Lucy Yu: Thank you, Stephen and Sisi. So my question is still on the margins. So it looks like judging from the minority interest is that East Buy might be loss-making for the quarter. So how should we think about the East Buy margin volatility impact on a group level in the upcoming quarter and upcoming fiscal year. So Stephen, how do you plan those margin for the next fiscal year? Thank you.
Stephen Yang: Lucy, I’m glad to hear from you that your questions about the East Buy. But I’m afraid I’m unable to share with you about the latest financial results at this moment and our guidance for the East Buy. And you know in the next quarter, in July, I think East Buy will announce their – the full year report – half year report and the full year report. And so at that time, I think the management’s of [indiscernible] of East Buy will share more color with you about the margins and the top line growth. Yes, but I must mention that we are still quite optimistic about the East Buy’s investment in this quarter. And over the long run, I think the East Buy will bear fruit from this front investment and will generate more revenue and profit to the whole group, Lucy.
Lucy Yu: Thank you, Stephen.
Stephen Yang: Thank you.
Operator: Thank you, Lucy. Our next question comes from the line of Tian Hou from T.H. Capital. Please ask your question, Tian.
Tian Hou: Hello. Yes. Hi, Steve and Sisi. The question is related to the high school learning center expansion and also the non-academic course learning center, what’s the retention rate and utilization rate for both of them? Thank you.
Stephen Yang: I think for the utilization rate and the student retention rate for both the high school business and the non-academic courses for K-9 are still improving year-over-year, actually quarter-by-quarter. And so the good news for us is we’re seeing the trend is still there. And so going forward, we will – I think we will see the higher – the utilization rates for the – for this business for the existing learning centers and the higher the student retention rates. And a couple of years ago, typically, it will spend us for 12 months to get the breakeven point after we opened the new learning center. But now, I think, roughly, it will take the half year, let’s say, the six months to kind of breakeven point. And so I think going forward, we expect the better – the higher utilization rate for learning centers and the higher students retention rate for all these lines. Thank you.
Tian Hou: Yes. So one follow-up question. So before the double reduction, so when you guys do the learning center expansion, so there’s a tricky line. So how much you do the expansion, if you do a little bit bigger more than will be impact the gross profit margin? So I saw this quarter, the gross profit margin relative to last year’s same time was down like a 5 percentage points. Is that because the learning center expansion or is it because the East Buy?
Stephen Yang: Yes. I think the learning center expansion we raised again the learning center expansion by 30%, I think it’s the results that we analyze the whole picture of this business for the last three – two to three quarters. And as I said, on demand side is very strong, especially for the non-academic courses for the kids. And on the competition side, the competition environment is different compared to a couple of years ago. And so I think – and the key is, we only choose the top performance cities both the bottom line – the top line and bottom line to allow them to open more learning centers or extend the new classroom area for the existing learning centers. So I think it will not drag the whole margin, in opposite it will help the margin expansion going forward.
Tian Hou: Got it. Thank you so much, Stephen. Good quarter.
Stephen Yang: Thank you.
Operator: Thank you, Tian. Our next question comes from the line of Timothy Zhao from Goldman Sachs. Please ask your question, Timothy.
Timothy Zhao: Great. Hi, Stephen. Hi, Sisi. Thank you for taking my question. My question is regarding the cash flow statement. So basically, one is on the operating cash flow. I noticed that for this quarter, I think the operating cash flow drop a little bit on a year-on-year basis. Just wondering if you can share some color on the rationale or the reason behind that? And second, also on the financing cash flow, I do notice that the existing share repurchase program is about to expire. Just wondering regarding your capital allocation and shareholder return? Any thoughts on the shareholder policy going forward in terms of potential dividend or further share repurchase programs? Thank you.
Stephen Yang: As for the operating cash flow, I think you know I suggest the investors to make the analysis of the cash flow by year-on-year, not Q-on-Q. Because the business seasonality where the students enrollment window change quarter-by-quarter. So that’s why I suggest to you guys to make the analysis year-on-year. So if you saw the deferred revenue balance year-on-year, the increase is still very strong. So yes, that’s it. And that’s why we give the very strong – the top line guidance for Q4, yes, even though Q4 is weak – is the slow quarter, yes. And as for the share buyback plan, yes, I think we keep to create more value to the shareholders. And I think we will keep buying the share back. And this round, we announced the share repurchase plan two years – roughly two years ago.
And we finished almost half $195 million. And I think we’ll keep buying in this quarter. And in the – this fiscal year end, I think we will discuss with the Board to decide whether or not to extend the share repurchase plan. And – but historically, we made a couple of times share buybacks and a couple several times the special dividend. So our aim is to create more value to the investors as the capital return, either share buyback or dividend. Thank you, Tim.
Timothy Zhao: Thank you. Thank you, Stephen. That’s helpful.
Operator: Thank you, Timothy. Our next question comes from the line of Chongguang from CITIC. Please ask your question, Chongguang.
Chongguang Feng: Hi, Stephen and Sisi. So actually, I had a question about the financials. So we saw a larger loss from equity method investments this quarter as well as less investment interest this quarter compared to same period of last year. So I’m just wondering which factors led to these changes? Thank you.
