Full Truck Alliance - Q3 2023

Transcript

Operator (participant)

Ladies and gentlemen, good day and welcome to Full Truck Alliance's third quarter 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.

Mao Mao (Head of Investor Relations)

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's 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.

Hui Zhang (Founder, Chairman and CEO)

大家好，欢迎各位参加满帮2023年度第三季度业绩电话会。迈入2023年的下半年，

满帮的产品迎来了上线10周年，这个十年是中国公路物流数字化变革的十年，我们通过线上化、数字化、智能化，不断打磨产品和服务，获得了广大货主和司机的信赖。我们从零开始，现在覆盖到了全国300多个城市，10万条市到市的线路，数千万个发货地和收货地的QI，200多个工业品及消费品的行业货类，形成了扎实的全国货运网络效应和护城河。我们将继续围绕多快好省的用户核心诉求，以赋能企业更具物流竞争力为使命，打造企业一站式的物流平台为远景，致力为3000万中小企业，成为发货入口。

Mao Mao (Head of Investor Relations)

Hello, everyone. Thank you for joining us today on our third quarter 2023 earnings conference call. Entering the second half of 2023, the Yunmanman App has ushered in the 10th anniversary of its launch. This decade has witnessed the digital transformation of China's road transportation industry, and as a leader in the industry, we have continuously improved our products and services through offline to online migration, digitalization, and intelligentization, gaining trust among our shippers and truckers. We started from scratch and now cover over 300 cities across the country, with more than 100,000 shipping routes, tens of millions of shipping and receiving locations, and over 200 types of cargo from industrial and consumer categories. This has gradually formed a robust nationwide network effect and a highly competitive mode.

Centered around our core user value proposition of plentiful, fast, quality, and value for money, we will strive to empower enterprises with greater logistics competitiveness through the building of a one-stop logistics platform for 30 million small and medium-sized enterprises in China.

Hui Zhang (Founder, Chairman and CEO)

在本季度以来，我们在用户规模、产品运营、运力供给、一站式服务、用户体验五个方面稳步提升。在用户规模方面，货主月活达到了213万人，同比增长15%，订单同比增长27%，其中时刻货主规模持续放大。688和非会员预约订单同比增长32%，达到了总体45%。在产品运营方面，适合时刻的优车产品，通过实时的分线路的精细化建议价、算法和差异化的预约服务，帮助新用户解决发货和旅途中的问题，有效地推动了新用户的增长。适合专业物流货主的企業版也在稳步推进中。在运力供给方面，我们进一步加强了司机分层供给的体系化管理，提升司机技能，完善运力保障，推进运力规模增长和司机钱包份额的提升，充分的运力供给和匹配策略的优化，驱动成交效率明显上升。无需建议，直接抢单的订单获得了较大、更快的增长。在构建一站式服务方面，我们的满运保、金融保险等增值业务的渗透率持续扩大，联进价值商险，给司货双端用户带来了更好的 一站式服务。除了产品功能的投入和迭代，我们也非常重视用户体验。本季度我们把用户客服中心升级为7×24小时×365的全天候服务，随时响应用户的诉求。同时，我们也简化了接入人工客服的流程，完善了司货交易的特殊标签和判决体系，致力于解决司货交易的本质问题，提升用户的满意度。

Mao Mao (Head of Investor Relations)

...Let me provide an update on our progress in the third quarter. During the quarter, we have steadily improved in five key areas: user scale, product operations, supply of truckers, platform ecosystem, and user experience. First, regarding user scale, we have reached 2.13 million monthly active shippers, a 15% year-over-year increase, which drove a 27% year-over-year increase in the number of fulfilled orders. Notably, the scale of direct shippers continued to increase, with order volume from 688 members and 1688 membership shippers growing by 32% year-over-year and accounting for 45% of total order volume. Turning to product operations, our entrusted shipment model, a niche product for direct shippers, has effectively attracted new users by addressing their needs through refined pricing algorithms and improved fulfillment services.

We are also working on the launch of an enterprise edition targeting professional shippers. Moving on to the trucker supply, we have further enhanced our tiered trucker rating system, enabling truckers to improve their fulfillment capability and strengthen transportation support, eventually leading to an expanded trucker supply and ownership gain. Adequate transportation capacity supply and optimized matching strategies have significantly enhanced fulfillment efficiency. For instance, the pre-priced connection allowed truckers to respond directly to order postings without price negotiation, and the order volume for pre-priced transactions, including Tap and Go and entrusted shipments, continued to grow faster than the overall order volume in the third quarter.

Looking at our platform ecosystem, with goal of establishing a one-stop logistics platform, we have witnessed an increased user penetration of our value-added services, such as insurance and credit solutions, as well as freight brokerage services, which in turn contributed to a higher user thickness for both shippers and trucker members. Lastly, in addition to product functionality upgrades, we highly value the user experience. This quarter, we upgrade our customer service center to provide 24/7 services, promptly addressing user queries. Through simplified user access, we have streamlined the process of collecting user feedback, providing efficient end-to-end service, genuinely helping shippers and truckers solve problems, and therefore improving user satisfaction. Moving on to our financial highlights. We delivered another record-setting quarter in both our top line and the bottom line, driven by our further expanded business footprint.

Our third quarter revenues grew by 25.2% year-over-year to CNY 2.26 billion, and the Non-GAAP adjusted net income reached CNY 827 million, up 67.6% year-over-year, both surpassing market expectations. As we expand our revenue scale going forward, we will continue to optimize our revenue mix and elevate monetization efficiency, creating more value for our shareholders. Looking ahead to the fourth quarter, the government has introduced a series of policies supporting the development of the private economy, where logistics as a backbone of the real economy, has gained increasing importance and policy support within the process of strengthening, supplementing, and extending the industry trend. With the ongoing macro tailwind, we are confident in achieving sustained growth in order volume and revenue scale.

We will continue to invest in technological innovation and user experience, dedicated to providing more efficient, intelligent, and convenient logistics solutions to create greater value for our users as we make logistics hassle-free. We are determined to drive progress across the wider industry in collaboration with our partners, fostering an open ecosystem that benefits all. Thank you, everyone. Let me pass the call over to our CFO, Simon, who will provide an update on our third quarter business progress and financial results.

Simon Cai (CFO)

Thank you, Mr. Zhang, and thanks everyone for making time to join our earnings call today. I will start with our operational highlights for the third quarter of 2023, and then provide a brief overview of our financial results before the Q&A session... We delivered another record-setting quarter with many operational and financial improvements. Our fulfilled orders increased by 27% year-over-year during the third quarter. On a monthly basis, the average daily fulfilled orders from July to September show the sustained upward trend, hitting historical highs almost each month. The main drivers of this growth were the ongoing expansion of user scale and due end users increased engagement.

Our ability to continuously deliver both top line growth and margin expansion in the past three years in a highly volatile macro environment demonstrates an irreversible trend of online digitalization of the road transportation industry in China. Our average fulfillment rate for the quarter reached 29%, an improvement of more than four percentage points year-over-year. Among them, the average quarterly fulfillment rate of both 688 member and non-member shippers rose to roughly 50% respectively. With the order contribution from these two types of low and medium frequency shippers continue to grow, the overall fulfillment rate of our platform will further increase. Furthermore, we continue to manage and educate users on their order cancellation behavior. For example, as of the third quarter, the trucker's status can be identified based on data collected from trucker punch ins and trajectories.

When a shipper tries to cancel an order that was dispatched, a reminder window will pop up on the app, reducing the chance of shipper canceling the order by mistake. At the same time, we emphasize the importance of online fulfillment for shippers to accumulate credit, providing reminders when they show the tendency to transact offline and gradually cultivate their fulfillment habit. Looking ahead, we will continue to mitigate malicious order cancellations and reinforce the consciousness and behavior of closed loop transactions for due end users through a series of incentives and control policies. By user type, the order contribution from 688 member and non-member shippers has increased alongside the number of direct shippers, reaching 45% during the quarter.

More importantly, the contribution of pre-priced orders, such as Tap and Go, and entrusted shipment models, mainly used by direct shippers, has also improved, while the proportion of negotiated orders fell further this quarter. In addition, we have further streamlined the transaction process and improved the user experience. For example, for users of our entrusted shipment model, we have greatly improved their shipping and fulfillment experience by creating real-time order trajectory visuals, which in turn is driving the rapid order growth for that service segment. We believe that the order contribution from direct shippers will further rise as we continue to optimize the accessibility of our apps. Moving on to our users, our average shipper miles reached another record high of 2.13 million, up 15% from the same period last year, and 6.7% from the previous quarter.

The increase mainly came from the continued growth of 688 member and non-member shippers, the vast majority of which are direct shippers. During the quarter, we continued to provide more user-friendly products and services based on our core value proposition of plentiful, fast, quality, and value for money. Comprehensively tackling users' pain points and meeting various shippers' diverse freight needs to bolster our shipper penetration rate in the long-haul transportation market. In parallel, we are pleased to see that trucker activities has also remained high since the third quarter, with the number of active truckers fulfilling orders through FTA over the past 12 months, climbing to 3.79 million, and the trucker user base growing steadily quarter-over-quarter.

On top of that, our 12-month rolling retention rate of shipper members and next month's retention of truckers who responded to orders remains stable quarter-over-quarter, demonstrating that we continue to boost user engagement and stickiness. Lastly, our online transaction service sustained strong growth momentum in the third quarter, with revenues amounting to RMB 602.1 million, up 54.3% year-over-year, mainly due to the solid growth in the number of fulfilled orders and the increase in commissions per order. Our commission model covered approximately 58% of fulfilled orders and generated an average commission per order of RMB 24.3 during the quarter. Going forward, we'll continue to optimize the commission rate and extend our commission model coverage while providing more value-added services to our users.

Before going over to the, to this quarter's financials, we'll quickly review the progress of our share repurchase program. From August 23 to November 17, we purchased approximately 3.3 million ADS shares, totaling approximately $23 million. Since we announced the program, we have repurchased a total around 22.8 million ADS shares from the open market, with a total value of approximately $147 million. Looking ahead, looking ahead, we'll continue to reward our shareholders through buybacks. Now, I'd like to provide a brief overview of our 2023 third quarter financial results. Our total net revenues in the, in the third quarter were RMB 2,263.9 million, representing an increase of 25.2% year-over-year.

The increase in revenue was primarily attributable to an increase in revenues from freight matching services. Revenues from freight matching services, including service fees from freight brokerage models, membership fees from listing models, and commissions from online transaction services, were CNY 1,904.4 million in the third quarter, representing an increase of 25.8% year-over-year. Primarily due to an increase in revenues from freight brokerage service, as well as continued growth in transaction commissions. Revenue from freight brokerage service in the third quarter were CNY 1,070.2 million, up 18.4% year-over-year, primarily attributable to the continued growth in transaction volume as a result of strong user demand.

Revenues from freight listing service in the third quarter were RMB 232.1 million, up 5.6% year-over-year, primarily due to an increased number of total paying members. Revenues from transaction commissions amounted to RMB 602.1 million in the third quarter, up 64.3% year-over-year, primarily driven by an increased order volume as well as higher transaction commission per order. Revenues from value-added services in the quarter were RMB 359.5 million, up 22.1% year-over-year, mainly attributable to an increase in revenues from credit solutions and other value-added services. Our cost of revenues in the third quarter were RMB 1,142.1 million, compared with RMB 953 million in the same period last year.

The increase was primarily due to an increase in VAT-related tax surcharges and other tax costs, net of tax refunds from government authorities. These tax-related costs, net of refunds, totaled RMB 1.0325 billion, representing an increase of 19.1% year-over-year. Primarily due to continued increase in transaction activities involving our freight brokerage service. Our sales and marketing expenses in the third quarter were RMB 290.8 million, compared with RMB 232.9 million in the same period of 2022. The increase was primarily due to an increase in advertising and marketing expenses for user acquisition. General and administrative expenses in the third quarter were RMB 290.4 million, compared with RMB 206.6 million in the same period last year.

The increase was primarily due to higher share-based compensation expenses and the settlement of the U.S. securities class action, which was disclosed in the Form 6-K filed on September eighteenth, 2023. R&D expenses in the third quarter were CNY 237.7 million, compared with CNY 226.6 million in the same period last year. The increase was primarily due to higher share-based compensation expenses. Our income from operations in the quarter was CNY 247.5 million, an increase of 74.4% from CNY 141.7 million in the same period last year. Net income in the third quarter was CNY 618.4 million, an increase of 56.4% from CNY 395.5 million in the same period last year.

Under non-GAAP measures, our adjusted operating income in the third quarter was RMB 458.5 million, an increase of 88.8% from RMB 242.8 million in the same period last year. Our adjusted net income in the third quarter was RMB 826.6 million, an increase of 67.6% from RMB 493 million in the same period last year. Basic and diluted net income per ADS were RMB 0.58 in the third quarter, compared with basic and diluted net income per ADS of RMB 0.37 in the same period last year.

Non-GAAP adjusted basic and diluted net income per ADS were CNY 0.78 in the third quarter, compared with CNY 0.46 in the same period last year. As of September 30, 2023, the company had cash and cash equivalents, restricted cash, short-term investments, long-term time deposits, and wealth management products of CNY 27.4 billion in total, compared with CNY 26.3 billion as of December 31, 2022. In the third quarter this year, net cash provided by operating activities was CNY 717.1 million.

For our business outlook for the coming quarter, in the first quarter of 2023, we expect our total net revenues to be between RMB 2.27 billion and RMB 2.32 billion, representing a year-over-year growth rate of approximately 18.2% to 20.6%. This forecast reflect the company's 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 hereof. That concludes our prepared remarks. We would now like to open the call to Q&A. Operator, please go ahead.

Operator (participant)

We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone 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 comes from Ronald Keung with Goldman Sachs. Please go ahead.

Ronald Keung (Head of Asia Internet Research)

Thank you, Hui Zhang. Thank you, Simon. Thank you, Hui Zhang and Simon. In the third quarter, we've seen that the number of fulfilled orders increased quite healthily, 27% year-on-year. What were the key drivers of the growth in fulfilled order, and what do you expect for the trend in the fourth quarter? Thank you.

Simon Cai (CFO)

Thank you, Ronald. In the third quarter, we witnessed sustained growth in order volumes within the full truckload long haul sector, and this growth can be primarily attributable to two key drivers. First, our growing shipper base and our further optimized product features have led to an increase in usage by our existing users. And this trend stems from the nationwide shift towards more efficient matching and platform-based solutions, and gradually replacing traditional offline models. And users naturally choose to use platforms that offer competitive advantages. Additionally, our unique business model and exceptional network effects have also significantly contributed to our order growth.

We selected a group, a sample group of shippers who are active since 2021, and we found that the volume of fulfilled orders for this group of users increased by about 15% year-over-year in the third quarter. This illustrate our platform's resilience and stickiness, as well as our strong network effect and extremely high entry barriers we have established in the long-haul road freight industry. The nationwide coverage and robust defensive mechanism of our platform created an irreplaceable advantage in the market. Looking forward to the fourth quarter, we anticipate that in line with the continued expansion of our user base, the steady improvement in our user engagement and stickiness, coupled with the arrival of the peak freight season, and the volume of fulfilled orders will continue to grow.

Ronald Keung (Head of Asia Internet Research)

Thank you, Simon.

Operator (participant)

The next question comes from Eddie Wong with Morgan Stanley. Please go ahead.

Eddy Wang (Executive Director, Equity Research)

Thank you, Hui Zhang, Simon Cai, Mao Mao. This is my question. Thank you, management, for taking my question. My question is regarding the shipper MAU. In the third quarter, the average shipper MAU reached 2.13 million, which implies a 15% year-over-year growth and 6.7% quarter-over-quarter growth.

Ronald Keung (Head of Asia Internet Research)

What is the primary reason behind this growth? And how can you describe the user structure? What is the expected growth rate for the fourth quarter? Thank you.

Simon Cai (CFO)

Thank you, Eddie. In the first quarter, we witnessed a continued rapid growth in the average shipper monthly active user base. This growth can be attributed to two primary factors. First, our effective user acquisition strategy played a very important role. Through a combination of online promotions and offline on-the-ground field marketing, we have expanded the platform's brand exposure and recognition, effectively attracting more users to join the platform. For online, we have primarily employed methods such as app store promotions, sponsored content in information feeds and search engine marketing to reach out to potential users. Offline, our field marketing teams and vehicle stickers have played a substantial role in acquiring new users, especially direct shippers.

Secondly, we have continued continually refine our product features and services, including the introduction of simplified shipping processes and optimization in our less-than-truckload services. These measures have significantly improved the conversion rate of new users and increased engagement and loyalty of the existing users, making them more inclined to use our platform for shipping. From a user structure perspective, there has been a sustained increase in the proportion of direct shippers. The average shipper miles of direct shippers has experienced nearly 17% year-over-year growth. As we look ahead to the fourth quarter, we will continue to closely monitor changes in user activities and user structural changes. We will strive to execute proactive user acquisition strategies and explore new business and product models to attract more high-quality direct shippers.

Ronald Keung (Head of Asia Internet Research)

Thank you, Simon, sir.

Operator (participant)

The next question comes from Charlie Chen with China Renaissance. Please go ahead.

Charlie Chen (Head of Asian Research)

In the third quarter, revenue from the freight brokerage service grew by 18.4% year-on-year, maintaining a very strong growth record. How should we understand the current competitive landscape of this, freight brokerage industry and the Full Truck Alliance position in this field? Thank you.

Simon Cai (CFO)

Thank you, Charlie. In recent years, the freight industry has faced a series of challenges, particularly the impact of the pandemic. This led to the closure of several small freight brokerage platforms due to insufficient cash flow, resulting in a gradual reduction of players in the market. The major players in the industries are now predominantly medium to large-sized national freight platforms. However, these large platforms often provide relatively singular product offering, which users who are highly price sensitive and exhibit low brand loyalty. And furthermore, such platforms typically have relatively weak freight matching capabilities and suffer from a lack of available orders, making it difficult to attract a large number of truckers. As a result, they primarily rely on invoicing or other services to generate profit.

In contrast, our FTA leverages its leading position in the industry and a nationwide network to establish itself as a prominent brand, enhance freight matching efficiency and lower user acquisition cost, and maintain relatively high gross margin compared to competitors. Currently, in our freight brokerage service, nearly 50% of orders are completed through platform-assisted freight matching, meaning that shippers who use our freight brokerage service has genuine needs to get a match for stranger truckers. Through cross-selling services, such as closed-loop commission and value-added services, FTA has created a diverse and comprehensive product mix and monetization model. This comprehensive advantage has allowed FTA to stand out in a highly competitive market and maintain higher service fees, solidifying its market position. The company's capabilities and business model enabled the provision of high-quality freight services to meet user demands and generate sustainable profits.

Charlie Chen (Head of Asian Research)

Thank you, Simon.

Operator (participant)

The next question comes from Brian Gong with Citi. Please go ahead.

Brian Gong (VP, Equity Research)

... Hey, Hui Zhang, Simon Cai, Mao Mao, well, good afternoon. First, congratulations on the very good results. I have a very quick question, which is about our membership fees. Third quarter membership fee revenue increased by 5.6% year-on-year, it seems, compared to the other segments, the revenue growth was slightly slower. Can you further introduce the growth situation of our members this quarter, and what kind of operational strategies and measures will be adopted in the future to promote the growth of this membership fee revenue? I will translate myself. In the third quarter, membership fee revenue increased by 5.6% year-on-year, which was lower than the other segments.

Could management please provide an update on the growth of shipper members in the third quarter, and what operational strategies and measures will be taken in the future to drive the growth of membership fee revenue? Thank you.

Simon Cai (CFO)

Thank you, Brian. Since 2018, we have been monetizing the Freight Yellow Page service through the introduction of membership system. Members enjoy more privileges than non-paying users, including the ability to post orders. Currently, there are two membership tiers. The first tier members paying an annual fee of RMB 688, allowing them to post up to 100 orders per year, primarily serving mid to low-frequency direct shippers. The second tier membership is designed for high-frequency shippers who pay an annual fee of RMB 1,688, enabling them to post up to 1,688 orders per year. The platform occasionally introduces membership benefits to ensure that members receive additional order posting rights.

From an operational synergy perspective, for high-frequency shippers, FTA has achieved a high level of user penetration compared to the traditional models, where shippers had to pay at least CNY 10,000 for logistics park fee rental fee. FTA has gradually replaced logistics parks, and the cost per shipment is reduced to less than CNY 1, $1 per order. Membership fees are significantly cheaper compared to traditional logistics park booth rental fees. For this user segment, FTA mainly monetizes through cross-selling value-added services and commissions, increasing the revenue scale of our other business. For mid- to low-frequency direct shippers, new shipper users entering the platform are mostly direct shippers. Hence, the number of 688 members has been steadily growing over the past few quarters.

Looking at the market size of millions of small and medium-sized business owners in China, there's still considerable growth potential. However, we observed that the number of orders corresponding to 688 members exceed the usage needs of some low-frequency users. Based on this, our operational team are actively devising product strategies in attempt to develop packages that are more suitable for low-frequency shippers. Additionally, while the ARPU for direct shipper members appears relatively low, their freight rates are higher, and they exhibit better fulfillment rates, offering greater monetization potential through commissions and cross-selling value-added services. In the long term, direct shippers are not only the main driving force for future membership fee growth, but also present opportunities for growth in other business lines.

Brian Gong (VP, Equity Research)

Thank you.

Operator (participant)

The next question comes from Qilu Li with CICC. Please go ahead.

Qilu Li (Research Analyst)

感谢张辉总，Simon总，毛毛啊，接受我的提问。那我这边主要还是有一个问题啊，就是我们也观察到第三季度这个公司的抽佣订单渗透率是在58%左右，比上个季度的59%，是略有下降。想问问这里主要的原因是什么呢？那我这边也简单翻译一下。Thanks, management, taking my question.

We noticed that the penetration rate of the commission model in the third quarter was around 58%, slightly lower than 59% in the previous quarter. So what are the main reasons for this? Thanks.

Simon Cai (CFO)

Thank you. That's a good question. In the past quarter, revenues from commission model reached around RMB 600 million, increasing by over 54% year-over-year. This strong growth was primarily due to the overall increase in order volume and continued improvement in commission rates. Operationally, we have been primarily focused on scaling the platform as a whole, with no additional city expansion or significant adjustment to our commission strategy. Nevertheless, we have conducted stress tests with higher commission rates in certain cities to prepare for potential future increase in commission rates and penetration rates. The penetration rate of a particular transaction type is defined as the number of commission orders for the transaction divided by the number of total order volume.

At the time of our IPO back in 2021, our short-haul transaction commission business was very small, hence it was classified under the value-added services line of our revenue. The transaction commission revenue line does not include short-haul contribution. So when calculating penetration rate, the numerator excludes fulfilled short-haul orders, while the denominator include both long-haul and short-haul orders. In the past quarter, the penetration rate was approximately 58%, showing a slight decrease compared to the previous quarter, primarily due to the fast increase of short-haul fulfilled orders under our Shengshen brand. The commission penetration rate for long-haul orders remained stable quarter-over-quarter. Looking ahead, our focus will remain on increasing the penetration rate of our commission model and adjusting commission rates. Both are critical metrics for our core business.

We'll achieve this through operational optimization and market expansion to ensure sustained rapid growth.

Operator (participant)

This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.

Mao Mao (Head of Investor Relations)

Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Full Truck Alliance or TPG Investor Relations. Our contact information for IR in both China and the U.S. can be found in today's press release. Have a good day.

Operator (participant)

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.