Thank you, operator. Good evening and good morning, everyone.

Welcome to our second quarter of 2026 earnings conference call. Joining us today are Mr.

Xing Wang, Chairman and CEO; and Mr. Shaohui Chen, Senior Vice President and the CFO of Meituan.

For today's call, management will first provide a review of our second quarter of 2026 results, and then conduct a Q&A session. Before we start, we would like to remind you that our presentation contains forward-looking statements, which include a number of risks and uncertainties, and may differ from actual results in the future.

This presentation also contains unaudited non-IFRS accounting standards financial measures that should be considered in addition to, and not as a substitute for measures of the company's financial performance prepared in accordance with IFRS accounting standards. For a detailed discussion of risk factors and non-IFRS accounting standard measures, please refer to the disclosure documents in the IR section of our website.

Now, I will turn the call over to Mr. Xing Wang.

Please go ahead, Xing.

Thank you, Scarlett, and hello, everyone. In the second quarter, our total revenue grew 14.4% year-over-year, and net profit turned positive.

Both Core Local Commerce and New Initiatives delivered solid results. We remain focused on our retail plus technology strategy, improving business quality and driving the high-quality growth across the industry.

As the go-to local services platform for consumers and merchants, our ecosystem continued to strengthen. We pushed forward with product and business innovations while stepping up investment in our ecosystem and technology to build a long-term value.

We also expanded our grocery retail and overseas businesses, with continued gains in operating efficiency. On the AI front, we made further progress in foundation models, as well as in AI agent applications.

Now, let me walk you through the details. In the second quarter, the quick-commerce industry shifted its focus to improving marketing and operating efficiencies.

Against this backdrop, our strong consumer mindshare and core competitive advantages translated into healthier financial results. Order mix and user quality continued to impose improve uh steadily.

For food delivery, core user stickiness strengthened further, with purchase frequency, retention, and average order value all trending up. Meituan InstaShopping maintained healthy new user acquisition, with the post-2005 uh generation growing particularly fast, while existing users also increased their order frequency.

Despite a high base from last year and evolving consumption trends, we actively pursued new growth opportunities, improving our supply offerings, strengthening product competitiveness, and deepening our understanding of user needs for different consumption scenarios. For food delivery, Pinhaofan improved its ability to identify consumer demand, and accelerated the roll-out of hit products from chain merchants.

Shenqiangshou continued to raise the bar on supply quality, catering to mid-to-high-end consumers seeking quality upgrades. We also steadily expanded innova- innovative store formats, such as branded satellite stores, [Pin Pai Wei Xing Dian?]

, creating incremental value for merchants. For Meituan InstaShopping, Meituan Instamart maintained rapid growth, and remained a key growth engine.

Waimai Songjiu expanded quickly across the majority of provinces in in China. It also launched more private-label products.

In June, it rolled out an anti- uh counterfeiting verification system to safeguard product authenticity for high-end alcohol. Songshu Bianli also accelerated its market penetration, leveraging customized product development and factory partnerships to enhance product competitiveness and better serve users in night-times and travel scenarios.

We also took more proactive steps to strengthen our platform ecosystem, deepening merchant support and empowerment. We continued to lead the industry in food safety governance and improved courier welfare.

In Q2, we fully rolled out 10 key initiatives under trusted food delivery, [Fang Xin Wai Mai?] , establishing an end-to-end food safety system spanning four pillars: pre-onboarding screening, in-process monitoring, crackdown on fraud and illicit activities, and colla- collaborative public oversight.

To address evolving industry needs, we launched the first comprehensive AI solution built for the quick-commerce industry. We also scaled up AI-powered tools, helping merchants optimize their online operation efficiency.

Around the peak holiday seasons, we supported 220,000 small- and medium-sized restaurant merchants with funding, operational supplies, equipment upgrades, AI tools, and store renovations. In Q2, we also launched a special program to boost demand in lower-tier markets, and energize uh county-level economies.

In the second half of the year, this program will expand to nearly 400 counties nationwide, helping over a half a million small- and medium-sized merchants digitize their operations. On courier welfare, we have expanded the the Occupational Injury Insurance Program nationwide, covering every order and every courier.

In addition, we continued to refine our algorithms, and just recently, we pioneered um pause the clock at red light, [Deng Deng Ting Biao?] , rolling out this feature first in Beijing.

Going forward, occupational injury insurance, pension insurance subsidies, and our Critical Illness Care Program for couriers and their families will together form a robust and comprehensive welfare framework. This quarter, we further strengthened our position as the preferred platform for local services, sustaining high-quality growth across our in-store, hotel, and travel business.

Despite a changing consumer consumption environment and intensifying industry competition, we continued to enrich our supply with more diverse, high-quality offerings, while elevating the overall user experience. Meanwhile, we push the industry further from choosing the uh right merchants to choosing the right artisans and the right experiences.

We saw a clear shift in local services consumption from standardized spending towards more personalized, uh experiential, and emotion-driven experiences. Authentic experiences and deep engagement are playing an increasingly important role in consumers' decision-making.

This quarter, we released the new Must-Eat List, [Bi Chi Bang?] , curated from 1.5 billion authentic user reviews.

It now covers 264 cities and regions globally, with 120 newly added cities. Through genuine user recommendations, more long-standing local restaurants, specialty dining spots, and hidden culinary gems are being discovered.

The Must-Visit List, [Bi Wan Bang?] , also continued to expand into more immersive, interactive, and interest-driven scenarios.

We believe that in the AI era, authentic experiences, authentic reviews, and authentic trust will continue to be the most vital infrastructure for the local services industry, and we will continue to strengthen our unique advantages in this area. In addition, we are leveraging AI to enhance both consumer experience and merchant operations.

For complex local services decisions, consumers increasingly turn to Xiaotuan, our AI assistant built-in uh Meituan app. As adoption grows, we are seeing a meaningful lift in user engagement on Meituan.

We also continued to elevate the consumer experience with integrated services, like uh pick-up now, [Miao Ti?] , or online reservations, uh advanced online ordering, smart queuing, and in-store smart ordering.

These features give consumer a more seamless experience across a wide wider range of scenarios. Our partnership with Tencent is progressing um rapidly, with both teams refining the product to deliver faster, more convenient services.

Beyond serving consumers, we are extending Meituan's operational expertise across industries through AI agents. On the Catapult platform, we are rolling out specialized AI agents across restaurants, services retail, medicines and health, and hotels and travel.

These AI agents help merchants in uh improving daily operations and driving tangible efficiency gains. This marked our evolving role from merchants' online channel to their AI business partner.

Looking ahead, we want to be more than a platform that connects consumers and merchants. We aim to become a digital copilot for merchants on our platform.

Now, let's move on to New Initiatives. In the second quarter, both grocery retail and Keeta maintained uh very rapid growth while further improving uh operating efficiency.

For grocery retail, Xiaoxiang Supermarket accelerated its expansion, and now operates across 68 cities. We continue to strengthen our supply chain and enhance our merchandising capabilities, with private-label products accounting for a growing share of our GTV.

We also expanded our offline footprint. In July, we opened our third uh Xiaoxiang Supermarket offline store in Hangzhou.

We scaled the Happy Monkey model to serve community scenarios, with 40 stores in operation as of Q2. For Keeta, we sustained um strong growth momentum alongside continued efficiency gains.

By market, Hong Kong has reached stable profitability. The Middle East delivered um further sequential improvement in operating efficiency.

In Brazil, we focused on Sao Paulo market. Going forward, we will continue to leverage our strengths in product, technology, and operations to deliver a superior consumption and delivery experience to Keeta users.

Reflecting on the second quarter, our focus was on building core operational capabilities. We continue to enhance supply quality, expand consumption scenarios, and deliver high-quality growth while steadily improving uh efficiencies.

Looking ahead, we see broad room for growth across the industry. Many niche local service needs remained underserved, and there is still significant potential to elevate both service experience and operating efficiency.

We'll move decisively to capture these growth opportunities, continuously iterating on our products and services, and actively deploying AI in real-world consumption scenarios. Our goal is to further extend our competitive edge in supply diversity, user experience, and operational efficiency.

At the same time, we'll remain committed to our social responsibilities, strengthening food safety governance, improving courier welfare, and empowering small- and medium-sized merchants. We will continue to drive the industry toward a higher-quality, and more sustainable development.

With that, I will turn the call over to Shaohui for an update to uh on our latest financial results.

Thank you, Xing. Hello, everyone.

With the on-demand industry gradually shifting toward efficiency improvements, our focus on operational execution and structural advantages translated into meaningful financial improvements. Revenue growth accelerated and the business turned profitable in Q2.

Now, let's look at our financial results in details. All comparisons are on a year-over-year basis unless otherwise noted.

Total revenue grew by 14.4% to RMB 104.6 billion this quarter. Cost of revenue ratio edged down to 66.5%.

The accelerated revenue growth and better controlled cost ratio were both primarily driven by the improved marketing efficiency. This reflected our continued focus on quality growth amid dynamic and competitive environment.

Selling and marketing expenses ratio also went down to 23.6%, mainly due to more disciplined marketing spending. R&D expenses ratio increased to 7.3% as we increased investment in AI, while the G&A expenses ratio remaining stable at 3.1%.

We turned profitable this quarter with total segment operating profit and adjusted net profit reaching RMB 3.9 billion and RMB 2.5 billion, respectively. As of end of June, we held cash and cash equivalents and short-term treasury investments totaling RMB 168.3 billion.

As of June 30th, our investment portfolio was nearly RMB 77.3 billion. Separately, fair value changes in certain of our investments resulted in an RMB 22.2 billion gain recognized in other comprehensive income rather than P&L this quarter.

We will be thoughtful and disciplined about evaluating exit opportunity for our investment portfolio along the way to provide more capital resources for our business and for shareholder return. Now, let's look at the segment results, starting with the Core Local Commerce segment.

Revenue reached RMB 71.5 billion in Q2, with year-over-year growth accelerating to 10.1%. Delivery service revenue and merchant service revenue both picked up growth pace during this quarter, while product sales delivering a solid year-over-year growth of 78.9%.

We are pleased to see our food delivery turned to positive year-over-year revenue growth this quarter. Our strategic focus on higher-AOV order segment, core user base, and operational efficiency continues to bear fruit.

We improved our leadership in both order volume and GTV this quarter. A healthier order mix has driven year-over-year recovery in our food delivery net AOV.

We also improved our marketing efficiency. However, the industry subsidy levels are still well above where they were in 2024, and we expect normalization will take time as market evolve.

On Meituan InstaShopping, it continued to deliver steady growth, with revenue growing faster than order volume on a year-over-year basis. This was primarily driven by two factors: the rapid expansion of our 1P business and strong advertising traction as more retail brands allocate marketing budget to our platform.

Revenue of our in-store, hotel, and travel business also grew steadily, and we continue to lead in core categories. Turning to profitability.

Segment operating profit turned profitable to RMB 5.7 billion this quarter. On-demand delivery unit economics turned positive, with our UE across both food and non-food categories staying far ahead of the industry.

The significant sequential improvements in UE was driven by seasonal tailwinds and meaningful subsidy reduction. With our strategic focus on high-quality growth and ROI-driven resources allocation, our in-store, hotel, and travel business also improved its operating profit margin sequentially, despite intensified industry competition.

All of these gains more than offset our increased investments in brand marketing and promotional expenses. Now, turning to our New Initiatives segment.

Revenue in Q2 was up 25% to RMB 33.1 billion. Segment operating loss narrowed sequentially to RMB 1.7 billion.

The rapid expansion of our grocery retail business contributed meaningfully to the segment's revenue growth, while losses from grocery retail increased quarter-over-quarter on a faster-growing business scale. We continue to see steady operational efficiency gains across the board, and its margin also improved.

On Keeta, growth momentum across Hong Kong and the Middle East remains strong. The losses narrowed quarter-on-quarter as operational efficiency improved across Hong Kong and Middle East markets.

Hong Kong is now profitable on a sustained basis, and unit economics in the Middle East continue to trend in the right direction. After navigating an intense competitive environment over the past year, the results we are seeing today prove our execution capability on quality growth and operational efficiency improvement.

The path forward is about compounding our advantages in product, ser- services, technology, and ecosystem, so that we can deliver more value to all stakeholders. We remain deeply committed in our long-term potential.

With that, we are now open for Q&A.

Hi, good evening. Thanks, management, for taking my questions.

Um how does management view the competitive landscape in food delivery and quick-commerce space? Uh specifically, what trends are you seeing in Meituan market share within the mid-to-high AOV order segment?

Looking into Q3, as industry subsidies gradually normalize, how do you expect the unit economics for food delivery to trend sequentially uh versus Q2? Thank you.

Thank you, Thomas, for the question. Let me first share some thoughts on where we see the food delivery industry is heading.

We are seeing a shift across the industry toward greater focus on marketing and operational efficiency. We believe competition will gradually shift back to what we what really matters: quality, service, and the innovation, as regulators provide further guidance on subsidy practice.

That will drive healthier industry development, and create a fair field for companies with genuine core competence. We are already seeing that play out.

Over the past few months, our advantage across user mix, order mix, and operational efficiency have continued to strengthen. We extended our lead in both order volume and GTV on sequential basis.

Particularly, in the mid-to-higher AOV segment, our focus on enhancing membership benefits, expanding premium supply, and elevating service quality are paying off. We are seeing deeper engagement and stronger mindshare among premium users for our brand.

For Meituan InstaShopping, we also maintain our industry-leading position. Quick-commerce has fundamentally reshaped consumer expectations around convenience and reliability.

It is an irreversible lifestyle shift. With adoption still at an early stage across different consumer groups, we see a significant long-term opportunity ahead.

While we recognize the pressure from a high base last year and a broader macro environment, we focus on strengthening our operational capability to build a solid foundation for high-quality, sustainable growth in the long term. Over the years, we built a diversified quick-commerce supply network, spanning a wide range of offline retailers and dark stores.

That's the solid foundation for us to meet evolving consumer needs and drive broader adoption of on-demand consumption over time. Going forward, we will keep investing in product competitiveness, supply chain integration, and supply diversity to deepen our consumer mindshare across different categories.

On Q3 outlook, we expect food delivery unit economics to improve meaningfully year-over-year, but it will still be impacted by seasonality on sequential basis. Even so, we expect UE to stay positive in Q3, as we continue to optimize operational efficiency.

Specifically, the industry subsidy level is still much higher than 2024 level, and it will take a few quarters to normalize. At the same time, seasonal headwinds will weigh meaningfully on our UE.

As we mentioned before, Q3 is the peak season for on-demand delivery, driven by summer activity. It's also when we ramp up our marketing spending sequentially to capture the highest demand window of the year.

We will also provide additional subsidy to our couriers to ensure our delivery service quality through the peak season and on extreme hot weather conditions. As such, delivery costs per order in Q3 will be higher than that in Q2.

On top of that, the Occupational Injury Insurance began its nationwide rollout on July 1st, which adds another cost layer. However, I want to highlight that the near-term UE fluctuations are primarily driven by seasonality and our proactive strategic decisions to balance scale, profitability, and ecosystem.

We are very confident to sustain our marketing market leadership and stay far ahead on UE across both food and non-food categories. That confidence is grounded in our improving user mix and operational efficiency.

Our ongoing investment in the ecosystem is also deepening our moat. In fact, under the current market environment, we are in a good position to focus on our strategic priorities them that matter most over the long term.

Our UE recovery has clear visibility, and it will gradually get back to a reasonable level in the mid-to-long term. Thank you.

Thank you.

Thanks Xing, Shaohui, Scarlett, and Wen. I want to ask about your AI side on LongCat 2.0.

Now, it's been open-sourced and being rolled out internally. How does management think about its role in your broader AI strategy?

Beyond internal efficiency, is there a path to commercializing the LLM, and how should we think about the financial impact of our AI investments near-term versus medium- to longer-term? Thank you.

Uh

thank you, Ronald. Uh I would begin with uh LongCat 2.0 is an important uh foundation for our AI strategy.

What we are really focusing on uh is evolving our AI to bridge the digital and physical worlds, and doing so uh deepens Meituan's competitive moat in local services uh over the long term. For us, AI is less about competing on the models, it's more about leveraging AI to uh reshape our organization, product, and workflow.

Uh as we have explained in the past, uh Meituan's AI strategy uh has three pillars: building LLM, AI at work, and AI in products. LongCat 2.0 is our uh next-generation in-house foundation model.

Uh it's one of the first, if not the first, um um trillion-parameter model uh trained entirely on uh Chinese infrastructure. It's uh open weight, and we have roll out rolled out across our core internal needs, including our uh software emp- uh developing and operations, customer service, and uh AI agents.

Uh LongCat 2.0 has uh made significant progress in core agentic capabilities, uh particularly in coding, reasoning, and tool calling, and complex task execution. It has gained uh positive feedbacks across the global uh developer community.

Uh we believe AI creates uh lasting value where it's deeply embedded in real workflow, and when it can solve real problems as a reliable infrastructure. Our full-stack domestic infrastructure for uh training and inference gives us a structural advantage in cost, uh infrastructure control over the long run.

Uh on the product side, we continue to upgrade our AI product offerings, uh including our uh AI assistant Xiaotuan, uh built-in inside the Meituan app. The direction is very clear: from understanding complex multi-constraint queries to full agentic task execution.

Ultimately, we want to deliver a seamless, closed-loop experience that takes users from discovery and decision-making all the way through to transaction and fulfillment. The key is making this uh deeply integrated with real-world local services scenarios.

Uh on the organiza- organizational side, AI adoption is deepening and driving productivity across the board. More of our employees are now using AI tools daily, and AI-generated code as a share of the total output continues to climb.

At this stage, our priority is to keep building our AI capability, driving real AI adoption across our uh business operations. Uh as I said uh in the past, we are not uh going to compete to be a token factory.

Our focus is on using our models and AI products to strengthen our core businesses. We hope to provide a better experience for both users and merchants, while also improving our internal operating efficiency.

We will access um our we'll assess our AI strategy with an uh ROI-oriented approach, and stay uh disciplined for capital allocation. Thank you.

Thank you, Xing.

Hi, good evening, management, and congrats on the um strong results. Uh I have a question on the in-store business.

Uh could management update us on the competitive landscape for in-store? Are you seeing any rational shifts towards monetization and profitability among competitors, and has the macro headwind be a meaningful drag on the business?

Looking into the second half, uh how is management balancing growth and margin, and is there a clear path to margin recovery from here? Uh thank you.

Thank you, Kenneth, for the question on in-store business. The competitive landscape in the in-store sector looks very different today versus a few years ago.

The market is much bigger. There are new players, more players, and uh different players.

We are seeing market players increasingly differentiate across user groups, consumption scenarios, and merchant segments. For us, our one-stop local service offering and authentic review system are well-positioned and consistently deliver value to both users and merchants.

Our operating priority is very clear. We are not going after subsidy-driven, low-quality orders.

What we are focused on is strengthening our competitive position in core categories and deliver better services to our core users and merchants, and to pursue high-quality growth, and allocate our resources more ROI-driven. Over the past few quarters, we've seen competitors stepping up investment in local service space through a dedicated shelf-based app.

They have been subsid- subsid- sizing heavily to redirect the traffic from their content-driven model to accelerate the app- adoption of the new app. Aggressive subsidy did bring in many price-sensitive users, particularly in lower-tier cities, but these users typically show weaker repurchase behavior.

We haven't seen meaningful impact on our core users or our core merchants, and our in-store GTV quality and redemption rates continue to run meaningfully ahead of key competitors. While macro has weighted on AOV in certain category, the local service sector has proven to be quite resilient overall compared to the e-commerce sector.

Online penetration across service retail category is still relatively low, there's long runway ahead. We now serve over 8 million merchants across 200-plus categories, and we are still seeing new demand emerging, whether that's new consumption scenarios, new service offerings, or more merchants looking to go digital.

For example, we are recently seeing categories like sports and wellness and immersive entertainment service accelerated their shift online. We are still confident about the long-term growth trajectory of the in-store business.

At the same time, heading into the second half, we are investing further to capture the growth opportunity. We will continue to strengthen our competitive positioning in core categories, in core user groups, and core merchant segments.

Beyond that, we will help more local merchants to digitize operation. Our goal is to go beyond being a traffic source for merchants.

We want to be the platform they run their business on, and over time, an AI-powered partner that helps them operate smarter and grow faster. At the same time, we'll continue to cut low-ROI spending and improve our resources allocation efficiency.

We will continue to realize the synergy between our in-store business and our quick-commerce business. On margin side, it's likely the operating margin will come down from Q2 due to our increased investment in Q3 and Q4 for our in-store business.

As competition gradually normalize in future, we believe our focus on ROI-driven investment and operational efficiency will translate into gradual margin improvement over the medium- to long-term. Thank you.

Thank you.

Good evening, management, and congratulations on an amazing set of results. Um thank you very much for taking my question.

Um could management give us an update on Xiaoxiang Supermarket and Happy Monkey? How they have been tracking recently, and where things stand on your omnichannel strategy?

Um are there any updates on their expansion plans from here? Thank you.

Uh

thank you, Charlene. Uh first, let's be clear.

Uh the mission of Meituan has always been to help people eat better and live better. Uh we believe more and more people will order food online, but if you still want to uh cook for yourself, you'll need to buy grocery.

That's why we consider both uh Xiaoxiang Supermarket and Happy Monkey to be a very important part of our grocery retail. Uh grocery retail is deeply aligned with our mission, and therefore, they are one of our key strategic uh priorities, uh in the past decade and over the next decade.

It will take a long time to uh do it right. Online penetration here is still low, uh and we see a significant growth opportunity ahead.

Uh but we believe uh the right approach is to do uh omnichannel, uh bringing both online and offline store uh on the same platform. On-demand retail is uh gradually changing how consumers shop uh groceries.

Um uh while In the past, people used to uh visit wet markets in the morning, or stock up uh at a um very large uh supermarket or warehouse, uh members membership warehouse, uh and every week, or every few days. Now, more and more consumers are uh adopting uh on-demand delivery services.

They just buy uh order what they need, uh when they need it, uh because they are confident that they can get it uh within 30 minutes. Once this habit is established, their purchase frequency goes up um significantly over time.

Uh and we believe the uh long-term consumption potential per user will be very huge very substantial. Talking about uh Xiaoxiang Supermarket, we continue to accelerate uh our coverage expansion in Q2.

Now Xiaoxiang operates in uh 68 cities. The GTV growth remains very strong, and we are seeing a steady improvement in uh operating efficiencies.

As we are committed to executing uh our omnichannel strategy, we are also uh actively exploring Xiaoxiang's uh offline uh store. Uh we opened our first offline store in Beijing last December, and we opened our second in Ningbo in April, and the third uh in Hangzhou in July.

In in this August, we uh we opened uh the the fourth store in Ningbo, uh and the fifth one in Shenzhen, uh exactly today. Uh we believe the online uh dark store allows us to scale up across cities quickly, and cover most of our targeted consumers.

Meanwhile, a select a select number of offline flagship stores will also play a very important role in the overall ecosystem. Walking into our offline stores, consumers can see, they can smell, and they can touch the products.

That sensory experience is something that cannot get from a uh a digital screen. It builds strong trust in both our products and brands.

In-store shopping naturally exposes uh consumers to a much broader range of products. Over time, we hope this uh omnichannel strat- strategy will help Xiaoxiang become one of the most trusted and recognized grocery brands in China.

Next, let's talk about uh Happy Monkey. Uh that's our neighborhood uh grocery format.

As of Q2, we have opened uh 40 Happy Monkey stores. Unlike Xiaoxiang's offline flagship store, Happy Monkey is built around a different uh value proposition.

It has a much smaller, uh more uh flexible store format, with a high uh private-label mix and curated uh SKU selection, focused on delivering strong value-for-money products within local uh communities. We see these two businesses as differentiated and complementary models.

Uh however, um Happy Monkey is still at an very early stage, and we will continue to refine our operational uh merchandising capability as we uh move forward. Regarding our long-term investment plans, we believe the true moat in grocery retail are organizational and supply chain capabilities.

These take time to build, but once in place, they unlock a very large addressable market. What gives us confidence is that uh consumer demand for high-quality grocery products is far beyond top-tier cities.

Many consumers in mid-sized cities, even counties in more developed regions, have good uh consumption power. They also have a strong demand for better products, especially for groceries.

This is also why we are exploring different um grocery models to better serve different cities and different consumer needs. Going forward, we will continue to strengthen uh our merchandising capability and deepen our supply chain collaboration across our grocery retail businesses, to build a more differentiated advantage.

There are significant long-term opportunities for us in this space, and we will grow these businesses in a disciplined and sustainable way. Thank you.

Thank you.

Hi, thank you uh management for the opportunity. Uh could you uh please uh give us some update on uh Keeta?

Uh it looks like that Keeta's traffic and app downloads have continuously uh been increasing. Uh how are you thinking about the expansion pace and also investment budget for Brazil?

More broadly, how should we think about the overseas investments in the second half? Thank you.

Uh

thank you, Gary. Um before getting into Brazil, I think we can take a review of the markets we entered earlier.

Because the progress we have seen there has proven our operational approaches in overseas markets. In Hong Kong, we launched Keeta in May '23, and UE turned profitable in uh October '25.

It took us about 29 months to reach that milestone. In our second market, Saudi Arabia, we entered the market in September '24.

I'm very glad to report that uh it has already turned profitable in July this year. That uh that means it took us 22 months to get to that milestone.

Even faster than Hong Kong. What's more important here is that Saudi Arabia is a much bigger market than Hong Kong.

Uh and we are unfamiliar with the local market at the beginning. Um but we are able to ramp up even faster and get to profitability faster, um against all kinds of headwinds.

This shows that our operational approach can scale well across different overseas markets. I think the key here is to stay focused on the fundamentals.

Consumers and merchants' needs are actually quite uh consistent across different markets. In every market, consumer care about better selections, better price, a more reliable, fast delivery.

While merchants care about incremental order volumes, fair commission rates, and reliable fulfillment services. Our goal has always been on creating incremental value for both sides.

That's how we can ultimately build the trust and a real edge in these markets. For Brazil, I believe it's a very attractive market to explore over the long term.

Because Brazil is one of the top five food delivery markets globally. The market is still growing rapidly, and it's still significantly underpenetrated.

However, this market is quite different from the other markets we have entered. We will stay flexible and iterate our strategy as we gain more experience on the ground.

For now, we will stay focused on Sao Paulo, which already uh make up 25% of Brazil's overall uh food delivery market. We want to improve our operation there, and to build a differentiated competitive edge before a broader expansion.

Regarding the investment pace in the second half of this year, the focus will be on operation uh optimization and efficiency gains in our existing markets. Factoring in our investment in both Keeta and grocery retail businesses, we expect the loss of of our New Initiative segment in 2023 uh 26 will not exceed that in uh '25.

Thank you.

Thank you.

hi, good evening, management, and congrats on a great quarter. Um my question is that, as food delivery competition shift toward efficiency, how should we think about your capital allocation priorities going forward, and how are you um balancing investment across uh different business, uh AI-related capex, and shareholder returns?

Uh would you consider monetizing some of your investment assets and, on buybacks, should we expect that to continue? Thank you.

Thank you for the question on um capital allocation. Um we have always been ROI-driven, and anchor in long-term value creation.

Core business comes first. We are committed to sustaining their high-quality growth and leading market position.

From there, we dynamically evaluate the investment for other initiatives, and direct resources toward areas that matter most to our long-term development. We don't think irrational competition is sustainable.

For Core Local Commerce, we will stay focused on high-quality growth and operating efficiency improvements. For overseas expansion, Keeta has already shifted focus toward operational optimization in Hong Kong and Saudi.

We will continue to pace our expansion in each country based on ROI. On grocery retailing, we are excited about Xiaoxiang Supermarket's long-term potential, and we are confident to drive its continued efficiency gains.

AI is a very important strategic opportunity, but we are being very delib- deliberate about where and how we invest. Our focus is on embedding AI into real business scenarios to improve user experience, merchant operating efficiency, and organizational productivity.

We have no plan to compete aggressively for token factory business. On shareholder returns, share buyback has always been our main approach to return capital to our shareholders.

We have executed meaningful buybacks over the past few years, and we will continue to do so, based on the competitive environment, cash flow, and offshore capital availability. On the investment assets, we will evaluate monetization of our high-quality investment portfolios on a regular basis.

We hold stakes in some truly outstanding companies. At current valuations, our stakes in these companies are worth more than RMB 70 billion.

Beyond the financial returns, some of our investments also offer meaningful strategic value. They give us deeper insight and allow us to stay close to frontier technology development.

Going forward, we will weigh market conditions, valuation, funding needs, and our broader capital allocation priorities. When time is right, we are very open to exit or monetizing selected positions to free up capital.

This will give us greater flexibility to reinvest in our own business and return value to shareholders. Thank you.

Thank you.

Thank you everyone for joining our call. We look forward to speaking with you uh next quarter.

Thank you very much for your support.