Ladies and gentlemen, thank you for standing by. Welcome to Xiaomi's 2021 third quarter results announcement conference call. Today's conference is being recorded. If you have any objection, you may now disconnect. If you have any questions you would like to raise during the Q&A section later, please press star one on your telephone keypad. If you wish to cancel the questions, please press star two. I'd now like to hand over the conference to your host today, Ms. Anita Chen, head of investor relations. Please go ahead, Ms. Chen. Good evening, ladies and gentlemen. Welcome to the investor conference call hosted by Xiaomi Corporation regarding the company's 2021 third quarter results. Before we start the call, we would like to remind you that the call may include forward-looking statements, which are underlined by a number of risks and uncertainties, and may not be realized in the future for various reasons. Information about general market conditions is coming from a variety of sources outside of Xiaomi. This presentation also contains some unaudited non-IFRS financial measures that should be considered in addition to, but not as a substitute for, the company's financials prepared in accordance with IFRS. Joining us on the call today are Mr. Wang Xiang, Partner and President of Xiaomi Corporation, and Mr. Alain Lam, Vice President and CFO of Xiaomi Corporation. To start, Mr. Wang will share recent strategic initiatives of the company. Thereafter, Mr. Lam will review the business and financial performance for the quarter. Following that, we'll move on to the Q&A session. I will now turn the call over to Mr. Wang. Thank you, Anita. Hello, everyone. Thank you for joining our 2021 third quarter earnings call. This quarter actually ended the background of global supply shortage. All our business segments continued to grow. Total revenue reached CNY 78.1 billion, up about 8.2%. Adjust net profit reached CNY 5.2 billion, up 25.4% year-over-year. Our global smartphone shipment remained strong despite the shortage of key components. In the third quarter, we ranked number 3 globally in terms of smartphone shipments. In the first three quarters of 2021, our global smartphone shipment reached 146 million units, equivalent to our 2020 full year shipments. This allow us to support our market positions as much as possible across our key market globally. At the same time, our smartphone gross margin reached 12.8% this quarter and increased by 4.4% year-over-year, 1% quarter-over-quarter. We continue to strengthen our position in the premium smartphone market. In the first three quarters of 2021, we shipped around 18 million premium smartphones globally. It accounted for more than 12% of total smartphone shipments, compared with less than 8% in the same period of last year. The growth of premium smartphone shipment has also led to an increase in our overall ASP. Meanwhile, we are using different product lines to penetrate different target market segments and to attract new Xiaomi smartphone users. Among our new smartphone product launch this year, over half of users are new users. Similarly, our stylish Xiaomi Civi attract over 50% female users. We remain committed to technology innovation to deliver best product and user experience. In China Telecom's 5G smartphone performance test in November, we ranked number one across all price categories, a result of our relentless focus on user needs and R&D investments. In the first three quarters, our R&D expenses reached CNY 9.3 billion, up more than 50% year over year. As we continue to make amazing products, actually we are also strengthening our distribution channels. In online channel, we were the clear leader in the year's Double Eleven shopping festival. We ranked as the number one smartphone brand by sales volume. At the same time, we continue to expand our offline channel. By now, we have over 10,000 stores in mainland China. Going forward, we will seize the growth opportunity in lower-tier offline markets and continue to strengthen our market share. This quarter, internet service performance remained strong. In September, our global MIUI MAU reached 486 million. At the same time, our mainland China MIUI MAU increased for four consecutive quarters, reaching 127 million. As we grow our user base and increase our premium smartphone shipments, internet service revenue and advertising revenue both achieved record highs in this quarter. Furthermore, our overseas internet services revenue contribute to nearly 20% of our total internet service revenue. We are happy to share that as of yesterday, our global MIUI MAU exceeded 500 million users. It took only 10 months for our global MIUI MAU to increase from 400 million to 500 million. This marks an important milestone for our smartphone times AIoT strategy. Now, I'd like to invite Alain to discuss our third quarter earnings result in greater details. Alain, please. Thank you, Xiang Zong. Good evening, everyone. Thank you for joining us today for our third quarter 2021 earnings call. Our total revenue and adjusted net profit continued to grow despite the global shortage of key components. In the third quarter, we ranked number three globally in terms of smartphone shipments. Our MIUI user base in mainland China, as well as globally, both reached record highs as of September, driving our internet services revenue to set another record. The number of connected devices on our AIoT platform exceeded 400 million for the first time, and the number of users with five or more connected devices also surpassed 8 million for the first time. In the third quarter of 2021, our total revenue reached 78.1 billion RMB, up 8.2% from a year ago. As all business segments continued to grow year over year. Adjusted net profit increased 25.4% year-over-year to CNY 5.2 billion. Adjusted net profit margin was a robust 6.6%. By further refining our smartphone user segmentation, we have been attracting new users to Xiaomi. Notably, for many of our new smartphones launched this year, over half of the users are new Xiaomi users. For example, over 70% of Xiaomi MIX Fold users and over 60% of Xiaomi 11 series and Xiaomi Civi users are new users of Xiaomi. These new users help us increase our internet MAUs in China from 111 million in December 2020 to 127 million in September 2021. We continue to improve our competitive position in the premium smartphones markets. In the third quarter of 2021, our premium smartphone shipments reached approximately 18 million units globally, significantly higher than the 10 million units in all of 2020. In the first three quarters of 2021, we've expanded our premium smartphone market share in mainland China across all price categories. For example, in the CNY 3,000-CNY 4,000 category, our market share grew 6.4% year-over-year. In the CNY 4,000-CNY 5,000 category, our market share grew by 7.7% year-over-year. At the same time, models such as Xiaomi 11 Pro, 11 Ultra, and MIX Fold continue to attract new premium users and improve our market share in the CNY 5,000 or above price category. The outstanding performance of our 5G smartphones has also been well-recognized by the industry. In the most recent China Telecom 5G smartphone performance test in November, which included tests on speed and stability, Xiaomi and Redmi smartphones ranked number 1 across all price categories against all of our peers. The result shows the competitiveness of our 5G smartphone products. As Shang Zhu mentioned, we have achieved remarkable results during the Double Eleven shopping festival. We set new records as our cumulative GMV exceeded CNY 19 billion, an increase of 35% year-over-year. We ranked as the number 1 smartphone brand by sales volume across the major e-commerce platforms. In the Android CNY 4,000 and above category, our premium smartphones ranked number 1 on JD.com and Tmall. Furthermore, our AIoT products achieved 208 number 1 rankings across different categories. Also, as Shang Zhu mentioned earlier, we're very happy to share that as of yesterday, our global MIUI MAU exceeded 500 million users. This marks another milestone of our history and demonstrating the strong growth momentum of our user base. We continued to step up our investments in R&D. In the third quarter of 2021, our R&D expenses increased by 39.5% year-over-year to reach CNY 3.2 billion. For the first nine months of 2021, total R&D expenses reached CNY 9.3 billion, up 51.4% year-over-year. At the end of the third quarter, we had approximately 14,000 R&D personnel, accounting for more than 44% of our total employees. In addition, our total patent applications exceeded 48,000 globally. Our smart EV business has been progressing ahead of schedule since we officially announced our entry in March of this year. So far, we have a team of over 500 people. We expect to continue to execute on our strategies and begin mass production in the first half of 2024. Let us dive deeper into each of our segments, starting with smartphone. In the third quarter of 2021, despite the global shortage of key components, we managed to increase our smartphone revenue by 0.5% year-over-year to reach CNY 48 billion, while our ASP increased 6.7% year-over-year. Our smartphone market share has maintained an upward trend. In the third quarter of 2021, our smartphone market share was 13.5% globally and 13.8% in mainland China, both were above our historical averages. In this past quarter, we launched our Xiaomi Civi for fashion-conscious users. With a lightweight and attractive design, Xiaomi Civi has been well-received. Since launch, based on our data, over 60% of Civi users are new Xiaomi users and over half are female, demonstrating our ability to penetrate new user segments. The Redmi Note 11 series is another exciting new product that offers cutting-edge technology to a wide user base. The Redmi Note 11 Pro+ comes equipped with a high refresh rate display, ultra clear camera, and 120-watt fast charging. Since launch at the end of October, sales of the Redmi Note 11 series in mainland China have already exceeded 1 million units. We continue to expand our offline network in mainland China. We currently have over 10,000 offline retail stores covering over 95% of cities and over 80% of counties in mainland China. We're focused on expanding in lower tier markets as well as improving the efficiency of our offline stores in the future. In the overseas market, our premium smartphones have gained wide popularity. In the third quarter, our overseas premium smartphone shipments grew more than 180% year-over-year, mainly driven by growth in Latin America, Western Europe, and the Middle East. As a result, our overseas smartphone ASP also saw a year-over-year increase. We maintained the number one position in 11 markets globally and was among the top five in 59 markets in the third quarter, according to Canalys. Now let's move on to the IoT and lifestyle products. In the third quarter, our IoT and lifestyle products revenue reached CNY 20.9 billion, up 15.5% year-over-year. In particular, overseas IoT and lifestyle products revenue reached a historical high, even though there were challenges with respect to overseas shipping logistics costs, which has impacted some of the IoT products overseas. As the global leading consumer IoT platform, we continue to expand our global IoT user base. By the end of September, the number of connected IoT devices on our IoT platform exceeded 400 million for the first time, up 33.1% year-over-year. Moreover, the number of users who have five or more devices on our AIoT platform exceeded eight million for the first time, up 42.8% year-over-year. Our AI assistant MAU reached 105.1 million in September, an increase of 34.1% year-over-year. Also, our Mi Home app MAU reached 59.9 million, up 39% year-over-year. In the smart TV category, we are rapidly expanding our global footprint. In the third quarter, global shipments of our smart TV reached 3 million units, despite the impact of increased panel prices, and we ranked top five globally. In India, our smart TV ranked number one for the 13th consecutive quarter. In mainland China, we ranked number one overall for the 11th consecutive quarter. And since launching our new OLED product in August, our OLED TV have ranked number one for two consecutive months, demonstrating our achievement in the premium segment. We have made continuous efforts to penetrate the high-end white goods market. We believe we can capture significant opportunities by enhancing traditional white goods with smart technologies while making our premium products available to the mass market. As an example of this effort, we launched our first premium smart refrigerator in October 2021, which supports connectivity with our Mi Home app as well as our AI smart assistant. Also, during the Double Eleven shopping festival, our home appliances products achieved record sales. On JD.com, as you can see, we ranked number three in the overall home appliances category by sales value, outpacing other players like GE. Notably, in the smart AV with ventilation category, which we have talked about in the previous earnings call, Xiaomi ranked number one in terms of both sales volumes as well as sales value. We have continued to make progress in the wearable areas. In the third quarter, according to Canalys, we were the global number two vendor in wearable bands. As we execute our smartphone times AIoT strategy, we strive to offer our users the coolest wearable products, such as our Redmi Buds 3 Pro and Redmi Watch 2, while enhancing connectivity with our smartphones. Now let's talk about our internet services. In the third quarter, our global internet user base continued its strong growth momentum to reach another record high. Our MIUI global MAU increased by 32% year-over-year to 485.9 million in September, while our MIUI MAU in mainland China reached 127.3 million, an increase of 3.3 million users from June of 2021. As Xiang Wang said earlier, our global MIUI MAU exceeded 500 million a couple of days ago. Just to recap, in the first nine months of the year, MIUI MAU in mainland China increased by more than 16 million. Our global TV MAU also continued to grow rapidly, increasing over 33% year-over-year. As our global and mainland China user base continues to grow, revenue from internet services achieved another record high, reaching CNY 7.3 billion in the third quarter, up 27.1% year-over-year. Our advertising revenue reached another quarterly high of CNY 4.8 billion, up 44.7% year-over-year. Gaming revenue also grew 25% year-over-year to reach CNY 1 billion, our first year-over-year growth in the past year. Let me elaborate further on our advertising and gaming business. Our advertising revenue is mainly derived from app pre-installation, by search, and by performance-based and brand advertisements. In the third quarter, pre-installation revenue per smartphone in mainland China increased by over 50% year-over-year, driven by increased premium smartphone shipments. In the overseas market, search revenue increased over 200% year-over-year, and performance-based and brand advertising revenue increased over 100% year-over-year, driving our significant growth in advertising business. For online games, contract terms are now comparable with the same period last year. Furthermore, higher ARPU contribution from our premium as well as our gaming smartphone users help drive solid revenue growth. Our overseas internet services revenue also continued its rapid growth and achieved a record high. In the third quarter, overseas internet services revenue increased 110% year-over-year, accounting for 19.9% of our total internet services revenue. Going forward, we will deepen our collaboration with global business partners and further enrich our overseas services offerings. Now let's move on to more detailed financials. As we mentioned before, in the third quarter, total revenue reached CNY 78.1 billion. By segment, smartphone revenue grew 0.5% year-over-year to CNY 47.8 billion. AIoT products revenue grew to CNY 20.9 billion, and internet services revenue grew 27% to CNY 7.3 billion. Overseas revenue increased 2.8% year-over-year to CNY 40.9 billion, accounting for 52.4% of our total revenue. Our overall gross margin increased year-over-year and quarter-over-quarter to 18.3%. This increase was mainly driven by higher smartphone gross margin, which reached 12.8% in Q3, an increased contribution from the internet services segment, which achieved 73.6% gross margin. As we mentioned before, we continue to invest in R&D in the third quarter. As you can see, our overall operating expense ratio was 12%, which was mainly driven by R&D expense ratio increase to 4.1%. In the third quarter, our cash resources remained abundant at CNY 98.1 billion. Let me provide you with an update on our ESG initiatives. Number 1, we continuously strive to protect our users' data and privacy and hold ourselves to the highest standards. Our efforts have been recognized by the British Standards Institution, which has granted the Kitemark certification to our Mi 360° Home Security Camera. Furthermore, in this quarter, we screened more than 85,000 in our mainland China Xiaomi app store for data collection violations and rectify any issues immediately. We also understand our social responsibility extends far beyond our products and services. In responses to natural disasters in the Henan and Shanxi provinces, Xiaomi Foundation donated CNY 15 million and CNY 10 million to the respective areas. In July, we also donated EUR 1 million to those affected by the flood disasters in Germany, Netherlands, and Belgium. We also strive to give back to our community through education. In November, the Xiaomi Scholarship was launched to the second batch of universities in China to support eligible students. In the future, as we grow our business, we'll continue to give back to our community and fulfill our corporate social responsibilities. This concludes our prepared remarks. We'd now like to open the call for questions from investors. Thank you, Alain. We will now proceed to the Q&A session. Please limit your questions to a maximum of two so that we could allow more investors to ask their questions. Operator. Thank you. The question and answer session is now open. To register your questions, please press star one on your telephone keypad. If you would like to cancel the questions, please press star two. Our first question is come from Kyna Wong with Credit Suisse. Please go ahead. Thank you. Thank you for taking my question. I have two questions. The first one is about the internet business. We see that a strong momentum in the advertising business, also gaming is picking up. We see overseas contribution also increased over 100% year-over-year in the third quarter. Could management give us some kind of outlook in the internet business in the fourth quarter, also first half next year? Because the overall, as we think that it's important to know the growth momentum going forward, as the MAU has already achieved the kind of certain level that potentially contributes to the internet business in the next few quarters as well. The second question is about smartphone side. I think we know that the chip shortage is hard to release in the near term, any improvement in the fourth quarter, and what should we expect on the full year shipment? Is the 190 million a reasonable target for us? What should we expect the target for 2022 if the chip tightness is actually improving in the second half next year? Thank you. Thanks, Kyna. Let me try to take the first question. Then I'll let Xiang Zong take the second question. With respect to the growth in the internet business, number one, I think it's driven by the increase of our global internet users. As we said before, our Q3 MAU reached 486 million, which means an increase of over 100 million in 2021 alone. In the first three quarters, our China MAU increased by 16 million. So a huge part of the increase in internet services obviously driven by the increased number of our user base, as well as our shipment base. I think that's number one. Number two is the increased percentage of our premium smartphone as our overall premium smartphone portfolio. As we demonstrated in one of the charts, premium smartphones do drive higher gaming ARPU, also drives higher pre-installation revenue. The move towards more premium smartphones for Xiaomi will also increase our advertising internet services revenue. Number three is also the gaming revenue, as we talk about. In the past 4 quarters, we've been hit by some changes in the contract terms with some of our providers, suppliers. Q3 is the first quarter that we're able to compare apples to apples in the past 5 quarters. As a result, we're very encouraged to see that our gaming revenue has increased year-over-year. Number four, you talk about overseas. Obviously, overseas is a function of the user base in the overseas market. We talk about the increase in revenue from our search business in the overseas market. I think that that will continue to contribute to our revenue as well as our net income. Lastly, I think the TV, we talk about the TV MAUs. The TV internet revenue has also contributed to the significant increase due to some of the memberships, et cetera, that we've seen a year-over-year increase. Right. In the future, we continue to be optimistic. Obviously, I think as you mentioned, there's a lot of regulatory headwinds, which are facing some of our peers as well, which we're well recognized. At the same time, I think given the strong shipments that we have, the increased number of new users on Xiaomi's platform, the premium users on Xiaomi's phones, and to the extent that we can continue to improve customer experience, customer services, we believe that we will continue to see, hopefully continue to see a healthy growth in the internet business. Yeah. The second question is related to the supply and also the forecast. Actually, everybody knows, during the entire year 2021, we are facing the challenge of supply shortage. Actually, the second half of 2021, the challenge even bigger. Even with the serious supply situation, actually, we have achieved actually a record high shipment. In the first 3 quarters, actually, the total shipment is over CNY 146 million. Is equivalent to the entire last year's shipment, actually. I think it's a very good result. Actually, Q3 and also Q4, the challenge is even bigger, as I mentioned earlier. I think we are working very closely with our suppliers to try to get more supply as much as possible. I think, CNY 190 million is a good number, but we still work very hard to try to get more. It is getting the middle of the Q4, right? We are working very hard. For next year, actually, we see very good, how to say, the momentum of the improvement. Unfortunately, in the first half, actually, we still see some structural challenges in the first half, Q1 and Q2. The entire year 2022, the supply situation will be very much improved. We are working very hard for the supply for Q1 and Q2, especially for the 4G devices, right? Right now, we are in the more than 100 different markets, actually. Many of our markets, the consumer really need a lot of the 4G devices, even in the developed market like Europe. We are working very hard for that supply. In overall, it's good, but yeah, as I mentioned, the first half will be a challenge. We'll maintain very high growth for the year 2022. I think, Kyna, just to contextualize some of what Xiang just said, right? If you look at our shipments in the first three quarters of the year. Yeah. We've already reached 146 million, which was comparable to the entire 2020. If you look at our revenue from smartphone in the first nine months of this year, it has already exceeded the whole of 2020. Despite overall shipments being flat in the global market, we have achieved very considerable growth in our smartphones this year. That's why we are very encouraged by the results. I think that's point number one. Point number two is obviously, as we mentioned in the last couple of conference calls already, in the global supply shortage situation, we're also able to maintain a very healthy gross margin. If you look at our smartphone gross margin this quarter, it's back to 12.8%, which is comparable to what we achieved in the first quarter. I just want to point those numbers out to you. Got you. 2022 sounds like good growth and to maintain good growth for 2022. Yeah. Yes. I understand that. Yeah. Thank you. Yeah. Thank you. Thank you, Alain. Thank you. Our next question is come from Andy Meng with Morgan Stanley. Please go ahead. Thank you, Xiang. Thank you, Alain. I have two questions. The first question is related to the AIoT business. We have seen the margin see a slight decline on quarter-over-quarter basis. Is it possible for Xiaomi to raise the ASP of the AIoT product and try to pass through the cost pressure? Can we say this will help us to improve the margin? Basically, the margin is more likely to stay at a current level, without much improvement in the following quarters? Okay. This is my first question. My second question is related to the smartphone. We have highlighted two products in our presentation, which is the Xiaomi Civi and the Redmi Note 11 series. Basically, I want to check, you mentioned about the positive feedback on those new products. Compare with the models we launched earlier this year, what's the key improvement we have achieved on those two models? What are the key areas we want to do better in the future? If you can share a bit more regarding the offline channel, which product is selling better, and why is that? Do we figure out how to play this offline promotion or just selling the popular models, et cetera? That will be very helpful. Thank you. Yeah, the first question related to the AIoT profit margin. During the entire 2021, actually, I just mentioned the challenge is the supply, right? On the AIoT side, I think there is another challenge with the logistic transportations. The transportation cost is very high, increased significantly. That will give us some impact on the international profit margin, generally from the international market and also because of the slow response of the transportation. They also give some impact on the revenue side for the international market. Because of the supply shortage. Some of the cost of our AIoT devices increased significantly. That gave us a temporarily impact on the profit margins. This is what I see. Probably, Alain, you can add. I think, Andy, on the IoT side, as Xiang Zong mentioned, we do have some products that we normally sell to the overseas market that's been delayed or that's been canceled due to the shipment costs. Yeah into the overseas market. I think that's the first point. What that means is we also shifted some of the product mix between China as well as the overseas market. Yes. That's the second point, right? China, as you know, is predominantly dominated by some of the larger white goods product, such as TV and laptops. Obviously TV and laptops are due to kind of a high LCD prices, carry lower margins. So I think it's just a math function, right? I think as LCD price, people are already seeing LCD price dropping a lot. Significantly. Significantly, in fact. So it does help in terms of the gross margin in future periods. Yeah. As we can see, the overall shipping cost has also been normalizing, and so it will also help the overall margin in the future periods. I think that's the first question. I think the second question is with respect to Civi and Redmi Note 11. I think, first of all, the Civi product is really made for a different demographics. A demographics that we haven't really targeted previously, which is the fashion conscious female demographics. As I mentioned in my prepared remarks, the female users, we estimate it to be around half of the buyers. Yeah. Probably some of the other buyers give it to their girlfriends and wives. We don't know, but the percentage could be high. So, I think from our data, we already targeted a kind of a new demographics that we haven't touched before. Second is we targeted the Civi products a lot into the offline channels. So this is also our first try into trying a different types of products into a different channels. We're very encouraged. Obviously, I think it will take time for us, like our premium products, to get used to serving the high-end premium users as well as the female demographics. So hopefully the next series of the Civi products will be much more competitive. I think that's something that we'll like to see. Right? In terms of the Redmi Note 11 series, obviously we've been improving the performance, but at the same time, we also increased the price. I think the price range that we offered our Redmi Note 11 was much higher than previously. I think you can see that we're also trying to broaden the reach using this Redmi Note 11 product. This is something that we are trying. Your last question is respect to the offline channel. The offline channel, I think this year we've added a lot of new stores. We are over 10,000 now. I think the next stage for us to focus on is really to increase the efficiency of these stores or increase the productivity of these stores. I think that a lot of these new stores are open for less than three to six months, and that it takes time to ramp up these stores. I think an important focus for us is to improve the productivity of each of these stores in the near future. Thank you very much. Thank you. Our next question is come from Piyush with Goldman Sachs. Please go ahead. Thank you for taking my question. Just picking up from the store point that you talked about, Alain, could you take us through, you've expanded the store number by more than a factor of three. Could you take us through what's prompted that expansion that we're observing? Give us a feel of whatever the initial feedback has been on the ability to sell through and market share gains you're seeing in the offline space. Also give us a feel for whether this is coming in at a higher end versus the overall ASP, or at another price point versus the overall ASP. Second is, what have been the key learnings for you from building out this retail presence from the standpoint of how effective your sales force has been, and how good the quality of the smartphone overall is versus the high end of the market? Third is more specific to how we should be thinking of the expenses related to EV, where I noticed you've fleshed out how many people have applied for and how many have started to work in that segment. Could you take us through what that cost point is at this stage and how that's likely to evolve, and how we should think about that and baking that into our numbers? Thank you. Thanks, Piyush. On the offline store expansion, as we mentioned previously, we are significantly lower in terms of number of stores versus our peers. Right? If you look at OPPO and Vivo, each of them has probably 200,000 sales points in China. At this point, we are still very low in terms of where we are. Obviously, we believe that we can be more efficient and that we don't need to have that many stores to achieve their market share. Right? If you compare the market share per store, I think we are much higher versus OPPO and Vivo at this point in time. Key lessons learned, obviously, number 1 is that these stores need time to ramp up. If you think about 10,000 stores, we are hiring 10,000 employees into Xiaomi. We assume one store manager per store, right? That puts significant pressure on training these people, on getting them up to speed, on getting them familiar with selling Xiaomi product, et cetera. We have to implement a lot of training sessions for them to learn about our style, our culture, how to sell the product, et cetera. Obviously it takes a while for these stores to get ramp up. I think that's one of the key lessons learned. For the next few months, I think we are spending considerable efforts trying to ramp up the productivity of these stores. I think what we've been encouraged to see, obviously, is our business partners, because a lot of these stores are not opened by us, are opened by our business partners. They will only open more stores with us if they make money, right? We've been talking about this ROI model for a while now, which we think is working. If you look at the number of average stores opened per partner, that number has been increasing. At the beginning, each partner probably opened three-ish stores for us. In the most recent data we collected, they're opening more than five stores with us. That's something that we are encouraged to see because obviously they're making money, otherwise they won't be opening that many stores with us. That's something that we'll continue to work on, increase the productivity of each store, improve the returns of each partner so that they will continue to build their network with us. In terms of EV expenses, right now it's still relatively small compared to other parts of our business. That's why we are not breaking that out at this point. I think this year will continue to be low, versus where our other businesses are. As we grow the business, we are also thinking about how to better disclose the expenses related to EV, so that analysts and investors will have a better view. Stay tuned on that. We are not quite ready yet, when we are ready, we'll let you know. Thank you. I think Oh, sorry. One last point you mentioned. Obviously, we do see higher percentage of premium products sold in our offline stores. Yes. That's something that we've observed as well. That's why as we continue to push our effort into the premium smartphone side, these stores will also be very helpful in that distribution. Thanks. Thank you. Our next question is come from Gurfath with JP Morgan. Please go ahead. Thanks for taking my question. My first question is about competition in China. It seems like Honor has come in and taken a fair bit of market share in a short period of time. How do you see competition evolve now that there are four local brands who are all competing for market share? How does Xiaomi plan to gain further market share in addition to the offline push in the next, let's say, 12-18 months? I think previously we've talked about potentially getting to high teens to 20% market share. We were there in first half of the year. Seems like there has been a little bit of a slippage in Q3. Could you talk a little bit about how we think market share evolves in China? Second is on the overseas internet business. Alain, I think you talked a little bit more in detail about advertising growth in overseas. Could you also get some more details on where is the revenue coming from overseas? Is it primarily coming from the higher ARPU areas like Europe, or is it more broad-based in terms of the overseas internet revenues? Thank you. The CNY 19. Yeah. Regarding to the competition, actually, we have a lot of competition. Actually, we respect every competitors in this market. China is the most competitive market. I think instead of looking what competitors are doing, actually, we should focus more on ourselves to improve the user experience, the quality of our product, improve the channel coverage. I think that's the way we are doing it. Actually, focus on our key strengths. I think one of the strengths we have is we have the scale, right? Last year, we have almost 150 million smartphone shipped to the global market. We have that scale. Scale means we have a higher efficiency, right? We have a better cost structure. That's a key strength we have. Also we optimize everything, in terms of the R&D and also the channel cost. That's what we are doing now. I think we are confident that, in the future, while we are building our coverage in the offline in China, we'll continue to improve the efficiency. I think we are confident we can compete with anyone more efficiently. It takes a little while for us to establish the offline channels in China. Actually, we are still the leader in the online market, and also we have a very broad global market. I think that's all our strengths. I think, Gurfath, a couple of other points. Obviously, in Q3, our market share was lower than Q2. I think one of the key reasons was really the strong performance by the iPhone 13. Right? I think it actually managed to squeeze all the Android players down in terms of their market share. I think that's the first factor there. They're still very strong. I think second thing is, obviously, if you look at some of the recent market share that we have in the Chinese market. Last week, we've seen 16.5%. Two weeks ago, we've seen 18.6%. As the November 11 festival plays out, we've been able to achieve a pretty high market share on a weekly basis in China. Our third point is also, I think this is a point that we made for the past couple of quarters already. As we are facing supply shortage, we are also trying to optimize our product portfolio globally, because we do have 100 markets to take care of. We've also been strategically allocating our resources globally to make sure that we are satisfying as much as we can all the channel demand under the constraint supply that we are getting. I think that kind of address your question on the market share. With respect to the overseas internet revenue, frankly speaking, we haven't been doing a lot of monetization, although some of these search revenue, pre-installation revenue comes naturally. Obviously, we've been focused on growing our user base. As I said mentioned earlier, I think this past nine months, we increased our user base by over 100 million. The user base increase is actually helpful to our internet revenue. In terms of regions, I do think that if you look at the breakdown, the higher ARPU obviously comes from the more developed market, right? Such as Western Europe, part of Latin America than over Southeast Asia, et cetera. I think you do see similar trends with respect to the economic development reflected in the overseas internet services revenue. Go ahead. Thank you. Thank you. Our next question comes from Wenhan Jin with CICC. Thank you. Good evening, management. Thanks for taking my question. I have two questions. The first one is about the overseas smartphone market, especially in India and Europe. Could management share the future channel strategy of these two markets? How will Xiaomi increase the ASP of smartphones in these two markets? The second question is a follow-up question about EV business. We see that recently the company registered the second car company. Could management update EV business such as the number and focus area of R&D team and the construction of supply chain? Thanks. Yeah. I think every market actually is different. Specifically in Europe, actually, we'll continue to execute the channel strategy we're using right now. In Europe, actually, there are half a half market in terms of the market share. Half is the open market. We sell the product, our smartphones, our AIoT products through the open channel. That means the big chain stores like MediaMarkt and others. We sell our product through that channels and other smaller channels. That's open market. That still represents 50% of the European market. Another half will be the carrier market. Actually, we have been establishing a partnership with the global carriers, especially European carriers. We'll continue to grow that market. Still up to now, our market share in the carrier channel still have a lot of room to grow. Especially in the higher tier product, this high-end product, we'll continue to strengthen the partnership with our carrier partner to help them and help ourselves to increase the market share in the high tier segment. That's a very important thing to do. In Indian market is different. Indian market, actually online market is close to 40%. The online market is the highest market share globally among all the countries. We'll continue to strengthen our position in online market through mi.com and also our partners including the Amazon and Flipkart. At the same time, we'll continue to grow the offline channels in the Indian market. Indian market actually is the mom-and-pop stores. There are thousands of those stores covering the cities and also the rural areas. We'll continue to improve the coverage. We use a very high efficient methodology to cover those areas. We'll continue to do that. This year, actually, our challenge in India is the shortage and also pandemic give us a very big challenge on the manufacturing side as well as the channel side as well. I think next year there's going to be improvement in supply and also the pandemic, we hope. We see a very big potential to grow our market share in both Europe and India as well as Latin America and the Southeast Asian countries. Yeah, on the EV side, unfortunately, there's not much to update. I think we've been spending time and efforts on defining our product as well as the product design, as well as reaching out to some of our supply chain partners or starting to reach out to our supply chain partners. Beyond that, I think there's not much to say. Obviously, you've seen that we've registered a couple of companies. Obviously from a corporate structure perspective, we also need to set up the corporate structure. That's been progressing on schedule. Okay, thanks a lot. Thank you. We now invite the last question. The question is come from Yingbo Xu with CITIC. Please go ahead. Thanks for taking the question. My first question is about overseas internet revenue. We are very glad to find that overseas internet revenue keep on acceleration on increase. Also when we calculated overseas ARPU, it keep on increasing quarter-on-quarter. My first question is that could you please give us some color on the forecast of the internet business, especially the overseas internet business? My second question is about AIoT business. We find that we have launched a new refrigerator and washing machine has been launched for a while. Could you please give us some forecast for about next year's AIoT revenue increase? Thank you. On the overseas internet question, what we've been trying to do is to increase our number of users in the global market at this point in time. Again, if you look at the average ARPU in the overseas market, it remains quite small, quite low. At the same time, because we have such a large user base, we've been able to get a pretty significant revenue from the internet services side. Going forward, we're optimistic that we'll continue to increase the number of users that we have in the overseas market. As a result, I think it will continue to grow quite naturally. I think that answers your first question. On your second question, with respect to the AIoT business, I think we've been trying to improve our product mix as well as improve each category of our products over time. For example, this year we've seen a very popular product on the air conditioner side. We've seen very good responses on the premium refrigerator. We've seen very good responses from our Xiaomi Pad, and we've seen very positive feedback from our wearable business as we improve the interconnectivity between them as well as our smartphone. We've been encouraged by some of these product lines that we have continued improvement and continued popularity among our users, and that's something that we'll continue to do. As you know, AIoT is a very diversified business line. We do have a lot of SKUs. Some of them will be doing better, some of them will be doing worse in one year. Over time, I think we're quite optimistic we'll continue to see growth in this area overall. Also I think as we ship more and more high-end product to the overseas market, actually it will improve the internet service as well. Thank you.