Good afternoon, everyone. Thank you for taking the time to participate in today's PT Avia Avian Tbk, or Avia quater two 2023 earnings call. For your information, we uploaded the presentation material to our website yesterday. We will begin the session with a 30-minute presentation, followed by question and answer. Overall, we plan to complete this earning call within 1.5 hours. We will mute all participants at the beginning of the presentation. During the Q&A session, please use the Raise Hands button, and we will unmute you to continue with your questions. Alternatively, you can use the chat box to ask your questions. Please note that the webcast of this event will be uploaded to our website no later than tomorrow for investors who cannot join us now. Allow me to start by introducing myself. My name is Andreas Timothy Hadikrisno. I'm the Head of Investor Relations at Avia, and I will be moderating this earnings call today. We are joined today by three other presenters, starting with Mr. Ruslan Tanoko, the Vice President Director of our company, followed by Mr. Robert Tanoko, the Operations and Development Director, and finally, Mr. Kurnia Hadi, the Finance Director. In quarter two, total revenues reached IDR 1.7 trillion, or equivalent of $116 million. This quarter, we recorded a gross margin of 45%, an EBITDA margin of 28.7%, and a net profit margin of 22.6%. Our operations are supported by more than 8,000 employees. As of the end of quarter two, we have 151 distribution centers nationwide, consisting of 114 wholly owned D.C.s, and 37 third-party D.C.s, providing high quality services to more than 56,000 retail outlets in 38 provinces and 99 cities in Indonesia. Consolidated sales in quarter two of this year were flat, as we are facing a comparison to a strong quarter, driven by a last buy moment across all product categories in the architectural solution segment. The trading goods segment delivered a better performance in quarter two, owing to the double-digit sales growth in the PVC pipe category. Consolidated gross margin was 45%, improved by 3.7% compared to the same quarter last year. The EBITDA margin was 28.7%, representing 2.3% improvement compared to the last year. The building materials industry in Indonesia continues to face challenges despite the downward trend in inflation. High price inflation, especially in furnishings and routine household maintenance, continues to be felt by consumers, as evidenced by the rising CPI. In addition, the increase in the minimum wage was not kept place with price inflation for the building materials industry. The rising number of claims for unemployment insurance also specifies increasing layoffs, which further deteriorated consumer purchasing power. Compared to other domestic segments, we witnessed that two FMCG companies reported 12% and 8% drops in sales. In addition, one ceramic tile company also experienced around 8% sales decline in this quarter. Amidst the challenging economic environment, Avian Brands continues its growth strategies by focusing on product innovations, coupled with multiple marketing initiatives to gain market share. In quarter two of this year, we launched two products in the marine category and one product in wall category. Leveraging on our well-known brands, we continue to introduce new products to meet the ever-changing consumer demands. We added one wholly owned D.C.s and three mini D.C. in quarter two. By the end of this quarter, we have established 114 wholly owned D.C.s, 37 third-party D.C.s, and 13 mini D.C.s. Within our wholly owned D.C.s, we own and operate 599 delivery trucks. We have the capability to make around 10,000 deliveries per day. We continue to work to increase our efficiency by focusing on streamlining the delivery process through logistics automation. Our goal is to reduce redundancies, waste, and errors to achieve lean and efficient delivery processes. Through multiple technology-driven initiatives, we are able to fulfill 95% of one-day delivery service to retail outlets within 50 km of a wholly owned D.C. I will now pass to Pak Hadi to continue the presentation. Thank you, Pak Andreas. Good afternoon, everyone. Consolidated sales grew by 3.8% in the first half. High sales contribution in Q2 last year was primarily due to the last-buy moment in architectural solution segment, which led to stronger demand across all product categories. As the chart on the left shows, Q2 contribution last year accounted for 26% higher than the historical average. We added more than 300 customer in the first half of this year. We are committed to building ongoing relationship with our customer based on trust and communication, so that customer feel more confident and connected to our brand. We believe this effort will lead to growing customer loyalty. To keep track of our growth in the five main island of Indonesia, we benchmark our sales to the GDP contribution of each island. We prioritize stronger growth by deploying more resources in the area where we lack the most, namely the Jakarta region and the northern region of Sumatra. On the island of Kalimantan, Sulawesi, and the rest of Indonesia, we have higher sales compared to GDP contribution. Within the architectural solution segment, the wall, waterproofing, as well as wood and metal categories, continue to be the top three revenue driver for the company. The company continues its focus on strengthening the wall category. Our mid-tier product, Avitex Gold, performed well in the first half of the year and exceeded our expectation. The contribution to sales in the trading goods segment improved compared to the previous quarter, as the PVC pipe category performed better in Q2. The chart on the right shows around 93% contribution to sales from traditional retail outlets. The contribution from modern retail outlet rose to more than 7%. The consolidated gross margin increased to 45%. This represent an improvement of 3.7% compared to the same quarter last year, and an improvement of 4.4% compared to full year 2022. EBITDA margin was 28.7% in Q2, a 2.3% improvement over Q2 last year. When compared to the full year 2022, the EBITDA margin improved by 3.8%. Net income margin was 22.6% in Q2. The comparison with the same quarter last year was flat. Compared with full year 2022, net income margin improved by 1.7%. Architectural solution revenue decreased slightly by 2.2% in Q2 compared to the same quarter last year. The slight decline was due to a strong comparison last year, driven by a last-buy moment in all product categories. In the first half of this year, total sales increased by 4.3%. As explained earlier, volume in the architectural solution segment was softer in Q2, as we face a comparison to strong quarter last year. The impact of the last spread in Q2 last year was reflected in a 28% volume contribution for the 2022. The company remained committed to improving its volume performance to meet its full year 2023 target. This is reflected in the introduction of new products by leveraging our well-known brand in the market, as well as strengthening our project division. The architectural solution segment acquired more than 900 new customer in the first half. By expanding our distribution presence, we continue to add new customers and maximize the number of retail outlet conducting transaction. We recorded stronger sales in the trading goods segment in Q2. Total sales increased by 5.6% in Q2 and grew by 1.6% in the first half. Within the segment, the PVC pipe category recorded the highest sales and performed better than the furniture and supporting product categories. In the first half of the year, we recorded transaction of more than 42,000 retail outlets in the trading goods segment. This segment continues to show high synergy effect within our business. Gross margin for architectural solution improved significantly compared to the same quarter last year. The sequential improvement is driven by the stabilization of raw material prices. Gross margin for Q2 was 51.4%, which represent a 5.2% higher value when compared to the same quarter last year. In the trading goods segment, the margin normalized to 17.9%. I will now pass to Pak Robert to continue the presentation. Marketing costs increased slightly in the first half of this year, as we continue our efforts to increase brand awareness and our distribution expansions. Declining trends in raw materials prices had a direct impact on the decrease in COGS as a percentage of sales. We observed relatively stable direct labor and factory overhead costs. Below-the-line marketing expenses also remained at around 8% of sales, in which around 7% allocated to existing products and 1% allocated to new products. We kept our trading working capital at around 27% in the second quarter of this year. We have a low routine CapEx of around 2% of sales. This CapEx consists of upgrades to manufacturing facilities and infrastructure of IT, trucks, and vehicles in the distribution centers, and in the machines for retail outlets. Our ability to generate a high level of cash, combined with low routine CapEx, has resulted in a strong, free cash flow, which gives us the confidence to meet our commitment to pay a dividend of at least 50% of net income. Please note that the company will continue its efforts in M&As, and in the meantime, we will maximize our dividend payout ratio. In the last two years, we have paid dividend amounting to around 90% of net income. Business dynamics in Indonesia, characterized by high inflation and weak purchasing power, have put pressure on retail outlets, as evidenced by a slight decline in our on-time collection. Nevertheless, we remain optimistic that retail outlets will continue to prioritize us in terms of payment. For the full year of 2023, we maintain our guidance for value and volumes, even though we are facing a weaker consumer spending. We expect gross margin for the architectural solution segment to be around 51% and around 17% for trading goods segment. The company continues to monitor the effectiveness of our strategies by focusing on growth initiatives, margin management, and cost reductions, while taking actions and planning for a variety of scenarios that could unfold in the incoming quarters. Thank you very much for the attention. I will now pass to Pak Andreas to moderate the Q&A session. Thank you, Pak Robert. We can now proceed with question and answer session. Please use the Raise Hand button or the chat box. I see Yuan Loh. You can start the question, Yuan Loh. Yeah. Hi, Pak Andreas, Pak Ruslan. Can you hear me? Yes. Hey, Yuan Loh. Hey. Hi, Pak Ruslan, Pak Hadi, Pak Robert. Thanks for taking my question. Yeah, maybe I'll start asking specifically on the volume side, I guess, you know, we all talked about tough comps in second quarter last year. Mm-hmm. I think to the extent that, maybe can you, Pak Ruslan, I mean, first quarter, you did highlight weakness in demand already, Lebaran, particularly out Lebaran. Can you just talk about, you know, how much is it market environment versus market share loss in there, maybe in the volume side? I guess for the volume target for full year, to the extent that, new product launch maybe doesn't happen as well as you planned, can we still meet the volume targets? Thanks. Thank you, Yuan Loh, for the question. When we look at again, in this year, right, I've always been cautious since the beginning of the year with regards to our guidance, right? Which is why, and I continue to communicate this during our first quarter earnings call. Looking at any potential loss of market share, again, I don't wanna sound arrogant, but the fact is, we've really done a lot of things as a company, right? It really doesn't make sense for us to be losing market shares, given that many, many, many smaller players really don't really do anything. If we look at the competition landscape in Indonesia, we've also been reacting very aggressively to whatever we see in the market. I suppose there's one other company, which is, as you know, report their Indonesia business, and I think in the next few days, they will have their earnings call. When we, again, look at the new products, as you mentioned, Yuan Loh, we have a lot of products that will be launched in Q3 as well as Q4. One product, which is mentioned earlier, Aries Bling, was only launched recently, in fact, only in May. It's a bit too early to see the impact for this product. Nevertheless, this is an important product because it is targeted for the budget wall category. Again, when we realized that this is a market where, you know, where, you know, weak consumer demands are really seen in Indonesia, right. Because we shared with you earlier, right. FMCG companies also recorded drop in sales. You know, a few other companies also are not performing all that great. Earlier today, we saw numbers from Ace Hardware, Depo Bangunan, and a few. They're all reporting like, you know, basically just single-digit growth within their business. This is really not a great environment to be in. We feel confident that, with some of the new products that we will launch in Q3, that we will still be able to achieve our guidance in terms of volume as well as value for this year. I think that's the short answer to your question, Yuan Loh. Got it. Thanks, Pak Ruslan. I guess, maybe, maybe a side question is, you know, we talked about the giving shares to distributors. I think you started this earlier this year. Yeah, how is that going on? It's still very slow. We started to do this with a few shops actually. I'm not doing this to the distributors, but the shops, which we basically tell them, "Look, instead of giving, getting gold coins, why don't you just take some of our shares?" It's only a few shops are starting to do it, but the fact that there are, you know, maybe about 20 shops or something like that. But I'm really curious to see the impact that we have in these 20 shops, because if they really show significant progress, then obviously more reason for us to actually do this on a larger scale. We didn't do this on a huge scale. We only trialed with, you know, like, 50 or so shops. We communicated with them, blah, blah, blah, and then explained, and then in the end, you know, about 20 shops decided to go ahead with it. As you can imagine, right, many of these shops are really unfamiliar with the equity market, so they don't know what's happening, and they don't know what to expect. It's a learning process. For us, at the same time, we're curious to see, okay, this is something entirely new. How is this going to be impacting them, right? We're also curious to see the effect of this, but we're only starting, like, as we speak now, Yuan Loh. They won't accept any shares in the next few days or a few weeks, and then we'll see from there what happens. Got it. Got it. And my last question before I head back to queue, Pak Ruslan, is, you know, last quarter, we talked a bit about Avitex Gold, right? Mm. How being key product, star product, how is that trending so far? It's still very good, which is why we said that it's, it's still, still above our expectation. In terms of new product launches that we've had, Yuan Loh, this is by far one product where we have seen, you know, the fastest pickup. We've never seen this kind of pickup for any other product that we've launched. Obviously, as the below-the-line marketing budget that you saw, right, we split into two, so that you guys have an idea that we're not just recklessly, recklessly spending our below-the-line budget. The fact is, for the existing products, they're down slightly, but an extra 1% is being allocated to cater for a lot of these new products. We need it to be extremely aggressive, and that's what Avitex Gold is. We... I just approved a new TVC concept for this product, so it's gonna be quite different again. We'll launch this in, maybe in a month and a half or so. We'll continue to maximize these products, as well as many other products that we'll launch. Not every product will be supported by television advertising, you know, obviously, because Aries Bling, for instance, won't receive any support of that kind. It'll just be predominantly the below the line, a, a few marketing bits and pieces. Avitex Gold continued to show its contribution, and it's been very meaningful, and so we're continuing to be extremely positive on this for this product. Okay. Thanks, Pak Ruslan. Head back to queue. Thank you. Thank you. Hey, Yuan Loh. We can go next to Robin. You can start, ask question, Robin. Hi. Thank you, Andreas. Can you hear me? Yes. Hi, Robin. Hi, Robin. Hi. Hi, Pak Ruslan and team. just I'll, I'll, I'll start with two questions. How much of ASP growth was due to product mix, how much was due to other factors? Aside from Avitex Gold, did any other products stand out in second quarter? In, in terms of, ASP hike, maybe Pak Hadi can answer that number. Yeah. I think, up to first half of 2023, the ASP effect is around 9%, Pak Robin. Your second question is, aside from Avitex Gold. We haven't seen any other products yet in the market. Well, to be honest, in the first and second quarter, not many products that we launched, right? If you see that we only launched two marine products in this quarter, Robin, this is a budget marine that we're trying to launch, leveraging on the Admiral brand from the company that we acquired just before listing. This is a completely new product. The left-hand side here, that you see here, is the first epoxy adhesive with a sawdust that we just launched in Indonesia, so this is like a new technology for Indonesia. Nobody's ever had this yet. The middle one here for Admiral is really a product which we target for the fishermen. So for these two products, I mean, the pickup is still very slow because you know, we're trying to introduce something new to the fishermen. "Don't use a house paint, but use this product instead." But we'll continue with this effort because, as you know, there are, there are millions of fishermen in Indonesia being an island nation. Aries Bling is another product where we believe will be contributing in a meaningful way. The reason for this is that this is a product which should answer a lot of the, you know, the lower income families' needs. You know, there's, there's already a segment for this product in the market, and we know that when we launch this product, you know, our competitors should be quite concerned because the y ou know, we are targeting their products, which exist in various parts of Indonesia. So we're, we're feeling quite optimistic about Aries Bling, but because it's only launched in the 22nd of May, right? We only have, like, one month and eight days. It's definitely too early to see the, you know, the effect or the contribution for this product. It will definitely be more meaningful as time goes by, because another product like Aries Bling is where we believe that we will make a dent in the market in terms of the budget wall paint. Thank you, Pak Ruslan and Pak Hadi. My next question is, how has July volume been doing? In the second half overall, anything specific to, you know, boost sales volumes? Yeah, well, obviously, because last year, June was also a lost fight. July last year, you know, we were, The comparison is the exact opposite, right? July this year, we're definitely doing better. The growth was, you know, in double digits. If we look at our year-to-date July performance, you know, we're able to actually perform, you know, better than what we did in June. Look, the market is still very weak. When I speak to many of our partners, you know, and they, they all basically communicated the same thing, you know. I think what, what we will do is to rely on the innovations that we have and look at some of the new products that we will launch, not in July, but mostly in August and September. This is again an interesting product, because when we leverage on our well-known brands in the market, we know that success is achieved in a shorter amount of time, rather than introducing a completely new brand that, you know, people have never heard of. It'll be another brand extension that we'll do, and in a category that we know needed this type of products to be, to exist. We're quite excited to see how the market will react in September or part of August when we start to launch this product. Thank you, Pak Ruslan. My last question is perhaps directed to Pak Robert. Could you comment on how raw material prices have tended, and how do you think they will fare till the end of the year? The raw materials, I will say that it, it has been stabilized quite a lot, and eventually it has declined, especially on the resin and the pigments for TiO2, as well as the packaging. We will see that the raw materials will, will, I will say, remain the same or normalize again in the Q3 and Q4. I, I think even some of the solvents have also... Yeah you know, gone down in price. The solvent materials, starting Q2, it has been, soften up as well. Yes. Which is why when Robert shared earlier, right, in terms of our guidance, we feel quite comfortable about maintaining our architectural solutions margin to be at around 51% margin. Thank you, Pak Ruslan and Pak Robert. Thank you. Safe to say, can, can we assume that the GPMs that we saw in the second quarter will, sort of hold till the end of the year? Yes. That's basically what we're saying. Mm-hmm. Thank you, Pak. Very helpful. Thank you. I'll jump back in the queue. Thank you. Is there anyone want to ask some questions? Harry? Yes, you can start to ask question, Harry. Hi, can you hear me okay? Yes. Hi, Harry. Hi, how's it going? Good, thank you. Good, good. I, I want to ask a bit more on volume, on the volume points, because I know you said that last year was a, was a high base. Yeah. If we look even on a two-year basis, then the volumes are still down quite, quite a bit. I just want to get a sense, like, is, you know, perhaps, these levels that we saw in 2021, you know, even around COVID, like a bit elevated? Do you just see this as a function of how weak the consumer purchasing power is? I, I think it's, it's the latter, right? On, on the weaker consuming power. We should not only benchmark this with, within the building materials itself, even though that's the segment that we currently exist at. When we, again, look at the FMCGs, Harry, that's basically what we're also seeing, right? It's unreasonable in my mind that FMCG to be experiencing this kind of weakness, because people consume things, right? They use soap, they use, you know, detergent, and they, they, they eat things, from the FMCG world, and yet, their performance has also been bad. I, I think that's basically what we believe is happening. Definitely, the industry is facing a lot of headwinds at this point in time, especially the building materials. What I basically gather from many of my, our friends, in the similar industry, is that this is really happening in, not only in paint, but many other products across the board. There are a few companies which are publicly listed in Indonesia, right? We mentioned, like, ceramic tiles, but there's also another one, which, who's also a player within the roof, plastic roofing. They also, for the first time, recorded a very low single digit, you know, performance in the first half. Even though, if you look in the past four years, their growth have been exceeding 15%. I think we, This is something that we really witness in terms of weaker purchasing power, Harry. Okay. Yeah, it, I mean, it seems like there's been a sort of dual track growth with the maybe more, the higher income segment being less affected, but- Correct. I suppose, you know, would it, would it be right to think maybe the higher end segment of customers of other paint companies, or, or would you, would you see that in your numbers as well? No, because we're really not a dominant player in the, in, in the premium segment, right? Obviously, when we in, in my mind, when we discuss this internally, then it makes sense that the, you know, the higher-end players would be doing better. I think you can also see that from the modern trade contribution, right? If we go to modern trade pie chart contribution, right, it actually exceeded 7% for first time in five years. If you think about it, the end consumers that visit modern retail outlets tend to be of higher income than those who visit traditional retail shops, which is why the modern retail outlets are slightly less impacted when the consumer buying power is weak. Nevertheless, as I shared earlier, right, the reported earnings of two publicly listed modern retail outlets, you know, showed that their growth is only about 6% and 5% in the first half. We, we are seeing it by. Therefore, the modern retail outlets contribution, you know, which always been hovering at around 6%, this time around, it, it, it passes the 7% mark. I think it will correct in, in Q3. It'll go back to around 6%. Okay. What, what do you think needs to happen for this, kind of, to start to see the volumes improve, particularly on the architectural side? In the Q3, the products that we will launch, again, will be catering to the consumers with, with lesser money, right? I don't want to disclose the product that we have, but we feel very optimistic about this one segment that we'll be launching. In August, the product will be launched in some parts of Indonesia, followed by a nationwide launch in by the end of September. I think you will see, you know, that in Q3, our performance will definitely be better, because this is, again, a product that we believe is needed in the market. And when we look at our competition for this segment at this pricing point, there isn't anyone there. We feel very good about this. In fact, you know, in terms of product launch, we're, you know, preparing a lot of inventory to, to cater for the demand that, that, that the retailer should have for this particular product. We'll, we'll, we'll see how things fare in August and in September for this product. Again, that will be for the architectural solution segment, for sure, to, to, to counter for the volume. Okay. Have you seen any, sort of more aggressive, competition, like more discounting or, or sort of higher promotions amongst your competitors, just, you know, given this feels like it's a market, a volume- No. A market volume decline? Not really. In fact, if, if I tell you, out of all the players in Indonesia, right, Nippon have, certainly increased prices, again, you know, the, their third time this year. If you look at, Dulux, they actually did it once. Jotun did it once. I think Mowilex also did it once. So a bunch of players are still, you know, trying to maintain their margin. We have not seen crazy discounting here and there, but we, but we do see intensifying in terms of branding, for instance, right? More and more shops are getting branded, so we, we follow suit. That's why we continue to do, and, and monitor this type of situation. If any shops are about to be branded by any of our competitors, and we look at their sales and say, "Hey, it's worthwhile for us to counter," that's what we do. We've been investing quite a bit on the branding as well, so that, you know, ideally, every year, you know, there'll be, you know, maybe close to 1,000 or so shops, between 500-1,000 shops that we'll brand with our products. You'll see more and more of this, you know. We use our good quality paint so that they, the branding and the painting on the exterior building will last longer. You know, you do it once, and you don't need to redo it for another seven to 10 years. No crazy discounting is evident in the market, Harry. Okay. And with raw material prices now sort of come down quite a bit, and, and if I look at sort of, you know, your, your architectural revenue divided by your architectural volume, like the, the price per metric ton. Mm-hmm. You know, it's quite high now. Is there any circumstance under which you think it makes sense to, to reduce prices, or is that just not something that… No. that crosses your mind? No. I would not reduce prices, but as I mentioned, like, we would introduce brand extensions of a very known brand that we already have and, and, and leverage those. That's how we would have it. I, I showed you, right, in the wood and metal, right, we have Avian, and then we have Avian Cling. That's, that's one example. I would not reduce the price for Avian- Mm-hmm. Then I would introduce an Avian Cling, so that consumers say, "If I want to buy something cheaper, at least it's the same brand." Even though the quality will be different, they know, but they, they're, they're willing to accept that. Avian Cling is another example that, that we, we have, and this product is, is, is doing very well. I mentioned, like, I mean, it exists in the same price range as Glovin, but, you know, we're planning to discontinue Glovin, and we're looking to see if in a year or so, Glovin really is not performing well, then we'll stop it, because we already have Avian Cling. We don't need to have Glovin. I think what will happen over time is that you know, you guys will see that we'll start to reduce the amount of brands that we have, and we'll in fact focus, you know, at maybe around two or so in each category. Give you an example, right? We have a Platinum under the wood and metal, okay? This is a product that we will basically rebrand. It will be called Avian Platinum. People know, oh, it's Platinum, yes, but it's the, you know, the premium version of that product. And then we'll have, Glovin will be discontinued, and then we'll probably have Yoko only. You know, in the wood and metal, only two brands. One is Avian, the other one is Yoko- Mm. -for premium, and then for the lower end. You know, things like that will, will, will basically happen in the next decade, and we'll continue to streamline our brands, because, as you know, branding is expensive, right? So we need to really just leverage on what we have and, and, and take it from there. We do not have any intention of lowering the price, Harry. Okay. By the looks of, by the looks of what the competitors have been doing, right, neither are they, right? Got it. Sorry, my final question, just based on the, the guidance you've given, I think it requires about 15.5%, 16% growth in sales in the, in the second half, year-on-year. Is that, I mean, is that something you still feel pretty comfortable with or. Yeah, because if you look at our performance last year, right? We didn't do so great in the second half. Mm. You know, we did better in the first half. The base that we have for the second half, Mm. is, is definitely lower. Nevertheless, let me remind you that we did have a loss pipe in the month of November last year. Mm. Obviously, then we need to think about this. Okay, November last year, yes, as you can see here in Q4, price increase in November, a last-buy in October. That's something that we, we, we were basically seeing. Okay, this is the only one obstacle that we need to overcome in when we're comparing ourselves to our performance last year. With, with, with the new products that we will launch in Q3 and Q4, we feel confident that we should be able to maintain this. Great. Thank you very much, and best of luck. Thank you, Harry. Any other questions? From Tian. Tian, you can ask question. Hi, hi, good afternoon. Hi, Tian. Hi, thanks very much. I just have some minor details to work out with you. First, we just look at the first quarter, second quarter. I think we do have the one slide that give down the breakdown. The product we launched, Avitex Gold, and also the new product, Aries Bling, are both in the wall paint category, right? Yes. I just want to check. On the QoQ basis, the wall paint seems to be declining. Among all the paint products, is the one experience most negative decline, is it correct? Mm. You're talking about the wall category? Yeah, yeah. In the first quarter versus second quarter? Yes. Hadi, do you have the number? I don't think it declined. Okay. Yep. Yep, [Pak Ruslan]. Actually, we have the number. Okay. I think, for Q2Q, just, like, Tian says that, yeah, our number actually is declining. Q1 versus Q2? Yeah, Q1 versus Q2. In terms of the wall paint contribution? Yes. Yeah, just on the value of the wall paints, in Q1 and the Q2 sale, since Q2 is on QoQ decline from the Q1. Yeah. Okay. Okay. I, I see what you mean. Yeah, yeah. Sorry. Yes, yes. Yes, of course, there are two factors here. One is Lebaran this year. Lebaran this year is in end of first quarter, right? Of course, then the April will be affected. I just wondering, given the Avitex Gold was such a big success in... Mm. They had a huge impact in March number and April number. Is there any concern about the over-purchase by your customer? Maybe you can just give me kind of the months or months, say, how the April to May to June and to July, so we can have the better. Because the year-over-year, here is so much being distorted, by very contrasted, you know, first half or the second half of last year. Yeah. Thank you. No, I, I wouldn't say that we're worried about you know, our retailers are overbuying on the Avitex Gold, because when we look at the number of shops that have bought Avitex Gold in this year, the number of shops participating is still far below our target numbers. Let's put it that way. We know that the potential for Avitex Gold is still huge, and we know that there are you know, a lot of shops that we, we, we're targeting to buy this product. But obviously, because Avitex Gold positioning is the most premium within the mid-tier, not all cities, you know, have a huge potential for that market, right? I, I tell my team that when we look at the market overall for Indonesia, for the mid-tier wall paint, ideally, Avitex Gold sales needs to be higher than Avitex. We haven't achieved that yet. You know, we're still quite far from it. We know that the potential for Avitex Gold is, is greater than that of Avitex. The fact is, Avitex now is still contributing way, way more than Avitex Gold, and that's what we're trying to basically narrow the gap. We're not worried about shops over-purchasing, because, you know. What they do when they over-purchase from us in certain shops is that they have to reduce from other brands, Tian. Because it'll be impossible for them to, to be selling and pushing Avitex Gold and still also buy from our competitors at the same time. It'll be quite difficult. The only way for that, for those shops to survive is to, to reduce what they're buying from other competitors. That's how it will work. Does that answer your question? Yes. Okay. Yes, thank you. Just a follow-up, another follow-up. I think you just mentioned by passing, you think the Nippon has done three price increase, right? Yes. We only did once. Yes ... in May due to the solvent, inflation. Yes. Oh, in what category Nippon has been increased? I'm saying price category or for that category. Yeah. Why you didn't react? Yeah. They basically decided to split their price hike this year in a bit of unusual way. They would only, Okay, for the second and third, yes, normally we would always react because as, as I shared, right, we don't want our products to be deemed to be inferior to them if the price difference is so much. That's not the case. In this time around, they actually launched, the second price hike that they did is targeted more on the automotive refinish. I don't know if you're aware, in Indonesia, the, within the automotive refinish category, Nippon really is the strongest. They have very strong presence in the automotive refinish category. In contrast, our automotive refinish category is still very small, we're not dominant in automotive refinish at all. You can see that from the pie chart. It's combined with others, so we don't pay a lot of attention on this. Obviously, when they decide to increase their price, we look at the price difference between their prices and our prices, and we felt that, okay, well, I think we don't need to adjust our price for the automotive refinish, so we didn't react. The third price hike that they just did, maybe just a couple weeks ago, is, they're only doing it, they only did it for the tinting products. When we, again, saw that, we made comparisons. Mm T heir tinting prices to our tinting prices. We felt that, yes, we also don't need to react. Tinting is way less sensitive in terms of, you know, price, because when consumers buy any tinted products, the price vary from one color to another. When you have 2,000 colors, let's say, and you go to any shop to get whatever color that you want, the prices are. There are 2,000 prices. You know, it'll, it will vary greatly, you know? Tinting is really not that sensitive. When we benchmark their prices to our prices, we thought, like: Look, we don't need to adjust this. We didn't feel the need to react on the last two times of their price hike. Okay, got you. Just speaking on the tinting machine, right? I think in the first quarter, we actually say, you're going to accelerate the rollout of the tinting machine. Yeah, yeah. I look at your cash flow number, I didn't see any big number. No change. Yeah, so- Yeah. It, it's still not big number at the end, but we are adding more tinting machines than what we have added last year. In the second half, in particular, we'll be adding, you know, more tinting machines. It's not gonna be huge number, because, again, we need to make sure that the revenue per tinting machine is achieved, because we just, we just don't want to start randomly adding, you know, aggressively in terms of tinting machines and not get the kind of returns that we do. Now, the performance per tinting machines continue to improve, right? If Avitex Gold does better, for instance, tinting will also improve, right? Because Avitex Gold is also available in ready-mix and tinting. Likewise, with this new product that we'll launch in August and September, for instance, it will also be available in ready-mix and tinting, and therefore, the tinting performance should also benefit from, from the rollout of this new product. We don't want to be that aggressive yet, because I think until we achieve the kind of revenue target that we have per tinting machine, you know, then the rollout will be faster, but not in, in any way that you will notice it from the trade working capital per se. Got you. Yeah, okay, that's all from all from me for now. I'll get back to you. Thank you. Thank you. We have a question in the chat. From Leonard. You can start, ask question, Leonard. Okay. Hi. Hi, Pak Ruslan and team. Hi. I'm actually quite curious regarding Aries Bling. Can you give us a sense of the gross margin there? Yes. When we look at our gross margin. Wall paint margin is where, you can see from the price difference from Category five all the way to Category one, it has really wide product portfolio, right? You can see from this page, right? It's a lot. In terms of profit margin, if we just focus on the difference between Aries, Avitex Gold to Aries, for instance, okay? Between Category three to Category one, we're looking at single digit margin difference, Leonard. It's not huge. If you look at Aries Bling, because it's somewhere in between, then the margin will be, again, in single digit. It'll be somewhere in between. That's how we generally approach our pricing, and when we look at our competitors, it seems like the approach that they do is quite similar. This product, as I explained earlier, is really targeting a lot of the different competitors which exist in Indonesia, and we're talking about a lot of different brands. It's not only targeting one by Nippon or Jotun or Akzo, but, in fact, there are a lot of different brands which exist in different pockets of Indonesia, and we're trying to attack that with Aries Bling. This is a product that will be is targeted or launched to do that, but margin difference is again, in single digit. Mm, got it. That's very clear. Just a follow-up. I think you previously mentioned that you're targeting GP margin of 51% for architectural solutions, right? Right. Given the price increase that you guys have been taking, as well as, raw material costs has been decreasing, I was wondering, is this a bit too conservative and perhaps, are you seeing any other gross margin kind of pressure that you guys are not revising it upwards? No, not really. I mean, as Robert indicated earlier, right? I mean, the raw materials are stabilizing, right? The trend that we're seeing now still basically leads that margin will be maintained or maybe even slightly improved, right? It is very possible that the margin will slightly improve to maybe 52%, 50%, slightly above 52%. The, the, the fact is, we don't know, right? We, we don't want to be overly aggressive and basically tell you that, you know, margin will continue to improve, because what we see now is still stabilizing. You know, a bunch of products which Robert mentioned are also on the declining trends. You know, we also don't know how long that will last. Given the fact that we're now in July, we do feel comfortable that, you know, maintaining our margin guidance for the architectural solutions at 51% is something that we know that we should be able to do, unless another war break out or whatever, right? You know, God forbid, if those things are not happening, then, you know, I think we, we feel quite comfortable here. Obviously, what I explained earlier, right? We need to then look at the OpEx side of things, right? Because now, you know, let's face it, right, transport, you know, costs, you know, is, is, is back, right? We, we can do our internal audits at all the D.C.s, you know, as per normal. People start traveling and things like that. You know, there's gonna be a slight increase in the sales and marketing aspects of things. As well as, as I mentioned earlier, right, in terms of branding, you know, we're trying to also do and make our brands feasible, more visible in many cities around Indonesia, and we'll definitely counter the aggressions of our competitors if they wanted to come into our shops. If as any particular shop is under threat from any competitors, and they say, "Hey, I'll brand with, with brand X," then we'll go there and say, "No, you better take our products," and then we'll, we'll, we'll do branding. We'll, we'll definitely look at that in terms of, you know, the effect on the EBITDA as well as the net profit margin. We feel quite cautious with regards to our growth margin maintenance for now. Hmm. Okay. Got it. Thanks, Pak Ruslan. Thank you. Next, from Jun Yong. You can ask question, Jun. Yeah. Thanks, Andreas. Yeah, hi, Pak Ruslan, and the team. Mm-hmm. Thanks for the opportunity to ask questions here. Can I ask on your, I mean, previously, you made a comment about Nippon, Nippon raising prices, and then you... Mm. we looked at your portfolio, and you felt there was, you know, no need to... Right - raise prices. I mean, the, the, does that mean that your pricing is already quite high, relative... even before your competitors raised their prices? You know, how does the price gap... how does your pricing ladder against your, your peers and your categories? So I guess my question is this: Are Avian price very high already, which is why-? Yeah you don't see the need to... Yeah. Okay, good question, Jun Yong. Let's look at the first comment, which I said on the automotive refinish, right? As the market leader in the automotive, automotive refinish, so Nippon definitely has a, a, a higher price than us. It's not true that our prices are higher than them in the automotive refinish, because we won't be able to sell our automotive refinish products. The fact is, our automotive refinish products needs to be lower in terms of pricing than theirs. When we saw their price hike, you know, between 2%-3%, 4%, we felt like, I think this is a margin that we still feel quite comfortable. We don't need to adjust. Automotive refinish, their prices are higher than us, and we don't, we don't feel that we need to adjust. It's fine. On the second matter, which you, which I explained, that they also decided to raise prices on tinting. Tinting in Indonesia, in terms of pricing, is a bit tricky, Jun Yong. When you look at the ready-mix, right? It's clearly segregated. Let's say I want to benchmark our waterproofing products, okay? I can look at Aquaproof, which is the pioneer in waterproofing. I can look at Nippon. I can look at other pro- paint products. For ready-mix, it's very easy. When it comes to base, it's quite tricky because some companies will price their base, A, to be higher than the ready-mix. Some companies will price it lower, and, and so on. We hardly make comparisons on the or benchmark each other on the base. Base, we'll just leave it as, you know, we set our own price, they will set their own price, you know. We don't really pay attention too much on what our competitors do on the bases, because like I said, right, base is very much an open price policy. When you choose different paint to another paint, the price will vary. I think in many other countries, including Singapore, that's how they also operate, right? That- because of that pricing that they give to consumers, right, retail shops are really not sensitive, you know, when it comes to base prices. It doesn't matter what our base price is, but they just look on the ready-mix as the more of a benchmark. That's why when Nippon raised theirs, we look at their tinting and say, "Oh, okay, fine. You, you raised your, your price. Do we need to adjust?" We look at ours. Nah, we don't need to make any adjustments on the tinting. We feel comfortable with our positioning, and the margin that we've demonstrated in Q2 still went up, so we're, we're, we're okay with it. That's why we didn't need to adjust. I hope that helps. Okay. automotive finishes, I mean, that's one. tinting, is, is that everything else, basically, on the screen? Say, say it again? I mean, is, is tinting basically everything, more or less everything in the wall, wood and metal, waterproofing, wood care, glue. No Others? Tinting that we have predominantly are in the wall, wood and metal, and waterproofing. Okay. So, so are the others. Wood care is not so much. Hardly anyone do tinting on the wood care segment. Okay. Oh, neither do they on the automotive refinish. Automotive refinish is not so much tinting. Unless you go to body repair shop, that's a different product. Again, we don't. Mm-hmm Compete against them. Okay. It's a very small niche market for the body repair. Okay. You know, that's different market. Okay. Since the price sensitivity and tinting is, you know, less sensitive. Right. Why would it be, I mean, I guess, what 's the logic behind not increasing your prices, especially if the pricing is so big across different brands? Yeah. Because we we're trying to encourage tinting from to consumers, right? The fact is, one of the biggest barrier that we found in the past few years is that the perception from the consumer is that tinting is a lot more expensive, okay? Maybe they, they're just not aware that it's, it's a different approach, right? The colors and, and everything else. Which is why I think when, when we benchmark our tinting, not to say that our tinting is cheap, Jun Yong, because, again, we have our policy that, let's say, if ready-mix is at 100, right? Maybe our tinting for base A will be at either 98, 97, or could be at 102. Different products, you know, we set it differently. It doesn't mean that our tinting price is, is way cheaper. Secondly, we look at our gross margin, right? You know, Hadi, Andreas, and Robert, right? We all participate in the gross margin monthly discussion, and it's actually split between ready-mix, gross margin and tinting contribution. If we see that our tinting contribution is less than our ready-mix, then we make a judgment call, "Hey, okay, so we need to adjust this." In the last meeting that we participated in, just a few days ago or a few, one or two weeks ago, right? We felt quite comfortable with our tinting margin, and many are actually higher than our ready-mix margin, and therefore, we said: Look, we don't really need to make any adjustments for now, so let it be. That's why we didn't make any adjustments on the tinting. Okay, okay. Thank you. Yeah. Yeah, that is clear. My second question is on Avitex Gold. Mm. Yeah, in the first quarter, it was, it was, I mean, it's, it was a pretty hot product. Mm. You were running that, aggressive, below the line- Mm. yeah, the, the aggressive- Yeah ... promotion strategy on that. Right ... can you just help us understand how big of your sales is Avitex Gold now? You know, what's the quarter-on-quarter growth, or did it decline, or yeah, just a bit more color on that? To be honest, Jun Yong, I don't want to share this information because I know that, you know, the others are listening, right? What I can share with you is what I said earlier, right? We have the ambition of trying to make Avitex Gold contribution for the company to be bigger than what the normal Avitex is currently contributing, right? If you look in the screen here, side by side, right, you have the Avitex Gold in the dark blue can, and then on the right-hand side, you'll see an Avitex in the white can with the blue colors. As of now, the contribution from Avitex, it's definitely still higher, way higher than that, okay, multiple-fold. Because of that, then we say, "Okay, well, we need to be very aggressive in Avitex Gold so that the contribution for Avitex Gold can be bigger than the normal Avitex," right? Which is why, if you recall, in my first quarter earnings call, we mentioned that it's likely that we will sustain the kind of aggression that we have, aggressiveness for the Avitex Gold promotion that we're currently giving to our retailers, and we'll maintain it maybe up until next year. We wanted to make sure that the revenue growth for this product can continue to grow before we decided to stop and reduce our below-the-line budget on this product. That, for now, the market is still very big for the Avitex Gold, you know, product portfolio, right? It's dominated by two players right now, right? Mm. One is Nippon, the other one is AkzoNobel. We're, you know, and a lot, a lot of smaller players, obviously, also try to participate and enter that market. The market is still very big, and therefore, we don't want to reduce the budget for the Avitex Gold because that's what we need to grab from our competitors. You know, as you can imagine, right they're not gonna follow our, you know, kind of budget that we're giving because when their revenue is already so big, right? I mean, you know, they'll lose money if they, they, they do what we're doing. For us, we're starting from scratch, so the margin for Avitex Gold is small to begin with, let it be, you know? Mm. The, the important thing is that we can maintain the margin for everything else, or we can improve, in fact, as you've seen with our numbers, and I think that's how we, we look at it. Okay. Every quarter, the contribution for the, for this product is, continues to be quite meaningful, and, and we're, we're quite happy where it stands for now. I tell my team: Look, there's still a lot more shops that we can, we can hit and offer with these products, so let's be even more aggressive. I'm always incentivizing our internal teams, with a lot of things on the wall paint and, and Avitex Gold in particular. Now I've added, "Hey, Aries Bling, you know, let's, let's hit our competitors also with this product. If you can share, you know, if quarter- on- quarter, is it directionally the same as your general paint portfolio, or, you know, did it buck the trend? I mean, your, your paint, revenue declined quarter- on- quarter. No. Avitex Gold continued to be. To grow. to, to be very good. Yes. Okay. We completed- It's. where it's heading. Okay. Avitex Gold revenue in second quarter is higher than the first quarter? I don't have the exact number, but if, if it's not higher, at least it's comparable. Okay, okay. It's still very good. Yeah. Okay, my last question, then I'll head back to the queue. In talking about your guidance, volume growth and all this, are you expecting, are you generally expecting the macro scenario to improve going through the second half of the year? You think it's, you know, mainly the low base last year that will, will help you, yeah, meet the guidance? I think it's, it's again, the latter, right? It's more the lower base. Also I think it's combined with the new products that we will launch. I don't think the Indonesian economic condition will actually improve in the second quarter, in the second half, especially as the presidential election, you know, it gets even closer, right? As you know, this is a time when retailers tend to be a bit anxious, and therefore, they don't want to stock up too much. Again, I mean, our entire value, you know, proposition to the retailers is like, "Look, you know, because of our speedy delivery and the fact that we have warehouses everywhere, really, you don't need to carry so much stock, right? You just carry enough. You know, whatever, whenever you want to make more profit, you can offer our products, and we'll deliver it." This is another thing that we'll, we, we'll, will do. Then you will see that when we say that we're improving our supply chain, you know, I think you, you will see that we'll, we'll, we'll, we'll do more on this. The whole idea is to really encourage the shops to carry, to sell more of our products and maybe don't need to keep inventory of those products. I think that's what we're expecting them to understand, and therefore, they're gonna be willing to offer more of our products. When we continue to launch more and more and more products, right, we have to think about the different ways to get the, the retailers to actually offer the products to consumers, right? In addition to our own team making, wave with the painters, contractors and so on, the retailers needs to also participate, right? Because, they, there are a lot of these retailers, right? 56,000 of them are across the nation. I don't think Indonesia's condition will improve in the second half, so we'll just have to be, you know, continuing with what we're doing, product innovation, new products, and really push. As you can also tell, right, our on-time collection also dipped slightly, even though it's a level that, you know, is still very reasonable. We're, we're looking at this and, and, and, and looking at, okay, what, what else needs to happen? Yeah, I think that's how we- Okay see the second half. Quite cautious. Sorry, speaking of elections, historically, has this been a boon or a bane for you guys, or just volatility in general? I, I think the volatility tend to be unknown when it comes to election, right? Even during Jokowi's second term, right, which supposed to be, you know, it should be a landslide victory for him. Nevertheless, you know, something happened, a, a huge demonstration erupted in Jakarta, and it was quite severe. I think I've also shared that the next day, everything just dies down, died down and just disappeared. I'm like, "Wow, what happened?" So we really don't know, and because we have no, you know, political affiliation whatsoever, right? We, we, we don't know what's gonna happen, what's likely gonna happen. I think the way we look at it is that, look, I think whether whatever happens on that end, right, it'll be business as usual for most Indonesians, right? We just need to do what we do, try to get market share. When our competitors are really, you know, lessening their aggression, then we'll be more aggressive. It's a controlled aggressiveness, right? We're not trying to just throw away the budgets and try to, you know, get rid of, and just spending recklessly, because that's not how we operate. Okay. Okay, thank you very much. Andreas, there's a question in the chat box. Yes, there's a question from Kian Lui. "May I ask why the four to five points improvement in gross margin from COGS are not filtering through the bottom line? What are the major increases in costs during this period that prevent this? When can we see a pullback in this additional cost and thus an improvement in margins? Okay. Uh- Go ahead. Yeah. Director, can you, yeah, go to consolidated margin, please? Yeah. I think to answer this question, we should go back to year of 2021, because in 2021, we extra monitor our expense or reduce our expense in response to COVID-19 condition and some because of movement limitation from the government. This condition continue to the first and second quarter of 2022, before coming back to normal level in Q3 and onwards. As a result, even though gross margin in Q2 last year was recorded at 41.3%, as you see in the table, but the EBITDA margin was recorded higher at around 26.4%. Yeah. This high level EBITDA margin is led to high level of net income margin in Q2 last year, which was at 22.5%. Normally, if gross margin was recorded at around 40%-41%, then the normal level of EBITDA and net income margin should be around 23% or, and 19% respectively, yeah. Now, back to 2023, gross margin improved to 45%, and even though OpEx increased or normalized, and also because of addition of new D.C., but the EBITDA margin is able to be maintained at around 28%, because the increase in OpEx was able to be absorbed by the improvement in the gross margin. The 28% EBITDA in Q2 2023 corresponded to the 23% level of net income. Therefore, when we compare to Q2 last year, net income margin was flat, quite flat because the net income margin last year was recorded at high level due to low level of OpEx by that time. Yeah. Hopefully it answer your question? Maybe to add that to Kian Lui's question, right? I mean, if revenue improves in Q3, right, if our guidance is met, then obviously the logical thing to, to, to be thinking is that the net income will definitely improve. The OpEx, as you know, right, can be covered by the improvement in sales. I think that's what we're looking to see if that can happen. Everything basically depend on our ability to hit our target. If the target is hit, then it's safe to say that our net income will also go up. I hope that answered your questions. Any other questions? Go ahead, Yuan Loh. Yeah. Thanks, Pak Ruslan. Thanks for letting me ask again. I guess maybe, maybe a bit more going back in history. I mean, you know, Pak Ruslan, every year you sort of launch new products, right? Like 2019- Yes. I remember, like, all-in-one Sunguard, you know, 2020- Yeah. You have Avitex and whatever. Sure. I'm just trying to think, I mean, what. This is the first time I remember meeting you guys, that, you know, we really emphasize Avitex Gold. Mm-hmm. You know, when you say star product. I'm just trying to understand, like, you know, your product portfolio, when you launch new products, what determines hit and miss, and what makes you decide to invest more? Because, you know, every year you launch, like, 10 to 12, for example. Yeah. This year, you know, last year we heard Avitex Gold, then this year you're saying there's the new one, the economy, I think you mentioned- Mm-hmm. Aries Bling. Mm-hmm. I'm just trying to go back in time and understand why now, why this product is more emphasis when, correct me if I'm wrong, I don't think you've been that vocal in pushing some of your products in previous yearsh? Yeah. Yeah. Yuan Loh, to be, to be honest, that's a mistake of ours. We should have been more aggressive in launching new products. Mm-hmm. Look, we're not trying to reinvent the wheels, right? First of all, let me stress to you that almost all of the new products that we launch, okay, there's already a market for that product, right? With the exception of Admiral, okay? Admiral in the marine, okay, we're trying something new. Okay, let's ignore that for a second. Everything else that you see in this page, right, there's already a lot of competitors in that particular segment, right? Whether that's Avitex Gold, whether that's Aries Bling, whether that's Avian Cling or whatever that is, right? If I learn and look at the success of Asian Paints in India, right, and then we, you know, we, we shared with you that we've been there, you know, before COVID- Mm-hmm ... to look at the market there. Based on Asian Paints presentation, you know, in one year, they launched more than 30 products, Yuan Loh. I said, "30 products? How is that possible?" Right? When you think about the footprints of a normal shop in India, it's only 1/3 of that of normal shops in Indonesia. How can Asian Paints launch 30 different products? The answer has a lot to do with their superiority in supply chain, how fast they can deliver, and how they can get their products into the hands of the retailers, right? Because Asian Paints supply all of their sales through the retailers, right? Immediately, this is what, what, what I basically mentioned earlier, right? Well, you'll see more surprises when it comes to our supply chain. Are we happy with 95%, you know, one-day delivery? No. You'll, you'll see us doing even more on that, because we already have the D.C.s everywhere, right? How can we get retailers to offer more of our products? That's basically the thinking behind how Asian Paints have been able to drive and continue to deliver the kind of volumes, the kind of value growth that they have been doing for decades, right? We're really learning a lot from Asian Paints, looking at what they're doing successfully in India and trying to say, "Okay, how is that applicable for our business in Indonesia? What can we do?" Right? The, the short answer to your question is, the mistake of ours was that we should have launched more products even more aggressively, maybe start from 10 years ago. Why didn't we? Well, that's the mistake. We should have. I should have learned more from Asian Paints from a decade ago and launched more new products. The question is, if we go back to the product portfolio, Terry, what I mentioned earlier, right? In the wood and metal category, right, Glovin, it doesn't work, we'll discontinue it, right? At the same time, Yuan Loh, we also do not allow our ego to get in the minds of the business, right? If Glovin doesn't work, we'll stop. I don't care if Glovin doesn't work, we'll terminate it. You know, launching new products, but at the same time being focused on analyzing whether which product works or which product doesn't. Is there a future for this product? If there's a future, okay, maybe we need to continue with this product, even though sales is slow now, it'll pick up as we educate the market and so on. If there is really no future for it, like in the case of Glovin, then we're really not shy. We'll just stop it. We'll terminate it. Again, we always do it in a way where, in terms of loss to the company, is very minimal. Whenever we discontinue any product, the process will last for at least two years. We really don't want to just take it all from the shop. We'll tell the shops, "Okay, a lot of colors will be discontinued, so you'll find that this product will slowly, slowly disappear, but in the meantime, you can continue to sell the products." The loss to the company when we discontinue any products is at minimum. At the same time, with any launching of new products, we're always concerned about the inventory, so we always use our ERP, our supply chain capability, to really manage this well. I think that's how we really try to balance the launching of new products and the discontinuing of products that really don't work. Got it. Pak Ruslan, if I can follow up. Sure. Two short more, two short questions. I guess maybe since in the past, Pak Ruslan, maybe if, just curious, why, why hasn't the company been launching more products, like, history-wise? Yeah. Yeah, I think we, we felt that we, we have a lot of, a lot of products, I think. Mm. I think we felt that, you know, I think I shared with you guys last time, right? I'm not a big believer of brand extensions. Mm. In fact, I didn't like brand extensions, right? In, since COVID, I've really changed my mind, you know? Mm. I, again, I think that's a mistake for me. You know, I, I, I should've, you know, done more brand extensions from a decade ago. You know, I, I should have been more aggressive in launching new products from a decade ago. The fact that we didn't, it's, it's, it's purely a mistake on our side. I mean, the good thing is, you know, we're, number one, we're not shy to admit if we make any mistake, and number two, we immediately take actions to correct those, right? Robert and I and the R&D team, we meet on a monthly basis, Yuan Loh. We go to the factory, we go to the R&D, we talk about all the products that we have. "Okay, what's next? What's next? What's next?" Robert has more than three years' worth of pipeline now, thinking about what we'll relaunch in the next three years. You know, because we need to know where the market is heading. We need to also prepare the company because we have warehouses everywhere, right? Are they gonna be enough, right? That's also a concern, right? We need to make sure that, okay, hey, we can't just launch, launch, launch without thinking about what about our warehouse capability? At the end of the day, the contribution from our wholly-owned D.C. is still around 88%, right? If you sell to third-party D.C., it's easy enough, right? It's your warehouse. I don't care about it. You know, I don't need to think about that. The fact that we sell through our wholly-owned D.C., means that we have to think about the preparation of all this, okay? Is the warehouse supportive, right? Buying trucks is easy. We can just buy trucks. Is the warehouse supportive? If not, what can we do? Do we need to get more warehouse? Do we need to build more? Do we need to lease more? These are all things that we have to put extra thought into because we own the wholly-owned D.C. to that extent. Got it. Thanks, Pak Ruslan. Yeah. My last question, Pak, if I can sort of probe you a little bit on that. I mean, to be fair, you have launched products in 2019. Yes. 2020, 2021. I mean- Yes. you guys, like, Sunguard one one, whatever. Sure, sure. I mean, just, we've followed you for a while. Yes. I guess in relation to, I guess, what Jun Yong and, and, and Harry have asked about the guidance for second half, some extent of that relies on, I guess, maybe Bling, for example, new products being launched to deliver. Yes, yes. Given how you've said it about, you know, products, success or not, what gives you the confidence for, I guess to- Well, For this, for example, Bling to perform? Sure. Yeah, for example. To perform in the second half. Yeah. Yes. Yeah. A very good question, Yuan Loh, because remember that I also said that we didn't do as well in the second half last year, right? Yeah. I think- Yeah we definitely have the lower base to our advantage. Mm When we entered the second half last year. Then couple that with the new products that we will launch, right? The continuation of the Avitex Gold, for instance, right? Mm. We feel quite comfortable, okay, we can meet our guidance, and then, we'll need to be aggressive. Our aggressiveness will not, you know, will continue in the second half, Yuan Loh, because I do not think that the Indonesian market condition will actually improve that much in the second half. You know, if we don't remain our aggressiveness, then it'll be very difficult for us to to, to hit our target. That's, that's not how we react, you know. We'll always push very much to the to the, to, to, to the limit. Mm. Got it. Hey, thanks, Pak Ruslan, for. Thank you. ... for sharing. Thank you. Yeah. Thank you. You're on mute, Andreas, so maybe Tian can ask your questions again. Oh, sure. Hi, hi, Pak. I just have questions. I checked the, all the, the volume data. We're still below the same period in 2019. That's not unique to you. I think every other paint company like AkzoNobel, PPG, Sherwin-Williams, I think all the volume this year so far have been collapsing. Mm. Price holding up, because of deflation, or some of the material help, much help. Since everyone is about the same story. My question is, because we always say some of the paint demand is nondiscretionary demand, right? When come the time, people have to do the repainting. If there's a new constraint, they have to be repainted. Mm-hmm. Now, where this volume is gone, where this demand in terms of volume? They just disappear, and when will come back, and what kind of condition those volume come back, at least thinking about 2019's level? Yeah. When, again, I think at the first quarter earnings call, I mentioned that. We are still experiencing a gap between where minimum wage have gone up in the past three years, when you compare that to where paint prices have gone up in the past three years, right? It's still about 10% or so gap. I think if you ask me where or when will that come back in, in terms of demand, I think next year will definitely a much better position because the minimum wage should go up faster than what prices have gone up in this year, and therefore, the gap will be very narrow, and therefore, I think we will be in a good place. Obviously, this also depends on the, you know, volatility of, on the predictability for the election market, right? If everything goes well, then nothing will happen, then we feel very confident about what's happening, what's gonna happen to the Indonesian paint market next year. I think that's how I look at it. Now, with that gap in mind, right, that we're still trying to overcome, then the introduction of more economical products, leveraging on existing popular brand needs to continue, and that's basically what we're trying to do. I just wish I had done it faster or sooner, you know? It's a mistake, and we're trying to correct that now with some of the products that we've launched or that we will launch. Hey, okay, let's hope that will be the true next year. Just on a related topic, I think we also disclosed some customer number, and the customer being. Right the retailer or the paints, right? Mm-hmm. I do the simple calculation. Since the average customer's kind of volume, the paint they, they are purchasing from you actually, getting lesser and lesser. Yes. At the same time, the number of customer, you have grown quite a lot, right? From used to be, below 40,000, something now is getting to close to 50,000. Mm-hmm. Why... this just mean the new customer are just long-tail customer, they are very skewed to the small volume purchase? Yeah. is about the average customer, they just purchase less today than, say, 2019, or 2018? No. It's more like, you're very correct to identify that the number of customers that we have, even though they've been growing, but what they've been buying on the average in terms of the per shop has not grown very much. That's because, generally speaking, for most companies, or in fact for all companies in Indonesia, Tian, is that when you go and enter any new market, the first shops that you'll visit will be the big shops, for sure, right? My team would have done that also exactly. Because of our way of thinking in terms of penetration, right, we want to supply to the shops directly. What has happened, right? Well, number one, in Indonesia, there are also an existence of shops where they actually like to redistribute, okay? They are, in fact, wholesaler, even though they are... You know, we don't have any wholesaler in the country, but these shops exist, and they like to supply to the smaller shops. Now, what happened with our distribution network expansions? Well, when we open more and more D.C.s everywhere in the country, so obviously the bigger shops who used to wholesale, obviously, their, their market share will shrink or their sales will shrink because we supply now to their customers, right? Because of that, when we add more and more customers, it definitely doesn't make sense that the revenue will scale up alongside with those shops, which is what I'm trying to counter now, right? If I, again, go to the Asian Paint case, right, we look at what they're doing with all the new products and say, "Hey, how is Asian Paint able to grow so fast every year, and yet continue to launch all these new products, and the footprints of the shops being only 1/3 of that of Indonesia's size?" The answer lies in the fact that we need to do something in terms of supply chain, and that's basically what we need to do, providing the fastest delivery system to encourage shops to buy more of our products. I think along the years, every time we add new shops, Tian, they tend to be smaller because they used to buy from wholesale, because they could not buy from us. We didn't have a D.C. there. Maybe our salespeople went there, they also, again, focus on the big shops. Now, as soon as we open a D.C., one of the important KPI is to add more shops, okay? Whether that's 10%, 5%, 20%, whatever it is, you have to add more shops and supply to them directly. What has happened in, in the past decade and will continue to happen in the future, is that wholesalers don't like us very much. Sometimes I meet these type of wholesalers, right? We invite them to come to the office, to get a visit to the factory, and then meet me, blah, blah, blah. They say, "Hey, but, you know, you're supplying to all my competitors now. You're supplying to all my shops now. You know, my revenue will drop because you supply to them." I, to, to which I said, "Please, when it comes to our products, you know, I only want you to sell our products on the retail front, because if the moment you want to redistribute, you're directly competing with our business model, right? It doesn't work. You, you know, I don't expect you to redistribute because it just, it's, it's not the way we operate, you know. We like to supply to them directly. We don't want to have any middleman in between." That's basically what has happened in the, in, in the past many, many years, and will continue to happen. The numbers of wholesalers continue to shrink, as you can imagine. Everywhere, you still find here, one or two here and there, here and there, you know, but we, we give them, you know, a good understanding. "Look, we just want your retail business. Don't do redistribution. It's not a good fit with our company. Okay. That's, that's, that's very, very good. Just on the last question. I think, last year, there was a concern about the Nippon's, setting up the D.C.s in Kalimantan, in Sulawesi. Sure. How, how does that go now? I think they have opened in a few locations, which is why, going back to my point earlier with regards to our aggressiveness, right? If any of our big shops are being, you know, offered or being, you know, approached by them, you know, we're really not shy to, to counter whatever they do. Not only Nippon do, but everybody else too, right? I think what has happened with, in Nippon specifically, is that finding warehouses in many of the more remote areas is not the easiest. If you're trying to open 10 in a year, I, I think, you know, you probably won't succeed. I think they'll be able to do, you know, lesser than that, and it will take them a bit longer. The moment they decide to open in any particular areas, then obviously, you know, we will compete even more aggressively with them. It's not easy for them to get our market and, you know, so because we always do our best to maintain and, and, and defend our position there. Launching a lot of new things, you know, a lot of different initiatives that we have with the retailers. We've been proactively trying to invite a lot of these customers to come to the to our factory, to have a meeting with me, as well as the R&D team, to really show them that our capability. To make them understand that, look, we're not only you know, a company that can do this, we can do way, way more, right? Including premium products, right? Including all kinds of products that you may not sell at this point in time. I think the, the battle between us and Nippon will continue, but I think as you can expect, right, if the number one and number two player continue to battle it out there, you know, the smaller players will suffer the most because they couldn't even keep up with the pace at which we're launching our new products, right? They're trying to counter Aries Bling, and then we already launched something else. Even my own third-party distributors are also complaining. I said, "Wow, I, I can't keep up with the number of products that you're launching into the market every day." I'm like, Well, but that's, that's, that's the name of the game. If we don't do this, I think it'll be difficult for us to grow. We just have to continue with this. We'll support you. We'll educate and train your people so that at the end of the day, they can perform their job well. That's part of what we do. We have to launch new products to, to, to cater for the market of Indonesia. Thank you. Yeah, that's all for me. Thank you. Thank you. Andreas, you're on mute again. Maybe we'll take the next next or last question from Felicia. Last question from Bu Felicia, Pak. Yeah. Felicia, you can ask question. I think she is still on mute. Yeah, Bu Felicia is still on mute. There you go. Hi, Felicia. Hello, Pak. Hi. Can you hear me? Yes, I can hear you now. Hi. Yeah. My question is actually on the rebranding strategy. Mm-hmm. Because previously you mentioned that, there's gonna be a rebranding on the wood and metal segment. Mm-hmm. Can I just clarify that it, it's only for that segment, or it's also going to be for the other segment? Because I saw that the brands in the wall paint especially, is also already quite, already quite a lot. Yes. If you're going to issue the economic products, at which price range that you will target? Is it gonna be at a, a three level or two level or one level? Thank you. Essentially, Felicia, is that the rebranding will not only happen in the wood and metal, but we will also do that in the wall category. Not only in the middle level or economical level, but some of the premium will also get rebranded. I think in a nutshell, I think you can see here in the wall category, right? In the premium under category five or four, you can see two brand. One is called Sunguard, and the other one is called Supersilk. Okay, this is part of the rebranding that we'll do. Essentially in the premium, we'll only have two brands. One is Sunguard for exterior, one is Supersilk for interior. Okay? Everything else that we have within this category will be rebranded under Supersilk, all under Sunguard. Likewise, when we talk about the wall segment in the mid or economical tier, right? I think you'll see that a lot of products are already under Avitex, right? You have Avitex Exterior, Antivirus, Avitex Gold, and so on. But then you also have Aries. I think for the mid and economical tier for the wall paint, you'll also see Avitex and Aries. Okay? I think that's how we look at it. Essentially, two brands per segment. I mean, wall paint is exception, exception because it's, wall paint is so big that we can have two in the premium and then two more in the, another two in the mid tier. In wall paint, we'll, we'll have, like, four different brands, but other segments will only have two at most. If you look at waterproofing, we don't even have a second one. Whether we'll launch a second one or not remains to be seen, but for now, we'll just focus on the existing one because the brand is very strong, and then we'll continue to leverage on that. We don't want to launch any more new brands. You know, nothing that will start from scratch, but instead, we'll just leverage on the popular brand that we have and continue from there. Okay. Okay, got it, Pak Ruslan. Thank you. Mm-hmm. I think that's all. Thank you, Pak Ruslan. Thank you, Felicia. Investor who have unanswered question, you can email me, and I will respond after coordinating with the management. Once again, we would like to thank you for your participation in our quarter two of 2023 earnings call today. We look forward to seeing you again in our next earnings call. Please take care and bye-bye. Thank you. Thank you. Thank you, everyone. Thank you.