom of Heroes Online 2, we most recently submitted the application materials to the relevant government authorities and we are waiting for its approval. We hope that once we got the approval, we will be -- most likely next year, we will be able to start internal testing and later open beta tests. We are currently preparing for the games localization because the game itself is in so-called complicated characters. And we need to simplify the characters -- that is one of the localization work that we need to do but there are many aspects of localization work that we need to do. So we are in very intense preparation period and we hope to be able to start internal testing sometime next year. We are sorry that we cannot give you a more specific date yet.

Dick Wei - J.P. Morgan

Thanks, and my last question is what were the changes to the employee stock option plan, if you can give some highlights, that would be helpful.

George Lai

We modified the exercise price of the stock option so accounting wise, it will create a one-off accounting expense, which is non-cash, to our P&L.

Dick Wei - J.P. Morgan

Okay, great. Thanks a lot.

Operator

Your next question comes from the line of Eddie Leung with Banc of America.

Analyst for Eddie Leung - Banc of America

This is Thomas on behalf of Eddie. Just a few questions -- will you give us some color on the government subsidies? Will there be any in the fourth quarter? And with regard to the impairments loss of investments, should we expect anymore happening in the fourth quarter? That's my first question.

George Lai

For the government subsidy, it is a one-off event and we cannot expect such subsidy to be received going forward. But of course, it is possible that if the government provides a subsidy in the future, it will be helpful to us.

Analyst for Eddie Leung - Banc of America

And with regard to the impairment loss on the investments, should we expect anymore happening in the fourth quarter?

George Lai

This is not a very easy question to answer at this point of time because you know, in Q4 we will perform a full audit for the whole year so the -- I cannot give you a concrete answer for now because we need to discuss with our auditors before that.

Analyst for Eddie Leung - Banc of America

I see. And my second question is can you give us some color on the number of promotional staff in the third quarter and what is your target by the end of this year? Thanks.

Xiaowei Chen

By promotional staff, you mean --

Analyst for Eddie Leung - Banc of America

[inaudible]

Xiaowei Chen

Right -- we have largely outsourced our ground promotion function so technically speaking, there are only a number of management team members for ground promotion. The actual team members are actually all outsourced staff, so they don’t count as headcounts within The9.

Analyst for Eddie Leung - Banc of America

And with regard to the revenue contribution from tier one and lower tier cities, would you give us some color on that in the third quarter and the previous quarter? Thank you.

George Lai

We do not have this type of an analysis.

Xiaowei Chen

But I do think you asked a very good question, because previously The9's revenue almost disproportionately came more from bigger cities and on coastal cities and less from lower tier cities and inland cities. I think that with the games that -- especially with the upcoming games that we are self-developing, they have culturally probably more attuned to also lower tier cities and also hardware size, the requirement may not be as high as before. We do expect proportionately more revenue coming from lower tier cities and inland cities, so you did ask a very good question. Thank you for that.

Analyst for Eddie Leung - Banc of America

Thanks. I will get back to the queue.

Operator

Your next question comes from the line of Max Choi with Citigroup.

Max Choi - Citigroup

I have two questions -- question number one; do you think you will still experience a gross loss next quarter? If so, when do you expect revenue to improve significantly that will cover all your cost of revenues? Thanks.

Xiaowei Chen

Even though we do not provide quarterly forecasts, it is pretty foreseeable that our quarter, we will experience a net income loss. At the same time, we do think that our -- we should experience a revenue increase in the next quarter, given both the new games being launched. However, at the same time, our new game launch schedule is not for certain yet. We will hope that our current games will continue to perform better. At this point, what we can say is we hope that our next quarter we will see revenue increase but this is not for certain yet. It depends on game launch schedule, which is not for certain. However, we think that our net income loss will continue into the next quarter.

Max Choi - Citigroup

Do you think the loss will continue on to gross profit level though?

George Lai

It really depends on the revenue side. As I explained previously, our current revenue scale in Q3 is not sufficient to cover our fixed costs in the cost component, so the same logic will apply in Q4 and so it all depends on our top line effort, which we do not give a forecast.

Max Choi - Citigroup

Thanks. My second question is do you expect your selling and marketing costs for the fourth quarter to go much higher than 3Q, considering you are closing and launching the closed beta test on some of the games?

George Lai

It depends on our schedule to launch our game and we do not expect a significant increase in Q4 marketing expenses.

Max Choi - Citigroup

Okay, thanks. That's all the questions I have.

Operator

(Operator Instructions) Your next question comes from the line of Atul Bagga with Thinkequity.

Atul Bagga - Thinkequity

A couple of questions -- I know you guys don’t give the guidance for the quarter, for the year but just so we better understand, internally what is your expectation? When do you expect the company to become cash flow positive? Can we see something in 2010 or is it more like a 2011 event?

George Lai

I apologize -- we do not want to share our internal forecast for the company at this point in time because we think it is [inaudible] to focus on our internal preparation of videogames instead of making too many forecasts.

Xiaowei Chen

That said, let me add that the game business has almost intrinsic less predictability than most other businesses. The revenue top line will fluctuate significantly depending on the performance of games. Of course, when you either develop or license every game, you hope that it would become the next hit. However, sometimes they will perform out of your expectation and sometimes they will perform under your expectation and so even with our best efforts, it is very hard to predict top revenue in the line at this point given how many new games we are going to be launching next year and some of which may not have been licensed yet. So at this point, with the difficulty in predicting top line, it is very difficult to predict a cash breakeven point.

Atul Bagga - Thinkequity

And that leads to my second question -- I'm assuming FIFA is under your expectations and if that is so, can you highlight -- you talk about next year you are expecting some growth from FIFA because of 2010, you have the World Cup Soccer, but are there any lessons that you might have learned from FIFA and what could you do better with your other upcoming games like Audition 2?

Xiaowei Chen

The lessons that we have learned from FIFA is that it is actually a very different game from just about any other game we have operated or we are going to operate, such as Audition 2 because it is a very football cultured dependent game and incorporating local soccer stars or football stars is one thing that we are doing with the developer, EA and also New Wiz. And also with the 2010 South Africa World Cup, remember this is also -- the World Cup event was also what gave the South Korean market a huge boost when the game performed very well there. So I am not sure exactly whether these lessons will be shared with Audition 2. Audition 2 itself has its own features and we believe with dancing games like Audition 2, increasing its SMS platform or social networking platform we feel is probably one of the most important features that could help enhance the game's performance. So at this point, we are not exactly what can be shared but it is a good thought and we will continue to follow that thought and thank you for that.

Atul Bagga - Thinkequity

And one more question for you -- on the call, in your prepared remarks you talked about the web games and that you guys are looking for more partners. It seems like -- is this the shift in strategy for The9 looking more on the web games? If that is so, can you explain the rationale behind it? Thank you.

Xiaowei Chen

It's not that far a shift for The9 and we are still focusing on our core strategy of remaining in the Chinese gaming sector. Web games have its -- even though with its short history in the Chinese gaming industry, it has its ups and downs and ebbs and flows and we decided not to be opportunistic by entering the web game sector with a well-developed by our own R&D team and to make that game perform well, we feel that it is strongly in the games interest that we partner with other companies that has its own platforms. At the same time, we are not excluding partnering with other game operators and developers who have developed their own web based games. So it's something for us to diversify our game portfolio and revenue source and it's something for us to experiment with and it's not far diversification from our core game strategy.

Atul Bagga - Thinkequity

Thank you.

Operator

Your next question comes from the line of Eric Wang with Main First.

Eric Wang - Main First

I just have two questions -- I know that The9 does not want to share revenue guidance and quite understandable, but given the good performance of MOF since its launch and MUX, is it correct to understand that The9 can break even with just its self-developed games? I'd appreciate any color on that. And I have a follow-up question. Thanks.

Xiaowei Chen

By the time World of Fighter or -- I think that is what you meant by MOF -- WOF -- World of Fighter and MUX commercially launch, we will still have licensed games in our pipeline and our goal is that both our self-developed games and licensed games can be standalone, at least break-even if not profit making games on their own and so yes, you are right -- we hope that both our self-developed games and licensed games will soon reach break-even and also profitable stage.

Eric Wang - Main First

My follow-up question is we have heard a lot of MUX and its ability to handle 3,000 people on the same screen, doing fighting. Can you share with us some of the unique features of MUX and I understand the company has been developing the game for the last three years and 3,000 on the same screen is actually quite a unique feature among the Chinese online games. What kind of technology and what kind of unique characteristics does this game, MUX, have? If possible, share this more information, shed more color on this game. We would appreciate it. Thanks.

Xiaowei Chen

Thank you for the question, Eric. I will bring in the expert, VP of The9 by the name of Lingdong Huang, who is in charge of this project. I will translate for you, or for the audience.

Lingdong Huang (Translation)

The game is based on a large 3D engine and we introduced a major PVP system into the game. Its main features is number, the graphics are fantastic and its based in a fantasy world and we have planned for six professions in this game and we have now introduced three.

The game is mostly built on a guild system and also as you just mentioned, there are more than 3,000 people on the same screen, so it can introduce large scale battles and more information can be found on our official website.

Eric Wang - Main First

(Translation not Provided)

Xiaowei Chen

Let me translate the question for the audience, for those who may need it -- Mr. Wang asked a question that he has heard that before for 2.5D and 3D, there cannot be more than 30 people on the same screen. How have we achieved 3,000 people on the same screen? Is there a certain technology -- and pardon me if I am not so clear on the technology's name -- at the bottom level, on the same servers? Eric, is that what you --

Eric Wang - Main First

Yes, it's a term that I don’t know how to translate into English but it is really a technology that only makes sure the quality of service for important PK related data to be transported first, where other background data can be transported second, to make sure the PK of [inaudible] can be executed on the same screen without losing fairness and key graphic data. That's my understanding of it but I don’t know if this is what MUX is using and I certainly understand there are several leading games coming out in 2010 which will be able to allow this kind of large PK scene, which previously only existed in 2D games, to happen in a 3D game. That's the one that MUX is leveraging, I'm just -- we can put this offline.

Lingdong Huang (Translation)

This may not be an exact translation -- this is something that we are striving toward and it's a technology that we are striving toward both at 2.5D and 3D and we invite you to come to our company to visit and see how it's done, real time.

Eric Wang - Main First

Thanks. I'll get back to the queue. Thanks very much.

Operator

(Operator Instructions)

Xiaowei Chen

Since we don’t have any more questions, we will end the call. We would like to thank you all for participating in today's call and please feel free to contact us with any additional questions. Thank you.

Operator

This concludes the presentation. You may now disconnect and have a great day.

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