Ladies and gentlemen, thank you for standing by and welcome to Xiaomi 2021 fourth quarter and annual results announcement conference call today. Today's conference is being recorded. If you have any objections, you may now disconnect at this time. If you have any questions you would like to raise during the Q&A session later, please press star one on your telephone keypad to register your questions. To cancel the questions, please press star two. I'd now like to hand the conference over to your host today, Ms. Anita Chen, Head of Investor Relations. Please go ahead, madam. Evening, ladies and gentlemen. Welcome to the investor conference call hosted by Xiaomi Corporation regarding the company's 2021 fourth quarter and annual 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 the 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, Founder and President of Xiaomi Corporation, and Mr. Alain Lam, Vice President and CFO of Xiaomi Corporation and CEO of Airstar Digital Technology. To start Mr. Wang will share recent strategic updates of the company. Thereafter, Mr. Lam will review the business and financial performance for the fourth quarter and full year 2021. Following that, we'll move on to the Q&A session. I will now turn the call over to Mr. Wang. Yeah. Thank you. Thank you, Anita. Hello, everyone. Good evening. Thank you for joining our 2021 first quarter and annual results earnings call. In 2021, against the backdrop of macro uncertainty and global supply disruption, we delivered outstanding business and a financial result across all business segments. In 2021, our total revenue reached RMB 328.3 billion, up almost 34% year over year. Adjusted net profit reached RMB 22 billion, up almost 70%. Our global smartphone shipments exceeded 190 million in 2021. I'm pleased to share that our smartphone shipments ranked number three, both globally and in Mainland China in 2021, with record high market shares. As we continue to expand globally, we ranked number one in 14 markets and top five in 62 markets in the year. In particular, we ranked number two in Europe with a market share of 23% and retained our number one position in Spain for two consecutive years and the number 1 position in India for 17 consecutive quarters. We continue to strengthen our position in the premium smartphone market. In 2021, we shipped over 24 million premium smartphones globally, compared to approximately 10 million the year before. Premium smartphones accounted for around 13% of our total smartphone shipments in 2021, compared with around 7% the year before. We remain committed to R&D investment and innovation. Last year, our R&D investments reached RMB 13.2 billion, up 42% year-over-year. To provide best user experience, we continued to deliver cutting-edge camera, charging, and display technologies. In 2021, we successfully launched our first ISP chip and our first charging chip and our groundbreaking CyberDog robot and the smart glasses. Furthermore, we expect to invest over RMB 100 billion over the next five years. As we continue to build amazing products, we also strengthen our distribution channels. As the leader in online channel, our online market share of smartphones reached 34% in Mainland China in 2021. Meanwhile, we continued to expand our offline channel, and by end of last year, we had over 10,200 stores in Mainland China, an addition of over seven stores in 2021. In 2022, our focus will be on further improving operational efficiency of these new offline retail stores and strengthen our sales and customer service capabilities. Our internet service performance also exceeded expectations in 2021. Our global MIUI MAU reached 509 million in December last year, a net increase of 113 million from the year before. Our mainland China MIUI MAU increased for five consecutive quarters, reaching 130 million. With our growing global user base and increasing premium smartphone shipments, our internet service revenue achieved robust growth. Furthermore, our overseas internet service revenue contributed to nearly 22% of total internet service revenue in the first quarter of 2021. The spring season is upon us. Together, we will face our challenges with courage and commitment, while seizing new opportunities. We will endure through this period of certainty and make our way to a brighter future. Now, I'd like to invite Alain to discuss our first quarter and annual result in greater details. Alain, please. Thank you, Wang Xiang. Good evening, good morning, everyone. Thank you for joining us today. Let's start with our Q4 highlights. Despite the global shortage of key components and the continued challenges brought by the COVID-19 pandemic, our quarterly revenue and adjusted net profit achieve outstanding growth year-over-year. In the fourth quarter of 2021, our total revenue reached RMB 85.6 billion, up 21.4% year-over-year, and our adjusted net profit was RMB 4.5 billion, up nearly 40% year-over-year. Moreover, all three of our major business segments delivered strong performance. In the fourth quarter, our smartphone shipments ranked number three globally, and the number of connected devices on our AIoT platform grew nearly 34% year-over-year. Furthermore, our global and mainland China MAU reached record highs. For the full year 2021, revenue of each of our business segments achieved record highs. Total revenue amounted to RMB 328.3 billion, an increase of 33.5% from 2020. Adjusted net profit was RMB 22 billion, an increase of 69.5% year over year. Our continuous investment in R&D has driven our overall robust growth. Our total R&D expenses in 2021 increased by 42.3% from 2020 to RMB 13.2 billion. We continue to introduce cutting-edge technology to the market. In 2021, we launched our first proprietary image signal processor, the Surge C1, and our first proprietary charging chip, the Surge P1, which were equipped in our Xiaomi MIX Fold and Xiaomi 12 Pro premium flagship smartphones to enhance our user experience. We also introduced Xiaomi Smart Glasses and CyberDog and established our robotics laboratory. In addition, we applied the liquid lens on our MIX Fold and our CyberFocus algorithm on the Xiaomi 12 series, which further optimized smartphone imaging experience. Looking ahead, we will continue to invest heavily in R&D, and we have announced our plan to invest more than RMB 100 billion in R&D over the next five years. Despite the global shortage of key components, our smartphone business maintained outstanding growth in 2021. Full year smartphone shipments exceeded 190 million units in 2021, and our global smartphone ranking rose to number three, setting record highs in terms of both market shipments and market share. From 2019- 2021, our global smartphone market share has increased from 9.2%- 14.1%. Our Mainland China smartphone shipments also achieved record high market share of 15.2% in 2021 and ranked number three overall. From 2019- 2021, our Mainland China smartphone market share increased from 10.5%- 15.2%. Our focus on premiumization has yielded promising results. In 2021, our global premium smartphone shipments exceeded 24 million units, far above the approximately 10 million premium units we shipped in 2020. Premium smartphone shipments, as a percentage of our total shipment, increased from approximately 7% in 2020 to approximately 13% in 2021. We continue to pursue our new retail strategy in mainland China. We maintained our leading position in the online channel, while further strengthened our offline channel. In 2021, we captured 33.6% online market share in mainland China, an increase of 10 percentage points compared to 2020. At the same time, we continued to expand our offline network. As of December 31, 2021, the number of our offline retail stores exceeded 10,200. We opened 7,000 new stores net last year. In 2021, our offline market share in mainland China increased to 6.7% from 5.2% in 2020. After successfully expanding our offline retail store coverage in 2021, we will focus on operating efficiency improvement in 2022. Our smart EV business has been progressing ahead of schedule since we officially announced our entry in March 2021. Currently, our smart EV R&D team has grown to over 1,000 people. We continue to expect mass production to officially begin in the first half of 2024. Now let's dive deeper into each of our segments, starting with smartphones. Our smartphone shipments continued to increase in the fourth quarter and full year 2021. In the fourth quarter, our smartphone revenue reached RMB 50.5 billion, an increase of 18.4% year-over-year. For the full year, smartphone revenue reached RMB 209 billion, up more than 37% year-over-year, and shipments exceeded 190 million units, up 30% year-over-year. Our ASP also increased by 5.6% year-over-year and reached RMB 1,098 in 2021. We continue to pursue our dual brand strategy. In December, we launched the Xiaomi 12 series, which for the first time introduced dual premier models with two screen sizes. Xiaomi 12 and Xiaomi 12 Pro both come equipped with Qualcomm Snapdragon 8 Gen 1 processor. In January 2022, their shipments exceeded the combined shipments of all other smartphones equipped with the same processor. Xiaomi 12 Pro, which is equipped with our proprietary charging chip, the Surge P1, and a CyberFocus algorithm, became the best seller among Android smartphones priced at or above RMB 4,000 on JD.com and Tmall.com. The Xiaomi 12 series has been well received among Mi fans and has successfully attracted new users. As of the end of January, over 50% of users of Xiaomi 12 series were new Xiaomi users. At the same time, our offline channels have helped boost the sales of our premium smartphones. More than 50% of Xiaomi 12 series shipments came from the offline channel in the first month after launch. Under the Redmi brand, we continue to provide the ultimate user experience across highly accessible products. In February, we launched the Redmi K50G for gamers, which offers outstanding performance in terms of speed, heat dissipation, fast charging, display quality, and sound and vibration effects. At the same time, we launched a special edition of the K50G in partnership with the Mercedes-AMG Petronas Formula 1 Team, which has a recognizable and exclusive design. Just last week, we also launched the Redmi K50 and the Redmi K50 Pro. Within the first minute of sales launch, which was today, total orders of those two products exceeded 330,000 units. Redmi K50 Pro features MediaTek's Dimensity 9000 processor using TSMC's advanced 4 nanometer technology. This also marks the first time Redmi phones featured 2K displays. In addition, the Redmi K50 Pro is also equipped with our self-developed Surge P1 charging chip and a 100-megapixel camera with optical image stabilization, bringing high-quality configurations to the mass market. User experience is our top priority, and we continue to improve our MIUI operating systems in terms of smoothness, stability, and privacy protection. In the fourth quarter, we launched MIUI 13. By optimizing memory management, background processing, and data access speed, we substantially improved responsiveness and stability. In addition, we added new privacy protection features in MIUI 13 to provide even stronger user information security. We continue to strengthen our overseas business and perform extremely well in major markets around the world. In 2021, our smartphone market share in all major regions, including China, Europe, Latin America, the Middle East, Africa, and Asia Pacific, all increased compared with 2020. According to Canalys, our smartphone market share in 2021 ranked number one in 14 markets and among the top five in 62 markets globally. Let's take a closer look at Europe, a market where we achieved remarkable results in 2021. Our smartphone shipment ranked number two with a market share of 22.5% in 2021. In Spain, we ranked first with market share of over 34%. In Italy and France, we ranked number two with market share of over 20% each. In Germany, we ranked number three with market share of nearly 16%. Our overseas shipment of premium smartphones recorded rapid growth. In 2021, our overseas shipments of premium smartphone increased over 160% year over year, and its share of total overseas shipments increased approximately six percentage points compared with 2020. According to Canalys, we ranked number three in terms of overseas shipments of premium smartphones, with retail prices at or above $350. We continue to increase our penetration in the overseas carrier channel. According to Canalys, our market share in Europe carrier channels increased from 7.9% in 2020 to 16.8% in 2021. Our market share in Latin America carrier channels increased from 4.6%- 12.3% during the same period. Overall, we shipped more than 25 million smartphones through carrier channels in the overseas markets, up over 120% year-over-year. According to Canalys also, our smartphone market share through carrier channels ranked top three in 34 overseas markets in 2021. Now let's look at our IoT products. Our IoT product revenue achieved record highs in both the fourth quarter and full year 2021. In the fourth quarter, revenue reached RMB 25.1 billion, up 19.1% year-over-year. For the full year, revenue reached RMB 85 billion, an increase of 26.1% year-over-year. Notably, IoT product revenue also achieved record highs in both the fourth quarter and full year 2021 in the overseas markets. We remain focused on executing our smartphone times AIoT strategy, with emphasis on interconnectivity and user experience. As of December 2021, the number of connected devices on our AIoT platform reached 434 million, up 33.6% year-over-year. The number of users with five or more devices connected to our AIoT platform reached 8.8 million. The MAU of our AI assistant reached 107 million, up 23.3% year over year. The MAU of our Mi Home app exceeded 60 million for the first time, growing 42% year over year. In 2021, despite the decline in global TV shipments in the broader market, our global smart TV shipments still managed to grow at a healthy pace, with full year revenue achieving a record high. In the fourth quarter, our smart TV global shipments reached 4.2 million units, up more than four, twenty percent year over year. Just last week, we launched our Redmi Max 100-inch TV, our largest yet, which comes with 4K display and a 120 Hz refresh rate. We continue to be the leader in smart TV in terms of market share, and we ranked top five globally in 2021. Additionally, our smart TV shipment ranked number 1 in mainland China for three consecutive years now, and number one in India for 14 consecutive quarters. Our white goods business has shown solid growth and further penetrated the premium market. In 2021, sales of our smart air conditioners exceeded two million units, up more than 70% year-over-year. Our smart air conditioner with ventilation ranks first on jd.com and tmall.com for nine consecutive months now. In addition, we launched our premium mini washing machine and direct drive all-in-one washer dryer in the fourth quarter, and both ranked number one in their respective categories on jd.com and tmall.com. We continue to maintain our leading position in wearable products. According to Canalys, our wearable bands ranked number two globally in the fourth quarter of 2021. According to IDC, our TWS earbuds ranked number two globally and number one in mainland China during the same period. In addition to the categories mentioned previously, we also maintain a strong market position in other categories. According to AVC, in mainland China online channels, our smart door locks and smart speakers ranked number one, and our robot vacuum cleaners and smart routers ranked number two. Within the IoT business, there are many product categories with rapidly growing markets, and we aim to capitalize on the huge market potential going forward. A quick summary of our rich and vibrant AIoT portfolio. As you can see, products at different stages of development offer different strategic opportunities for us. In the relatively mature product categories such as TVs, smart bands, and air purifiers, we have achieved and maintained high market share, which allows us to enjoy very healthy and stable cash flow. In categories where the market itself is high, but our market share remains relatively low. We will aim to improve market share in these markets and drive our overall business growth. In categories such as smart door locks and TWS earphones, we aim to maintain our high market share while enjoying the fast-growing market momentum. Going forward, in addition to getting our basics right, we obviously aim to strengthen our market position, tap into high growth categories, such as what you see, like monitors, projectors, et cetera, and continue to introduce new hit products in both the domestic and overseas markets. Now let's look at the internet services in more details. In 2021, we experienced significant increase in our user base. In December 2021, our global MIUI MAU reached 509 million, and we added more than 112 million MAUs globally in 2021. Mainland China MIUI MAU grew for five consecutive quarters to reach 130 million, and we added 19 million MAUs during this year, during last year. At the same time, global MAU of our smart TV grew more than 29% year-over-year. This continuous growth in active users will lay a solid foundation for the future growth of our Internet business. Despite heightened industry uncertainty, we continued to improve our monetization capabilities, resulting in the solid growth of our Internet business. In 2021, Internet services revenue reached RMB 28.2 billion, up 18.8% year-over-year. In the fourth quarter, Internet services revenue reached RMB 7.3 billion, up 17.7% year-over-year. Our advertising revenue achieved record highs in both fourth quarter and full year 2021. Meanwhile, gaming revenue also increased 9.5% year-over-year in the fourth quarter. In addition, our Internet services growth margin reached 76.1% in the fourth quarter of 2021, which was a record high due to increased contribution from our advertising business. Our overseas Internet business continued to outperform. In the fourth quarter, our overseas Internet revenue increased 79.5% year-over-year to RMB 1.6 billion, accounting for a record high 21.5% of total Internet services revenue. Let me talk more about the monetization of our advertising and gaming businesses. In the fourth quarter, as I mentioned before, our advertising revenue hit a record high, as did each of pre-installation, search, and performance and display advertising revenue. Revenue from games increased 9.5% year-over-year, mainly due to the growth in the number of paying users. I would also like to talk about the monetization of our smartphones from a lifetime value perspective. Looking at our internal data, it shows that the 12-month LTV, lifetime value of our premium smartphones is nearly two times that of non-premium smartphones over a 12-month period. About 4.2x. In the future, we'll continue to execute our dual brand and premierization strategies to further drive the growth of our Internet services business. Now let's move on to more detailed financials. Let's look at the revenue breakdown in the fourth quarter. As I mentioned before, our revenue reached RMB 85.6 billion, an increase of 21.4% year-over-year. If you look at the revenue from the overseas market, it has reached RMB 41.6 billion, representing an increase of 23.4% year-over-year, and accounting for 48.7% of our total revenue. For full year 2021, our revenue reached RMB 328.3 billion, up 33.5% year-over-year. By segment, smartphone revenue grew 37.2%, IoT revenue grew 26.1%, and Internet services revenue grew 18.8% year-over-year. Our revenue from the overseas market reached RMB 163.6 billion, representing an increase of 33.7% year-over-year, and accounting for 49.8% of our total revenue. Against a rapidly changing market environment, in the fourth quarter, our overall growth margin achieved another year-over-year increase to reach 17.6%. The growth margin of our smartphone business segment decreased slightly from 10.5% in the fourth quarter of 2020 to 10.1% in the fourth quarter of 2021 due to enhanced promotional efforts during major shopping festivals, particularly in mainland China last quarter. The growth margin of our IoT and lifestyle product segment reached 13%, representing a year-over-year increase, and quarter-over-quarter increase. As I mentioned before, our Internet services growth margin reached 76.1% due to increased contributions from our advertising business. Overall, in 2021, our growth margin increased to 17.7%, a record high. More impressively, annual growth margin of each of our segment achieved year-over-year growth and achieve their record highs respectively. For Internet services, gross margin increased 12.4 percentage points to 74.1%. We continue to maintain high operating efficiency, while continuing to invest in R&D. In the fourth quarter, our overall operating expense ratio was stable at 13.4% versus a year ago, and our R&D expense ratio was 4.5%. For the full year, overall operating expense ratio was 11.8%, and R&D expense ratio increased from 3.8% in 2020 to 4.0% in 2021. We continue to generate robust cash flow. In the fourth quarter, our adjusted operating cash flow was RMB 12 billion. We are also actively returning cash to our shareholders. In 2021, we repurchased HKD 8.4 billion of our own shares in the market. In fact, you may have just seen our announcement that our board has approved a new HKD 10 billion stock buyback program for the next year. As of December 31, 2021, our cash resources remain abundant at RMB 106 billion. Last but not least, I would like to provide an update on our ESG related initiatives and recognition. Fulfilling corporate social responsibility is highly important to us. In December 2021, Xiaomi was granted the Award of Excellence in ESG by the Chamber of Hong Kong Listed Companies in recognition of our ESG efforts and contributions. In October 2021, Forbes named Xiaomi in its World's Best Employers list for 2021, demonstrating our employees' acknowledgement of our commitment to employee care, talent development, and social responsibility. We're trying to create a safe and reliable ecosystem for our users. In January, we issued version 2.0 of our cybersecurity baseline, which enhances the fundamental security framework for all Xiaomi's smart devices. In the same month, the German Federal Office for Information Security, which we've known, otherwise known as BSI, announced that it could not identify any anomaly in Xiaomi smartphones regards to data usage and network security. In February 2022, TrustArc certified that Xiaomi's data policies are in compliance with the EU's GDPR requirements. In November 2021, the Internet of Things Security Foundation recognized Xiaomi's vulnerability disclosure policy as one of the best in the world. In January 2022, our AX3000 router received the British Standards Institution's Trade Mark Certification. All the above demonstrate our commitment to protecting our users' data and privacy. Finally, we've also been deepening our involvement with public welfare initiatives. Beijing Xiaomi Foundation provided the disaster relief to Henan and Shanxi provinces, and pandemic related assistance to Xi'an. Xiaomi Foundation Limited in Hong Kong joined the pandemic control efforts in Hong Kong. We also actively donate to education. The Xiaomi Scholarship project aims to provide student financial aid totaling RMB 500 million over five years. In February 2022, Beijing Xiaomi Foundation launched the Xiaomi Young Scholar Project, committed to funding university faculties and researchers in science-related fields. It plans to donate RMB 500 million over five years. This conclude our prepared remarks. We'd 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 beginning. To register your questions, please press star one on your telephone keypad. Should you wish to cancel your question, please press star two. Our first question comes from Ke Wang with Credit Suisse. Ke, please go ahead. Thank you for questions. Congratulations for such a good result despite the challenges we've seen in the fourth quarter. I have two questions. Given the global geopolitical tensions like smartphone market weakness and also pandemic issue in China, what do you expect the smartphone shipment in 2022? Last time I remember, Wang Xiang actually mentioned that the good momentum in 2022, but of course you working hard to deal with these challenges in the first half, like chip shortage, supply constraint, et cetera. Want to have an update here. The second question is about, as we have seen the sales promotion in the fourth quarter actually drive the gross margin of the smartphone business, but what should we expect going forward? Should we expect a more normalized margin trend in 2022? Given this kind of like supply constraint and also channel inventory et cetera, this issue, what should we expect on the margin trend? Thanks. Thank you. Thank you for the question. Let me answer the first question first, and then I'd like Alain to address the second one. The first question is related to the market, the smartphone market for 2022. I think that despite the outside environment, actually the smartphone market, the size of the smartphone market is still very big. For example, in 2021, the total available market for smartphones was around 1.3-1.4 billion units. It's a very big market. We see Xiaomi. We still have a lot of great potential to grow. For example, in Europe today, we are right now, although we have achieved a very fast growth, although we are number one in Spain, we are number two in France, Italy, but still we see a lot of potential growth opportunities. The overall market in Western Europe, market share in Western Europe for us is right now is about 16%-17%. I think we still have a very big room to grow in Western Europe as an example. Another example is in Latin America. Our market share in Latin America right now is only 12.5%, so we see a huge potential to grow. Of course, we have the Southeast Asian market. This, those are the market potential. Those are the good examples. Of course, we still need to grow our market share in China and in India. Those are the traditional big market for us. This is the growth potential we see. We still have a lot of potential to grow. Well, how we can achieve the growth? I think number one, we will continue to strengthen our investment in the R&D. In 2021, we put RMB 13.2 billion in the investment. In 2022, we'll continue to put more R&D dollars focused on several key areas, for example, smartphone, and of course, new growth area like vehicle, electric vehicle and other area. That's our R&D plan. Of course, we'll continue to drive our growth in the mid and high tier product. We see very good momentum in 2021. We shipped over 24 million mid and high-end smartphones to the market. We will continue to drive the market to drive our product into the mid and high tier product segment. Also we try to attract more and more new users. In the past, actually, especially with our new larger high-end devices, over 50% of our users in those high-end devices are new users. That's a very good signal to us. We'll continue to find a way to attract more new users into buying Xiaomi smartphones. Of course, lastly, we'll continue to improve the efficiency of our offline channels. Right now we have over 10,000 offline stores. The focus for 2020 and 2022 will be improve the efficiency of those stores, try to attract more users go to store to look at our product, especially mid high-tier product selling through our offline retail stores. Overall, the supply situation will be improved in 2022, will be much better especially in second half of 2022. In first half, especially in Q1, we are still facing a great challenge in supply. Starting from Q2, the supply situation will be changed significantly. Q3 and Q4, we'll have a lot of supplies. We'll take those opportunities to grow our market share, especially in the second half. I think, Ke, on your question about gross margin, let me try to address that. I mean, obviously, the Q4 gross margin was 10.1%, which was a quarter-over-quarter decline. Obviously, as I mentioned on the last earnings call as well, I think that Q4 is a big promotional quarter everywhere in the world, right? With Double 11, Double 12, Thanksgiving, et cetera. Black Friday all over the world, right? We expect that the gross there will be a lot of promotional events around the world, especially in China. Obviously, if you look at the shipment numbers, as a percentage of overall shipments, our percentage in China has increased in Q4. As a result, I think that also has some impact on our overall gross margin in Q4. Overall, I think that, if you look at our 2021, we were still very happy with what we achieved in terms of gross margin. 2021, our gross margin was 11.9% overall, which was an increase of 3.2% over 2020, while at the same time increasing our market share overall. If you look at overall 2021, the gross margin, especially, on top of the fact that we're increasing our market share, I think we are very happy with that. Looking forward in 2022, I think we have to look at. It's probably too early to say overall what the gross margin this year is going to look like. I think it depends on a few things. Number one is obviously the macro environment as we are seeing now. They've become a bit more uncertain. Number two is also what's going to happen to the competitor landscape when supply become more normalized. I think as we've been stressing, we believe that our strategy of our advantages remains with our scale, 'cause, you know, we're talking about a scale effect that brought to us from our 190 million+ units. at the same time, continued investment in R&D that led to our premiumization of our smartphones. We are very confident that our gross margin will continue to stay at a reasonably healthy level. Yes. Next one. Operator, next question, please. Thank you. Our next question is from Andy Meng with Morgan Stanley. Andy, please go ahead. Thank you. Good evening, Xiang Wang and Alain Lam. Thank you very much for taking my question. My first question is related to the EV business. How should we think about the cost of the EV business in 2022? We know there's a good progress on your overall EV development, but I think definitely there will be some cost booking. What percentage of the EV cost will be capitalized in 2022? For the rest, are they all recorded in the administration costs? Is there any subsidies to be booked in 2022? My second question is related to the smartphone supply chain. I think there is mixed message at the industry level. Someone telling us there's an SoC shortage, others are saying that there's oversupply and there's order cut post-Chinese New Year. What's the latest status on Xiaomi's smartphone component supply? Assuming the supply chain condition is improving, will Xiaomi be able to achieve continuous shipment growth in each quarter of this year? Thank you. Yeah, I think the first question is a general question for Alain, right? He likes EV. I'd like to Alain to answer the first question. Sure. I'll take the second one. Sure. Hey, thanks, Andy, for the question. I think as you look at the size of our EV team at this point, the majority of the employees that we have right now are still R&D related, right? As we said in our disclosure, we have over 1,000 of our employees, R&D employees on the EV team. The majority of the expenditures this year will be booked on the R&D side, right? I mean, obviously, there are some people supporting them on the administrative side, right? That will be in other parts of the expenses. The bulk majority of the expenses will be R&D related for 2021. In terms of how much that will be, I'm afraid that we haven't disclosed it at this point in time. I think as we progress throughout this year, we're hoping to, you know, give some more enhanced disclosure on the R&D expenditures so that you guys can figure out, you know, how much we are actually spending. Yeah. Actually, we wanna keep the secret. Keep some secret. Yeah, we will disclose whenever we find a good location on the EV. For the second question related to the supply chain, especially for chipset supply in the 2022, I think it's very interesting. In 2022, in overall, I think the semiconductor supply situation will get normal. If you look at the 12 months time period, it will be no problem, even oversupply. But in Q1, we are still facing the very big challenge for Q1. Q2 will be a big improvement. Q1 is still a challenge for us. We are right now working very hard with our suppliers to improve the supply in Q1. Secondly, in Q1, because of the pandemic, the recent development of the pandemic, actually, we are also. I think the whole industry is also facing challenges on the logistics. For example, the transportation from factory to the port to the airport, the cost of the transportation, so on and so forth. That's a near-term issue we hope. We believe this will be a near-term issue. Logistic issue will be resolved, removed. That's the overall situation. In summary, actually, we are facing challenges in Q1. From Q2 and Q3, Q4, you'll see significant improvement in the chipset supply. We are in 2021 we ship over 190 million smartphones to the global market. I think I mentioned the potential opportunities for us in front of us, especially in Europe, Latin America, Asia-Pacific regions. I think with the good supply, I think we will do our best to grow as much as we can. Thank you. Okay. Thank you very much, Xiang Wang, Alain Lam. Thank you. Thank you. Thank you. Operator, thanks very much. Thank you. Our next question comes from Timothy Zhao with Goldman Sachs. Timothy, please go ahead. Hi, Xiang Wang and Alain Lam. Thank you for taking my question and congrats again on another set of strong results. I have two questions. The first question will be about the premium phone shipments. If we look at our smartphone ASP growth over the past few years, the growth rate has been quite stable at around 5%-6% year-on-year. May I ask what is the ASP level and growth rate for China and the overseas market in 2021, and how should we think about ASP growth in 2022, especially as we become more ambitious about the premium phone segment? The second question is on the internet revenue. I noticed that there's some sequential slowdown in the fourth quarter game revenue, compared to the third quarter. Could management share some color on this, and how should we think about the internet revenue in 2022? Thank you. The ASP growth, I think this is a very good question. Actually, in China market, the ASP growth is much higher than the global average. The reason is very simple. Because of the scale, our global shipment scale, actually, we are shipping a lot of very cost-effective smartphones, 4G and the 5G smartphones, especially entry-level smartphones in terms of the shipments. The average price ASP growth will be in China higher than the average. Maybe we can let me look at the number. Actually, 2021, the ASP is a 5.6% growth in overall. In China, I don't think we should. Yeah, we did not disclose. We never disclose the specific ASP number region by region. Right? I can mention that China ASP growth is much higher because in China we ship much more mid and high-end devices to the market than the rest of the world. The rest of the world, actually, the growth rate is very high. I think, Tim, let me take that as well. I think obviously our China ASP growth is faster than the international ASP growth, as Xiang Wang mentioned, right? I think the China ASP growth is probably close to a double-digit growth. Yeah. The international, because of the volume, is very hard to grow the ASP significantly. At the same time, I think Q4, given the continued supply shortage that we've seen, we're also making less lower ASP phones to the international market. That also helped increase the overall ASP. Over the longer term, I think you can see that our ASP has grown from a little bit less than RMB 1,000 in 2019 to now close to RMB 1,100 in 2021, right? Obviously the ASP has been growing in all the different areas, both in China as well as in the overseas market. I think longer term, I mean, as we continue to go premium, you know, both in China as well as in the overseas market, as we continue to increase our premium smartphone as a percentage overall, I think you'll continue to see ASP growing with time. The second question is. The second question is related to First one. To the internet revenue. Internet revenue. If you look at our internet revenue, well, obviously, there are multiple dynamics. I think year-over-year, it has continued to grow. I think one of the questions that people may ask was the gaming revenues, obviously, with the continued impact on the gaming market, which I know a lot of the internet analysts on the call will know for, there has been no new games launched in the quarter as well as seasonality. Obviously, the year-over-year growth on the gaming revenue was lower. But we continue to see, you know, very healthy growth in terms of our advertising as well as our overseas internet services revenue. I don't know whether that does answer your question or you have other follow-up questions. Yeah. Let me add one point. The good signal is actually we continue to grow our overseas internet revenue, service revenue. Right now, I think the latest number for the year 2021 is 22%, growing from a 15%, probably two years ago. We steadily grow our international internet service revenue. It's a good, very good sign. Sure. That's very helpful. Thank you. Thank you. Our next question is from Gokul Hariharan with JP Morgan. Gokul, please go ahead. Yeah. Thanks for taking my questions. My first question is on China smartphone market. Do you expect that we can take market share, more market share this year? It looks like everybody's expecting the market to be relatively flat from an overall market perspective. Do you think that Xiaomi can continue to take market share this year? Second is, could you talk a little bit more about what should we expect on the China offline strategy from here on? I think we've kind of reached the 10,000 store target. Is that what we aim to reach, or do we think that there is further potential to actually expand the store fronts from the 10,000 stores this year? Do you expect to have even more investments in terms of expanding storefronts? Is that enough to kind of take on the current incumbents in the offline market? Yeah. Thank you for the question, Gokul. Actually, we aim to grow our China offline sales revenue or market share, smartphone market share in the offline channels. Actually, in 2021, we made a very good progress, where we increased our offline shares. I think... 6%. Yeah. Right now it's, I think, yeah, it's 7%, right? 6%-7%. We aim to grow that. In order to gain market share in the offline channel, actually, we have to do several things. Number one is we have to improve the efficiency of our offline stores. Right now we have 10,000 stores. How to improve the efficiency will be our focus for 2020 and 2022. I think number one. Number two, I think we will continue to drive our products in the product growth, the growth in the mid- and high-tier product so that we let our offline channels sell more and more mid- and high-tier product through that channel, as well as our ecosystem product through the offline channels. 3, I think it would take time for us to build the coverage and the efficiency for the offline channels. I think we need some time. Yeah. Yeah, the second question is? Well, I think, Gokul, I think on the overall market, obviously, we do believe that we can continue to take market share away from other players, right? I think, as we continue to execute our strategy of, one, going to the premium smartphone market, which we believe that, you know, is an open space for us to grow into. Number two is, as we continue to build our offline retail network, right? Three is as we continue to launch a new smartphone to target different segments like the female demographics or the gamers, I think we continue to see opportunities to take market share away from other players in the market. I think we're pretty confident that we'll continue to our market share. I think Xiang Wang mentioned about our offline network. I mean, obviously we've been expanding our scale. I think that's something that we've achieved our target of the initial 10,000 stores. I think in 2022, we are very focused on improving the store productivity, per store productivity, improve the operating efficiency, which takes time because as you know, a lot of these stores were added in the second half of last year. It takes time for us to ramp those up into their real potential. That's something that we'll be focusing on, at least in 2022. Thank you. We now invite last question, and the question comes from Wen Hanjing with CICC. Hanjing, please begin your questions. Okay. Good evening. Thanks for taking my question. I have only one quick question. What is the strategy about the expansion of overseas carrier markets? Thanks. Oh, yeah. This is my favorite topic. Actually, the carrier market actually is one of the most good opportunities for us to grow our market share. Right now, for example, we are working with over 100 carriers globally, especially in Europe. We are working with every single one of the European carriers. We are building a trust partnership with them through the years' effort. Right now, the good thing is we build the initial trust. We are working with them very closely. Also our market share there is still very low. That means we have a great potential. Right now we are only, I think, around 12% of the European carrier market. In Europe actually, the total smartphone market divided by open market and carrier market is a 50/50. In the open market side, we are doing extremely good. The next step is we'll continue to grow our presence or market share in the carrier channel. Right now we're only 12%. Compared to the open market, we are over 20% in every major market in Europe. You see the potential. I think the team there and at headquarters will work very hard to meet the carrier requirement to improve the user experience for the carrier customers.