Good afternoon. Welcome to Plover Bay Technologies' first half 2024 results conference call. Today's speakers will be Mr. Alex Chan, founder and chairman of Plover Bay, and myself, Christopher Tse, CFO of the company. Our results have just been posted on HKEX News website. Our presentation has also been posted on our website at ploverbay.com. Dollar amounts mentioned in the call will be in US dollars unless otherwise stated. We will start with a brief results highlight and business update, and then proceed with a Q&A session. Let us proceed with the results highlight. During the first half of 2024, we recorded a revenue of $57.3 million, up 28.4% year-on-year. Our gross profit was $31.7 million, rising 33.4% year-on-year. Gross margin was 55.4%, up 2.1 percentage points year-on-year. Operating expenses, other income, and finance costs in total was $9 million, modestly increased 1.4% year-over-year. The combination of gross margin improvements and a modest increase in OpEx has lifted our profitability. Consequently, our net profit was $19.1 million, increasing 55% year-over-year. Our net profit margin was 33.3%, up by 5.7 percentage points. Diluted EPS was $1.73 per share, up 54.5% year-over-year, and our board has approved an interim dividend of HKD 10.83 per share. Diving into the details of revenue, first, sales from Fixed First connectivity segment increased 7.4% year-over-year to $8.8 million, while sales from the Mobile First segment increased 48.3% year-over-year to $32.2 million. Combined together, sales from these two segments grew an impressive 37.1% year-over-year to $40.9 million. In the beginning of the year, we became Starlink's only authorized technology provider. This allowed us to run a channel program focused on Peplink Starlink solutions and elevated our brand among the market, which helped to contribute to the overall sales growth of both connectivity segments. Particularly, we see a sizable increase in the sales volume of our high-volume products. It is encouraging to see that this sizable increase was rather broad-based across multiple regions and verticals. Next, revenues from Warranty and Support Services segment grew 6.8% year-over-year to $12.6 million, and Software Licenses grew 26.2% to $3.8 million. Together, the Warranty and Support Services and Software Licenses segments, they constitute the majority of recurring revenues, which was $15.7 million, which increased 12.8% year-over-year. During the period, growth of recurring revenues was driven by growth in organic subscriptions, which grew 20.3% year-over-year. While growth from the embedded portion was relatively flat, which was in line with previous year's hardware growth, recurring revenue accounted for 27.5% of our revenue in the first half. Even though the proportion was a bit lower compared to last year, the underlying drivers of recurring revenues remain very strong. As at June 2024, the number of devices under subscription at end June increased 34.9% year-over-year, and the take-up rate continued to climb to 29.8% from about 28% at the end of last year. Also, the dollar amount we received from subscriptions during the period increased 45.5% year-over-year. These figures all point to a strong recurring revenue pipeline to be recognized going forward. Next, recurring revenue by region, our sales continue to be mainly driven by sales in North America, which grew 37.9% year-over-year. Our sales in Europe, Middle East, and Africa grew 21.4% year-on-year. In other regions, mainly Australia and New Zealand, our revenue increased 58.9% year-on-year, while sales in Asia decreased 14.2%. Moving to gross profit, during the period, our gross margin was 55.4%, which improved 2.1 percentage points compared to the same period last year. The remarkable improvement was due to two things. First, it's the lower component cost of our router products. Second, we have been optimizing our product portfolio, which has led to a more concentrated portfolio with less product lines, which in turn allows us to derive better economies of scale. As you can see from the chart in the lower left-hand corner, margins from both Fixed First and Mobile First segments, which represent the majority of non-recurring revenues, continue to improve in the past 12 months. Of course, as mentioned, the sales growth of non-recurring revenues also outpaced recurring by a lot. Consequently, the contribution to gross margins from recurring revenue dialed back a little bit to 46%. In this period, still, I would like to repeat that underlying drivers of recurring revenue remain very strong. Next, operating expenses overall increased 4.6% year-over-year. OPEX growth remains disciplined, and there was no major increase in headcount despite our revenue growth. This illustrates the high degree of operating leverage of our business. Finally, a recap of our balance sheet. Our inventories further decreased to $13.1 million at the end of June 2024. Again, over the past three years, we have redesigned many of our routers to use components and chips that are currently readily available in the market. After optimizing our product portfolio, we are now more concentrated in fewer product lines, which means we now have a smaller range of components to worry about and keep stock of. So these factors have enabled us to keep a lower inventory on hand. Contract liabilities increased 19.7% compared to six months ago, which reflects a sizable increase in subscriptions booked. Together with our increased operating profits, cash flows from operating activities increased substantially to $31.8 million during the period. The company's financial position continues to be very healthy, with a cash balance of $53.5 million versus $4.3 million debt at the end of June 2024. This wraps up the financial highlights. Now, let me invite Alex to share his comments about our business. So thank you, Chris. So over the last couple of months, our partnership, the collaboration with Starlink, has significantly enhanced our channel program. So during the period, no less than 50 resellers have signed up for the Peplink and Starlink Solution Provider program. So these premier resellers, they have received specialized training and support on these unique value propositions from Starlink and Peplink. And during the period, we also see some large service providers. They are increasingly confident in deploying Peplink solutions within their enterprise customers' network. So we're confident that these developments will lead to more developments with large-scale customers in various industry verticals in the coming years. So our core market, the mission-critical services, such as the fire services vehicles, they continue to benefit from Peplink's superior performance, reliability, and feature set. So we also see substantial growth in deployments at passenger buses and railroads. So together with our go-to-market partners around the world, we have won multiple projects for large transport deployments in European countries and the U.S. So six months ago, we mentioned about we are entering into the fixed wireless access market. So our differentiated approach is working pretty well. So traditionally, the network operator, they are buying the network equipment, the CPE, directly from the factory, and then it's bundled up with their subscription plans. So these operator-bundled devices are tied or locked up to a single telecom operator with restricted capabilities. So our approach is to launch an easy-to-use, feature-rich product equipped with a full range of SpeedFusion capabilities at a very affordable price and marketed directly to the end customers with our go-to-market partners. So this allows our customers to use SpeedFusion. Recording in progress. To combine different FWA networks with Starlink, cable, DSL, fiber to sell the services for multiple fixed mobile operators and low Earth orbit satellite providers. So even though as Chris mentioned earlier on that we have streamlined our product SKU to smaller numbers, but that doesn't mean we are offering less restricted but it doesn't mean we're offering a more restricted choices for our customers. In fact, we have streamlined these key products and consolidated the features together such that now this is actually way easier for our customers and partners to pick the right product for their desired applications. And that is with our streamlined product lines, we are still addressing a pretty long-tail connectivity market. So at the same time, we're also working on the number of new products, which will be launched towards the end of the year. So these new products will enable us to grow the services and better integration with Starlink and continue our technology advancement and ecosystem and enriching our ecosystem in the upcoming years. So basically, we are very excited with what we are doing. In summary, we streamlined the number of SKU into smaller numbers, but at the same time, we will be entering into new market categories that will continue to leverage our core technology, the InControl SpeedFusion and our hardware-software ecosystems. So we are pretty excited about what's happening in the market and with what we are doing. So yeah, we're open to Q&A right now, so please feel free to raise your hand in Zoom, and then we'll mute you. Hello? Hello. Can you hear me? Yes. Oh, yeah. Okay. This is Meeran. Yeah, congratulations on a very good result this half a year. I just have a couple of questions. For the major U.S. carrier, you mentioned that they start to get very comfortable deploying Peplink product. Do they deploy themselves, or they actually go through some MSPs? That's my first question. Sure. Hi, Meeran. So the cooperation with these large U.S. operators is actually going into the enterprise customers. So I would say, okay, as you know, we sell through our distributors in the U.S.A. So the product is selling through these guys. But then so the activation and everything is done by the large operators themselves. So in other words, I would say there's no MSP in between. But the product flow is these large U.S. operators, they are buying from our distributors. And then so this is their direct customers. Okay. And the software is complete from Peplink, or they can bundle with their software? Actually, they are not bundling with the software. What they do is they are offering this as a managed service. As you know, in the U.S., these large operators, large carriers, they also have a managed service business. So they are bundling with their data plan and managing all these routers for their enterprise customers. Okay. Got it. Okay. And my second question is, you mentioned there are further integrations with Starlink and also saw some Starlink Mini dish coming out. That looks very attractive. So can you give some more details on what kind of further integration you have in plan? Sure. Sure. So first of all, we are seeing that Starlink is a very attractive connectivity offering. And then so now they have multiple variants. So they have the small dish, and they have the FHP Flat High Performance dishes. So we are seeing the opportunity that people want to manage multiple Starlinks. And people also want to manage multiple connectivity, including Starlink, cellular or cable connections. So in other words, we see we have the opportunity to become the connectivity controller to manage all these WANs. And all these WANs, including Starlink, cellular, cable, and even multiple cellular operators. So this is number one. And then so the number two thing is we are also seeing in order to power these devices, the PoE thing, and then all these kind of things, it's actually quite a complicated thing for most end customers. So we are seeing the opportunity to have a much more simple way in integrating all these things together such that people can just acquire their Starlink either online from the Starlink website or the FWA devices from other operators and then just connect it together with the Peplink devices. So we are working towards that direction. Okay. Great. Okay. My last question is on the lot size. I think basically the background is our stock price has gone like eightfold since IPO, but our lot size is still like 8,000 shares per lot. And in the Hong Kong market, it's very difficult to buy odd lot. So that's equivalent to like $4,000 US dollar per lot, which is a lot, and actually a lot more than the average stock in Hong Kong, I think, like Xiaomi is probably 10 times of Xiaomi's size. Yeah. So I'm just wondering if the management has any plan to reduce the lot size and therefore boost the liquidity. Yes. We do have plans to reduce the minimum lot to a lower denomination. This should happen after the results. Give us a little bit of time. We'll do it hopefully before the end of this year. Okay. That's wonderful. Thank you so much. That's all my questions. Thank you. Congratulations again. Yeah. Thank you, Meeran. Hello, Kamal Kant. Please. Yeah. I just had a quick question. With all this talk about tariffs being imposed, if Trump comes into the presidency, what kind of an impact would such tariffs have on your business, given the biggest chunk goes to North America? Okay. I think first of all, our products are entirely made in Taiwan. So of course, in the future, if there are tariffs coming, if there are tariffs for products coming from Taiwan, there will be impacted. So I guess that kind of things, if that happens, it just happens. Okay. Next, Kate. Hi. Congrats on the strong results. I have a few questions. You mentioned about our new product development by integrating different technologies. I'm just wondering, do you have any plan to expand in different regions? Because I saw that Starlink boosted our North America sales by around 38%. I'm just wondering, Europe is our second largest market, and do we have any plans for expanding into Europe and maybe in the APAC region? That's my first question. Thanks. Sure. Hi, Kate. Actually, the beauty of our business is we are actually having a pretty good footprint around the world with our channel partners, with our go-to-market partners. These days, we do not really need to set up a physical team, a physical office in order to address those opportunities. In fact, all of those 50 Starlink Peplink partners that we talked about, these people are actually covering pretty much every Starlink-covered areas. It is very interesting that we have acquired a number of new channel partners because of that Starlink Peplink channel program. The reason why is people are seeing there is a tremendous value of bonding multiple Starlinks or putting multiple Starlinks or Starlink together with cellular connections or wired connections or traditionally other traditional point-to-point wireless connections. The user experience is completely different. To answer your question: yes, when Starlink is having a wider footprint, a coverage, a way better coverage in other areas, yeah, we will benefit from there. By the way, don't forget that the low Earth orbit satellite market is just at the beginning. There are other LEO providers as well. Then there's these and other LEO providers; they're also working with us as well. Got it. So other from North America, we are definitely expanding into other regions. And also, we see a greater deployment in other verticals and also with other technology integration. I hope I got you right. Yes. Yes. That's correct. Yeah. And then I'll have a follow-up question on this. Actually, I think our operating leverage is stronger than my expectation. I'm just wondering if we have a wider footprint across the globe. Will this impact our sales strategy? And possibly, would it impact our selling and distribution expense? And to what extent may the impact be? Do we have a preliminary thought right now? Yeah. So what you said is completely correct. But at the same time, we understand the importance of marketing. And then so these days, marketing is quite different from the old days. So we intend to create much more local content, much more regionalized marketing content, or even it's a partnering with the KOLs or even making applications videos and things like that in different regions. So if you go to the YouTube channel, so you will see actually some of our U.S. close partners, they create a lot of really interesting and educational YouTube videos related to their deployment applications and explaining the technology and our products. So that is great. But then so we may need to put more resources into other regions with other languages. So that is an area that we are looking into. Of course, when we do things like that, it costs us money. I think it won't be some crazy money considering the other operating leverage that we are seeing. Got it. Thanks. I have one last question. Do we see any changes in our competitive landscape? Although I've seen our enhanced presence globally, especially in North America. Do we see we are taking shares from our competitors, or do we see any new entrants from either the local market or in the domestic market? And yeah, do you think any changes would impact our business? Thanks. Okay. Yes, Kate. Yeah, this is a great question. From time to time, we were being asked about, so who are our competitors? So traditionally in North America or in Europe or globally, we have the more well-established players. And then so I would say those well-established players are still those guys. But then at the same time, we are not concerned at all with those guys because we are still a very small company. And at the same time, okay, we think big, but we act small. So speed matters a lot. And a lot of times, customers love us because of our speed. And the large operator that we mentioned in the USA, they really love the execution speed in working with us. And so I think in terms of the conventional traditional competitors, that is still pretty much the same. But at the same time, so if you go to Amazon, if you do a Google search on Amazon on 5G routers, 5G cellular routers, you'll see tons of that. You'll see tons of those routers coming from China. You'll see tons of them maybe coming from even Taiwan. And then so everybody is telling you that they have a cellular router business. But I think the nature of this business is when people buy a product, they don't expect it just works. They expect long-term support. And long-term support meaning the firmware update. So they expect if I'm investing on a cellular router or a business router, I expect this thing hopefully could work for the next five years. If they're putting this into their recreation vehicles, if they're putting this into their mega yachts, if they're putting this into the roof of their home, if they're connecting to their Starlink, they do not want to touch that next year. They do not want to change that two years later because actually the installation cost, the decommissioning cost is way higher than the product itself. So they expect software update. They expect the company to stand behind the products. So that's why on the surface, you will see a lot of competitors. You will see a lot of 5G routers. Yeah. Again, when you do the Google search, when you do the search on Amazon, you will see tons of that. But that is a different market because again, people are not just buying something on price. People want to have something that could last for the next couple of years. So from that perspective, our ecosystem plays into a bigger role because now this is our opportunity to bring in new product lines. This is the opportunity for us to bring in new product categories. And over the years, we have seen this thing is actually working pretty well. And that's why we keep mentioning that we actually don't put much attention on the competitors. It's not because we are arrogant. It wasn't like that. It isn't like that. The thing is we just feel like we just need to keep launching products that customers love. We just keep launching products that our partners will be impressed. For example, recently, we launched a product, the POTS adapter, P-O-T-S adapter. So what is okay, POTS stands for Plain Old Telephone Systems. So if you look into this name, this is an analog phone replacement. This is not sexy. This is actually a boring business. But our partners, they love this product a lot. The reason why is there are still a lot of applications. For example, it's the analog phone in the elevator, the analog phone in the machine room, the analog phone in the rural area, or the analog phone at the park or whatever. So now they are connecting to our POTS adapter. And then we convert the plain old telephone system, the analog telephone line into VoLTE, Voice over LTE. So you can see this is the bridge of two worlds. VoLTE is sophisticated. It's state of the art. This is cellular. This is cellular voice. VoLTE is crystal clear. But then so we connect an analog phone to VoLTE. That is a product that our system integration partners, the go-to-market partners, they all love it. So again, if you look into a single point product, if you just look into the hardware spec, do they have a 5G radio? Yes, they do. Do they have Wi-Fi? Yes, they do. So how much they're selling? They're selling at $200. So how much we're selling? We're selling at $900. So are they going to be our competitor? I don't think so. Yeah. Again, when people are looking for a long-term solution for the next couple of years, they compare the total cost of ownership. They do not compare the point product. And what's even worse is if you buy from online on that $199 product today, probably two years later, you won't be able to find the same model. Even that consumer networking company is still there. But they probably retired that model already. So yeah, I think our customers' groups, they are looking at something different because of the total cost of ownership. Yep. So that is our view on competition. Got it. Thanks, Alex. I look forward to the continuous tech upgrades and innovation. Sorry, I have one small question for our recurring revenue. I remember our data services account for about 2% of our total sales in 2023, and it's standing at roughly the same level in the first half this year. So I'm just wondering, how is our activation rate going in the first half? And do we see more clients or more users noticing that we have these new services? And what is your view on this business, this service going forward? Thank you. Sure. So maybe I should share with everyone that is, how are we going to market the data services. We see the data plan that we offer. We do not see this as a low-cost alternative to the primary SIM providers in the country. No, we don't see it like that. But instead, we see our data plan is this is convenience features. What that means is when people buy a router, instantly, it connects to the network. When it connects to the network, basically, this is providing a lot of convenience for people to reduce the short route, to minimize the installation cost, to simplify the thing. You can say we bundle the SIM data there. That is for bootstrap applications or for emergency applications. So the customers are always welcome to use their own SIM, to bring their own SIM, or the managed service providers are always welcome to use their preferred SIM providers. So we never force people to use our SIM. But instead, we provide that as a convenience feature. So that is the essence of our SIM business. So in other words, when we sell more hardware, when we move more hardware boxes, so we believe this number will grow up. But of course, I think if you are asking about the activation rate and that kind of numbers, I think it will probably quiet. It might be too early to share that. No, no, no, no, no. I mean, it's volatile. I mean, I don't have the numbers. What I'm trying to say is, let's don't look into the activation numbers because it's actually, again, you know, when somebody just uses it for whatever reason, for emergency use or just for configuring the unit. If we look into from this perspective, even though it is an activated device, but it's not contributing any meaningful revenue to the data business. So that's why I think we should not track those numbers. Yeah. I'm trying to say we should not track those numbers, particularly at this stage. But again, if you look into the SIM offering, are there any SIM offering that is giving you an annual plan? Because the data plan offering that we offer, this is not a monthly plan. This is not really a prepay plan or postpay plan or whatever. So this is something that you kind of like top it up. So if you join our PrimeCare program, the subscription program. Then we give you a bucket of data, which is good enough for emergency use, which is good enough for, let's say, when you have a vacation home. You only stay there for seven days in the quarter. So that bucket is probably good enough for you to do that. So in other words, we are seeing this is pretty much more like a value-add, a convenience feature to our customers. And bear in mind, we keep explaining or we keep mentioning that our subscription is really different from the traditional conventional players. Their subscription package is an enforced subscription. If you don't pay for the subscription, the hardware is effectively a brick. It's effectively not working or they don't allow you to do any configurations. You can't do anything with that if you are not paying the subscription. But at Plover Bay, our subscription plan is a package of convenience features. We put it together. So we just make people's life easier. Got it. Thank you, Alex. Thank you, Chris. Stephen. Oh, okay. Thank you. Can you hear me? Oh, sorry. Can you hear me? Okay, good. Okay. Hi, Alex. Hi, Chris. This is Stephen from [GateFree]. So I have, yeah, quite a couple of questions. I will just go through them one by one. Congratulations on a great result. I mean, it's really impressive, especially on the margin side, actually, and actually the revenue growth as well. But yeah, so I have like I want to go through it one by one. So first is in terms of the revenue, I mean, we definitely see strong growth, and we understand, especially in the U.S., there are a lot of more use cases. I just want to do you think how sustainable this demand would be? Do we think that actually such our—I mean, do you think this time is a little bit different from before that, in fact, that our brand today gets a lot more recognized? Because I think a while ago, a friend of us shared with me, and I also shared with Chris that if you look at the Google search trend, I think nowadays a lot of people really know about Peplink. They search Peplink itself rather than getting referred by the distributors. So I just want to—do you think this time is a little bit different from before that people nowadays know about us? So maybe if we continue to make good products, it will be—I mean, our growth or our market size would be a little bit very different from what we see in the past five years. So yes. So Stephen, first of all, I want to share with everyone that we did not want a lottery ticket over the last six months. So basically, this is not just this is not a one-shot opportunity. This is not one big deal we want. We did not want a lottery ticket. But we are seeing that is, don't forget that we have been in business for 18 years. SpeedFusion is 18 years old. And then so people are starting to recognize the value of what we do. People are starting to see the convenience package, the convenience subscription is way more reasonable than the enforced subscriptions from the traditional larger competitors. So actually, this is very exciting to us because we are seeing that we are not changing anything. We are still the same guys here. We just continue to do what we do well and what we enjoy. And then the deals are getting larger and larger. So we're actually pretty excited. And at the same time, we are also seeing people are buying more and more high-value routers. So at first, okay, I would say back in five years ago, and then so some of our routers is like $6,000. And then we felt like, "Oh, maybe if we are lucky, we can sell 50 units in a year." But now it's in one single deployment. People are buying 200 units. And we also have a managed service provider that's buying a couple hundreds every quarter. So we are seeing this is starting to become a trend. But at the same time, we don't want people to feel like they are breaking the bank in order to use Peplink devices. That's why we are also aggressively launching more competitive models, for example, with edge computing capabilities. So the goal is not to really drop our price, but the goal is helping them to eliminate other devices. So they do not need to buy an extra PC to run their software. They do not need to put in extra devices in order to do other stuff. But instead, they can just use our devices to do that. And again, in the coming few months, you will see we will have a lot of next-gen new products coming out. And then these new next-gen products, they have really impressive performance and capabilities. But the price, we will even drop it a little bit further. So you will see situations like that. But again, don't be scared that we are going to cannibalize ourselves. No, that's not the case. Because this is a growing market, we just want the customer to feel like we are delivering way more value than other guys. And using our product is a lot more comfortable and easy, convenience. So these are the value propositions that we look at that very strongly here. Okay. I don't know. We have known each other for a long time. In the past, I don't know, 5 years, 10 years, do you have any moment like now that do you think this time is a little bit different from the past, or do you think it's just always as usual? I mean, my question is actually, do you think there's any tipping point change for this time? Actually, you know what? A few months ago, I have a similar feeling like what you were asking. I keep asking our US team, "Hey, did we want a lottery ticket?" They said no. And then two months later, I asked them, "Hey, we have another couple of big deals working on. Are we winning another lottery tickets?" And they said no. So I would say to us, it's pretty much like the same. And it's just we are seeing maybe the brand recognition is better, or maybe we have been staying in the industry long enough that eventually people started to be aware of us. And even speaking about the geopolitics, I think as I shared with some of our investors before that, from time to time, our competitors, they will love to bring up that, "Oh, these guys are coming from Hong Kong." Yeah. So, can you trust these guys?" And I think over the last few months, we are also seeing, yes, they did not keep their mouth shut. They're still yelling. They're still publicly giving this story every day. But then we're still winning opportunities from public safety agencies, mission-critical services. So I think now we started to feel like this is just like another day. Okay. I know it's very difficult to segregate, but this is my last question on the revenue side, maybe. So we have grown like 30% in the past, I mean, in the past six months compared to last year. If I need to segregate the market size growth and also our we are taking shares, do you think the market is also growing at 30%, or you think the market is actually not growing at 30%, but we are also taking a lot more shares from others? You know what? You probably know I never care about those market shares. I never believe in market research report. But I would like Chris to answer the question. I just want to voice out my opinion. But Chris, go ahead. Hey, Stephen. Yeah, I think if you look at other networking companies, our revenue growth is definitely ahead of the pack. So I'm not sure if our direct competitors, they are boasting the same kind of growth. But then definitely, as Alex said, in the past six months, we're seeing larger deployments, more customers. So I think, yeah, everything is quite positive. Okay. Okay. No, I don't look at those figures, but what I want to feel is whether it's like [Foreign language] or it's actually we are getting a lot more credit from doing much better job to our clients. So yeah, that's just the reason why I asked that. Yeah. So the other thing is on the margin. So I don't actually notice that. I mean, if you look at every six months as a period, I don't think we have an improvement a lot in terms of the voluntary part. But actually, we see the wired and the wireless routers are actually the margin, GP margin, and segment margins are both increased quite a lot. So I just wonder is it because we are selling more high-value items or we are pricing highly or because we moved to a lower-cost manufacturers, which give us a better deal. That's why we get a much better margin for these two hardware segments. Okay. You know what? I want to take credit here because I jumped into the supply chain thing, and I was the head of procurement over the last couple of months. And then so I enjoyed pretty much in finding new contract manufacturers and working with these folks strategically, telling them that we are the next big thing. And I think it's good that so it's good that we expanded and we expanded the supply chain a little bit. And more importantly, we have a much closer strategic relationship with our contract manufacturers. Because I was telling our team that is, "Hey, this is not just a transaction. You just don't tell these guys you are going to build this and that. You need to tell them what you need to share with them about our dream. You need to share with them what we are doing. “You need to share with them what we want to be.” So we tell everybody that we want to be a $300 million business. And then so they support us a lot. And then they give us better pricing. And then we streamline the products. We give them larger orders. And then again, all these kind of things is just so natural. And again, we don't measure our margin every month. We don't measure our cost every month. We just do what we believe that's the right thing to do. And so this is just the consequence of what we do. Yeah. But again, I think again, I don't intend to be the procurement manager forever. I was just trying to look into that area to see if there's any resources that we can leverage from those guys. But again, I think actually this is coming from our fundamentals. Plover Bay or our brand Peplink, Peplink is a product-led growth company. We focus entirely on products. So when we focus entirely on products, we want our manufacturing partners, contract manufacturers, we want them to understand what we are trying to build. And then so these guys are world-class. They have been in the industry and in the market for years. And they are working with all these leading networking equipment providers in the world. So when we work with these guys, we learn a lot, and we leverage a lot of their expertise. So I would say is that the improved margin and that kind of thing is actually coming from the product-led growth strategy. Okay. Okay. I still have 3 questions. Sorry, I've been with me. I mean, I know it's quite long. Yeah. So another thing that contributes to our improvement, significant improvement in our net profit margin is actually our saving, the operating leverage. But the operating leverage actually is seen the most from R&D expenses. So compared to I mean, we are still spending like $ 4.2 million on R&D. And I just look at our staff numbers. It really amazed me. You have 196 staff last year at the same point of time. But today, you only have like 177. I just want to given that we are expected to continue to grow, and maybe I don't know what's your target, but anyway, is it sufficient to have like 177 staff and $ 4.2 million per half R&D expenses per half year? Is it the expenses that you want to control with, or actually we should, I mean, are we going to increase a lot more hectares or R&D expenses in the future? Yeah. You know what? It's actually people are difficult. Managing people is a very difficult task, and it's no fun at all. So at the surface, there's only less than 200 people here. But don't forget that now we are working with all these global world-class tier-one contract manufacturers. We are leveraging their engineering resources. We are leveraging their test lab. We are leveraging their facilities. And all these great things. It doesn't cost us any upfront investments. But the whole idea or the whole thing is you need them to believe in your story. You need them to believe in your growth ambition. So the great thing is, again, we have a track record. And then so we have been listed for 8 years. So our numbers were extremely transparent over the last 8 years. So the numbers speak for itself. And at the same time, when these people talk to our team, talk to us, they know we exactly know what we are doing here. They know what we are exactly looking for, and they know what we are exactly chasing after. So with this approach is you don't need to fill up the headcount for another 100 people, 50 people, or things like that. And again, I think managing people is actually no fun at all. And now we can even create pretty healthy competitions because for certain projects, for certain new product introduction, we work with multiple contract manufacturers, manufacturing partners to work on that. And again, every new product, there will be bugs. There will be bugs. There will be some idea we felt that's a great idea, but in fact, it actually doesn't work. So now we are working with all these guys. We know what is working or we know what won't work way faster than we just do it by ourselves. So in order to do this, and I don't know if we have any competitors joining this call or listening to what we said. So in order to do this, the whole thing is you need the contract manufacturer, the manufacturing partners to believe in your growth ambition. So if they decide to bet on us, yes, we can leverage their resources, which is great. Okay. Okay. Great. And sorry, just two more. I mean, the next one is on our inventory. So what happened to our inventory, actually? Because it's pretty crazy if we only have like 100 days or less than 100 days of inventory. I think it was like we never see this in the history or in our company before. Is it like because our product is selling too fast or there's a different kind of supply chain model that you have adopted? Okay. So the great thing is, first of all, Plover Bay is not a traditional company. So that's why a lot of our traditional way of thinking do not apply here. And then so what we explained to you about is our R&D approach, the headcount, and all that kind of things. It sounds crazy, but it is working really well. And again, why we're able to do this is just because we are unconventional. So when we look into this inventory, so this is the outcome. Yes, we don't cook the books. This is real. This is real. But do we—I mean, I just want to share with you about our way of thinking. Do we really care about is that 207 days or 107 days? No, we don't. Because these inventories, it could fluctuate. It could fluctuate. But is that going to kill us when it's hitting 207 days? No, not really. Is that going to improve the margin a lot or whatever on 107 days? Yes, it's good. But yeah, but even at 250 days, we're still doing well. So I think we do not really look into this. But I want to share that is because our manufacturing partners, they believe in the Plover Bay growth story and the growth ambition. So they are very willing to provide their purchasing resources, their capability, and share that capability with us. And I think this is also the outcome of that kind of partnership. So yeah, the 107 days is an outcome of that partnership. It's not just because of, "Oh, we want to show better numbers or what." So our thought process is just like that. Okay. My final question is just on your target, your outlook. So what do you think about Plover Bay can achieve in 3, I don't know, 3 years or 5 years? Up to you, I mean, in your predictable vision. And what are the risks that you right now you're worried about the most? And what could kill Plover Bay? I mean, including geopolitical risks or any kind of risk. What will you feel afraid of when you see when you wake up tomorrow and you see a newspaper or read a newspaper and you come across? What kind of things are you worried the most about, yeah, today? Right. Okay. Sure. So first of all, actually, we are having fun. We're having a lot of fun. We just don't have the time or we don't have the mood to worry about anything. Yeah, because we feel like, "Hey, we love what we do." There are a lot of excitement, a lot of exciting products coming up. So in terms of geopolitics, we understand, so even when we worry about that, then if we worry about that, it makes no difference. So we just do what we are best at. We're just full speed at doing what we are good at today. I think in the past, we already shared with everybody that, so our manufacturing partners are in Taiwan. Then so yeah, if one day they impose tariff to Taiwan, then I think the whole industry will be impacted. As long as we are not the only company that is impacted by the tariff or whatever, as long as we are not the only company impacted by the geopolitics, then I think we should not just worry about that too much. I think we just continue to execute fast and just enjoy the show. What's our target? Oh, yeah, the target. Oh, great. Yeah. Actually, yeah, we told everyone about it that is we are working towards $ 300 million. But why $300 million, not $400 million? I don't know. But I was just telling the team that is, "Hey, we need to grow bigger. Yeah, being bigger is we have more fun. And then when people entertain us for dinner, then yeah, the business dinner is better. The quality is better. So let's do $ 300 million." So that's the pitch. But in 5 years, 10 years, any time frame? I think if 10 years, that would be too slow. If that is 2 years, I will be super happy. I don't know. It's just you know just like when I was a kid, I wanted to be a fireman and things like that. Yeah, you need a dream. Yeah. And then so when I wanted to be a fireman, I started to exercise. But yeah, but eventually, I didn't become a fireman. Okay. Okay. Thank you. I will leave the time to you. Alex, thank you very much for bearing with me. Thank you. Next, [Gloria Zhang]. Hi, Alex and Christopher. First, congratulations on a great H1 result. I have a few questions if that's okay. My first question is a higher-level question on your software revenues. If you had to estimate, how does the lifetime value of your typical recurring revenues compare to the initial hardware price for the customer? Typically, it's about 15%-17% per year of the device's pricing. Got it. That's very clear. Could you also give us a sense of what the churn of your recurring revenues is and how has this churn evolved over time? We do not have numbers for churn rate. But then over time, our take-up rate has been increasing steadily. So for example, last year, last year's June, right, the take-up rate was 26.5. At the end of last year, it was 28. And in June this year, it was 29.8. So we're steadily bundling more features into our subscription packages, increasing the value of our increasing the value proposition of our subscription packages. And that helps us build up our take-up rate. Understood. One last question. It's on the Starlink partnership. Have the revenues mainly been coming from the current Starlink installed base from the existing customers, or has it mainly been the new Starlink customers you're getting revenues from? Okay. So that partnership program allows us to bundle the Starlink product, the Flat High Performance antenna, together with the Peplink devices together. So that is, yeah, so those are actually new installations, right? Yeah, new installations. But you're bundling your hardware and software. Is that right? Sorry. Did you say bundling our hardware and software? Yeah. Is that the right way to think about it, or is it just the software? Okay. Our software runs on our hardware. So it's one hardware box with our software. That is the Peplink product. Got it. Okay. That's very clear. Thank you. We have some questions from the chat room. So I think we will go through some of it. So the first one, why Asia revenue decreased? Is it because of Huawei? The Asia revenue decrease is just, I would say, most Asian businesses coming from governments, government-driven opportunities. So usually, these things have a longer lead time. And then, I mean, the project is the time for those projects takes a longer time to work on. And then it's, of course, this is done by our channel partners. So I would say, actually, if you're looking at the numbers, it's actually pretty small numbers. Yeah. Right. So yeah, actually, if you're looking at the numbers, it's a very small number. Yes, it is. Yeah, it decreases, but it's just a small number. And I think the focus is actually we don't really look into, "Oh, we need to grow bigger in Asia. We need to do better numbers in Asia." No, we don't think like that. Again, this is a product-led growth company. So we focus on the products itself. I'm pretty sure that these numbers will come back pretty strong in the next 12 months. The next is, can we have an idea of the proportion of revenues coming from Starlink Peplink Solutions? So overall, the Starlink-related sales, it's about 10% of our sales. It's in the range of 5%-10% of our sales. Next is, what was the user base compared to 500K last year? So I think you're referring to the number of devices that show up in our InControl 2 management system. So last year was 500K. At June 2024, it was 570K. Can you share the latest guidance for FY 2024? I think, yeah, we sort of shared a revenue target of $ 300 million. But so that's what we're sharing. Okay. But that's not guidance. That's our current ambition. That's our guidance. Okay. Next question. Can you talk about the deal lost in 2024 and the reason for the loss? I can't recall. Okay. I can't recall any substantial deal loss. I'm sure there were people buying from Amazon because of that $199 price attracted people buying the product. I'm sure that happens every day. But I don't recall any substantial deal loss over there. And again, I want to emphasize again, we are completely focusing on the products itself. We completely focus on the competitiveness of our product and the ecosystem. How can we make the user experience better? How can we make people feel like, "Oh, this is the best ecosystem I want to stick with"? Yeah, that is our day and night questions. So I mean, that's our day and night questions to the team. And that is what we really focus on. And then so we actually don't keep track of any deals that we get that we lost to the competitors. Except, I think I shared it with some investors before, except one thing that it wasn't the last six months. It was like two years ago. And then so we lost a deal for a very large U.S. bank to the traditional competitors. And then at that time, it's our thought process. We were thinking of, "Oh, maybe we just give them an amazing price and a good price in order to win." But eventually, we didn't win. And the reason why is because it's on the tender. We put a lot of TBD to be discussed. And then so they told us that is, "If you want to work with us, there's no TBD. Everything is a must." And then we felt like it's, "Oh, maybe it's just we are not just compatible in doing that kind of things by ourselves." So later on, we decided not to engage in those RFP or those bids directly. But as I mentioned earlier, this year, we have some large U.S. operator. When they're working with us on these large opportunities, and then I think that is if there's a time machine, we should not respond to that bid. We should just work with our carrier customer on that bid. So that's the answer. Do we have any big projects that were completed in the first half that could explain the big jump of revenues? What could be the organic growth for the second half? As I mentioned earlier, we did not want a lottery ticket. So we expect the organic growth will be able to continue. Next is, what's the potential for the data business in the next 3-5 years? Can it go beyond 2% revenue share? So, I think if our revenue growth is faster, then probably okay, maybe I think we should look into this. Let's don't look into that into the percentage of the total revenue. If we look into the app, if we look into the absolute numbers, that is way more meaningful. Because all these databases and all these subscription things almost go directly into the bottom line. I think looking into the absolute numbers is more meaningful. If our focus is on the absolute numbers, yes, definitely it will grow. I think it will grow pretty well too. But again, it's our revenue base because we want to see to a lot more market. Yeah, comparing to the percentage of the revenue share might not be the best metrics to look into that. Next is, are you seeing much growth tailwind related to IoT? Related to IoT? In terms of verticals, IoT does not account for a very large percentage of our deals. So right now, IoT is still a small part of our business. What's the potential for the Software Licensing segment? Oh. So yeah, this is a good one. So the potential for the Software Licensing segment is our work. In the next few months, you will see we have some exciting products coming up. And so in the past, one of the challenges that we faced with the Software Licensing is we need to teach people how to integrate our product into their product. And then so that eventually turns into a tuition business. So we don't like that business. We don't like that way. We don't like the engagement model. So in the future, it's actually we are working on putting the SpeedFusion and all these things into a module, into a little box, such that people can just integrate this little box. Okay, in the next few months, you will see we have some interesting products that could allow us to expand the Software Licensing segment in a much more efficient way. So yeah, I think it's yeah, by the end of the year, you will see something interesting related to that aspect. Next is, will you provide routers to Tesla's Robotaxi project? I don't know. I don't know. I don't know I don't know if it's possible. Yeah. But again, a lot of time is just like this morning, I realized that is in USA, if you go to a large stadium, then there's a kiosk. And then so for that kiosk, the kiosk is doing a lot of the facial recognition and this and that. So they're using our products inside. The department has been departed for quite a while. I didn't realize until this morning. They asked for something. Then we know there's installations like that. So again, because we focus on the product-led growth, sometimes we just don't know who has deployed our products. What are our top three selling Peplink models, and what proportion of those top three are? Oh, sorry. I don't want to talk about this. I don't want the $199 guys to keep looking into that and then drop the price to $149. Okay. So I think I recall Alex holds nearly 70% of the company shares. This leaves a small float for the public. Would you consider selling down some of your? Oh, this is a great question. So now I think our market cap is reaching something like $500 million. So I only own 70%. In other words, $115 million shares are in the market. I don't know why there's still a liquidity issue. Given the success of Starlink Peplink for cruise vessels, do you see more projects in the same industry with other operators in the near future? Oh, yes. Absolutely. So what we are seeing is all these cruise vessels, they are basically floating buildings. So they need a lot of bandwidth. And we are seeing they keep on increasing the bandwidth. And a lot of times, people don't understand one thing is when people look into the bandwidth and the speed, they keep talking about the download speed, the download speed. But in fact, the upload speed is as important as the download speed because people need to upload their Instagram photos. People need to sync their photos with the iCloud and this and that. So definitely, this is a growing market. The cruise vessel market is a big market. But not only cruise itself, there are also movie productions, video productions, passenger buses, railroads. We are seeing a very similar trend in other segments as well. I think it's just like some time ago, we mentioned that our connectivity market is actually pretty long-tailed. How do you think about pricing power? Do you raise prices each year? Oh, no, no, no. We don't want to do this. I mean, doing this, this is so old school. We want to create value. We want people to feel like this is the best choice. Okay, we are building a brand. We want people to fall in love with the brand. When we want people to fall in love with the brand, we don't want people to feel like we are greedy. So instead, we want to create more values, and we just want to create more values and make people feel like, "I love Peplink. This is what we want to achieve." So no. You are having a lot of fun now. There's clearly momentum in the business. Can you explain our feelings for now and the future? What has changed? Does this feel like anything? Okay. This is a great question. I think why we are able to enjoy the fun and do relatively well is, again, this is coming from our unconventional approach. There are many companies. They They really care about optics. At Peplink, we care less about optics. But what we care about is the value creation coming from the brand, the emotion related to the brand. And then so doing all these kinds of things, it requires a lot of love. It requires a lot of passion. So if you talk to our different team members, or if you meet with our team members, you will probably feel like if we are not talking about anything, if we're just having a face-to-face meeting, you will see basically nobody is that impressive. We are not that good at optics, but we are really passionate in doing what we do well, and we really care and focus on the fundamentals. So the fundamentals, we want to impress the customers. We want to create a product that our integrator partners, the resellers, we want to create a product that they love us. We want to create a product that is not a me-too product. We want to create a product or the whole ecosystem that people feel like, "This is so great." Yeah. And I think in doing all these kinds of things, it's actually very, very difficult for other people to replicate. But at the same time, does that mean this approach, we won't be able to reach $1 billion? At this stage, maybe we won't be able to reach $1 billion. But our near-term goal is $300 million. So in order to do $ 300 million, definitely our approach should be different from what we do when we grow from $0 to $ 30 million. The way that we did, the way that we grow the company from $0 to $ 30 million is definitely very different from $30 million to $50 million. And now we are growing from like $100 million to $300 million. Yes, the approach should be different. But the fundamentals are still the same. So I think, yeah, did we really hit the inflection point or whatever? I think the moment just arrived. And I think many years ago, I shared at the chairman's statement that our goal is to build a small giant. And that goal has never been changed. We still want to become, and we still want to become a small giant. So I think we didn't really hit the inflection point or whatever. Nothing has really been changed. Again, we have been spending 18 years in doing the same thing. So the last question, what is the progress of the B One series? Oh, the B One is doing great. The B One series is our go-to market product for fixed wireless access. Do you have the numbers on this? Okay. So I think in a nutshell, B One is doing great. If you go to Amazon, you will see people putting pretty very positive feedback about the products. And we believe a B One can be extended to, okay, this is our go-to market brand for the prosumer business. Okay. Thank you for all the questions. It's great to see everyone here. We look forward to speaking to our investors again in the coming months.