Operator: Thank you for standing by, and welcome to the Meituan Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to Scarlett Xu, VP of Capital Markets. Please go ahead.

Scarlett Xu: Thank you, operator. Good evening, and good morning, everyone. Welcome to our second quarter of 2026 earnings conference call. Joining us today are Mr. Xing Wang, Chairman and CEO; and Mr. Shaohui Chen, Senior Vice President and CFO of Meituan. For today's call, management will first provide a review of our second quarter of 2026 results and then conduct a Q&A session. Before we start, we would like to remind you that our presentation contains forward-looking statements, which include a number of risks and uncertainties and may differ from actual results in the future. This presentation also contains unaudited non-IFRS accounting standard financial measures that should be considered in addition to and not as a substitute for measures of the company's financial performance prepared in accordance with IFRS accounting standards. For a detailed discussion of risk factors and non-IFRS accounting standard measures, please refer to the disclosure documents in the IR section of our website. Now I will turn the call over to Mr. Xing Wang. Please go ahead, Xing.

Xing Wang: Thank you, Scarlett, and hello, everyone. In the second quarter, our total revenue grew 14.4% year-over-year and net profit turned positive. Both core local commerce and new initiatives delivered solid results. We remain focused on our retail plus technology strategy, improving business quality and driving high-quality growth across the industry. As the go-to local services platform for consumers and merchants, our ecosystem continued to strengthen. We pushed forward with product and business innovations while stepping up investment in our ecosystem and technology to build long-term value. We also expanded our grocery retail and overseas businesses with continued gains in operating efficiency. On the AI front, we made further progress in foundation models as well as in AI agent applications. Now let me walk you through the details. In the second quarter, the quick commerce industry shifted its focus to improving marketing and operating efficiencies. Against this backdrop, our strong consumer mind share and core competitive advantages translated into healthier financial results. Order mix and user quality continue to improve steadily. For food delivery, core user stickiness strengthened further with purchase frequency, retention and average order value all trending up. Meituan Instashopping maintained healthy new user acquisition with the post-2005 generation growing particularly fast, while existing users also increased their order frequency. Despite a high base from last year and evolving consumption trends, we actively pursued new growth opportunities, improving our supply offerings, strengthening product competitiveness and deepening our understanding of user needs for different consumption scenarios. For food delivery, [ Pinhaofan ] improved its ability to identify consumer demand and accelerated the rollout of hit products from chain merchants. [ Shenqiangshou ] continued to raise the bar on supply quality, catering to mid- to high-end consumers seeking quality upgrades. We also steadily expanded innovative store formats such as Branded Satellite Stores [ Pinpai Weixing Dian ], creating incremental value for merchants. For Meituan Instashopping, Meituan InstaMarts maintained rapid growth and remained a key growth engine. [ Waimai Songjiu ] expanded quickly across the majority of provinces in China. It also launched more private label products. In June, we rolled out an anti-counterfeiting verification system to safeguard the product authenticity for high-end alcohol. [ Songshu Bianli ] also accelerated its market penetration, leveraging customized product development and factory partnership to enhance product competitiveness and better serve users in night times and travel scenarios. We also took more proactive steps to strengthen our platform ecosystem, deepening merchant support and empowerment. We continue to lead the industry in food safety governance and improve courier welfare. In Q2, we fully rolled out 10 key initiatives under Trusted Food Delivery [Foreign Language] establishing an end-to-end food safety system spanning four pillars: pre-onboarding screening, in-process monitoring, crackdown on fraud and illicit activities and collaborative public oversight. To address evolving industry needs, we launched the first comprehensive AI solution built for the quick commerce industry. We also scaled up AI-powered tools, helping merchants optimize their online operation efficiency. Around the peak holiday seasons, we supported 220,000 small- and medium-sized restaurant merchants with funding, operational supplies, equipment upgrades, AI tools and store renovations. In Q2, we also launched a special program to boost the demand in lower-tier markets and energize on county-level economies. In the second half of the year, this program will expand to nearly 400 counties nationwide, helping over 0.5 million small and medium-sized merchants digitize their operations. On courier welfare, we have expanded the occupational injury insurance program nationwide, covering every order and every courier. In addition, we continue to refine our algorithms. And just recently, we pioneered pause the clock at red light, [Foreign Language], rolling out this feature first in Beijing. Going forward, occupational injury insurance, pension insurance subsidies and our critical illness care program for couriers and their families will together form a robust and comprehensive welfare framework. This quarter, we further strengthened our position as the preferred platform for local services, sustaining high-quality growth across our in-store, hotel and travel business. Despite a changing consumer consumption environment and intensified industry competition, we continued to enrich our supply with more diverse, high-quality offerings while elevating the overall user experience. Meanwhile, we pushed the industry further from choosing the right merchants to choosing the right artisans and the right experiences. We saw a clear shift in local services consumption from standardized spending towards more personalized experiential and emotion-driven experiences. Authentic experiences and deep engagement are playing an increasingly important role in consumers' decision-making. This quarter, we released the new Must-Eat List, [ Bichibang ], curated from 1.5 billion authentic user reviews. It now covers 264 cities and regions globally with 120 newly added cities. Through genuine user recommendations, more long-standing local restaurants, specialty dining spots and hidden culinary gems are being discovered. The Must-Visit List, [ Biguangbang ], also continued to expand into more immersive, interactive and interest-driven scenarios. We believe that in the AI era, authentic experiences, authentic reviews and authentic trust will continue to be the most vital infrastructure for the local services industry, and we will continue to strengthen our unique advantages in this area. In addition, we are leveraging AI to enhance both consumer experience and merchant operations. For complex local services decisions, consumers increasingly turn to [ Xiao Tuan ], our AI assistant built in Meituan app. As adoption grows, we are seeing a meaningful lift in user engagement on Meituan. We also continue to elevate the consumer experience with integrated services like Pickup Now [Foreign Language], or online reservations, advanced online ordering, smart queuing and in-store smart ordering. These features give consumers a more seamless experience across a wider range of scenarios. Our partnership with Tencent is progressing rapidly with both teams refining the product to deliver faster, more convenient services. Beyond serving consumers, we are extending Meituan's operational expertise across industries through AI agents. On the CatPaw platform, we are rolling out specialized AI agents across restaurants, services, retail, medicines and health, and hotels and travel. These AI agents help merchants in improving daily operations and driving tangible efficiency gains. This marked our evolving role from merchants' online channel to their AI business partner. Looking ahead, we want to be more than a platform that connects consumers and merchants. We aim to become a digital copilot for merchants on our platform. Now let's move on to new initiatives. In the second quarter, both grocery retail and KeeTa maintained a very rapid growth while further improving operating efficiency. For grocery retail, Xiaoxiang Supermarket accelerated its expansion and now operates across 68 cities. We continue to strengthen our supply chain and enhance our merchandising capabilities with private label products accounting for a growing share of our GTV. We also expanded our off-line footprint. In July, we opened our third Xiaoxiang Supermarket offline store in Hangzhou. We scaled the Happy Monkey model to serve community scenarios with 40 stores in operation as of Q2. And for KeeTa, we sustained strong growth momentum alongside continued efficiency gains by market. Hong Kong has reached stable profitability. The Middle East delivered further sequential improvement in operating efficiency. In Brazil, we focus on São Paulo market. Going forward, we will continue to leverage our strengths in product technology and operations to deliver a superior consumption and delivery experience to KeeTa users. Reflecting on the second quarter, our focus was on building operational capabilities. We continue to enhance supply quality, expand consumption scenarios and deliver high-quality growth while steadily improving efficiencies. Looking ahead, we see broad room for growth across the industry. Many niche local service needs remained underserved, and there is still significant potential to elevate both service experience and operating efficiency. We will move decisively to capture these growth opportunities, continuously iterating on our products and services and actively deploying AI in real-world consumption scenarios. Our goal is to further extend our competitive edge in supply diversity, user experience and operational efficiency. At the same time, we remain committed to our social responsibilities, strengthening food safety governance, improving courier welfare and empowering small- and medium-sized merchants. We will continue to drive the industry toward higher quality and more sustainable development. With that, I will turn the call over to Shaohui for an update to -- on our latest financial results.

Shaohui Chen: Thank you, Xing. Hello, everyone. With the on-demand industry gradually shifting toward efficiency improvements, our focus on operational execution and the structural advantages translated into meaningful financial improvement. Revenue growth accelerated and the business turned profitable in Q2. Now let's look at our financial results in details. All comparisons are on a year-over-year basis, unless otherwise noted. Total revenue grew by 14.4% to RMB 104.6 billion this quarter. Cost of revenue ratio edged down to 66.5%. The accelerated revenue growth and better controlled cost ratio were both primarily driven by the improvement in marketing efficiency. This reflected our continued focus on quality growth amid the dynamic and competitive environment. Selling and marketing expenses ratio also went down to 23.6%, mainly due to more disciplined marketing spending. R&D expense ratio increased to 7.3% as we increased investment in AI, while the G&A expenses ratio remaining stable at 3.1%. We turned profitable this quarter with total segment operating profit and adjusted net profit reaching RMB 3.9 billion and RMB 2.5 billion, respectively. As of end of June, we held cash and cash equivalents and short-term Treasury investments totaling RMB 168.3 billion. As of June 30, our investment portfolio was nearly RMB 77.3 billion. Separately, fair value changes in certain of our investments resulted in RMB 22.2 billion gain recognized in other comprehensive income rather than P&L this quarter. We will be thoughtful and disciplined about evaluating exit opportunity for our investment portfolio along the way to provide more capital resources for our business and for shareholder return. Now let's look at the segment results, starting with the core local commerce segment. Revenue reached RMB 71.5 billion in Q2, with year-over-year growth accelerating to 10.1%. Delivery service revenue and merchant service revenue both pick up growth pace during this quarter, while product sales delivering a solid year-over-year growth of 78.9%. We are pleased to see our food delivery turn to positive year-over-year revenue growth this quarter. Our strategic focus on higher AOV order segment, core user base and operational efficiency continues to bear fruit. We improved our leadership in both order volume and GTV this quarter. A healthier order mix has driven year-over-year recovery in our food delivery net AOV. We also improved our marketing efficiency. However, the industry subsidy levels are still well above where they were in 2024, and we expect normalization will take time as market evolves. On Meituan Instashopping, it continued to deliver steady growth with revenue growing faster than order volume on a year-over-year basis. This was primarily driven by two factors: the rapid expansion of our 1P business and strong advertising traction as more retail brands allocate marketing budget to our platform. Revenue of our in-store, hotel and travel business also grew steadily, and we continue to lead in core categories. Turning to profitability. Segment operating profit turned profitable to RMB 5.7 billion this quarter. On-demand delivery unit economics turned positive with our UE across both food and nonfood categories staying far ahead of the industry. The significant sequential improvement in UE was driven by seasonal tailwinds and meaningful subsidy reduction. With our strategic focus on high-quality growth and ROI-driven resources allocation, our in-store hotel and travel business also improved its operating profit margin sequentially despite intensified industry competition. All of these gains more than offset our increased investments in brand marketing and promotional expenses. Now turning to our new initiatives segment. Revenue in Q2 was up 25% to RMB 33.1 billion. Segment operating loss narrowed sequentially to RMB 1.7 billion. The rapid expansion of our grocery retail business contribute meaningfully into the segment's revenue growth, while losses from grocery retail increased quarter-over-quarter on a fast-growing business scale. We continue to see steady operational efficiency gains across the board and its margin also improved. On KeeTa, growth momentum across Hong Kong and the Middle East remains strong. The losses narrowed quarter-on-quarter as operational efficiency improved across Hong Kong and the Middle East market. Hong Kong is now profitable on a sustained basis and unit economics in the Middle East continue to trend in the right direction. After navigating an intense competitive environment over the past year, the results we are seeing today through our execution capability on quality growth and operational efficiency improvement. The path forward is about compounding our advantage in product, services, technology and ecosystem so that we can deliver more value to all stakeholders. We remain deeply committed in our long-term potential. With that, we are now open for Q&A.

Operator: [Operator Instructions] The first question today comes from Thomas Chong with Jefferies.

Thomas Chong: How does management view the competitive landscape in food delivery and quick commerce space? Specifically, what trends are you seeing in Meituan market share within the mid- to high AOV order segment? And looking into Q3, as industry subsidies gradually normalize, how do you expect the unit economics for food delivery to trend sequentially versus Q2?

Shaohui Chen: Thank you, Thomas, for the question. Let me first share some thoughts on where we see the food delivery industry is heading. First of all, we are seeing a shift across the industry towards greater focus on marketing and operational efficiency. We believe competition will gradually shift back to what really matters, quality, service and innovation as regulators provide further guidance on subsidy practice. That will drive healthier industry development and create a fair field for companies with genuine core competence. And we are already seeing that play out. Over the past few months, our advantage across user mix, order mix and operational efficiency has continued to strengthen. We've extended our lead in both order volume and GTV on a sequential basis, particularly in the mid- to high AOV segment, our focus on enhancing membership benefits, expanding premium supply and elevating service quality are playing off. We are seeing deeper engagement and stronger mindshare among premium users for our brand. For Meituan Instashopping, we also maintained our industry-leading position. Quick commerce has fundamentally reshaped consumer expectations around convenience and reliability. It is an irreversible lifestyle shift with adoption still at an early stage across different consumer groups, we see a significant long-term opportunity ahead. While we recognize the pressure from a high base last year and a broader macro environment, we focus on strengthening our operational capability to build a solid foundation for high-quality, sustainable growth in the long term. Over the years, we built a diversified quick commerce supply network, spanning a wide range of offline retailers and [ dark ] stores. And that's the solid foundation for us to meet evolving consumer needs and drive broader adoption of on-demand consumption over time. Going forward, we will keep investing in product competitiveness, supply chain integration and supply diversity to deepen our consumer mindshare across different categories. On Q3 outlook, we expect food delivery unit economics to improve meaningfully year-over-year. But it will still be impacted by seasonality on a sequential basis. Even so, we expect UE to stay positive in Q3 as we continue to optimize operational efficiency. Specifically, the industry subsidy level is still much higher than 2024 level, and it will take a few quarters to normalize. At the same time, seasonal headwinds will weigh meaningfully on our UE. As we mentioned before, Q3 is the peak season for on-demand delivery driven by summer activity. It's also when we ramp up our marketing spending sequentially to capture the highest demand window of the year. We will also provide additional subsidy to our couriers to ensure our delivery service quality through the peak season and on extreme hot weather conditions. As such, delivery cost per order in Q3 will be higher than that in Q2. On top of that, the occupational injury insurance began its nationwide rollout on July 1, which adds another cost layer. However, I want to highlight that the near-term UE fluctuations are primarily driven by seasonality and our proactive strategic decisions to balance scale, profitability and ecosystem. We are very confident to sustain our marketing -- market leadership and stay far ahead on UE across both food and nonfood categories. And that confidence is grounded in our improving user mix and operational efficiency. Our ongoing investment in the ecosystem is also deepening our moat. In fact, under the current market environment, we are in a good position to focus on our strategic priorities that matter most over the long term. Our UE recovery has clear visibility, and it will gradually get back to a reasonable level in the medium to long term.

Operator: The next question comes from Ronald Keung with Goldman Sachs.

Ronald Keung: I want to ask about your AI side on LongCat 2.0. Now it's been open source and being rolled out internally. How does management think about its role in your broader AI strategy? And beyond internal efficiency, is there a path to commercializing the LLM? And how should we think about the financial impact of our AI investments near term versus medium to longer term?

Xing Wang: Thank you, Ronald. And I will begin with LongCat 2.0 is an important foundation for our AI strategy. But what we are really focusing on is evolving our AI to bridge the digital and physical worlds and doing so deepening Meituan's competitive moat in local services over the long term. So for us, AI is less about competing on the models. It's more about leveraging AI to reshape our organization, product and workflow. As we have explained in the past, Meituan's AI strategy has three pillars: building LLM, AI at work and AI in products. And LongCat 2.0 is our next-generation in-house foundation model. And it's one of the first, if not the first trillion-parameter model [ trained ] entirely on Chinese infrastructure. So it's open weight, and we have rolled out across our core internal needs, including our software development and operations, customer service and AI agents. And LongCat 2.0 has made significant progress in core agentic capabilities, particularly in coding, reasoning and tooling and complex test execution. And it has gained positive feedback across the global developer community. And we believe AI creates a lasting value where it's deeply embedded in real workflow and where it can solve real problems as a reliable infrastructure. And our full stack domestic infrastructure for training and inference give us a structural advantage in cost infrastructure control over the long run. On the product side, we continue to upgrade our AI product offerings, including our AI assistant Xiao Tuan built inside the Meituan app. The direction is very clear from understanding complex multi-constraint queries to full agentic task execution. Ultimately, we want to deliver a seamless closed-loop experience that takes users from discovery and decision-making all the way through to transaction and fulfillment. The key is making this deeply integrated with real-world local services scenarios. And on the organizational side, AI adoption is deepening and driving productivity across the board. More of our employees are now using AI tools steadily and AI-generated code as a share of the total output continues to climb. At this stage, our priority is to keep building our AI capability, driving real AI adoption across our business operations. As I said in the past, we are not going to compete to be a token factory. Our focus is on using our models and AI products to strengthen our core businesses. We hope to provide a better experience for both users and merchants while also improving our internal operating efficiency. We will assess our AI strategy with an ROI-oriented approach and stay disciplined for capital allocation. Thank you.

Operator: The next question comes from Kenneth Fong with UBS.

Kenneth Fong: Congrats on the strong results. So I have a question on the in-store business. Could management update us on the competitive landscape for in-store? Are you seeing any rational shift towards monetization and profitability among competitors? And has the macro headwind be a meaningful drag on the business? And looking into the second half, how is management balancing growth and margin? And is there a clear path to margin recovery from here?

Shaohui Chen: Thank you, Kenneth, for the question on in-store business. The competitive landscape in the in-store sector looks very different today versus a few years ago. The market is much bigger. There are new players, more players and different players. We are seeing market players increasingly differentiate across user groups, consumption scenarios and merchant segments. For us, our one-stop local service offering and authentic review system are well positioned and consistently deliver value to both users and merchants. Our operating priority is very clear. We are not going after subsidy-driven low-quality orders. What we are focused on is strengthening our competitive position in core categories and deliver better services to our core users and merchants and to pursue high-quality growth and allocate our resources more ROI-driven. Over the past few quarters, we've seen competitors stepping up investment in local service space through a dedicated shelf-based app. They have been subsidizing heavily to redirect the traffic from their content-driven model to accelerate the adoption of the new app. Aggressive subsidy did bring in many price-sensitive users, particularly in lower-tier cities, but these users typically show weaker repurchase behavior. We haven't seen meaningful impact on our core users or our core merchants and our in-stock (sic) [ in-store ] GTV quality and redemption rates continue to run meaningfully ahead of key competitors. While macro has weighed on AOV in certain categories, the local service sector has proven to be quite resilient overall compared to the e-commerce sector. Online penetration across service retail category is still relatively low, so there's long runway ahead. We now serve over 8 million merchants across 200-plus categories, and we are still seeing new demand emerging whether that's new consumption scenarios, new service offerings or more merchants looking to go digital. For example, we are recently seeing categories like sports and wellness and immersive entertainment service accelerated their shift online. So we are still confident about the long-term growth trajectory of the in-store business. At the same time, heading into the second half, we are investing further to capture the growth opportunity. We will continue to strengthen our competitive positioning in core categories in core user groups and core merchant segments. Beyond that, we will have more local merchants to digitize operation. Our goal is to go beyond being a traffic source for merchants. We want to be the platform they run their business on and over time, an AI-powered partner that helps them operate smarter and grow faster. At the same time, continue to cut low ROI spending and improve our resources allocation efficiency. We will continue to realize the synergy between our in-store business and our quick commerce business. On margin side, it's likely the operating margin will come down from Q2 due to our increased investments in Q3 and Q4 for our in-stock (sic) [ in-store ] business. As competition gradually normalize in the future, we believe our focus on ROI-driven investment and operational efficiency will translate into gradual margin improvement over the medium to long term. Thank you.

Operator: The next question comes from Charlene Liu with HSBC.

Charlene Liu: Congratulations on an amazing set of results. Could management give us an update on Xiaoxiang Supermarket and Happy Monkey, how they have been tracking recently and where things stand on your omnichannel strategy? Are there any updates on expansion plans from here?

Xing Wang: Thank you, Charlene. First, let's be clear. The mission of Meituan has always been to help people eat better and live better. We believe more and more people will order food online. But if you still want to cook for yourself, you need to buy grocery. So that's why we consider both Xiaoxiang Supermarket and Happy Monkey to be a very important part of our grocery retail. And grocery retail is deeply aligned with our mission. And therefore, they are one of our key strategic priorities in the past decade and over the next decade, it will take a long time to do it right. Online penetration here is too low. We see a significant growth opportunity ahead. But we believe the right approach is to do omnichannel, bringing both online and offline store on the same platform. And on-demand retail is gradually changing how consumers shop groceries. And in the past, people used to visit wet markets in the morning or stock up at a very large supermarket or warehouse -- membership warehouse every week or every few days. And now more and more consumers are adopting on-demand delivery services. They just buy order what they need when they need it because they are confident that they can get it within 30 minutes. So once this habit is established, their purchase frequency goes up significantly over time. And we believe the long-term consumption potential per user will be very, very substantial. And talking about Xiaoxiang Supermarket, we continue to accelerate our coverage expansion in Q2. Now Xiaoxiang operates in 68 cities. The GTV growth remains very strong, and we are seeing a steady improvement in operating efficiencies. As we are committed to executing our omnichannel strategy, we are also actively exploring Xiaoxiang's offline store. We opened our first offline store in Beijing last December, and we opened our second in Ningbo in April and the third in Hangzhou in July. In this August, we opened the fourth store in Ningbo and the fifth one in Shenzhen exactly today. We believe the online dark store allows us to scale up across cities quickly and cover most of our targeted consumers. Meanwhile, a select number of offline flagship stores will also play a very important role in the overall ecosystem. Walking into our offline stores, consumers can see, they can smell and they can touch the products. That sensory experience is something they cannot get from a digital screen. It builds strong trust in both our products and brands. And in-store shopping naturally exposes consumers to a much broader range of products. Over time, we hope this omnichannel strategy will help Xiaoxiang become one of the most trusted and recognized grocery brands in China. Next, let's talk about Happy Monkey. That's our neighborhood grocery format. As of Q2, we have opened 40 Happy Monkey stores. Unlike Xiaoxiang's offline flagship store, Happy Monkey is built around a different value proposition. It has a much smaller, more flexible store format with a high private label mix and curated SKU selection, focused on delivering strong value for money products within local communities. We see these two businesses as differentiated and complementary models. However, Happy Monkey is still at a very early stage, and we will continue to refine our operational merchandising capability as we move forward. Regarding our long-term investment plans, we believe the true moat in grocery retail are organizational and supply chain capabilities. These take time to build. But once in place, they unlock a very large addressable market. What gives us confidence is that consumer demand for high-quality grocery products is far beyond top-tier cities. Many consumers in midsized cities and even counties in more developed regions have good consumption power. They also have a strong demand for better products, especially for groceries. This is also why we are exploring different grocery models to better serve different cities and different consumer needs. Going forward, we will continue to strengthen our merchandising capability and deepen our supply chain collaboration across our grocery retail businesses to build a more differentiated advantage. There are significant long-term opportunities for us in this space, and we will grow these businesses in a disciplined and sustainable way. Thank you.

Operator: The next question comes from Gary Yu with Morgan Stanley.

Gary Yu: Could you please give us some update on KeeTa? It looks like the KeeTa's traffic and app downloads have continuously been increasing. How are you thinking about the expansion pace and also investment budget for Brazil? And more broadly, how should we think about the overseas investments in the second half?

Xing Wang: Thank you, Gary. Before getting into Brazil, I think we can take a review of the markets we entered earlier. Because the progress we have seen there has proven our operational approaches in overseas market. In Hong Kong, we launched KeeTa in May '23. UE turned profitable in October '25. So it took us about 29 months to reach that milestone. And in our second market, Saudi Arabia, we entered the market in September '24. And I'm very glad to report that it has already turned profitable in July this year. That means it took us 22 months to get to that milestone, so even faster than Hong Kong. And what's more important here is that Saudi Arabia is a much bigger market than Hong Kong. And we are unfamiliar with the local market at the beginning, but we are able to ramp up even faster and get to profitability faster against all kinds of headwinds. This shows that our operational approach can scale well across different overseas markets. I think the key here is to stay focused on the fundamentals. Consumers and merchants needs are actually quite consistent across different markets. In every market, consumers care about better selections, better price, more reliable, fast delivery, while merchants care about incremental order volumes, their commission rates and reliable fulfillment services. Our goal has always been on creating incremental value for both sides, and that's how we can ultimately build trust and a real edge in the market. For Brazil, I believe it's a very attractive market to explore over the long term because Brazil is one of the top five food delivery markets globally. And the market is still growing rapidly, and it's still significantly underpenetrated. However, this market is quite different from the other markets we have entered. We will stay flexible and iterate our strategy as we gain more experience on the ground. For now, we will stay focused on São Paulo, which already make up 25% of Brazil's overall food delivery market. We want to improve our operation there and to build a differentiated competitive edge before a broader expansion. Regarding the investment pace in the second half of this year, the focus will be on operation optimization and efficiency gains in our existing markets, factoring in our investment in both KeeTa and grocery retail businesses. We expect the loss of our new initiative segment in 2023 -- '26 will not exceed that in '25. Thank you.

Operator: The next question comes from Ya Jiang with Citics.

Ya Jiang: Congrats on a great quarter. My question is that as food delivery competition shift toward efficiency, how should we think about your capital allocation priorities going forward? And how are you balancing investment across different business, AI-related CapEx and shareholder returns? Would you consider monetizing some of your investment assets? And on buybacks, should we expect that to continue?

Shaohui Chen: Thank you for the question on capital allocation. We have always been ROI-driven and anchored in long-term value creation. Core business comes first. We are committed to sustaining their high-quality growth and leading market position. From there, we dynamically evaluate the investment for other initiatives and direct resources toward areas that matter most to our long-term development. We don't think irrational competition is sustainable. For core local commerce, we will stay focused on high-quality growth and operating efficiency improvements. For overseas expansion, KeeTa has already shifted focus toward operational optimization in Hong Kong and Saudi. We will continue to pace our expansion in each country based on ROI. On grocery retailing, we are excited about Xiaoxiang Supermarket's long-term potential, and we are confident to drive its continuous efficiency gains. AI is a very important strategic opportunity, but we are being very deliberate about where and how we invest. Our focus is on embedding AI into real business scenarios to improve user experience, merchant operating efficiency and organizational productivity. We have no plan to compete aggressively for token factory business. On shareholder returns, share buyback has always been our main approach to return capital to our shareholders. We have executed meaningful buybacks over the past few years, and we will continue to do so based on the competitive environment, cash flow and offshore capital availability. On the investment assets, we will evaluate monetization of our high-quality investment portfolios on a regular basis. We hold stakes in some truly outstanding companies. At current valuations, our stakes in these companies are worth more than RMB 70 billion. Beyond the financial returns, some of our investments also offer meaningful strategic value. They give us deeper insight and allow us to stay close to frontier technology development. Going forward, we will weigh market conditions, valuation, funding needs and our broader capital allocation priorities. When time is right, we are very open to exit or monetizing selected positions to free up capital. This will give us greater flexibility to reinvest in our own business and return value to shareholders. Thank you.

Operator: There are no further phone questions at this time. I'll now hand the call back to Scarlett Xu for closing remarks.

Scarlett Xu: Okay. Thank you, everyone, for joining our call. We look forward to speaking with you next quarter. Thank you very much for your support.

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.