Three of Thornburg’s International Equity Portfolio Managers discuss investing in China. We are waiting for the U.S. to pivot – but has China already done so?
China Is On Sale, But Is It a Buy?
Miguel Oleaga: We can see that there is a lot of valuation support within China, even given the recent short-term rebound in the market in the last few weeks. If we look at near-term P/E ratios, if we look at cyclically adjusted price earnings ratios over the last decade or even market cap to GDP, there’s a lot of value that’s being presented within China.
Craig Blessing: Hi and welcome to another episode of Away from the Noise Thornburg Investment Management’s podcast on key investment topics, economics, and market developments of the day. I’m Craig Blessing, client portfolio manager for international equity at Thornburg, and I’ll be your host. Joining us today is Charlie Wilson, portfolio manager for emerging market equity, Lei Wang “Rocky,” portfolio manager for international equity, and Miguel Oleaga, portfolio manager for global equity. China outperformed the broad MSCI ACWI ex-USA Index by about 6 ½ percent a year from its bottom in 2008 through its high in early 2021 with its economy growing about 7 ½ percent a year, and companies like Alibaba and Tencent becoming household names, at least in the investing world. Since February of last year, however, China’s down about 55 percent, second only to Russia for the worst return in the international index. A number of factors have been at play that will be familiars for our listeners, a slowing economy, a draconian COVID policy, a real estate crisis, and a heavy hand of government regulation on private companies, but I think it’s fair to say that investor sentiment hit extreme negative levels at the end of October, with China trading at a 50‑percent discount to the S&P 500 on 12‑month Forward P/E. Since then, China’s had a 20‑percent bounce off its lows but has traded off again on recent, in recent days on news of spreading COVID cases in China and public protests against the zero-COVID policy and the government. Charlie let’s start with you, and in that context, what are you seeing in China and what are you thinking, looking forward into next year.
Charlie Wilson: Thanks Craig. I think there’s been a lot of concern about the pace of China’s reopening and how they’re moving away from zero-COVID policy over the next couple of months. I think there was a lot of optimism coming out of the recent election that we would see a change in that policy and move more towards a normalization. Unfortunately, it appears like the timeline for that’s gonna take a little bit longer. But the reality of it is, is that China has to open back up. They need to get their economy back moving the right direction. They need to i elevate the growth of the economy, and I think we’re gonna see that over the next couple of months. Expectations are very low. I think investor positioning in China is very light when you look at the way people are, are positioned both in global and international portfolios today, and so I think there’s a lot of room for upside in the market, if people do become a little bit more optimistic about the outlook for China.
Craig Blessing: That’s great. Thanks, Charlie. Miguel, you made a really interesting presentation to the investment team recently. Looking at the cyclicality of the Chinese market, valuations, earnings, sentimental where you thought there might be opportunities, with the events of recent weeks, how would you update those thoughts?
Miguel Oleaga: Thank you for having me, Craig, and, and thank you for the question. Yes, the, the, the way we try to approach the market opportunity in China is to really focus and realizing the fundamentals of businesses and of the underlying market. And across a variety of measures, we can see that there is a lot of valuation support within China, even given the recent short-term rebound in the market in the last few weeks. If we look at near-term P/E ratios as you highlighted, if we look at cyclically adjusted price earnings ratios over the last decade or even market cap to GDP, there’s a lot of value that’s being presented within China. That tends to be a good set up point for equity returns from this point forward. In addition, when we look at the earnings power of many of the companies in the market, we can see that the lockdown and the associated recession has really driven down profitability and returns. And as we go forward, we think that the lockdowns, while the timing of the ending is uncertain, there could be a very nice recovery in profitability. And so, we would get the dual benefit of improving earnings trend and potentially an improving sentiment and multiple that’s being paid on the market. As Charlie has just recently highlighted, in addition to that you do have this dynamic where many international and global investors have de-emphasized investing in China. The liquidity in the market is lower today than it structurally has been historically and that maybe provides some, some technical support as well as when the market does recover fundamentally there will be a recovery in volumes as more investors return to the Chinese equity markets.
Craig Blessing: Miguel, the lower volatility and sentiment is partially behind that big recent bounce that we’ve seen in China markets?
Miguel Oleaga: Tough to say for, for certain but we do think that positioning has been significantly underweight relative to recent history and, you know, as investors maybe rotate back in that, that does tend to drive equity prices higher.
Craig Blessing: Rocky, I know in recent conversations you’ve been talking about the possibility that China may be in the midst of its own policy pivot or pivots, and what you think are the most important short, medium and long-term factors for China and its markets. Can you elaborate?
Rocky Wang: Thank you Craig. And Craig, I was born and raised in China and, uh, working for China Central Bank for a couple years. You know, you must, and be observing China and investing in China for past decades. China’s story is always complicated. Actually, even from here it is more complicated. It is not as linear as in the past or as transparent as in the past. So that’s really kind of a challenge for all of us, me and Miguel and Charlie. But allow me to be set back and take a little bit more simplified view China from here so help other shareholders or our clients to have a little bit of framework to look at how China evolve from here. So, I would say in the near term, Craig, as you mentioned, I think already China already see a so‑called pivot or pivots. If a pivot, I think the COVID policy kind of have a pivot moment already. But if you say pivots, I think both COVID and the property sector which had been hammered for the past couple years also see some pivot policy and trying to stabilize property, even jump start property as a growth engine for the economy. So that’s for the short-term. I do recognize this pivot or pivots in both COVID and the property sectors. So, in the mid‑term, I would focus, watching, observing closely for the China consumer how they’re doing. You know, just take a look at next couple years. I think what drive the China economy from here, why they, they will continue the growth engine for the global economy or even for themselves, is no more coming around fixed asset investment. Why? Because I think, number one, the overview is over capacity and meanwhile local government already hit the wall. They had a very tight fiscal budget versus massive spending on the COVID testing for the past couple years. So, they have a very tight budget. So, the fixed investment will be very handicapped by availability of funds for the Chinese local government. Exports, that’s a very tricky one. We all recognize of the growth in this U.S. or the Europe slowing down and the consumer probably being tied up with budget in the coming years. So that’s the Chinese export demand for the Chinese exports will be slowing down. So export actually instead of be the push or stimulate the Chinese economy for the past 2 years, from here I think will be drag for the economy. So, the third pillar is consumption. So really up to the Chinese politician to really help jump start consumption, why the Chinese consumer, the mid‑Chinese consumer balance is as strong as we expect to be, and whether they’re still waiting to open the pocket to spend, whether we’re going to see some pent‑up demand in the coming months. That’s all open question marks in the area. So, in the long run I would say the China story is really depend which path they choose to go from here, right. They will continue to do the so‑called part of global citizen, part of global economy, part of globalization, waiting to collaborate with other major economy. Or they want to go their own or so‑called internal circulation, isolated from the global community, instead of sharing the advantage with other economy, they become more isolated. I think that’s the path dependent in a long-term call on China.
Craig Blessing: Rocky, it seems as though following up on, on your first comment that, that a COVID policy pivot could sort of be a double-edged sword and we may be seeing a little bit of that right now. As China opens up and COVID cases get greater and hit more areas do you think that the current situation is going to be a challenge for China’s opening up or maybe an opportunity for China to ease policy.
Rocky Wang: Again, that’s a great, great question. I wish I had a clear answer. But, you know, you have to recognize as mentioned China is such complicated places, such huge places with so many nuances and variations across different state or different provinces or different demographic. So that’s very hard to say. But I would say from here it’s very bumpy because we’re heading for the wintertime. Usually the COVID have the so‑called surge pattern during the wintertime then kind of decreasing when we come to spring. So at least for the next couple months you will continue to see the back and forth of the COVID cases and, uh, surge or compression within China. You’re going to see some back-and-forth policy at the different local level versus the federal level. I think federal level pretty clear. They want this COVID policy in place instead of this looking for some zero policy, they kind of become more muted on that front. But it’s really up to the local government execution and you will see a lot vary. You will see a lot of headline news. I think that definitely will dampen some kind of the market sentiment about China because these headlines are just unpredictable. It’s not political issues. Actually it’s more like public health execution issues for China from here.
Craig Blessing: Okay, so the following questions are for anybody, and you can jump in in any order that you want. The market is demanding a higher equity risk premium for Chinese assets today. As capital becomes relatively more scarce are you observing any changes in how companies are behaving?
Miguel Oleaga: That’s a good question, Craig. I’ll lead off with one example that stands out to me, Tencent, which is one of the leading gaming social media operators within the Chinese market. And we’ve noticed a change in their philosophy in terms of trying to create more shareholder value over the last year or so. And in that context, they’ve been trying to unlock value that is in many ways stuck inside their corporate structure. And they’ve been spinning off or dividending out to investors shares in other major Chinese firms that they own. So, about a year ago they issued a dividend out of JD.com shares to investors and they recently announced that they are going to be doing the same with Matwan. So that’s an example where in the past maybe the company wasn’t as focused in unlocking latent value in its share price but now, they essentially have a plan in place where they’re returning the equivalent of about 10 percent of the current market cap in the company in special dividends in shares in, in other listed companies to investors.
Craig Blessing: That’s great. Anybody else what to chime in?
Rocky Wang: Okay, I’ll chime in Craig. On the risk premium, I think definitely in my observation investing in Chinese assets that other the risk dramatically increasing a lot in the past one year or so. It’s not just coming from a regulatory front. It’s also something related to this public health, COVID management, how they execute it, how they’re managing that. That’s definitely number one. Number two, some geopolitical-related risk premium as well. So, I would say the risk premium for a foreign, international investor of China assets dramatic, uh, increasing. And you know what, that’s actually created a certain opportunity because as a fundamental bottom up based investor like Thornburg, we are really looking into individual stock and as you mentioned there are just some individual stocks that become so attractive in terms of valuation. So that’s a spike of the risk premium. Actually, that means the valuation could be just kind of so much that’s created opportunity for fundamental driven investor like Thornburg folks here and that’s created opportunity for us.
Craig Blessing: Charlie, do you think that the events of the last couple of years have driven any changes in how you need to look at Chinese companies bottom up and do you think that China requires a higher risk discount or return hurdle than it did before?
Charlie Wilson: I guess what I would say is that we hear calls for the higher risk levels in China periodically. So, every 4 or 5 years there’s this question around is China uninvestable. The last time we had a crisis like this was in the 2015 time period when there was heavy concerns about the stock of debt in the financial system and how that might impact other parts of the economy. Over the last, you know, 5 or 6 years they’ve gradually worked through that debt pile really without having any major banking or financial crisis. And I think what western investors a lot of times fail to understand is, is how a centrally planned economy works and that there can be things that really can be taken care of behind the scenes without a crisis being required. And I think it also means that you have to give up some transparency in terms of how decisions are made and how plans are executed. That has really been a part of the, the Chinese investment landscape since they opened up the capital markets to outsiders, that that’s part of, a part of the process of investing in China. I don’t think that’s changed. I think one thing that has changed in, in the recent past, which could carry some additional risks when thinking about Chinese investments, is their relationship with the U.S. and then, and other major markets. And that’s definitely evolved, I would say for the worst, over the last couple of years, especially as the U.S. has ratcheted up their sanctions around sensitive technologies. And then, you know, I think it’s put China in a very difficult position and they’re trying to, you know, figure out other ways to maintain their leadership position on technology and as well as to advance other parts of the economy. So, I think that there’s some risks that maybe weren’t there a couple of years ago when Chinese and U.S. governments had better working relationships than they do now. I think the other side of it is on, with respect to the Chinese communist party leadership, Xi Jinping has really consolidated power at this point and I think taken some unprecedented steps to strengthen his, his leadership position. Which I think leaves a lot of question marks about the, the future of power transitions within the communist party in China.
Craig Blessing: So investors, clients and advisors have concerns about investing in China. What do you think it takes for investors to get more comfortable with re‑investing in China and how do you each of you get comfortable with investing in China?
Miguel Oleaga: Maybe I’ll, I’ll take that first, Craig, if okay. As fundamental investors, I mean, we seek to assess both the opportunities that individual stocks offer but then also assess the risks inherit in investing in those names, and whether or not the valuation is compensating us for accepting those risks. As I mentioned earlier, when we look at the valuations today in China it does feel like we are receiving adequate compensation for taking some risk in Chinese equities in a portfolio context. And, so for us, we have an opportunity today where we can invest behind leading businesses with strong market positions and they have an increased focus on profitability, cash flow and shareholder value creation. And those factors, while they’re present and they may not guarantee success for us, it does improve the risk reward skewness and favorability of investing in China today. And so, for us, it may make sense for our portfolios to have a reasonable, active position to Chinese equities given that backdrop.
Craig Blessing: Rocky, China appears to be in pretty active monetary fiscal easing mode compared to other countries, particularly the U.S. What implications, if any, do you think that has for relative performance in China and emerging markets in general looking into next year?
Rocky Wang: Again, that’s a great question. Actually, at some point I relate it to what I said earlier, right. I think the Chinese government have this massive spending on the COVID testing. I think a lot of money kind of squandered, wasted, and they had a very tight budget. So really put the, the stimulus, instead of physical stimulus, they had to be using more credit expansion, that means put more pressure on the central bank, or more depending on the monetary policies. So that means I think the U.S. probably had an either 100 or 150 bps hike and other central bank as well. But China is going another way. They probably had a very loosening monetary policy from here. You know, they recently just cut the RRR bank reserve ratio. I think sooner or later they had to cut interest rate, particularly in the lending to the property sectors, trying to help the consumer to rebuilding confidence on buying purchase for house properties. I think there’s all kind of stimulus on the way. You know that simple thumb rule is, more liquidity usually is good for risk taking on risky assets, right. So, I think that’s going to happen on China which kind of makes China’s equity stories more unique versus many other countries which kind of are still vulnerable to the upside of the interest hike. Chinese definitely have more liquidity pumping into the system like we saw in the U.S. in the past couple years. I think China, you will see that repeat in China. So definitely we’re supporting the Chinese valuation recovery from here. Just, just a simple rule is, liquidity is pumping into the system. So, from that perspective I will share the positive bias my, my colleague Charlie has, is I think, next, at least 12 months, 18 months and the Chinese risky assets probably have some relative more upside room if you’re just looking from a liquidity perspective.
Craig Blessing: Charlie, just as there’s a monetary cycle, there appears to be a regulatory cycle in China where the government has been intervening at the company and industry level to counter what it perceives as practices that are contrary to its policy goals. Where do you think we are in that cycle and what does it mean for investors?
Charlie Wilson: Yeah, so if we step back and think about what China was trying to achieve with the latest round of regulatory tightening, I think they were really targeting some of the large, private sector companies that may have been abusing their, their market positions, and really trying to make sure that they weren’t really taking that too far and, and maybe hurting the end consumer, uh, with high prices or poor service quality. One key area that they focused on was the education sector. And I think one of the challenges that many households in China face is the affordability of raising children. So, China’s been trying to stimulate additional births over the last couple of years, you know, removing the one‑child policy but that hasn’t really led to additional new births. And I think a big challenge for that is just the cost or the affordability of raising children. So, this, this regulatory process has been, I would say, multi-pronged in that there were different objectives depending on the industry. What I would say is it’s done a very good job of killing consumer sentiment. And I think there’s a lot of the lack of certainty around how businesses will continue to evolve, what it means to the private sector to have this ongoing regulatory wave. And I think that the, that the party leadership has probably gotten that message now, that continuing to turn the screws of regulation and tinker with individual sectors the way that they have is not good for getting the economy going again, especially if you need participation, you know, as Rocky mentioned, from private sector investment where we’ll need to see not only bank lending but we’ll also need animal spirits to pick up and see some, some private investment really try to help drive the economy. So, I think, my view is that China knows that they need to get the economy going the right direction. Regulatory crackdowns really don’t help that process and I suspect we’ll see them stepping back from that in the next few months as well.
Rocky Wang: Charlie, I echo what you said. I think very likely you will see some deregulation or, or top-down efforts in terms of re‑instill confidence on the private sectors. And the one thing that could happen, if I were the Chinese politician on the top, is re‑start a certain IPO process, for example, and financials. Because remember, this whole thing’s regulation very harsh and self-inflicted problem and it all started from the suspension of the Ant Financial IPO a couple years ago. I think if the Chinese politician is smart enough, probably they can start from there and restart that process and re‑instill the confidence for those entrepreneurs and welcome them back. And Charlie, as you mentioned, is bring back animal spirits because when they economy is struggling you need those kind of active entrepreneurs coming back and to help economy rather than flip the country to other places.
Craig Blessing: In October the U.S. announced regulations that further restrict the export of semiconductors and other associated technologies to China. What impact do you think that and the recent trend of re‑shoring, and supply chain shifts will have on the Chinese economy?
Rocky Wang: Well Craig, that’s another very, very challenging question because this is something, go to some area, you know, is really beyond my capability as you have, you know, certain things politicians sometimes have a different mindset. They’re looking at things from the geopolitical perspective rather than capital return margin and ROE perspective. So that’s making that question very tough. Here’s my question, is I think this super-friendly relationship between China and U.S. is behind us. I think both party recognize, particularly on the U.S. side, recognize that China definitely is rising competition in a different way. And I think for many politicians, particularly generation of the Cold War period, I don’t think anyone know how to deal with that because such massive economy and the second-largest economy with such a momentum and nobody knows how to deal with it. They are speaking different language, share a different culture, a different certain ideology and I think it’s understandable for certain people, certain politicians in this part of the world to feel a little bit uncertain. So I think this super honeymoon period of time between China and U.S. or the west is kind of behind us. I think from here is more like competition. Hopefully competition does not go to extreme, to extreme manner. But definitely U.S. rise in competition. So during competition you will see some conventional competition that they are all using, like a leverage and marketing access, leverage and marketing size, consumer-based size. But also, you will see unconventional competition too the politicians on both sides trying to use. So that’s something could be very new dimensional risk for investors like us. But we keep communicating with individual corporates and can analyze quantified impact on the business, whether this other sector policies is really having impact or not. Because in my understanding certain U.S.-based companies definitely got exemptions based on certain INAUDIBLE of related. So, the market is moving fast but the reality, material impact on the real economy, on the real earning actually is not as bad as people think. So that’s create opportunity for investor like me and Miguel and Charlie to identify those opportunity, identify there is a gap and realize that there’s opportunity. So that’s something we focus on rather than just focus on those headline news.
Charlie Wilson: Craig, I’d just like to add on a few comments to what Rocky just said. You know, if you think about over the last 5 to 6 years, we’ve actually seen supply chains start to re‑organize well in advance of COVID, really well in advance of the U.S. trade war as well. The primary driver for that is the fact that Chinese wages are much higher than they were say 20 years ago. You’ve basically had two decades of double-digit wage increases and so the labor arbitrage opportunity isn’t quite as attractive as it once was. And so you’ve seen supply chains moving out of China into southeast Asia, even to parts of Mexico, well in advance of, of the recent events. And so, I think that China’s reliance on net exports as a growth driver is also less important to them. But it’s also, you know, a headwind that they’ve been facing in some respects for, for several years as supply chains have been re‑organized. I think the recent events and the shortages, you know, during COVID has probably accelerated some of those plans and I think probably some of the, you know, concerns around the trade regulations, restrictions and the trade war with the U.S. and how that might actually impact supply chains has actually forced people to re‑think about diversifying their supply chains. But I think overall this is a trend that’s been happening for quite some time, so I think it’s something that China’s been managing for several years already.
Craig Blessing: Okay, last question. Market bottoms, if we are at or near one, tend to bring with them leadership. What are your, each of your thoughts on where the new opportunities in China might be?
Miguel Oleaga: Maybe I’ll take that first, Craig, if okay. It’s an interesting question in it’s a, it’s always a very difficult one because there’s almost an element there of trying to just predict how things evolve. And I think in our minds a lot of the winners of the past may, may still be positioned to be winners in the future. The type of names that we are getting exposure to in our strategy, you know, tend to be exposed to consumption and the consumer in broad terms. And so, you know, our view is that we have a very large economy in China that is still only partially evolved into middle class. And so, there’s somewhere around 250, 300 million Chinese who are in the middle class today, of a billion people. And so, as we continue to see more and more Chinese enter the middle class, we still think that things like consumption-related plays should continue to do well from here. Some, some of the names that have worked in the past, the outlook still looks very promising for those businesses on a long-term view even though the short-term may be less clear in terms of when the businesses normalize or return to more consistent growth.
Rocky Wang: Okay Craig, that’s typical crystal ball questions at end of the year or the beginning of the year, but I want to give it a try again. At Thornburg, we’re not really just investing in China for the sake of China investing. You know, we really compare the Chinese opportunity on a global perspective. And so, for example, in China we’re trying to focus those kind of large-cap, blue quality, blue chip quality names, so trying to stay away from those SOE or some company potentially vulnerable to corporate governance issues which we really dig in a lot on that front. But having said that, we can play China indirectly. For example, a lot of great companies in Europe, in Japan or even the U.S., and if you find the right one actually it’s a great play on China either with re-opening trades or liquidity trades or other fundamental related. Meanwhile, by the companies, I will say in a good hands I mean in the good corporate governance communicate in a way we really understand, really kind of doublecheck and like for accounting irregularity and also more transparent, more disclosure. So, China, you don’t have to go straight to China directly. You can do the backdoor, indirect China play in many other ways. But having said that, just say Rocky, what’s the next of China theme for the next couple months or couple quarters, here’s a summary, right, for your records. Number one, of course, easy one is with opening trades, right. I think the COVID probably have the darkest time during the winter, but I think my expectation is sometime around springtime things in China will be more or less normalized than we have here in this country. So, with opening trade you can do hotel, travel, but also, you know, for example, a certain insurance business model is so dependent on the free mobility of those agents who can knock on doors selling the policies, right. I think you can buy some insurance company who have a huge leverage, optional leverage of increasing mobility of the agent team. So that’s something we’re looking for that’s a unique opportunity. Another thing is liquidity as you said earlier. Chinese will pump massive liquidity to jump start their economy. So, there’s another way to play the liquidity. You can buy stock exchanges, you can buy certain banks or you can buy anything that will be part or, share of this of this liquidity party as we have seen in this country in the past couple years. So those kind of interesting angle but from a long-term perspective you still have the looking for some consumption and the Chinese so‑called import substitution because the Chinese have to face the sanctions coming from the west. So, they really spend a lot of efforts trying to rebuke their own capacity capability that would cause import substitutions. So, there’s definitely a lot of interesting names in that space for us to explore. So that’s my crystal ball view on China for next period of time.
Charlie Wilson: Yeah, thanks Rocky. Maybe just to add on a few comments, if you look at China today, we’re really seeing the opportunities across all three baskets if you will. So that’s the consistent earners, emerging franchise and basic value. And the reason for that is because you have an economic slowdown that’s been driven by the zero-COVID policy as well as concerns around the property market which has really impacted valuations on economically sensitive companies like the banks for example, which are trading near all‑time low multiples and all‑time high dividend yields, some of them just a fraction of book value. Then if you look at other areas like Rocky and, and Miguel mentioned on the re‑opening side, those are some great long-term growth stories which are suffering from the fact that zero-COVID policies lasted for longer and that’s depressed the valuations. And those are, are things that we might typically put in our consistent earner basket. And then finally, you know, if you look at some of the regulatory scrutiny that’s really hurt a lot of the high-growth companies over the last couple of years, that’s pressured multiples I would say in some of the emerging franchise or more aggressive growth type stories. What’s interesting is, and typically in a situation like this you wouldn’t find opportunities across all three baskets. But that just speaks to how depressed I think the market environment in China is today. And really what I’m talking about specifically is the H-share market, and more so than maybe the A-share market which has remained somewhat elevated in terms of valuation and different, different parts of that market. But I think that they’re really seeing some great opportunities across so many parts, many styles and types of companies in China today.
Rocky Wang: Craig, allow me adding something more to reinforce another view on China from here is, yeah, at Thornburg we’re looking for stock, individual fundamental and trying to focus on valuation, fundamental driven investment. But having said that definitely we also have some time we overlay that with a macro view. Here’s one of our macro view for the next couple period of time, year, is I think the dollar likely peak from here or at peak. So that’s why we keep talking to U.S.‑based shareholders, investors, saying, you know, when dollar peak you have to start looking for non‑dollar investment opportunity outside of U.S. You can go to Europe, it can be Japan, it can be emerging market and it’s also part of China’s story as well. So, trying to benefit from the potential other currency appreciation versus dollar, in addition to the potential pretty interesting stock return just because of valuation outside the U.S. It’s so depressed versus S&P 500 for example. So, you likely you have some very decent return from a non‑dollar, from non‑currency related but also from a local investor return on a local currency perspective. So those two things definitely make other countries, including China, becoming interesting investment destiny for may U.S.‑based shareholders.
Craig Blessing: Great wrap up. Thank you to our panelists and thank you for listening. You can find us on Thornburg.com/podcasts as well as on Apple podcasts where you can rate, subscribe and review us. Please join us again soon for the next episode of Away from the Noise, and thanks again.
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