Ladies and gentlemen, good day and welcome to Full Truck Alliance's fourth quarter and fiscal year 2023 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mao Mao, head of investor relations. Please go ahead. Thank you, operator. Please note that today's discussion will contain forward-looking statements relating to the company's future performance, which are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion. A general discussion of the risk factors that could affect FTA business and financial results is included in certain filings of the company with the SEC. The company does not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. Joining us today on the call from FTA's senior management are Mr. Hui Zhang, our founder, chairman, and CEO, and Mr. Simon Cai, our CFO. Management will begin with prepared remarks, and the call will conclude with a Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this call will be available on FTA's investor relations website at ir.fulltruckalliance.com. I will now turn the call over to our founder, chairman, and CEO, Mr. Zhang. Please go ahead, sir. 大家好，欢迎各位参加反方2023年第四季度的业绩电话会。我们很高兴四季度再次交出了一份亮眼的成绩单，为2023年画了一个完美的句号。在23年充满机遇和挑战的外部环境下，我们顺应货运行业降本增效的大趋势，持续推动公务货运行业的线上化、数字化、智能化的发展，以省钱这一核心优势替代线下传统物流。我们不断打磨产品功能和运营效率，加强对直购货主的渗透，致力于成为千万中小货主发货的入口，通过富人企业根据物流竞争力为其商流带来更好的利润。 Hello, everyone. Thank you for joining us today on our fourth quarter and fiscal year of 2023 earnings conference call. We are thrilled to report another record of stellar results for the fourth quarter of 2023, closing out the year on a strong note. Despite the challenges and opportunities present in the external environment, we have adeptly navigated the prevailing trend of efficiency enhancement and cost reduction in the freight industry. By embracing the digital transformation of China's road freight sector, we have positioned ourselves as a leader in online, digital, and intelligent logistics tech solutions, effectively replacing traditional offline logistics with our core cost-saving advantage. Through continuous enhancements to our product features and operating efficiency, we successfully deepened our penetration among direct shippers. We are committed to becoming the preferred shipping gateway for tens of millions of small and medium-sized shippers, empowering enterprises with greater logistics competitiveness and improved profitability. 四季度我们的关键运营指标稳步的提升，分别体现在用户规模、产品运营、运力供给和一站式服务四个方面。在用户规模方面，发货货主月活达到了224万人，同比增长接近19%，创历史新高。本季度直客货主数量持续增加，直客履约的订单占比首次突破了45%，体现出了直客货主不断从传统低效的线下模式向省钱高效的线上模式在迁移。在产品运营方面，我们为直客新用户提供了极简发货和高效成交的产品功能，有效降低了新用户的使用门槛，进一步推动了新用户的强劲增长。在运力供给方面，我们升级了司机分层运营体系，通过权益牵引和竞争匹配不断优化成交效率。运力规模和司机年度也持续提升。在一站式服务方面，我们的满运保、金融保险、能源ETC等增值业务的渗透率持续扩大，同时以运输业务形成了协同效应，共同提升对用户和司机的年度和满意度。这些成绩进一步证明了我们的网络效应以及增长飞轮，不断推动公务货运市场从传统线下模式向高效的数字化新模式变革。 In the fourth quarter, we witnessed steady improvements across key operational metrics spanning user base, product operations, transportation capacity supply, and one-stop services. Our average shipper MAUs reached an all-time high of 2.24 million, representing nearly 19% year-over-year growth. Notably, the scale of direct shippers continued to increase during the fourth quarter, with their proportion of fulfilled orders surpassing 45% for the first time, reflecting a significant shift towards more efficient and cost-effective online channels. For product operations, we further refined and streamlined shipping and efficient fulfillment product features for new direct shippers, facilitating their onboarding and driving robust growth. With respect to truck supply, we upgraded our tiered trucker rating system, consistently optimizing transaction efficiency through incentive-driven offerings and precise matching, while continuously expanding the supply of truckers and elevating user stickiness. Additionally, for our one-stop service, our value-added services such as freight brokerage service, credit solutions, and insurance, energy services, and ETC saw continued penetration, synergizing with our transportation business to enhance user satisfaction and tickness. These achievements further boosted our network effect growth momentum, catalyzing the road freight market shift from traditional offline models to an innovative, efficient, and digitalized future. 业务的强劲增长给我们带来了超预期的财务表现。本季度收入同比增长25.3%，达到了24.1亿元。非美国通用会计准则下的调整后净利润同比增长了64.4%，达到了7.3亿元。未来我们将持续优化平台收入结构和提升变现效率，为股东创造更大的价值。24年2月，中央财经委员会第四次会议强调有效降低全社会物流成本，物流连接的生产和消费是支撑实体经济的底座，将获得更多的关注和支持。在这样的大环境下，我们有信心通过数字化物流进一步推进物流效率的提升和成本的降低，为行业和用户创造更大的价值。 Our strong business growth translated into exceptional financial performance, with revenues growing by 25.3% year-over-year to RMB 2.41 billion in the fourth quarter. Non-GAAP adjusted net income increased by 64.4% year-over-year to RMB 733 million. Going forward, we remain committed to optimizing our revenue mix and enhancing monetization efficiency to create greater value for our shareholders. In February 2024, the fourth meeting of the Central Commission for Financial and Economic Affairs emphasized the importance of effectively reducing logistics costs throughout society. As logistics serve as the backbone of the real economy, it continues to garner increased attention and support. Within this strategic landscape, by leveraging digitalized logistics offerings, we are confident in leveraging digital logistics to further enhance logistics efficiency and reduce costs, creating greater value for both the industry and our users. 下面我把时间交给Simon，为大家具体介绍一下我们四季度业绩表现。 Thank you. Let me pass the call over to our CFO, Simon, who will provide an update on our fourth quarter business progress and financial results. Thank you, Mr. Zhang, and thanks everyone for making the time to join our earnings conference call today. I will now provide an overview of our operational highlights and financial performance for the fourth quarter of 2023. We concluded the year with strong operational and financial results in the fourth quarter. Our fulfilled orders experienced a remarkable 40.4% year-over-year growth, driving quarterly average daily fulfilled orders to an all-time high. Despite the impact of the adverse weather conditions, fourth quarter order growth again outpaced the overall freight market, propelled by sustained scale expansion and increased activity of both shipper and trucker users. We set a new record in fulfillment rate at approximately 32% in the fourth quarter, an increase of more than 8 percentage points year-over-year and more than 3 percentage points quarter-over-quarter. From a supply-demand perspective, the quarter's increased supply of truckers improved matching efficiency across various transaction types, including negotiated orders, tap-and-go orders, entrusted shipments, and including long-haul full truckload, less-than-truckload, and short-haul by distance range. Operationally, we continue to make progress with our tiered trucker operations strategy during the quarter. Initiatives such as our Saving Package 2.0 and truckers' deposits helped strengthen our tiered truck rating management and enhance fulfillment quality of truckers, thereby boosting retention among high-frequency active truckers. In terms of order structure, we sustained the growth momentum of direct shippers from the third quarter, with direct shippers contributing more than 45% of total fulfilled orders in the fourth quarter. We expect direct shippers' order contribution will continue to grow as their penetration increases, leading to additional improvements in our platform's overall order fulfillment efficiency. Regarding our user base, our average shipper MAUs reached a historic high of 2.24 million in the fourth quarter, up 18.7% year-over-year and 4.9% sequentially. This increase was primarily driven by rapid growth of our non-member, low-frequency direct shippers. Meanwhile, our 1688 and 688 member shippers' activity levels remained essentially stable year-over-year, given all types of shippers, whether it's professional shipper or direct shipper, have incentives looking for efficient shipping channels to lower their logistics costs. We expect this trend to continue with robust growth in our shipper user base through the year of 2024, primarily from low and medium-frequency direct shippers. Our platform's strong and growing network effect drove parallel growth in both our trucker base and activity during the quarter. For example, the number of active truckers fulfilling orders through our platform over the past 12 months rose to 3.88 million. In addition, we maintained our shipper member 12-month rolling retention rate, as well as our next month's retention of truckers who responded to orders on a sequential basis. In the fourth quarter of 2023, revenues from our online transaction commission amounted to RMB 644.8 million, up 44% year-over-year. This growth was fueled by the solid expansion in the number of fulfilled orders and the heightened commission penetration. Our commission model currently covered more than 59% of fulfilled orders and generated an average commission per transaction of RMB 23.7 during the quarter. It is important to note that historically, we did not include revenues from our Intra-city commission model in online transaction commission revenues. Therefore, Intra-city transactions were also included when calculating our commission penetration, resulting in an underestimation of overall commission model coverage. Moving forward, starting from 2024, we will rename our transaction commission revenue stream to transaction services, which consists of all monetization from truckers relating to freight matching services, including the revenue generated from our Intra-city business that was previously classified under the freight listing and value-added services, in order to better reflect the company's latest development status and the business nature of our revenues. Next, a brief update on our share repurchase program. From November 20th, 2023, to March 6th, 2024, we repurchased approximately 7.9 million ADS shares, totaling approximately $52.7 million. Since we announced the program, we have repurchased a total of around 30.7 million ADS shares from the open market, with a total value of approximately $200 million. Now, our 2023 fourth quarter and year-end financial results. In the interest of time, I will be presenting abbreviated highlights only. We encourage you to refer to our press release issued earlier today for complete details. Total revenues for full year 2023 were RMB 8.4 billion, representing a 25.3% increase year-over-year. Net revenues for the fourth quarter were RMB 2.4 billion, representing a 25.3% increase year-over-year. Net revenues from freight matching services, including service fees from freight brokerage models, membership fees from listing models, and commissions from online transaction services, were RMB 7,048.8 million for the full year of 2023, up 24.6% from 2022, primarily due to the rapid growth in transaction commissions as well as growing revenues from our freight brokerage service. Revenues from freight brokerage service reached RMB 3.9 billion for 2023, up 16.5% year-over-year. For the fourth quarter, net revenue increased by 19.2% to RMB 1.1 billion, primarily driven by an increase in transaction volume due to robust user demand. Revenue from freight listing service were RMB 929.4 million for the full year, up 9% year-over-year, and rose 10.4% year-over-year in the fourth quarter to reach RMB 246.2 million, primarily due to a growing number of total paying members. Revenues from transaction commissions amounted to RMB 2.2 billion in 2023, representing a 52.6% increase year-over-year. For the fourth quarter last year, net revenues amounted to RMB 644.8 million, representing a 44% increase year-over-year, primarily driven by strong order volume growth as well as higher per-order transaction commission. Revenues from value-added services were RMB 1.4 billion in 2023, representing a 28.8% increase year-over-year. For the fourth quarter, net revenues increased to RMB 392.2 million, representing a 27.3% increase year-over-year, mainly attributable to an increase in revenues from credit solutions and other value-added services. Fourth quarter cost of revenues was RMB 1,152.3 million compared with RMB 951.8 million in the prior year period. This increase was primarily due to an increase in VAT-related tax surcharges and other tax refunds from government authorities. These tax-related costs net of refunds totaled CNY 1,015.3 million, representing an increase of 18.4% from CNY 857.4 million in the same period of 2022, primarily due to the continued growth in transaction activities involving our freight brokerage service. Our sales and marketing expenses in the fourth quarter were CNY 421 million compared with CNY 281.1 million in the prior year period. The increase was primarily due to an increase in advertising and marketing expenses for user acquisitions. General and administrative expenses in the fourth quarter were CNY 266 million compared with CNY 408.2 million in the prior year period. The decrease was primarily due to lower share-based compensation expenses and professional service fees. R&D expenses in the fourth quarter were RMB 255.3 million compared with RMB 250.2 million in the prior year period. The increase was primarily due to higher share-based compensation expenses and increased investment in technology infrastructure, partially offset by a decrease in salary and benefit expenses. Income from operations in the fourth quarter were RMB 250.8 million compared with a loss from operation of RMB 5.3 million in the same period of 2022. Net income in the fourth quarter was RMB 588.3 million, an increase of 200.6% from RMB 195.7 million in the same period of 2022. Under Non-GAAP measures, our adjusted operating income in the fourth quarter was RMB 398.8 million, an increase of 60.6% from RMB 248.4 million in the same period of 2022. Our adjusted net income in the fourth quarter was RMB 733 million, an increase of 64.4% from RMB 445.8 million in the same period of 2022. Basic and diluted net income per ADS were RMB 0.58 in the fourth quarter compared with RMB 0.18 in the same period of 2022. Non-GAAP adjusted basic net income per ADS were RMB 0.7 in the fourth quarter compared with RMB 0.42 in the same period of 2022. Non-GAAP adjusted diluted net income per ADS were RMB 0.69 in the fourth quarter compared with RMB 0.42 in the same period of 2022. As of December 31st, 2023, our cash and cash equivalents, restricted cash, short-term investments, long-term time deposit, and wealth management products totaled RMB 27.6 billion compared with RMB 26.3 billion as of December 31st, 2022. For our first quarter 2024 business outlook, we expect our total net revenues to be between RMB 2.11 billion-RMB 2.16 billion, representing a year-over-year growth rate of approximately 23.9%-27.1%. This forecast reflects our current and preliminary views on the market and operational conditions, which are subject to change and cannot be predicted with reasonable accuracy as of the date here. That concludes our prepared remarks. We'll now like to open the call to Q&A. Operator, please go ahead. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. At this time, we will pause momentarily to assemble our roster. The first question today comes from Ronald Keung with Goldman Sachs. Please go ahead. 谢谢张会长和三位的分享。想问一下那个司机度履约率，我们看到达到一个新高32%，那同比还提高了8个百分点，那环比也有3个百分点。那主要驱动的因素有哪些？然后我们怎么看这个2024年的这个履约率？我们有没有一个目标？那我翻译一下。Thank you, management, and for the sharing. I want to ask about a fulfillment rate that we've seen the record fulfillment rate of 32% in the fourth quarter. What are the key drivers behind? And with the year-on-year increase and the sequential increase as well, what is your expectation for fulfillment rate for 2024? Thank you. Thank you, Ronald. In this quarter, we have seen a substantial improvement in the freight matching efficiency, which can be attributed to the rapid expansion of our user base on both ends and the scale effects generated as a result. So with more active shippers on the platform, we attract new trucker registrations, ensuring a sufficient supply of transportation capacity to meet the diverse needs of shippers quickly. This dynamic cycle, again, lead to an influx of newly registered small and medium business owners. Specifically, the significant improvement in fulfillment rates in the fourth quarter was driven by a number of positive factors. Firstly, the average trucker daily active user who are responding to orders increased by approximately 13% year-over-year in the quarter, resulting in an increase in effective supply on the trucker side, further balancing the supply and demand, and therefore increasing the probability of successful matches. And secondly, ongoing optimization of the shipper structure also led to an improvement in matching capability. The contribution of fulfilled orders from direct shippers increased by three percentage points year-over-year to over 45%, enhancing the overall quality of order listing and the certainty of order fulfillment. Another key factor is the continued improvement of the platform's pricing capabilities. Through big database and measurement, the platform can set reasonable recommended prices that are better aligned with the current market conditions and further increasing the likelihood of transaction completion. Additionally, we have continued to create remarkable value adds to our users during the fulfillment process, such as dispute resolution and user rating, all of which have also contributed to the increase in fulfillment rates. Looking into the coming year, we will continue to attract more shippers and truckers by utilizing a multilateral market approach to create and match more supply and demand, thereby maintaining a better balance between users on both sides. We also continue to encourage shippers to utilize transaction types such as entrusted shipment and tap-and-go, which more truckers are willing to respond to while consistently optimizing the product function and improving data efficiency to drive even higher fulfillment rates. Also, as the user structure continuously shifts towards direct shippers, we also anticipate a further improvement in the fulfillment rate. Thank you. Thank you. The next question comes from Eddy Wang with Morgan Stanley. Please go ahead. 张会长，Simon 总，Mao Mao，晚上好。对，首先恭喜非常强劲的业绩。我的问题是关于四季度这个履约订单增长的。我看其实四季度增长还是非常强劲，40% year-over-year，然后全年的同比增长也是33%。这个是比整个货运大盘的这个增速要快很多。所以我就想问一下，就是说咱们平台履约订单增长背后的主要驱动因素是什么？然后我们2024年对整个订单的增长的预期大概是什么样的水平？我自己翻译一下。 Thank you, management, for taking my question. My question is regarding the fulfilled orders. We noticed that there's a 40% year-over-year of the fulfilled orders in the fourth quarter, and for the full year, last year is around 33% year-over-year. So this is significantly higher than the growth of the broad logistics market. So what's the major driver behind this strong growth, and what's your expectation for the fulfilled order volume growth in 2024? Thank you. Yeah, thank you, Eddy. Since last year, the online penetration of the freight matching industry has shown very consistent growth. Our platform has maintained strong order volume growth over the past year, and mainly benefiting from the continued increase of new shippers' improved activity level of existing users and continued improvement in matching efficiency as a result of operational strategy optimization. In the fourth quarter, we sustained our holistic user acquisition efforts across various channels, including App Store, information streams, and SEM, among others. Additionally, our leading network effect brought us a large number of new user registrations through natural traffic. As of the end of December, we had an average of around 20,000 new shippers and 10,000 new truckers registering on our platform every day. Looking ahead to the coming year, we will continue to invest in branding and improve user acquisition efficiency by further exploring innovative user acquisition channels, such as increasing offline truck stickers advertisements and promoting online mini programs. At the same time, we'll optimize the conversion of registered users to active users through a series of effective operational tools. Also, this quarter brought more than just the growth of long-haul business. With our ongoing product functionality and operational efficiency optimizations, the less-than-truckload orders matched through our platform also grew rapidly in the past quarter. We believe that the online penetration rate of LTL remains considerably low at the moment, indicating there's still huge market opportunity to be unlocked. As we look ahead into 2024, we will see new opportunities for growth as the trend towards direct shippers and LTL transactions continue to intensify. We anticipate continued high growth in our total fulfillment orders, not solely confined to the FTL market. Additionally, we anticipate making significant strides in new markets such as LTL and capitalizing on emerging opportunities. Thank you. Thank you. The next question comes from Charlie Chen with China Renaissance. Please go ahead. 谢谢，感谢给我这个机会提问。那我想了解一下关于会员服务方面的进展，然后我们想看看这个四季度会员的人数趋势是怎样。然后我们看到就是相对于比较快的这个货主的月活，货主会员费的这个收入增长相对就比较慢一点，然后中间这个 gap 的这个差异主要原因是什么？然后对今年 2024 年的会员增速的预期是怎么样？我自己翻译一下. Could you please provide me with an update on membership services, specifically the trend in the number of subscribing shipper members during the fourth quarter? It seems that the revenue growth of membership has been slower compared to the fast growth of monthly active shippers. Could you please explain the main reason behind the growth rate discrepancy and provide us with an estimate of the expected membership growth for 2024? Thank you. Thank you. The number of shipper members remained largely stable in the fourth quarter, with approximately 790,000 existing subscribing members as of December, a steady increase from last quarter end. Our shipper members have demonstrated strong retention and engagement, with a 12-month rolling retention rate of over 80% since 2023. The reason membership growth has been primarily driven by two factors. Firstly, we have already achieved a high penetration rate among professional shippers, and we expect the number of shipper members from this segment to remain relatively stable in the future. Secondly, we have observed a majority of the new shippers are low and medium frequency users, and the number of orders included in our 688 memberships exceeded their needs. In response, our operation team is actively formulating product strategies and exploring the development of packages that are more suitable for low frequency direct shippers. In addition, although direct shipper members contribute less revenue from our pool perspective, their specific characters, such as willing to accept higher freight rates and demonstrate a better fulfillment rate, provide us with a greater potential for cross-selling with online transaction services and value-added products. So in the long run, direct shippers will not only serve as the primary catalyst for future freight listing revenue growth, but will also present growth opportunities across other segments of our business. The next question comes from Jiulu Li with CICC. Please go ahead. 喂，可以听到我的声音吗？ 可以。 张会长、Simon、Mao，晚上好。那谢谢接受我的提问。我这边主要有两个问题。第一个问题是关于抽佣方面的。我们看到2023年其实整体上的抽佣进程是相对比较稳定。那么2024年我们的整体抽佣规划是怎么样的？在渗透率和抽佣率的主要策略是什么？那么我先问第一个问题，我在这里也先翻一下。 Okay, my first question is about the commission strategies. So what are the overall commission strategies for 2024, and in particular, what is your plan for commission rate and commission coverage improvements in 2024? Thank you, Jiulu. The substantial increase in our commission revenue in the past quarter was fueled by the rapid growth rate of the platform's overall orders. The number of commission orders rose by 41% year-over-year and nearly 10% from the third quarter. From an operational level, this quarter we will continue to prioritize growth in users in order of volume rather than just extending to additional cities under the commission model. By the end of 2023, our commission model had been successfully rolled out in 204 cities. In the meantime, we have also stress-tested higher commission parameters in randomly selected cities and verified the reliability. Entering into 2024, we will maintain our prudent approach for our transaction service business. In addition, we will continue to enhance the value of our transaction services to users through ongoing product functionality improvements. For instance, we recently launched our Sheng Sheng Bao Saving Package 2.0 product for truckers, which includes various privileges and protection features for those who subscribed. Truckers who purchase the Saving Package 2.0 will also receive discounts on future commissions as well as bonus order points, which they can redeem for additional benefits such as expedited deposit refunds. From a long-term perspective, we believe that our current commission rates are very conservative and that there's still ample room to boost our commission revenues in the future. Looking ahead into 2024, as the platform's network effects strengthens and users' reliance on our platform deepens, we expect that year-over-year commission revenue growth will remain strong and potentially surpassing the growth rate that we achieved in the past year. 谢谢。我的第二个问题是主要是指我们的费用方面。就是我们可以看到四季度 Non-GAAP 的销售费用其实同比增速是达到了 50.6%。其实比我们看到的前三季度的增幅都是要来得更高的，包括也超过了我们收入的一个同比增幅。那么销售费用在这个季度比较高速增长的原因主要有哪些呢？以及我们如果往后看 2024 年该怎么去预测销售费用，销售费用的变动趋势是怎么样的？那在这里我也翻译一下。 My second question is that Non-GAAP sales and marketing expenses increased by 50.6% year-over-year in the fourth quarter, outpacing revenue growth for the same period. What are the main reasons for the high growth in sales and marketing expenses in the quarter? How do you expect sales and marketing expenses to trend in 2024? Thanks. Thank you. The high growth rate of Non-GAAP sales and marketing expenses in the fourth quarter was primarily due to the increase of investment in marketing to acquire new users both through online and offline channels, as well as brand promotion to increase our brand awareness. Online we mainly advertise through App Store's information streams and search engine marketing, among other venues. Offline we primarily acquire users through truck stickers and advertising and our field marketing teams. Moving into the coming year, we will continue to employ a very active user acquisition strategy to grow our user base and optimize our user structure. Our overall user acquisition strategy will continue to attract shippers and truckers to our platform via a combination of online and offline channels, driving expansion in our logistics network. We expect to increase our user acquisition efforts in comparison with last year. In the longer run, we anticipate a continued increase in sales and marketing expenses aligned with the expansion of new business ventures. However, as our revenue quickly scale up, and especially as we optimize commission penetration and further improve the operating leverage, sales and marketing expenses will gradually decline as a percentage of total net revenues. This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. Again, thank you everyone for joining us today. If you have any further questions, please feel free to contact us at Full Truck Alliance directly or TPG Investor Relations. Our contact information for IR in both China and the US can be found in today's press release. Have a good day. Bye-bye. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.