Q1 2020 Earnings Call
2020 at this time all participants are in listen only mode. Today's conference call is being recorded I would now like to turn the call overtime to your host Mr. silly only the senior IR manager of the company. Please go ahead so silly.
Thank you operator, Hello, everyone and welcome to Balmedie technologically trade earnings conference call for the first quarter, Tony Tony As a reminder, I guess conference is being recorded to common financial and operating results were issued a press release earlier today and that they'll stay online you can download on your press release and find out.
The company email distribution list by maybe paying the I actually thought the company's website at <unk> Dot com.
In today's call.
Topping chairman founder shall not I'll get bored topped actress and typically the officer Mr. Fink Young Chief Financial Officer. The company's management will begin with prepared remarks ended the call will conclude with a two and a session.
Well we continue please note todays discussion will contain forward looking statements made in there that they'd have a comedy shows how the U.S. private securities litigation reform that come knocking on five.
Mmm involve inherent risks and uncertainties as such the company actual results may differ materially different from the views we expressed today.
Well the information regarding these and other risks and uncertainties is included in that counties annual reports on form 20-F.
The other filings this bother with are you asking or anything changed commission.
Tony does not assume any obligation to absent any forward looking statements, except as required by law.
Here's how for now what's your mom is earnings press release and today's conference call. Also include discussion. So in all this together when you see information as well as an odd in non-GAAP financial measures.
Well. This press release contains a reconciliation of helping out in non-GAAP measures to the air ought to get most of it I must tell me I'm sorry, so they can come back on that are down there.
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[noise]. Thank you shopping this is surely barmy see Oh, we try to greatness the trends remarks, before providing operational upgrades and discuss our financial performance for the first quarter of Twentytwenty well everyone. Thank you for joining our first quarter Twentytwenty earnings conference call, despite challenging industry conditions, an ongoing macro and.
Certainties as a result of good corporate 19 outbreak, we successfully delivered better than expected results in the first quarter of Twentytwenty net revenues for the first quarter increased by 13.2% year on year to 766 million RMB, demonstrating the resilience and diversified nature about business as well as our strong execution capabilities since the beginning.
The second quarter, <unk> business and supply chain capabilities have largely returned back to normal.
Additionally, we have seen meaningful signs of an overall industry to recovery with these positive trends that you need to emerge we have accelerated the execution about growth strategy for this year under out fiveg costs, our chief strategic framework.
Development of Fiveg in China has accelerated rapidly according to Chinas Fiveg Economic report Twentytwenty released by China released by the China Singapore.
International economic exchanges Fiveg uses in China are expected to reach or about 800 million by 2025 in much. The government proposed to speed up do you establish mix on Fiveg network infrastructure and expand explication scenarios. The number of available Fiveg stations in China has reached over 200000 by make according to that.
Data published by the Ministry of industry in information technology or tried.
We could trend of increasing Fiveg network penetration. We believe this will be one of the key potential growth drivers of industry glory near term and beyond.
We believe the upcoming Fiveg will bring about wallet revolutionary technological enhancements in the Iraqi at home environments product conductivity algorithms interactions and ecosystems driving the evolution from product intelligence to scenario intelligence Army has been dedicated to exploring new technologies and applications.
In the Fiveg, plus Archie space expects to be at the forefront and the standard bearer of Fiveg Archie for the farm environment.
Just last week, we hosted about Fiveg, Archie strategy and Twentytwenty, new product launch event, where we outlined a vision product strategy for the imminent Fiveg <unk>, Iraq and emphasized our long term strategic objectives.
We introduced a number of new and exciting product lines across our product portfolio, including the started the 21 face interactive Smartscreen TV product will come in for sizes, including a high and 75 model with Fiveg connectivity and eight Gee I tell you resolution liberating studying lifelike scenes.
<unk> industry, leading specifications users will be able to enjoy a next generation contact content offerings with high speed Fiveg connectivity.
Supported by three D. intact, if census, long distance sensors and attend ATP HD camera the product enables actual gesture and motion control, while integrating why five Bluetooth zigbee and other other protocols to deliver truly holistic Iraqi functionalities.
The launch of this product will be an important milestone in the realized nation across Mario and cross screen interactions and complete our vision for the fully integrated and Greenfield Iraqi in autumn lifestyle experience. In addition to introducing the smart TV as an into it as an interactive interface for Iraqi at home. We also introduced out.
Private cloud service on sauce concept.
Operating rich media streaming content cloud storage and improved interaction services bring bringing uses an enjoyable seamless experience, while protecting their privacy and data safety.
The development about one cloud service together with other content and service offerings will allow us to provide uses more intelligent Archie solutions based on the integration of software services and our key products with the support of Big Tiger and Fiveg infrastructure further expand be any sensing the Iraqi at home experience and providing us with producers.
No value creation opportunities.
In addition, we announced several exciting next generation products at the event, including new lines of water purifiers with revolutionary water purification technologies, such as though Arotechs 1600 gallon watered pure purify product, which you need to next generation lives flux reverse osmosis capabilities other decisions to apart.
Our portfolio, including New series about flagship 21 price lives couldn't refrigerators washing machine various small kitchen products and smart devices, among others also announced where new scenario based content offerings and partnerships to enhance user stickiness.
We continue to introduction of new and innovative products and partnerships is a desk Testament to our commitment to research and development, which will further strengthen allergy product portfolio and differentiate our branded products among peers.
We've also been expanding our premium cocaine brand, which was first introduced in late 2019 with a series of <unk> centric air conditioning products through increasing additional products categories across cone scenarios with the expansion about premium coating, Brian we will be offering a complete advanced and centric product portfolio to the.
Hi end market.
Further strengthening our brand image, while diversifying our sales channels and consumer target markets.
Consumer market targets to drive premium to drive Premiumization and deliver additional growth prospects in terms about April marketing strategy. In addition to major product launch events and traditional advertising campaign, well diversifying our advertising and promotional channels in accordance with the latest consumer preferences and markets.
Thanks.
We continue our efforts to showcase some products through cooperation.
Through cooperation with numerous parallels on some are on some platforms like self media missile Red book, though when you talk together with live streaming on E commerce platforms, such as Taobao and J.D.. We invite these parallels to test and showcase how products as well as interact with their fans and consumers on these platforms such marketing.
Started use helps attract a wide audience of young consumers and you and increase their interest in the purchase about products.
In summary, looking ahead and twentytwenty empty on really here to dynamic and prudent business practices, while maintaining stable expansion under out Fiveg plus Archie strategic framework, we are fully committed to I'm confident achieving our threefive one one long term objectives, our roadmap to becoming a lot scale heartache lead up.
The Iraqi Ocwen space.
That concludes our founders comments I'll now provide a quick operational updates and discuss our financial performance for the first quarter Twentytwenty [noise].
Despite the adverse industry conditions in the first quarter, we achieved solid financial operating performance net revenues recorded a double digit increase speaking out pretty that's pretty good guidance. Thanks to our diversified business product and channel mix as well as ever increasing brand awareness across sales channels and among and consumers. We also continued to sustain.
A healthy level of profitability, having implemented a number of stringent cost control measures to offset the adverse industry wide actually cobot, Nike, while maintaining our commitment to research and development. The company's balance sheet remains strong with approximately 1.2 billion.
RMB of cash and cash equivalents short term deposits and investments as of the ended the first quarter. The number of army offline experience doses of approximately 1500 as of March 31st and it's held relatively steady in the subsequent months.
Number of household users reached more than 3.7 million the percentage of household users with at least two about connected products reached 18.4%.
While uncertainties remain we believe our financial strength and operational flexibility will position us well to capture the opportunities as hard as the industry and broader economy continue to recover.
Let's now turn to detailed financial review about first quarter results as well as your outlook for the second quarter.
Hi shopping discussed net revenues were 765.5 million RMB compared to 676.2 million R&D for the first quarter 2019, primarily due to the successful rollout and increased sales of certain xiaomi branded and barmy branded products offsetting the broader industry wide impacts of climate 19th.
Revenues from Archie enabled smart home products increased by 8.0, the sense to 542.7 million a to 540 542.7 million RMB from 502.5 million RMB for the first quarter 2019, primarily due to continued successful rollout of the company.
He smart kitchen and smart products.
Within this category revenues from our water smart water purification systems decreased by 10% is 208 million RMB 420 million RMB for the first quarter 2019. The decline was mainly was primarily due to decreases in average selling prices despite double digit year on year sale.
Volume growth in the quarter.
Revenues from smart kitchen, and other smart products increased by 13.6 percents to 434.7 billion RMB from 382.5 million RMB for the first quarter of 2019. The growth was primarily driven by the continued successful rollout that set new products in particular, the shami branded sleep orbit, which offset.
Brought it industry wide impacts of carbon 19 revenues from consumable products increased by 35% to 65 million RMB from 48.1 million R&D for the first quarter 2019, primarily due to increased demand for the company water purifier chemical products revenues from value added businesses.
Chris by 25.6% from 157.8 million RMB from 125.6, new and basically the first quarter of 2019, primarily due to new product introductions together with increased demand for the company small appliances products.
Cost of revenues increased by 27.7% to 621.5 million on be from 486.8 million RMB for the first quarter 2019.
Gross profit was 144 million RMB compared to 189.4 million R&D for the first quarter of 2019 gross margin was 18.8%.
Declining gross margin as compared to the first quarter of 2019 was primarily due to the shifting the company's product in business mix together with decreases in average selling prices of certain categories, including our smart water purification systems.
Total operating expenses decreased by 12.4 percents to 134.2 million RMB from 153.1 million RMB for the first quarter of 2019, primarily due to a stringent expense control measures implemented during the quarter to upset last industry wide impacts a corporate 19.
While continuing to invest in research and development.
R&D expenses increased by 62% to 59.3 million RMB.
Primarily due to increases in employee related expenses expenses associated with new product development.
Fences related to the application of new patients.
Selling and marketing expenses decreased by 35.1% to 65.5 million RMB, primarily due to a decrease in logistics expenses as well as stringent expense control measures in relation to marketing and promotional activities and other selling and marketing related expenses implemented during the quarter to upset the address industry wide.
Impacts of the 19th.
DNA expenses decreased by 39.5% to 9.5 million RMB compared to 15.6 million RMB for the first quarter 2019, primarily due to the company's stringent expense control measures.
Net income was 17.8 million RMB and non-GAAP net income, which excludes the impact of share based compensation expenses was 31.4 million RMB.
Now, let's turn to our outlook as discussed previously you why we'd have seen meaningful improvements as compared to the first caught up and the overall industry trend is encouraging we believe our industry as well as the broader economy in China I am globally, I still faces significant challenges and uncertainties that will be difficult to quantify in life.
These factors for the second quarter Twentytwenty. The car company currently expects net revenues to be between 1.25 billion I'm being 1.28, appealing RMB, representing a year or be a growth of approximately 7.7% to 10.3%.
In terms of profitability as a result of continued aggressive promotional campaigns, particularly with the upcoming 618 online shopping festival together with ongoing de stocking initiatives for previous generation production in preparation for the launch of several new product lines. We do expect gross margins to decline slightly in the second.
Quota as compared to that first quarter of Twentytwenty.
Nevertheless, as a result about stringent cost control measures together with how dynamic and prudent business practices and execution capabilities. We do expect to continue to remain profitable in the second caught up with a positive trend heading into the second half as such cost control measures take full effect and new high margin products can.
Tributes to a greater share of out overall sales revenues.
I'd be a Bob outlook is based on current market conditions and reflects the company's current and preliminary estimates of market and operating conditions and customer demand.
We're all subject to change.
This concludes our prepared remarks, and we will now open the call for QNX operator. Please go ahead.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using eight speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then too.
Benefit of all participants on today's call. If he wants to ask your question to the company's management in Chinese. Please immediately repeat your question in English.
At this time, we'll pause momentarily to assemble roster.
And our first question will come from Hanley fan with Morgan Stanley. Please go ahead.
Heightened though our general on city on thanks, Thanks for the thinking sent for taking my question on before the call I have three questions I'm for for this the first one is you mentioned just now that you've seen some kind of like ER positive signs in terms of the industry recovery.
In terms of why all me I'm phone from management point of view, how would you see that business recovery for the company itself Inc. recently for example April and and also or they May that's my first question.
The second question is that how how was your online performance in the first quarter, particularly joins a called me 19, because we saw other competitors. They are pretty aggressive in terms of online marketing on south on how would you perform in the first quarter on on the compared with yours.
Competitors or other new initiatives, you've like two to Hughes. That's my second question for the on lifestyles.
And as a third why is that for for the water purification systems in the first quarter, you're just mentioned that that's the ASP decline and also the volume double digit growth actually I Wanna I want to see so what's the actual impact from from the covert 19, because a weak demand so.
You may kind of reduce your ASP, but looking forward given that we oh, we out we experienced a the market recovery. So a with less impact from Cowen 19, So how do you see the S.P. pressure in terms of water purifier.
In the following quarter. It's all in here 2021, that's my third question. So so I finish on thing. Thank you.
Okay. Thank you how are you I don't I address them one by one.
So in terms about sales recovery, yeah, Indeed see meaningful sales recovery in April and May as compared to February and March and this all a public company. All your second question is also online channels or presumed year on year gross in recent months and encouragingly offline sales are all sort of close to similar levels.
As to what they want the respective period all of last year. So in terms of a product categories in the past couple of months larger appliances, such as refrigerated and kitchen products have seen the most visible pickup in demand recovery as retail channels and logistics and ER I knew distillation services hundreds you normal activity.
So I really do see positive a lot of positive momentum heading into the 618 shopping festival and have guided around 10% year on year revenue growth until the second quarter off a strong base up from last year. So in terms of your second question on on the sales channels. So the first.
In the first caught up.
Approximately just over 50% about south came from the Shami channeling around in the remaining came from the Army channel. It's all about army channels, approximately 70 or just an assembly decision came from online and the remainder came from offline now in January offline, who is doing quite well before the onset of.
Oh, corporate 90, and as you would know offline suffered a lot.
In the subsequent months, if you're looking at the second quarter, but that ratio will trend more towards say, 80% online to 20% offline, particularly given the increased contribution all.
August six upcoming 618.
Shopping festival to ourselves wildly offline channels are still in the middle or they're a bit recovery phase so far in offline online I think what we're seeing very positive trends and a and even double digits a year on year course heading into or imagine heading into two Jude.
In terms of the water purifier margins, so as we guided as we guided last year.
So as we guided last quarter, the gross margins, what a pure by decline quite materially in the first caught up.
Well Asps and margins are we believe season margins for this part of Kelly will likely remain under a degree of pressure in the second quarter due to continued promotional activities at commercial continued promotional and de stocking activity, especially for old or S.K. years, while we do expect a recovery in the second.
Cost or in terms of a expertise and margins. These will will largely be driven by a ramp up in sales volume and contributions from new high margin high ASP products, such as those that we announced last week you know product launch event, a second is the country.
You'd realize they snow various cost control measures.
Including along the supply chain megis coming into effect.
And certainly a as you alluded to a we do expect a degree of price competition to ease and industry, an economic impacts of cover 90 continue to moderate and de stocking initiatives a complete so I thinking in terms of the water purifier trends the second quarter, we'll still.
Yeah, I never get recruited pressure, but is likely to be a trough if you're looking at it from a from a whole year perspective.
Yeah. Thanks, I just want one quick clarification in terms of numbers, you mentioned, 80% and 20% or online offline spacing in the second quarter plenty plenty, that's only for a while me channel or all yourselves revenue.
That's one of our new channel.
Okay. Okay. Okay got it yeah I've no question. Thank you.
Thank you.
Our next question will come from you Dongtan, let's see I see see please go ahead.
Yes, I mean, all centered on the high management. Thank you for taking my question I have two questions first as we saw you just the launch of five to eat smart Green or smart TV last week and also upgraded a lot of amazing product what can we expect the new product for this year and it's.
Especially board it can go shopping festival on June 18, and then my second question is about the Kobin I'd seen the global demand has seen shopping decline Q2, but China market is recovering from koby, 19th home appliances company I agree just broad their self warming up did you see the Rick.
Oh really from your side and in Europe effective did you see some did mountain laid all or for one quarter or did you see demand banished because people have <unk> money due to the cobot 19 packet and tried to buy cheap a thing what will be the trend and what will be the company strategy to deal with the situation thing.
Yeah. Thanks, maybe I'll take your your second question Cushy for Us So as we mentioned and as you mentioned, we have seen very meaningful recovery across the board and in terms of products going into April and May.
Plus how product categories. So I think the overall improvements have been very visible.
Obviously, the recoveries to ramp degree messenger and it remains to be seen how how sustainable it is but I think going into the 618 shopping festival. A there is a degree of optimism, particularly particularly in terms of the volume. So now I think our dinner.
First quarter and early in the second quarter, there was still a degree of inventory amongst various channels.
As that.
Continues to be cleared we do see kind of additional upside potential going into into the second half. So as also mentioned if you look at the if you look at.
Second quarter.
I'll ask piece continue to be a little bit under pressure or volume increases have seen quite meaningful uptrend sand recoveries. So I think that's something that will underpin a rebound in the second half as the broader economy continues to pick up I think.
In terms of the overall consumer sentiment and and wallets, that's it's a little bit too early to comment on but I think what is interesting for far out business is that we are minimal all close to two negligible overseas exposure.
So we don't have much exposure.
To the international export markets and are we nearly 100% exposed to to the recovery all the China demand side.
So on your first question with regards to new products, we have launched a whole series off new products over the past several monsoon, including library rights here all of our new product lines, though.
Across our product portfolio, such as the refrigerators washing machines that air conditioning sense and U.S. can use a long along these product categories and we do you expect to.
We generated good revenue growth from these products at an air conditioning is a is a completely new category for us this year.
And we have seen very positive response as we have begun selling this product over the past several over the past. Several months are you may have seen union to recent keep a maybe one shopping festival. That's some of our air conditioning products were among the top 10 or indeed.
Condition or a category among various a mall embarrass online channel side. In fact category is definitely are off to a good start and should contribute a relatively me fleet for the full yet I think in terms of Xact sales fall costs, it's still a good lead Boston in terms.
But I think.
Air conditioning as well as somebody the other than U.S.K. use that way introducing our product launch events should should contribute meaningfully as we get into to the second half.
Another new product category.
That was launched in late last year was the Xiaomi sleek robust I think that has also do very well.
Aseptic bought by them or see by the market, having generated over 100 million revenues of revenues per quarter since its launch in third quarter over the last year. So in terms of television products. I think this is more or at least in the early stage as a standard bearer.
Or as a.
As a as a centerpoint I mean in terms of increasing our brand image and and Ah Kinder anchoring our Oh Wow brand positioning a as a fully fledged our TV experience provider I thinking in terms of the sales volume led.
Wait and see it was only a bunch to last week, but I think if you look at the overall revenue contribution to the end type business.
It shouldn't be too meaningful at least for this year.
Okay very clear thanks.
Our next question will come from Robert Colwell with 86 research. Please go ahead.
Hi management. Thanks for taking my question <unk>. My question. It's also about the recent launch event and a couple of.
Somewhat related point the first is.
Basically the sponsor that was online I think one of your first major launch event that was conducted through that like broadcast format.
When we look at this launch event as a brand building and promotional opportunity how does the live event compared to our previous launch event and then the second question is about the Smartscreen that was launched you laid out a vision for how it works that kind of a centerpoint for the smart home.
I'm wondering how you think about pricing for their and whether or not there is some consideration of I'm basically trying to be aggressive on the pricing to get that.
That position in the smart home.
And then third it also related to this vision of the smart home how do we think about interoperability with other platforms for smart home devices are we at.
Trying to.
Make our devices accessible across different platforms are we looking at more of a close.
Uh huh.
Thank you.
All right well, but thanks for your questions or maybe our Pos these onto trends on CRE can get very detailed response that followed up with some translation.
Our next question will come from Vincent Yu.
Income sorry.
Sorry, not yet where we're going to answer these questions.
In Chinese first and then some translation.
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Sure him Oh Gee, the it'll Sheehan Guy Hes, each I had a bonuses, but how do you see I wish I forgot to when would you see how to coastal that he wants to do with other clunky and Shaygan legal would you just you know I wish I forgot to buy you kind of course, you digital student I don't have I've had I forgot how many are going to me I don't I mean, theres not a whole because it.
Does that went on I guess I'm, just wondering if I can't give she'll be sort onto what I'm. There were still that's what I can take too long and yeah I forgot to hit eight I'm going down at all got off to list will not be enough you sound like is the theater secondly, on especially the field because it sounds Saudi whom I know what you definitely got succumbing to see how dare I mean, just like the other one than just a stone.
Yeah, Let me just not increase actually Shannon.
TDP moved up in orderly, ladies and gentlemen, but it doesn't make other juggle Oh Gee algae Cheadle challenged on Tonight I called out it will not only like that.
The and she can we don't see it will show you the England piano you can go the lead on the trend I call them, not only kicking in but if I'm going to their own jogging. Originally got what else can you tell me the transaction Oh wouldn't hold on it yet Jason I think if you don't want Mandiant just on the don't Johnson to the walking what does your 20 minutes yet.
Yes, and I, usually again watch a yeah I mean this I don't want me to them I guess I don't I'm, just a well known we gain a little tiny tiny Mci Atlanta is oh, the chatting with all you got.
Good.
Got you like what you know why they should that is how does your wish him younger well mission was to warm the timing for a minute, England at all no no no no no can don't you get to wait.
Well I guess you could argue that should that she could you know how to show that do should I can you finally got fundamentally the bad luck given what you don't want me Jason I also they got until now that your phone.
[noise] Oh wait a second piece.
[noise], maybe I'll just translate as opposed to responses August and Chen will respond to the first question sorry in terms of the online product launch event. It was actually very successful are able to reach over 2 million views us it since.
Since since last week, so a very high viewership, which is a signal a very high interest in the direction of not only have already but also in terms of armies positioning in the upcoming kind of fiveg and our euro which has been a very hot topic.
In the industry I think the news reports and feedback that we received has been very plentiful and overall quite positive and that's really kind of a increased <unk> interest in barmy environmentalists direction, among our industry watches not only in a sense all.
Smart appliances, but also in terms of the broader fiveg and ER and IR team industry.
So I think some key points with regards to to the event de de interactive smart screen TV that we launch I think this will as mentioned these very central twice already t. at home experience.
It is essentially complete Susan completes the yards here at home scenario in terms about product coverage <unk> being a focal point oh, the living room, so screen in your living room.
Able to engage in cross Operability and cross with cross screen experience across scenarios and environments.
Secondly is the home SaaS or cloud services that we announced.
So this concept it really kind of brings.
Factor that were not only mean offering products, but really pushing this a holistic Iraqi concept right sort of armies of Barneys Fiveg Iraqi strategy, a places a mock ups will fall barneys future strategy direction and positioning has not just a its not just paradox provider.
But in terms of a holistic kind of hard to experience play.
The second question on Fiveg piece or a five g.. We do expect this to have quite a revolutionary impact on the kind of home appliances industry. All the arts here at home I industry quite similar to two or whats currently underway in the them about foreign industries.
So I think several kind of easy to understand concept. So fiveg you saw it was or is that it will directly upgrade routers and current Wi Fi connectivity, resulting in faster or.
Boston connections being able to connect more products are the same time and the offering automatic connections Reits are a very easy to use and seamless connections flawed for the end consumer so the overall fiveg plus Iraqi ecosystem, we envisage the more flexible being able to.
Offer more high quality content and I think in the end a will offer a better experience embedded value proposition for consumers and what used this value proposition I think we want consumers to really get into this next generation idea at the high tech or sort of what will it be likes or I think.
The next period it will be important to educate consumers on a our vision for what the future harm should be and and how we can help them achieved this two to essentially upgrade yeah I'm living experience.
So.
Mr. Chen will now provide to answer that for for the third question on interoperability.
Oh, well actually I had this I know when he can I just due to this is not only isn't I used to that.
Well you would see the allocation damned, if on me and they say they don't pull him get it will have to hit that understating. What are some kind of delicious and that's you said two if or how should we can you tell me when would you just on the indeed, a highly efficient we're going to go into how well they need I want you to Joel I have added awards will come on as you know Tucson Electric company. He only or you think would only when you.
The initial just not only on like in that group would I draw Jailing, you know more looking out almost inevitable, you'll get an I'm not actually all my younger winter weather. So he can glatfelter, Tony how much do not Hogan.
Can you off we'll see how did you get your team he got quite and I don't know someone you got all Italian Borgata bought actually went out why don't I wish you put on targeted yesterday and told you probably honestly when we bought it won't steadily and you know me John again that doesn't gotta came out in the different Gotta Genband stage I don't want people, there's one hot digital media suitable to want to Jesus.
No I'm sure we can generate NGL into depend a bit on again I see it would only 40 algae. There's no spillage me in here, let me jump into getting tighter equal to Eagle only I don't want me to finally I'll keep it suddenly you know what are some that somebody who can get a I'll get that they don't need on digital he will then.
And of course, you know show he chose should I be meeting room can you kind of noble younger how does it also he said that he should actually you are.
Sure in 18, or sometimes even though the thing I really don't unless you do that how do you should that a lot I will just how does how does how does he will not having I love you got the only other only at Stephen just go out to the older people out there that you don't want a colder both of which again, we don't they don't what happens on the phone Japan to come down over the weekend I just eagle Alky digital spend on some of that there was a domain.
Just on Jonny Jones, how do you all show me well don't know how much on which way the only to put them in I mean.
A lot because I'm not going to I don't know many of them and people who maybe he can you give him when he will make it doesn't hit you know I mean fishing gold I don't know, especially will make it a little yamana going door to door MTV filmed what I'm getting him and he will make industrial she'll be last week.
Putting people were talking to quote on Pmnine Huddling, Oh man or woman led to our he faces to take a spot in the meantime, how many how do we need it for money should only only the should I don't wasting it was and I mean, how many and I'm wondering just yaga. If I wanted just to see you hit on stock in good times in the Minnesota Cohu has lost Nicole.
So 200 wheel Sheila I mean.
Just want to sell they are you Tony may seem to treat you locked tell you that houdini, telling you to get us what I'll, let you don't get them onto did on a teeny tiny matter, it's been on toward sometimes with a lot get on Poland, sometimes but wouldn't if we're getting it done, especially on a lot at all we've only people don't wait I doubt al Qaeda shown that hopeful.
No well mcginley algae should that I, sometimes challenging he may want to see that thought I'd be answered joke in that comes out to accomplish all for Lee sleep, commonly known it sounds like you can call. It. She does sort of decided he says I am I reading on dealt with I don't come out of time, yeah, Yeah, or just what are we wish him wishing you got implemented Oh.
[noise], Okay. So I'll answer that question in two parts or in terms of inter Operability, I think where adopting you're quite an open oh.
Approach, we believe that are going to fiveg generation, what will in general be a quite an open a platform.
And there will be very interoperable similar to close operation among current foreign carriers. So a wall. They may be a single account I'm more products will be able to connect across a bit. This accounts and this was mainly due to the increased our connectivity is always the ease of connectivity such as I I'll kick.
One touch a car connection that is able to achieved across our products as well as at the.
Well I was across Fiveg routers.
So I think in terms of a in terms of what we really thinks that the value lies you fiveg.
In the Fiveg Europe. So as we noted threeg enabled enable browsing fourg enabled videos out as Fiveg RTT generation, we believe will enable price control, particularly with regards to say streaming an interactive screen based content and also allow for more color.
Intense and content consumption scenarios across a cross the home and across a variety of connected screens in the home environment. So this scenario based consumption will also be a key feature eaten into fiveg here. So I think in summary, Fiveg just makes.
Everything more seamless to use for consumers and will create additional opportunities at the Mormons may not have the best experience all our current to me I know whats available yet.
Okay.
Yeah.
Thank you.
Our next question will come from Vincent Yu with Needham and company. Please go ahead.
So you're going to know what you should use when she now shows in the judicial woman. She got a you're seeing this if you go to the tune and gene onto the cooking the Tunisia.
Do you know much agenda.
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Yeah earlier.
Georgia to close it sounds like there's a logical or just to talk to you.
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Are there excuse such as refrigerators also have.
The as I just.
I get it was that the display. So we have been we have been able to kill me some data and are we going to.
We introduced them.
Like advertisements camping no the talking to a user behavior innovative rooms Nario on my second question is considering the.
Competition landscape are we going to.
We'll be asking about the of our strategy.
Picking up share and also is like how to handle the pricing.
Pressure from peers MISO question is having or.
And the large item.
We returned to normal.
Okay sounds like a April may.
A timing after the.
Like breakout pandemic now thanks.
Yeah.
Uh huh.
No.
Okay.
First couple of questions Yeah.
Okay.
Going to hit upon your take a committee adoption enough, we're going to wait AGP. It up somewhat digital economy seems well, let me handle I didn't get on the is it should if they don't know there's a woman well initial San Jose say, they prove I'm quoting guy his tongue in cheek. So look a lot of what's going on here I'm not I Wonder if you watch hold onto you wish him and he will.
We don't quantum call yeah.
And on a t. well you don't collecting so you want me to 19 days. So he's here. So you don't want to such a cohort on comedy on here too a lot of course it little just don't walk you want to use how they all English only to give a fish again, because it's probably the only without all you didn't the total Joel can you give us out of it.
It was out of the and don't you give us any idea what is that just wondering what you're supposed to say what I kinda I hear them like doing reasonably well you know how how can daughter fishing you got Gareth I should again sheepish again.
Certainly eke out and I believe you can pull more easily would I think initially hoped would have initial many I guess, we clearly want to watch on a lot G thing when you're talking a lot teak I'm talking a lot I didn't know channel with him in 10 will tell me why recently, it's true yeah wash out I would've thought don't they don't put into like I said not wanting to do get on Uh huh.
Doing well I'm going to let me you couldn't fortune, if I'm going to making sure feed I mean, I'm reality was Oh, there's always you wouldn't count well well Chicago, how many will take longer hold.
Someone doping into dog, especially I'm going to tell me they all work.
Kumamoto wasn't always I forgot when and if we got skin on the lease shipping you can I know maybe should actually leave out I think its work publishing container count what came in I don't they don't seem to anyone who adopt sure yeah, what somebody like ours.
Sure.
Okay got it off but to me on how much is our between our it's the England put Alameda figure if I'm pleased to what did it well if you would have I'm going to God for your company I'm going to may be found herself all undrawn brought up.
Hey, guys, how does that our so called R&D team going again, let me share and child that touches eagle how many deals I mean, you buy a minute ago.
Should we be interim.
Well, let you know that probably I'm on the something got home young women.
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Hi, guys should that it I mean any data show that is Adam will determine how should I thought it seemed kind of how they had a political eat out okay, I must say woman Sterling.
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But again.
Reaching like let's say, saying she module units, but all of that by the lock him a free rent caching finally talking Shannon.
I didn't say equivalent to kind of stop.
We will see I think I had another we all got money, you'll see that means that we see again look on what do you probably don't she and I hand, it to see Dona suite.
Well I'm sure. They should get you would do I think yeah. Nonetheless, typical logically all Michigan Kodiak being down here, what do you really can't Youre not going go ahead. Please go ahead.
I am hopeful that I'd say, we're making it pretty there's all these young cocoa how did you I mean, what's going to Tony Tony or share. How many we are held groundwater you said all the old saying, how that it'll steam and I'm glad to hear so he can I take a long inconveniently I wouldn't get I say would it still encoded I don't think don't washing out at this stage, Indiana Chlor alkali data will get those.
The conditional shell on board. So do you know what we always heard me I well. This is page that she that Oh.
Oh.
Okay. Thank you all to address those questions. One by one. So first question is with regards to the data, but our products are able to to catch up from household uses and what we're able to do with it I'm sorry.
I think a several different factors I think the most obvious use in terms of advertising some of the pilot programs that we've enabled particularly on out 21 face refrigerators that there would be quite successful I think if we are able to roll this out on on a larger scale and as we continue to increase our installed base.
This will essentially be similar to a focus media screen right, but not just that's how we're able to collect a variety of data to position each household or each area quite uniquely.
We can offer very targeted advertising capabilities across individual households, all areas all regions, rather than say say blankets blanket advertising campaigns and more importantly, wherever we could then collected data point that the data.
That we utilized so being able to see why did the advertising campaigns are being engaged on what their conversion ratio, we use and really being able to increase significantly increased the advertising quality all value going forward. So it so we see a loss are.
Communities in this area as we continue to roll out a concept August screen field higher tier or.
Periods.
So its second question on D kind of did the TV industry and competitive dynamics. So I'll positioning is definitely not gonna going for pure price competition or we don't think that this is or correct strategy for us.
As mentioned this particular product as you would've seen you know park launch event last year is very much in an integral part about Irish here at home portfolio and an overall experience. So it's not just in individual product.
I'm very much fits into our the holistic experience that we want to to provide so it's a quite a unique positioning.
He wants to give the consumers. This a this premium hi tech experience.
But then again on Ah Onez Midland or what is the price so what were.
Trying to do is provided this fiveg next generation product acts traditional prices right.
Thirdly in terms of logistics, so I'm thinking a general nearly all operational operations have returned to close to normal within the industry I think if they're the most noticeable trend has been a pickup in demand in sales of larger appliances, such as refrigerated air conditioning kitchen products.
In recent weeks or even month or two which were very depressed a into first quarter. Since it is products, which I'm very very high.
I'm kind of installation or logistics requirements are seeing very significant rebound. So I think definitely for TV, which you just less insulation intensive products, it's definitely not to not a another problem. So I think in general what we're seeing now he is a is the industry effective.
And at least that Didnt domestic China industry.
Heading or close to normal in terms of or a supply as well as demand and we're cautiously optimistic heading into the 618 shopping festival as well as the second half of this year.
Thank you management just yet.
As there are no further questions now I'll like to turn the call back over to management for closing remarks. Please go ahead.
Thank you once again for joining us today, if it happens the question PC afraid to content.
Sounds good through their contact information out last night, Alright accounts [noise].
Thank you all have to one [laughter].
Thank you the conferences.
Got it.
Thank you for attending today's presentation you may now disconnect.
[noise].