Ladies and gentlemen, thank you for standing by for Autohome’s Second Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. (Operator Instructions) It is now my pleasure to introduce your host Cara O'Brien, from FIT Consulting. Ms. O'Brien, you may begin.

Thank you operator. Hello everyone and welcome to Autohome’s second quarter 2014 earnings conference call. Earlier today Autohome distributed its earnings press release and you can find a copy on the company’s website at www.autohome.com.cn. On today’s call we have Mr. James Qin, Autohome’s Chief Executive Officer and Mr. Nicholas Chong Autohome’s Chief Financial Officer. After their prepared remarks, James and Nicholas will be available to answer your questions. Before we begin please note that the 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 are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include but are not limited to those outlined in our public filings with the Securities and Exchange Commission. Autohome does not undertake any obligation to update any forward-looking statements except as required under applicable law. The earnings press release in this call also includes discussions of certain unaudited non-GAAP financial measures. The press release contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures and is available on Autohome’s IR website. As a reminder, this conference call is being recorded. In addition, a webcast of the conference call will also be available on Autohome’s IR website. I will now turn the call over to Autohome’s Chief Executive Officer, Mr. James Qin. Jim?

Thank you Cara and hello everyone. I’m very excited that we’re reporting another strong set of results for the second quarter of 2014. We again exceeded our expectations for the top-line and recorded very healthy profits in cash flow. Also we have made additional important progress across all of our four key strategic initiatives and make significant steps forward in exciting new areas such as online transactions. And importantly, we continue to demonstrate to our customers and users that Autohome is the clear leader in China’s auto online sector in terms of the value of our media assets and the value of our transactional platform. Nicholas will go through our second quarter financial results in detail in a moment, but let first highlight some of our most important achievement for the second quarter. Looking first at our key financial metrics. Our net revenue increased 72% year-over-year to RMB506.8 million. Net income increased 69 % year-over-year to RMB206.3 million. Net cash provided by operating activities increased 189% year-over-year to RMB163 million. Similarly, in terms of our key operational metrics I’m very encouraged to note that Autohome remains a clear leader in the industry. In terms of PC traffic, according iResearch Autohome continues to lead China’s automotive websites and other automotive channels on Internet portals across all of the most important metrics, average daily unique visitors, average daily page views and average daily time spent. Our PC-based unique visitors and average daily page views in the second quarter were 6.8 million and 127.3 million respectively. Average daily time spent per user increased from 15.4 minutes in the second quarter of 2013 to 16.3 minutes in the second quarter of 2014. On the mobile front, in the months of June the number of average daily unique visitors who access our websites via mobile…

Thank you James, hello everyone. As James noted we’ve posted very strong results for the second quarter coming ahead of our initial expectations. Let me spend a few minutes to drill down into those numbers and talk you through some specific details for the second quarter. Note that I will reference RMB only in this discussion, but you can find equivalent U.S. dollar numbers in our press release issued earlier today. Net revenues for the second quarter increased 71.8% to RMB506.8 million from RMB295 million in the corresponding period in 2013. This increase was due to increases in revenues from both advertising services and dealer subscription services. Looking this Advertising services revenues for the second quarter of 2014 increased to RMB366.2 million from RMB227.9 million in the corresponding period in 2013, as we increase was due to an increase in revenues from both automaker advertisers and dealer advertisers. Revenues from automaker advertisers and dealer advertisers accounted for 75.3% and 24.7%, respectively, of total advertising services revenues for the second quarter of 2014. Breaking this down further, advertising services revenue increased 60.7% to RMB366.2 million from RMB227.9 million in the corresponding period in 2013 as the increased revenues from both automaker advertisers and dealer advertisers. The increase in automaker advertising services revenue was primarily due attributable to an increase in average revenue from automaker advertisers. As automakers continue to allocate more of the advertising budgets the Autohome’s online advertising channels. The increase in deal advertising services revenue was mainly due to an increase in the volume of advertising, purchased by dealer advertisers as a result of our expansion into new geographical markets and deeper penetration into existing markets. We also increased the rates for our dealer advertising services. Turning to dealer subscription services, revenue increased 109.6% RMB140.6 million from RMB67.1 million…

(Operator Instructions) Your first question comes from the line of Evan Zhou from Credit Suisse, your line is open, please go ahead.

Hi, good evening James, and congrats on a very strong quarter. My first question is regarding our transaction platform. So, these 3,000 transactions we have done in the past month. It's a very impressive number I have to say so. So, I would like to pick your brain on some of the quarters there, what do you expect that run rate to continue going forward, and within that 3K transactions, actually how many coupons are actually sold and what kind of conversion that we see from this transaction platform to help dealers to make the deals? Thanks.

Okay, so the number we gave on our results 3,000 transactions and among that I think majority of the transaction are done on the cash coupon basis. So basically, we have done about four different types of so called online transactions. Cash coupon is a very -- majority of transaction will be done in a cash coupon format. And another sort of relatively big portion will come from the presale version. And the other two versions which is fixed price and customized car only for Autohome, those are kind of very small portion and I think it’s very early probably it’s too early to tell going forward what the spilt or the trend would look like, because at this point it’s pretty much depending the capability of Autohome to source product from either the dealers or carmakers. So, I am not sure if I answered you question, so I think 3000 per month, no this is per month, right? First month is only a beginning and we haven’t really put a full gear in term of sourcing product from dealers and carmakers, but I think we have done the full sales cycle which is very encouraging.

Understood. Thanks, James. That's very helpful. My second question is regarding the mobile exposures. You have around like 2.9 million on mobile wap and 2.3 million MAU, on mobile apps. I'm wondering, how do you see that breakdown then going forward? Do you see that in all the verticals that users tend to use more mobile wap or tend to -- probably web information within the app, and how do you see the user behavior differences between the web and the app within all verticals?

Okay, this is a great question. I think currently you can say that we have a little bit more users access our servicing through mobile wap than mobile app. I don’t have the industry data. I think it depends my guess is the content oriented company tend to have more users to visit through mobile wap while transaction, the pure transaction platform will tend to have more users to use the application services rather than through the mobile wap. But I think in our line of services, I think the mobile wap at this point has more user base is very natural. Few times I think that might change, it really depends on the bandwidth it really depends on the product capabilities. So that’s the first thing about the split between mobile wap and mobile app. Secondly, I think your question is that whether or not there is major difference between the user usage pattern between the mobile wap and mobile app. Currently, we didn’t see we haven’t seen a very clear difference, so from our point of view they almost seems to be very similar.

Your next question comes from the line of Vivian Hao from Deutsche Bank. Your line is open. Please go ahead.

I have two questions. One is regarding our operating margin outlook, especially on the sales and marketing side. For the second quarter, we still have a very strong margin of 43% on bottom-line, and what is the outlook for the rest of the year, especially factoring the PC Aladdin cost? This is my first question. My second question is on the -- as for the second quarter traffic seems to be slightly weaker than first quarter. Is it because of seasonality or other reasons? Thank you.

So Vivian let me handle the question on margin. I think for 2014 year-to-date, we have posted very strong performance overall in terms of both revenue and margins. We have also been able to gain operating leverage as evidenced by the increase in the gross profit percentage. As communicated before and since the IPO road show, we were continued to reinvest in future growth opportunities in area like mobile, sales and marketing, product development and in new businesses like used car transaction business et cetera. So for 2014 we expect the non-GAAP net margin with the similar to what we have averaged in this area for the last three calendar years. So you could think higher than mid 30s, so keep in mind though that we do not presently provide formal guidance on our margins and bottom line.

I will take the second part of the second question. I think I just want to clarify you’re asking about the PC traffic or you’re asking about the mobile traffic or both? PC traffic, okay, so there is one number I don’t have which is the industry average growth because we can always deliver higher than industrial growth but we cannot grow out of the industry I’m not sure when you say I think probably from the absolute number our Q2 DAUs growth is slower than the Q1 growth but I don’t have the current rate, I do not have the industry average growth from Q2 compared with Q1. So, I don’t really know whether or not that absolutely growth rate slowdown means anything.

Okay. So this is not a trend for now, we need to compare with the industry growth.

Yes, I think first you need to compare with the industry growth and secondly because everyone knows the PC DAU growth for the whole sector is topping off, is slowing down. When we roll our PC DAU shares, we’re basically taking the shares from our peers. I’m pretty sure in July our DAU growth by certain percentage and hours can attribute to the PC Aladdin fact. By doing that we’re taking share from our peers.

Yes, I think just to add on to that I think as you can see from our earnings release we say that in June, we have 6.8 million for PC DAU say in the month of July it has increased to 7.4 million DAUs.

Your next question comes from the line of Piyush Mubayi from Goldman Sachs. Your line is open, please go ahead.

Thank you James, Nicholas, congratulations on your number. Just two questions from me. The first is when I look at the ARPU, it went up nicely in the quarter, and I think you mentioned that rates also went up during the quarter. Could you just run me through what are the rate increases you were able to push through and should we think of these as being an annual event potentially in the second quarter? And the second question I have is relating to when you talked about the 550 cars purchased for RMB80 million, were you referring to the Guangzhou Auto Toyota Show? On the e-commerce Mall or was it a different car, could you just remind me of that? Thank you.

Yes, I think on the first question -

Okay, that clarify when you say ARPU you’re meaning on the dealer subscription services or the blended of dealer subscription services plus dealer advertising services.

The dealer subscription.

The dealer subscriptions services.

Or either blended. When you mentioned rate increase which were you referring to?

Yes, I think our dealer subscription service went up by about 109% on the revenue side and then the ARPU it’s about 86.3% of that is coming from volume increase because our number of paying dealers has gone up by 86. So the ARPU actually gone up by about 12.5% because we’re able to pick some price increase in the dealer packages and some of it is also because the dealers move up on the base package to the premium package because we offer both the basic and a premium package in our dealer subscription services.

And what is that premium amounting to for the quarter from basic to the premium package?

I think we don’t have the number.

We don’t have the number on top of my head.

The number should be good.

Yes, we can get back to you on that. But I think point you highlight is that what we’re saying is that because we’re able to not just only grow in terms of the numbers of paying dealers but we obviously able to increase ARPU.

The second question is about, there was a car sales event which we sold about 500 cars and the result is for RMB80 million, right?

That is the April promotion that we’ve done over four days period.

That was in three provinces, right?

Yes, in three provinces the Guangdong -

No, that 80 million is for - Tiggo 3 that was a pre-sales.

Pre-sales, okay. There was a more recent one that we read about which was Guangzhou Auto Toyota that was much broader in its reach I think it was 30 provinces?

Well, does that Q2 or is already –

That is maybe of after Q2.

Yes that’s Q3.

Okay. Is there any color you could shed on how that's progressed?

We can always talk about that in the next earnings call. I think for the transaction services, before June, mainly we’re trying to running more trial runs in order to get a better feeling of how to source a product, how to talk with the car makers, how to talk to the regional sales offices of car makers and dealers. And on the, when we launch the Autohome model that was the time we start to launch the products sourcing effort. And I think throughout a second half of this year we’re going to do more of that and to all the effort we should be able to see most of those efforts.

And Piyush just a view on what James has said, I think if you look at the more autohome.com in the first month we have 36 brands involve and 137 models and right now by end of July we have increased from 36 brands to 47 brands and then the number of car models have increased from 137 models to 195 models. So that’s what James is saying that we are trying to source small brands and more models to incorporate into the --

I got the lines Piyush is referring to. Basically before we launched the model we did two meaningful events we would like to share with you. The first one is the, we call them April 15 is around the April 15th for the event happened in three provinces, in the number of selected brands and that was the 550 vehicle purchased. And the next one is the Tiggo 3 is a pre-sale promotion. We’ve got a sales meet and the most people paid out first and then they can buy a latest model of Tiggo 3 from Chery that was the second sort of meaningful trial event we have run. And that’s one I think sort of still ongoing.

Your next question comes from the line of Ella Ji from Oppenheimer. Your line is open. Please go ahead.

Thank you. Congratulations on strong quarter. I have a few detailed follow-up questions. First, relating to your transaction services line. I saw that you recently started to work with JD.com and just wonder what are you seeing the trend there, how much sales lead is JD providing you versus your organic traffic. And also within that 3,000 transactions you did in June, how many of that are coming from the mobile side? And then I also wonder if management can talk about your revenue model for this business line. So it seems that for such transaction services for now you’re collecting money from the buyers, from the customers. Any thoughts also maybe getting revenues from the dealers or are you going to just focus on revenue source from the customers for now.

Okay. So I’ll answer the second question first and then I’ll refer to, I’ll talk about Jingdong. The second question is whether or not, how we’re going to treat the revenue lines from those transactional services. Yes, we do collect some deposit money from the users and once consumer bought the car we’re not going to return the money back. However, we also provide some discounted backup by our self as marketing expense. So from my point of view is we don’t really, our intention is now to generate a meaningful revenue from those kind of events. However, I think as a Internet company you always focus on creating value for the whole industry I think right now is our investment in doing that business. Basically help facilitating China’s auto consumer to buy car over the Internet rather than go through the dealers. So we try to be part of that transactions loop. So in order to do that right now our intention is definitely not to generate a lot of revenue from that kind of business so if I were you, I would not have huge expectation from Autohome generate that revenue line especially in 2014. The first part of your questions about Jingdong, we did have a very successful co-branded sales event with Jingdong. However we -- because we signed a confidentiality agreement with Jingdong probably we’re not in the position to share with you the traffic split and the sales split. All I said that was the very successful event and going forward you’re going to see a lot more of that. It may now be Autohome work with the Jingdong alone we are in the process of working with majority of China’s large e-commerce providers, because as I mentioned in the first part of my answers we’re in the process of invest our resources and energy to cultivate this market. We want to change consumers’ behavior.

Okay you also asked about the sales lead from mobile in June about the transaction services. Unfortunately -- because -- the Autohome Mall, the mall.autohome.com.cn is easier to visit through the PC service at this point, so I would assume majority of the sales lead probably is not all from the PC at this moment.

Okay. Thank you for the color. Just relating to that -- I think you know your competitors are increasingly focusing on mobile. And our understanding is that they also get Baidu alerting on mobile. So can you talk about your thoughts of for example facilitating transactions on a mobile and in what does Autohome plan to do on the mobile end in order to create more value for the users?

I can tell you what we have done. I think every single internet companies at this point focused on building their mobile user base. That’s for sure and Autohome is definitely one of those companies. If you look at the mobile user coverage, there are two types of mobile services one is the mobile wap the other one is mobile app, mobile A-P-P. And I think your question towards me is about the mobile wap and for mobile wap basically any mobile wap like Autohome is a mobile wap or some of our peer mobile app will have mainly three sources of traffic. The first one is from sort of the overflow from your PC client, those people who visit your PC very often and then when they use their mobile browser they tend to directly go to your mobile sites so that’s one. And secondly is through browser because majority of China’s mobile browser company provides similar services such as navigation, so that’s one. I think the third one you mentioned is the search. Currently in China’s mobile search area, there is only one that my change in near future because UCWeb is going to introduce some [indiscernible], I think in this month. But having said that, before there was only Baidu's mobile search and Baidu's mobile currently we only the provide show up as a net natural search readout. So if you think about the mobile wap traffic acquisition you have to think about three things. If you have a better PC traffic, you naturally will have your mobile wap traffic. If you have better navigation services where you have more exposure over there, you have better traffic acquisition. If you have more exposure on the Baidu’s mobile search, yes, you’re going to be better. So there is…

Yes, thank you very much. That's very helpful. Then my second question is relating to your guidance for next quarter. Just looking at the number, it seems the year-over-year growth is little lower than the prior two quarters guidance. Just wondered if just management being conservative about it or is there anything that you want to bring to our attention?

You are right that the fifth quarter year-on-year growth is lower. I think that’s basically we also look at the last two years we look at the Q3 year-on-year growth rate has always been lowest quarter in the last two years. I think you can say that we are on the prudent side.

This was to sum with there was nothing special we’ll also bring your attention.

Your next question comes from the line of Gene Munster from Piper Jaffray. Your line is open, please go ahead.

Good evening and congratulations and special congratulations on the transaction business. And I know you've talked a lot about that this evening, but if we think about that business longer term and you've touched on this; but if we think about that longer term, can you walk us through or that -- how that should impact the growth rate maybe in 2015? And when we should start to feel that we can model more of that into our estimates?

That’s a good question. We actually haven’t really planned the revenue generation on the transaction business I think in general that will have some uplift to our revenue because things in other ways it basically relate the sales lead conversion more apparent to anyone within the industry, because now we cannot only say we convert a way we’ve certain percentage of conversion - we can basically say, if you have a need for example some car makers have a need in the second quarter to boost up their sales. Now, is that only time we can provide our services in the past there was no way we can provide our services. So, I think this is definitely we’ll have some positive impact. However, we actually haven’t really planned out our revenue generation model on those type of a business because business is still evolving, because currently we actually haven’t really done track the all the payment upfront and deliver the cost to the dealer itself, we haven’t done that, we really want to see that but so far it’s just not happening yet. So, I think probably only after that then I can revert to your question.

Let me ask you think, do you think there will be a point in the next two years where this starts to be incremental to the model or is it something that is just kind of driving a broader platform?

Well, it would be - two to three years access, if we really put this off, it’s going to be disruptive for us in the whole industry and a lot of people’s business model is going to be changed.

Okay. I kind of think of this two to three years out versus one year out.

Sorry.

I was saying we should think about this two to three years out versus one year.

Yes.

Excellent, thank you.

Your next question comes from the line of Philip Wan from Morgan Stanley. Your line is open, please go ahead.

Hi, James and Nicholas, thank you for taking my questions. This is Gina Chen asking on behalf of Philip. My question is regarding the growth of subscribers. Your subscriber number increased by 86% year-on-year, which is quite impressive. So I guess most of the incremental subscribers are from non-tier 1 cities. So could you please give us some color on your subscriber penetration in non tier 1 cities, including the historical numbers and the car number? Also, how does it look like compared with the penetration in tier 1 cities. Thank you.

Okay. So, the growth rate of tier 2 to tier 3 cities in Q2 right?

Yes, second quarter.

Hold on, let me get that number to you. So, except tier 1 cities currently our growth rate for 2000 Q4 was 86%.

In our category that is called the class. BCD but you know what basically it tier 3, tier 4 in your definition because our all categories are little bit different from the general conditional tier 1, tier 2, tier 3, tier 4. So majority the 86% is except the tier 1.

Okay, right. And how about the penetration rate?

The penetration rate I can’t give that majority of the tier 1 cities at this point is 80% and in Tier 2 cities is close to 80% and Tier 3, Tier 4 only Tier 3 is positive Tier 4 even lower.

One thing to highlight the percentage that was shared just now there are number paying dealer divide by those registered dealers rather than divide by the total number of available dealers in the market.

Okay, you mean the total dealer doesn’t include some second level dealers or?

Yes, I think the parentage that was shared just now for example we have 13,693 paying dealers, and the percentage that was quoted just now by James was over the total number of registered dealers that we have about 32,000, 33,000 and not versus the 30,000 authorized dealers that we have in total China.

Got it. Also, I have a follow-up question on the mobile, the first elimination before. Yes, James, you said there will be three major traffic sources for the mobile websites. So could you please share how much revenue is from use see browser right now?

So from mobile browser?

Yes, right.

Unfortunately, we don’t disclose that number for now, but I can tell you sort of rush another two type of revenues we currently generate from the mobile platform. Majority is the dealer subscription. The dealer subscription is the fixed subscription that cover all of our three platform PC platform, mobile wap and mobile apps. Internally we track the number of sales we split among the three platforms. But because of the revenue is a blended fixed subscription cover all three platform. So it’s typical for us to say, our mobile wap platform generate how much revenue, because that was not done in that way, our present one who doesn’t support that so that’s what. And secondly, is our advertising services currently? Yes, some car makers are doing advertising business with us so there are a small percentage of the revenue generated from the mobile app and mobile wap. But at this point let me give you a conservative guess, it’s less than 5% of the OEM advertising dollars spend on mobile wap and mobile app all together.

Your next question comes from the line of Gregory Joe from Barclays. Your line is open. Please go ahead.

Hi James, Nicholas thanks for taking question and congratulation on the strong quarter. I have three very quick questions. First, I think we made some very good progress on the used car side. So I want to ask for the used car, what do you think is the best monetization way and do you think the transaction based business model can also be used on used car? This is my first question.

Okay. I’ll take crack on your first question. Currently, we do not generate any meaningful revenue from the used car business meaningful because we believe that the industry is just view too early to generate any meaningful revenue. However, having said that, we watched some of our peers, if they generate a lot of revenue from the used car business trust me we don’t change our sales model overnight. But we do believe right now used car market sizably maturing for us to generate revenue, because majority of China’s used car transaction done to C2C rather than P2C because of China’s regulation as well as the attacks.

Okay. My second question is, currently while our sales guy only want to approach a new auto dealer client, so what do you think that the dealer they care mostly about the traffic on PC, only on PC or from mobile or other kind of dealer services?

Dealer only care about making money, because the majority of, if you look at those leaders some of them just in Hong Kong Stock Exchange. So it think they are very practical, they worry about going forward their profit generation capability. So I think that was positive reason we have a very good first and second quarter because they felt the pressure of where we can help them sell more cars and in turn generate aftermarket services for them, will tend to get their wallets. So that’s good for us.

Okay. Thank you. My last question to you is about Baidu PC Aladdin. So our estimate currently, will the traffic and the -- you need really the contribution increased by the Baidu Aladdin and compared to the traditional Baidu search so -- for the quality of that conversion rate of the Baidu Aladdin. Thanks.

Okay, yes, we do have some DAU increased through the Baidu Aladdin project, but that was sort of two factors together because definitely the Baidu Aladdin will give us some number of new visitors who traditionally will not visit Autohome because they are at the top of the funnel. So they don’t know Autohome first. But having said that, there will be some number of visitors which tend to use Autohome’s natural search results not because of Autohome being the number one search result on PA Aladdin platform to click on PC Aladdin, so basically in a sense some of which traffic supposed to be mine. So this is two factors together. So it’s really difficult for us to split whether or not the between new-new and mine but still from Aladdin, but I think in general our estimate is PC Aladdin match our expectation in terms of absolutely new DAU generation and also in terms of the behavior of those users in terms of related to monetization.

Okay, and how about the conversion rates -- I mean convert to transaction and convert to lease?

It’s still in line with our expectation.

Your next question comes from the line of Tian Hou of T.H. Capital. Your line is open. Please go ahead.

Related to your Baidu Jesing program, and I think it's great to really win this bidding and to generate more traffic. And I wonder you know since we all know Baidu Jesing program is quite expensive, I wonder how should we look at your operating margin going on forward? That is number one question. And then number two, maybe today used car business is not so ready yet but I really want to know what kind of preparation for you guys are doing to prepare you for upcoming maturity of this part of market? Thank you.

Let me answer your first question on margin actually I have talked about it in earlier discussion. According for 2014, it has you can see that so far year to-date we have strong performance in both the revenue and margin because on one hand we’re able to gain operating leverage as you can see that continuous increase on the gross profit percentage, but we always want to reinvest back into the business in mobile, the traffic position that you talk about. So for 2014, we expect that a non-GAAP net margin will be similar to what we have averaged in this area for the last three calendar years so higher than mid 30s, but because we do not provide former guidance on the margin and bottom line. I think for the out years like 2015 actually it’s too early to provide or give any estimates for the next year. What we can say is that, we will work to balance achieving operating leverage and reinvesting in business initiatives to help take advantage on the market opportunities and gain market share.

I will try to take the answer on used car operation. I think currently there are two major challenges or obstacles if I may say with regard to the used car business development. The first one is the government regulation on the [indiscernible] so they control the used car which registered in other cities to be registered in current city. For example in a city close to Beijing which is Baldwin unfortunately it has to be meet emission standard, a very high emission standard, and also it will be bought within three years and then Baldwin can only allow those used car to be registered in the city of Baldwin. So currently in China, there are about 13 cities only allow the emission standard above China’s national fire service to be registered in that city and there was other 250 cities only allow with national standard number four to be registered in that city and that basically make sure majority of the old cars cannot be sold or transacted outside of this original city. So that’s one, the second one is about the tax. In China, there is used car transactional tax is called value added tax is about 2% of the whole car the transaction value and unfortunately it cannot be always on chaser to - I only know the Chinese [Foreign Language]. Cannot be deducted and that for one the transaction between a customer and a company. So, that’s why majority of China’s used car transaction either is done locally will be looked at as done from a consumer to consumer. I think if those two articles are not looked at China’s used car business or used car market is typical for the used car market to flat. And from our point of view at this point even the used car market is a very little bit developed that all we can do is that make sure we provide the best user experience and by doing that we think we can put a very strong foothold in case the used car market is really slight, we can capture that. We are probably tracking where we’re more anxious than most of you guys to wait for the used car market to flow and then we can take the advantage of that.

Your next question comes from the line of Chao Wang from Nomura. Your line is open, please go ahead.

Hi, thank you for taking my question. Just one, what do you think is the impact from the new regulation on auto dealer industry announced recently, if any? Thank you.

Yes. To be honest we watched closely our data. I think in the near term you won’t have a meaningful impact because this is only the levy from it is called a - it’s only one thing from SAIC that this is means that in the future those car dealers, they basically not have to register whereas [indiscernible] with the SAIC. However, currently the limitation of those dealers are put by the car makers rather than SAIC. I think without that change the whole industry landscape won’t change. That always basically show the government want to be open minded and promote the marketing comics which in general tend to be a good sign for internet business. Alright, thank you very much for joining us today. And we appreciate your support and we look forward to updating you on our third quarter 2014 conference call in the few months plan. In the meantime, please feel free to get in touch with us if you have further questions, concerns or comments and thank you everyone.

Thank you.

That does conclude our conference for today. Thank you for participating. You may all disconnect.