Hello, ladies and gentlemen. Thank you for standing by for ZEEKR's Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Mr. Yuan Jing, the CFO of ZEEKR. Please go ahead. Thank you, Operator. Good evening and good morning, everyone. Welcome to ZEEKR's Third Quarter 2024 E arnings Conference Call. Before we continue, please be reminded that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve current risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in certain company filings with the U.S. Securities and Exchange Commission. The company does not take any obligation to update any forward-looking statements except as required under applicable law. Joining us today from ZEEKR's senior management are Mr. An Conghui, Co-founder and CEO, and myself, CFO. Our CEO will make his remarks in Chinese, followed by an English translation. With that, I will now turn the call over to our CEO, Mr. An. Please. Hello everyone, thank you all for joining ZEEKR's Third Quarter 2024 Earnings Call. Recently, the domestic market penetration rate for new energy vehicles has surpassed 50% for three consecutive months. Meanwhile, ZEEKR achieved a new quarterly delivery record with a total delivery of 55,003 units, reflecting solid growth both year-over-year and quarter-over-quarter. In October, our deliveries surpassed 25,000 units, setting a new monthly record for the ZEEKR brand and propelling our cumulative deliveries for 2024 to nearly 170,000 units. With current order trends and the anticipated year-end market demand, we are targeting a new monthly delivery of over 30,000 units in each of the next two months. As such, we are confident of achieving our annual delivery target of 230,000 units. Now, I would like to share the progress we have made across products, operations, and innovations. On the product front, the ZEEKR 7X has become ZEEKR's second model to achieve monthly deliveries exceeding 10,000 units, marking a robust achievement in the highly competitive mainstream SUV market. The ZEEKR 7X delivery exceeded 20,000 units within 50 days since its launch, once again breaking the delivery record of luxury pure electric vehicles. Supported by our robust operational system, we rapidly ramp up production, supply chain, and distribution for the ZEEKR 7X, enabling immediate deliveries upon launch and expanding market potential for the entire ZEEKR lineup. Meanwhile, models like the ZEEKR 001 and the ZEEKR 009 continued to lead in their respective premium segments. In particular, the ZEEKR 009 Grand delivered exceptional performance, achieving 1,500 deliveries within just 159 days since its launch, surpassing the combined sales of the second to tenth highest selling premium four-seaters this year. The very good market result of ZEEKR 009 also contributes positively to our gross margin. In terms of operations, the surge in our delivery volumes has driven substantial growth in the company's overall revenue. In the third quarter, our vehicle sales revenue exceeded CNY 14.4 billion, setting a new record. Thanks to continuous optimization of our product mix, economies of scale, and our innovative advantages, the company's profitability has constantly improved, with the gross margin reaching 15.7% in the third quarter. At the same time, we accelerated our domestic one-stop channel expansion. The 100th ZEEKR House was launched in September, bringing the total number of ZEEKR Houses nationwide to over 110. Internationally, we have entered over 40 countries and regions, covering markets in Europe, Asia, Oceania, Southeast Asia, and Latin America, steadily advancing our global strategy for the coming year. [Foreign language] 在创新方面，我觉得主要体现在智能化方面。尤其在智能座舱，我们在智能驾驶，我们凭借端到端大模型的赋能和进化，极客自研的这个浩瀚之家的迭代的速度，远超于预期。产品的成熟度和全量推送的速度也做到了行业最快。在高速的NZP上，在智能泊车、主动安全等方面成为了第一梯队。刚刚上市的极客MIX，更是在全行业率先实现了全场景的智能泊车的功能覆盖。 Finally, we talk about the innovation, especially in intelligent functions such as ADAS. Empowered and evolved by the end-to-end large model, ZEEKR's self-developed SEA Autonomous Driving is iterating at a pace that far exceeds expectations, setting new industry benchmarks in terms of product maturity and full-scale deployment speed. It has become one of the top players in the industry in aspects like NZP on highways, intelligent parking, and active safety. Moreover, the newly launched ZEEKR MIX has taken the lead in the whole industry to achieve full scenario smart parking functionality. [Foreign language] 具体的一些计划，我在这可以讲一下。这个我们在10月底，浩瀚之家2.0的无图的城市NZP，比原来预期提前两个月在全国已经分批推送了。我们也在今年年底之前，我们还将会搭载浩瀚之家2.0的二五款的极客001、007，全新上市的7X MIX，实现无图的城市NZP。它能够全国全量全车型的推送，真正的做到全国都能开，有路就能开。 At the end of October, the map-free urban NZP of SEA Autonomous Driving 2.0 started nationwide batch rollout two months ahead of schedule. By the end of this year, we will achieve the rollout of the map-free urban NZP for all 2025 model years of ZEEKR 001, the ZEEKR 007, and the newly launched ZEEKR 7X and the ZEEKR MIX, which is equipped with SEA Autonomous Driving 2.0. This comprehensive nationwide rollout will ensure that ZEEKR owners enjoy a seamless driving experience on every road across the country. Tomorrow at the Guangzhou Motor Show, we will have a launch event to showcase our latest technological breakthroughs on ADAS, and we invite our investors to watch the live stream. Last but not least, I would like to share with you that in September this year, Geely Holding Group released the Taizhou Manifesto, announcing that the group has entered a brand new stage of strategic transformation. The group will adopt five major measures, namely strategic focus, strategic integration, strategic coordination, strategic stability, and strategic talent. It will concentrate on the core business of automobiles, lay out the technological ecosystem, enhance its competitiveness, make progress while maintaining stability, and promote the sustainable development of the company. [Foreign language] 作为落实这个台州宣言的这个战略呢的一些关键举措呢，今天下午这个吉利控股正式宣布了对极氪和领克股权结构进行了优化，理顺股权关系，减少关联交易，来消除同业竞争，实现了坚定不移的推动内部资源的深度整合和高效的融合。 As a crucial measure for implementing this strategic framework of the Taizhou Manifesto, this afternoon Geely Holding has officially declared the optimization of the shareholding structures of ZEEKR and Lynk & Co. This move aims to rationalize the shareholding relationships, cutting down the related party transactions and eliminate competition within the same industry, thereby facilitating the in-depth and efficient integration of internal resources. [Foreign language] 那吉利控股呢，也将向吉利汽车，也就0175转让了其持有的11.3%的极氪股份。那交易完成以后呢，吉利汽车对极氪的持股将提升到60%-62.8%左右啊。同时呢，对领克汽车呢，也进行了股权的结构优化，以推动极氪和领克来进行全面的战略协同。极氪将持有领克1%的股份，领克的其余49%的股份呢，继续由吉利汽车旗下全资子公司持有 。 Geely Holding will transfer the 11.3% of its shares in ZEEKR to Geely Automobile. After the completion of this transaction, Geely Automobile's shareholding in ZEEKR would increase to approximately 62.8%. Meanwhile, the shareholding structure of Lynk & Co will be optimized to promote comprehensive strategic synergy between ZEEKR and Lynk & Co. ZEEKR will hold 51% of the shareholding in Lynk & Co, and the remaining 49% will continue to be held by the wholly owned subsidiaries under Geely Automobile. [Foreign language] 好的，我想我就做一些这些开场白和做一些这个分享。我觉得下面时间我们就直接进入这个问答环节吧。这样我们可以效率更高一些。So with that, I think we can move on to the next agenda for our Q&A. Yes, Operator. This is Yuan Jing, CFO, so maybe we can move directly to the Q&A session, and you can provide your instructions and host Q&A, please. 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 raise your question in Chinese, please immediately repeat your question in English. Please limit yourself to one question at a time. If you wish to have a follow-up question, please rejoin the queue. The first question today comes from Tina Hou with Goldman Sachs. Please go ahead. [Foreign language] 哎，你好，管理层，感谢今天的时间。对我第一个问题是想要请问一下，就是站在极客这个上市公司的角度，请问一下我们这个对领克的这个并购重组，我们是怎么考虑的？ So thanks very much management for taking my question. So my first question is with perspective to ZEEKR, the listed company, how do you think about the M&A with Lynk & Co and what kind of impact or benefits is it going to bring to the ZEEKR company? Thank you. [Foreign language] 好的，这个问题非常好哈。这个就是为什么极客要合并重组领克啊。我觉得这个这项交易啊，它不是一个简单的两个公司的合并加总。啊，我觉得是双方的业务的重组。哎，他是管理和业务团队的优化整合。他能够通过这种合并，对新极客的未来的发展带来更多的协同效益，能够创造更高的股东价值。哎，比如说吧。啊，你先翻译。 So very good question. Why ZEEKR needs to integrate the Lynk & Co? So this deal is not just simply to combine the two companies, but to deeply integrate the two companies' business and optimize their management and the leadership team to bring better synergies to the new ZEEKR and create better value for the shareholders. [Foreign language] 所以这点我特别强调，不是一个简单的合并，就是它是一个业务的重组。那这个重组整合以后呢，应该说对新极客快速拓展了产品的范围和市场空间。中国乘用车市场，从中国乘用车市场18.7%的25万到50万的这个市场份额，通过就是极客所占有的这个市场的这个细分市场。如果说这个整合了领克以后呢，实际上它的市场空间可以拓展到市场15%到30%，还可以拓展35.3%的15到30万的市场。这意味着这个新极客可以覆盖将近60%左右的中国乘用车市场。它可以大大的提升，快速提升极客未来的增长空间. So the new ZEEKR after the integration would have a much expanded market and potentials. So previously ZEEKR's segments are focusing on the vehicles priced between CNY 250,000-CNY 500,000, making up around 18.7% of a Chinese domestic passenger car market. With, after the integration of Lynk & Co brand, we can expand our market segment in the segments priced between CNY 150,000-CNY 300,000, meaning that the new ZEEKR can have a product offering in around 60% of a Chinese domestic passenger car market. So that's with a significantly boost the potential for our future growth. [Foreign language] 我们不仅在纯电这个增长的这个市场上获取好的份额，实际上大家也看到了，实际上混动这个市场增长速度更快。所以我们怎么样通过收购领克以后，快速在混动市场上面有一个更好的表现。 Not just about pure battery electric vehicles, we can have a great potential. And also, as we all understand that the PHEV products of the sales of a PHEV products growing quite quickly in the Chinese domestic market. After the integration, we can also have a great potential in that area as well. [Foreign language] 那同时呢，领克极客通过重组呢，也将会大大降低同业竞争的风险。我想这个事情同业竞争大家所有投资人以前都非常关心的事情，实际上通过合并以后来也解决这个问题。 After the integration, we can significantly reduce the risk of competing the two brands competing with each other. I think this is also a very important topic that are interested by many investors. [Foreign language] 那今年领克加极客应该说可以达到50万台。那我们应该在这个基础上，我觉得新极客要打造一个百万级的呃高端豪华的新能源汽车品牌。 This year, if we combine the sales volume of Lynk & Co and ZEEKR, that would already exceed 500,000 units. So based on that, the new ZEEKR after integration would try our best to quickly reach one million units annual sales to become a premium new energy vehicle brand that can achieve a one million annual sales volume. So I would also like to emphasize that I highlight that after the integration, I will directly oversee the business operations of the two brands, no change. And I sincerely hope that after today's integration, we can achieve a very good synergy and to quickly bring very good new values for all of us. Now I will hand over the floor to our CFO for further information. Thank you, thank you, Mr. An. Yes, excuse me. So as Mr. An mentioned, from today on, Lynk & Co and ZEEKR will become one integrated company headed by one management team. We have a very definitive trajectory for the overall integration strategy, and we have specific execution teams in each of the business sectors to look at a detailed planning of the future business development of this company. We will introduce a little bit about the overall thoughts from the senior management level at a very high strategic level in terms of integration and synergy. Just as we mentioned earlier, just as you know, brands like Volkswagen and Toyota, when those companies are operating those multi-brand strategies, we will have the two brands relatively separate from each other when facing the customers, such as the sales channel development. But as we move towards the back office of this business, such as R&D, manufacturing, supply chains, we will start to push integration and start showing, demonstrating synergies as soon as possible. Say, for example, the two brands of ZEEKR and Lynk & Co will now start to move to slightly different differentiated but very specific positions. For ZEEKR, we will brand ourselves as a global luxury technology brand and covers mainstream luxury markets. For Lynk & Co, it will be branded, it will position as a global new energy vehicle brand that covers mid to high-end markets. The two brands will cover different sectors of this market and maximize the overall coverage of this particular company. For sales channel in China, Lynk & Co has around 437 sales channels, and ZEEKR has 442 sales channels. The two brands will have separate sales channel developments in Tier 1 and Tier 2 cities. But as we move to lower tier cities, ZEEKR can work together with the Lynk & Co channel and start demonstrating synergies. For the aftermarket channel, we will start integration and synergy as well. At this moment, ZEEKR operates 128 authorized Lynk & Co Service Centers. The service standards are based on Lynk & Co service standards, but managed and monitored by ZEEKR's aftermarket sales team for the customer experiences. As we started to integrate the two brands, the business operation for those kinds of authorized service centers will be more and more smooth. In the future, for places and cities that have ZEEKR House operation, a ZEEKR House operation, ZEEKR House service network will replace those authorized service centers. But for cities and regions without ZEEKR House planning, we will still work together with the Lynk & Co service network. Specifically, in lower tier cities where there is sufficient existing ZEEKR clients, we will authorize related Lynk & Co service centers to provide services. For example, then let's move to products. We will start reviewing and reshuffling the product lineup of these two brands, making sure the specific markets for each of the brands and adjust the pipelines of each of these brands. We will reduce the number of products, especially in perceived overlapped products in those different markets. In mid to long run, ZEEKR brand will move towards mid to large luxury vehicles, whereas Lynk & Co brand will move to mid to small size high-end vehicles. Specifically, ZEEKR will focus on vehicles that have a wheelbase of more than 4.8 meters, that is class B to class D. Some of the class C and class D vehicles will be powered by a plug-in hybrid powertrain, and the rest of ZEEKR's vehicles will all be powered by BEV powertrain. For Lynk & Co, they will focus on Class A, B, and C vehicles, whereas the Class A vehicles will have BEV power chain, and the rest will have a plug-in hybrid power chain. So in Class B and Class C, the two brands will be differentiated by the power chains and the product definition. In technologies, we see tremendous synergies in architecture power chain, that is including BEV power chain and PHEV power chain, EEA, smart cockpit, and ADAS systems. We will continue to fully integrate all those aspects in both Lynk & Co and ZEEKR's vehicles. For example, the architecture, we will unify the architecture of those two brands to SEA and GEA architecture, and we'll unify the EEA into ZEA architecture, and we will unify the hardware and OS for the smart cockpit while having differentiated user interface or human-machine interface at the vehicle level. In addition to that, we will continue to see tremendous synergies and cost savings in sales marketing, that is from a less number of vehicles sold and more for a more volume for each of the models, with synergies from manufacturing in terms of increased utilization, and we see synergies in the supply chain in terms of more vehicles sold and less models. For finance, HR, and other back office support departments, we will continue to see tremendous synergies after the integration. So this is a brief introduction of what we see in terms of the synergies. At this moment, we have only announcements of this transaction, and detailed financials will first be provided by 0175 shareholder circular, and later we will also provide U.S. GAAP financials for Lynk & Co in our 2024 full year financials. So Tina, I hope it satisfies your question. [Foreign language] 好的，非常感谢安总和袁总。 Thank you so much. The next question comes from Tim Hsiao with Morgan Stanley. Please go ahead. [Foreign language] 感谢安总、袁总，这是我的提问。我这个问题就想延续一下刚才这个整合这一块。那除了刚才讲就技术产品端之外，因为我们今天看到就是极客海外市场这边其实遭遇比较多的挑战，但也想了解一下就整合之后透过领克的品牌或渠道是不是在接下来海外市场会有一个更优解，或者这个可能也可以进一步促进我们明年极客在海外的增长。 So my question is about the export market because apparently the export market has been quite challenging to ZEEKR this year given the geopolitical headwinds. Could the integration with the Lynk & Co overseas business help ZEEKR to find an alternative way to tackle the overseas challenges? So that's my question. Thank you. [Foreign language] 谢谢。 Thank you, Tim. This is Yuan Jing. So we do have a very detailed discussion between Lynk & Co and ZEEKR in terms of the overseas expansion. As you mentioned correctly, both markets, we are still at our initial stage when it comes to non-European international markets. So we do have very careful planning sessions in this aspect. The conclusion we draw from those planning sessions is that we need to have very detailed and very specific models and unified models for different markets, and we have to have a coordinated strategy when it comes to dealership negotiations in different areas in the international markets. Also, very importantly, we have to leverage each other's existing infrastructure when we are expanding into international markets. There are different types of international markets that we will adopt different strategies. For example, in countries or regions where both Lynk & Co and ZEEKR have existing infrastructures, we're making sure that we have very close discussions among the two teams in terms of vehicle introduction and price. Say, for example, in Israel and Saudi Arabia, when both of the brands have a presence, say, for example, in Saudi Arabia, some of the ZEEKR's brands will be put into Lynk & Co sales channel, and some of the branding team from ZEEKR will be integrated into Lynk & Co's team. In countries and regions where we have ZEEKR's presence but without Lynk & Co's presence, we will have a differentiated strategy as well. Say, for example, in Mexico, we will introduce BEV model from ZEEKR. We have already introduced BEV model from ZEEKR. In that case, we will not introduce BEV model from Lynk & Co, but the PHEV models from Lynk & Co to that particular market. In Mexico, Lynk & Co will rely on the existing infrastructure that is set up and utilized by ZEEKR for their local expansion. In countries and regions that Lynk & Co has entered but ZEEKR haven't entered, say, for example, in Vietnam, we will have ZEEKR brands utilizing existing Lynk & Co sales infrastructure and sales channel and have a shared aftermarket networks. So, as you can see, we do believe there is a tremendous synergy to be realized after the two brands have been integrated under one umbrella. [Foreign language] 我再补充一点。 感谢袁总。请说。 现在领克和沃沃的合作现在在欧洲做得很好。这个我觉得对于现在已经有30多家的合作伙伴，用沃沃的渠道，未来会增加到100多家。所以领克会下一步在欧洲会有一个比较大的变化。当然，我们主要还是混动，因为混动没有欧盟的反补贴。那对于极客来说，也会运用好这些资源，怎么样能够未来在欧洲有好的表现。 So I would like to add one more point. Currently, in Europe, Lynk & Co is cooperating quite well with Volvo on the sales channel expansion. This year, Lynk & Co would already open over 30 new dealerships, and then would further expand to over 100 dealerships in Europe. So there will be very good positive moves around Lynk & Co regarding the sales in Europe. Of course, Lynk & Co in Europe would focus on the PHEV vehicles because those models are not subject to the additional tariff by the EU authorities. For ZEEKR, we would fully utilize and leverage all these good resources for our Europe ramp-up. [Foreign language] 还有一点就是极客通过今年在国际上的布局的话，应该说已经进入了市场。大家对极客是一个豪华的一个沉淀品牌，也得到了基本的认可。也就是说，我们产品的价格定价和其他的中国品牌相比，我们就有一定的溢价。应该说这点还是比较好的。 Another positive point is that this year ZEEKR entered into many countries globally, and we have won very good recognition by the customers as a luxury pure battery electric vehicle brand. And the price tag for ZEEKR vehicles in those markets is higher than many of our competitors, showing that we are already enjoying a good brand premium in many markets. [Foreign language] 好，谢谢。 Thank you. [Foreign language] 感谢安总。安总不好意思，我可不可以很快跟进一个很快的问题？因为这次整合基本上已经奠定了极客在集团内高端新能源的这个地位。那往后去看的话，极客是有机会进一步整合集团其他的优质的资源，就是一个很快的跟进的问题。 So just a very quick follow-up. Since ZEEKR now is positioned as the only or the most important high-end brands within the group, will ZEEKR have a great opportunity to integrate other high-quality assets in the Geely group? Thank you. [Foreign language] 我觉得首先可以肯定地说，目前除了已经公布的交易之外，公司没有考虑其他的潜在的交易或者说兼并收购的项目。好吧，我这次要非常明确地表示清楚。那至于说现在我也看到了今天网上一些评论，说我也担任了极氪科技的董事长。实际上我觉得领克和极氪的合并，这种协同，实际上在控股集团内各个品牌也都在实现这种协同的各项的工作。因为我在公司也是控股集团担任总裁，所以我觉得这种协同一些工作在控股集团内是正常的。当然，我主要的精力肯定都是在极氪这一块。在集团层面，我主要从战略上和一些在协同战略方面的一些指导的工作。 So in response to your question, I can say very clearly, for sure, here that apart from all the announced deals at the Geely Holding Group, we are not considering any other potential deal or M&A. With regards to some online rumors that I have become the chairman of ZEEKR Intelligent Technology, I would like to say that Lynk & Co and ZEEKR deeply integrate with each other to achieve a very good synergy. And regarding the other brands under Geely Holding Group, we are also exploring different types of synergy. So this is normal. And I can say for sure here that most of my time and energy will still be on the ZEEKR company's operations. I'm also the president at the Geely Holding Group, but at the Geely Holding Group, I'm more spending time on the group-level strategy and synergies around the brands. [Foreign language] 好，谢谢 。 So in response to your question, I can say very clearly, for sure, here that apart from all the announced deals at the Geely Holding Group, we are not considering any other potential deal or M&A. With regards to some online rumors that I have become the chairman of ZEEKR Intelligent Technology, I would like to say that Lynk & Co and ZEEKR deeply integrate with each other to achieve a very good synergy. And regarding the other brands under Geely Holding Group, we are also exploring different types of synergy. So this is normal. And I can say for sure here that most of my time and energy will still be on the ZEEKR company's operations. I'm also the president at the Geely Holding Group, but at the Geely Holding Group, I'm more spending time on the group-level strategy and synergies around the brands. [Foreign language] 好，谢谢 。 So in response to your question, I can say very clearly, for sure, here that apart from all the announced deals at the Geely Holding Group, we are not considering any other potential deal or M&A. With regards to some online rumors that I have become the chairman of ZEEKR Intelligent Technology, I would like to say that Lynk & Co and ZEEKR deeply integrate with each other to achieve a very good synergy. And regarding the other brands under Geely Holding Group, we are also exploring different types of synergy. So this is normal. And I can say for sure here that most of my time and energy will still be on the ZEEKR company's operations. I'm also the president at the Geely Holding Group, but at the Geely Holding Group, I'm more spending time on the group-level strategy and synergies around the brands. [Foreign language] 好，谢谢 。 So in response to your question, I can say very clearly, for sure, here that apart from all the announced deals at the Geely Holding Group, we are not considering any other potential deal or M&A. With regards to some online rumors that I have become the chairman of ZEEKR Intelligent Technology, I would like to say that Lynk & Co and ZEEKR deeply integrate with each other to achieve a very good synergy. And regarding the other brands under Geely Holding Group, we are also exploring different types of synergy. So this is normal. And I can say for sure here that most of my time and energy will still be on the ZEEKR company's operations. I'm also the president at the Geely Holding Group, but at the Geely Holding Group, I'm more spending time on the group-level strategy and synergies around the brands. [Foreign language] 好，谢谢 。 So in response to your question, I can say very clearly, for sure, here that apart from all the announced deals at the Geely Holding Group, we are not considering any other potential deal or M&A. With regards to some online rumors that I have become the chairman of ZEEKR Intelligent Technology, I would like to say that Lynk & Co and ZEEKR deeply integrate with each other to achieve a very good synergy. And regarding the other brands under Geely Holding Group, we are also exploring different types of synergy. So this is normal. And I can say for sure here that most of my time and energy will still be on the ZEEKR company's operations. I'm also the president at the Geely Holding Group, but at the Geely Holding Group, I'm more spending time on the group-level strategy and synergies around the brands. [Foreign language] 好，谢谢 。 So in response to your question, I can say very clearly, for sure, here that apart from all the announced deals at the Geely Holding Group, we are not considering any other potential deal or M&A. With regards to some online rumors that I have become the chairman of ZEEKR Intelligent Technology, I would like to say that Lynk & Co and ZEEKR deeply integrate with each other to achieve a very good synergy. And regarding the other brands under Geely Holding Group, we are also exploring different types of synergy. So this is normal. And I can say for sure here that most of my time and energy will still be on the ZEEKR company's operations. I'm also the president at the Geely Holding Group, but at the Geely Holding Group, I'm more spending time on the group-level strategy and synergies around the brands. [Foreign language] 好，谢谢 。 Thank you. [Foreign language] 谢谢安总。 The next question comes from Ming Hsun Lee with Bank of America. Please go ahead. [Foreign language] 安总，还有袁总，你们好。那我这边也是有两个问题。那第一个问题，刚才袁总已经有稍微回答，但是我想再确认一下，就是我们这个极客跟领克之后合并之后，我们这个包括车机还有自动驾驶的路线也会有所整合吗？还是说因为领克它的这个价格带还是稍微比极客低了一些，所以有可能在这方面它还是会有不同的路径去做发展？那我先翻译一下，这是我第一个问题。So after ZEEKR and Lynk & Co merge, will you consolidate your technology path for your smart cabin and your autonomous driving software? [Foreign language] 谢谢，这是我第一个问题。好的，谢谢我做一些回答。这个领克极客业务合并以后，我觉得这个协同效应得到了巨大的体现。我觉得几个方面吧，因为现在我们从竞争公告发布以后，那将开始做具体的一些规划和执行。那今天我在这里简单地介绍一下从战略层面的一些思考，一些主要的思路。So thank you. So after the integration of Lynk & Co and ZEEKR, we can achieve very positive synergies. So after the announcement, the publication of the filings, we would do deeper planning and execution. But here I would like to share some of my strategic thoughts around what we would do after the integration here. [Foreign language] 比如首先在品牌方面，品牌方面我们双品牌战略相对独立。那极客品牌主要是去覆盖主流的豪华市场，领克是定位的高端品牌，覆盖于中高端市场。那这两个品牌在价位和价值观上面两个维度有明确清晰的定位，相互区隔的。同时我们又能实现市场的覆盖度能做到最大。So first of all, regarding the branding, so we would have two independent brands under our new company. And ZEEKR is targeting at mainstream luxury vehicle market sectors, and Lynk & Co is targeting at mid to high-end vehicle sectors. The pricing of the two brands is quite different from each other, clearly differentiated, and we are targeting different market segments and sectors. [Foreign language] 第二方面从产品方面，产品的规划。那产品规划我们将会从车型的大小、能源方式来。同时也解决减少车型的数量，打造爆款。 Regarding the products, we would differentiate the two brands in the areas of size of vehicles and the powertrain of vehicles. We will reduce the number of the new models and to reduce the competition between the brands. [Foreign language] 刚才袁经理做了解释，我就不再深入解释了。那第三个关于技术方面，技术方面大家都关心的，实际上未来新能源汽车在电动化、智能化方面更加要讲究平台化的战略。所以在技术方面的话，我们有机械架构、电子架构、座舱、支架、三电等等，我们要通过两到三年时间的努力能实现最小的、能实现最大程度的一个平台化。 Regarding technology, which is a very highly interested area among the investors, we believe that in the era of smart new energy vehicles, we need to have the platform strategy. In the areas of mechanical architectures, electrical and electronic architectures, smart cabin, ADAS, and e-powertrain. In two or three years' time, we strive to maximize the platform strategy among the products under the new company. [Foreign language] 比如说我们机械架构以最小的数量，现在有CMA，有SPA，有浩瀚，那我们会对架构方面进一步的做精简。比如说电子架构未来就一套，领克、极客统一。比如说支架也未来也完全统一，全部采用自研系统。比如说座舱，但座舱我们可以在硬件方面，在一些底层的这些软件、中间件方面完全统一。但在应用方面，我们可以保持领克还是用Flyme，极客还是用极客OS。 So for example, when it comes to the mechanical architecture, currently the two brands of vehicles use different architectures, including CMA, SPA, and SEA. In the future, we would streamline the architectures that our products are developed based on. Secondly, when it comes to the EE architecture, in the future we would unify and to use one EE architecture for all the products under the new company. When it comes to the ADAS, in the future we will also unify the solutions and to rely on our in-house developed system. When it comes to the intelligent cockpit, of course, when it comes to the user interface and human-machine interactions, we can be different. So Lynk & Co will still use the Flyme, and ZEEKR would use the ZEEKR OS, but when it comes to the backend, we will achieve very good synergies. [Foreign language] 那比如说供应链方面，那我们在技术协同的同时实现规模化的效应，这样使我们的采购成本比较大幅的降低。在制造方面，那这样的话我们可以充分的把产能利用率能够进一步提升。对于支持部门，也就是行政管理部门，我们在人才、法务化等等这方面，我们组织架构进一步优化，提升效率。 So when it comes to the supply chain management, we would aim to strive to have a better economies of scale accordingly to lower the cost. When it comes to the manufacturing, we would further improve the utilization rate of our capacities. When it comes to the supportive functions, corporate functions, including human resources, finance, the legal, and IT, we would further streamline the organization to achieve higher efficiency. [Foreign language] 从我的经验来看的话，举几个例子吧，比如说研发投入。研发投入我相信双方合并联合以后，我们研发投入应该会降低10到20左右。那意味着什么？如果说两个品牌都要花100亿的研发投入的话，未来你可以减少200亿的话，可以减少20亿到40亿。这是比较可观的。那比如说我们在供应链方面采购方面，如果规模化效应的协同，我认为创造5到8的BOM成本的降低是完全没问题的。比如说在一些支持部门，我们通过组织的优化、效率提升，我们的费用降低10到20这肯定没问题。等等吧，从各个环节各个方面来说，我们一定能做到就是说成本会比较大幅度的降低，成本费用的降低。同时我们这个效率也会更快，能够我最快时间想把实现整个盈利。我们今年这个承诺的按照香港亏损的情况下能够平衡，所以我相信今年的目标是能够实现的。当然我们紧接着下一个目标，我们怎么样快速的在每股的亏损的情况下怎么样能够赚钱，这可能也是我们新的目标也开始了。 So from my experience, I think after we integrated the two companies, we can achieve 10%-20% R&D expenses reduction. And when it comes to the procurement purchasing, we can achieve 5%-8% BOM cost reduction. When it comes to these corporate supportive functions, we can also save around 10%-20%. In all areas, we can lower our cost and to boost our efficiencies and strive to be profitable as soon as we can. And earlier this year, we said that we aim to achieve break-even per Hong Kong Financial Reporting System, and we still stick to this target. And I think that we have good potential to achieve that. For our next goal, of course, is to be profitable per the U.S. Accounting System. We would, our management team would work hard to achieve that quickly. [Foreign language] 好，谢谢。我不知道讲的大家还有什么意义。 Any other questions? [Foreign language] 对，那不好意思，我还有第二个问题是关于这个混动，因为最近这个市场上的车企很多都这个明年的混动或增程的产品普遍都会把这个纯电的里程加长，甚至我们现在有听到可能200公里是标配，甚至有到400公里的。那因为我们明年本来这个极客品牌就有这个大七座的混动产品的计划，那想了解一下就是说您怎么看就是我们明年的这个混动的这个产品会在哪一些地方可以展现更多的这个技术的优势，或者是说跟目前市场上的这个产品有一些差异化。那特别就是我们极客跟领克在合并之后，因为其实领克它的混动产品做得相当好，那在这个两个品牌合并之后这个车型或者是之后的这个发展会不会有一些新的变化，那我也翻译一下。 So recently we find many auto companies their plug-in hybrid product, the pure battery mode driving range will increase a lot in 2025. And especially after you merge with Lynk & Co, will you learn any advantages for Lynk & Co because Lynk & Co some of the models, PHEV, sell very well? So yeah, what is the plan after the merge? It's a very good question, and I believe that the PHEV vehicles can be a very good growth point for the future of the new ZEEKR company. Let's start with Lynk & Co. Lynk & Co currently is using the EM-P powertrain developed by Geely, and it is well received by the customers quite positively. In the Lynk & Co product lineup, in their next generation, they will also use the EM-P platform, but equipped with a smaller engine, which will be 1.5 liters. When it comes to ZEEKR, ZEEKR's current engineers are working on a new super electric hybrid system more suitable for the large-sized vehicles. For the future ZEEKR large-sized vehicles, including SUV model and MPV model, we will use that self-developed architecture. I can say with pride that our architecture and our technologies are far technologically leading than our peers in the market. Of course, details of that technologies I am not able to share here due to the compliance issue. We would soon in the future hold a formal event to explain all the details and the advancements of that architecture and the technology to the public. [Foreign language] 当然我可以讲一下这个车的一些特点。我觉得实际上全球的，我讲全球，极氪做的事情不是简单的中国，全球市场的豪华车，大型的豪华SUV，以BBA为代表的，比如说GLS这种大型的豪华SUV，现在基本上都还是以燃油的。那我们在想这个市场未来非常豪华的，同时它又是非常节能的，操控感能够，操控是一种纯电的一种操控的一种体验，它一种纯电的一种操控体验。同时它没有里程焦虑，它无论在城市还是在高速，城市省电，高速省油，实际上这个市场是非常大的，极氪要快速地在全球这个大型豪华SUV市场上要能够有一个很好的体现。 So but I would like to share some highlights of the vehicles we are currently developing. When we look at the global luxurious SUV segment, we can see that it's mostly dominated by the legacy brands such as Mercedes-Benz, BMW, and Audi. Taking Mercedes-Benz GLS as an example, these models are all equipped with conventional gasoline powertrain. In the future, if we can roll out good models that are highly fuel efficient with great valve-like handling without any kind of range anxiety, can save oil gasolines in the urban scenario, can save electricity in the urban scenario, and save fuels on the highways, I think that model would enjoy and have a huge potential in the market. So for ZEEKR, we would quickly roll out such a good large-sized SUV for the global markets. [Foreign language] 可以剧透一下吧，这个我们会在明年4月份车展会车型会展出，在下半年将会投放市场。 So our plan here is to unveil the vehicle at the Shanghai Motor Show in April, and we would start deliveries in the second half next year. [Foreignn language] 好，谢谢。 Thank you. [Foreign language] 好，你有什么？ Yeah, so in addition to what Mr. An just mentioned, as I discussed earlier, in the B segment and C segment, where we have the largest addressable markets, Lynk & Co and ZEEKR will tap this market utilizing different powertrains. In addition to that, you can see in the future we will continue to further streamline the platforms and drive trends of both battery electric vehicles and the plug-in hybrid vehicles. At this moment, as Mr. An mentioned, some of Lynk & Co's vehicles still run on the legacy CMA platform or SPA platform, but in the future, we will unify the PHEV platforms into—sorry, unify Lynk & Co PHEV platform into that of ZEEKR's, and that will ensure us to enhance the profitability of each of the models and also improve cost savings and enhance our bargaining power along the supply chain. I hope that answers your question, Ming. Yes, thank you, Yuan Jing. Yes. The next question comes from Qiyang Xie with CICC. Please go ahead. [Foreign language] 嗨，安总，袁总好。哎，谢谢接受我的提问啊。你现在公司刚刚在极客领克的协同以及混动车型的。我们速度快一点，你直接用英文讲好了. Okay, okay, okay. Okay, I have two questions about the intelligent driving. We all know that ZEEKR has made significant investments in intelligent driving and has achieved excellent progress. How can ZEEKR maximize the results of its intelligent driving efforts? Will it empower other brands in the future, creating new opportunities for revenue growth? That's the first quest ion. Thank you. Thank you. So, apologies. So for ZEEKR, I think it's very, very clear that our ADAS solution, especially our high-performance ADAS solutions, will be adopted by Lynk & Co as well. So in the future, both ZEEKR and Lynk & Co's high-end ADAS solutions will be based on the current NVIDIA chipset and in-house software algorithm solutions that currently ZEEKR is working on. On the other hand, obviously, within the big Geely Group, there are two different ADAS branches, and the more cost-efficient ADAS branches will provide ADAS solutions for Lynk & Co vehicles that target at a more cost-conscious population. Okay, thank you. The second question is about, is there any update on our cooperation with Waymo, and will there be any deeper cooperation after that? Thank you. Yes, so with regard to the Waymo, we are still working with them according to the agreements that we have with them back in 2019. So all the testings and other test drives and trial rounds are working smoothly in the U.S. at this moment. [Foreign language] 这个我们明年开始，上半年就开始进行批量交付了。 So we will start deliveries of batches of the vehicles from the first half of next year to them. [Foreign language] 好的，好的，谢谢，谢谢两位领导。 Thank you. The next question comes from Bin Wang with Deutsche Bank. Please go ahead. Thank you. Dr. Wang, quick question. What's your guidance for the number four quarter this year's gross margin? Because we found that you actually introduced a zero interest rate promotion for volume in the fourth quarter, meanwhile you actually have a better volume in the mix. So combining two factors, what's your guidance for the fourth quarter margin? Thank you. Thank you, Bin Wang. So for the fourth quarter gross margins, given the fact that we have already seen a tremendous customer demand in terms of orders, and also if we look at the product mix, we continue to see very strong demand from our customers for our high-end, high-margin ZEEKR 009 models, we do believe the fourth quarter margins, especially the vehicle-based margins, are going to continue to improve. Thank you. [Foreign language] 这一点的话，首先大家看到了我们的毛利水平都在不断地朝好的方向发展，这还只是极客。我相信未来和领克协同以后，那这个毛利率我觉得应该会更好。还有就是明年我们这个大型的混动车出来以后，这个也对我们的毛利率也肯定有重大的变化。 So investors can see that in the past quarters, our ZEEKR vehicle margins kept growing, and I think after integration with Lynk & Co, the gross margin level will see further positive improvements. The next year, we will roll out large-sized luxurious PHEV vehicles that can further contribute to the growth of healthy improvement of our gross margin.[Foreign language] 所以我再次强调，这是非常好的一次业务重组。这不是简单的一个股权的变化，这一点非常重要。 I would like to highlight again, this is a very good business integration of good operations, not just simply to combine the two companies. [Foreign language] 好的，继续吧。如果大家感兴趣的话可以继续。 Please, next question. The next question comes from Jiayi Liu with BOCI. Please go ahead. Yes, thank you. Yeah, thank you for taking my question. I have two questions. One is about our sales distribution integration. As we know now, Lynk & Co stores rely on dealers, while ZEEKR mostly adopts their own direct sales. Following the consolidation, will ZEEKR use Lynk & Co sales dealer to achieve faster expansion? I mean, will Lynk & Co share the same store to sell their individual cars? Yeah. Yeah, this is my first question. [Foreign language]首先我刚才讲了双品牌领克和极客，商业模式不发生变化。领克继续保持经销商的模式，极客也继续采用直营的模式。但直营我不知道大家现在清楚吗？我们现在有一个直营的情况下的一个极客家，极客家的模式。极客家的模式实际上在这个也需要有投资人，但是销售由我们来负责。所以极客还继续采用直营，极客家的模式来进行运营。那对于通过整合合并以后，我觉得因为极客的直营很多，有些也是领克的投资人来做的，所以未来也会有领克的更多的投资人会进来，尤其是在三四线市场，三四五线市场。大家知道极客时间比较短，现在主要聚焦在一二线市场，上三四五线市场还没有完全发力。我们通过合并以后，我们可以迅速地把三四五线市场的领克的一些投资人的一些资源能得到充分的运用，是极客品牌快速地能够在三四五线市场最好的表现。 So I said that after the integration, we would keep two independent brands, and they would remain in their respective business approach. So Lynk & Co would remain to use the dealers, and ZEEKR would remain to sell directly to the customers. But I'm not sure if our investor colleagues are aware of ZEEKR House model that we are currently applying in the Chinese market. So there are investors that are investing in the stores, and ZEEKR's colleagues are handling the sales at the facilities. So after the integration, ZEEKR would continue to use the D2C model, but we would invite more Lynk & Co investors, if they are interested, to help us to expand our sales reach in the tier three to tier five cities, lower tier cities in China, and to further expand our sales outreach in those markets. ZEEKR is a young brand, so most of our stores are in the Tier 1 and the Tier 2 big cities. We have not yet had a very good outreach in those Tier 3 to Tier 5 cities. So after the integration, I see very good opportunities for us to attack those markets. [Foreign language] 同时我们也在售后体系也都可以进行共享。在物流体系，那更加可以完全可以进行共享。所以这未来在整个营销端的话，我觉得我们的协同会产生非常好的一个结果，会降低很多的费用。 Also, when it comes to the after-sales services system, we can achieve a very good synergy as well as the logistics systems. So I think in the future, when it comes to the marketing sales and the services, we can achieve good synergies. [Foreign language] 怎么样，刘佳，情况还有什么？ Thank you. [Foreign language] 好，拜拜，谢谢。谢谢安总。 My second question is about our combined sales target for new ZEEKR. That is one million units by the end of 2026, which is quite positive as it is double from this year. So I just want to know that any detailed breakdown for individual brands of ZEEKR and Lynk & Co, or if we have some preliminary breakdown by region? Yeah, thank you. [Foreign language] 刘佳，这样的，就是说我们没有明确地说26年一定要实现百万台。这是我们通过协同制定的一个目标，我们希望尽快能达成百万辆的一个汽车集团。那具体的商业计划的话，我想今天还不能够准确地拿出来。我们一般情况我们在和0175一样吧，是在1月份是吧？ 对。 我们到时候会公布我们的消费销量的公告里面它会。 我们会来进行发布。好不好，刘佳？ So we didn't say that for sure that it is our very target to achieve one million annual sales target in the year 2026, but we want to, as soon as we can, make our company at one million unit sales level. When it comes to the details of business case, I apologize that I cannot give you detailed breakdown here. For further information on the sales guidance, we would publish in January alongside the 0175's for annual sales reports. [Foreign language] 谢谢安总，希望新极客越来越好。 Yeah, thank you, An Conghui. Hope that new ZEEKR will get better and better. Thank you, Jiayi Liu. Thank you. [Foreign language] 谢谢。 Do I have the next question? Sorry, I forgot. From Paul Gong with UBS. Please go ahead. [Foreign language] 谢谢，谢谢，这是我的提问。很快的两个问题吧。就第一个来说的话，就是安总刚才提到的一点，非常有意思的就是减少车款的数目，然后聚焦在大单款上面。就不知道有没有心目中有没有一个叫最理想的，合并了之后的车款的一个数目. So quickly, the first question is, just now you mentioned that you are going to eliminate the number of models to consolidate on the large volume models. Do you have an optimal number of the number of the models? [Foreign language] 这个问题是这样的，因为现在首先结果是我今天还不能给你明确的结果。我只做前期做了一些了解，以及对于两个品牌未来的一些产品规划判断还是比较多。我们从今天开始，通过整合以后，公告发了以后，我们两边团队就开始工作了，开始来继续拿出具体的车型的计划。所以今天还不能给你准确的一个产品的一个详细的一个数量的规划. So I apologize that I cannot give you a detailed figure in response to your question, but I have already conducted some good study about the current product planning with the two brands. And after today's announcement, the teams at both brands are working very closely with each other to roll out a more detailed product planning update for the future years. So today here, I would not give you a detailed answer, but we would try to answer that as soon as we can. [Foreign language] 但是整个产品的规划的梳理的话，原则是有的。那就是说根据车型的大小，根据能源方式，能源的不同，以及每款车型在每个系统上必须要成为标杆，这个原则已经确定了。 We have already laid out the principles for registering future products at the two brands, depending on the brand's positioning and the size of the vehicles and the powertrain setups. And we also have make a very solid goal that all the future products need to be the benchmark in their respective segments. [Foreign language] 对于明年初步的计划，我觉得可以说一下，明年大概极客有两款车型，领克的话也基本上会有两款车型。所以明年总共大概有四款车型，当然这四款车型会在不同的细分市场，这点可以明确。 So for the next year, ZEEKR will roll out two new models, while Lynk & Co will roll out another two new models. So new ZEEKR next year will roll out four new models positioned at different sectors. [Foreign language] 好吧，谢谢。 Thank you. Yeah, thank you. The next question comes from Eugene Hsiao with Macquarie. Please go ahead. [Foreign language] 各位，非常感谢今天的时间。我就直接问吧。 So my question is about the old ZEEKR, which is asset-light, but with the Lynk acquisition, I think that also means you acquire the Lynk manufacturing facilities. So does that mean that the new ZEEKR business model is shifting away from asset-light and being more of a traditional OEM? And if that's the case, does that mean you would consider acquiring the main production facilities of ZEEKR from Geely Holding Group like the Ningbo plant? Thank you. [Foreign language] 这个严总。 Yes, this is Jing. And thank you for your question, Eugene. So when we set this company up, set this ZEEKR up, we're starting from a blank sheet of paper, and we are a startup. Hence, we're adopting this asset-light business model. And when we were considering these Lynk & Co transactions, obviously, Lynk & Co is a fully integrated business, and it incorporates at this moment three manufacturing facilities. So when we conduct this transaction, we bring in the three manufacturing facilities. As Mr. An mentioned earlier, we will continue to see how to fully utilize those manufacturing facilities by optimizing and restructuring the models that will be manufactured at each of these sites. At this moment, apart from this Lynk & Co transaction, we do not have any further plan or discussion with any third parties or Geely Group regarding additional manufacturing facilities or other businesses. Okay, very clear. Thank you. [Foreign language]好的，这个我想我再对刚才讲的再补充一点。我觉得刚才讲这个产品规划、技术规划是非常重要的。这个对于产品规划，我觉得再明确一下，就是我们根据品牌的不同的定位、车型的大小和能源的方式，以及打造。必须成为爆款的目标来做我们整个产品的规划. So when it comes to the product planning, in the future, when we register new products, we need to analyze based on the brand that the model would belong to, and whether it fits to the brand positioning, as well as the size of the vehicles, and also considering the powertrain of the vehicles, and also considering whether this vehicle could be the benchmark in their segment. These are all the factors that we will seriously consider when we register new products. Thank you, Operator. Thank you for the Q&A session. I would like to turn the conference back over to the company for any closing remarks. [Foreign language] 好的，这个最后再次感谢现场的各位投资人，感谢你们对极客品牌的支持，尤其对未来新极客、极客和领克的合并，希望也能得到大家一如既往的支持。我们一定会拿出好的背景和结果给大家。 Thank you all once again for joining us today, and thank you all for your support to our companies. Our management team will work hard to deliver a good result to all our investors' community in the future. Thank you again. Have a great day.