DPC Dash (HKEX:1405) Q2 2026 Earnings Call

0:00 Good day and welcome to the Dpc Dash Ltd. First Half twenty twenty six Earnings Conference Call. All participants will be in listen only mode. Please

0:26 note today's event is being recorded. Recorded. I'd now like to turn the conference over to Kathy Zhong with Investor Relations. Please go ahead. Thank you, operator. Hello, everyone, and thank you for joining us on today's call. Again, as a reminder, you're all currently on mute. Call. Today, you will hear from Ms. Aileen Wu, Executive Director and CEO of DPCDF Ms. Helen Wu, CFO of DPCDF and Mr. Michael Xu, CPO of DPCDF. Eileen will provide insights into the company's overall performance and share recent developments. Helen will go a bit deeper into the first half financial results. The management team will address your questions after their remarks.

1:12 Before we continue, I'd like to remind you that our earnings call and investor materials contain forward looking statements about our business that may be considered as forward looking statements under applicable securities laws, which are based on various assumptions and other factors that are beyond the company's control and are subject to risks, future events and uncertainties. Accordingly, actual results may differ materially and adversely from those anticipated or implied in the forward looking statements. You can identify these forward looking statements because they include terminology such as may, will, expect, estimate, believe, going forward, plan, projection, aim or other similar expressions. Statements that are not historical facts, including but not limited to the statements about the company's beliefs, plans and expectations are forward looking statements.

2:00 All forward looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the Hong Kong Stock Exchange.

2:09 Also, this call includes discussions of financial information and certain non IFRS financial measures. Please refer to our results announcements and interim report to be published in accordance with the rules governing the listing of the securities on the Stock Exchange of Hong Kong Limited, which contain a reconciliation of the non IFRS measures to IFRS measures. All information provided in this earnings call is as of the date of this call. The company, our affiliates, advisers and representatives undertake no obligation to update any forward looking statements, except as required by law. With that, I will turn the call over to Ms. Eileen Wang, Executive Director and CEO of DPCDF. Eileen, please go ahead. Hello, everyone, and thank you for joining us today. As we discuss DPCDF limits results for the first half of twenty twenty six.

3:00 As the exclusive master franchisee for Domino's Pizza in the Chinese Mainland, Hong Kong SAR and Macau SAR, we continue to operate in a market with substantial growth opportunities. Our global franchisor, Domino's Pizza Inc, remains one of the largest pizza companies in the world with more than 22,500 stores across over 90 markets as of the end of the reporting period. Before we discuss the figures, I want to contextualize our first half performance, which provides a clearer perspective on our current trajectory. Revenue grew 20.8% to RMB3133.8 million, driven primarily by a 33.7% year over year increase in transaction volume.

3:54 This growth was fueled by both our expanding store network and a 7.1% increase in same store transactions. However, this half was characterized by two opposing forces, robust demand and network expansion versus pricing pressure from industry wide aggregator subsidy dynamics. I will now outline how these dynamics diverged across our different types of markets. Let's start with our initial city markets, defined as the markets we entered before 2023, where we have the longest operating history. Transaction counts accelerated and same store transaction growth was 8.5%, actually a healthy number. But same store sales growth, SSG, turned negative, marking the first such occurrence in these initial city markets in recent years. We did not see evidence of a broad based demand deterioration in our initial city markets.

4:54 Indeed, more customers were visiting us. This shift was primarily attributable to the intensified third party platforms, subsidy campaigns leading to lower average ticket as they put in a meaningful share of orders onto these lower priced channels. Now let's turn to our new city markets, The markets we have entered since 2023, SSG, while still negative and negative 9.4%, has narrowed consistently for three consecutive halves. We have improved from negative 19.6% to negative 13.2% and now negative 9.4%. This is the normalizing curve we expect to see. When we enter a new city, our first stores open to extraordinary demand, often the strongest sales performance in the entire Domino's system globally.

5:48 As that initial launch phase settles and we increase more store density to drive operational efficiency, same store comparisons naturally experienced contraction for a period. We made a deliberate choice on managing this transition period, and I would like to outline our strategic rationale behind our decision making. Rather than waiting out the 3PP subsidy wave, we view this as a one of a kind immediate window and then accelerated the rollout of delivery services in our new city stores ahead of our original plan. As a result, delivery order contribution in these new city stores rose to 25% today and in a much faster pace as we observed in our initial city markets in the past.

6:36 We want to point out that through building delivery penetration, together with launching value and other initiatives, same store transaction growth in new city markets turned positive at 2.2%, up from negative 19.1% a year ago and negative 7.9% in the second half of last year. However, embracing aggregator platforms meant accepting a lower realized transaction price in the near term, since 3PP orders carry a lower average ticket than orders through our own channels. But we believe that the customer habits and brand mindshare we're building today in what is an early and formative period for delivery in these new cities, like what we did in the initial cities, will yield long term benefits.

7:26 And importantly, even at the deep point of same store sales comparison cycle, the underlying economics level at these stores has remained healthy. Our 93 stores opened in new markets this half generated an average daily sales of RMB28230 with a weighted expected payback period of just fourteen point eight months. Beyond the network expansion and same store story, we continue to innovate our products and collaborate with popular IPs to engage with our customers. To name a few of the highlights, we launched a Crispy Croissant Crust, Football Field Square Shaped Pizza,

8:09 Gearing Chicken Pizza and Energy Bowl series, alongside a successful partner with the gaming titled Ark Nights, Min Yu Fengzhou, to capture a larger share of the used demographics. On delivery, we maintained a delivery on time rate of 93.6% even as volumes grew significantly, which speaks to the quality of our operating system. On digital engagement, our loyalty program grew to 41,900,000 members, up from 30,100,000 a year ago, with 18,100,000 new customers placing their first order over the past twelve months. On our supply chain, our full supply chain center in Wuhan commenced operations on 08/21/2026, serving over 200 stores around Wuhan areas across the Western Region.

9:04 We have also secured sites in Chengdu and Nanjing, targeting opening during the second half of twenty twenty seven. We believe these investments are necessary to solidify our product and operation foundation as we keep scaling. Moving forward, our strategy is defined by a distinct approach to our two core business segments. In our initial city markets, the priority is structural average ticket improvement. Orders placed through our own channels, our application and WeChat mini program have consistently carried an ATP, meaning average transaction price above RMB90, meaningfully higher than 3PP orders. So our focus is migrating more customer back to these higher value channels through our loyalty program, Humble, New Innovation, etcetera.

9:55 In our new city markets, the priority is still expansion and penetration, continuing to scale up delivery from its current base of around 25% and communicating our iconic value programs while taking similar initiatives to migrate customers to our own channels and elevating ADP. Regarding our network expansion, we remain on track to open approximately three fifty net new stores in 2026, have already delivered two thirty five openings in the first half. To better quantify our long term growth potential, we're introducing store density as a key performance indicator this period. Currently, China's overall pizza market density stands at 13.9 stores per million population, while our own national footprint is just 1.1.

10:48 We believe these metrics provide a more precise illustration of the significant unpenetrated demand available to us, highlighting a substantial runway for growth both through new city entry and further densification of our existing markets. With that, I'll hand the call over to Helen to discuss our financial results in more detail. Thank you, Aileen. Our financial results this half encapsulate the margin dynamics resulting from our continued network scale up amidst the ongoing market subsidies. I will now detail the specific impacts across our P and L. Revenue performance.

11:35 The total revenue grew 20.8% year over year to million. Alongside our usual Tier one versus non Tier one breakdown, we're also sharing a new lens this half based on market maturity, the initial city markets versus new city markets, which we think gives a clearer picture of where our growth is coming from. Looking at this by market maturity, our initial city markets contributed RMB1723.9 million or 55% of revenue, growing modestly as strong transaction growth was largely offset by the ATP pressure Aileen described previously.

12:26 Our new city markets contributed RMB1410 million, now accounting for 45% of revenue and up from 34.6% a year ago, growing 57.3% as our expanding new store base scaled up. Looking at the same revenue through our Tier one versus non Tier one net. Non Tier one markets grew 36.5 to RMB 2,059,700,000 and now represents 65.7% of revenue, again, reflecting our revenue network growth is concentrated. The channel story reflects the same underlying dynamic playing out again.

13:16 Total delivery sales grew 44.7 to 1,618,800,000, now representing 51.7% of revenue. But within that, deliveries through third party platforms grew 81%, while deliveries through our own channel actually declined 11.8% because the subsidy pulled orders through 3PP. This matters for margin because our own channel delivery orders carry an ATP average transaction price of RMB94. So every order that shifts channel has a direct effect on our realized pricing, not because the customers are spending less, but because of which door they are walking through.

14:06 So offering the differentiated value and services to build up a larger base of customers of high quality loyal customers over time will help us improve ATP and order economics and a higher lifetime value of our customers. Margins and cost efficiency. This channel and pricing dynamic flow straight through to our store level profitability. Store level EBITDA grew 8.3% to RMB544.5 million, though the margin declined to 17.4% from 19.4%. And the store level operating profit grew 2.9% to RMB390.4 million, with the margin at 12.5

14:56 versus 14.6% a year ago. The primary driver was the lower ATP or together with a higher Sweet PP delivery sales mix, which carries a different cost structure. And this was only partially offset by the cost efficiency measures that we have underway. To put some texture on that offset, our raw material cost, rental and other store level cost all grew broadly in line with our revenue store count growth. And in a few areas, we actually improved. Advertising and promotion expenses fell to 5% of revenue from 5.3%.

15:36 And the store operation and the maintenance expenses improved slightly to 6% from 6.1%, both reflecting more efficient spending as we scale. Where we saw more pressure was in the store level staff cost, which rose to 28.9% of revenue from twenty seven point seven percent, reflecting the staffing we put into our new stores to protect service quality, plus the simple mathematical effect that lower ADS means less revenue to spread our fixed labor costs and also the higher rider costs from our growing delivery volume. At the group level, our corporate cost discipline served as an effective buffer, improving from 8.1% to 7.5% of revenue as we get scale benefit and cost control at headquarters even while we keep investing to support our growth.

16:33 Putting that all together, adjusted EBITDA grew 8.6% to RMB350.7 million with margin at 11.2% versus 12.4% last year and the adjusted net profit grew 7.4% to RMB98.2 million. Liquidity and capital allocation. We ended the period with cash and bank balances of RMB934.7 million. Our operating cash flow grew to RMB504.9 million from RMB361.1 million. So this means that our growth continued to be substantially supported by internally generated cash.

17:19 Our gearing ratio improved to 7.9% from 8.2%, and we retained RMB300 million in unutilized credit facilities. So we're comfortable with our funding positions as we continue to expand. Looking at our capital expenditure. At the store level, our average CapEx for a new store, excluding the landlord rental deposits and net of tax, is approximately RMB1.3 million per store. We will continue to optimize the store design and procurement to further lower new store CapEx and improve the cash payback cycles. Looking ahead, we will continue to invest in our three main areas: store expansion, supply chain center investment and the digital infrastructure to build our competitive strengths for the business in the longer term.

18:13 To sum up, this half result tell a consistent story across both the operating and the financial numbers. Our underlying demand and the network growth are healthy. And in the case of our new city markets, the improving are faster than expected.

18:30 While pricing pressure from the current subsidy environment is a near term drag on margin, but with a clear pathway for recovery as subsidy gradually normalize, the channel mix improves and together with our other growth levers. Now also with our own cost efficiency initiative continue to build, we believe the business remains well positioned to benefit from operating leverage as sales productivity improves. This marks the end of our presentation, and we will open the floor for questions now. Thank you very much, operator.

19:06 Thank you. We will now begin the question and answer session. And today's first question comes from Lisa Liao with Jefferies. Please go ahead. Good evening, Elaine, Helen and Michael. Thank you so much for the earnings call today. And here's two questions from my side. The first is about the same store sales trend we have observed.

19:51 In our fact sheet, we actually disclosed that we saw slightly positive same store sales in May and June with successful marketing initiatives. So just wonder how do we see the most updated trend? And what will be our key initiatives to help further support the same store sales in the second half? And regarding my second question is more on the aggregator subsidies. So we know the most intensified subsidies actually happened last year. So how do we assess the overall subsidy level from aggregators this year? Do we see any mitigation or slightly better situation recently? And how does this impacted the overall consumer behaviors?

20:41 What would be our key strategies to further drive our own delivery channels regarding this part? Thank you so much. Thank you, Lisa for the question. I'll take this one. So last year, the algorithm will actually started in May, right?

20:59 So May and June, we already had this aggregator sort of subsidy impact. And then at the same time, we have the new market normalization impact. So with that, we can still manage to actually keep SSG positive for May and June. That actually shows the strength of our strategy and also our sales initiatives. Now that said, going forward in h two, I think last year in h two, sort of, we have several things happening. One thing is that the aggregate will actually went

21:30 to the peak. Right? So in the summertime and and also in sort of part of the quarter three, so then we're comping against a very strong base of last year. And then at the same time, you know, we have very strong sort of new markets. The repubbering in Xiamen, that kind of new markets entering the same store size cycle. So these actually will make the SSGPG sort of, you know, got some difficulty in h two. But then at the same time, we continue to see the average ticket starting to stabilize and also improving. So then with these two together, we we will still see SSG negative in the second half of the year of 2026. Now but we forecast to see in 2027, we'll start to have positive same store sales.

22:18 So that's to sort of answer sort of high level the first question. And then in terms of the initiatives, right, so like we mentioned, so for the initial market, the key issue is actually the average ticket because the TC is still sort of healthy. And then we also need to find a way to support h two when the subsidy level goes down. And then for the new markets, we did have, you know, comping against the higher opening base in the past and plus the same issue on ATP. So that the initiatives actually have two aspects. The first one is actually on the average ticket. We already see it started to stabilize. And then we actually started to see that in the past two months, it actually got improving. Right? So I think the key is

23:04 actually sort of one, the average the CPP with the subsidy level going down, the average ticket on CPP will actually come back naturally. And then two, as Helen mentioned, our own online channel for delivery, our average ticket is actually as high as 94. So then we do have people who are very loyal to us and then pay, you know, higher average ticket on our own channel. So then the key is how to convert, you know, aggregated customers to our own channel and then optimize the channel mix. And then on the TC side, we believe that in the initial markets, we will continue to, you know, launch innovative new products like we did for the durian chicken, for example. So durian is actually very popular in the pita market, but we're the first brand to actually put protein together with durian, which is a great innovation, and our customers like it. And also on crust the leadership, we actually launched the croissant crust. Right? It's another innovation to combine pizza and the bakery.

24:12 So that proves that we will continue to lead on product innovation. And then also, we launched this new combo. Right? 79 with two pizzas, two sides, and two drinks. Right? With this, we do believe that it will help both the average ticket side and also on the guest concept. Right? Because this is quite attractive value. And then also by offering the combo, we make it very easy for customers to make choice. And then also we have other things like

24:39 IP innovation. And for the new markets, we will continue to offer the iconic value programs and also keep penetrating our delivery as we continue to build the delivery market share in these cities. Right? I stop here to for a second for this first question. Now for the second question, with less aggregator subsidy this year, do we see sort of any influence on consumer behavior and also on own channel? So we did see that our own channel sales has been growing back.

25:13 So we do believe that on the aggregators, there are two types of customers. Either for their sort of this, you know, original oil customers, and then as the aggregator actually provides more subsidy, so then they spend less on aggregators, so they move to aggregators for Domino's. Right? Or we have new customers coming to aggregators for Domino's. Right? So

25:37 I think for either one, the original one, if the subsidy actually goes down, they will naturally come back to oil. And then for the second group, the new customers, we will just let them know that how our own channel actually provides very different sort of value value propositions. And then that way, we will actually build more channel mix in terms of oil. So I will stop here. Sorry. I I talked a lot about these questions. Just to give you a full picture on what we're doing at a second versus TC and then initial markets versus new markets.

26:14 Yes, very clear. Thank you so much, Aileen. Thank you. Our next question today comes from Lucy Yu of BofA Securities. Please go ahead. Hi, Aileen, Helen. Thanks for taking my questions. So two questions here. First of all, is the subsidy will come down in the second half of this year. So how should we think about ticket counts in the second half? And also the margin for the first half we saw margin has been contraction possibly because of the negative same store sales. How should we think about the margin for the second half especially on a year over year basis? Is it a contraction going to be wider or narrower than the first half? Thank you.

27:02 Got it. Thank you for the question, Lucy. So for the first question, it will be quite similar to my answer to the first question. But then I'll reiterate that we do think that our sort of TC momentum is healthy. Right? We're just comping against last year's high base. We do believe that we actually offer, you know, DPC and the innovative products. We do offer a new value. After ten

27:28 years of, you know, having the crazy Tuesday and Wednesday, you know, 30% off across all pizzas on Tuesday and Wednesday, we actually offer this new and sort of different value in terms of the combo, and then customers like it. And then at the same time, we also start to offer single view offers. Right? Because we we realized there's a new occasion for this new demand. Right? And then at the same time, for the new markets, we'll emphasize more on sort of delivery and also value and all the levers we mentioned for the initial markets. One thing I can mention more is actually the media optimization. We have our new CMO journey. Her background is co portfolio McDonald's.

28:13 She brought in a lot of new thoughts, and she will help us to optimize the media and spend that to create more sort of, you know, sales and also higher with higher ROI. And I'll stop here for the first question. And the second question is on margin. I hand over to her. Yes. Lucy, thank you for the questions. For the first half, our store operating profit margin is at 12.5%. That's for the whole group, right? And also, I think the initial Citi, the store OP margin is slightly below that. But the new market is higher than that. The reason being, even though people or you have seen that the SSE for the new market, for the initial new market sorry, for the new markets is actually negative. But we have said that because they started from very high base in terms of dollar sales, right? So even if you they have a negative SSG, when they enter this into the the SSG cycle, but in terms of dollar value wise, in terms of sales, they're still very pretty high and very healthy. So their OP margin for the new city are actually higher than 12.5%.

29:19 Now this trend is probably going to be the same for second half. And also, I think we also actually starting from over the first half of this year, we also gradually rolling out a lot of our cost saving initiative or cost control initiative at the store level. Now some of that actually started from mid of first half. So we would expect that a more kind of effect or impact on the cost saving will be kicking in during the second half. So for instance, we are actually trying our best to recover in the ATP, right? And also at the same time, we have a lot of initiative to actually maintain or to keep the ticket transaction volume. So

30:10 having improving ATP at the same time, sort of more impact on cost saving initiative in the second half overall, we were expecting actually the margin the store OP margin will be actually better than the first half. And on this basis, the performance between the initial city markets versus the new city market will be similar in pattern for the first half. Our next question today comes from Linda Hong with Macquarie. Pardon me Linda, this is the operator. I'm not sure if we were able to understand your question there. Your line was breaking up pretty badly.

31:31 We cannot hear you ma'am. So I'm going to move on to our next question. I apologize. And our next question today comes from Miao Zhang with CNBI. Please go ahead. Thank you management for taking my question. I'm Niao Zhang from DnBI. And I have just two small questions on 3PP users. Not so sure if it's been addressed already. Could management share some color on what measures are currently being implemented or what are to convert DPCD users into our own platform and to bolster repurchase frequency or lift average transaction price? And also, I'm wondering, is there any available statistics on the first rate or retention rate of such measures? Thank you. Okay. I'll take this question. So the question is what measures are being taken to convert platform users to on online users.

32:25 Right? Okay. So like I mentioned before, right, I think for the aggregators, for the Domino's users, either they're actually converted from the OLO of Domino's or they're actually sort of new customers choosing Domino's on aggregators. Right? So for the first of all people, we actually think that with the subsidy coming down, they will actually naturally come back. Now that said, we're also taking proactive approach to actually attract people back to OAO. And then for the new customers, we also want to highlight our own online channel offering different things. So first, the value we're offering on two channels are different. Right? So our readers is more like Red Pocket or if you reach this level, you deduct this level. But in our own channel, we have this combo. We have crazy Tuesday Wednesday, which are very different for different needs.

33:18 And then, also, we have the loyalty program. And by the way, our loyalty program actually has 42,000,000 members already. Right? So these people who are very loyal to us and then stay with us on our own channel. So we attract people to get our own channel, and they can only actually get points, you know, through our own channels' orders. And then at the same time, once people are on our own channel, we're upgrading, you know, our OIL experience, right, to make that smoother and also to help us to sort of, you know, improve the average ticket. And then also, we have different engagements, digital games, you know, bounce back coupons, and then, you know, proprietary interactive properties. These are the things we Pardon me, this is the operator. It looks like we may have lost audio from our main speaking line here. If you can please stand by, I'll place hold music in the call and we'll be right back with you.

34:21 Thank you. Hello, everyone. Looks like the apologies. It looks like the line is back. You can please proceed with your answer. Thank you, ma'am. Got it. Okay. I don't know where you lost me. Let me start from the beginning. So we're talking about how to convert the aggregator platform users to our own online channel. We do think that our own online channel actually provides different differentiation, right, some points. The first thing is the value. For example, the algorithm channel actually has, you know, the red pockets or if you reach some fresh mood and then you get deduction.

35:06 But then on our own channel, you have the combo. Right? You have the crazy Tuesday Wednesday. I think these are very different And then I think in time for the loyalty program, you actually get rewarded for the loyalty program. You can be ordered through our online channel. And then we're upgrading our online so that people get smoother experience. And then also, they get this opportunity to actually upsell across the board and then which will help. And then also our own channel, you have engagements. Right? Digital engagements, you know, WeChat games and bounce back coupons, and then you also have proprietary IP, you know, products, etcetera. And and then to get people back, we have, you know, different targeted and then customized offers, right, through CDP.

35:58 So that's why we do think that OYO is actually a different offer and then we'll attract people back. And then we've been continuing to monitor the conversion and retention rates. So in the past, when the aggregator actually has higher sub subsidy, I think you naturally, these two channels, people actually coming back and forth. Then when the aggregator subsidy is higher, naturally, people will go more toward the aggregator. But as the subsidy level goes down, we do see OLO channel is actually showing more growth as I mentioned before. Thank you. Our next question today comes from Xingwei Lei with CICC.

36:43 Please go ahead. Hi, management. Thanks for taking my question. So I have one question regarding store opening plan. So you have maintained a fast pace of store expansion year to date. How should we think about store opening plan for 2026 and 2027? And how do you balance entering new cities versus opening stores in existing ones? Thank you. Okay. I'll take this question. So as we mentioned in the earnings call, my part, we use this ratio of, you know, a Peter Stoke per million population. And then if you look at Domino's Peter Stoke per million population, ours is very low. It's only 1.1.

37:29 We do think there's a very long wait for us in China for, you know, the pizza store opening. And then we iterate that in the medium term, the 3,000 targets unchanged. That shows we have high confidence in the Chinese pizza market and also our penetration. Now as I mentioned before, for 2026, we're very much on track to achieve the target of three fifty and seven, we're still in the sort of the planning phase. And then I think high level, we are very much on track, but then we'll decide the detailed opening number based on several things, the customer dynamics and also the opening performance. Thank you. And our next question today comes from Kang Chi with CITIC Securities Company. Please go ahead.

38:30 Thank you for taking my questions and good evening management. I have only one question about average transaction value. And could you break down the reasons for the changes in the average transaction value for us? And how do we expect the average transaction value trend going forward? That's my question. Thank you. Thank you for your question. So for the average ticket, right, so we we do believe that the average ticket change was primarily attributable to the channel shift. So as we mentioned, for the aggregators, the average ticket is actually lower because of the subsidy. And then for our own channel, it's actually it stays actually quite healthy. Right? So we already see that naturally the with the subsidy level going down, the pricing has been stabilized.

39:23 And then we've been taking a lot of actions to proactively improve the average ticket. So we wanna reiterate that the average ticket sort of improvement does not depend on aggregator subsidy going down or not. Actually, on aggregators, we have, you know, offers, and then we're continuing optimize these offers, so that will help too. And then on our own channel, as I mentioned, so our error ticket is originally quite high. And then the question is how to actually sort of convert people when, you know, from the aggregated channels to our own channels. So as I mentioned, combo is actually a very good choice. Right? So it has multiple items that would naturally actually increase the average ticket. And then also, we we're uplifting, you know, size and drinks so that people can actually cross sell and upsell more.

40:16 And then at the same time, when we're launching, you know, new products, we also have average ticket in our mind. So for example, during ticket, it's actually a premium product. But as long as it's actually very good sort of taste and the innovation, people are willing to pay for the hard ticket. So that's how we consider sort of on the average ticket. Thank you. And thank you everyone. That does conclude our question and answer session. I'd like to turn the conference back over to the company for any final remarks. Helen, do you want to comment more? Well, first off, for for the training 27, one thing that we are seeing is that so over the past few years, we've been going through the normalization and also the three p p heavy subsidies, etcetera.

41:14 And then and that's why, you know, our SSG sort of experience something that actually normally a brand probably wouldn't see, you know, from high base and normalized and also, know, in the overall market. Now I think for '27, what we've been seeing or what we are looking at is that our SST will turn positive. That's number one. And second is that we would expect that ATP will gradually coming back. Now this is something that we have seen over the past few months that actually ATP is coming back. It is on the back of a lot of the initiative. We already take, for instance, the combo launch, for instance, the differentiated services between the 3PP and also on our online platform. So we will continue to work on that.

41:59 Now third part is the margin. Second half, I have just said, actually, we would expect some improvement second half versus the first half. Now this trend will continue in 2027 because a lot of the cost initiative savings we're going to actually put into place and stick to it. And so this fee these are the things that we will actually carry on to '27. On top of that, because we're scaling up gradually. So as we build up larger scale, a lot of other benefits in the scale will continue to unfold. So on top of that, so '27, we're also looking at margin improvement versus '26. Yes. So this is something that I will conclude for '27.

42:47 Also in terms of store counts, first of all, '27 '26, 96% of the total net opening of the three fifty has been locked in. So we are pretty much confident that we will deliver that for the net opening of three fifty. Now for '27 and beyond, we have a medium term target of of growing to 3,000 store counts by the end of 2030. So the store count planning or the expansion planning for the next few years, we will actually work along that medium term target to actually plan for each year. And then also depending on the factors that actually Aileen just mentioned the store performance, etcetera, we will actually, you know, every year we will roll out 50 appropriate store counts that fit our stage, fit our capacity and fit the medium term sweet starting target.

43:43 Okay. Well, thank you, Helen. Well, thank you for joining today's call and for your continued support. We look forward to keeping you updated on our progress moving forward. Thank you. Thank you. That concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.