Good morning, everyone. Thank you for joining us today.

I'm Jaeha Shin, Executive Vice President of APR, and I'd like to welcome you to our second quarter 2026 earnings call. Today, I'll review our second quarter performance, followed by a Q&A session.

Before we begin, please note that the financial results discussed today are preliminary and may change as we complete the external review process. Our discussion may also include forward-looking statements based on current expectations.

These statements involve risks and uncertainties, and actual results may differ materially. I'll now begin with an overview of our second quarter results.

Page 3 highlights our quarterly revenue trend. Second quarter consolidated revenue reached a record 768 billion won.

After approaching 600 billion won last quarter, we surpassed 700 billion won for the first time, marking another consecutive quarterly high. The growth was led by the strong overseas momentum in North America and Europe, supported by the new SKU sales and our expansion into US offline and European online channels.

Page 4 provides an overview of our second quarter financial performance. We delivered record quarterly revenue and operating profit.

Consolidated revenue increased 134% year-over-year to 768 billion won, while operating profit grew 135% to 191 billion won, resulting in an operating margin of 24.8%. Page 5 breaks down our second quarter revenue by business segment.

The revenue from our cosmetic and beauty segment increased 186% year-over-year to 648 billion won. This marks the sixth consecutive quarter of triple-digit growth and another quarterly record, with revenue surpassing 600 billion won for the first time.

The growth remained well-balanced, supported by solid demand for our core products and increasing contribution from newer categories. During Amazon Prime Day in the US, 11 of our products ranked among the top 100, reaffirming the strength of our best-selling portfolio.

We also participated in Prime Day in Europe for the first time, with an average of more than seven products ranking in the top 100 across the UK, France, Spain, Italy, and Germany. Our newer categories are also showing increasing momentum.

The Collagen Glow Sunscreen, for example, surpassed 400,000 units in cumulative sales within eight months of launch, demonstrating its potential to become another key product. The revenue from our home beauty device segment increased 24% year-over-year to 112 billion won.

The demand remained solid in our core markets, while geographic and channel expansion supported growth in newer markets. During the quarter, we launched Booster Pro, powered by LDM ultrasound technology.

By adapting technology used in professional aesthetic equipment for at-home use, we further strengthen our home beauty device portfolio. Lastly, the revenue from others businesses declined 31% to 7 billion won, reflecting the continued downsizing of non-core operations.

Page 6 provides an overview of our regional revenue. Beginning this quarter, we are reporting revenue across five regions: Korea, North America, Europe, Asia, and others.

This change provides greater visibility into North America and Europe, now key markets for APR. The prior-year figures have been recast on the same basis for comparability.

The second quarter overseas revenue increased 178% year-over-year to 704 billion won, surpassing 700 billion won for the first time and setting another quarterly record. The overseas revenue accounted for 92% of total revenue, up from 77% a year earlier.

The growth was led by the continued strength in North America and exceptional momentum in Europe. Together, the two regions represented 68% of total revenue.

I will discuss each region in more detail on the next page. Let me now provide more detail on our regional performance.

In the second quarter, we delivered strong growth in North America and Europe, while maintaining solid momentum across Asia and other emerging markets. Starting with Korea, revenue was 63 billion won.

The year-over-year decline mainly reflected the continued downsizing of our non-core businesses. The North America revenue increased 265% year-over-year to 376 billion won.

The online growth remained strong, supported by an expanding portfolio of best-selling products. The Medicube ranked number one in Amazon Beauty category in both the first and second quarters.

During the Prime Day at the end of June, the Medicube also became the most searched term across all categories on Amazon, reaffirming the strength of the brand in the US online market. We also expanded our offline presence through major retailers, including Ulta Beauty, Target, and Walmart.

Going forward, we will build on our strong online demand while broadening offline distribution and consumer reach. The Europe delivered another exceptional quarter, with revenue increasing 380% year-over-year to 145 billion won.

Our entry into online channels across five major European markets has established a strong platform for expansion. With revenue reaching nearly five times the prior-year level, Europe is emerging as another major driver of our global growth.

We plan to strengthen brand awareness and sales in our existing markets while entering additional countries and pursuing opportunities with major offline retailers. In Asia, the revenue increased 15% year-over-year to 121 billion won.

Lastly, revenue from others region increased 325% to 62 billion won, supported by growing B2B demand and expansion across the Middle East and Latin America. Page 8 highlights the progress we made in expanding our global presence during the first half of 2026.

Starting with North America, revenue increased 261% year-over-year to 648 billion won. The region has become a core market where our global growth model was first successfully proven at scale.

Building on the channel expertise and brand expansion capabilities we developed in North America, we have been able to accelerate our growth in Europe. The revenue in Europe increased 363% year-over-year to 229 billion won.

The growth playbook we established in North America and Europe is also beginning to gain traction across newer markets, including Middle East and Latin America. Revenue from others region increased 235% year-over-year to 99 billion won, demonstrating encouraging early progress in these markets.

Going forward, we plan to replicate the experience and capabilities we had built in North America and Europe across additional regions, including the Middle East and Latin America, further strengthening the foundations for our global growth. Please refer to page 9 for our summarized consolidated financial statements.

The summary is provided for reference purposes only. Additionally, let me briefly update you on our EBD and skin booster businesses.

For EBDs, we have received Korean regulatory approval, clearing a key milestone towards a domestic launch by year-end or early next year. Feedback from leading medical professionals has been encouraging, and we are now building out our sales organization and preparing manufacturing for commercialization.

For skin boosters, our PN-based product has received Class 2 medical device certifications and also export authorizations in Korea, establishing the foundation for overseas sales. The initial exports have begun, with a broader rollout expected from the third quarter, led by Japan and the Middle East.

We are also preparing a Class 4 approval applications for the Korean market, with more meaningful domestic revenue growth targeted for 2028 onwards. Finally, let me address our full-year 2026 guidance.

We began this year with a revenue target of 2.1 trillion won and operating margin of approximately 25%. Since then, the growth has accelerated significantly, led by the US and Europe, and also supported by strong online and offline channel expansion.

Reflecting this momentum, we are raising our full-year revenue guidance to approximately 3 trillion won, while maintaining an operating margin outlook of 24% to 26%. We remain focused on delivering strong growth with solid profitability.

This concludes APR's earnings call for the second quarter of 2026. The Korean presentation is now coming to an end.

We'll now move on to the Q&A session. Thank you.

Thank you for this opportunity and congratulations on the successful Q2. I have two questions.

I'd like to get some color on Q3 performance. In Q2, we had the Prime Day effect from Amazon, I'd like to understand what is your expectation for Q3 performance going forward.

Secondly, the impact of tariff refund from the US as well as the transition to IFRS 18, I believe there has been some impact on your margin. Nevertheless, at the cost side, I believe that you were able to save some, can you provide more details?

Thank you.

Rather than providing color on Q3, I'd like to give you some color on the second half performance. As for Q3, we don't have much visibility to Q3 performance.

We will not be able to provide you with aggressive figures for Q3 because there are no special events for Q3. The Amazon Prime Day was rescheduled to the second quarter.

The biggest event that we anticipated in the middle of the year would normally be scheduled in October, November, and December. Nevertheless, we continue to generate revenue, and we see a continued revenue growth trend all over the markets.

Overall, in Q3 and Q4, I believe that 1.7 trillion won of revenue is expected, 2.7 trillion won, and for the US and Europe, we see a QoQ growth in our revenue. In Europe, led by the UK, where we see a big growth in revenue, we also work on Germany, France, Italy, and Spain, and in these markets, we see our rankings continue to go up, resulting in a growth in our revenue performance.

When it comes to our Q3 performance outlook, I believe that it will be similar to our performance in Q2. Far, we have had aggressive growth on a QoQ basis, but in Q3, we have some uncertainty and lack of visibility because we don't have a major event or promotional event, we will have to rely on organic growth.

It is difficult to predict accurately, but our performance in Q3 is pretty good. Including Q4, in terms of our second half performance, we expect good results.

Moving on to the impact of tariff refund from the US, right now, about 13 billion won of tariff refunds was recognized already, and it's not a total amount, but partial refund was made. In the second half of the year as well as early next year, we will be able to receive tariff refunds in a significant amount, but as for the amount, I won't be able to give you a specific number.

Nevertheless, you mentioned about IFRS 18 recognition. For the second quarter, there was no big impact in terms of positive impact, but we will communicate separately through an IR channel.

We also saw an increase in one-off expenses, including logistics costs, and it is included in COGS, it was recognized as part of inventory expense. In terms of cost, we have air freight, and air freight rates have been going up quite significantly, we had incurred some major air freight expenses in the second quarter, including 10 billion won.

There are several reasons why. We have had this Amazon Prime Day, which was scheduled in June, and we had to meet the cutoff deadlines.

To do so, we had to make huge shipments through air freight. There's an increasing sales in Europe, and to respond to this demand, majority of the shipments are made through air freight.

The major reason is that there are disruptions in ocean freight. We're looking for alternative sea routes, but nevertheless, to provide stock to Europe, we would have to continue to utilize air freight, and so air freight expense is expected for the third quarter as well.

For the US, we have some safety stock already in place. As I mentioned, there's no major promotional event scheduled for Q3, inventory stock forecast is going up, gradually air freight burden will decrease.

In addition, Coachella festival as well as other one-off marketing expenses were made, and that is why we didn't see a significant growth in operating profit margin. It is similar to the previous quarters.

Yes, do you hear me?

Thank you very much for taking my question. I have two questions.

Now first is about the cost. Of course, it was explained earlier in the presentation, in terms of the transportation cost as well as the commissions and also the promotions and the ad spend, I wonder how much they were.

Also, those costs, will they be more stabilized in Q3? The second question is, now at the revenue side, we see that in the US, the revenue was stronger than expected.

What is the share between the offline and then also in terms of the other channels as well?

Thank you very much. I will have to double-check on some of the numbers.

Now, first of all, about the cost. Now, the COGS went up by 20.8%, and then the sales commission went up by 18.6%, and the ad spend was 22.5%, and then the transportation was 7.7%.

Then the transportation cost is actually a bit higher because the COGS also includes part of the transportation, because when we export then to Europe and the US, then they would be first recognized as inventory, and then when they are sold, then they will be recognized as COGS. At this time, the air freight is increasing the most rapidly, and part of that is actually recognized as COGS at this time.

Now we see that the ad spend has gone up a bit, and especially in Q2, we were more aggressive in our sales growth. We mentioned this at every call, but then our biggest focus right now is on growing our sales.

Of course it was one-time cost, but then, yes, Lisa was in Coachella, and we are also the main sponsor in Coachella, and also the promotion events with Kim Kardashian, and also some other events as well. These are some of the examples of our more aggressive ad spend.

Having said that, the aggressive ad spend, I do not believe that it is going to increase much higher than this because our expectation is to be around 20%. The sales commission, it is not much of an increase from the past.

Our biggest consideration at this time would be about the stock shortage, and that means that we also need to manage the supply chain more effectively, and also out of the sales, we also need to make sure that there will be no gaps in the sales. That is why we rely on air quite heavily.

Now in the US, there had been severe stock shortages, but then now coming into Q3, we see that the stock shortage is considerably easing. For the US market at least, we do believe that there is now decline in the usage of air freight.

Then now, in order to meet the Prime Day, now there had been some products where there have been stock shortages, and we are still using the air freight for those. For the European market, was it the Suez Canal?

Now because the Suez Canal is also blocked, now it is taking double the time over the ocean to reach Europe. Now we are also getting more revenue out of Europe, and yes, that is, of course, a good thing.

Then in order to meet the demand, the very quickly rising demand, we are using even more air freight for Europe, more so than the US. We do believe that going into Q3 as well, we will have to still rely on the air freight for Europe.

Then now from Q4 and on, now because there is the safety stock to be built up, we believe that that is also going to ease somewhat. Then now

about the offline channel mix and allow me to respond to this question. Yes, this is Cha Tae-young from the Communications Office, and let me respond to the online and offline mix in the US market.

Now as you would know, there was some regional reclassifications, some of the cross-borders now they have been also reclassified. Now based on this new standard, then in the North American sales, then about 80% was online and 20% offline.

Also based on the altered criteria, then in the first quarter last year in the US, the offline was 18%, but this time it was 23%, there was increase by about 5 percentage points. Also the sell-through trend, it is quite steady, and I cannot give you the specific data at this time, but now in the channels where we have presence, then yes, we see that it is quite steady, and also the sell-through trend is also quite healthy.

We have entered Target first, and yes, the sell-through data is very quickly rising. Also in Ulta as well, we are not seeing any drop or decline, it is also steadily rising.

Also in Walmart, the sell-through data, we are not getting the specific data yet, and I believe that we will be able to share the data with you in time. Thank you.

Hello, I am Park Jeong-hwan from Daol Investment & Securities. Thank you for this opportunity.

My questions are quite similar to the previous questions, and based on the answers, on a quarter-over-quarter basis, there was some changes to operating profit, and there was an increase in the share of Amazon, and then there was an increasing share in B2B, and resulting in the improvement of OP margin. Considering our air freight expenses and ad spend, I believe that there will be some recovery in OP margin in the second half of the year.

Do you think that this will be mainly driven by the increase in offline sales? What do you think are going to be the major drivers behind the improvement in the OP margin?

I'd like to get some guidance on the overall direction. Thank you.

What you made is quite valid. As you mentioned, we have the online channel as well as very aggressive marketing with increase in viral, not only in the US and Europe, there will be increase in B2B orders.

As a result, B2B channel, because it has higher margin, will contribute to OP margin, which means that the marketing expenses and ad spend are more allocated to the online channel, and with the B2B increase, OP margin will improve. Now in terms of geography, in Europe, the OP margin is currently lower than the average OP margin in Europe because we are quite aggressive in increasing our top line in Europe.

Of course, we're not incurring any losses on that in that sense, but we are quite aggressive in conducting our marketing in Europe to expand our presence. When it comes to our cases in Japan and the US, once we have more mature presence in these markets, OP margin will naturally improve.

For instance, in Japan, our revenue growth is almost three times, but OP margin continues to improve. Therefore, in Europe and other channels, when we consider that they are online channels, OP margin will improve in the future as we become more mature in these markets.

Initially, in order to increase penetration and in order to address the market entry barriers, we tend to execute aggressive marketing, therefore resulting in an increase in marketing and ad expenses. It's not so much about efficiency improvement, but whether we try to improve our top line in these new markets, and later our margin will improve.

Moving on to OP margin trend for next year, we don't have any specific sales guidance or OP margin guidance for next year because we still are working on our internal analysis. In our view, we believe that there's enough story to further drive up our OP margin.

As you mentioned, we have very rapid increase in online sales, and B2B demand will go up as well. These are our expectations for next year.

Nevertheless, this year, we have had to deal with many unexpected situations, there are a lot of uncertainties for next year as well. When we communicate with our analysts, we try to provide some buffer in our outlook and projections.

Our goal is to maintain our OP margin while trying to increase the top line further. We continue to observe our market situations, and we will make sure to communicate with you.

Yes, good morning. Thank you very much for taking my questions.

Now it was actually mentioned earlier, a couple of questions as an extension to that. Now the first is, as was mentioned, yes, I see that the revenue guidance has gone up from 2.1 trillion to 3 trillion, even accounting for the geopolitics, and I would say that that would also include the uncertainties about the air freight, the cost is going to be higher.

Then going into next year, then assuming that 3 trillion is going to be the baseline, then I believe that the air freight by that time could go down. Today, then what is the percentage of the air freight out of the revenue?

Or what would be the percentage in each quarter? Then now for next year, if it is going to be about 3 trillion won in revenue, then again, I wonder whether there is a chance that the air freight is going to drop considerably next year, I hope for some guidance on this one.

Then now the second question is, now in the second half of this year, the revenue growth is very hard to predict, and, of course, then the same for next year as well. Then still the growth is very high, I wonder whether the high growth is going to continue into next year, given the high base.

Then perhaps for next year, then even if you cannot share the specific revenue target or guidance, then can you at least give us some insight into the potential drivers of the revenue going to next year as well?

Thank you. About the air freight, then yes, compared to last year, we would say that it is about 10 times higher this year.

Then this time, it's not the cost for commission, but then now just in terms of the Q2 air freight actual, then it is close to 30 billion, which is highly abnormal, and that is why we called this one-time cost or a one-off cost. Now in terms of the share out of the revenue, then now in terms of the air freight, now it is 10 times higher than the ocean freight.

Now one thing that we could not expect was the long-distance markets, for example, in the EU and the US and the revenue growth there. Also, we have all these SKUs that are existing, and then also some of the newly launched SKUs, and they are also growing very rapidly.

If there are some stock shortages, then they tend to drop dramatically in the Amazon ranking, we also wanted to keep them up in the ranking, and that is why we had to rely on air freight quite a lot. Again, the long-distance markets, for example, in the US and Europe, now because inventory was not enough, there also was quite a lot of expense in terms of the air freight.

Then now, more recently, we are seeing that there is some stabilization of the inventory in the EU and the US, we believe that now in the second half, the inventory is going to stabilize. We believe that in the second half, the inventory is going to be built up to the extent that it will also reduce the air freight considerably.

Also, because we had been relying on online and D2C, we were having very lean operations. Then now the K-beauty trend these days, not just for the company, but also for others as well, we do believe that the demand is going to steadily and consistently rise, meaning that I believe that now we also have the fundamentals to have healthy inventory turnover.

That is why the inventory is being built up, and we believe that that is also going to drive down the air freight in the second half. Now about the growth drivers, now in the US, the US revenue is growing much faster than we had expected in the early part of the year.

Despite that, the offline now it's still about 8:2, meaning that offline the sales growth was not as fast as we had expected. Rather than that, I would put it this way: so the online growth is growing more rapidly, and in terms of the offline, of course, it takes time for us to enter into these brick-and-mortar shops.

We do believe that, yes, there will be growth in both online and offline as well. Also for the offline, we are also looking forward to the growth in the new categories.

We did not mention this earlier in the briefing, but then now in the hair and body categories, we see that some of the K-beauty companies are also thriving there, and the same for us. In the hair and body categories, we are also seeing growth.

We intend to be even more aggressive in the US market, and that is where we are looking forward to in terms of the stronger growth. Then let me summarize: now for the US online, then the existing products expansion, and also the new categories.

Through these moves, we continue to broaden our growth base. Then for the offline market, we believe that the revenue will continue to grow as well.

Then looking to the European market, we see this still as a new market for us. We believe that the US leading the way, Europe will also follow suit.

We will also continue to be aggressive in the European sales as well. Now in the early part of the year, now for the European market, we would say that this is our year one, and we are looking to about 300 billion won in revenue, but then now in the first half, we have already achieved over 220 billion.

Based on this trend, then we believe that for the full year, we will be able to more than fulfill 500 billion in Europe. Now for information, in the US, it was 500 billion.

Now if we achieve 500 billion in Europe this year, then that means that we will match number coming from the US last year, meaning that Europe has a very strong growth potential for us. Not only that, but in Europe, now we are focusing on the online channels in the top five countries.

Then again, in Europe, there are some other new countries for us as well, we can continue to broaden our presence and our base there, meaning that there can be more growth to come. Not only that, but also the EBD medical devices and also the skin boosters, as well as the home beauty devices, which are our focus these days, now they are also high drivers for us today, but also will continue to be so into the future, especially for the home beauty devices.

In Q2, there was a transition from the existing product to a new product. As the main SKU transitioned, perhaps the growth was not as high as we have seen in the previous quarter.

Then now going into the second half, we will have stronger promotions for the new products, and as a result, we will also match the ASP of the predecessor product as well. We cannot specify how much it is going to be, but then the skin booster and the EBD, we do believe that they will also be able to drive quite a strong sales next year as well.

Hello, can you hear me?

Thank you for the opportunity. I have two questions.

About marketing expenses. About 20% of revenue is used for marketing, according to your explanation.

In anticipation for major events in Q4, I'd like to know whether you are going to spend marketing expenses preemptively in Q3 as well. My second question is about B2B revenue.

What is the percentage of B2B sales in Q2 out of the total revenue? Also, in Latin America and Middle East, if you have any go-to-market strategies for these markets, please share them with us.

Thank you for your questions. Typically, before any major event, we are likely to spend marketing expenses one month prior to that major event.

As for Q3, in my view, rather than preemptive marketing expenses, Q3 is expected to see an early recognition of air freight in Q3 instead of Q4. We have cutoff deadlines that we need to meet, and cutoff deadlines are usually two to three months prior to a major event, and for that, we will have to stock up faster than usual.

In order to address inventory shortage, we're utilizing air freight, and some of these air freight expenses are likely to be recognized in Q3. As for commissions and marketing expenses, the Prime Day is from November, some of them may be recognized in October, but these may not be recognized in Q3 to a large extent.

For the percentage of B2B sales, we are not able to provide you with a specific breakdown, but it's, roughly speaking, 30%. Moving on to our Middle East and Latin American market, for your information, last week we accompanied the president's visit to Latin America, and we visited Brazil.

Latin America was, in our view, a market with great potential, and we were able to see that in person. Our Latin American sales is not very significant, and this was not our major market.

It was mainly B2B channels, namely focusing on B2B distributors rather than large retail chains, the volume was not very big. When we actually visited the market there, we were able to see that there was a high brand awareness and awareness of K-beauty.

When we meet with people who are not in the beauty business, they were even aware of Medicube and our brand. Far, we focused on Europe, North America, and Asia, but as you mentioned, Latin America and Middle East are boasting a lot of potential because we were able to see that there is high interest in K-beauty, and there is viral marketing such as TikTok and Instagram and social media channels.

We were able to see that there was a growing fandom for K-beauty in these markets as well. Going forward, we believe that sales can grow in these new emerging markets.

However, in Q2, Latin America and Middle East figures cannot be provided, but if you want to know more details, we will communicate to you separately.

Online and offline breakdown in the US and Europe, as I mentioned, 80% online and 20% offline in the US, and in Europe in Q2, 50% online and 50% offline. As you may know, we started online earlier this year, and there was an acceleration of growth, more than half of growth in the online market in Europe.

Moving on to our projections for Europe and the US for the second half of the year, as you may know, in the US, we continue to offer new SKUs and bestsellers as well, and in the second half, in October, we have Amazon Prime Day, and also we have the Black Friday event in November, and so we are preparing for that. We entered Walmart and Target in the first half of the year, but going into the second half of the year, we're planning to enter major retailers, including Costco, there will be a big increase in the second half of the year for these offline channels.

With initial shipments to new retailers, we'll be able to see a big driver. Moving on to Europe, the UK is a leader, and Germany, France, Spain, and Italy are markets with big growth.

In Amazon top 100, there is an increasing presence of our products, if we accelerate this speed, we'll be able to expand our online presence, and this will lead to a growth in offline market as well, these are going to serve as important drivers for next year. We are on track for the US market, and for Europe, as we checked, there is a huge upside for offline sales increase.

Indeed, in Europe so far, we focused on marketing and Amazon play. For online, we didn't, but for Amazon and TikTok and online channels, we are able to increase our revenue through viral marketing on social media, there is big growth in demand for our products in Europe, I believe that sales growth in Europe will take off in earnest.

Thank you very much for taking my questions. Now first, about the US offline.

Starting this year, Target, Walmart, you have also entered these retailers. Then I believe that the channel is a bit different in characteristics from Ulta, I wonder what the initial performance is, and also in terms of the initial operations, what has been your experience so far?

The second question is, now as you expand the offline presence in the US, then now moving from Amazon-centric to more offline, then I wonder whether there are any concerns of cannibalization, because now in the offline, they say that the consumers offline are a bit different from online, could you also share your experience so far? Also last, now in the US and Europe, you have also upwardly adjusted the guidance for the year, and then out of this, what would be the share of offline?

Thank you. For the offline revenue in the US, now as we diversify the channels, we do believe that there is going to be sufficient revenue upside.

Now I did not share specific data with you earlier, but then now in terms of the Target or Walmart, and also for the future what we are planning for, for example, the Costco and CVS Pharmacy, I would say that we will be able to meet the GMV that is similar to Ulta. In the US now for each of these five channels, in terms of the GMV and also the purchasing power, now they are quite strong.

Also what we have seen so far is that now in terms of the cannibalization among the offline channels, now it hasn't been long enough for us to see any signs of that yet. We can see that there is healthy growth coming from each offline channel.

Then also your question was whether there was any cannibalization between online and also offline, and we have not seen anything like that so far. It is also hard for us to figure out the reasons yet.

Perhaps the offline consumers are different, and also in terms of the accessibility, it might be different by the region, as well as the purchasing patterns and the shopping patterns might also be different by the region. Yes, we are also seeing increase in offline channels, but now even more so, we are also seeing revenue growth in Amazon as well.

Far we are seeing little to no signs of cannibalization so far. In terms of the 3 trillion won guidance, and you also asked about the offline in the US share, and for us, the guidance now this is actually based on the rollout plan from the first half.

Yes, there is going to be growth in the volume in the US as well, but then now if the offline is going to grow even more, then we actually believe that there is also some more upside potential. Based on the guidance so far, then the share of the offline is going to be similar to where we are today, about 20% to 25%.

Hello, can you hear me well?

I have two questions. I'm not sure if this is an appropriate question, but within this month, there will be some changes to your business when it comes to lockup.

The second question is that your existing products are selling well, but there's high expectation for new categories, including hair and body. If there's any number or data you can share with us, we will appreciate it.

CEO and myself, there will be no longer lockup, and the other executives, their lockup period ended a year, more than a year earlier, so as for share sales-related events, we don't have anything expecting soon. As for the remaining quarters, as I mentioned before, about a year and a half lockup period ended, and a couple of times shares were traded, but these were mainly to pay taxes for stock options.

Tax payment has not been done, there will continue to be some selling of shares, but there will not be any major share block deals or any major selling of our shares into the market. As for myself, I don't have any intention to sell my shares right away, but for some time we continue to focus on shareholder value enhancement.

Going forward, if there's any plan for major share sell-off, then we will make sure to communicate that with you in advance, so that there will be no major impact on the market. What I can say right now is that there's no concrete plan for equity sell-off, and our CEO is not interested in doing so anytime soon.

Moving on to your second question regarding our performance in the new categories, we don't have specific data to share with you at this moment. We will share them later separately, but we see encouraging performance coming from the new categories, not only the new categories, but also the mud packs and multi balm product.

We have these new SKUs. Their performance is really encouraging.

In the new categories, especially the hair category is quite encouraging. In Amazon, we were ranked in top 100 in Amazon, which shows that our performance is growing quite significantly.

Therefore, we plan to be more aggressive in the new categories, including hair and body. In addition to our existing SKU lineups, but also we see a huge potential for success in the new categories, including body and hair, we are planning to execute more marketing for these products as well.

Thank you again for taking the time to join us today. Everyone at APR remains fully committed to delivering sustainable growth through continued innovation and disciplined execution.

We sincerely appreciate your continued interest and support. This concludes APR's second quarter 2026 earnings call.

Thank you.