Ladies and gentlemen, good day and welcome to Full Track Alliance’s Fourth Quarter and Full Year 2021 Earnings Conference Call. Today’s conference call is being recorded. At this time, I would like to turn the conference over to Mao Mao, Head of Investor Relations. Please go ahead.

Thank you, operator. Please note that today’s discussion will contain forward-looking statements relating to the company’s future performance, which are intended to qualify for the Safe Harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the company’s control and could cause actual results to differ materially from those mentioned in today’s press release and discussion. A general discussion of the risk factors that could affect FTA’s business and financial results is included in certain filings of the company with the SEC. The company does not undertake any obligation to update these forward-looking statements, except as required by law. During today’s call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. Joining us today on the call from FTA’s senior management are Mr. Hui Zhang, our Founder, Chairman and CEO and Mr. Simon Cai, our CFO. Management will begin with prepared remarks and the call will conclude with a Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this call will be available on our FTA’s Investor Relations website at ir.fulltruckalliance.com. I will now turn the call over to our Founder, Chairman, and CEO, Mr. Zhang. Please go ahead, sir.

Hello, everyone. Thank you for joining FTA’s fourth quarter and full year 2021 earnings conference call today. Over the past year, FTA has further solidified its leadership position in China’s rapidly expanding logistics industry and we are pleased to have capped a successful year with an excellent financial and operating performance in the fourth quarter. FTA’s continued growth reflects our consistent monetization improvements and service optimization as well as our business models that is resilient and sustainability. By broadening our logistics network, utilizing our big data reserves and intensifying our platform’s positive network effects, we served a growing user base of truckers and shippers with increasingly efficient mentoring and convenient product functions in 2021. We also leveraged our digital capabilities to transform FTA into a growing and low carbon logistics service provider and proudly fulfilled our social responsibilities by improving efficiency, promoting energy conservation, and reducing emissions. We seek to benefit our industry and the society at large as we enhance our value proposition for our users and investors. For full year 2021, our gross transaction value reached RMB262.3 billion, an increase of 50.9% compared with the prior year and the number of secured orders rose 78.8% year-over-year to RMB128 million. For the fourth quarter of 2021, GTV increased 22.1% year-over-year to RMB69.5 billion, extending the year’s robust momentum and the number of fulfilled orders climbed 41.6% year-over-year to RMB34.8 million. Also, we witnessed a significant increase in average shipper MAUs, up 20.6% year-over-year to RMB1.57 million. As a result, we grew our total net revenues by 68.1% year-over-year to RMB1.43 billion and realized a non-GAAP adjusted net income of RMB243 million in the fourth quarter. Also in 2022, we will leverage our massive user base, data resources and AI capabilities to drive growth across verticals and accelerate digitalization, which we believe is the future of our industry. To support our long-term healthy development, we will continue to explore new business models and strengthen our monetization system to optimize profitability as we holistically improve user experience. In addition, we will increase our investment in R&D to fortify our technological innovation capabilities, creating new growth opportunities that also promote China’s dual carbon goals. And finally, we will spare no efforts to establish a more comprehensive data security protection system and enlarge our safe yet efficient nationwide logistics network. As we welcome the digital age, we remain true to our original aspirations to make logistics smarter. FTA will work tirelessly to drive innovation, promote sustainability, and create value for all of our stakeholders as we continue to lead China’s road transportation industry. With that, I will now turn the call over to our CFO, Simon. He will elaborate more on our fourth quarter progress and go over our operational and financial results in more detail. Simon, please go ahead.

Thank you, Mr. Zhang, Mao Mao, and hello, everyone. We are glad to have delivered another quarter of solid operational and financial results. I would now like to walk you through some details of our fourth quarter operations, beginning with our platform. The fourth quarter is normally the peak season. However, the suspension of new user registration, COVID recurrences and electricity shortage induced production constraints since the end of September, impacted our business. Fortunately, these obstacles are short-term. Our solid foundation and focus on improving user experience helped to mitigate macro impacts and we successfully improved our fulfillment rate by 5 percentage points year-over-year to reach approximately 26%. In addition, the average rate matching time continued to decline, falling to less than 10 minutes in December, a substantial improvement primarily attributable to our advanced big data technology and algo capabilities. We took matching efficiency to a new level in the fourth quarter as we improved search functionality for users and generated more and better structured superior and trucker data. For example, we enhanced our search features, sorting logic based on driver fulfillment probability and future embedded information out of the results to maximize truckers’ access to shipping orders. We also introduced a WeChat based matching service to diversify matching methods. We went and encouraged adoption of our tap-and-go model with more reasonable pricing to further streamline matching and combine algo to accurately predict and distribute user rewards to guide transaction habits. We continuously strive for more accurate matching to truly optimize the allocation of logistics resources. Looking forward, we will remain focused on upgrading our logistics ecosystem to strengthen our comprehensive end-to-end platform and closed loop business model. Supported by our revolving big data and algo and cutting-edge AI technology, we are confident that these efforts will lead to stronger…

Operator, please open the line for Q&A, please.

[Operator instructions] Our first question today will come from Ronald Keung with Goldman Sachs. Please go ahead with your question.

Thank you. Thank you, Hui Zhang and Simon. Thank you, management. I have – and congratulations on the solid results. Going to ask, this quarter on how has our entrusted shipment program progressed since its launch last year? What are your future rollout plans for this program? Thank you.

All platforms continues to grow. We have seen gradual changes in the shipper competition with a broader range of small to medium size drop shippers choosing our platform. So, we introduced our entrusted shipment program to better meet their needs and conducted our initial pilot testing in June last year. And as of the end of January this year, we had successfully launched the program in 29 cities in Jiangsu, Suzhou and Shanghai and Anhui provinces. And we plan to roll out these surveys in more regions by end of this quarter, and we expect that its revenue contribution will continue to increase. And our interest in shipment program mainly targeted the small and medium sized companies. Current operating data shows that the project is running well, with an average fulfillment rate of over 70%. The successful launch of the entrusted shipment program so far enables us to further improve our user ecosystems and optimize user competition while creating additional monetization opportunities for the platform. As of now, we have implemented a commission model for this program in the three cities. So going forward, by leveraging our extensive transaction data and advanced algo capabilities, we will continue to improve the product functions and provide more reasonable and accurate pricing to drive user stickiness and enhance our performance overall matching efficiency and consumer rate. Okay. Next question please.

Thank you. And our next question today will come from Charlie Chen with China Renaissance. Please go ahead with your question.

Thanks for taking my question. The platform for future GTV and a number of fulfilled orders both maintained year-on-year growth in the fourth quarter, but quarterly – quarter-over-quarter gross declined compared with the same period last year. So, what are the key drivers of this decline? And how do you think for fulfilled GTV and a number of fulfilled orders will trend in the first quarter of this year? Thank you.

Thank you, Charlie. This is Simon Cai here. I will address your question directly in English. The year-over-year growth in the platform’s GTV and number of fulfilled orders in the fourth quarter was primarily attributable to sustained increase in market penetration, as well as our platform’s fulfillment efficiency. As of Q4, average shipper MAUs reached to RMB1.57 million, growing over 20% year-over-year, and average trucker MAUs who responded to shipping orders also exceeded MAU3 million. So, given that new user registration was still suspended during the quarter, such a robust numbers are a strong indication of FTA’s solid leadership in the industry. As the platform’s network effect grows, more and more shippers and truckers are relying on our platform for shipment. From an operational perspective, we continue to optimize the user experience and refine our operation capabilities during the quarter to raise new users use of freight usage frequency and conversion rate, while elevating the activity level and retention rate for existing users, creating a dual engine effect to drive the continued growth of our overall business. Regarding your question on the sequential trend, the fourth quarter of the year is typically a peak freight season, so overall shipment demand increase is on a quarter-over-quarter basis. However, in 2021, the seasonal upside was partially offset by external factors, such as the suspension of the new user registration, the COVID recurrences and production constraints related to electricity shortage, that lead to slightly lower quarter-over-quarter growth. Unfortunately, we believe all these external factors are temporary and we will not have a substantial impact on the platform’s long-term growth. And as for Q1, it is outside of the peak freight season, and the demand for shipping always tends to be lower in Q1, especially during the Chinese New Year period. This explains the relatively low GTV and number of a few orders in Q1 compared to the rest of the year.

Thank you very much.

Thank you.

Our next question will come from Brian Gong with Citigroup. Please go ahead.

I will translate it myself. How did a user composition and the user activity changed during the first quarter ‘21 and is a medium average freight matching time in December dropped to below 10 – as mentioned – just mentioned, what drove the decrease? Thank you.

Thank you, Brian. In terms of user composition and behavior, there was no obvious change in the past quarter versus Q3. Despite the impact of multiple external factors, our trucker and shipper MAUs remained steady. In the meantime, our existing users continue to exhibit strong stickiness. For Q4 shippers – shipper remembers 12 months of retention rate remain steady quarter-over-quarter at approximately 85%. With respect to user composition to GTV, contribution from direct shippers in Q4 were stable compared to Q3. We expect that the GTV contribution from direct shippers to increase steadily, especially after new user registration resumes. The major drivers of changes in our user composition and behavior include our platform’s growing network effect, consistently improving data algo and enhanced product functions such as tap-and-go and entrusted shipment. These are all increased in matching efficiency. And coupled with our continuous efforts to optimize the user experience, these features intensified a user’s dependence on our platform. The reduction in Q4’s average freight matching time was primarily attributable to our ongoing algo refinement. For instance, we optimized either searching and sorting logic by taking drivers fulfillment probability into account. We also improved the accuracy of the targeted recommendations by filtering out invalid order placements and further enhanced user experience. Optimizing both the search process and recommended results substantially heightened our overall matching efficiency in Q4.

Thank you. That’s very helpful.

Our next question will come from Shuyao Li of CICC. Please go ahead.

Thank you for taking my question. I just have one question here. Have you seen any significant change in the competitive landscape, since the suspension of new user registration in the fourth quarter? Thank you.

Thank you. We have not seen any substantial changes in the FTL market’s competitive landscape since the fourth quarter. And effective FTL network typically involves a highly complex and dynamic combination of millions of shippers and truckers and hundreds of thousands of transportation rails, making it very difficult to replicate. Once a nationwide network is fully established, it has enormous impact on the industry and forms a very high barrier for new entrants. Our nationwide platform and high matching efficiency, which naturally attract both shippers and truckers, are our competitive edge. We have – we help shippers save 10% to 15% of shipping costs compared with traditional channels. This is an advantage new entrants cannot match when they start from scratch. On truckers side, new industry entrants are unable to compete with our platforms significant economies of scale, even with short-term subsidies or promotions. Rather than other platforms, our true competitors on the truckers side are offline model brokers and contract carriers, and we are confident that our brand reputation, standardized services, and more reasonable freight prices will continue to attract users to our platform. In the early stages of our business, we accumulated a nationwide user base at a very low cost by deploying local sales teams to recruit users at offline logistics parts. Our user acquisition system is built on our premium user experience and good word of mouth referrals among users, resulting in the high retention rate at very low cost. Going forward, we will strive to maintain our digital freight platforms leading position in the industry. We will continue to expand our network and leverage our big data capabilities and technological advantages to advance industry wide digitalization and create greater value for our users.

Thank you very clear. Yes.

Ladies and gentlemen, at this time, we will conclude our question-and-answer session. I would like to turn the conference back over to Mao Mao for any closing remarks.

Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Full Truck Alliance directly or TPG Investor Relations. Our contact information for IR in both, China and U.S can be found in today’s press release. Have a great day.

Ladies and gentlemen, the conference is now concluded. We thank you for attending today’s presentation. And you may now disconnect your lines.