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Good morning and good evening to all and welcome to the C-Limited first quarter 2026 results conference call. All lines have been placed on mute to prevent any background noise. After this video's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If would like to withdraw your question, press star one again. For operator assistance throughout the call please press star zero and finally if you like to if you would like to advise all participants that this call is being recorded thank you i'd like to now turn and welcome the call over to miss rebecca lee to begin the conference please go ahead hello everyone and welcome to seed 2026 first quarter earnings conference call i am rebecca from these investor relations teams on this call we may make forward-looking statements which are inherently subject to risks and uncertainties and may not be realized in the future for various reasons as stated in our press release also this call includes the discussion of certain non-gap financial measures such as adjusted EBITDA we believe these measures can enhance our investors understanding of the actual cash flows of our major businesses when when used as a compliment to our GAAP disclosures. For discussion of the use of non-GAAP financial measures and reconciliation with the closest GAAP measures, please refer to the section on non-GAP financial measure in our press release. I have with me Chief Chairman and Chief Executive Officer, Forrest Lee, President, Chris Fung, and Chief Financial Officer, Tony Ho. Our management will share strategy and business updates, operating highlights, and financial performance for the first quarter of 2026. This will be followed by a Q&A session in which we welcome any questions you have. With that, let me turn the call over to Forrest. Hello, everyone, and thank you for joining today's call. We have had a strong start to the year. In the first of quarter, we generated over $7 billion of revenue, representing 47% year-on-year growth. Adjusted EBITDA exceeded $1 billion for the first time. As we have shared before, 2026 is a year where we are leaning into growth advancement to deepen our competitive mode while maintaining financial discipline. Our strong revenue growth reflects the effectiveness of this investment, and we are already seeing unique economic start to improve for some of these initiatives. We believe this is the right approach to maximize long-term value, giving the significant runway for growth still ahead of us in our market. With that, let me take you through each business' performance, starting with Shopee. Shopea delivered another record-setting quarter, achieving new highs in GMB gross order volume and revenue. GMB grew 30% year-on-year in the first quarter. At the same time, we maintain financial discipline, generating an adjusted EBITDA of over $220 million. Our monetization strengthens further in the first quarter. Ad revenue grew 80% and ad take rate increased by more than 90 basis points year on year. Ad paying sellers and their average ad spend both increased by around 35% year on years, reflecting the strong value sellers see in our ad offerings. Our results validate the operational priorities we have laid out for Shopee, improving price competitiveness, service quality, and our content ecosystem. Our strong execution across these priorities drove user acquisition and engagement in the first quarter. Average monthly active buyers increased 16% year-on-year, and the buyer purchase frequency grew around 12% year-on-year. We continue to deepen our structural mold across logistics, shop EVIP, and the content. First, logistics continues to be one of our most important depreciators. XPX Express remains one of the largest e-commerce logistics solution providers in our market. We have developed a strong capability to dynamically optimize perceived cost and the user preference. In the first quarter, we continued to scale delivery options, serving different consumer demands while maintaining cost leadership. We have seen strong adoption of our instant and same-day delivery services. With greater economics of scale, we are seeing lower delivery costs for order for these faster services compared to last year. For example, in Indonesia, our instant delivery service can deliver orders in as little as two hours in urban areas. Order volumes for this service go over 35% in the first quarter, with cost per order reducing by around 20% year on year. Scaling this service has enabled us to extend our product assortment into higher-frequency categories. We expanded partnerships with major convenience stores and pharmacy chains, such as Indomerit. At the end of March, we had around 7,000 offline stores available on our instant services. This has shifted more offline purchasing behavior online and into the Shopee ecosystem. Buyers using instant delivery enjoy greater convenience, and we are seeing such buyers spending more with better retention on Shopee. Beyond delivery, we are increasing our focus on fulfillment as a natural extension of our logistics capability. We are making good progress. In the first quarter, fulfillment order volumes grew by around 25% sequentially. allows for faster and more reliable delivery while enabling sellers to operate and scale more efficiently on our platform we already see this happening with our fulfillment orders consistently delivering faster than the platform average in asia over one-third of puzzles fulfilled by us were delivered within the next day in march much higher than the platform average. The combination of fulfillment with our extensive delivery network allows us to drive significant improvements in both service quality and cost efficiency. For example, in Taiwan, our collection point network expanded to over 3,100 locations at the end of the first quarter, nearly 50% more locations compared to just a year ago. We leveraged our growing fulfillment capability to scale initiatives such as shipping directly to lockers without additional packaging, improving speed while reducing cost. With these efforts, average buyer waiting time improved 12% in the first quarter year on year. We reported double-digit GMV growth year-on-year in the first quarter in Taiwan, deepening e-commerce penetration, and strengthening our market leadership there. Second, our Shopee VIP program. This subscription-based membership program continues to gain strong traction and drive user engagement. By the end of March, total subscribers across our Asian market surpassed 10 million, up more than 40% from the previous quarter, with strong program retention averaging above 80%. Across all markets, our Shopee VIP members have consistently demonstrated double-digit spending uplift after subscribing by as much as 30-40% in some markets. Shopeep VIP members now contributes around 20% of GMV across Asia. Building on this success, we have rolled out our shopping VIP program in Brazil in April. Third, our content ecosystem continues to grow healthily. In the first quarter, orders from live streaming and short-form video grew more than 50% year on year. These orders accounted for more than 25% of total physical goods orders in Southeast Asia. To further strengthen our content ecosystem, we continue to deepen our content partnerships, orders driven by YouTube more than doubled year on year. Our collaboration with Meta is scaling well, with over 4.5 million affiliates across our market, up nearly 30% quarter on quarter. In Indonesia, we have extended our Meta collaboration to enable seamless product promotion and check-outs, not just on Facebook, but also on Instagram. I would also like to highlight our strong performance in Brazil and the growing role AI is playing in our business. Brazil was our fastest growing market in the first quarter while continuing to be profitable. We continue to outpace the market on GMB growth driven by increases in active buyers, purchase frequency, average basket size. This strong performance was supported by solid fundamentals including wide product assortment at competitive prices and our structural logistics cost advantage. We also made steady progress strengthening our presence in the upmarket segment enabled by our strong logistics capability. We continued to improve delivery time by more than one day in the first quarter compared to last year we opened three new fulfillment centers bringing our total to five these efforts allowed us to onboard more merchants especially to shopping mall supporting stronger spending among buyers in the first quarter gme from shopping mall sellers more than doubled year on year and now contributes around 15% of GME. We remain confident in Brazil's long-term growth potential and in our ability to further strengthen our competitive position in this market. On to AI. We have taken a practical resource-oriented approach, embedding AI into our operations to drive better outcomes for our users and greater efficiency across our platform. It is already making a meaningful impact. AI-powered enhancements to our search and recommendation algorithms have led to better product discovery. Our AI-generated content tools are helping sellers create more compelling product listings. These efforts supported a 14% improvement in purchase conversion rates year-on-year in the first quarter. An AI-driven personalization and targeting helped contribute to the strong year-on-year ad revenue growth we saw this quarter. On the cost side, around 80% of customer queries are now handled by our AI chatbot. AI usage helped reduce customer service cost per contact by around 30% year-to-year, while maintaining high satisfaction rates. Looking ahead, we are exploring authentic AI experiences. For buyers, we're testing an AI Shopping Assistant that leverages purchase history and preferences to deliver personalized recommendations and optimized savings. For sellers, we build an AI agent that acts as a virtual business advisor, providing diagnostic and actionable insights on shop performance. Both are in early stages, with plans to roll them out more widely over time. In summary, Shopee has had a great start to 2026, delivering strong growth while maintaining financial discipline. We are being deliberate about where we invest, in delivery, fulfillment, our Shopeep VIP membership program, and user acquisition. We are already seeing some improvement in unique economics and we expect this to continue over time. Looking ahead, we are confident in the strength of our shopping ecosystem and our ability to execute our strategies. We are on track to deliver our 2026 guidance to grow shopping annual GMV by around 25% year-on-year with full-year adjusted EBITDA no lower than 2025 in absolute dollar terms. Next, moving to money. Money also had a strong start to the year, with robust year-to-year growth across both revenue and adjusted EBIDDA. Credit continues to be the primary driver of our growth. Our loan book reached $9.9 billion at the end of March, an increase of more than 70% year-on-year while maintaining stable asset quality. We continue to expand the credit business along three fronts. First, by deepening existing user relationships, offering them more credit as we get to know them and their repayment behavior better. Second, by acquiring new users, especially in segments with better risk support and greater affluence. These users tend to have better repayment behavior and higher borrowing capacity. Our campaign to attract such new users with competitive pricing, higher limits, and longer tenure are showing early signs of success. third by expanding our credit use cases beyond shopee an important runway for future growth we are making good headway with offshopee expansion more users are progressing from unshoppy escalator to offshore psp later and the personal cash flow following strong momentum in malaysia we are also seeing good traction in some other markets offshore pst later loans in thailand and Indonesia exceeded 20% of the SPLater portfolio at the end of the quarter. Notably, we are seeing strong growth in higher value categories such as electronics and two-wheelers in Indonesia, where installment credit plays a meaningful role in enabling such purchases. Taken together, these efforts resulted in strong growth in both user numbers and the loan outstanding per user. In the first quarter, we added 4.9 million first-time borrowers. Our active credit users crossed 38 million at the end of the quarter, an increase of more than 35% year-on-year. An average loan outstanding-per-user grew to around 250 percent higher year-on-year. Brazil has become our fourth market to cross one billion dollars in loan book size growing over 250 percent year- on-year the strong growth momentum was supported by a localized product we introduced the last year a combined escalator and a cash loan limit that aligns well with how brazilian consumers utilize credit this led to strong user growth with higher repeat usage where average loan outstanding per user more than doubled compared to last year as pay later penetration on shopee is around 10 of gmv in brazil well below our more mature markets, indicating substantial headroom for growth. We also obtained the SDFI license in Brazil during the quarter, allowing us to broaden the scope of financial services we can offer. We are still in the early stages of scaling this business in Brazil with a strong foundation in place to support future growth risk management remains our top priority our 90-day npl ratio remains stable at 1.1 at the end of the quarter this reflects the strength of our underwriting capabilities and the disciplined way we expand across users and markets our deep understanding of our markets and borrowers allows us to respond quickly to macro changes. Our loans typically have short tenures and we can adapt our product success, credit limits, and the tenures in real time. These attributes enable us to adjust our risk appetite and optimize our asset quality as we skills. In summary, money continues to grow healthily. Expansion into more user segments of Shopee use cases and early markets like Brazil are giving us a much larger addressable opportunity across our portfolio. We remain confident that money will be a significant long-term profit contributor for SEA. Next, turning to Garena. Garena had a stellar start to 2026, delivering its best quarter since 2021. Bookings were up 20% and adjusted EBITDA to 25% year-on-year. This performance was driven by the continued strength of Free Fire alongside the record contribution from arena of valor in january free fire launched a major collaboration with the popular anime jujitsu kaizen as with our previous collaboration we invested significant effort in bringing core elements of the anime into gameplay we transformed the part of the map into settings from the jujutsu haiku and introduced a cursed energy resource that that the players could collect to activate special character abilities. For instance, Gojo's Unlimited Void, one of the highest-level techniques from the anime, allowed the players to draw their opponent into a separate domain for a one-on-one fight. Players resonate strongly with the campaign's attention to detail and authentic visual effects. This collaboration generated over 700 million official content views, making this one of our most successful IP partnerships to date. Taken together with the highly successful Naruto Shiften collaboration last year, we have demonstrated our ability to consistently execute high-impact partnerships with global IP owners. We are also evolving how we sell our content globally. One of Free Fire's long-standing strengths is our ability to hyper-localize the game for players. This year, we have challenged ourselves to both localize and globalize some of this content, making it highly resonant for target markets and also enjoyable for everyone else. A good example from the first quarter is our Ramadan campaign. In past years, this campaign was only launched in Ramadan observance markets. This year, we scaled it into a global event under a lots of treasured theme. Players from markets celebrating Ramadan recognized this as a festive event catering to them, while players from other markets saw it as a desert-themed campaign that was new, interesting, and fun to play. During matches, players could find treasure maps triggering team-based missions, guiding them to hidden treasure locations. This highly interactive campaign resonated strongly across markets. Globalizing campaigns let us pool resources, elevate content quality, and deliver more and more frequent in-situ events. Beyond Free Fire, Arena of Valor delivered record high quarterly bookings in the first quarter in its 10th year of operation. The sustained success of both games demonstrates our unique ability to operate games well across genres, in multiple markets, and over long periods of time. Gretna has started 2026 with great momentum, we will remain focused on delivering fresh experiences and building the long-term value of our game portfolio. In conclusion, we have started 2027 well, with each business expanding its addressable opportunity while strengthening its competitive position. Meanwhile, across our ecosystem, we see the AI era creating significant opportunities for a company like ours, with established skills, rich cross-vertical data, and deep local expertise. We are investing deliberately to capture the growth runway ahead, and we are confident of continuing to deliver robust top-line growth while improving our adjusted EBITDA year-on-year. With that, I invite Tony to discuss our financials. Thank you, Forrest, and thanks to everyone for joining the call. For the overall, total gap revenue increased 47% year-on-year to $7.1 billion in the first quarter of 2026. This was primarily driven by growth in Shopee and money. Our total adjusted EBITDA was up by 9% year on year to $1 billion dollars in the first quarter of $2.26. On Shopee, gross orders increased 29% year-on-year to $4 billion in the first quarter, and GME increased by 30% year on year to $37.3 billion in the first quarter. Our first quarter GAAP revenue of $5.1 billion included GAAP marketplace revenue of 4.5 billion dollars, up 44% year year and get product revenue of 0.6 billion dollars within get marketplace revenue core marketplace revenue mainly consisting of transaction-based fees and advertising revenues was 3.8 billion dollars up 61 year-on-year value-added services revenue mainly consisting of revenues related to logistics services was 0.7 billion dollars Shopee adjusted EBITDA was $223 million in the first quarter of 2026, compared to an adjusted EBIDDA of $264 million in first quarter 2025. This year-on-year change primarily reflects our increased investments in delivery, fulfillment, our Shopeep VIP membership program, and user acquisition, partially offset by higher monetization. Money gap revenue was up by 58% year-on-year to $1.2 billion in the first quarter of 2026. Adjusted EBITDA was up 14% year on year to $275 million in the 1st quarter of 2016. As of the end of March, our consumer and SME loans principal outstanding reached $9.9 billion, up 71% year to year. This consists of $8.8 billion on-book and $1.1 billion off-book loan principal outstanding. Non-performing loans passed due by more than 90 days as a percentage of total consumer and SME loans was 1.1% at the end of the quarter. Garena bookings grew 20% year-on-year to $931 million. revenue was up by 41% year-on-year to $697 million. The growth was primarily due to the increase in our active user base and deeper paying user penetration. Garena adjusted EBITDA was up by 25% year on year to $574 million. Returning to our consolidated numbers, We recognized a net non-operating income of $62 million in the first quarter of 2026 compared to a net not operating income of 89 million dollars in the quarter of 2025. We had a net income tax expense of $214 million in first quarter 2026, compared to net income tax expense of $136 million in the first quarter of 2025. As a result, net income was up by 7% year-on-year to $438 million. Thank you, Forrest and Tony. We are now ready to open the call to questions. Operator? We will now begin the question and answer session. If you would like to ask a question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question simply press star 1 again. In the interest of time we will take a maximum of two questions at a time from each caller. If we wish to ask more questions please request to join the question queue again after your first questions have been answered. At this time we'll pause momentarily to assemble our roster. Your first question comes from the line of Alicia Yap of Citigroup. Your line is open. Hi. Good evening, management. Thanks for taking my questions. Congratulations on the strong results. I have two questions. First of all, on e-commerce, so looking at your 30% GMV growth, 29% order growth seems be suggesting is a decent increase in the asp so could management share what you have observed during this past quarter so how much of the strength of the gmb is attributed to your deeper penetration in the higher end user and higher asp product in brazil uh obviously follow your strategic expansion in your warehouse fulfillment and how much that is uh could be attributed to the highest stickiness of your VIP members across the Southeast Asian regions and also Taiwan. And then following up on that is that despite delivering the 30% GNV growth, management still maintained a full year GNV grow of 25%. So is that because of the higher base of the second half of 2025? Or is it management being conservative in light of the macro uncertainty so any colors management could share or elaborate would be helpful and then a second very quick one is on your gaming a very strong booking growth so do you do you expect this strong rebound of arena of valor could set a tone for the continuous strength and rebound of the game for the rest of this year or is it just more a one-off due to the seasonality and promotion thank you um on the growth for shopee um we see a combination of growth from both brazil and south asia um the overall brazil does grow slightly faster than south asia but you know i think it's probably not only driven by the group of brazil side i think as you already pointed out we try to to have more fulfillment businesses in Brazil. We also have more sellers joining us in Brazil, which contributes to high-end user segment attractiveness. The Shopee VIP has been driven quite a lot of growth in Asia as well, as far as mentioned in the opening. For the GMV guidance, Q1 has Ramadan and also Chinese New Year fall into the quarter. We see very good seasonality, kind of attributed to part of the growth. We also see that many of the initiatives were implemented from last year, including the VIPs including the instant delivery including the AI enabled better discovery that we that we roll out to our platform all this contribute to a kind of better growth that then we expected in q1 of the future guidance I think the we will observe how the market evolves the the it's bit early to sort forecast for yet at this stage we will communicate with the market as we see better indications from the growth trend in the market. Regarding Garena, we are very encouraged by Arena Valor's performance this quarter. It delivered record high bookings in Q1 in its 10th year of operation which really speaks to the enduring appeal of the game and our team's ability to keep the experience fresh and engaging for players. This is not a one-off. We have been making deliberate investments in content updates and community engagement that are driving real results. With a content-packed year to celebrate the game's 10th anniversary, we expect 2026 to be a record year for Arena of Valor. That said, Q1 is indeed a seasonally stronger quarter for gaming. Benefits from Lunar New Year, which is a key engagement period. So we are mindful of that when looking at the sequential trend. As you know, gaming performance can also vary from quarter to quarter depending on the timing of content release, IP collaborations, and seasonal events. But the underlying health of the franchise in terms of user engagement and paying user penetration give us confidence. We remain confident in delivering strong year-on-year booking growth for Garena for the full year. And Arena of Valor's reaching new heights in its 10th year gives us even stronger conviction that we can do the same with Free Fire over the long run. Your next question comes from the line of Divya Kothiyal of Morgan Stanley. Your line is open. Thank you very much. My first question is on Brazil. So the growth in Brazil has been clearly very strong for Shopee, but how should we think about the margin cadence there for this year, especially since we are seeing the market leader has dialed up their own investments in the market? Brazil has be profitable this quarter, but would love to hear your thoughts on how you're thinking about Brazil profitability when you give the full year guidance for e-commerce EBITDA targets. Also, are there any early learnings from the loan book ramp up in Brazil, and how different is are the returns versus ASEAN. So that's my first question on Brazil. My second question is on e-commerce take rates. We're seeing e-commerce take rates have risen very consistently this quarter, especially in ASEan. I would like to hear your perspective on how much of these increases are being reinvested back into seller rebates or consumer incentives, and are you seeing ASEAn e- commerce margins actually improve? Also, given the rise in cost inflation, there has been some pushback by sellers in markets like Thailand about these hikes, but are you broadly seeing these increases being well accepted by sellers, or are we kind of reaching a cap on commissions per se? Thank you. In terms of the Brazil growth, we see, as you rightly point out, we see very strong growth in Brazil. If you look at Q1, we grow well ahead of the market growth in the market, which enables us to gain better market shares, which in turn gives us better skills to drive down our cost to serve in the markets. The weapon, possibly Brazil, for the last few consecutive quarters, I don't foresee any change towards that at this point in time. We will still continue to grow healthily in Brazil, likely with the profitable margins as we see right now. But again, while saying that, we do commit to investing to Brazil, especially for the few areas we mentioned, like the fulfillment network that we are building. We are further expanding our same-day delivery in Brazil. also launching the we also have the VIP program in Brazil as well I think all those will be rolled out in Brazil over time to drive further growth the in terms of the long book in Brazil will be doing very well in Brazil on the on the long side we actually have more than 1 billion outstanding in Brazil already which is a kind of very high growth year-to-year if you look at last year Q1. I think the key driver for us is to localize the product. We didn't take the Asian products, you know, just take to Brazil. We localized the product, for example, we have a single flexible limit the user can draw on across the year escalator and the personal cash loans based on what they need. We also spend a lot of effort on localizing the data sources, not only from the shopping data, but we also draw data from the open banking networks in Brazil, which give us a pretty good impact in terms of the risk profiles. I think that's part of the reason that we see better risk in Brazil, which enables us to expand more user pools while maintaining the profit profile in the market. Overall, we are doing the very early days of the market penetration in Brazil for the lending businesses. If you compare our sizes versus some of our peers in the markets for financial services, there's a huge room ahead of us in terms of growing the businesses in Brazil. In terms of the e-commerce take rate, I think the simpler way to look at this was we just increased part of the take rate. We also have our EBITDA margin resonantly similar to previous quarters, so a big part of that will be reinvested into the market to drive the growth. Again, the area we invest in, the few areas mentioned, the fulfillment networks, we're building the VIP programs, etc. But generally, we see that in most of the markets, we see a good margins quarter over quarter for our ASEAN market. On the seller commission reactions from the market, the most important thing for us is to look at how the seller commissions impact the pricing. We look at the impact of commission increase on pricing compared to the peers in the online market. And we also compare with the pricing compared with the offline market. Pricing is one of the most important things for us, as we mentioned all the time. We still see a very price competitiveness in our platform. I think going forward, I think we will still kind of look at the dynamics and decide what's the best way to manage the commission part. But again, I think the most important thing is we're able to deliver profit to the sellers. The profit is depending on number one is how much commission we're taking, number two is how much cost they're running our platform, number three was the volume we're driving for them, our platforms. With slightly higher commissions, we spend a lot of effort on reducing the cost of running businesses on our platform. For example, we offer an AI-powered chatbot for the sellers so they can do customer service with their buyers automatically without sort of hiring more customer service agents. For example we help them technologist their businesses a lot easier with our AI- powered agents in our seller centers, etc. And at the same time, as we always share that with a still fast growth in our market, you know, CELA has a bigger pie to draw from. So all this contributes to sort of a healthy ecosystem when we look at the CELAs commission plan. Your next question comes from the line of Nevin Killa of UBS. Your line is open. Hi. Hi. Thank you for the opportunity and congrats on the strong results. I had a couple of questions. So if I look at your e-commerce, I guess, absolute EBITDA in Q1 this year compared to Q1 last year, you know, there's obviously a moderate decline. I just wanted to understand if you could help us kind of, you know get a better sense of where this decline is coming from geographically. If it's split between, let's say, Brazil, Taiwan, and Southeast Asia, and also as things hopefully improve over the next couple of years, how will the split of that be in terms of the magnitude of growth in EBITDA coming from each of the regions? And secondly, on fintech, again, the margins have obviously been inching down. Is there a steady state number that we should be looking at and a timeframe over which you can get there? First of all, let's start with the e-commerce side. I think you are absolutely right on the slightly lower EBITDA year-to-year. I think the other way to look at this was that if you look at last quarter in Q4, 2025, do see an increase on the EBITDA from Q4 last year to Q1 this year. I think there are many reasons driving the dynamics here. Last year was the first year that Ramadan falling to Q 1 which is you know a different analogy that we had for many many years. I mean there was some adjustments that we have to learn from how does this energy impact the businesses. I think we have better success this year compared to last year. I think part of reason also because we launched a bunch of initiatives to further drive the growth this year as we shared across the course and some of that started from later part of last year which kind of continued from Q1 to Q1 this year. For this near term in 2026, I think we share with our guidance we expect a pretty good growth of 25% with the bottom line EBITDA at least not worse than last year. I think we will see how this evolves over the quarter. In terms of the medium to long term, we still maintain our judgment that I would believe that 2 to 3 percent EBITDA margin is something we target to achieve. In terms of the FinTech, the Fin Tech margin, one thing we look at very closely is our absolute returns. When we grow our loan outstanding, we would like to make sure that additional loan will bring a positive EBITDA in absolute terms. We do recognize that if you compare with the outstanding as a ratio, it might fluctuate and eventually might go down a bit over time. If you look at over the quarter, I think largely driven by the mix of different countries and different products. Early in the market, for example, like Indonesia, Philippines, does have a higher ROA compared to the market that's coming a bit later to the portfolio, if you look at, let's say, Thailand or Malaysia, Vietnam, et cetera. So this drives, if we look at the ratios, a slightly lower ROA as time goes. I think at this point in time, the business is really early. We see a huge potential in front of us, especially if you look at some of the new market growth. uh even you look at thailand malaysia or the brazil we talked about um that there is a big potential ahead of us and if you just now we talk about brazil is compared uh our outstanding compared to the ps outstanding that's a huge room for us um that we also try to develop the non-shoppy ecosystems for example the uh i think for us mentioned the cell phone stores the the two I think all of this are pretty dynamic. I think it's a bit too early to guide a steady-state number at this stage, as it's pretty much impacted by the country and product mix. Your next question comes from the line of Yong Xiao of Barclays. Your line is open. Thank you very much for taking my questions. I have two as well. If I may, I'm going to just ask one at a time. Firstly, would you be able to just talk about the potential impact from a higher fuel prices? I know the conflict in Middle East started in March. You probably did not see too much of an impact in Q1. the oil price stay at current level for longer, how would that affect your cost? Would you be able to pass on some of the costs to either the sellers or consumers? Any comments would be helpful. Then I have a second question. Yeah. It's clearly something we look at very closely in terms of the oil price impact to our businesses. I think there are few degree of impact when we look at this. The first degree of impact is just absolute oil price. It does impact our operation cost. I think the good thing is that we leverage quite a lot of the subsidies from the government in our countries where it helps us to absorb the cost increase in many countries, especially the last mile delivery, which is the largest part of the delivery cost. We also work closely with our partners, like for example our line haul partners, our airline partners to match the cost together. So all in all, if you look at actual cost, it does have impact in our cost, but we believe we can manage it within the guidance that we're giving out. And also in terms of timing, you're actually right that the Q2 will probably see more impact than Q1 in terms cost. I think that's the first degree of impact. I think the second real impact is potentially this might impact the spending powers in some of the countries if they have to spend more money on the gas stations. I think generally we're seeing moderate impact in our platform. I think most important reason for that is our platform is actually the cheapest platform you can find the products that people essentially need it so when people looking for a savings actually we look at a small and our platform is also a more essential product platform rather than something that people buy a luxury product from or the all discretionary spending left spending our platform compared to, let's say, offline spending, et cetera. So all this helps us to show the impact from the second degree impact that we have seen. OK, great. Very helpful. Thank you for that. My second question is about your fulfillment build out. You talked about adding three fulfillment centers, I think, in Q1 in Brazil. Could you talk about some of your, perhaps like near-term targets and long-term targets for example as you know one of your peers in brazil is adding i think over a dozen fcs this year uh in brazilians so if you can share with some of your thoughts both neutral and a longer launcher and on top of that the pace of the investment um and is that you adding let's say some fulfillment centers this year and then next year take a pause to absorb some of the capacity then perhaps add more after that so just help us understand the the the pace when you build out your you know fulfillment infrastructure from relatively a low base from timing wise compared to low base compared to competitors obviously and any sort of a timetable for getting returns of this investment thank you so much um so on the fulfillment businesses i think especially for brazil i think that you refer to um we do have our uh uh expectations on uh growing uh uh more percent of businesses from fulfillment as we build up things we started wrestling not too long time ago we are still in the early stage of building up the fulfillment businesses I think the the typically we actually don't over build too much so the our capacity utilization in our fulfillment center is relatively high and I think the core reason for that is we're able to project, predict how much of the volume from fulfillment well ahead of the time then we build our fulfillment center according to the timetables. So it's probably unlikely that we're going to do a lot this year and we stop next year then we'll do you know while waiting for semester to be for the fuse then we build again I think Morgan to be a continuous process while we are doing the fulfillment center and and ultimately we would like to you know how our equipment center as overall size bigger than our close competitors in the market in terms of absolute volumes but I think it would take a few years to get there, giving, you know, to stop it later. In terms of the return on investment, if you look at individual fulfillment centers, typically the infrastructure, the capex, is actually not that high, as we don't own the fulfillment center itself. We typically rent a fulfillment center. The capex essentially is to make sure the fulfillment center is well-equipped. So if you look at that particular part of investment, the return on investment is pretty fast. It's not that long ahead of the time. The other part of the investment we're doing for the fulfillment businesses is more move the seller to be part of a fulfillment and so and move the buy and advocate the buyer to understand the fulfillment uh businesses that we have so that's part of the ongoing investment we uh we drive we used to drive business growth your next question comes from line of ranjan sharma of jp morgan your line is open hi good evening um thank you for the presentation uh and congratulations on the results Three quick questions from my side. Firstly, how do you see the economics of the VIP program? Will you consider optimizing the value offered to consumers or the subscription price charged to the customer? The second question is, given the momentum on Free Fire and Arena of Valor and the content coming in the coming periods, how should we think about the growth of the gross bookings this year? question is, can you help us understand how you evaluate the intrinsic value of C? We know you have a billion-dollar buyback, but you have only executed $170 million or so, despite the stock price easing $78 at some point. So, would you help to understand how we are thinking about the buyback going forward? Thank you. On the VIP program, I think there are two parts of the offering that we are providing to the market. product offering is the Shopee offering. For example, in some markets, if you join the VIP, you can get a free shipping, et cetera. Part of that is with our partner offer to our users. One of the key thing we are working on is to expand our partner pool so we can strongly offer the benefits to our user. For example the ChaiGBT program that we offer to our users, which is very well accepted and liked. There are quite a few other partners we are going to announce actually not too far away while working on the system integration, et cetera. So all this work, all these partners offerings will help us in terms of the unit economics over time. But the, and also for the pricing, would continue to look at the pricing. There's a potential to have a different tiering as well for the pricing, depends on how the market reactions and how the user nominate look at for different segment of users, and also depends on who we have partner with, et cetera. At this point in time, we were still going to invest a bit more the VIP program giving that the retention we see on the user base and also the uplift of the activities from the VIP users but eventually we do we do see VIP program can be a even more profitable program compared to the non VIP program keeping the techniques of the users giving the ability for us to bring the benefits our partners your next question comes from line of Ellie Yang of Macquarie. Your line is open. Sorry. Jay, please go on. Yeah, there is a – yeah, so for the – the course booking for Garena for the rest of the year, at this moment, we remain very, very confident, and we think this year we We have a very strong growth and we remain the guidance we gave during the last time earning call. And in terms of your question of the buyback considerations as we share in our earning release and we have actively bought back our shares since last November and we're going to continually doing so and as we shared we remain very confident about our our three vertical businesses and also the strong growth potential of our market so that's the key underlying considerations when we buy back our shares my apologies Thank you so much, management, for taking my questions. I've got two. One is a follow-up on the prior question on Shopee VIP. Just wanted to have a better understanding of the current progress of the VIP members, because clearly you guys have been making pretty good progress on penetrating into many of the core operating markets, and it seems like it has reflected positively on both user frequency as well as for the ticket size. So going forward, what would be the key KPIs? Would it be, you know, that the percentage of penetrations in several key markets be it over a certain percentage of their total MAUs, or would it be certain GMB thresholds that you guys will be monitoring? I JUST WANTED TO GET AN UNDERSTANDING OF KIND OF THAT INVESTMENT KIND OF REFLECTION SORT OF IN THE NEXT SEVERAL QUARTERS. SO THAT'S THE FIRST PART OF THE QUESTION. THE SECOND WOULD BE ON MONEY. SO CAN MANAGEMENT SHED SOME LIGHTS ON THE ACTUAL BREAKDOWN OF THE BUSINESS, INCLUDING, FOR EXAMPLE, THE COUNTRY MIX, ALSO ON SHOPPY AND OFF SHOPPEY PERCENTAGE POINT. ULTIMATELY, THE LATEST QUARters OF 71% INCREASE IN CONSUMER AND SMA loan principal outstanding was very impressive especially given that you guys can control the asset the loan quality at a very high level so can you talk about kind of the key factors in the upcoming years you know what will be the key triggers to continue continuously contribute to such strong growth momentum for the loan book as well for the revenue as well thank you I think there are a few key numbers we look at, for example, the penetration of our GMBs, the retention of our users, and also the unicnomics for this part of the program. I think they are a couple of things that are quite important for us to look at. I think the other key thing we look at is how many partners that we have in the VIP program, as I shared just now. It's important for us to make sure that we bring benefits to our users, not only from Shopee, but also from our partners as well. We started Shopeep VIP in Indonesia first. I think we see very good progress there. And I think as we roll out to more countries, we see, you know, essentially we learn more from the early countries and roll out similar learnings to other countries. For the money businesses, as I shared earlier, we started first in the early country like Indonesia, et cetera, but the newer countries like Thailand, Malaysia, or Brazil have kind of, especially because they are later countries, they grow faster compared to the older countries, in a way, so the share between the countries will dynamically adjust because of the timing of the rollout of our products. I don't think we give a precise country mix to the market. In terms of the on-Shopee and off-Shoppee, the on Shopee, especially the ex-payless on Shoppee has, was the majority when we started with, and now it's less than half of the business already. And even you compare with the escalator on Shopee and versus off Shopees, the percentage of escalator off Shopy is about 20% already as a total escalator, on Shopy and off Shoping, which is a significant milestone for us. proves that we're not only be able to drive our expediter or in general lending in the Shopee ecosystem but also we successfully drive this in the off Shope ecosystem and in fact we see higher growth in the of Shope eco system versus the unshoppy part of the businesses the key factor on driving the growth again the three elements one is within our current user base we still see a possibility to drive more credit adoption and this will come with a more product roll-out to this group of users and better credit assessment as we accumulated more data over time and also deeper integration with Shopee and expanding of our non-Shopee scenarios for this group of users I think it's actually we even within the same user base we see a future room for us to deepen the credit penetration the second one is essentially expand the the new scenarios beyond what we have right now where the user can spend their credit limit on this including you know for example we partner with more online merchants who can accept escalator partner with or more merchants offline so they can accept it as well even for our in some of a market where credit card is big slightly bigger we roll out a debit card system leveraging on expedited credit limit so they can use our escalator credit through a car network as well so all this will expand the pool address for market pool for for our user base I think the third thing is for us to continue to expand to new user segments I think that's very important for us well I believe I was mentioning the opening to that as we started more from a subprime market segment when we when we committed more risk data and also better our risk models and we are we are able to expand to a more prime user segment with site different products in various market this user might have a slightly lower our age but this gives us a bigger outstanding pools for us I think all this will try the growth of our lending businesses in the coming years across our market. This concludes our Q&A session. Oh, now let's turn the conference back over to Ms. Rebecca Lee for any closing remarks. Thank you all for joining today's call. We look forward to speaking to all of you again next quarter. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.