Good afternoon, everyone. Welcome to the Plover Bay's 2022 interim results conference call. The conference call today is hosted by Alex Chan, the chairman and the founder of Plover Bay, Christopher Tse, the CFO of the company, and myself, Vicky. I look after the investor relations and corporate development for the company. Today, we just announced our interim results, which are available on the Hong Kong Exchanges and Clearing website at hkexnews.hk. Our presentation is also already available on our company's website at ploverbay.com. Today, we will be going through our financial highlights, business review and outlook. Then we will have a Q&A session at the end. Please note that all currency figures mentioned in this call are in U.S. dollars unless otherwise stated. Now, I will pass it over to Chris, our CFO. Thanks, Vicky. Now, let me start with the highlights of our financial results. During the period ended 30th June 2022, we recorded revenue of $40.1 million, which grew 22.5% year -over -year. Our gross profit was $22.3 million, and gross profit increased 14% year- over- year. During the year, our gross profit margin was 55.7%, which was a slight decline from previous years. Our operating expenses remained at around 25% of our revenue during the period, and our profits before tax was $12.3 million, which increased 11% year- over- year. Our net profit was $10.3 million, which increased also 11% year- over- year. We reported a diluted EPS of $0.94, and the board has declared an interim dividend of HKD 0.059 at around 80% payout ratio. Next slide. Now, a more in-depth breakdown of revenue. In the first half, our business continued to grow despite the many challenges during the first six months of 2022, such as the COVID-related shutdown in Taiwan and Hong Kong, which delayed the launch of our key new product to mid to late June. The U.S. dollars also had a strong run, which negatively affected our sales made in other currencies upon translation back to the U.S. dollars. Despite all these challenges, we are still able to grow at a decent pace of 22.5% and at a constant currency basis, that's actually 24.9% year-over-year, which again proves that the need for reliable connectivity is now a necessity for businesses and individuals, and our approach to grow our business has been working well so far. Now, drilling down to product segments. Wireless SD-WAN revenue was $6.6 million, growing 10% year-over-year, while wireless SD-WAN segments grew 20% year-over-year. During the first half, our product mix of volume-driven products further increased relative to high-end products. We have been adopting this strategy in order to grow our products' install base, which will translate to recurring revenues in the future. Next slide. Speaking of which, recurring revenue increased 43% year-on-year to $10.9 million. While half of this is reflecting the accounting booking of deferred revenues from devices sold in the past 12 months, we also noted that the number of actual subscriptions has increased 34.5% year-on-year compared to June last year. The number of re-registered devices on our InControl tier management ecosystem increased about 30% year-on-year to 396,000 users of registered devices compared to a year ago. Moving down to geographic breakdown. North America continues to be our key market, growing 31% year-on-year to $23.6 million revenue. We continue to see broad-based growth across channel partners and vertical markets, especially the home office and mobile office vertical, as our brand begins to gain traction on social media among customers from this particular vertical. In Europe, Middle East and Africa, our revenue was $10.6 million, growing 14% year-over-year. On constant currency basis, this market would have grown 21% year-over-year. We continue to see decent growth from this market, but we think we are still relatively unknown in this market. Contrary to what most people would do in the current economic outlook, a few of our partners in this region actually have expressed their optimism and are proactively expanding into more countries such as U.K. and France in this region. In Asia, our revenue was $4.7 million, just a modest growth of 4% year-on-year. For this region, our sales is typically driven by government-led projects and therefore the growth rate can be bumpy at times. For the first half, we are seeing a very strong revenue growth from Japan, Hong Kong, and Vietnam, but the growth was offset by declines in Singapore and Malaysia. In others, our partner in Australia continues to ramp up since beginning to sell Peplink products last year, and their pipeline continues to look promising. Our gross margin as mentioned was $22.3 million. The gross margin dropped down to 55.7% in the first half. For wired SD-WAN, our gross margin drifted down to 44%, while wireless SD-WAN gross margin dropped to 39%. Meanwhile, warranty and software margins remained well over 95%. The main reason for the lower gross margin during the first half is our product mix, which has further shifted towards high volume products, and those products typically carry a lower gross margin. Plus, we are also accelerating the growth of our user base, which we believe will lead to more high-margin subscription and services revenues in later years. Therefore, while most of our competitors responded to rising material costs by dramatically increasing their prices across the board, we limited our price increases only to specific products. This results in our products being even more competitive. Having said that, we believe semiconductor shortages have begun to show improvement and production cost increases should stabilize. Down to operating expenses. Our operating expenses increased modestly by 17% year-over-year. Operating expenses as a percentage of revenue is 25%, which is the same as 2021 levels. If we exclude a $1 million foreign exchange loss upon translation of non-U.S. currencies on hand, which we booked into general and admin expenses, operating costs would have increased 5.3% year-over-year. This once again shows our strong cost discipline. Our net profit grew 11% year-over-year, and our net profit margin was 26%. Again, excluding the Forex translation loss, our net profit would have grown 22% year-over-year, and net profit margin would have been 28%, around the same levels as 2021. Next slide, about balance sheet. I'd like to mention that our inventory balance increased to $27 million from $19 million at the end of 2021. The increase is mainly because of an accumulation of wireless modules to ensure we have sufficient materials to ramp up our highly competitive high volume products. Of course, to avoid semiconductor shortages. Another reason is an increase in finished goods. As previously mentioned, a key product launch was delayed to mid to late June. Even though there was many orders for this product, we could not ship them until the end of June. This summarizes the financial part. Let me pass the floor to Alex to go through the business review and outlook. Thank you, Chris. We continue to see three major opportunities ahead. First of all, we are seeing all these small-sized networks. For example, those are branch networks, including the retail stores, including the coffee shops or including the business branches. This segment is growing very fast 'cause today all the branch networks or every branches, they cannot afford to lose the connectivity. The connectivity could be used for their POS systems, or this could be used for the staff Wi-Fi, or this could be used for surveillance cameras. And also for the digital signages. All these is a branch networks today. People are looking at a homogeneous network. In the past, they might be limited by the broadband availability in that particular building or in that particular shopping mall or with limited choices of operators. Now with the mobile network, with the 5G or 4G network, they are able to have a freedom of choice. That is the branch networks. Then is the other small-sized networks, we see there's a fast growth in the IoT networks. These are basically the smart city applications. For examples, different governments or different organizations, they are putting a lot of sensors into the lamp post, including cameras, including sensors, for example, a pollution sensors, air sensors and various types of sensors. All these IoT networks are actually contributing a fast-growing small networks. At the same time is that we're also seeing small autonomous systems. For example, those are delivery robots or the EV charging networks. Today is all these EV charging networks, they are connected. At the same time is that they need to. Since they are connected, so they need to have a way to connect to the internet or to the cloud. Then is in most of these parking spaces, using wireless connectivity is the best choice for them to get connected. Then with all those delivery robots. Actually we are seeing these autonomous systems. This segment is actually growing very fast. Because, as all these delivery robots, it's different from the autonomous driving, but at the same time is that they need to get connected reliably. Is also we are seeing is that the volume for these small delivery robots are actually growing pretty fast. Is the other fast-growing application for these small-sized network is the work from remote locations. These days, as we have seen in the last two years, a lot of recreational vehicles. People really live and stayed on all these RVs. Is also when they live and work from these RVs, they need to stay connected. At the same time is people are moving away from the city. People are now able to work remotely from a remote location. They could be using low-Earth orbit satellite services. All these LEO broadband is actually very affordable these days. At the same time is that people are still needing a reliable connectivity. In other words, you will be seeing people are connecting to low-earth orbit satellite modems together, or people may be mixing the 4G or mixing a fixed wireless service together with all these LEO service. These are the three major markets that we have seen growing very fast, and these are all we consider as small-sized networks. What is essential for this market is, again, is a reliable connectivity. People might be using 5G or people might be using multiple LTE, but the catch here is they cannot rely on a single network. Multiple connectivity is needed. There's also the second area, second opportunity that we can. We see there's a tremendous growth in front of us is a multi-year 5G deployment cycle. We have seen that SD-WAN has been deployed by a lot of enterprises. With all these SD-WAN installations. If they want to connect to the 5G network, they'll probably want to stay with what they have today. That means they are not switching away from their SD-WAN vendor, but they would love to add 5G connectivity on top of this. There's another 4G upgrade cycle. People upgrading to 4G, to 5G, and then also who are going to upgrade from here. We are talking about, for example, the vehicle Wi-Fi, the public transport Wi-Fi or the maritime market, or the construction site, or these fixed wireless applications. In the past, they might be using 4G, they might be using LTE, or they might be using a slow DSL connection. Now they are seeing, when they upgrade to 5G, First of all, it will be faster, but at the same time the overall cost might be even lower than the past. The third area that we see a tremendous growth is people are looking for an ecosystem. People are looking for a simple way to get connected. Today, if you look into the connectivity market, people need to go to the operator to subscribe a data plan. Then at the same time is that they need to go to shop their hardware, the devices. Maybe in some cases, the operator is going to bundle a 5G router to you or to the customer. This is only limited to one operator choice. People are actually, as we discussed earlier, people are actually looking for freedom of choices. People are looking for the best connectivity to get connected. We see there's a big motivation for people to find a simple way to have everything together. In other words, we believe the Peplink ecosystem, which is including the Peplink devices, our router devices, together with our SpeedFusion infrastructure and together with a very easy-to-use mobile app. All these things when we add up together with our e-commerce platform. We will be providing a huge benefit for the users for choosing the connectivity providers. That means now they are not limited by one provider, but they can use more than one provider anytime. At the same time is that they do not need to have a very complicated process to sign in multiple year contracts and things like that. Because as of now is all these things are automatically, electronically delivered. There is actually a big benefit for the operators too, because now we are expanding the market size for operators. In the past, when people are selling a router, they are selling together with one connection over there. That means there's only one operator provider for one devices. Now the new. Now the provider can. I mean the market size for these providers are actually hugely expanded. Because now the customers are going to connect to multiple networks. When they connect to multiple networks, that means the market size for the operators is actually getting bigger. This is definitely a good thing for Plover Bay because this is going to create a good recurring revenue for us. At the same time for the end user, the benefit for them is this is a simple and easy way to access for connectivity. This also for the operators, we are expanding the market size for everyone. In summary, we see these three major drivers are going to contribute to our future growth. Okay, thanks. Thanks, Alex. Let's start the Q&A session now. Your lines will remain on listen only. If you would like to ask a question, please feel free to press the Raise Hand with the little hand icon at the bottom of your Zoom window so we can unmute you. Or you can also type in your question in the chat box. Hi, Gerard. You can ask. Yes. Hi, good afternoon. Can you hear me? Yes. Yes. Hi. Thank you so much for the presentation and your time this afternoon. Just have a couple of questions on the margins for the first half. If I can refer to slide number 25, we can see that there are two factors that could explain. Mm-hmm The decline in the margins compared to last year. The product mix and also the raw material prices increase. Between these two factors, could you share a bit more, especially on the raw material side? You mentioned also a semiconductor shortage. To what extent this raw material issue has impacted the margin for the first half? Sure. Absolutely. First of all, in the past, what we have done is we just want to make sure that our suppliers supply to the market is stable. That means in order to do that we are willing to buy from the spot market. We have explained it to everybody in our previous call. This is our strategy. We just want to make sure the supply is stable. When we are buying from the spot market, definitely the price is much higher than what we usually pay for. That is still needed. That's one reason that is driving down the profit margin. Is the other one, as we mentioned, we see bringing customers to the Peplink ecosystem is super important. We believe in our services, our products. Because these are all these things are tightly integrated, so it is actually pretty. I don't know if we should use the word addictive, but I like to use that word internally. I think I would say our service is actually pretty addictive. The good thing is when people are starting to use our products, they will be expanding to some other higher-end models too. They will not stop in using one device. That's why we also try to make sure certain products are really attractive to the market. That's why we have a change of mindset. Basically for some of the products, we are very happy to live at a profit margin, even like 10%, 15%. We're willing to do so. Why? Because we see this is actually a great way for us to market our product. We also see this is a great way for us to bring in new customers to our ecosystems. We are also seeing this as a great way for our channel partners. Because we are bringing in a very disruptive and interesting and exciting price for some quality products. So this is going to help our distributors. This is going to help our resellers to do more business. That's why we actually not too concerned about the product cost margin. If you look into the big picture, what we care about is the net profit margin. Even our gross profit margin dropped, even the product margin dropped a bit, but our net profit margin and the net profit, the absolute amount, they're increasing. Yeah. That's why is we say this is actually a sustainable long-term strategy. Okay. Thank you. Just to follow up on that. Given what you say, should we expect the margins, the gross profit margins, to stay a bit under pressure for the second half? Okay. First of all, I won't call it pressure because we intentionally do that. We all know we are going to face a tough economy. We are going to have a rough world. We are going to see inflation coming. All these things are actually not good. I think that this is a great opportunity for us to grow really fast. Why? Because when everybody is having the inflation and everybody's having a situation, a tough time like that, if we are offering a very attractive price point to the market, then there's some more people are going to switch to our product. More and more people are going to switch to Peplink. When they switch to Peplink, our operating costs won't go up substantially because, you know, we have a very efficient operation. That's number one. The second thing is we worked very closely with our distributors, resellers. That means we have the ability to scale the business at a very efficient way. But I would say that you might see that these kind of margin might drop further a little bit, but this won't be forever. As I said, the economy is going to be bad, so at the same time I believe our contract manufacturers, the suppliers, all these cellular modules and all these SOCs and all these things will have an oversupply at some point. At that point, that means some people, they don't manage their inventory that well, they need to do some fire sale. I'm not talking about a fire sale for the end product. I'm talking about the components. Especially what we have seen is that over the last 12 months, a lot of people, they really place a lot of orders for their components. Now all these components are starting to pop up to the warehouse. If they are able to digest that fast enough, fine, but I'm pretty sure that some people won't be able to digest that fast. That means we will have the opportunity to have lower cost components along the road. I would say is that this might not happen in the next three months, this might not happen in the next six months or 12 months, but it will happen at some point. That's why is I see is that having I would say is that being proactively doing something like this is good for our long-term business. At the same time is, don't forget, Plover Bay, we do not make commodity products, and our products are not a me-too products. We have an ecosystem. We build our product from an ecosystem mindset. That means when people started to use one of our products, they will have an excellent experience, and then is that they will be expanding to use it for other applications too. Together with our management system and the ease of use and all these things together, they will be using more and more our products. I would say some of our higher-end models, which we have no competitor elsewhere. Those products, our profit margin is still maintaining at a very healthy level, and we have no pressure to drop the price down for those higher-end models. In the combination of all these things, you might see the gross margin varies a little bit. I don't think we should worry about that. That's why I suggest we should not see that as a pressure. Thank you for the detailed reply. If I may just last question for me. You mentioned some orders that have been delayed during the first half. Should we expect that there's some easing in the supply chain for the second half and that we can deliver these orders in Oh. more easily in the second half? Actually, I would say, in terms of supply chain, we don't worry too much about the supply chain because we are very realistic. We are very realistic. Our team is extremely realistic. So when things are in a shortage, then we are willing to pay for premium. We are willing to pay for premium in exchange for fast delivery or in exchange for the availability. But at the same time we also stock up pretty good components to cater for our growth. I would say that the thing that is totally beyond our control is the city lockdown or anything like that. We don't. I mean we all don't know about how this COVID will evolve. Is that every time is when the city is kind of like slowed down or locked down, that is bad for the supply chain because is the contract manufacturers or the factories, they are not operating. That is something beyond our control. Okay. Thank you. That, that's all for me. Thanks. Thanks. Sure. Moving on to the next question. In the chat window, we have received, like, quite a few questions, first from Brian Denyeau. Again, this is a question about the gross margin. The volume-based products have grown over 40% year-over-year, but the overall sales only grow by 22%, and the gross margin dropped sharply on both wired and wireless to record low. What is happening on the higher end and the blue chip products? How would you tackle that segment? Are you expecting the gross margin to remain at that level? Hey, Brian. Actually, our profit margin for the higher-end models has not changed at all. Again, let me remind why we have the same as that. The margin dropped quite substantially for certain products. It's because we are willing to pay a premium in exchange for the product supply, in exchange for the availability. At one, I don't think it is going to last long. Actually, what we are seeing is that the supply chain has improved a lot. I would say that is not a long-term trend. At the same time, it's for our higher-end models, we don't have that problem at all. The profit margin are actually still extremely healthy. Sure. We've got another question in chat box from Jeff Penn. How should we think of- Your AirPod might be mute. Oh, mute. Sorry, let me repeat the question again. How should we think of the take-up rates of your software warranty subscription moving forward? Chris? Chris, would you like to take this question? I think we heard his AirPod is out of battery. Oh, okay. Okay. Jeff, maybe we'll wait a little bit for this question. We'll come back to this question. From Steven Wong. If the economy and inflation in U.S. and Europe further worsen, are we worried about our customers will slow down their IT investment spending? Would it affect the price and demand of our products? Actually, we don't worry at all because it's based on our experience back in 2008. During the global financial crisis, that year we did extremely well. The reason why is because our approach is we always use the analogy that we are a low-cost carrier. We use the low-cost carrier approach to run our business. First of all, I think it's the economy, inflation and in U.S. and Europe they further worsen. People will be cutting budgets, but they still need to get connected because this is the connectivity has actually become a necessity these days. It's just, I think connectivity is just as important as electricity. People will still need this. But then there is the [question] are they going to just behave like the old days? For example they still choose the.. In a lot of times, people don't want to make any changes. In good times, people don't want to make any changes. In tough times, people are forced to look into alternatives. When people are starting to look into alternatives, they will see that our total cost of ownership is actually at least 23%-50% less than the other options today. I think people will actually look into alternatives. These behaviors are actually good for us. I wanna get back to Jeff's question about our take-up rates and how our software subscription is going to move forward. Our take-up rate has been pretty. I would say it's increasing gradually over the past 12 months. The take-up rate, when we began to look at this figure, it was around 25%. That means out of the 100 units that we sold, around 25 of those currently have an active subscription. That's what take-up rate means. Going forward, I think we will see a pickup in the take-up rate because as we are pushing our installed base with high volume products, and then we're also beefing up our software features such as there's a new feature called InTouch that allows your InControl subscription to basically manage your cameras and IP phones and all other IoT devices without having to add additional infrastructure. That's very useful for a lot of our partners and customers. I think going forward, take-up rate will improve. Sure. Moving on to the second question from Steven Wong. How do we think about our difference in positioning with Cradlepoint and Sierra Wireless? It seems like Cradlepoint has the highest brand awareness for customers in the West, and customers in general have a high regard for their user interface. How can we improve our brand awareness and user interface going forward? Okay. Yes, this is a great question. First of all is, yes, Cradlepoint and Sierra Wireless, they are popular. They are considered as the highest brand awareness for customers in the world. We are not nobody. People actually know about Cradlepoint, people know about Sierra Wireless, and people also know about Peplink. Actually these are the three choices that usually people pick around. Again, I think in good times and if people are using an existing product from their existing vendor, they don't need to look out. They don't need to look elsewhere. They don't need to make any changes because times are good, so why bother? In tough times, people will be revisiting the cost side of all these things. I would say, first of all, yeah, as I said, we are not nobody here in the market. Actually a lot of times people are using our products to compare with these players. In good times we have one disadvantage, because we do not have a big direct sales team. We work with our channel partners, we work with word of mouth, and we rely on our products to grow the market. In good times, yes, we might not be growing as fast as them. Then so I think our long-term strategy and also what we are doing right now is we are expanding beyond the devices. We are expanding beyond the cloud management. Everybody has a device, everybody has a cloud management. How do you manage your connectivity? How do you manage your SIM card? How do you manage multiple network providers? We see this is actually the pain point of the customer. It is also definitely we have spent years of R&D efforts in going after that area. That's why I'm very optimistic about. I mean, we are not. We actually do not really need to focus on the brand awareness. Even saying about that, are we going to do nothing? No. Actually, in fact, today, we just do something that is going to create a big brand awareness for us, because we just dropped the price of our market leading 5G product, BR1 Pro 5G. We dropped that from $1,499 to $999. To give you a comparison, at a price point of $1499, $1,500, that is already the market's lowest price 5G routers. We are 20%-40% less than the competitor already. We are going to take that one big step further. We are going to drop it down to $1,000. We have done the math. For three years total cost of ownership, the exact percentage point is 40%. We will be 48% less than the alternatives. I'm sure that this is going to improve a big time for our brand awareness. That is also for the user interface. Yes, we are aware of this issue. We are really aware of this. That's why we are also working on a mobile app that is going to solve the user interface problem, the user interface issue. However, every coin has two sides. We also hear a lot of engineering-oriented customers, techie customers, managed service providers, network operators. They are telling us that our user interface is actually way better than the alternatives. Why? Yes, it is hard to use. It is not as beautiful as others, but it is feature-rich. It actually saved them a lot of time in doing the same job or doing a better job to manage the networks. On the surface, yes, it's not as fancy as others. We are going to tackle this problem by having a mobile app which is beautiful and easy to use. We will still keep our feature-rich functionality on our existing user interface. In summary, yes, we are competing. We are just competing in a way that we believe that I mean we don't like the idea of playing catch up. We always look for game changers. We believe our approach is actually being able to compete in a better way rather than just follow what others are doing. Okay. Thanks, Alex. Moving on to the next question. Again, another question from Steven Wong. How long can we see for our order backlog currently? That's around three months. Okay. On the last question about how the InTouch works, Chris, previously just mentioned about it. Do you want to add a little more details on this, Chris? I don't have anything to add there. Alex, do you have anything to add for InTouch? Basically, InTouch is. In technical terms, we call that out-of-band management. Basically, for example, you may have a remote network, and then is in that remote network or on that remote network, maybe is you have a network printer, maybe you have devices. Those devices are not Peplink devices. Traditionally is if you need to go into changing the configuration for those devices, you need to send somebody over there. Maybe is for other industry players, they will ask you to buy a device that's called OBM devices. You plug that device to the console part of the remote devices, and then you can remotely go into that device and then is do the configuration and setup and things like that. That means when people want to save a truck route, people want to save a trip in order to reconfigure something, then they need to buy a device to do that. With the Peplink InTouch service, you don't need to buy anything else. Because we are leveraging our routers, we are leveraging our multi-connection routers, we are leveraging our cloud services. We are able to remotely do all these things in a very secure way. That is the general idea. I think we should also take this opportunity to introduce the Plover Bay YouTube channel. Basically, as we understand, a lot of our investors, they might want to understand certain technology, how it works or fundamentally why Plover Bay is different from other guys. Yeah, that's why we have created a Plover Bay channel. Then we will be doing another version of more simplified explanation on what we do and services like the InTouch. Yeah, stay tuned. We should have more information over there. Okay. Moving on to the next question from Brian Denyeau. You're having a record high in inventory to ensure to meet the customer demand. How long do you expect the inventory to last? Are they mainly for the volume products? Sure, Brian. Yes, we have a record high in inventory. If we dig into the details about all these inventories, it's all about SOC, and our SOC is actually the latest generation system on chip. That means this inventory won't get obsolete. All this inventory are 5G modules. We have made sure that we have the inventory available for us to move for the volume products. For our higher-end models we don't worry too much on that because the volume of those products are decent, but it's not to the extent. I should give you some idea. In the past, when the product was selling something like 20,000 units in a year or something like that, we feel like, okay, that product is doing well. Now we are looking at selling one SKU at 200,000 units. We are looking at a volume like that. In order to prepare for that's why we need the inventory. At the same time all these products, they are not obsolete product or they are not, or these are not fire sales thing. These are actually pretty popular products. For example, just the one I just mentioned about the 5G router with Wi-Fi 6, with a 2.5 Gb Ethernet port, so we have a very decent throughput. It support eSIM. All the state-of-the-art technology, all the latest technology is over there. We are expecting to sell a lot of all these products. That's why we don't worry too much about the inventory. Again, for example, now let's say we have $100 million in inventory, but if we are looking at $100 million revenue, so it's only 40% of that. That's why we... Yes, it is record high, but we don't think that there's a concern over there. Okay, thanks. Next question is from Steven Wong. Is there any new development in the autonomous driving area? Okay. I think the autonomous driving area, we have a decent number of customers having our products in their development. I would say, in terms of the volume growth and that kind of things, we don't have huge expectation for this area in the next 12 months, because that thing is really a long-term thing. However, we are also seeing some really cool application. For example, people are doing teleoperation with our products. They're putting our routers into the Caterpillar machines. These are actually pretty big. I think we have a YouTube channel, and we have a YouTube on that thing too. Maybe in the next couple of days we should upload that or we should link that to the IR website. The idea is we are seeing a lot of teleoperation. People are using our products to ensure smooth operation. Because teleoperation means some people are operating the thing remotely. I would say that area we have a pretty good presence. We see that is probably more prominent than the autonomous driving in the near term. However, those delivery robots is a totally different story. The little delivery robots, people are shipping that in large quantities. These delivery robots, some of them are actually having our products over there. Okay. I see Steven Wong has another question, how would the drop in price affect our margin? Overall, I don't think it will drop. It won't affect too much. Why? Because as you probably have seen, basically when people are buying our products, they will subscribe to service as well. Okay, hey, Christopher Tse, maybe can you help me to explain that the dynamics about the subscription and the product relationship? Yes. You talk about the drop in price. I'm assuming you're talking about the 5G devices that Alex was talking about. Let's use that as an example. For when you purchase this machine, $1,499, you will usually subscribe the subscription for two more years, in total three years, right? In total, the margin is around 70% for all three years, device including subscriptions. After lowering the price, we're also reducing the discounts available to distributors. For this particular device, because it's now fast-moving, right? It's in another category now. The margin on the device itself will drop a bit. However, if you look at a long-term three-year horizon, you know, the margin would still be around maybe 60%, 55%. Does that make sense? Okay. Sorry, guys. Let me emphasize that a little bit more. Actually, you know what? Even though it's we make the first move, dropping from $1,500 to $1,000, it sounds crazy, it sounds dramatically, but it's not. The reason why is actually after the discount and all that kind of things, we don't drop $500. That's number one thing. The number two thing is we are also seeing the customer acquisition cost for us is very different. In other words, if you look into the gross margin level, some company, they might need a 60% gross margin in order to achieve a single-digit net margin. For Plover Bay's, we don't need that. Even our gross margin goes to 40%. Sorry. Even our gross margin goes from, let's say 60% to 40%, but it is very likely that we can still deliver a 25%-30% net margin. It's because our operation dynamics is totally different from other guys. Our business model is a low-cost carrier model. Okay. The next question is from Jeff Penn. It seems that when some of the distributors stock up quite a lot of your competitors' products. As 10 end customers double ordered last year. Do you see similar issues with your channel partners? Hey, you know what? Actually, I don't know if our distributors stock up a lot of our competitors' product. Yeah. I'm not aware of that. If they are stupid enough to do something like that, I just wish them good luck. The answer is, do you see similar issues with your channel partners? No. We don't see anything like that because they don't. Our distributors are owners. Most of our distributors, they are just owners. I don't think these owners manage the business. They will just stock up the product like that. Jeff, maybe you can elaborate on your question again? Because it seems contradictory. You're saying that some of the distributors stock up quite a lot of your... Okay, so you're saying that our distributors carry multiple products, and then they stock up a lot of competitors' products double. It's, so are they going to, okay, this is not contradicting. Your question is, are they stocking our products double? I'm not aware of this. Hi, Alex. This is Jeff. I think I can clarify that a bit. I think some of your competitors' distributors stock up their products because they got some double ordered and they have a bad lock in their channels. But I'm wondering if the same issue is happening with you and your distributors. Does that make sense? Yes, yes. Okay. Yes, that makes sense. I don't think so, because there's no need to double order from us. I mean, we don't give people financial incentives. I mean, why they double order from us? Got it. Got it. You know what I mean. I mean, it's always, well, price is a stable supply. Why do they need to double order from us? Got it. Thank you. The next question is from Gerard Arholz. Given the exciting prospects of the company, do we have any concerns about production capacity from our contract manufacturers? Actually, no. The good news is, first of all, our existing contract manufacturers. These guys are actually tier one, tier two contract manufacturers. They're pretty big. They can definitely scale to way bigger level. At the same time, we are also expanding our contract manufacturers, you know, beyond Taiwan. We actually is talking to someone in Vietnam as well. I would say is that we don't have a problem with that. The good news of being a public company is our financials are pretty transparent. All these contract manufacturers, they can look into the financials and they understand is we are a fast-growing company. From time to time on LinkedIn, we were approached by new contract manufacturers. We welcome all these new contract manufacturers to help us to scale the business. We are not too concerned about the production capacity. As I said, we are more concerned about the COVID lockdown. That is actually more a concern that is totally beyond our control. Thanks. The next question is also from Gerard. What is the customer concentration currently? How much of the revenue the top five customers will represent? It's around 45%-50%. Yeah. I think we can elaborate further because we work with distributors, and one of our distributors. They are operating in USA. They are also operating in Europe, so they have covered two regions. They have totally different teams in Europe and U.S. This is a great partner. We have been working with them for a long time. Our products are usually shown through distributors. That's why you might see it's a concentration there. The reality is actually it's not that concentrated because they are distributors. They are not the end users. All these distributors are selling to resellers. Now we have finished up all questions in the chat box. Does anyone have any more questions? If not, that seems to be all the questions that we've got for today. Thank you very much for joining the Plover Bay's 2022 interim results conference call, and we look forward to speaking to all of you again soon. Enjoy the rest of your day. Thank you, everyone. Thank you. Thank you. Thank you, everyone. Yeah. Thanks, everyone. Thank you.