EHang - Earnings Call - Q1 2020
May 29, 2020
Transcript
Operator (participant)
Good day, ladies and gentlemen. Thank you for standing by, and welcome to EHang's first quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now, I will turn the call over to Julia Qian, Managing Director of the Blue Shirt Group, Asia. Ms. Qian, please proceed.
Julia Qian (Managing Director)
Hello, everyone. Thank you all for joining us on today's conference call to discuss the company's financial results for the first quarter of 2020. We released the results early today. The press release is available on the company's website as well as from Newswire Services. On the call with me today are Mr. Huazhi Hu, Chief Executive Officer, Mr. Edward Xu, Chief Strategy Officer, and Mr. Richard Liu, Chief Financial Officer. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filing with SEC.
The company does not assume any obligation to update any forward-looking statement, except as required under applicable law. Also, please note that unless otherwise stated, all the figures mentioned during the conference call are in Chinese RMB. With that, let me now turn the call to the management team and our CEO, Mr. Huazhi Hu. Mr. Huazhi Hu will speak in Chinese, then our CSO, Edward Xu, will translate his comments to English. Please go ahead, Mr. Huazhi Hu.
Huazhi Hu (CEO)
[Foreign Language]
Edward Xu (Chief Strategy Officer)
Thank you, Mr. Hu, and hello, everyone. Let me first do the translation of what Mr. Hu said in his opening remarks, and then I will talk about our key business strategies going forward.
Hello everyone. Thank you for joining us on the call today. Despite the unprecedented global COVID-19 pandemic that started this year, we are pleased to report solid first quarter financial results with significant top-line growth. Total revenues were RMB 18.8 million, increased by 80.3% year on year. Gross profit grew by 82.7% year on year, and the sales volume of EHang 216 reached nine units in the first quarter of this year versus only three units in the first quarter of 2019. During the first quarter, China implemented strict controls to contain the virus. The country was locked down, businesses were closed, and people were quarantined. Because of this, we did experience some short-term impact, including disruptions across the supply chain and temporarily decreased demand, including delayed orders from the customers. However, we were able to create new business opportunities from this crisis.
We successfully introduced a practical application for both EHang 216 and Falcon B in medical emergency transportation. Our flight tests in Hezhou People's Hospital in Guangxi have fully demonstrated our ability to apply AAV technology in an emergency situation. We will continue to actively develop more UAM applications, such as emergency response and air tourism. We will expand the UAM pilot city network and achieve regulatory breakthroughs in the U.S. and Europe, paving the way for global expansion after the virus is contained. Business in China has gradually resumed since the beginning of April. The situation appears to have turned the corner. Sales are recovering, and our business is regaining momentum. Our business opportunities are promising due to emerging opportunities to provide cost-effective and safe service with unmanned AAVs. We are excited to continue to drive significant business development opportunities in air tourism, emergency response, and passenger transport.
Notably, we obtained the world's first commercial pilot operation approval of passenger-grade AAV for air logistics uses. This starts a new chapter in the commercialization of air logistics. We are confident that we can generate at least 200% revenue growth in 2020. We believe our first-mover advantage, sound growth strategy, and ability to execute can drive robust growth. As Mr. Hu mentioned, despite the challenging market conditions due to the pandemic, we still strived for rapid growth and great performance in the first quarter of this year. We expanded our global presence and raised our brand visibility. Let me cover some achievements in this regard. In January, with the support from the North Carolina Department of Transportation, we conducted our first-ever trial flight of an EHang 216 in North Carolina after receiving approval from the Federal Aviation Administration.
Our EHang 216 became the first autonomous aerial vehicle to fly in the U.S. This achievement underpins our industry leadership and helps to increase customer confidence. In February, our EHang 216 obtained another operational permit from the Civil Aviation Authority of Norway. This marks another milestone, as it was the first operational permit for long-term flight tests of the EHang 216 in Europe. We believe this lays a solid foundation for our future UAM operations in other E.U. countries. Now, let me discuss the E.U.'s UAM pilot city initiative. In the first quarter of this year, we established UAM partnerships with the city governments of Sevilla and Llíria in Spain. Both cities are members of the UAM Initiative Cities Community, an E.U. initiative established to promote urban three-dimensional transportation.
In partnership with Sevilla, we will work together to develop urban air mobility services such as passenger transportation, air logistics, and command control platforms. The city will also collaborate on applications for permission to conduct test flights in accordance with the Spanish and European legislation, and we will coordinate with EHang in the planning of flight routes. Nearby, EHang will collaborate with Llíria City Council to develop the 3D air mobility solution for smart cities. Together, we plan to launch pilot operations of passenger-grade AAVs designed to explore different application scenarios, including tourism. Furthermore, EHang and Llíria will work together with the Spanish Aviation Safety and Security Agency to establish relevant systems and standards to support this new transportation ecosystem. Going forward, we expect to establish more partnerships with the city governments in order to expand our global UAM footprint.
To demonstrate our UAM industry leadership, in January, we issued a white paper entitled "The Future of Transportation: White Paper on UAM Systems." This paper explores the potential for UAM to transform transportation globally. We cover vehicle design, potential applications, the current regulatory landscape, and how to optimize UAM's path to commercialization. As Mr. Hu mentioned, we found new opportunities during the outbreak. Importantly, both the EHang 216 passenger-grade AAV and the Falcon B non-passenger-grade AAV were valuable for medical emergency transport. We demonstrated this real-world application of AAV technologies to transport medical supplies and personnel. The AAV was also able to perform air inspection and broadcast of instructions in several cities. We are further exploring other emergency response situations in which AAVs can operate with efficiency and effectiveness. To conclude, although we started 2020 in an unprecedented and challenging environment, we still achieved solid business results.
This demonstrates our attractive growth strategy and ability to execute. We believe our first-mover advantage will enable us to drive robust growth in the promising UAM industry. Now, I will turn the call over to our CFO, Mr. Richard Liu. Thank you.
Richard Liu (CFO)
Thank you, Edward. And hello to everyone on the call. Before I go into details about our financial results, please know that all numbers presented are in RMB, and percentage changes refer to year-over-year comparisons unless otherwise specified. Detailed analysis is contained in our earnings press release, which is available on our IR website. I'm going to highlight some of the key points here. Although our business was affected by the global pandemic, we still achieved significant top-line growth. Total revenue was RMB 18.8 million, up 80.3% year-over-year. Growth was mainly driven by the significant increase in revenue from our core business of air mobility solutions, which represented 80.4% of total revenues. Sales of the EHang 216, our flagship passenger-grade AAV, reached nine units in Q1 compared with three units in Q1 2019, a 200% increase. Gross profit in Q1 amounted to RMB 11.2 million, up 82.7%.
This led to a gross margin of 59.3%, up 0.8 percentage points versus the same period last year. The improved gross margin was due to a favorable revenue mix, reflecting the inherent value in our industry leadership and the first-mover advantage, which gives us pricing power. Adjusted operating expenses, excluding share-based compensation, increased by 32.9% to $31.1 million. As a percentage of total revenues, it was 165.3% as compared to 224.3% in Q1 2019. Compared to the 80.3% revenue growth, the 32.9% expense increase was modest. It was mainly volume-driven spending and strategic support for global commercialization. We also increased R&D expenses as we strengthened our product development efforts. As an innovative technology-driven company pioneering a new sector, we have always kept tight control of operating expenses.
However, we have built the basic infrastructure we need to grow and expect to see meaningful operating leverage as sales continue to ramp up. Under the impact of the COVID-19 pandemic, our adjusted operating loss in Q1 increased by 18.8% to CNY 19.2 million, while adjusted operating margin improved by 52.7 percentage points from negative 154.7%-102%. And the adjusted net loss in Q1 was CNY 18.5 million, increased by 13.4% year-over-year. Owing to the significant year-over-year revenue growth, the adjusted net margin improved by 57.8 percentage points from negative 156%-98.2%. Turning to our balance sheet and cash flow, we ended the quarter with CNY 257 million in cash, cash equivalent, and short-term investments. In summary, we generated solid financial results in Q1 despite the unprecedented coronavirus impact. The lockdowns and restrictions implemented in China and elsewhere had some adverse impacts on customer demand and supply chains.
Nonetheless, we are pleased to have achieved 80.3% revenue growth. As a young company, however, we will continue to invest heavily in technology and talent to accelerate the commercialization of our products and solutions. We think we can sustain our momentum if the COVID-19 situation will be under control. We have seen solid recovery since mid-March. We are optimistic about our potential in 2020 and the long-term promise of the UAM industry. We are confident in our ability to lead this industry. As a newly public company, EHang has been actively interacting and communicating with our investors. We believe that transparency is key to earning the trust of our shareholder community. In March, we successfully conducted two virtual conference calls with our investors and analysts. We were pleased to see many interested investors and analysts join our calls and to discuss business developments.
And going forward, we intend to increase our interactions with investors and further improve our transparency. Now, let's turn to the business outlook. We're not changing our annual guidance at this time. We're confident that we can achieve accelerated annual revenue growth of at least 200%. We also believe we can achieve adjusted operating profit for the full year 2020. With that, we conclude our prepared remarks for today. Let's now open the call for questions. Operator, please go ahead.
Operator (participant)
Thank you. Ladies and gentlemen, we will now begin the question and answer session. To ask questions on the phone, please press star one and wait for a name to be announced. If you'd like to cancel your request, please press the pound or hash key. Once again, to ask questions, please press star one. There'll be a short silence while questions are being collated. Our first question comes from the line of Vincent Yu of Needham & Company. Needham & Company, I beg your pardon. Please go ahead.
Charles Alcock (Managing Editor)
Hi, management. Thanks for taking my question. I have a few questions. So the first question is for the commercial pilot operation, which is approved by CAAC in Taizhou. Is there a route-specific approval, or is it a blanket approval to carry out commercial pilot operations for logistics users? My second question is, can we expect to see accelerated approval from CAAC for more routes after the approval in Taizhou? And my third question is about the demands in April and May. Can management give a sense of how the demand recovery is in April and May? Thank you.
Richard Liu (CFO)
Thank you, Vincent. This is Richard. I will answer your first two questions. They're correlated. First of all, the approval is an area-specific approval. It is not just a route-specific. So that means EHang 216 can fly different routes for air logistics users within that area. If you refer to our press release, we described at least two use scenarios, which are between ground and hilltop and between shore and islands, as it is a coastal area in the Taizhou city where there are hills and islands. And there is a video attached to the press release, and you are welcome to watch it. With that, you can get a more concrete idea and your second question, also, as we put in our press release, we intend to expand it to other areas in China.
And we're working on applications for other areas or sites in different cities, such as Guangzhou, where headquartered and so forth, etc. With the first one accomplished and the pattern established, the following ones will be less. You can imagine that will be less difficult and would be quicker to accomplish. Also, the CAAC, the regulator, has been very supportive along the way for these innovative AAV solutions. Hello?
Operator (participant)
Hi, sir. Do you have any follow-up questions?
Edward Xu (Chief Strategy Officer)
Yeah. Maybe I can answer the third question regarding the pipeline, right? So this is Edward. So regarding your question on the demand for April and May, currently, our order pipeline is approximately on a quarterly rolling basis. We have largely resumed from the impact of the COVID-19 outbreak. And basically, we see our order pipeline for the second quarter back to roughly the level of the fourth quarter of last year, which was at a historical high level. But unfortunately, I cannot tell you the exact number. But based upon our current order book, we are comfortable and confident that this can give us the ability to achieve at least 200% growth year-on-year. Thank you.
Charles Alcock (Managing Editor)
Got it. So very quick follow-up. Do we have any capacity expansion plan for rest of 2020 as of now?
Richard Liu (CFO)
I will take this question of yours. So basically, in light of the pandemic right now, we're very cautious about CapEx. So in respect of capacity needs, we have been exploring alternative ways to support those needs. And as you probably know, the carbon fiber structure or full-scale manufacturing is potentially a capacity bottleneck in our own facility in China. And we have been exploring an outsourcing approach and discussing with some potential third-party carbon fiber manufacturers in China to support the needs for this year at least. And looking to the second half of this year, we may resume our full capacity expansion plan, as you know, given the pandemic situation will be contained and there will be more stronger business momentum going forward.
Charles Alcock (Managing Editor)
Got it. Thank you very much.
Operator (participant)
Thank you for the questions. Next question comes from the line of Hxiao Tim from Morgan Stanley. Please go ahead.
Hsiao Tim (VP and Equity Research Analyst)
Hi, Mr. Richard, Edward. Congratulations on the solid progress and thanks for taking my questions. So just a few quick questions. The first one, again, about the supply. So I think during the previous conference call, I remembered that management highlighted there was impact from the supply bottleneck of certain components. So may I know if the component has been removed, the bottleneck has been removed at the moment, and have we secured enough inventory for the upcoming delivery? And secondly, as we stick to our current guidance for 2020, so what would be the potential swing factors post the outbreak that management will keep a close watch and which projects we should pay more attention to, and it would be more relevant or crucial to our 200% year-over-year revenue growth? And my last question is that, could you provide some update regarding our overseas business?
Have we resumed the delivery? And if not, when would we start to do so? So those are my questions. Thank you.
Edward Xu (Chief Strategy Officer)
Thanks, Tim. This is Edward here. So regarding your first question, I answered. So yeah, you're right. So basically, at the beginning of the year, due to the pandemic, we did experience some of the impact on the supply chain. And regarding the inventory and the components, basically, we have resumed to normal level. And so now, based upon our current order book and our capacity and production, we should be able to fulfill all the existing orders.
Operator (participant)
Sorry.
Richard Liu (CFO)
Sorry, Vincent. May I know your second question?
Oh, I beg your pardon. Please continue.
Yeah. Sorry. Your second question was?
Hsiao Tim (VP and Equity Research Analyst)
Oh, that's about because we stick to our original guidance for the full year. So based on current situation, what would be the potential swing factor after the pandemic that management, including Edward, Mr. Richard, you guys will keep a close watch? What would be the key swing factor? And which project we should pay more attention to, which would be crucial to our 200% year-over-year growth in which market and which clients?
Edward Xu (Chief Strategy Officer)
Yeah. So basically, this 200% growth is based upon our assessment of the current situation, including the ongoing impact of the COVID-19 on the overseas market. So on the domestic market, we think it is basically it should be okay because now the production is coming back and the market demand is there. So given our inventory and the component level, we see no big issue to fulfill all these orders. But on the other hand, what we are a little bit concerned about is this airshow performance because due to this COVID-19, some of the activities were canceled, and especially at the beginning of the year, we did plan our overseas expansion for this airshow, etc. So this could be some swing factor. But it's no harm for our core business.
Our core business is still the EHang 216 AAV, which so far we think has upside. And if we are lucky, if the COVID-19 can be contained in the overseas market and the demand comes back, we should see some upside. But now, we keep our guidance at the 200% growth year-on-year. So going forward, we would watch the situation of the pandemic closely. And also, on the domestic market, we are also in talks with different business organizations and governments, and we seek potential partnerships with different organizations. So on the domestic side, we think that the macro situation is also very important because if the macro situation deteriorates, it may negatively affect the general tourism market and for consumption demand.
So the risk can come from people's reluctance to consume or to travel, and so, which will in turn affect the demand and also the real delivery of our AAVs. So that can be a risk. But from a management perspective, we are all watching these factors closely, and we will report as soon as we see any issues. Thank you.
Hsiao Tim (VP and Equity Research Analyst)
Got it. So just a quick follow-up on my third question is, so regarding the overseas business, have we resumed the delivery? Or if not, where will we start to do so?
Edward Xu (Chief Strategy Officer)
Yeah. For the overseas market delivery, we are still doing the delivery even in the first quarter. For example, we deliver three vehicles: one to Japan, one to Russia, and one to Mexico. So all three are new markets, and I believe that although we are only delivering one, this can basically serve the purpose of the test flight. Our customers are quite enthusiastic about our product, and so they purchase one for the test, and if it goes smoothly, we do expect further follow-up orders from them, but yeah, as I said, the biggest risk is the pandemic, which may also negatively affect the real demand from our overseas customers, but the good thing, as you can see, we did achieve some milestones. For example, we did the test flight in the US for the first time.
We did obtain the operation, the test flight permit from the Norway government. I think those are very good things. And we did the partnership with two Spanish cities. So yeah. So from a long-term perspective, we are quite comfortable about our overseas expansion plans. Thank you.
Hsiao Tim (VP and Equity Research Analyst)
Got it. Thank you very much, Edward.
Operator (participant)
Thank you for the questions. Our next question comes from the line of Joseph Osha of JMP Securities. Please go ahead.
Charles Alcock (Managing Editor)
Hello, everyone, and thank you for your comments. I have a couple of questions. The first one is I'm curious as to whether you have looked at incorporating DC fast charging technology into the platforms, and then I have a couple of follow-ups. Thank you.
Richard Liu (CFO)
Sorry, the cooperation with what? DC?
Charles Alcock (Managing Editor)
DC Fast Charging. So when you charge, you can charge, obviously, slower with alternating current, or you can charge very quickly with DC direct current, like, say, for example, a car, which allows you to charge the battery more quickly. So yeah.
Edward Xu (Chief Strategy Officer)
Yeah. Yeah. That's right. So we've got the two modes of charging. The quick mode can finish around 60 minutes, and the longer one can take longer than that, one hour and 1.5 hours. Yeah.
Charles Alcock (Managing Editor)
Okay. So that is a direct current charger, or is that just high-energy AC? I'm just trying to understand what the technology is.
Edward Xu (Chief Strategy Officer)
Yeah. Direct current charging is quicker. So we are talking about the 100% full charge at one hour. But normally, if we can fly, if we have 90% full. So for 0%-90%, it only takes like 40, 45 minutes. But if you charge to 100%, it may take about 60 minutes.
Charles Alcock (Managing Editor)
Okay. Thank you. Second question is as regards battery chemistry. Obviously, I think you're NCA. Correct me if I'm wrong. But I know, obviously, through your platform, weight matters a lot. I'm curious as to whether you have looked into any of the emerging technologies like dry cell or very low cobalt. I'm just wondering what your thoughts are about the path for battery chemistry for your platform.
Edward Xu (Chief Strategy Officer)
Yeah, of course. That's a good question. And definitely, the battery is a key factor which will affect our range in the future and also the weight, right? So given the current battery technology, we can achieve about 21 minutes flight. But this is not enough. We are always looking for better solutions, and we look for better technology which can effectively improve our range and also by reducing the total weight of our AAV. However, we are not a battery company, and we design the BMS ourselves. And we have our own scientists looking at different options for the batteries. So definitely, we understand that the battery is a very critical factor in the future success of our product. And we believe that the future breakthroughs in this battery technology can help our AAV to fly further.
Charles Alcock (Managing Editor)
Thank you.
Just a final question. I apologize. I should know this. What form factor battery are you using? Are you using a cylindrical cell or pouch or prismatic? I am curious. Thank you.
Edward Xu (Chief Strategy Officer)
Oh, I'm sorry. This is a very professional word. I don't know how to translate into English, so we are using ternary lithium battery. Richard, do you have the term in English?
Sorry. I don't have it.
Yeah. Yeah. Could you send us an email? We can get back to you on that.
Charles Alcock (Managing Editor)
Sure. Sure. I'll be glad to. I'm sorry about that. Thank you very much for your comments.
Edward Xu (Chief Strategy Officer)
Okay.
Thank you.
Operator (participant)
Once again, if you'd like to ask a question, please press star one. Next question comes from the line of Charles Alcock from AIN. Please go ahead. Sir Alcock, your line is open. You may unmute locally.
Charles Alcock (Managing Editor)
Thank you very much.
Operator (participant)
Go ahead, please.
Charles Alcock (Managing Editor)
Yes. Hello. Can you hear me?
Operator (participant)
Yes.
Charles Alcock (Managing Editor)
It's very encouraging to hear about the cooperation you've had from the CAAC in allowing the commercial pilot operations. But can you please just clarify what the longer-term plan is to achieve full type certification with the 216 aircraft? Because I don't understand how you can keep delivering these aircraft across China and other parts of the world if you don't have a plan to achieve type certification, not just temporary operating permission.
Edward Xu (Chief Strategy Officer)
Yeah. Of course. Our goal is to get the permanent certification. But I think it's good enough for the CAAC authority to grant the temporary certificate first. And so this is all due to our safety record and also the standard we have achieved. So going forward, according to our ongoing conversation with the CAAC officials, we already set up a team with experts from both CAAC and from EHang to make the standards, to set the standards to assess the future, the permanent certification. So we are working with the CAAC closely. And so you should understand that this is a very new product and a new technology. And basically, there is no precedent in the world. So both the government officials and us, we are working on an appropriate way and standard for the certification.
Charles Alcock (Managing Editor)
Thank you. And will you also apply for certification in Europe now that EASA has issued consultation over the means to comply with certification?
Edward Xu (Chief Strategy Officer)
Yeah, of course. We do have a European team based in Vienna to work with the EASA officials.
Charles Alcock (Managing Editor)
Thank you.
Operator (participant)
Thank you for the questions. Our next question comes from the line of Tim Xiao of Morgan Stanley. Please ask your question.
Hsiao Tim (VP and Equity Research Analyst)
Hi, Edward and Richard. Sorry, just a quick follow-up question regarding the competition. So could you please provide some updates regarding our peers, for example, like a Volocopter, Kitty Hawk, or Archer? Did you hear anything about all these competitors, and when would you expect to face more intense or have to have competition with all these players? Thank you.
Richard Liu (CFO)
Yeah. Tim, this is Richard. The name you mentioned as our peer company in other countries, they are still probably not, like us, already public, so the information, frankly speaking, is very limited, so based on the information available, it seems that most of them are looking at putting their product to market in about two years' time or more. So basically, EHang probably will continue to be the only one that has entered commercialization or are doing commercial delivery in the market for a while. And because we're in China, as projected in your firm's research report, China will be the largest regional market, so our experience so far attests to it, so even though we are looking global, for the time being, it's more advantageous to be in China where the needs are getting more vibrant.
In terms of competition, we think we're in a very good spot right now.
Hsiao Tim (VP and Equity Research Analyst)
Got it. Thank you very much.
Operator (participant)
Thank you for the questions. Once again, if you'd like to ask a question. Oh, ladies and gentlemen, thank you. That does conclude our Q&A. May I take another question from the line? It's a follow-up question. Yes. You do have a follow-up question from Charles Alcock from AIN. Please go ahead.
Charles Alcock (Managing Editor)
Yes. Thank you. Since there's a bit more time, can you tell us about your plans to continue flight testing in the U.S.? Will you build on the tests that you started in North Carolina at the beginning of this year?
Richard Liu (CFO)
Thank you for the question. This is Richard. Yes. We do have the plan, cooperating with North Carolina DOT to continue the flight tests there. As you probably know, in January, we conducted an unmanned demo flight. The next step will be a manned, which means carrying passenger demo flight or flight test in North Carolina, but frankly speaking, because of the pandemic, this plan has been postponed. But we hope that once the pandemic situation is contained and everything is back to normal, we will implement this next steps plan as soon as possible in the U.S., and secondly, we have a partner, a U.S.-based biotech company called United Therapeutics. They are actually doing tests with our 216 for basically the use case of medical emergency transport, specifically to transport organs.
They are currently doing, have been doing, or preparing for the flight test in their Canadian base. They have a Canadian base. Then later on, we'll move to the U.S. to do the further tests in the U.S.
Operator (participant)
Thank you. Thank you. Our next question comes from the line of Damien Donnelly of Equitas Fund. Please go ahead.
Damian Donnelly (Analyst)
Hi. Yeah. Just looking at the use cases of the offshore oil, I presume that was in Norway where that's suggested to happen. How is that supposed to play out when the range of the EHang is 30 kilometers, 40 kilometers, and the nearest offshore oil platforms are 50 km offshore?
Richard Liu (CFO)
So far, this project has not started because we recently obtained the permit from the Norwegian government, and also, we are seeing this pandemic going on in Norway, but our local partner in Norway will test the flight, the AAV, as soon as the situation stabilizes. I believe that they will have their plan to implement the test flight, and with that, EHang will also send a technological team to Norway to assist the local flight, but right now, I cannot tell you the detailed plan at this stage. Sorry.
Damian Donnelly (Analyst)
Okay. All right. Thank you. Thank you, everybody.
Operator (participant)
Okay. Thank you for the questions. Ladies and gentlemen, if you have more questions, please contact us by email. Now, let me turn the call back to Mr. Liu for closing remarks.
Richard Liu (CFO)
Thank you, Operator. And thank you all for participating on today's call and for all your support. And we're pleased to be of interest in our company and look forward to reporting to you again next quarter on our progress.
Operator (participant)
Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect your line.