Vivian Xu - IR, Manager Yan Kang - President Julian Jiun Lang Wang - CFO.

Amanda Chen - Morgan Stanley Terry Chen - HSBC Nora Zhang - Bank of America Merrill Lynch Ming Xu - UBS Liping Zhao - CICC.

Ladies and gentlemen, thank you for standing by for the Autohome’s Fourth Quarter and Full-year 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will be followed -- by the formal presentation. As a reminder, this conference call is being recorded.

If you have any objections, you may disconnect at any time. It is now my pleasure to introduce your host Vivian Xu, Autohome’s IR Manager. Ms Xu, you may begin..

Thank you, operator. Hello, everyone and welcome to Autohome’s fourth quarter and full-year 2016 earnings conference call. Earlier today, Autohome distributed its earnings press release, and you may find a copy on the Company’s Web site at www.autohome.com.cn. On today’s call, we have Mr. Yan Kang, Autohome’s President and Mr.

Julian Jiun Lang Wang, Autohome’s Chief Financial Officer. After the prepared remarks, Mr. Kang and Mr. Wang 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 the non-GAAP measures to the most directly comparable GAAP measures and is available on Autohome’s IR Web site. As a reminder, this conference is being recorded. In addition, a webcast of this conference call will also be available on Autohome’s IR Web site.

I'll now turn the call over to the Autohome’s President, Mr. Kang please..

Thank you. Thank you, Vivian. First, we have with everybody here at Autohome, I like to wish you all a very happy and prosperous New Year of the rooster. Now the fourth quarter of 2016 was the first full quarter in which we were able to implement our 4+1 strategy.

And here I’m very pleased to report that our revenue increased over 86% year-on-year to over RMB2 billion. Adjusted net income in the fourth quarter grew by 38% year-on-year to RMB446 million, which translate into an adjusted net income margin of 22%.

Our core media and leads generation business both generated very solid year-on-year revenue growth, increasing 33% and 40%, respectively. Online media supported by our precision marketing and sales capabilities is becoming even more critical in driving our clients business in China's highly competitive auto market.

By leveraging our solid business fundamentals and reputation as China's leading online auto media, we were able to deliver greater value to our client by working very closely with those OEMs and dealers to capture an extensive array of online media resources, much more that can be found in traditional media.

For example, our open content platform continues to expand in both breadth and depths, attracting a larger number of young people who spend more time to share content with their self of peers.

As of the last months of 2016, the number of our average daily unique visitors to our module services have exceeded RMB17.5 million which is a solid 27% increase year-on-year. Our mobile advertising revenue grew by 113% as compared to the same period last year, accounting for roughly 33% of our media service revenue.

Again, all of these clearly demonstrate our market dominance, increasing brand equity, broad portfolio of products and service, and our ability to sustain our growth momentum as we give consumers a unique experience for customized auto information and services.

With our strategic vision laid out and our teams aligned would be [indiscernible], our OEM and dealer clients have also showed very strong confidence in our operations and have strengthened their partnership with us.

For example, we’ve integrated new technology into our dealer digital platform during the last quarter, adding innovative new service offerings, which enables our dealer friends to effectively engage with millions of online consumers who use our network every day generating higher conversion rate and returns.

These also led to more [indiscernible] and stronger monetization on our end. Despite some doubts and uncertainties, some people may have from the management transition in the middle of last year, it is now evident that we’ve pushed Autohome back on a even stronger growth path.

I’m very pleased that our total 2016 revenue has increased by 72% from the year 2015 and adjusted net income margin by 24%. Now looking forward to 2017, we’re extremely confident that our 4+1 strategy which we believe will strengthen our foundation for sustained growth in the future.

Our core media and lead generation business will continue to be the pillar in driving revenue growth throughout the coming year.

We will expand further our open content platform to focus on a even wider array of original content, create new communities and build a unique and personal experience for individual users based on better understanding of their profiles. We are also upgrading our dealer platform with integrated intelligent feature such as AR showrooms.

This will greatly enhance our dealer clients ability to interact and engage with their consumers through better customer relations, channel and payment management systems.

In addition, we will leverage our strong performance and experience in managing an integrated campaign as evident from the Singles Day Auto Festival that we’ve successfully held in the last few years to a series of monthly campaign throughout 2017.

This will allow us to unlock the high value assets that our media advertising, lead generation, offline network, and diverse value added products are able to create within our ecosystem. Now turning to auto-ecommerce.

As I mentioned last time, in our Q3 conference call, we’ve made adjustments to our new car e-commerce business by stopping the asset heavy direct selling model.

Consequently we have cleared most of the direct sales inventory during the fourth quarter of 2016, as well as the first two months in 2017 with approximately only 3,100 unit remaining which we anticipate to clear in Q1 of 2017.

Looking forward, we will continue to focus on developing our asset-light new car e-commerce platform leveraging our deep consumer data analytics to optimize the matching and clearing process between consumers and also suppliers.

Also our new car e-commerce revenue will be driven primarily by commissions and fees charged from facilitating transactions. Although, however, for 2017 is to validate our new model that increased our transaction volume through consumer and all the supplier users [indiscernible] making them more dependent on our platform for transactions.

With this, we will have completed the entire e-commerce loop, capturing all consumer data beginning with marketing and then ending with the final purchase.

While we currently do not expect this business to generate significant revenue in 2017, we do believe with model shift, paradigm shift is a potential core value for our long-term sustainable growth.

Finally, our focus in 2017 for other emerging businesses, which include our used car e-commerce platform, auto finance, and auto lifestyle, will be on the -- will be on building solid platforms, expanding traffic volumes, and enhancing the underlying infrastructure to make sure that we’ve the best of all and adaptable model to adapt to a rapid changing market environment.

These business may take some time to bear fruit and will require persistent commitment to its due execution, which is by the way the very strength that are made Autohome who we are today. We are very confident that our tremendous assets, hard work and investment will deliver significant long-term shareholder value.

To conclude, I’m very pleased to see that the uncertainty caused by the management changes in 2016 is well behind us. We're now having a clear defined strategic plan in place, a strong and stable management team, laser-like focus on developing solutions to better service customers and suppliers, and a resourceful and loyal partner as Ping An Group.

Leveraging all the assets we will be able to build a comprehensive consumer centric auto ecosystem. We are very excited at the possibilities that we’re seeing in the market today and we’re truly charged in expanding our market leadership, enhancing our brand equity and delivering sustainable future growth and profitability.

I’d like to thank all of you, Autohome employees, users, clients, and shareholders, for all your trust and contribution to our continued success. With that, I will now turn the call over to our CFO, Julian, for a closer look at our Q4 financial results and business outlook.

Julian?.

Thank you, Yan. Hi, everyone. As Yan has already highlighted, we’re very pleased to report another strong quarter. Please note that I'll reference only RMB in my discussion today. Net revenue for the fourth quarter is up 86% year-on-year to 2016 new year.

This was only slightly below our original guidance and that slide show put was simply due to polythene [ph] new car inventory clean up is pushed back to first quarter 2017 from a company standpoint. Other than that, our core business delivered a very strong performance.

Among all, our media revenue is up 33% year-on-year to RMB732 million, representing 36% of total revenue. This robust growth is driven by our increasing share of automakers marketing budget and is again a proof that we are automakers partner of choice when it comes to online media platforms.

In fourth quarter, leads gen revenue is up 40% year-on-year to RMB556 million, representing 28% of total revenue. This increase was primarily attributable to ARPU increase and is a strong evidence that we continue to build up dealers trust in Autohome.

Lastly, online marketplace contributed RMB727 million in revenues, 97% of which is from direct vehicle sales. However, as we mentioned earlier, we are deemphasizing this direct sales model and you should expect much less revenue contribution from this business side going into 2017. Now moving on to cost.

Cost of revenue was up 257% year-on-year to RMB961 million, the bulk of which is the cost of vehicles we sold directly. Our blended gross margin is down to 52% in the fourth quarter, including the impact from inventory write-down of RMB16 million. In total, the inventory write-down was RMB50 million for full-year 2016.

Excluding new car direct sales model, the gross margin of our existing business was 83% for the fourth quarter 2016 versus 84% in third quarter 2016. Now let's take a closer look at our operating expenses. Sales and marketing expense in the fourth quarter was RMB517 million, up 67% year-on-year, much lower than our revenue growth rate of 86% growth.

Product and development expense was RMB168 million, up 106% year-on-year, this represents our commitment to investing in technology and talent. Finally, G&A expense was RMB95 million, up 41% year-on-year and representing only 5% of our total revenues. As a result, we delivered operating profit of RMB274 million.

On top of that, we also recorded a tax benefit of RMB104 million in the fourth quarter, which was derived from change in the effective tax rate of one of our subsidiaries. As a result, adjusted net income attributable to Autohome Inc. is up 38% year-on-year to RMB246 million.

Non-GAAP basic and diluted earnings per share and per ADS for the fourth quarter were RMB3.87 and RMB3.82, respectively, compared to RMB2.86 and RMB2.79, respectively in the corresponding period of 2015.

As of December 31, 2016, our balance sheet remained very strong with cash and cash equivalents, restricted cash and short-term investment of about RMB5.7 billion, and we generated cash flow of RMB792 million in the fourth quarter versus RMB687 million fourth quarter a year-ago. Let me now turn to a short summary of our 2016 full-year results.

We continue to drive significant revenue growth of 72% to RMB6 billion. In addition, we also delivered an adjusted net income over RMB1.4 billion, representing 29% year-on-year growth. This would not have been possible without strong execution and prudent cost controls. Before I move onto guidance, I'd like to reemphasize a few important points.

First, as we change to a more asset-light new car e-commerce model, you should be expecting a lot lower revenues from this business side going into this year.

Secondly, we have also completed the headcount reduction as a result of strategic shift in select business lines with a total headcount of 3,752 as of end of 2016, down from 3,965 at the end of third quarter. This two factors combined, we shall be seeing a P&L structure that is more tailored to our new strategy.

Let me now address our first quarter 2017 outlook, which reflects our current and preliminary view on the market and operating conditions that may be subject to changes. At this point, we expect to generate net revenue in the range of RMB1,268 million to RMB1,319 million.

This represents roughly a 25% year-on-year growth in our core operations on top of revenues around RMB260 million from our buy out inventory clean up. In summary, we are very proud of what the team has collectively achieved so far and we are all very excited about what we could achieve in the quarters to come.

We will continue to invest in technology and content and we are committed to serving users and customers in ways no one else could. With that, we are ready to take your questions. Operator, please open-up the floor..

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Amanda Chen from Morgan Stanley. Please go ahead. Your line is open..

Hi, management. Thank you for taking my question. I have three here. The first one is regarding your 2017 core business revenue guidance.

Just wondering do you -- are you still confident about the 25% to 30% year-on-year growth? I think many investors concern that this is a slowdown of new cars out growth and the increasing competition from the new comers, such as [indiscernible] how will you approach this growth target? And also use this target how much of the advertising revenue will come from the auto advertisers? Thank you..

Thank you, Amanda. This is Yan. Very happy to address your question. It is clear that after the very robust market grows in 2016, particularly in Q4, we’ve -- we’re seeing some slowdown in the auto market in Q1 of 2017, which we’re hearing stories from various market participant, seeing -- coming back with similar message.

Now our forecast, our revenue projection of [indiscernible], however, is not entirely dependent on what you call a macro market factor. The reason for that is because this confident that we are holding in the outlook is very much driven by a number of factors.

Market being one, but more importantly an evolution of our media platform from just an advertising servicing model to a more solution driven provider to our OEM and dealer friends.

So that includes an advertisement plus data services, plus content complaints, plus integrated online, offline operations that is aimed to translate our clients, media ,advertising lesson into a more comprehensive value to resistant. So we’re still rather confident in our overall outlook in 2017.

Having said that, we do also recognize that new media types such as [indiscernible] Total and more players sometimes fragmented players like the [indiscernible] for example are putting a pressure into the traditional players. We are actively addressing that.

And the view that we see in Autohome's trends to defend the erosion of [indiscernible] players is exactly as I described earlier, is to go in deeper into the customer experience journey.

Not only the awareness, education, media exposure were rather a continuation of conversion of those attention to the media exposure into transaction, into a lifestyle, into a lifecycle engaging experience throughout consumers lifecycle. And this is where we intent to take our business in the next two years to go..

Got it. Thank you. Just a quick follow-up.

So within the 2017 target, how much revenue were from the non-auto advertisers?.

Yes. For non-auto advertisers, first we’re being extremely cautious in experiment with what we call -- what you call non-auto advertising.

Now we do have a vision to expand Autohome beyond just a auto portal, as we do have the auto lifestyle, and we will talk about auto lifestyle, you’re talking about automotive and a adjacent array of various topics like traveling, like leisure, like social networking and so on and so forth.

So one of the derivative of that is not leisure topic that we can engage with our consumers. That include some in the non-auto space, but again those are adjacent -- auto adjacent spaces. So we are controlling our non-auto advertisement into mostly just adjacent categories.

But as we’re experimenting and we’re learning, we’re in the process of fudging our features, we're also closely monitoring consumer conversions of various types of advertisement.

I think it's too early to say it's hard yet in terms of percentage or revenue, but we are at same time experimenting being both, and the same time conservative, making sure first and foremost we safeguard the interest of our consumer, but at the same time offer them a much wide variety of various options, including some lifestyle adjacent to automotive service..

Got it. Thank you. And I ….

Ladies and gentlemen, please limit yourself to one question. Our next question comes from Terry Chen from HSBC. Please go ahead. Your line is open..

Hi. Thank you accounts [ph] on Julian and Vivian for taking my questions. I have more of big picture questions.

So with that 4+1 strategy in mind, let's say three to five years from a row, how do you envisage Autohome's business and revenue mix to evolve? What kind of new value proposition you want to bring to OEM dealers and your online users in the medium and long-term? Thank you..

Okay. This is a very good question. Actually it’s a question about I’m really very happy to address, because I do believe our business would only be able to rigorous if we aim for the long-term rather than just purely for the short-term.

Now our belief is that Autohome needs to evolve from a auto media online platform into an ecosystem of platforms to allow various players in the market to benefit from the traffic and user stickiness we generated that in a broader sense.

From a consumer's perspective, we wanted to make sure that we capture not only the auto buying experience of the consumer, which includes doing online research, compare different autos, look at reviews, classifieds, placing online orders, maybe engage with offline dealers so on and so forth.

But more importantly to get into their ownership lifecycle, which is how do you maintain a car, how do you service the car, how do you have fun with your car.

And it goes on to when you dispose with your second hand car and trying to resend a new car and throughout a process you have financing need, you have need to form network groups of people with same interest, you have needs to use your car to travel to make friends, to engage on adventures and so on and so forth. So that was one [indiscernible].

We wanted to be a all in one place where consumer find it easy to be the one destination to find everything they want. And we want to make sure that our data analytics will be allowing each consumer to have customized offering services, even in anticipation, even before in [indiscernible] , payments, ultimately.

So with that, we need to organize our ecosystem service providers, business partners, to make sure that to bring consumer experience is being delivered.

And that is where Autohome will be different from [indiscernible] still focus very much on the media side and that will allow Autohome to also different from other e-commerce platform like Alibaba and JingDong which focus primarily on the transaction side, which is also -- make us different from the Ten80 [ph] is the [indiscernible] in that we’re putting, we’re spreading all the [indiscernible] with other angel, a beautiful [indiscernible] where the consumer would have everything they need, surrounding the auto lifestyle.

So ultimately it also goes back to the 4+ we described, which is media, which is e-commerce, which is finance, which is lifestyle. A lifestyle eventually is what encompass in sort of stick it together and the very center of it is really data.

How we understand our consumer through their behavior, how we anticipate their needs through their behavior, how do we amalgamate all the service providers making sure they have the tailored and adjusted services where like when they want it..

Oh, thank you for the answer. Very helpful..

Right..

We will now take our next question from Nora Zhang from Bank of America. Please go ahead. Your line is open..

Good evening, management. Thank you for taking my question. I have two questions. So first you mentioned that auto makers continue to allocate more budget to us.

Could you share with us approximately what percentage were share in the overall automaker on that budget? And how much do we estimate the auto ad online penetration in 2016? And my second question is regarding the operating margin.

In fourth quarter we’ve noticed that there is -- we’ve become more aggressive on mobile traffic acquisition and the operating margin has declined a little bit comparing to third quarter.

Could you give us some color 2017 outlook on the margin front and also what is the effective tax rate we expect in 2016?.

I can answer the first part of the question regarding the market allocation of funds and budget and maybe I will refer to Julian for some of the more number related questions that you have. Roughly rule of thumb, online media spending represents roughly 50% of all automotive marketing budget.

And also rule of thumb vertical portals represents roughly 50% of all the online spending of OEMs, okay. So its 50% of 50%. Now within that percentage Autohome continue to increasing our share as compared with our competitors. If you look at the average growth of who else will be following, their number was more likely to be single digits.

We have year after year delivered very high in double-digits. Now in this case in the last year over 30% of growth and we continue that number -- we anticipate to continue that number in the 2017. So that means we’re prudently very aggressive with rapid share.

Now our current strategy is roughly spending around 50% of that 50% of 50% of 50% is what you’re talking about and that number is keep on rising..

Thank you. That’s very helpful..

Nora, this is Julian. Let me address your second question, which is on the operating margin side. If you look at the fourth quarter 2016 numbers, I will suggest that we look at the cost items in more detail there are recurring events.

For example, in particular, the product development headcount increased from 787 in fourth quarter '15 -- year 2015 to close to 1,400 by end of last quarter. So there is a substantial headcount increase in product development departments.

Therefore, we do have a larger cost base which again is a proof that we are investing in technology and talent and we will be carrying this cost base going into year 2017, but also there are nonrecurring events in fourth quarter '16.

For example, we booked a cost of over RMB50 million as a result of accelerated vesting of stock options of the previous management team, who have left the Company already. This is a one-off event and also we booked an inventory write-down of RMB16 million in fourth quarter as well.

So overall speaking, we may be seeing a higher cost base going forward, but that higher cost base in turn is also helping us fuel further revenue growth going into the next few years. You also mentioned about the rising marketing expenses.

Now in fourth quarter we did spent a bit more on mobile traffic acquisition, but as Yan mentioned in his earlier remarks, we are upgrading our user experience and as a result we do expect to see more organic traffic going into this year.

So in summary, on the marketing side, we do not expect the marketing expenses to grow as much as our revenue growth. I hope that answers the question..

Thank you.

And if I may ask a tax benefit question?.

Right. Now your third question on tax benefit, in fourth quarter this year -- last year, we did recorded a tax return from above RMB100 million in fourth quarter.

Now going into yea r2017, there is a likelihood that we may also receive tax benefit, but at this point we’re not sure, because the tax authority actually changed their rule and they will review year by year. So at this point we just don’t know for sure yet.

If you look at the effective tax rate, excluding the tax benefit you actually can assume that in year 2017, we shall a effective tax rate similar to the level you see in the year 2016..

Thank you..

Our next question comes from Ming Xu from UBS. Please go ahead. Your line is open..

Good evening, [indiscernible], Julian and Vivian. So I have two questions. So first one is on the now to add and also the platform business for the self media.

So could you maybe give us some quantitative measurement or color on how much that -- those two lines will account in the total advertising OEM, advertising revenue for the full-year 2017? And also how do we compare the margin of these business with traditional OEM advertising? And a second question is a housekeeping one.

So we notice that your app was delisted from app store for roughly a week ago. So maybe -- could you maybe elaborate or share with us the potential revenue impact in Q1? Thanks..

Okay. Thank you Xu Ming. I’m not sure if you got first question asked by Amanda, which we’ve talk about, the non-auto ad. Basically we’re experimenting with non-auto ad in terms of with our expansion of our topics to auto consumers into some of the adjacent lifestyle categories.

But at this stage of time, it's too very, very early to put a revenue estimate on that, because we’re still testing water and making sure that we’ve the right balance between customer experience and also making sure that the ads will be in pursuit opportunity and adding color to our intended auto lifestyle platform.

Now on the platform auto advertising which I think you’re probably talking about the FC type of volume exchange, right?.

Yes. And so basically the one with we enlist all the self media content providers and have a revenue sharing mechanism with them..

Yes, yes. Again, you know we’re in the early stage of experimenting with that. For us, having the right model making sure is the right recipe in our future endeavor is more important than the number itself. So again, we’re not putting any number behind this. It's more important for us to making sure that has the right recipe and mix element..

Sure.

But how do we compare the profit margin of these different various business format?.

Yes, by definition there are profit margin will lowest in our advertising revenue. Particularly, when you look at our advertising revenue they will be no longer just advertising revenue, because as I mentioned again and again our advertising will be more integrated with content marketing, data services, on and offline integrated services.

So media advertising will be only be a integrated element where our OEM friends put their budget behind. So it is harder and harder to fill into the future receipt advertising revenue has tend alone adding traditional sets because it simply will be moving into much more reach or context in the years to come..

Sure. Sure.

And on the second question?.

Well, it's basically a hiccup in our updating process of our apps, technically. You know it's just a technical hiccup. Some communication with Apple, so we’re very happy to sort it out. Well, frankly, I think if it is the China will be much faster than Apple to American company.

They don’t work on weekend and sometimes they rely on emails to communicate. So it's particularly longer, but we actually realize the hiccup in the first hour it happened and get it solved within three hours and the rest media time is basically on the Apple side..

So what do we think about the -- is there any -- where there will be any like revenue or traffic impact, because of the -- because of this hiccup?.

Nom whatsoever. If you look at -- well, if you have access to our mobile or traffic, we actually -- our model of traffic actually hit historical highs, well three times in the few weeks after Chinese New Year, instead of a [indiscernible]. So ....

Okay. .

… the hiccup, of course we have really neglectable impact in the [indiscernible] things we’re really growing our traffic very nicely..

Got it. Thank you..

[Operator Instructions] Our next question comes from Alvin Jiang from Deutsche Bank. Please go ahead. Your line is open..

Hi, management. This is Maria on behalf of Alvin Jiang. So thank you for taking our question. We have two questions here. So first one is on the new business initiative about car finance and the used car business. So could management share some detailed business plan or the recent update for this two business? And also maybe the revenue outlook.

And the second question is on the cooperation with Ping An Group. Is there any update on the projects working with Ping An? Thank you..

Okay. Good questions. Auto finance is a integral part of our 4+1 strategy. And used car e-commerce is also a very important element in our bigger e-commerce platform. We have -- as when we outline a 4+1 strategy, I do remember we have roughly a direction of each one -- everyone of those businesses.

That is 40 transaction business, it's going to be asset light. We are going to focus on online, particularly our data analytic advantages and our online traffic to make sure that we do the transaction facilitation, very much like what you see in [indiscernible] in early years.

Now with regard to auto finance, again, those are not auto finance off shelf as you see any banks and other financial institutions, those are tailored to customize finish products, that are [indiscernible] or embedded, you know our transaction businesses.

The only thing I can say is that, in 2017, our biggest priority is to make sure we graft the right model with [indiscernible] on the details, all the doubles and [indiscernible] in the very details of execution and of the transaction realization. And that is our first and foremost part in 2017. We are not actually putting any number behind it.

Quite frankly, we’re very happy -- we’re very okay, with that being much revenue growth in those business as well as we believe the model we're detailizing is creating the right consumers thickness, dealer business partner thickness, is making sure that our stretch or advantage is a Autohome, which seems fully embedded into those risk models.

So that’s really the RHAs for 2017. And I’ve just, we don’t have the number behind it. We do think in 2018, which is about 12 months from now, those business will be comp pillars of our future growth. Now again how do we mange height is another question. Remember Amazon take a decade to monetize. [Indiscernible] and how fast monetize is another question.

But we want to make sure, adding plan '17 to focus is making sure that we have the right mode and home planning '17 will gradually monetized. The pace of monetization, very much depend on the situation. And at that point of time, it depends on the market dynamics, it depends on our ambition. It depends on our competitors so on and so forth.

So [indiscernible] already to comment on that, but the devils and angels will be slowed out in details in 2017. Now your question on team line [indiscernible], we’ve very orderly of our company into our home and made of the year, started a series of projects. Now all of these are business as you look.

So from [indiscernible] any big projects like sort of related to [indiscernible] and Board like to know we’re already one, is that our vision are interconnected, so a lot of activity happening daily with regard to how we -- that were too nice financial product, design capabilities to tailor everything financially to our transaction.

At the same time, as we mentioned in our last call, our Singles Day [indiscernible] campaign, there were a lot of online and offline synergistic integration between the online expertise of all common also the offline networks. So I think that will continue to happen.

So you will not see anything popping after rise, but [indiscernible] will have the strong back in [indiscernible] and now behind this, our majority of shareholder it is even stronger message [indiscernible] on this is fully behind, so holding out to home odd [ph] initiative that we’re undertaking. .

Our final question comes from Liping Zhao from CICC. Please go ahead. Your line is open..

Thank you, Mr. Kang and Julian. Thanks for taking the questions. I have two questions here. The first one is about the strategy to grow our asset light mode transaction.

Can you elaborate on that? And my second question is about how many remaining asset heavy mode vehicles deal needs to be create in first quarter of '17? And correct me if I’m wrong, there will be no further asset heavy mode transaction from Q2 '17 onwards, right?.

Okay. I will try to answer your first question and I will refer to Julian for the inventory clearing cadence, if you will, in the next few months. Our last and light model, I will just take new car e-commerce for example, okay. So instead of in the past, we hold inventory and we buy the vehicle and will start ourselves. We no longer hold inventory.

On the other hand, we will allow dealers and OEMs to open online classic stores on our platform. Now we will use our traffic to guide transactions to our e-commerce platforms.

Throughout every step of the consumer journey, we will be able to track, analyze, and [indiscernible] and serve their needs both in information and in financial needs, in generating comparing options and all I know [indiscernible] experience and so on.

So, it will be a consumer centric journey [indiscernible] through with services of our class one, financial service providers, OEMs, dealers, and other partners. A consumer centric model, with online element -- online and offline elements, we’ve even [indiscernible]. For the value proposition of course is efficiency gain.

We wanted to make sure that thread pros will offer a much enhanced [technical difficulty] and consumer experience in that. That’s the big picture historic out of details, a very, very complex.

And that is why we’re not elaborating too much and will be -- hoping you give the management, the confidence and time in 2017 to execute against those [indiscernible]. But the big picture, I’ve described is the picture that we hold will be delivering toward the end of 2017..

Now let me take the question Zhao, the inventory. At the end of third quarter, we had about 13,000 units of costs in our inventory. In fourth quarter, actually secured contract of over 11,000 units to dealers. You could only book revenues after the dealers have committed their payment [indiscernible] confident.

In short, from operating standpoint of view, we’ve secured the deals, but we’ve not booked all of the revenues in fourth quarter. Of the 11,000 units we’ve sales contract in hand, we only booked revenue for about 8,800 units in fourth quarter. Now you also adds [indiscernible] units we’ve left at the end of February, so only two days ago.

We had 3,100 units led in our inventory and like I said earlier we’ve already secured sales contract for most of them. So in the next two months we’re very confident that we will be selling and booked revenue for most of them in the next two months..

Okay. That’s very helpful. Thank you..

As there are no further questions, I will now turn the call back to your host for any additional or closing remarks..

Okay. Thank you very much for you all for joining us today. We really appreciate your support and we look forward to updating you on our next quarter conference call in a few months time. Meanwhile please refer you to get in touch with us if you have any questions or comments. Thank you very much. Have a great evening, have a good day..

That will conclude today’s call. Thank you for your participation. Ladies and gentlemen, you may now disconnect..