Thank you, moderator. Can everybody hear me okay?

Dear investors and analysts, good evening. I am Li Yu, CEO and Executive Director of Super Hi International.

Let me present to you the key highlights of Super Hi International for the second quarter of 2026. This quarter, the company's earlier investment in employees and customers have further translated into operating improvements.

Customer traffic and table turnover rates both improved the year-over-year while the employee cost ratio and several operating expense ratios declined, driving a significant year-over-year increase in operating profit. In Q2, Haidilao restaurants have served 8.1 million customer visits, up 5.2% compared to the previous year last year.

Supported by customer traffic, overall table turnover rate for the quarter was 3.9 turns per day. Same-store turnover was 4 4.0 turns per day, both up 0.1 turn per day year-over-year.

Both the dining service at Haidilao restaurants and also we're expand expanding revenue sources. Revenue from delivery and other businesses both doubled this quarter.

Driven by the above business, the company achieved total revenue of $219 million in the second quarter, representing a 10% increase year-over-year. This quarter, company's operating profit increased by 118.9% year- YoY.

Operating profit margin increased by 1.8 percentage point YoY. Profit growth significantly outpaced revenue growth, reflecting the continued conversion of company's earlier investment and the beginning of the operating leverage release.

Now, I will review the major operational initiatives this quarter. First, continue to enhance operational management of Haidilao restaurants.

This quarter, we maintained management flexibility with each region autonomously adjusting operating strategies based on the local business conditions, market conditions, and consumer trends. At the same time, we further strengthened the professionalism and support capabilities of the headquarter platform by introducing digital tools and new technologies.

We enhanced our insights into the industry markets and consumers, empowering frontline restaurants in areas such as a menu items, marketing, and labor efficiency, thereby making improvements in the precision and execution efficiencies. This second quarter is a traditional low season.

Judging from the table turnover performance, we believe that these initiatives have delivered positive results. Second, in terms of products and menus, in the first half of this year, the company fully integrated the local consumer dietary habits, consumption trends, and dining scenarios to drive menu optimization and new product development.

For instance, in Southeast Asia, we introduced local flavors such as lemongrass, satay, and basil; expanded soup bases, snacks, and beverage combinations around the core products to enhance cross-selling. At the same time, we optimized the existing products by improving taste, presentation, and product combination, lowering the barrier for customer trial and enhanced product appeal.

In addition, the company continuously conducts dynamic operations based on new products sales performance, customer feedback, and regional market character characteristics, providing customer with a more value-oriented and differentiated consumption experience. Third, in terms of membership and marketing, as of the end of June, the number of overseas members reached 9.46 million.

This quarter, we continued to improve customer management loop around sustained marketing, precise traffic acquisition, and member operations. On the other hand, each region combined the local consumption habits, holiday occasions, the preference of younger customer groups to continue to enhance brand exposures and reach new customers through IP collaborations, new product launches, and new local events.

On the other hand, we place greater emphasis on post-marketing customer retention by further strengthening tiered membership operations using member exclusive activities, differentiated benefits, customer communications, in-store experience optimizations. We improved member activities and visit frequency.

We're continuously exploring more scenario, more across scenario and multi-brand membership benefits, hoping to gradually transfer one-time marketing traffic into long-term membership relationships, further enhancing customer repurchase and store operating resilience. In terms of store expansion, this quarter, we opened one new Haidilao restaurant in South Korea, one in Vietnam.

In the first half of this year, we opened a total of three Haidilao restaurants. At end of Q2, we operated a total of 129 Haidilao restaurants overseas.

To date, the number of signed but not yet opened Haidilao stores remain in the double digits. Meanwhile, based on the current construction schedules in July and August, we expect several new stores to be open successfully in the second half of the year.

The full-year new store opening target is in the double digits. As of this quarter, the Pomegranate Plan has operated a cumulative total of 12 brands and 22 uh second-brand restaurants overseas.

We continue to optimize the HiBowl malatang project, which originated in Canada, and we're now opening up the second HiBowl store in Japan. At the same time, the Izakaya project in Japan is also steadily improving its stability with potential for further replication.

Various country markets are exploring opportunities to independently incubate or replicate existing second-brand formats. That's my conclusion for the business performance for this quarter.

I'd like to invite Qu Song to present the financial results.

Thank you, Mr. Li.

I will now report about the financial results. In the Q2 of 2026, the company achieved a total revenue of $219 million, an increase of 10% year-over-year.

Haidilao restaurant operating revenue was $198 million, up by 4.6% year-over-year. Number of Haidilao restaurants increased by a net of three compared to the same period last year.

Company served around 8.1 million customer visits in this quarter, an increase of 5.2% year-over-year, continuously to support the rest restaurant business. Beyond dining business, the company continued to expand revenue sources.

Delivery service reached $7.562 million, up by 105% year-over-year during the period. Each region continued to strengthen delivery operation investment, deepen collaboration with the major delivery platforms in each country, secure more promotional resources and online traffic favorabilities, enrich the delivery product offerings to enhance product appeal in the delivery scenario.

Other businesses reached $13.439 million, up by 119.7% year-over-year, mainly contributed by sales of food and seasoning under the Haidilao brand and from the company's own central kitchens as well as the active development of some new restaurant business under the Pomegranate Planet Plan. Overall, in this quarter, delivery and other business together generated $21 million in revenue, up by 114.3% year-over-year.

Their share of total company revenue increased from about 5% in the same period last year to nearly 9.6%, further diversifying company's revenue. In terms of cost and expenses, overall operating efficiency improved compared to the same period last year.

In the second quarter, raw material and consumable cost was $74 million with a gross profit margin of 69 point 65.9%, down slightly by 0.1 percentage point year-over-year. Restaurant operating gross margin remained stable, mainly because the central kitchen, B&D supply chain business has grown significantly versus last year.

In terms of employee cost, $74.951 million, and the employee cost to revenue ratio decreased from 35.3% in the same period of last year, down approximately 1%, decreased as past years' employ- efforts in employee cap- capacity building, staffing, and store management optimization have gradually been implemented. Labor efficiency improvements have begun to materialize.

Rent and related expenses were $5.6 million, accounting for approximately 2.6% of revenue, down about 0.4 percentage, mainly due to revenue growth, diluting rent expenses as well as adjustment in restaurant network layout, reductions in short-term utility expenses, $7 million, accounting for approxi- approximately 3.3% of revenue, down 0.3% year-over-year. Depreciation and amortization, $21 million, accounting for 9.6% of revenue, down about 0.3% year-on-year.

Uh in terms of travel, communications, and other operating-related expenses, about $25.783 million, accounting for about 11.8%, remaining broadly stable year-on-year. Overall, the declines in employee cost ratio and the expenses ratio for rent, utilities, depreciation, amortization were important factors in the operating margin improvement this quarter.

Raw material and other expenses ratios still have room for further optimization. In Q2, the company achieved operating profit of $8.1 million up by 118.9% from $3.7 million in the same period last year.

Operating margin increased from 1.9% in the same period last year to 3.7%, up 1.8 percentage point year-over-year. As revenue grew, the employee cost ratio and several fixed operating expense ratio declined, driving the earlier investment in employees, customers, and store management to gradually translate into operating efficiency improvements.

Although operating profit improved significantly, non-operating items in this quarter were mainly affected by exchange rate fluctuations. The same period last year, there was a net foreign exchange gain of $16.33 million.

For this quarter, there was a loss of $4.34 million, a negative swing of more than $20 million year-over-year. A company results record recorded a net loss of after-tax of $1.93 million for this quarter compared to a net profit of $16.39 million in the same period last year.

Although final net profit was affected by non-operating factors, but the company's core operating profitability improved significantly. In terms of operating cash flow, company's for this quarter was a net inflow of $28 million, an increase of 6.2% compared with a net inflow of $26 million in the same period.

As of 30th of June this year, company's cash reserve was approx- approximately $266 million, and overall liquidity remains ample to be used for continued store expansion. In terms of key restaurant operating metrics, the company served approximately 8.1 million customers visits per this quarter, up by 5.2%.

This reflects that Haidilao's turnover ratio and as well as same-day period, it's going up, further improvement in the store uh customer traffic, and overall spending per store for the quarter was $24.3. Daily revenue was $17.4 thousand, down slightly by 1.1%.

This overall restaurant operations, customer traffic, table turnover have improved this quarter, though single-store operating quality in certain regions have room for further optimization. By region, market performance diverged this quarter.

Table turnover in South East Asia and East Asia continued to improve. Turnover tank rates in North America and other regions faced pressure.

For Southeast Asia, and the uh restaurant revenue for this quarter was $98.66, up about 3.9% um in term this is mainly driven by high customer traffic. Then uh in terms of average spending per customers, it was $18.6, flat year-over-year.

Other Overall, Southeast Asian stores maintained a steady and upward operating trend. In East Asia, Haidilao restaurant revenue was $33.7 million, up about 9.9% year-on-year.

Average table turnover increased from 4.8 turns per day, 4.9 turns per day, continuing to maintain at a high level. This is mainly because customer decreased the spending from $29.4 in the same period down by $2 to $27.4.

On a constant currency basis, average spending per customer in both countries actually increased year-over-year, excluding exchange rate disturbances. East Asia continues to maintain a strong operating trend with good customer traffic and table turnover performance.

In North America, Haidilao restaurant revenue was approximately $40 million, up about 6.6 year-over-year with the store count increasing from 20 to 22, average table turnover four turns. In terms of the average spending per customer increased from $39.1 the same period to $41, but the higher average check has not fully offset the impact of the lower turnover.

North America still needs to focus on improving customer traffic and operating efficiency. Other regions, the restaurant revenue was $25.1 and down by 1.8%.

Average table turnover is 3.7 turns per day, down by 0.2 turn per day. This is mainly due to geopolitical volatility in the Middle East is still affecting the operation, though the impact is currently assessed to be gradually diminishing.

Average spending per customer in other regions increased from $39.7 in the same period to $41, primarily driven by exchange rate effects. Overall, regional operating performance in the second quarter showed some divergence.

Southeast Asia improved. East Asia continued to maintain a high level.

North America and other region need to further enhance customer traffic and per-store output. Same-store performance, uh there were 111 same-store restaurants.

Same-store sales was approximately $179 million, down about 0.8%. Among them, same-store sales in Southeast Asia and East Asia increased by 2.5% and 0.9% year-over-year.

Same-store in other regions declined by 2.7% and 8.5%, and the same reason as a consistent over-trend overall. Going forward, company will continue to focus on cooperation, customers, customer operations, and in-store operations, driving further conversion of customer traffic improvement into per-store sales and profitability enhancement.

Thank you, Mr. Li and uh Ms.

Qu. Thank you for giving me this opportunity.

I have three questions. Number one is that we can see that in China and right now, there's an emphasis on empowering through an intelligent middle platform.

Does the overseas operation have any new ideas or plans regarding middle platform constructions or um organized structure adjustment? Second is about the uh Pomegranate Plan, and uh how do you balance the mature single-store model to share, and do you balance the long-term investment cost of the new brands with the company's short-term performance?

Do you currently have any relatively mature mechanisms and methodologies to further improve the probability? My third question is about further optimization measures there are for cost and expensive controls going forward.

Thank you, Mr. Lai, for your question.

There are a total of three questions, and I will take them one by one. In terms of the middle platform capability building, overseas is similar to China, but the overseas characteristic is that each country has different consumer habits, labor regulations, supply chain, tax, and marketing environments.

There's no single set of operating methods that can be directly replicated across all markets. Therefore, the principle for overseas middle platform construction is the headquarters should build common capabilities well, whilst regions and stores should run their local business well.

In terms of division of labor, headquarters centrally build common capabilities such as digital systems, bulk supply chain, personal management, financial management, and membership system standards and infrastructure. Regional teams then adapt and implement these capabilities in combination with the local market conditions whilst specific operational decisions are left to the frontline teams who know the local markets and customers.

From an organizational perspective, HQ's role will increase uh become increasingly become that of a supporting platform, and frontline autonomy in operation will continue to be preserved. Uh but things such as food safety and service quality will not be relaxed in any way.

Currently, there are two projects that are running relatively smoothly. One is HiBowl malatang.

Currently, we have both in Canada and uh one in Japan. It's a simple and fast casual and easy to run, low barrier.

In terms of turnover efficiency and operating performance, both meet our expectations. We're also looking at United States, Canada, and other markets will continue to verify its replicabi- replicability.

Other is the Japanese Izakaya. Its product offering focus on sashimi, yakitori, and Japanese side dishes.

At the moment, in Tokyo, the customer acceptance and operation stability are continually improving, and the second store is being prepared in Osaka. Regarding the balance between long-term investment and short-term performance, we use uh We verify the certainty with the small cost.

Each project start with one or two stores. The investment per store is not large.

A trial and error cost is controllable. It will not have a material impact on the short-term performance.

During the process, if operating performance or customer experience does not meet expectations, we'll make adjustments without blindly pursuing scale. The real significant spending comes in the scale replication, and we only allocate replication resources to models that have been verified and proven viable.

Once proven, the company has already designed the return path and expectation for projects in the replication phase. Your third question about the cost control.

The Currently, uh it's not about compressing cost across the board, but to narrow the gaps between the stores. There is still imbalance in operating performance among stores, and lifting underperforming stores to the average levels.

This is a better way forward. Uh if we continue to compress store-level investments, this will ultimately harm customer experience, and that's not the efficiency we want, nor is it sustainable.

We have identi- identified two sources of improvement. First is operating leverage as the second half enters the peak season.

Customer traffic and table turnover maintain good performance. Revenue growth itself will dilute relative relatively fixed cost such as labor, rent, and depreciation.

Second is the daily refinement, staffing, and scheduling efficiency, procurement, and supply chain, and inventory shrinkage. We will continue to optimize these areas as routine work, not dependent on peak season.

Uh right now, we still focus on our investment in Pomegranate Plan. We are not going to be stopping due to short-term profit pressure, but will control the pace and strictly manage budgets.

As you can see, with the new brands gradually contribute revenue and the middle platform capability building completes, its major investment phase this gap will gradually narrow.

Thank you, Mr. Li, for your comprehensive response.

Thank you, Mr. Li and Ms.

Qu. This is Zeng Jun from Huatai.

I would like to congratulate the company on your very stable performance. My first question is that with more Chinese hot pot and catering brands going overseas, how do you view the competition, and especially that you are quite competitive in the China market, how do you view the overseas competition?

Especially for the Pomegranate Plan, in this phase where the brands are not yet established, how do you view the competitors' entry? For instance, in terms of your brand's buzz, and what are the localized approach that you would adopt?

Uh my second question is that we can see table turnover performance has been good, average steadily rising. What specific measures are used to improve the stores that need improvements?

Uh in addition, what are the uh planned measures that you have in mind? Thank you.

Great. Thank you, Ms.

Zeng, for your questions. Uh I will take the first few questions and Ms.

Qu will answer the third question. Number one, in terms of overseas market, apart from Chinese cuisine and hot pot, we also look at the entire dining market.

Currently, overseas consumers' acceptance of Asian cuisine and Chinese food continue to rise. There's a lot of room for development.

Our main brand is in the hot pot segment in Chinese cuisine. We're still cultivating the market and raising consumer awareness.

Far from a zero-sum competition at the moment. Therefore, more Chinese brands going overseas is a positive sign.

It validates the real demand existing, and will also accelerate the process of overseas customers getting to know and accept Chinese cuisine, expanding the overall category pie. Of course, we maintain a healthy respect for competition.

We will focus on doing our own things well, continue to in- enhance brand appeal through products, service, and customer experience, especially by diversifying our customer base and continuing improving the proportion of local customers. For Pomegranate projects, they're relatively diverse, including incubating and operating restaurants serving local cuisine.

It's not about brand, but it's about model and capability first. For these projects, being the first to enter is not the most critical factor.

What matters the most is to really prove the single-store model and make it replicable. Second, in terms of the overseas brand building, we don't really need to increase marketing spend to buy the buzz.

We center on products, service, store experience to let buzz grow organically. Marketing expenses have always been kept at a reasonable level, and what we pursue is discussion, conversion, not just impressions.

There are three layers. The first layer is to place marketing creativity and execution locally.

Teams in each region have considerable flexibility to collaborate with local IPs, artists, and games to plan around the local festivals and major events, and to interact with the customers on the local online platforms so that the activities are rooted in local culture and feel familiar to local customers. Second is to make the products themselves carriers of communication.

We launched a coriander-themed product series in some of the regions. Coriander as an ingredient is strongly loved or hated by people, and we built a complete product portfolio around this theme, extending from soup base to dishes and snacks, generated excel- excellent organic discussion and in-store conversion.

We plan this every season, and with the same logic, the theme selection comes from the real interest of local customers while supply chain and R&D are centrally supported by the company. Number three is to capture and retain the buzz.

If it only comes once, then the value is limited. We continue to connect market activities, member operations, and online attention is directed to offline stores, and after arrival, through membership benefits and refined operations, it is converted into repeat purchase and referrals.

Buzz is the entry point, membership and repurchase are the lasting accumulation. Finally, we must return to the fundamentals.

No matter how front-end marketing changes, the metric we value is all about customer satisfaction. Customers willing to come, come again, and recommend us to other people.

This is where the brand influence truly takes root. Marketing can amplify the process, but cannot replace it.

The third question about table turnover performance and what are the specific measures that we have, I'll have Ms. Xu to answer this question.

Thank you, Ms. Zeng, for your question.

I will take your third question. For Q2, our overall increased by 0.1 turn year-over-year.

The trend is healthy, but there is indeed divergence among regions. East Asia and Southeast Asia perform better while North America and other regions still have room for improvements.

Take North America as an example. The issue for some stores is that customer base structure is relatively concentrated and coverage of mainstream local customers is insufficient.

For instance, if there are changes in local immigration or visa policies, this can cause fluctuation in traffic. In the short term, we'll drive store traffic by adjusting menu combination, off-peak operations, but at the end of the day, it's really about diversify the customer structure, solidly develop surrounding customer groups, member operations, and localized marketing, reducing reliance on any single customer segment.

This is our long-term direction across all over all overseas markets. In other regions, there are external factors, such as geopolitics, which are beyond our control.

What we can do is to adjust operating strategies and control expenses in a timely manner based on local conditions. At the moment, we can see that the negative impacts are gradually diminishing.

In terms of mechanisms, the headquarters role is to help stores accurately identify problems and using operating data to attribute underperforming stores by table turnover on a store-by-store basis, whether it's a customer base issue, a trade area issue, or operational issue. We will be looking at solutions, for instance, whether we will be relocating, adjustment, and rather than continuing to invest just to maintain the store count.

Thank you. That is very clear.

I would also like to thank both the CEO and CFO for their answers.

Mr. Li and Ms.

Qu, this is Weijia Bao from CITIC Securities. I have three questions.

Number one is what is the outlook for the average check average unit price per customer trend in Q3 and Q4 and why? What are these specific measures that you will be taken if there are price increase or decreases?

Second, which region will be the focus for store openings in coming quarters? Will you accelerate openings in the regions with a few current stores or enter into entirely new countries?

Number nine Next question is on the investment and payback period and uh in each region. Compared with the past, are they improving, roughly flat, or increasing?

What are the reasons for these changes behind those, if any?

Thank you, Mr. Wei, for your question.

Your first question with respect to the unit price for Q3 and Q4, right now, we don't really have any plans for uniform price adjustment. We will not simply pass all costs onto customers.

Each market will adjust autonomously based on the local customer acceptance, competitive environment, and product structure. We pay more attention to the value perceived by customers rather than simply pursuing higher prices.

For instance, we add new products across different price ranges, adjust set meals and combo products, and give customers more choices. That's our unit price.

Uh with respect to store openings for second half, and uh we expect double-digit new stores to open in North America, East Asia, and Southeast Asia. In addition, there are still about a dozen of stores with substantial progress, among which stores in North America and the UK are already in construction phase, and will open successively over the next two years.

Layout and business expansion in existing countries continue to be handled by each country in a bottom-up manner. The project advancement pace in each country is basically consistent with its operating rhythm.

For new entrants, headquarter will more cautiously assess market conditions, consumptions, and specific site locations. There is currently no definite entry plan for new countries.

We are under discussion, but they are not yet definitive. On your third question, for new stores, currently, we are looking at a standard payback period of three to four years roughly, Southeast Asia relatively faster and Europe and America relatively slower.

Versus the past, each region has become uh more uh careful and prudent in site selections, the overall store payback periods are more controllable, and quality has also improved. For single-store investment, it fluctuates due to factors such as location, store size, and decoration style.

In the meantime, decoration and labor cost in some markets have indeed risen over the past two years. We continue to control investments by optimizing store formats, decoration design, local procurement, and construction management, and overall per-store expenditure remains stable.

Thank you.

Thank you, Ms. Qu, for your answer.

Thank you for giving me this opportunity for ask question. I have two questions here.

Number one, which is about the localization of supply chain. For instance, Singapore and Malaysia in these areas in Southeast Asia, do you have uh central kitchens, and uh do you have uh plans for localization of central kitchens and supply chains in these areas?

My second question is about the impact of exchange rate fluctuation on your net profit and hedging. Because we can see that there is uh an impact to a certain degree on the net profit.

Uh what are the control measures that you have taken, and uh perhaps you could share with us on those points?

Thank you, Ms. Li, for your question.

The first question on supply chain and uh central kitchens in Singapore and Malaysia, after many years of operation, local procurement and supply chain systems have become mature. For products that can be stably procured locally and meet quality requirements, we will localize as much as possible.

For some core seasonings or products whose local supply is not yet stable enough, we'll continue to source from central kitchens or established suppliers. Central kitchens do not necessarily expand linearly with the store counts.

We will consider store density, delivery radius, and capacity utilization. Existing central kitchens have a surplus capability capacity, then we will also try to do some external sales to improve capacity utilization efficiency.

With respect to the exchange fluctuation for Q2, that was indeed quite pronounced, and this is mainly due to base effects. Same period last year, we recorded a large foreign exchange gain.

This year, it's a loss. Positive and negative combined, amplified the year-over-year fluctuation.

It should be emphasized that this is a non-operating, non-cash impact from currency translation. It does not reflect changes in the underlying business.

Excluding foreign exchange gain losses, operating profit and operating profit margin in Q2 both improved significantly year-over-year. Therefore, we ourselves focus on the operating profit measures.

In exchange rate management, our approach has two layers. The first layer is natural hedging, that is most of our revenue and costs occur in the same market, local collections, local procurement, local labor, and rent repayments.

The higher the degree of the business localization, the smaller cross-border exposure that truly needs to be managed. The second layer is for exposures that do exist, such as centralized funds and cross-border settlements, company will continue to monitor them and based on the size of exposure, hedging cost, local compliance requirements, evaluate appropriate fund and exchange rate management methods.

However, we will not engage in speculative forex operation just for the sakes of reported numbers. Overall speaking, we're quite cautious.

Thank you.

Thank you, Ms. Qu.

That's very clear.

Hi, everyone. This is Zhongye Cheng from Zheshang Securities.

I have two questions. Number one is about stores.

If we divide them into mature stores, relatively new stores, and new stores, are there significantly differences in the table turnover and store model among them? If we compare, and uh which ones would perform better and or vice versa?

Uh my second question is about incentives for overseas headquarter management teams. Uh we are going overseas early, and we have a large-scale, relatively sound talent pipeline with more and more Chinese cuisine broad brands going overseas.

Um it's likely that there are people who will be poaching your staff and your talent. How do you insure ensure the team's stability?

Thank you for your question. On the first point, the store age itself is not the key factor determining store performance, and difference among mature stores come from the trade areas and operational capabilities rather than how many years they have been open.

The real impact of the store age is mainly in the first six months after opening. New stores need to go through a ramp-up period of team integration, uh developing of surrounding customers groups, and stabilizing operating processes.

This is a normal pattern. Taking 2024 as a dividing line, among 107 stores opened from 2018 to 2023, about 50 achieved a positive cash flow in the first month of opening.

Among the 27 stores opened from 2024 to June this year, the proportion rose to about 78%. In other words, the ramp-up speed of the new generation stores is significantly faster than before.

The underlying reason is that in recent years, we have tightened requirements in site selection standards, investment calculations, store format design, and store manager reserves. Stores are opened more precisely, and preparation before opening is also more thorough.

Your second question with respect to the evaluation, there are three levels. Uh core of a store manager evaluation is about uh on one hand, employees; on the other hand, on customers, with a focus on customer satisfaction, employee development, and long-term store operating quality.

Business results are included in incentives, but they are not only uh the only metric because focusing solely on short-term profit can easily sacrifice employee and customer experience. Regional teams are more result-oriented, looking at operating performance, growth quality, and talent development.

Headquarter functional teams are evaluated on whether they can truly help frontline improve efficiency rather than merely completing their own tasks and targets. In terms of talent's stability, intensified competition is inevitable, but retaining people is not only about compensation, but also growth space and operating space.

Haidilao went overseas early. Its greatest advantage is that it has already cultivated a group of local store managers and regional managers from the frontline.

They have a deep understanding of the local market and company culture. As new stores expand, new regions are entered new regions are entered, the new Pomegranate business are explored, outstanding managers will always have the next bigger stage.

They can also share in the fruits of the business growth through incentive mechanisms. This is our most fundamental way to maintain team stability.

Thank you for your question.

I would also like to thank the management for your very clear answers, and I also wish the company a bright future. Thank you.