Good evening. Welcome to Plover Bay's annual results call for financial year 2025.

I'm Christopher Chau, CFO of Plover Bay, and I will be hosting this call. Alex Chan, founder of the company, is also with us today.

We have announced our latest annual results. The announcement can be found on HKEX's website and our own website at ploverbay.com.

The PowerPoint presentation that I'm currently sharing on the screen can also be found on our website. As usual, I shall begin with the financial highlights, and then Alex will go through our recent business updates, and then we can go into Q&A.

Let us begin. Our sales in 2025 reached $113 million, increasing by 11% year on year.

Our gross profit was $74 million, a year-on-year growth of about 15.5%, and our gross margin was 57%, an increase of 2.1 percentage points. Our overall operating expenses and finance costs increased 5.1% year on year.

As we continue to benefit from operating leverage, our net profit reached $45.5 million, a year-on-year increase of 19.5%. Net profit margin improved to 34.9%, an increase of 2.3 percentage points.

Finally, our diluted EPS came to be 4.11 US cents per share, which increased 19.1% year on year. Let's drill down to our segments.

In 2025, our Fixed First Connectivity segment revenue increased mildly by 3.5% year on year to about $18 million. Mobile First Connectivity segment increased 10.4% year on year to $73 million.

Overall, we are seeing strong growth in high-end Mobile First routers and new supporting products. Sales of Starlink equipment is included in the Mobile First segment, and this year we are seeing quite strong volume growth.

Because most of our channel partners pair our products with Starlink into a solution, this strong volume growth has also directly benefited the sales of our own products. Driven by our continued growth in subscriptions, our Warranty and Support Services segment reached $28 million, up 12.3% year on year, and Software Licenses segment reached about $11 million, up 34% year on year.

Together, the recurring revenues in these two segments add up to about $38 million, an increase of 17% year on year. Recurring revenue now accounts for close to 29% of our total sales.

Our take-up rate has increased up to 38.6% from 34.2% a year ago, and the number of devices with a subscription increased 25% year on year. These numbers continue to show that our recurring revenues are healthily growing.

Next, in terms of geographic segmentation, North America increased 2.1% year on year to $76 million, accounting for about 59% of our sales. The mild growth of North America market is largely due to tariff uncertainties back in April where we had to halt product shipments to the US for about two months in the first half.

Shipments have since resumed to normal in the second half. Sales to EMEA increased about 28% year on year to $37 million as our partners continue to deliver their multi-year, large projects, and now account for about 29% of our total sales.

Sales to Asia increased to $12 million, growing 36% year on year. Again, our growth here is because of some large multi-year projects delivered by our partners plus some remarkable growth in new markets such as Japan.

In others, mostly Australia, our sales increased 14% year on year, making up about 4% of our total sales. Moving on to gross margin, our gross profit margin increased to 57% from 54.9% last year.

Our gross margin improvement is attributed to a favorable product mix towards high-end mobile routers and economies of scale among our high-volume products. Overall, our hardware gross margin is now 41%, while recurring revenue margin is over 90%, both contributing roughly half of our gross profit.

Next, our operating expenses: total operating expenses as a percentage of revenue was 17% of sales during the year, which is 0.6 percentage point lower than last year. Due to our strong operating leverage, our sales continue to grow faster than expenses, which contributed to our net profit growth this year.

Finally, our financial positions continue to be very strong with no debts and strong operating cash flows. Trade receivables turnover days remained at 67 days.

Inventory turnover days slightly decreased to 112 days, while trade payable days increased to 50 days. This wraps up the financial highlights.

Next, I will let Alex present the business updates.

Thank you, Chris. To begin with, I want to have...

I want to give everybody a quick recap. Basically is we are in the connectivity market, and we serve a very long-tail market.

We have thousands of customers in multiple verticals, from maritime, transportation, public safety, constructions, and so on. There is no single customer or vertical dominates the...

dominates our business. We have also gone through multiple technology cycles, from fixed to wireless, from 3G to 4G to 5G, and now is that we are seeing is a satellite communications as a very promising way of connectivity.

We were... we were in this market for 20 years, and every time is when there is a new technology coming up, a new technology application coming up, usually we are ready for that market.

For example, recently is we have seen is the autonomous systems, the teleoperation, and all these applications are having a more and more sizable deployments. In the past couple years back is we were seeing autonomous driving companies were using our products for their product development.

Now is that we are seeing is teleoperat... we are seeing is Waymo operations, teleoperated cabs, they are massively deploying our products with their vehicles.

I would say is the importance of connectivity is actually way beyond a lot of people's imagination, and we are in the business of making this connectivity reliable. Also is you probably will ask us one question is about is the increased memory costs and the components costs.

Just like every other hardware company, we are not immune to this. We are also facing is the increased cost of in in building the hardware.

However, is our our business model is actually helping us to mitigate this, because every time is when a customer is buying a Peplink devices, it has the we have the opportunity of of selling multiple-year subscription services. Then so is with this blended model, we are able to absorb some of the hardware costs.

At the same time is our customers are buying our products not because of the cost of the components or the cost of the product. They're basically is buying our product because of the value, because of the value creation they can have with our product, or they can use or because the reliability of our product is helping them to minimize the downtime.

Is this is the foundation of our business. I guess is today is probably is many of us will have a question about is why do we announce our plan to spin off our North America business through a distribution in specie?

We are seeing that is the US market and other parts of the world, the market has very low... very different requirements.

For example, is now is if we need to meet the TAA approval, NDAA NDAA approval, and all this kind of compliance thing, then is we are limited to certain supply chain. We are limited to produce the product in certain in certain locations.

Then so is we are also is restricted to use certain technologies. It will be difficult for us...

We're we're seeing that is so our business in the whole world is growing, but then it's difficult to run that in under one platform. We are seeing that is if we are able to separate the two operations, one to be really focused in the North America North America market, and the other market which is the the global market, then is we are able to produce more competitive products.

At the same time is we are able to expand our supply chain, including our contract manufacturers and the choice of components. This is actually the foundation, fundamental reason why we are doing this.

Then is also moving forward is so maybe is maybe is our investors might have a concern that is so are we able to remain our lean operation, just like the last 10, 20 years? I think is we are we should be able to do so, because now is with a lot of AI tools, you do not need a lot of people to do many things.

Then so we are seeing is that this is a great opportunity for us to grow further and to keep our lean operation models. I think is this is the current update, and I'm sure that today will have a lot of questions, maybe we just reserve the time for the Q&A.

Sure. We already have a few questions from the chat.

First question comes from Lucas Lu, question on marine certifications for cybersecurity compliance: "Why not apply for these kinds of certifications and what are the main difficulties?"

Okay. Lucas, I guess is you're probably referring to the discussion at the forum.

Yes, we are aware of that, too. I would say is when people bring that up, yes, this is a legitimate concern.

At the same time is we are very clear about our position, because is our business is to make connectivity reliable. Is all this cybersecurity requirements can be addressed by putting a UTM or cybersecurity products there, and there are plenty of cybersecurity products available in the market.

Some people choose to integrate that into one box, but we feel like is that the cybersecurity product is more like a preference. Some people might prefer cybersecurity vendor A, and some people might prefer cybersecurity vendor B.

Then so we feel like is so we are still in that market by offering unbreakable connectivity, by putting multiple Starlink, multiple satellite connections, multiple 5G connections together and make it super reliable. Then so is for all these cybersecurity requirements or compliance, people can easily is put a third-party cybersecurity product there and to meet the requirements.

That's why is I would say is do we really need to integrate that into our products? Yes, it's a nice to have, but it's not a must.

That is our view on that. Again is we are very practical and we are very practical on all these kind of things.

Is you will see is we will be also partnering with some of the leading cloud provider to provide certain cybersecurity features. Again is those in the coming months, you'll see is we'll have products like that.

The short answer is we are not taking the approach where people expect us to be taking to solve that concern, but there are multiple ways in meeting the same requirements.

Right. Another question from Lucas is about WireGuard support: "So the company has many distributors and clients who need this support, why not provide it?

What are the main difficulties?"

Many people can provide WireGuard support. I don't think this is a dealbreaker.

Yes, of course, we hear the feedback and we will provide that. Again, our fundamental business is not to become a me-too company.

Our fundamental is not just to catch every single Wi-Fi standard being the latest one, or we are not here to be the most feature-rich product. Our business is just to make connectivity reliable and be the best company in doing reliable connectivity.

Yes, WireGuard support, we will support that, but is that our first priority? I don't think so.

The last question from Lucas: "The number of the company's retailers and distributors has dropped a little bit since last year. As a result, is this why our revenue growth rate also slowed down?"

Let me answer this. I think the number of distributors or retailers, that I don't know where you found the number from, but then it's way more than 300, I think our revenue growth this year, as I said, there were a few reasons that they were 11%.

The US tariffs was one of the major factors. It caused us to stop or halt our shipments for 1.5 months, so that did affect our sales quite a bit.

Lucas, let me remind one thing is that we are in a very long-tail market. Is I guess your focus is more on the retail or the prosumer market.

That is one of the long-tail market that we address, but that is not the only one.

Next is from Jonathan Tan on the proposed separation: "Should we think about this as a valuation unlock or recognition that North America and the rest of the group now have fundamentally different capital allocation, growth, investment, and operating models? As a long-term shareholder, what specific metrics would you point to in three years' time to judge whether the separation has truly created value?"

I guess is we are looking into all these things not really coming from a financial angle. Most of the time is we are looking into how can we be the predominantly market leader or the de facto standard in that segment.

For example, is that in teleoperations, we want to be the market leader and the de facto stand there. In the maritime is we want to be is the most welcomed product in all these from superyachts to container boats.

We want to be the market leader in all these areas. Then so is when we look into that is I would say is in the next couple of years is we would love to see is we have more and more vertical markets that people are using our products, being the de facto devices for reliable connectivity.

I think is that is our primary goal. Again, the concern is mostly related to North America, they have a different expectations and requirements.

Just like what I mentioned earlier on is, we need let's say is if this is a cellular product, it needs to be AT&T, Verizon, and T-Mobile certified. Then is if we are going to a different market in Europe or in a different market in Africa, we might not need those certifications.

Then so is by separating these two markets, we are able to expand our choice of contract manufacturers, technology providers, components, semiconductor choices. We'll have a wide more choices for addressing different markets.

Next is from Brian Cheung: "So what is the number of InControl 2 registered users in the year end?" If I recall, the number has exceeded 800,000 by year end.

"What is the likely impact on the gross margin given current shortage of RAM and storage, or will the cost be passed down to customers?" Okay.

Some of our high-end models, we do not have any intention in adjusting the price yet. At the same time is if we need to increase the price, I think is that the market will have no problem in accepting that for the higher-end models.

Then so for the entry-level products or for the higher-volume products, we also do not want to or intend to increase the price at this point yet, because it's again is just like I explained earlier, is our business model is there is usually a subscription goes along with the devices. We would love to see the take-up rate, we would love to see the expansion of those subscription business.

Then so is that the hardware devices is just an entry point. Again is that the memory price, we just don't know how crazy it can become, but then is we have a lot of flexibilities in dealing with that.

For the time being is that we are not increasing any price yet.

Next is regarding to recent AI development: "Is Peplink currently or will soon be using AI on traffic decision and/or identify cybersecurity risk? What are the threats and opportunities of AI?"

Oh, we are us-

we are using we are already using a lot of AI internally, and we are very excited about all these applications. At the same time is, yes, we are definitely working on something which is AI-based, and then so we believe is that that kind of product will be able to help us to visualize the value that we bring in with our with our bonding technology and together with our existing product servi- services.

Yes, we're we're working on that, and we're very excited about what we've seen.

Okay. Next, regarding the spinoff: "Which company will own the intellectual properties?"

Hi, this is Cherry. I am a member of the board as well, and in regard this question, it's unfortunate that there's little of the specific that we can disclose at this point.

Then I think it's safe to say that in our plan, we're definitely making plans to ensure that both groups will have the necessary resources, including the IP they need to continue to thrive. As and when the times come to a stage where we are in a position to discuss more, we believe we will be sharing the details with you in our later announcements.

"So

will the SpinCo become a pure US company so that it can avoid all the consequences of the geopolitical frictions?"

Okay. The ultimate goal is to address all these concerns.

I would say is that is definitely the direction. "And

do we see more growth in 2026 in the US market?"

Oh, absolutely. Yes, US is a very I I would say is US and Europe are two very interesting, major growth market for us.

Another question on spinoff: "With regards to the proposed spinoff, how can shareholders expect future dividend payouts to be in terms of the SpinCo and retain group? Can you provide some color on the different growth trajectories for SpinCo and retain group in the mid to long-term?"

I would say is if you looked into our operations from day one, we always is distribute the excessive cash back to the shareholders. We are not going to change this approach, and we still plan to do the same thing.

At the same time is just like we mentioned that some years back is when there are opportunities where we can grow the company faster, or to dominate the market better, we are very very very willing to look into the M&A, and then so we are very willing to look into opportunities to expand the company. Is dividend is not the primary thing, but it's our approach which is by distributing the excessive cash back to the shareholders is that's always the case.

Again is it really depends on the market opportunity, and our goal is always is to look into sustainable growth and being a major player in the area that we are in.

Next is from Martman Yeung: "Could you please provide an update on progress of Starlink business?"

The Starlink business is actually doing pretty well, and then so first of all is we are covering is the entire Starlink product line. Then so we are also working on something more interesting that is related to the Starlink APIs.

Then so at the same time is you probably have seen is we have some products like is Antenna Max, which is a product that we can integrate the Starlink antenna, which is the Starlink Mini, together with our 5G routers into one integrated box. Moving forward, you will probably see is we will have a series of Starlink companion products which is to make the Starlink deployments better, and eventually is that this will be a benefit for multi-constellation deployment.

Now is we are seeing that just like the 5G connections, people eventually might want to have more than one Starlink connections. People might even want to have multiple Starlink or multiple satellite connections in order to failover their fiber network, or in order to provide better connectivity for their boats, for the container boats, for the cruise boats, or even for logistics centers or data centers.

We are very excited and optimistic about the Starlink-centric ecosystems.

Next is back to Gerard: "MNCs have operations in many countries and they usually don't spin off their businesses. Why cannot we manage different geographies?"

Oh, because is we are taking a different approach. We never think we are MNC, but instead is we're thinking of we are still a small fish in the pond, but then is everything when we look into this is entirely coming from the efficiency's point of view.

Don't forget that is we have a large network of channel partners, and our channel partners usually are way bigger than us. Then so is most of our channel partners are taking the traditional approach.

Then so is I would say is with this approach, we should be able to expand the supply chain. We should be able to expand the choice of semiconductor chips.

We are able to expand the choice of contract manufacturers, cellular modules manufacturers, SOC suppliers, and even is AI models. Is that's why is we are seeing this is way more important than the traditional way of doing business.

Next question from Mufasa Capital: "Could you update us on the development in drones and robotaxi?"

As I mentioned earlier on is we have a one deployment in Las Vegas, and then so is this is not entirely a robotic taxi, but it's a teleoperated taxi service. The entire fleet is using our products, and then so we were glad to partner with our customers to do this.

At the same time is we are seeing this is one major deployment. At the same time is we also have another customer in Europe, they apply teleoperation for the mining trucks, for the mining equipments.

Then so is these autonomous vehicles, these autonomous trucks, these autonomous equipments are actually very exciting, because is they all demand a reliable connectivity. At the same time is with the drones, and then so is these kind of market is we believe is this is going to be a multi-year opportunities for us.

Next question from Gilbert Law: "Can you share the plan and performance of the SpeedFusion Connect app? Any business plans with SpaceX Direct to Cell technology?"

The Direct to Cell technology is more related to the cell phone, and I would say is the application of the Direct to Cell at this stage is more related to messaging. Of course, as the technology evolve is we won't be surprised later on then is the DTC technology will become faster.

Then so the idea of the SpeedFusion Connect on the phone is again is to expand to a new market. I guess is if you look into the forum, some people are asking us is, "Why don't we build a travel router?"

I feel like is our view in looking to the travel router market is probably is the best travel router is your phone. Or maybe is we all have the last generation phone together with us, and then so maybe is if we are running a SpeedFusion Connect app with these phones, then this is actually the best travel router.

You do not need to carry extra charging batteries and this and that, and at the same time is the SpeedFusion Connect can goes into the Android market, which is being used in a lot of kiosk or embedded systems. I would say is the pace of the SpeedFusion Connect is encouraging, but at the same time is we are still learning about the possibilities of that.

We're still working on that, and I would say is you can see this is not contributing to any meaningful revenue yet, but is the future of SpeedFusion Connect is pretty broad, and we believe is that is going to be an important piece of element which can help us to go into and expand into some new exciting consumer markets.

The second question from Gilbert is: "I assume shipments would have resumed in Q3 and 4. Any particular reason for the slowing down in the revenue growth in the US?"

As I said, in the US, there was some kind of tariff uncertainty in April, in the second quarter of the year, right? Due to this uncertainty, we stopped shipments to the US for basically the entire second quarter.

That is why that this year's US sales has been affected. Next is from Jonathan Tan again.

A follow-up question on the spinoff: "Will one entity sell to Frontier going forward or will both?" Oh,

it depends on the country. It depends on the region.

Essentially, our split will be one based on the geographical split, and so for one transaction, obviously they can only go to one of the location. Then it may well be the case that anyone customer, they can be having different locations.

If that's the case, then yes, it's a possibility that both can be selling to the same customer, but that it would definitely be for different transactions.

"Will SpinCo consider retaining dividend and excess cash completely due to the inefficient dividend tax scheme in the US?" From Roderick Li.

We will definitely look into the possibilities on how to optimize this. The fundamental is the same.

The idea is any excessive cash that we don't need will be distributed back to the shareholders. Next,

Steven Wong: "Will you still be the chairman of both companies? Will there be any change in HQ and the make-up of senior management?"

Alex will stay the chairperson of both company, but then his role in Plover Bay will transit to a non-executive role. Also Keith, our current CEO, he will also becomes the CEO of the SpinCo rather than Plover Bay.

Other than that, all other three executive director will remains with Plover Bay. Liam O'Brien:

"When will we get details of the US company? Where will those details be and will we need to be able to invest?"

For the US company, essentially we assume there will be more information coming as we make the announcement for the EGM. Those information will be disclosed alongside.

Obviously, for us to disclose those details, we will also need to get our US-side authority, get things ready with them. As far as the investment speaking, the same for all current shareholders as we are doing a distribution in specie, unless there are restrictions coming maybe from your holding or your fund itself.

Otherwise, we see that all current shareholders will be able to get their same shareholding in the same proportion for the new SpinCo.

Next is from Jeff Pang: "How do you plan to split your time between SpinCo and RemainCo? The US business is the largest, but there are also new initiatives with the RemainCo."

Okay. I think is I'm a long-term guy, and then so is I'm also a product guy.

Is what I look into that is what kind of product, what kind of services that could be impactful for the future. Then so is I'm not the guy who is to really build and make that happens.

Is we have a teams on both companies, on both sides, to execute that. I think is the role itself is does not change really that much, but it's on the execution side is we'll have a dedicated team focusing on the products and services that could be most competitive for that market.

We have a question from Mr. Leung: "Regarding the spinoff, is circumventing US regulatory and policy risk one of the considerations?"

I'd say we are not looking at this at a circumventing perspective, but definitely, complying with the US regulatory and policy issue will always be an issue. It's not just about we are planning to list in the US, but in our day-to-day business, obviously those are also regulations and policy that we always have to observe.

"US business accounts for a significant portion of revenue. Following the spinoff, will this weaken the interest of Plover Bay shareholders?"

Oh, not really. As I mentioned earlier, Europe is growing very well.

Europe is growing very well, and in fact is Asia is growing pretty well, too.

"Will US companies be bring in strategic investors before going public?" This will be a distribution in specie, basically we will distribute the US company according to the ownership that you have in Plover Bay.

At this stage, there are no strategic investors. Next: "Will the total fixed costs increase substantially because now we need two separate management teams?"

I think is that we have a very good track record in making things very efficient, super efficient. Again is we are still the same day-one guy, and then is for those people who knows us is yeah, we're still pretty cheap and still pretty efficient.

Again, with the AI tools, I think is there's a lot of automation that we can do with it. Maybe initially is there are more compliance cost and this and that, but is I would say is that the operational cost probably won't change materially.

Next from Graham Rhodes: "What makes the spinoff a better solution than relisting the whole company or keeping everything in one company, but creating a new subsidiary or brand? Is there a geopolitical consideration?"

As I mentioned earlier, what we do is we just want to be the de facto standard, to be the most preferable partner in certain markets. That is our goal.

Then so is we feel like with this approach, this is probably is the most efficient way to accomplish the goal.

Second question from Graham: "One customer is a very large share of revenue. What is the economic relationship and what are the downsides if volumes, pricing, or scope change?"

This customer is from the US, and we have been basically working with them since the very beginning of our company, and they...

They are a distributor.

They're

just a distributor. A distributor sells to many resellers, and many resellers are selling to many, many customers.

Next question from Graham again: "Second half margins jumped. How much was mix versus pricing, and how sustainable is the uplift?"

Second half is there are two reasons that margins increased: first is mix in high-end routers, and then second is because of our economies of scale in the high-volume routers. Both were causing the second-half margins to increase.

"Where are you winning or losing versus Cradlepoint and other competitors, and what are you seeing on discounting and deal cycles?"

I think is we don't see much competition from Cradlepoint. Again is this is a very long-tail market.

The market is pretty big. Is we actually don't encounter with Cradlepoint that often.

That's why is we even can't recall the last time we encounter a competition with Cradlepoint. That was probably earlier in the year in Australia, and we won that.

I wasn't aware of any opportunity that we have lost to them. Oh, no.

Recently, this was lost last year, but recently is we won a pretty major deal in Europe. Yeah.

We won over Cradlepoint recently. It's a pretty major European infrastructure project.

"Subscription take-up rate rose to 38.6%. What are the renewal and churn rates, and what is the next lever to push attachment higher?"

We do not provide renewal and churn rates right now, next lever to push the take-up rate higher: I suppose we keep adding new features into our software to increase the value proposition of our subscriptions, and that's how we increase our take-up rate.

That is our goal, to increase the take-up rate and at the same time is to increase is the content of the subscription. Again is that we see that is there are lots of tremendous opportunity for us to tap into the subscription products.

Last question from Graham is: "Receivables and inventories increased. Is the timing looser term or slower collections, and what is inventory obsolescence risk?"

I think receivables and inventories rose in line of our revenue, I do not see a sudden jump in inventory. Also, in this kind of semiconductor shortage environment, I think inventory obsolescence risk it should be pretty low.

Next question is from Aseem Verma: "Right now, the same products are sold in US and other markets. Going forward, will product development in two companies become independent and diverge?"

Oh,

absolutely. Yes, both company will become independent.

Next question, Kate: "How will Alex and CEO split time between SpinCo and Retained Group? As Alex becomes a non-executive director of Plover Bay, does it mean he will be hands-off for decision-making of North America business?"

I'm still a 68% shareholder. I will watch it out very carefully.

Then so we have a two CEOs running on separate teams. These CEOs is we've been working together for more than 16, 17, or even 18 years, or maybe even 20 years.

It has been too long. I can't remember how long we worked it together.

Follow-up from Mr. Leung: "The previous earnings announcement, we mentioned a collaboration with Iridium.

Are there any upgrades on that?"

The Iridium thing is definitely one of that. Then is we're seeing that is they're starting to have more satellite providers coming to the market.

We really like that. We really love to see that, cuz the multi-constellation thing, we are ready for that.

We're ready for that, and we have our products ready for that already.

Next question from Gerard: "Will all the shareholders be able to vote for or against the spinoff during the EGM, or is it only for minority shareholders to vote?"

It's not strictly the rules for us to do so, but yes, this is our current plan to put forward the plan for voting during the EGM. This is the current plan.

Seems to be all the questions from the chat, and I see some raised hands. Maybe we can answer...

Oh, hi, Alex. Hi, Chris.

Can you hear me?

Yes.

Hi, Steven.

Hi. Congratulations for the great results.

I have a couple questions. Maybe it's easier to ask by voice.

My first question is just now someone asked about the dividend, the tax issue. I was thinking that because right now we are actually just only segregating two companies, one is the sales to US, the other is the sales to others.

Most of the product is actually still booked in Hong Kong, if I am not mistaken. It's only that the sales happen to be selling to US, but then the company that sells to US is still based in Hong Kong.

In that case, the dividend tax and all that should still be following the Hong Kong tax rules. Is this understanding correct?

I believe so. If you are in Hong Kong and when you buy US stocks now, you're not on the hook for US tax, right?

I think this will be the same for our US company.

Okay. Then just going back to the business, I want to know so with everyone talking about adoption of AI, and just now Alex just briefly mentioned, "Oh, AI can help a lot," can you give us a little bit more details how AI is changing the way Plover Bay works or how it is adding value to your products, and what new functions that you can foresee that would bring enormous value to our customers by adopting AI to our product?

Sure. When we look into this, we can look into that from two perspective.

One is internally: how do we use AI to help product development, how do we use AI to make our operations way even more efficient, or how can we use AI to support our customers better? Is on the internal side, you see we are doing all these things in various fronts.

Then on the product side is we are seeing the opportunity to apply AI to predict the WAN connectivity in various locations. For example, is maybe is when your boat is cruising in a certain area, is that area the best to use satellite or 5G or things like that?

We will have some capability in doing that. At the same time is so when somebody's going to deploy is 1,000 Peplink products, our products, to the branches, so, okay, this can be in Malaysia or this can be in USA, and then so is when people start to deploy these 1,000 devices into these different remote locations, do they really need to do a site survey?

Hopefully not, because then is we could apply the AI to predict the connectivity and how it looks like. Is that is the thing that we are working on.

Okay. Then next question is on verticals.

I just wonder so we have been growing around 10 to 15% consistently. I just wonder do we foresee there's any new potential verticals that could potentially become a very meaningful market to us, whether there's any new market that you're aware of or you're already in that market?

Stephen, we don't judge. We just focus on the product and let the market tells us who are using it.

Okay. Then the next question is on the Peplink conference in the US, I think is in November or last November.

I just wonder whether that you have any key takeaways from that conference, any changes in your mindset, in your business in the way you look at the business after you attend that conference?

Oh, sure. There are way more people than the past, and at the same time is people really spend a couple of days there for exchanging ideas and having trainings.

Cuz we have built a pretty interesting community, and the community is that their customers are very willing to share their deployments and share how they use the products with others. The interaction is very good in this events.

Okay. Sorry, my last question is on on on back to the spinoff issue.

Can can I, I know everything has not been decided yet, but can I say like the the biggest changes that the company would see as a whole, let's let's assume I still continue to own the two companies, is it is it only that that would be like two teams, that one would be very specialized in in taming in in taming the US market, in like selling to the US market, and and the other team is more on like the remaining market? Then in the R&D side, in the production side, can I say that there won't be like a material changes, or or even in HQ, I would assume that it will still be in Lai Chi Kok?

Is it like that or or like what would, besides sales, what would be the major differences after the spinoff?

Okay. Our goal is to dominate the market where we see we should be the de facto standard.

That is the goal. Then so the rest are just tactical execution details.

Is we never want to chase for shiny office because that might be able to attract talents. We never believe things like that.

I think is that the team is not going to change substantially because of anything like this. Okay.

Thank you.

Thank you, Steven. Let's take the last question for tonight.

A follow-up from Jonathan Tan, he said: "With regards to margins for each entity, will it resemble current existing segment margins?" The answer should be yes.

That's all of the questions for tonight. Thank you very much for jumping into the call tonight, and we'll see you soon, hopefully in the EGM.

Thank you, everyone.