eHi Car Services' (EHIC) CEO Ray Zhang on Q4 2016 Results - Earnings Call Transcript
eHi Car Services Limited (NYSE:EHIC[1])
Q4 2016 Earnings Conference Call
March 22, 2017, 20:00 ET
Executives
Brandi Piacente - Investor Relations-The Piacente Group, Inc.
Ray Zhang - Founder, Chairman and Chief Executive Officer
Colin Sung - Chief Financial Officer
Analysts
Leon Chik - JPMorgan Hong Kong
Nelson Wang - Goldman Sachs
Operator
Welcome to the eHi Car Services' Fourth Quarter and Full Year 2016 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded.
I would now like to turn the conference over to, Brandi Piacente. Please go ahead.
Brandi Piacente
Hello, everyone, and welcome to eHi Car Services' fourth quarter and full year 2016 earnings conference call. The Company's results were issued via Newswire services earlier today and are posted online. You can download a copy of the earnings press release or sign up for the Company's distribution list by visiting the IR section of its website at ir.ehi.com.cn.
Leading today's call is Mr. Ray Zhang, eHi's Founder, Chairman, and Chief Executive Officer, who will provide operational highlights and updates on the Company's business strategy; Mr. Colin Sung, eHi's Chief Financial Officer will then review the Company's fourth quarter and full year 2016 financial results.
Before we continue, please note that today's discussion today will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the Company's results may be materially different from the views expressed today. Further information regarding these risks and other uncertainties are included in the Company's prospectus as filed with the U.S. Securities and Exchange Commission. The Company does not assume any obligation to update any forward-looking statements except as required under applicable law.
Please also note that eHi's press release and this conference call include discussions of un-audited GAAP financial information, as well as un-audited non-GAAP financial measures. eHi's press release contains a reconciliation of the un-audited non-GAAP measures to the un-audited most directly comparable GAAP measures.
I will now turn the call over to eHi's Chairman and Chief Executive Officer, Mr. Ray Zhang. Please go ahead.
Ray Zhang
Hello everyone thank you for joining us. 2016 was a successful year for eHi both operationally and financially as we increased our fleet size significantly and achieved the robust top line growth and profitability. Operationally our total average available fleet size increased by 47.2% to 38,944 vehicles for the full year of 2016 up from 26,460 vehicles in 2015. As of December 31, 2016 our [indiscernible] reached 56,916 vehicles and at the same time we maintain an industry leading rental fleet utilization rate of 72.4% for the full year of 2016. Financially we finished a strong 2016 by delivering a 45.4% of net revenue growth led by a 51.2% growth in car rental segment and 8.72% growth in car services segment. We also pleased to report on net income RMB13.7 million for the fourth quarter marking our third consecutive quarter profitability which contributed to a net income of RMB33.1 million for the full year of 2016 compared with a net loss of RMB40.5 million excludin g the investment gain for the full year of 2015.
Meanwhile we continue to be firmly committed to our expansion plan and our growth initiate throughout 2016. As of December 31, 2016 we directly operate a network of 3249 services locations including 391 stores and 2858 picked up a drop off point in 216 cities compared with a 1861 service locations in 151 cities one year ago.
As one another key focuses we had increased our [indiscernible] to 137 vehicles at the end of the 2016 compared to 96 rental vehicles per store one year ago. With the explosives growth of sales drive and extensive coverage on the sharing concept in China car rentals, with the sharing spirit by nature it has become more popular again and better suited to satisfy leisure in the business travel needs. As such we focused on expanding our footprint in key locations such as travel destinations, in highways, airports and railway stations. As of December 31, 2016 our services location covered 319 train station and 97 airports compared with 217 train stations and 73 airports at the end of 2015.
Second, we strive to improve and provide the best in class services for our customers based on our deep understanding of their transportation needs, since we began offering free door to door delivery services in major cities in the third quarter and increase the number of customers have enjoyed the convenience and the flexibility brought by its value added service. Our customer oriented services also include take up and return in different cities, 24 by 7 open stores and a variety of the vehicle model selections including luxury cars, electronic vehicles and hybrid models.
All those not only help us attract new customers but also enhance experience and the satisfaction of our existing customers. Third, we remain focused on enhancing our brand -- series of marketing efforts. We are very excited and looking forward to the close cooperation with our marketing partner NBA China and our renowned brand ambassador NBA All Star Stephen Curry. NBA and the team work match well the core values that eHi aspires to embody and NBA fans demographic and purchasing profiles aligned well with those of eHi target customers. Reaching out to sports fans in the part of those strategic formula aimed at introducing our brands. In addition we were recently recognized by China net promoter score NPS as the most recommended car rental brand by Chinese customers and we will continue our efforts to bring the best in cost of services as well as free and healthier lifestyle to our Chinese customers.
Fourth, we continued to drive innovation and strengthen our mobile and internet platform. New technologies have been reshaping people's day to day lives. In eHi staying at the forefront of this revolutionary trend has dedicated its resources for technology driven mobile and internet platforms. Our efforts to further improved efficiency of our reservation and the vehicle delivery programs have successfully captured and addressed the customers evolving needs.
In the fourth quarter 81% of our total car rental reservations were made on built-on devices and we recorded over 18 million mobile downloads in 2016. Mobile app reservations combined with website reservations accounted for 96% of our fourth quarter a car rental reservations.
Lastly we continue to explore potential strategic cooperation and investment opportunities to enhance our operating synergies and a competitive positions. As the nature of expansion of our existing business relationships we honored to establish partnerships with leading companies in the automotive industry such as SAIC and Yongda. To collaborate in multiple barriers in the formats including vehicle procurement and financing, used car sales, post sales services and vehicle maintenance. We also aim to capture the technology driven demand in the car rental and in share economy and further diversify the vehicle related services that we offer to our customers.
Looking ahead we expect to continue growth in mobility and travel demand as per capita disposable income increases which demonstrates the tremendous market potential for eHi. In 2016 we will remain focused on our expansion plan and growth initiatives, we look forward to providing best in class customer experience through technology driven platforms and diversify the vehicle service offerings while continuing to drive growth and profitability by capitalizing on this significant market trend.
With that I would now turn the call over to our Chief Financial Officer, Colin Sung who will discuss our financial results. Colin, please go ahead.
Colin Sung
Thank you, Ray and hello everyone. We are pleased with our results by reporting year-over-year net revenue growth of 34.1% and 45.5% in the fourth quarter and full year 2016. We were achieving profitability of RMB13.7 million in the fourth quarter and RMB33.1 million in the full year 2016 benefitting shrinking cost control we have also realized broad-based margin expansion resulting in record high full year gross profit margin of 28.1% non-GAAP adjust EBIT margin of 12.9% and non-GAAP adjusted EBITDA margin of 44.6%. To better position ourselves for the increasing busy season in the first quarter 2017. We put actively adding vehicle in late fourth quarter 2016 to capture the growing travel demand for 2017 New Year as well as Chinese New Year holidays. In 2017 our goal remain to drive rapid growth and improve probability would emphasize our margin expansion to increase operating efficiency.
I would now go over fourth quarter operating and financial results in more detail. For the fourth quarter of 2016 our key operating metrics were as follows. For the car rental segment average fleet size for car rental increased by 33.6% year over year to 40,073 vehicles up from 30,000 vehicles for the fourth quarter of 2015.
RevPAC for car rental increased to RMB121 up from RMB116 for the fourth quarter of 2015. Fleet utilization rate for the car rental was 71.2% compared with 70.4% for the fourth quarter 2015. For the car service segment, average available fleet size for car services increased by 17% year-over-year to 2639 vehicles up from 2255 vehicles for the fourth quarter of 2015. RevPAC for car services increased to RMB488, up from RMB482 for the fourth quarter of 2016. As a result total average available fleet size increased by 32.4% year-over-year to 42,712 vehicles up from 32,255 vehicles for the fourth quarter of 2015. Total fleet RevPAC increased to RMB 144 up from RMB142 for the fourth quarter of 2015.
Now let me walk through our fourth quarter 2016 financial results. Net revenue were RMB565 million or US$81.4 million, up 34.1% year-over-year attributable to increase in net revenue from both car rental and car services. Net revenue from car rental were RMB446.5 million or US$64.3 million, up 38.9% year-over-year, primarily driven by the growing average available fleet size for the car rental in response to customer demand. Net revenues from car services were RMB118.6 million or US$17.1 million, up 18.6% year-over-year, primarily driven by increased demand from existing and new customer for car services.
Cost of revenue or vehicle operating expenses were RMB408.3 million or US$58.8 million, up 27.8% year-over-year, primarily driven by increased depreciation and labor costs. In the fourth quarter of 2016, 1823 used vehicles were disposed off, and 1871 used vehicles were under sales contract pending title transfer. The company recognized a disposal gain of RMB2.8 million or US$400,000 in aggregate for those 3694 vehicles.
In addition, a disposal gain of RMB1.4 million or US$200,000 were unrecognized in the fourth quarter of 2016 as a result of the completion of the title transfer during such period. These disposal gains were both recognized as adjustment to the vehicle-related depreciation expenses as part of the cost of revenues.
Gross profit was RMB156.7 million or US$22.6 million, up 53.6% year-over-year. Gross profit margin was 27.7%, compared with 24.2% for the fourth quarter of 2015. Gross profit margin improvement was primarily due to a percentage decrease of labor cost in terms of net revenue which was benefit from economies of scale and improved operating efficiency. Selling and marketing expenses were RMB19.5 million or US$2.8 million decreased 22.7% year-over-year as the company focused on planning of 2017 [indiscernible] and marketing activity in the fourth quarter of 2016.
General and administrative expenses were RMB72.6 million or US$10.5 million, up 29.1% year-over-year, primarily due to increased employee-related costs including salaries and welfare expenses as a result of increased headcount, as well as increased foreign exchange loss in the fourth quarter of 2016, caused by the utilization of the U.S. denominated debt.
Profit from operations were RMB71.5 million or US$10.3 million, up 204.2% year-over-year. Interest expense were RMB56.7 million or US$8.2 million, up 54.2% year-over-year, primarily attributable to the interest expenses associated with the Company's US$200 million senior unsecured notes. Net income was RMB13.7 million or US$200,000 compared with a net loss of RMB12.3 million for the fourth quarter of 2015. Net income margin for the fourth quarter of 2016 was 2.4%. Basic and diluted earnings per ADS for the fourth quarter of 2016 were RMB0.20 or US$0.03 compared with basic and diluted earnings ADS of RMB0.18 each for the fourth quarter of 2015.
Non-GAAP adjusted EBIT was RMB76.7 million, or US$11.1 million, up 166.8% year-over-year. Non-GAAP adjusted EBITDA margin was 13.6%, compared with 6.8% for the fourth quarter of 2015. Non-GAAP adjusted EBITDA was RMB256 million or $36.9 million, up 53% year-over-year. Non-GAAP adjusted EBITDA margin reached 45.3%, compared with 39.6% for the fourth quarter of 2015.
Now I would like to review our operating and financial results for the full year 2016. For the full year 2016 our key operation metrics were as follows. For the car rental segment average available fleet size for the car rental increased by 48.4% year-over-year to 36,455 vehicles up from 24,573 vehicles for the full year of 2015. RevPAC for car rental increased to RMB125 up from RMB123 for the full year 2015. Fleet utilization rate for car rental was 72.4% compared with 71.4% for the full year of 2015.
For the car services segment, average available fleet size for the car service increased by 31.9% year-over-year to 2489 vehicles, up from 1887 vehicles for the full year of 2015. RevPAC for car service decreased to RMB490 from RMB508 for the full year of 2015. As a result, total average available fleet size increased by 47.2% year-over-year to 38,944 vehicles, up from 26,460 vehicles in the full year 2015. Total fleet RevPAC decreased to RMB148 or RMB150 for the full year 2015.
Now let me walk through our full year 2016 financial results. Net revenue were RMB2.1 billion or US$303.8 million, up 45.4% year-over-year attributable to increase in net revenue from both car rental and car services. Net revenue from car rental were RMB1.66 billion or US$239.6 million, up 51.2% year-over-year, primarily driven by the growing average fleet size for car rental in response to customer demand. Net revenues from car services were RMB445.4 million or US$64.2 million, up 27.2% year-over-year, primarily driven by increased demand from existing and new customers for car services. Cost of revenue or vehicle operating expenses were RMB1.5 billion or US$218.2 million, up 33.2% year-over-year, primarily driven by increased depreciation and labor related costs.
In full year 2016, 4775 used vehicles were disposed off, and 1890 used vehicles were under sales contract pending title transfer. The company recorded a disposal gain of total RMB1.8 million or US$300,000 in aggregate for those 6665 vehicles. The gain were recognized as adjustment to the vehicle related depreciation, depreciation expenses as part of the cost of revenue.
Gross profit was RMB593.7 million or US$85.5 million, up 83.9% year-over-year. Gross profit margin reached 28.1%, compared with 21.6% for the full year of 2015. Gross profit margin improvement was primarily due to certain cost controls, primarily in vehicle insurance, and to a lesser extent, in vehicle repair and maintenance, which were benefit or enhanced economy of scale and operating efficiency.
Selling and marketing expenses were RMB97.2 million or US$14 million up 49.4% year-over-year, primarily due to increased sales and promotional activities in 2016. General and administrative expenses were RMB251.9 million or US$36.3 million up 37.3% year-over-year, primarily due to increased employee-related costs such as salaries, welfare expenses as a result of increased headcount, as well as a foreign exchange loss in 2016 compared with foreign exchange gain in the 2015.
Profit from operations were RMB254.8 million or US$36.7 million, up 240.7% compared with RMB74.8 million for the full year of 2015. The interest expenses were RMB225 million or US$32.4 million, up 81.8% compared with RMB123.8 million for the full year of 2015. Net income was RMB33.1 million or US$4.8 million, compared with RMB696.3 million for the full year of 2015 which including a net gain of RMB736.8 million related to the sale of investment asset after transaction cost and tax provision.
Net income margin for the full year 2016 was 1.6%. Basic and diluted earnings per ADS were RMB0.48 or US$0.07 compared with basic and diluted earnings ADS of RMB10.99 and RMB10.85 respectively for the full year of 2015.
Non-GAAP adjusted EBIT was RMB272.3 million or US$39.2 million, up 175.1% year-over-year. Non-GAAP adjusted EBIT margin was 12.9%, compared with 6.8% for the full year of 2015. Non-GAAP adjusted EBITDA was RMB940.4 million or $135.4 million, up 63.9% year-over-year. Non-GAAP adjusted EBITDA margin reached 44.6%, compared with 39.5% for the full year of 2015. As of December 31, 2016, the company, company's cash, and cash equivalents and restricted cash balance of RMB786.6 million or US$113.3 million.
Before turning to guidance, we estimated the net revenue for the first quarter of 2017 were range from RMB600 million to RMB650 million. For the full year 2017 were ranged from RMB2.9 billion to RMB3 billion. The outlook reflect the company current and preliminary review which is subject to change.
This concludes our prepared remarks. We will now open the call to question. Operator, please go ahead.
Question-and-Answer Session
Operator
[Operator Instructions]. The first question comes from Leon Chik with JPMorgan Hong Kong. Please go ahead.
Leon Chik
I just have a few quick questions, so I just have a few questions. So if its on the result release but the first is the actual year end December 31, fleet size and based on your forecast what's your '17 year-end target? Second question is the exact like the CapEx or approximate CapEx for '16 and '17. And the third question is interest rate it looks like it's down 16 versus 15, what's a good rate to use for '17 interest percentage? And additions for the rental fleet, what is the cost per view [indiscernible] today in the trends? Thanks.
Ray Zhang
Well first of all you asked the 2017 fleet size is that the first question Leon or 2016?
Leon Chik
And also 2016, not the average just whatever you had at the end of the year?
Ray Zhang
End the year for 2016 is 56,916 that's the fleet size, that's including both car rental and car services. Currently company is not giving the guidance for the full fleet number, or any fleet number for 2017 yet and the answer to your CapEx question I will conclude two parts of question to one, so on the average of the CapEx per vehicle at the current stage for 2016 is roughly around RMB100,000 to RMB110,000 per vehicle on average CapEx that's inclusive of the tax or related matter. So those are the two questions I kind of combined for the time being and the company will may choose to giving a fleet number after the Q1 financial results.
Leon Chik
So 2016 CapEx, I mean we're going to get that fleet anyway, would or are you just wait, the actual CapEx for 2016?
Colin Sung
I don't have that exact number in front of me but if you look at the differences for the cost increase 10 times the average of acquisition of 100 or 110, that's pretty much of the net CapEx of cost. The increase you have to look in the disposal of roughly around close to 6600 or something disposal vehicle. So the difference from the previous year and -- sorry 8070 vehicle to 56,916 the difference is that's the net increase of the CapEx.
Leon Chik
And interest rates, it looks like its coming down but do you know what's like effective rate for '17 or whatever it is today?
Ray Zhang
Right now on the average we have a two piece of interest, one is giving the bond or the debt notes with the syndication loan that's kind of subject to U.S. dollar interest rate that range is around 6 to 6.5 on the average. On the domestic borrowing is a range of between 5 to 6 in average, so I will assume giving the company economy scale, the overall the percentage of interest, the net revenue will continue to show some improvement for 2017.
Operator
The next question comes from Nelson Wang with Goldman Sachs. Please go ahead.
Nelson Wang
I think I've two questions, my first question is regarding the gross profit. We've seen that the average fleet available have increased from 3Q to 4Q but it looks like the [indiscernible] revenue still are going down and also gross profit also went down I think gross profit margin so I'm just wondering is it due to seasonality issue or due to something else? And then my second question is regarding 2017 average reached daily range against one of the major competitor guided that they will lower the average daily rate in this year. So with that I'm just wondering what's your view on the competition and also the average daily rate in this year. Thank you so much.
Colin Sung
First I will come to average between the Q-on-Q basis. If you look at a Q3 and Q4 we're basically not adding vehicle in the beginning of the Q4, the overall growth of average [indiscernible] only represent 2.2% between the vehicle for ending for the average fleet for 2016 in Q4 is about 40,000 vehicle but obviously you answered correctly that is definitely certain seasonality. Traditionally summer season is the busy season for the car rental giving the summer holidays, school vacation and such. So the company is proactively adding the vehicle towards the end of 2016 and as earlier in mentioned to anticipate the demand for the holidays.
And then also the revenue you say slightly went down, because given the company not adding the vehicle in more large quantity and then this sort of seasonality relates the pricing then there is little bit sliding on the revenue mainly coming for the car rental space. I think that's the main contributor for the little bit slower revenue growth or no growth for the car rental piece.
As far as looking ahead for 2017 the pricing, if you look at the trends you know for the last few years car services has been kind of increasing slightly, our cases is for couple RMB from the previous year. As far as we can see for the Q1 is basically going to be concluding the one week of something. Again Q1 it may not be the necessary representative, the whole RevPAC for the full year but overall depending on the consumer demand and then the user behavior.
In our view we do not believe that any significant or material impact for the whole year RevPAC for our car rental. I mean again I will compare keeping demand last year at the same time they are also claiming the whole car rental is dying as well giving the car hailing sector. So again the strategy for us we will maintain our focus to expanding our revenue base, increase our fleet number as well as focusing our car services so there is no changes to our strategy as well as focus. So Ray maybe can add up with any regarding pricing issues.
Ray Zhang
The first part of the question Nelson is that last summer third quarter was particularly strong seasonality wise and the fourth quarter is a little bit slower than expected. So that basically result in like what you just mentioned. In terms of pricing going forward we had heard this kind of a story a couple years ago and so there's nothing new -- its always like that. So I think when you look at all ADRs over the past couple years have been relatively stable and so going forward we don't think that's going to be a major factor and all of that. Again I sorry I mentioned that its RevPAC and over the past couple years has being relatively stable.
Nelson Wang
Sorry just one more additional question adding to what you said, how about like going forward how do view the GP margins like I need guidance and any color on that.
Ray Zhang
I think in our statements we mentioned company is focusing given the cost control and also continue to focus our revenue growth the infrastructure and the cost structure. We see that its still continue to be room for improvement particularly relate to the insurance area, maintenance and giving the company for the last couple years is a more rapid replacement, our aging fleet so there are certain area we definitely see there is continued improvement for the cost saving. Again we are not giving a clear guidance regarding the margin. Given the improvement on the previous year almost a 6% changes from 2015 to 2016. Obviously we will like to continue to focus, continue as the margin expansion.
Operator
The next question comes from [indiscernible]. Please go ahead.
Unidentified Analyst
There are two, so in July 2016 your [indiscernible] have improved for one percentage points so wondering what -- like in 2017 just maybe an idea, so this is first question. And second question, is so management briefly mentioned that so the percentage of order coming from other platform account for single digit so wondering what was the percentage now and going forward, any idea? These are the question I have. Thank you.
Ray Zhang
On utilization front, you know company being focused since day one, our operation and the historically even if look at we are the leader in the utilization. So companies always looking at utilization giving the growth of the car rental space and we will maintain or at least improve on the 70 base as our benchmark for the utilization that applies for the car rental space. So there will be no change because it's a function of revenue is utilization price and number of vehicles and there are certain factor, I think earlier a question from Nelson regarding pricing, so we're overall looking at prices are relatively steady so that is the kind of market driven and then the two factor the company continue to focus are based on the drive the revenue is the utilization rate as well as the vehicle. So answer is long winding response to your question is we would still base at 70 odd but its our benchmark for the utilization rate.
And the second question was the platform revenue contribution, the overall 2016 and compared to 2015 we do not see any material changes. We still will be like earlier race prepared statements. We will continue looking for opportunities to ponder and I think Ctrip is always -- our important partner come to the rental and also more increasingly we are looking more opportunity as a car service partnership increasing value but overall given the company revenue scale growth the percentage coming from a platform, a partnership will still be contributing a single digit basis.
Operator
[Operator Instructions]. The next question comes from Leon Chik from JPMorgan Hong Kong. Please go ahead.
Leon Chik
I just had a question, can you let us know the number of outlets you have at the end of the year like actual manned outlets?
Ray Zhang
Okay. The actual store, you're talking about the physical store right correct?
Leon Chik
Yes correct.
Ray Zhang
Actual store is 391 store at December 31, 2016, 2858 is considered as a pick up or drop off points. The total city coverage is 216 cities.
Leon Chik
And the 391, I mean how much was it increased during the quarter?
Ray Zhang
I think maybe 10 or less for the quarter. I think last time we had 370 something, Q3 378 stores so we increased--
Leon Chik
Is it still growing or is it about that?
Ray Zhang
Well I think at the store level I emphasize you know company is more looking at vertical expansion than the horizontal. So we will continue to expand certain location, but the philosophy is we want to be increase the vehicle to our existing infrastructure on the early year. So you asked me how many store we can open, I don't think we're going to double our physical stores in 2017 if you ask me that way.
Leon Chik
Second question, do you have this door to door delivery thing or is it a big part of the business and does it cost a lot of money to you?
Ray Zhang
Yes we have free door to door delivery services, its not a major percentage of our total pick up and drop off of the vehicle change over. So that's a very small percentage.
Operator
The next question is a follow-up from [indiscernible]. Please go ahead.
Unidentified Analyst
I just have one question on the yesterday's stall [ph] I noticed a new product rolled out called Hi Car [ph]. Just wondering if management could give us some comment on this new initiative? Is it like [indiscernible] how many vehicle have been deployed there and how much CapEx have we spent and in terms of the R&D have we -- are we developing this system internally. Thank you.
Ray Zhang
Hi Car is a form like a Zip Car, it's a car sharing platform and we just started in Shanghai in the becoming and right now we only have less than 100 to begin to deploy in Shanghai. So gradually expand a nation-wide given our existing service locations that we think that we have advantage that kind of a service instead of [indiscernible]. In terms of vehicle it's a separate operation, it's a separate subsidiary of eHi -- under the eHi umbrella. And vehicles and fleets of Hi Car we will basically lease from eHI and fleet. So at this point we don't have separate CapEx for the Hi Car program and basically it's a car sharing service that for customers can pick up and vehicles on their own. It is self-serve mode similar to Zip Car model in the U.S.
Operator
The next question comes from [indiscernible]. Please go ahead.
Unidentified Analyst
My question is back in September of 2016 sixteen you guys entered into a cooperative agreement with Didi, is there any more information? Can you share any light on that relationship or anything new with regard to that?
Ray Zhang
I think still at this stage the agreement is still in place but again at the time given the policy and also the regulation tightening regarding the car hailing. So Didi is more a kind of looking for partnership venturing SLI model for the car rental space. So we're only one of the kind of vendor or partnership, Didi enter for the car rental that's part you refer to back in September. So at today's stage as I said earlier in the question as what the platform any other partnership, any revenue contributed is still less in a very single digit basis. So again this is one of the partnership we have been working with.
Operator
And this concludes our question and answer session for today. I would now like to turn the conference back to Brandi Piacente for any closing remarks.
Brandi Piacente
Thank you. Once again for joining us today. If you have further questions please feel free to contact eHi's investor relations or any of us at The Piacente Group. Thank you.
Ray Zhang
Thank you, guys. Bye.
Colin Sung
Bye.
Operator
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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References
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