Good day, and thank you for standing by. Welcome to the Huazhu Group Limited Q2 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would like to hand the conference over to your first speaker today, Jason. Please go ahead. Thank you, Karina. Good morning and good evening, everyone. Thanks for joining us today. Welcome to Huazhu Group's 2021 Second Quarter and Interim Earnings C onference Call. Joining us today is our Founder and CEO, Mr. Ji Qi. Our President, Mr. Jin Hui. Our Chief Digital Officer, Ms. Liu Xing Xing. Our CFO, Ms. Chen Hui. Our Deputy CFO, Ms. Ye Fei and Mr. Li Dong. Following their prepared remarks, management will be available to answer your questions. Before we continue, please note that the discussion today will include forward-looking statements made under the Safe Harbor provision of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. Huazhu Group does not undertake any obligations to update any forward-looking statements except as required by applicable laws. On the call today, we will also mention adjusted financial measures during the discussion of our performance. Reconciliation of those measures to comparable GAAP information can be found in our earnings release that was distributed yesterday. As a reminder, this conference call is being recorded. The webcast of this conference call as well as supplementary slide presentation is available on Huazhu Group's website at ir.hworld.com. With that, now I will turn the call over to Mr. Ji Qi. Mr. Ji, please. Good morning, good evening, everyone. Thank you for joining us today. I would like to give you an overview of our business. In the second quarter, our China RevPAR recovered to 102% of the same period of 2019, supported by strong leisure traveling demand in May, but offset by a relative weak RevPAR recovery in June due to COVID-19 resurgency in Guangdong Province and traffic control in Beijing. Unfortunately, the Delta variant of COVID-19 was again detected in Nanjing since late July. With further spreading into many other provinces and cities, the Delta variant promoted the Chinese government to post another round of strict traveling restrictions, which seriously affected our performance in August. Our European business saw some positive trends, with RevPAR recovering to 50%-60% of 2019 level during the summer holiday. It's mainly due to the continued progress of vaccination and restriction ease. However, we remain cautious on the future recovery as the European governments, especially the German government, are still carefully monitoring the situation regarding the Delta variant and a potential impact from it. Looking ahead, uncertainties brought by the pandemic may exist for longer than expected time, and we expect to be well prepared to overcome any business turbulence in the near term. Nevertheless, in the long term, we have high confidence in China's future economic growth and think the upward trend of the China lodging industry remains intact. Therefore, we will be implementing our strategies, such as further penetration of low-tier cities, building up of upper middle scale and upscale segments, organizational upgrades and talent acquisition, as well as concentrating on high-quality hotel expansion to support our sustainable growth. With that, I will turn the call to Jin Hui to update our recent business developments. Thank you. [Non-English content] Thank you, Ji Qi. As usual, I will discuss our recent business recovery trend in detail. Please turn to page two. For the second quarter, our RevPAR recovery shows upward trends, with RevPAR in April and May recovered to 100% and 106% respectively. [Non-English content] However, as mentioned by Ji Qi earlier, due to the COVID-19 resurgence in Guangdong and traffic control in Beijing since late May, our RevPAR recovery in June slowed down. If we excluded the impacts from the Guangdong and Beijing, our RevPAR recovery for the remaining areas was on track in June. [Non-English content] Unfortunately, since late July, a new wave of Delta variant of COVID-19 was detected again in Nanjing and spreading into many other cities in China. Post that, the government imposed another round of strict traveling restriction, which negatively affected traveling demand, and significantly affected our business as August was normally a peak season for traveling. Due to the impacts from the Delta variant and the historical high base, as of August 23rd, our RevPAR only recovered to 46% of 2019 level. [Non-English content] We saw the recent wave of Delta variant has been largely contained, given the good prevention measures posted by the government, the newly confirmed case declined significantly from the peak. [Non-English content] Please turn to page three. For the hotel development, we achieved a record high number of new signings at 1,502 for the first half of this year, increased by nearly 50% year-over-year. [Non-English content] At the same time, our lower tier cities penetration is further accelerating. Lower tier cities proportion accounted over 50% for both our current hotel pipelines and the new signings. [Non-English content] Moreover, we have already penetrated into over 1,000 cities as of June, including both hotels in operation and the pipeline, added 200 cities compared to the same period of last year. [Non-English content] However, please note that given the travel restriction due to the Delta variant of COVID-19, as we mentioned above, our recent new signings and construction progress were also negatively affected. [Non-English content] Please turn to page four. For our upper middle hotel segment, we will use multi-brand strategy to further exploring the market opportunities. Our upper middle hotel brand portfolio includes Crystal Orange, Intercity, Mercure, Manxin, Madison and Novotel. [Non-English content] As of June 2021, we have total of 404 upper middle hotels in operation and 248 in pipeline. We are targeting to achieve over 1000 upper middle hotels in operation and pipeline by the end of 2023. [Non-English content] On July 9th, we announced a license agreement between Steigenberger and Porsche Design Group to establish a joint hotel brand. This is another breakthrough into the upscale and luxury hotel segment globally. Please turn to page five. [Non-English content] We are planning to open at least eight hotels in the next 10 years. Those hotels will be all located in prime areas of international metropolis. [Non-English content] Similar to other international hotel brands cooperation with luxury brands, our cooperation with Porsche Design Group will further enhance our Steigenberger brand positioning and awareness globally. It would help us to catch more opportunities in the upscale and luxury segments in the future. [Non-English content] Please turn to page six. Along with our lower-tier cities penetration, our membership program synergies to lower-tier cities and ability on traffic generation to hotels are the most concerned parts that you may have. We are very happy to see that our CRS contribution in lower-tier cities achieved to 56%, very close to the higher-tier cities. It has demonstrated our ability to further penetrate into lower-tier markets. [Non-English content] Please turn to page seven. We constantly emphasize on the data security matters, and it is the bottom line and the highest priority for Huazhu. First of all, we have established the Information Security Committee and set up the Information Security Center. [Non-English content] Secondly, our data are all saved locally. Lastly, we have received various certificates on data security. As shown in our slide, in year of 2019, Huazhu became the first domestic hotel group which received ISO 27001 certificate. In 2020, Huazhu became one of the global hotel groups which received ISO 27701 certificate. Additionally, Huazhu has also obtained the PCI DSS Payment Card Industry Data Security Standard certificate. [Non-English content] Please turn to page eight. After we acquired Deutsche Hospitality, we launched 500 days Digitalization Plan for it. As of the second quarter, all functions and system setup is completed and are ready to use. We are now in the stage of massive rollout, with targeting to roll out to 70% of DH hotels by the end of this year and 100% completion next year. [Non-English content] With that, now I will turn the call to Ms. Ye Fei to discuss our second quarter operational and financial performance. Thank you, Jin Hui. Good morning and good evening to everyone, wherever you are. Let's move on to our operational and financial review for the second quarter of 2021. As shown on slide 10, our hotel network expanded by 15% in the second quarter to 692K rooms compared to the second quarter of last year of 599K rooms. Excluding DH, Legacy Huazhu's hotel network expanded by 16% year-on-year to roughly 668K rooms in the second quarter. For our hotel turnover in the second quarter, our total turnover grew by 98% year-on-year to RMB 13 billion in the second quarter. It was mainly due to our continuous network expansion in China and the initial recovery of Deutsche Hospitality's operation, as well as the low base for both China and the European business last year. Excluding DH, Legacy Huazhu's hotel net turnover grew 95% year-on-year to RMB 12.7 billion in the second quarter, and it recorded a 45% increase if compared with the second quarter 2019. The growth is mainly driven by the hotel network expansion under the Asset Light model. Turn to page 11. Legacy Huazhu blended RevPAR for the second quarter grew 2% from 2019 to RMB 210. The ADR in the second quarter grew by 8% to RMB 255 compared to 2019. The occupancy in the second quarter is still 5% lower compared to 2019. It was mainly caused by the COVID-19 situation, especially the resurgence in Guangdong Province and also the traffic control in Beijing in June. Turn to page 12. Our legacy DH business saw initial recovery in the second quarter since German government imposed a lockdown from last November. Thanks to the continued progress of vaccination and the restriction ease, our legacy DH blended RevPAR for the second quarter grew 26% to EUR 20 compared to the second quarter of 2020. The occupancy improved by 6 percentage points compared to the second quarter last year, while the ADR dropped by 6% to EUR 82. Please see our financial results on slide 13. Total net revenue grew by 84% year-over-year to RMB 3.6 billion in second quarter 2021. Excluding DH, Legacy Huazhu recorded an 85% year-over-year growth rate to RMB 3.4 billion. The revenue was slightly below our previous guidance. It was mainly due to the COVID-19's resurgence in Guangdong Province and traffic control in Beijing, as mentioned before. Excluding the impact from the above-mentioned areas, the revenue growth was actually in line with our previous guidance. Breaking down the revenue of the second quarter, leased and owned revenue increased by 85% year-over-year to RMB 2.3 billion. Excluding DH, the leased and owned revenue of Legacy Huazhu grew by 84% year-over-year to RMB 2.1 billion. Net revenue from managed and franchised hotels grew by 89% to RMB 1.2 billion, mainly driven by the 89% year-over-year growth of Legacy Huazhu. Due to the further expanding hotel networks with asset-light model, managed and franchise revenue contribution enlarged to 36% in the second quarter, compared with the 35% in the second quarter 2020 at the group level. For Legacy Huazhu, the managed and franchise model also expanded to 38% in the second quarter of 2021 compared with 37% a year ago. Let's move on to the cost and profitability section on slide 14. In the second quarter 2021, the reported operation income turned positive to RMB 629 million, compared to a loss of RMB 494 million last year, and a loss of RMB 575 a quarter ago, mainly due to the business recovery in both China and Europe. Excluding DH, the Legacy Huazhu's operation income in the second quarter of 2021 was RMB 763 million, compared to a loss of RMB 207 million last year, and a loss of RMB 172 million a quarter ago. The hotel operating cost and other operating costs for the second quarter of 2021 was RMB 2.8 billion, increased by 28% year-over-year. The cost increase was mainly driven by the Legacy Huazhu, which recorded RMB 2.2 billion hotel operating costs, indicating a 29% year-over-year growth. The increase was mainly attributable to the higher rental cost of the new upscale hotel, higher hotel level personnel costs as we expand growing our hotel networks rapidly, and the higher D&A, depreciation and amortization costs, which were related to the upscale hotel openings and upgrading of existing hotels. As we mentioned in the previous quarter, our future expansion of upscale hotel will mainly use asset-light model. Therefore, our pre-opening costs declined by 84% year- over- year, and 20% QoQ to only RMB 16 million in the second quarter of 2021. Our SG&A in the second quarter of 2021 increased by 49% year over year to RMB 553 million, mainly driven by the increase of Legacy Huazhu. Excluding DH, the SG&A for Huazhu increased by 71% year- over- year to RMB 423 million. The increase was mainly attributable to the increase of selling and marketing expenses due to the revenue recovery, the increase of headcounts for our BD team support penetration into lower tier cities, the increase of personnel cost for upscale business units, and the increase of IT investment as well. Other operating income in the second quarter of 2021 increased by 121% to RMB 362 million. Mainly due to the EUR 38 million subsidy received from the German government. This is related to the 2020 lockdown period. Turning to page 15, our adjusted EBITDA income turned positive to RMB 1 billion, compared to a loss of RMB 97 million a year ago. DH's EBITDA loss in the second quarter was RMB 73 million, narrowed from RMB 235 million last year, mainly due to the government subsidy. Excluding DH, Legacy Huazhu recorded adjusted EBITDA income of RMB 1.1 billion, grow by 709% in the second quarter of 2020. In the second quarter of 2021, we recorded adjusted net income of RMB 464 million, compared to a loss of RMB 476 a year ago. Excluding DH, Legacy Huazhu recorded an adjusted net income of RMB 579 million, compared with RMB 253 million loss in the second quarter of 2020. The non-GAAP pro forma adjustment mentioned on this page included unrealized gain or losses from fair value change of equities related to some of our investments. Coming to the cash position, we further lowered our net debt of RMB 4.4 billion by the end of second quarter, compared with RMB 5.2 billion by the end of first quarter, and there's no risk of breaching the financial covenants of the $1 billion syndication loan. Our cash balance was RMB 6.2 billion. The unutilized bank facilities was RMB 6.8 billion. This cash and bank facilities would allow us to further pay down Huazhu's bank debt in 2021 and also 2022, CB. Also will be used to weather any unforeseen circumstances. Coming to DH's update on page 18. The recovery is coming to the right direction, although the path is bumpy. Vaccination commenced since December 2020 has been speeding up in the second quarter of 2021. Restriction were eased, especially toward people who recovered from COVID-19's infection and people with either complete injection or negative test result. As of August 23rd, about 64% of German population have received at least one shot. 59% of the whole population were fully vaccinated. DH's occupancies rised continuously from about 19% in Q1, 24% in Q2. Now is about 50% in the August summertime. The recovery ratio compared to 2019 is about 54% in July and 67% in August month to date. Meantime, DH is taking further actions to reduce costs and preserve cash, including negotiating for lease waivers, streamlining overhead at both hotel and headquarter levels. The impact of the extension of the lockdown will be also partially offset by the short-term worker allowance and also the special government subsidy, of which EUR 38 million subsidy has been successfully received and recorded in Q2 relating to the 2020 lockdown. The company is still working towards more government subsidy, which would be related to the 2021 lockdown. The company's cash position is sufficient and still has another EUR 12 million credit line available. Turning to page 19 on guidance. Considering the impact of COVID-19's resurgence in Guangdong and traffic control in Beijing since late May, and the impacts of Delta variant spreading from Nanjing to several cities in China recently, we lowered our Q3 and full year revenue guidance. For the third quarter of 2021, Huazhu expects net revenue growth to be in the range of 8%-12% compared to the third quarter of 2020, and 4%-8% if excluding DH. To provide a more meaningful guidance excluding the impact of COVID-19, Huazhu expects net revenue growth will be in the range of 12%-16% compared to pre-COVID-19 results in the third quarter of 2019, and the net revenue reduction will be in the range of 3%-7% if excluding DH. For the full year of 2021, we now expect the net revenue growth in the range of 29%-33%, or to the range from 34%-38% if excluding DH. To provide a more meaningful guidance excluding the impact of COVID-19, Huazhu expects the net revenue growth will be in the range of 17%-21% compared with pre-COVID-19 results of 2021, or to the range from 2%-6% if excluding DH. Please note that our current revenue guidance is based on the expectation that the recent Delta variant of COVID-19 resurgence can be well contained by the beginning of September. However, given the future situation of pandemic is still uncertain and unpredictable, we may need to adjust our guidance accordingly. We also keep the gross opening target of 1,600 and 1,800 hotels unchanged. The signing speed of the new pipeline and the construction of new hotels in the next few months will be affected as well. With that, let's open up for Q&A. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound or hash key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Tian Hou from TH Capital. Please ask your question. Good morning, management. I have two questions. Would you please give us some color on the member situation? In Q2, how many members newly added? What is your channel for member acquisition? That is number one question. Number two, in your Q3 guidance, what do you see in China in terms of traveling, hotel demands as well as COVID? It seems like the COVID here and there always pop up. I just wonder how, in this guidance, how much do you already see in your guidance? What's the base for your Q3 domestic guidance? Thank you. [Non-English content] [Non-English content] Okay. Let me just switch to the English. I think that answered the first question. To Mr. Jin Hui for the second question. In Q2, from the membership recruitment, the number was 6 million increased. Okay. I think that we continue the best practice to develop a member recruitment, such as something like the hotel based from all service touching points, just to be transferred to the member and how to make sure something like the frequency. Okay. I think that from the second way, this is we encourage our team just to develop like the B2B and the B2C, from the local sales team and the corporate sales team. Number three, this is the most important, but something with the innovation. This is we do a lot of partnership with the B2B2C or B2B2B, such as just Alipay and WeChat, even like DiDi. We do this kind of partnership with many useful way to do the external, how to say, the membership recruitment. That is for my question for number one. Thank you. [Non-English content] For our Q3 revenue guidance, we have admitted that the Chinese government had imposed very strict traveling restrictions and prohibition control measures that really affected our business performance recently. For the Q3 guidance and full year guidance, our current estimate and expectation for the RevPAR recovery for the third quarter on a same hotel level, we are expecting the RevPAR in third quarter will be recovered to 70%-75% of 2019 level, and 90%-95% in fourth quarter of 2019 level. As I mentioned previously in my prepared remarks, our current focus and the revenue guidance are very much based on there will be no massive COVID-19 recessions happening again in the remaining of this year. Thank you. Thank you. That's all my question. Your next question comes from the line of Praveen Choudhary from Morgan Stanley. Please ask your question. Hi, thanks so much for taking my call. I have two questions. The first one is about lower tier cities. I just wanted to understand what are the challenges that you are facing in lower tier cities? It seems like it's going very well based on the pipeline, if you can talk about any challenges that you're facing in future. The second one relates to the other strategy, which is upscale strategy. Wanted to understand what portion of upscale hotel opening would be in lease and operating versus franchise and managed. The reason for asking this question is to understand how long will it take before you can have a good size of these hotels. During that time, what kind of cost do you have to incur? I remember previously you used to have very big pre-opening expenses. Should we worry about similar expenses going forward? Thank you. [Non-English content] Okay, so for the lower tier cities, actually the lower tier cities penetration is progressing pretty well. But we have to say that we are still facing some of the challenges, especially for the local sales, and also matching and meeting the local customers' demand for these areas. We are continuously adjusting our strategies, especially on the sales team, to improve this area for helping us to further penetrate. [Non-English content] In addition, we also trying to building up a localized employment and staff team, and also supporting our lower tier cities penetration as well. [Non-English content] We will be doing quite a lot of organizational restructuring, especially for those lower tier cities in different districts and areas. [Non-English content] For Huazhu, we divided the hotel segment into four segments, which including economic middle scale, upper middle scale, as well as the upscale. Within these four segments, we always think the most interesting parts as well as the attractive area is those upper middle scale and below, and include those economic middle and upper middle scale. For the upscale segment, for China market, it's more like a consolidation story. As you may know that the upscale hotel segments in China was kind of a supplementary for the property developers as well as for the government. It's not a real market-driven investment many years ago. There is a lot of existing hotels in the market. For Huazhu, we have been cooperating with Sunac through the joint venture, and we will do some incremental hotels in this area. In the longer term, we are also trying to consolidate the market by leveraging our capabilities. For the developing model, we will no longer use the lease and own business model. We rather choose a franchise or hotel management contract, which is the Asset Light. In current stage, we are still exploring and learning and doing the research in the upscale hotel segment, rather than the timing that we are going to get some return from those investments. Thank you. Your next question comes from the line of Yulin Zhong from Haitong International. Please ask your question. Hello. Good morning, management. Thank you for taking my question. My question is regarding the DH Hotel. I was wondering to what extent you can improve the margin profile of DH Hotel by the digitalization, as you just mentioned. Any quantitative metrics would be helpful. Thank you. As we just shared for the DH, the progress. I think that up to today, we just fulfilled the one global digital platform ready. Now, we have already launched the massive rollout in the DH for all the hotels. As we shared before, the one digital platform is not only focused on the business operation efficiency, but also just to do something like the loyalty and even the CRS contribution. We hope that we can improve the CRS contribution from the before, I think the very original, the version now around the 1% or 2%. We hope that we can achieve in the coming new year to around the 20%. This is the business target. On the other hand, we're not only just to focus for the CRS contribution, but also to pay the serious attention to the global loyalty platform, such as the membership recruitment. According to the current plan, we would like just to officially launch the new global loyalty program. We call it, this is the H World, will be released officially at the beginning of October. It's a system program, not only focused for the one point. We hope that we can very quickly just to deploy the one digital platform for all hotels in DH. Then we can achieve the business value in the coming year by the business integration program, by the operation efficiency improvement program, by the CRS contribution, and global loyalty. That's all. Thank you. I just wanted to build on Xixi's point. I think you asked a very good question. Right now, I think it's still too early to tell you the margin improvement of digitalization because we are still in the first phase of setting up the infrastructure and preparing for the rollout. Right now, the company's focus is still sharpening the brand and reducing the loss of operations and then bringing the brand back to Asia. Your question is very important, and it's also our return target as well. I think putting into more digital equipments and also solutions can help strongly support the company streamline its organization. Right now, we have a rough target that we probably need to optimize 20% to 30% of the staff, both in the headquarter and also the operation level, through the several years program. I believe this will contribute at least several percentage points regarding the margin improvement. Thank you. That's been helpful. Your next question comes from the line of Simon Cheung from Goldman Sachs. Please ask your question. Hi, thanks for the presentation. I got two questions. I remember in the first quarter you mentioned something related to the cleanup of the hotel, in particular on Elan, some of the lower branded hotel. I wanted to get a sense about the update. It's grateful to see that you maintain your cross net guidance full-year 1,600 -1,800. I wanted to get a sense, how is the trend looking like perhaps quarter-to-date in the fourth quarter and your confidence level of achieving that target? What sort of assumption you are baking in order to achieve that guidance? That's the first question. The second one, if I use your forward guidance, the revenue guidance, excluding or not excluding DH, it seemingly like that you're expecting the revenue for DH would jump to around RMB 600 million in the fourth quarter, compared to, I think second quarter you're running at about RMB 254 million, so doubling. I think that's basically all driven by RevPAR supposedly. At that level, would you expect your EBITDA to be breaking even for your DH operation individually? Thank you. [Non-English content] For Elan brand, as you may know, it was our softer brand. It used to penetrating into the economic segment. You may also know that we have many other brands in this segment, including Nihao, Hi Inn, we are using different products to further penetrate and enlarge our market share in this segment. For Elan, for sure that we are continuously going to do a quality control and eliminating those unqualified Elan from our operations as well as pipeline. Simon, I wanted to clarify your question regarding the DH. I think your first one is asking about the guidance for the fourth quarter of DH's revenue. Is that correct? Also the second one is that you wanted to understand the development of DH in Europe. Yeah. Correct. Because I'm just using your full year guidance versus your fourth quarter guidance. Seemingly, you're baking in quite a bit of a step up in terms of fourth quarter revenue expectations. If that were to be achieved, then would you be able to turn EBITDA even by fourth quarter this year? That's really the questions. First of all, I think the fourth quarter probably, we are generally positive about DH improvement of occupancy, but we still be cautious about the recovery given there might be a fourth wave of Delta variant on the way. I think based on our guidance, the revenue for the fourth quarter is certainly will be the highest among all the quarters. However, I think it's still not reached the breakeven point yet. Having said that, the company is still working hard on striving for another government subsidy, which is related to the 2021 lockdown. Understood. On the development of a DH brand, first of all, as we mentioned before, we're bringing DH's major brand back to China, particularly Steigenberger and also Porsche Design, et cetera, and also Intercity and also the MAXX Brand as an upscale brand as well. That's number one. In Europe, we are positive about the market consolidation in the lower-tier segment, especially the economy and midscale segment. DH's brand actually enjoy a pretty good market reputation, especially in terms of Intercity in Germany and Zleep in the northern part of Europe. We're going to continue to grow these two brands, combining both lease model and also management franchise model in Europe. In the meantime, we'll also sharpen the top brands like the Steigenberger and the MAXX by further improving the product design and also infrastructure facilities as well, in order to establish The Steigenberger as a truly upscale brand in the European markets, and also trying to find the right expansion model across the globe. Understood. Thanks a lot. That's very helpful. Thank you. Your next question comes from the line of Bruce Lee from UBS. Please ask your question. Hi, management. Thanks for taking my question. I have two small questions. The first one is, as you previously mentioned, one of the challenges when penetrating into lower tier cities is to meet different franchisees' demand on brand. May I ask, currently for the hotels in pipeline and new signing in lower tier cities, how much are from the core brands such as HanTing Hotel and Ji Hotel, and how much is soft brand? My second question is that, if we look at the same brand, how is the take rate in lower tier cities compared with Tier 1, Tier 2 cities? Thank you. [Non-English content] For our current lower tier cities penetration, currently from our new signings, Ji Hotel and the HanTing brand are still the key brands for the penetration. It accounts for roughly 70%-75% of the new signings. Some other brands such as Starway, Orange, as well as Ni Hao, are also progressing pretty well. Sorry, can you please repeat your second question? Sure. My second question is, if we look at the same brands, for example, take HanTing Hotel as example. How is the take rate, for example, the franchise fees, compared between lower tier cities and Tier 1, Tier 2 cities? I just want to understand in the margin comparison between the lower tier cities and Tier 1 cities. [Non-English content] Our take rate for HanTing Hotel and Ji Hotel brands in the lower tier cities are very close to the higher tier cities or at similar level. As you may see that our CRS contribution in the lower tier city are very close to the higher tier city. Therefore, at the percentage perspectives, the charge rate or the take rates are very similar to each other. Thank you. Okay, thank you. That's all my questions. I would like to hand the conference back to today's presenters for any closing remarks. Please continue. Thank you everyone for taking your time with us today, and we look forward to connect with you again in upcoming quarter. Thank you and goodbye. This concludes today's conference call. Thank you for participating. You may now disconnect.