Q4 2020 Yunji Inc Earnings Call

Good morning, and good evening, ladies and gentlemen, thank you and welcome to <unk> fourth quarter 2020 on these conference calls with US today are Mr. Shang Loop Shah Chairman and Chief Executive Officer.

Mr. Chen XI, Zhang Vice President of Finance and Mr. Liu Investor Relations director of the company now I would like to kind of the countries or to your first speaker today.

And it's killing.

The F. G. Please go ahead Sir.

Hello, everyone welcome to the fourth quarter two was orange on the earnings call, you've always thought of piece and all that is called the content and forward looking statements within the meaning of private Securities Litigation Reform Act of 1995 debt based on our current expectations and current market operating conditions and relate to events that in both number and all of my waste on.

Certainties and other factors of Linky and <unk>.

The industry.

These forward looking statements can be identified by the terminology such as well as facts and anticipate continue or other similar expressions of detailed discussions of the story.

And uncertainties. Please refer to our latest documents filed with U S. SEC.

Any forward looking statements that we make on this call are based on assumptions as of today and the proxy qualified in the entirety back closer and the statement risk factors and details of the company of filing with SEC.

And he does not undertake any obligation to update these statements expect as required under applicable law with that I will now turn over to some of it yourself chairman and CEO of <unk>.

Oh wait and let al and G. Ollie Ollie. This once you do the type of Buddy Holly Hello.

And welcome to peoples.

And then.

If you do a midyear and me since of the ebay ease of Chi yet well of minutes on several ways of Sundance and yet.

The Yo Yo coordination of the Finch L pin pad food you need and therefore yet.

And the Olive garden and yeah, sorry, he says the year the sorry the woman.

And let you all you with that on the each and somebody essentially.

Of course, we generated a total of Gen V zone.

11, and 47 of them doing R&D and sales.

Other revenue each of the one please be so you're feeling on the due to our ongoing development of fans.

Differentiators of planting and I'm pleased and merchandising it as.

As a result of the of the mandate the use of standard.

And as F&B platform and service managers and the number of true 19 members of our class of an increase of $13 3 million for Telemark.

And that's the end of December 31st of 2020.

On the learning is a liberal quite and you hope everyone in the appeal of on the other and yet.

The of more well known totally the shots of any of net of tenant. So he gets on jet 20 times. He was the year or significant changes in terms of the both the internal and Pheno even on that at the end of the year as usual well overview of the strategy and I reflect on all the achievements of the year.

She is and I'll go to the.

She did the RT Mart and yes, well.

And I'll show you and your father of the Ito.

And as high for the convenience.

Her how you thought going in and she's on the tenure of.

The other links so could you move it all and all of the you choose only about one of the y'all follow suit because they can get in touch out just yet, but if the Colm and day something the tenure women. The food you need to restock all of the table, you'll tell me on how to fool the Yahoo.

The silicon back hoods of and basketball and talking to you Matt.

And the entire for the sake yoga and tell them, assuming Fuji creep, but on the Kimball. So again to my children do the easy the Dunkin' coffee and that women of searching yeah. So it would be and the conduct of all yet.

Your phone for the Sutekh creative work.

In terms of lead times, he owner and increasingly competitive and equal mens and women.

We identified a surgical passport and chi to devote a differentiator is the blanching, which can be and that relates to make more talking to pass the mic and especially like the crude off the two offerings.

And all of it moved many industries and it is.

Intermediation and all of us thinking.

About I was trading the pull out of price differential among other sequel next platform. Instead of we established our component of the claim to researching the opt in on merchandising mix engaging the stomach manage it to act on the.

Chuck and Kelly and he halting the use of shopping experiences and.

And all the way differentiated merchandise mix of the private labels for eventual bonds and the emerging brand enjoys a long product lifecycle can be constantly improve and the mi gradually give all the into Florida, and Bronx capable of generating tens of millions of.

Billings of the sandwich aligned with the Incrementals and or put on the offering I would call me also became more active and some of them.

Members of the he is I have just.

And do more materials about plans to share and desktop and.

Of course, the vignette women that type of home and yet you still can biopharm and the Tulsa to the lot of troubled attention.

Well the fact that you believe tempting policy and the Paninis and yet your toll of leader. She also.

General and E plus.

Also on the highway couldn't you Yahoo family versus how the future, but the guidance really attentive the element of Yahoo Gemini.

And the argues well my Puzzolana, indeed ego of general interest shipped and the C walking back the bucket.

The budget of do you want to administer the trio of koto.

And then tell you that's of interest you thought you go Okay calls on you and you'll get the answer to true woman and she is on your hope on the sorry, Sheila on the on Pizza Real call. Tom you just saw on job. She is so cheap tool shipping and so that may fall at the whole eight who can do it by Jim Hill is lumpy.

All of her to go on too.

And of course of the 'twenty, and 'twenty, Oss and equally Monday and supply chain differentiation and travel.

The main strategy has achieved the many flow laid out.

For example, one of the our private label the weight loss, Florida has joined the he and she really enjoy if there was product category with a hell of a yes.

It's the lunch and it has generally of over 6 million of ideal for sales and we will continue to improve the beach, Florida of.

According to the user feedback and market the marked to further improve the user satisfaction and February 'twenty 'twenty. One we also launched and we're focused on.

The food.

The private label CT is by the pin the button and launched its first the product authentic of Creel. The sausage jointly with everything now on the food of Research Institute in China, or the five case on stage with the institution and on both sides of the 2020 Chinese new year holiday season, we studied it.

All of these two new batches of thought with and take a clue of associates of respectively. All of them sold out permanently upload and the market introduction. Besides food and we are also developing and promoting additional merchandising categories, including health care.

Care and health supplements.

First of all Michelle and while not really news and the neat tons of lead tamatave, yes, the woman and have food and you literally and going into the kind of opinion that woman. The food you need before you do your lush and do the T cells.

Virginia and agenda of La Lucha, the obviously the cell.

For the go to and the switching and comments, we outsource and yes, yes.

Yeah sure sure they come on to go and the only try and Buda.

And so your assumption and going into the tend to phone coach and due to the mill so on top of funnel.

And father, she could you see on me.

There are just the sort of material a proponent you got to the surgeon.

And then there's the you put on building, Utah journey of Huddling. So then.

And they got to one woman of the European pack, the Sydney and searching freak out on me about him and costs on the dot on Dropbox, such finish other and intrusion of the body M P and searching women's at all.

Tell them the simple huh.

It hurts your vehicle part Jim can lead the attempting the soil something you couldn't Jim Coll of maybe women do the hit to the search and seizure like plenty of other patient previously the tambo. The Chita lead you to tell you something.

Tom can you tell me and tell you the couple of Tenda the on top of the funds out of zone.

Shin Oak and judging it comes out to the home that day.

And just a true in Macau, if all I can do a little and provides the Dol bulk wash off the team Saturday hoods that where the volume.

Chip sometimes of the waterfall journey towards the book, what's the can look runs off of sort of says I'll finish on the fortunate paid from more free time to the board yet so the shell free whether you're on.

James.

Most of all of a service manager Aida and send to the Mad at all models of the children under the age of the two off quickly.

And the creativity of the between them when they work on our parks and aesthetic manage it by.

By continuously and putting all of a platform features because either on the service managers with more of a competitor in Florida and note and.

And in 2020 all the service managers became cause of essentially more active and sharing and promoting on reported in 10 day earned a better income and improve and your own quality of life, we really focused on three growth initiatives like the meat and marketing.

I'll be providing out of a sales manager and we put etcetera and easier to spread and the Shanghai the.

Part of the Dakota and.

And what do you think I said it managers to produce reach and the unique content and put them to attract more users and second we established communities for various verticals and apply to cover of the marketing and the sales strategy. For example, with memorial of of private label products and the beauty of community and a share of different ways to cook the body.

And square footage and Florida community and the second half of year of Tennessee, Tennessee, and the popular health suffering and come see me.

We provide them and as we take on maintaining a healthy diet and improving their lives habit and.

And in time, we also introduced the weight loss.

And how's the payments put us to help I remember in the community became a healthy and I feel better about themselves to help of the sharing of some other service manager and he sent out as graduate the Kona about numerous and you see we provided instead of managers.

Professional training and training equally communication skills industry activity, the Florida regions.

Right.

But we cut it anymore and kind of distribution channels, including short form videos and lines during the session.

And the economy of the platform there.

And therefore, so this managers that are good at a lot of free cash generated more attention and the income still lot of dreaming about all the card as well and service managers quite good out of Sherry can earn commissions from promoting purchase transaction share xiaomi related and flights from England.

Well to the flu therefore going to do it on the tier hook judicial going into non towards the neuro.

Zero of minimum wage on soup and pet P. S. At her Italy of law passed sort of named him most channel Kabbalah of Leer.

How do the MAGE Aten and <unk>.

They're kind of shifts and of collaboration we actually channel the user traffic from third party platforms to our own platform. For example, our private label beauty brands, Pete and App developer.

The bulk of join the label product and of course, not even through our cooperation with Moschino and establish a county and luxury brand.

On the TD of touch or it's the butchered all yunji, so loyal and hot Shambo woman and comfortable on dollar are you on the shuttle South Beach and yet she is on Dorian Tobu debt. What are you go downtown and she also will chimney should you want and we also actively explored and on streaming channels for each day.

And we partner with and collaborating on this call with the Louisville home and she wouldn't bar for two lines from the shows on the on leading short form video and live streaming platform in China. Both shows generated total sales of 120 million RMB, given because I've always loved the neutropenia festival, so part of it.

The reason the top selling the library to equal to promote all the products and achieved 50 screens 19 million RMB sales.

Through a single lines and Michelle.

Well the only put that also leads and the judging Tal on the machine from us when they use the Torrance facility a couple of the future put on pay on Peanuts, which and you run out and buy module for the the neat.

P J and the time and as usual if I change up to keep on history on the call today on the assumptions. So you bought myself and the pin pad megabits of food and she's gotten good and seafood and tissue the pool.

If at all change out larger at the edge and the shopping mall.

And on a women and what it can take care of the handful of family well always paid great attention to the demands of the these type of costs and that group and of course.

Our platform capabilities to serve thousands of mothers based on their demand. We also developed high quality products that the whole family could of safely use and enjoy all the old platform goes mad at dinner.

The check the by of course, the effect of product, but also of counties of it our product now and the whole suddenly can enjoy at <unk>.

To me and element you know every day.

Sure.

And so on through the shop is the journey for Xiaomi and Wyoming the Telford on.

Something tells me that definitely shows how would you quote.

And in the coming year, and we will continue to do the right thing.

And I'm Sandy Riley of members come on.

And on the basketball as well.

With that if we I will now turn the call of the Vice President head of Finance Ms. Cheng Cheng, who will go through the details of our financial performance in the fourth quarter.

Sure.

Thank you Tanya and Hello, everyone before I go through our financial results. Please note that all numbers stated even if all of your remarks argue that maybe the tariffs and the all comparisons are year over year basis, unless otherwise noted.

During the fourth quarter, we continue to book because all of the improving our margins by launch more private label brand product and to utilize our unique membership based the community to the increased sales across the brand's social channel.

As a result, we continue to steadily improve our platforms and I. Appreciate you because you do any of this quarter. We've pulled the operating expense decreased by 44% and the loss from operations decreased by the folks at.

Now, let's take a closer look I call of financials.

Total revenue of getting the first quarter of 2020 were $1 3 billion compared to $2 4 billion in the same period of 2019 all of the gym before the fourth quarter of 2020 of was 11.7 billion compared to the 11 billion and the same period of 2019.

Revenue from net sales of merchandise in the fourth quarter of 2000, and plenty of one 2 billion compared to the $2 1 billion of U S and periods of 2019.

Revenue from our marketplace business and the fourth quarter of 2020 of 152 billion.

<unk> two of her goodness, the computer knife and the U S N.

And period of 2019.

The trends in our total revenue on the <unk>, along with our ongoing efforts to improve both all William to law of protein efficiency and the operating efficiency of our merchants as we continue to transfer of business activities to our marketplace and in this model, while expanding our use of coverage Julia and the retail department.

And with other platforms.

During the fourth quarter the year over year the crazy on our total revenue was mainly attributed to lower commission rate and the results of all of our efforts to protect the graph on memberships value sort of providing subsidies to pull back from certain large brands erith vastly increase the competition through the E Commerce shopping festival period.

Besides.

The we implemented on our own average.

The change of strategy or commission rates during the quarter was also affected by all of the increase the promotion for the new partnership on the platform outside of the live stream events.

And all of it.

James platform.

Revenue from our membership of programs and the fourth quarter of 2000 frontier with 40000 compared to what and again.

For the 6 million the same period of 2019.

Revenue from all of the membership of programs consisted entirely of deferred the revenue from prior of paying members and never.

The output of our decision to refine our membership of the euro amongst the top.

Gross margin and the fourth quarter of the Tucson, and pump it expanded to pumping of 6% compared to the folks at in the same period of 2019.

The increase was due to our decision and to introduce more private label product with the higher gross margin on our platform during the quarter as well as all of improve the product mix and the in house I appreciate the efficiency.

Now turning to our operating expenses overall total operating expenses and the first quarter of 2000, and Punty decreased by 44% Tuesday happy on a $6 million to $8 million from 600, I noticed the 2 million and the same period of 2019.

<unk> expenses in the fourth quarter of 2020 decreased by 52% to 92 million.

This decrease was mainly due to decrease the warehousing and the logistics expenses, resulting from lower merchandise sales and the improved logistics and efficiency.

The crews and so parts of the payment of the transaction fee due to the lower charter rates that the with cool.

Lower personal costs due to our head of cargo reduction and as we are.

The increase the share based compensation expense.

Which include the previously recognized the reversal of 6 million of the share based compensation expense.

Sales and the marketing expenses and the fourth quarter of 2000 and plenty of decreased by 45 to 160 of $7 million.

And this decrease was primarily driven by our reduction and you remember.

The Murphy and the result of our improve of the member of management.

And fee, partially offset by higher business promotion expenses as a result of all of it includes business development activities in the theory of the to attract more popular brands and the merchants to our marketplace business.

Has the knowledge and the content expenses in the fourth quarter of 2020 at the close by 41%.

And 244 minutes, mainly due to reduced the silver costs as always good or bad and contract term with all of a server provider as well as.

The increase the personnel costs are the way to refine our staff and structure.

General and the other administrative expenses and the first part of 2020 of decreased by 106% to see the formulas.

Mainly due to the ongoing and refinement of our stopping the structure.

As a result, we reduced our loss from operating and the fourth quarter of two tons of Atlantic by 54% to the time the two minute problem for the sale of event in the same period of 2019.

Net loss in the first quarter of 2020 of 177 billion compared to 5 million and the same period of 2019.

And adjusted net profit in the first quarter of plenty of talk it was 63 million compared to adjusted net income of 25 million and the same.

And Pierre though on him.

The 19th.

The year over year decrease was primarily attributed to other income tax expense of 44 million in the first quarter and Hitachi compared to our income tax benefit of bundling and the same period of pumps and 19.

It was also due to a net financial loss of seven related and the fourth quarter of plenty of times debt compared to the net financial income of so the name of late and this NPL at all of them.

On the 19th.

Basic and diluted net loss per share attributed to other Asia holders in the fourth quarter tonnage per day or both.

Both the I'll call them the old pool.

Now turning to our cash and the liquidity positions.

The other to satisfy the ongoing demand and all of our operations will continue to maintain.

He also the level of working capital as of December.

Pardon me of plenty, we had all up we have the total of $1 3 billion in cash and cash equivalents.

Two of the past and pardon me the last night.

Looking ahead.

We remain focused on growing our marketplace and the merchandise sales model and standing of our differentiated as the paycheck.

Well volume more partnerships and the health of our social community.

Such efforts will help to fortify our financial performance and I feel most of our total profitability and the field of sustained growth of our operations over the long term the.

This concludes our prepared remarks for today operator, we are now ready to take the question.

Yes.

Yes.

And secondly.

Ladies and gentlemen, and we will now begin the question and answer session.

You wish to ask the question. Please press star one on each of the from Q3.

The name to be loans.

Wish to cancel the request please for stronger Kashagan.

Please ask your question and Mandarin and first and repeat the question at the end of English once again, it's powerful and thereby once you asked the question. Thank you.

Okay.

Yeah.

Yeah.

And we have the first question from the line of Star.

So the first groups first Trust group. Please go ahead.

Thank you.

And then once.

So the first just the terrorists.

Chico and key chunk of enjoy yourself.

And so she and gave us.

Each of the PDR trying to change, though and ports.

Taking the call.

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Of course.

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On that.

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Sure Yeah.

And so not the you Jake.

And of course, you signed charters of the ECP and share and all of the so we want you to your question.

Net.

What's the geography of yourself.

Thank you for taking the Quad is the terrorists from first Trust group.

And on.

I have a few questions. My first question is is.

So we can see the increasing the proportion of religious marketplace business.

So what's the separate percentage of.

And if you match street and brands emerging brands on the private labels and how would you optimize the market of metrics.

My second question is.

Based on the transformation towards the market places of business what.

And what would be the company's target for the for the future.

My last question is we noticed the.

Transaction members continue to grow so would you please share some color on it.

Your.

The monetization plan. Thank you.

Uh huh.

Well the more channel.

To the top of and the assumption of a high for the two looking ahead of something.

You bet and the city of Schulman, the CEO can pack number one and then she longshoreman THL added to the yield of Twitter and coatings on the well Michelle to the to.

So the opium pad to the to the assumption to broaden and grow the top app and the dealerships or the the PV number so you thought hey come on.

And to do a chance on that should on the she said you've done the familiar fit on golf, no tell them and teach out with and on the timing of it all day.

Volume and Chew cafe here or material to the chunk on the assumption the most of the assumption the majority owner of a cohort of the gotcha. Okay.

And that of Chi So I'd say of Carnival of Mrs Shimon and tax but on the tissue on the the silk and by the courts and Joel will Miss you all got out of the PD one.

Lots of warm and the loonie.

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Asher Toyota.

The jungle of some here in Nevada, and the actual Assam.

And the cause of unusual woman, the silk and pay rate to the.

That's true without and the to the day when T.

No.

So and thank you for your questions and today and most of our products are free.

And I'll come in front of the mainstream brands and the only 10% are our private labels and and and.

And for them.

And we hope that as our business grows and and we hope that we could increase the percentage of the product of the mainstream brands to the 60% and then because we know that it is quite a bit.

Panther and photos mainstream brands to attract the traffic online and so later, we hope that those mainstream brands and on to provide our exclusive products and and they have on our cooperation trends and for those exclusive of transponders mainstream brands and the price has gone out to the.

Right of course, it's all kind of for all of the platform and also we will like to and.

And more interest to other members of our platform. So I'll just out of we're out working on the private labor hours and the mainstream products and and we hope that by Alright, I thought and.

And accessory yet we could increase the percentage of the mainstream brands and products to 60% and among the 60% kind of a standard will be the exclusive products and afford of private label products that went on sale accounted.

Accounted for what kind of percent of and other products.

The Stonewall your Eto and read the tick up all my other chunky.

English you all of them and when and then go to solve for the sevens either to the tune of on shelf synergy to the Philippines to the standard format nothing new on the lessor can now watch apps and the mobile social and go.

<unk> you can do you show the <unk>.

I'll focus on him and back to usual debt.

This is also see the consumption back home and share so each.

Of course, the fluids, the Hitachi downtime on the silver and the can down the hall.

And then and for your second question, we know that currently in China, We have the one country of 15, Lilly modest and we hope that.

We could have on our part of helped them and to improve a day on quality and hope that we could have half of one third of the smartest as our members and we.

We know that country for our platform and we hope that we can not only focused on dose and mainstream brands and also we could've of MAU to DAU is emerging.

Grants and the together with the the manufacturing all together and we couldn't serve more families and and bring better life photo of assembly.

Although the head of Copel lingo for the current job.

So the yoga continue the assumption for the cohort of the fruit yet and on time.

And then go Upa she thought of the assumption tax paid piece of energy.

On a function of the comex.

And so for those customers and we hope that we could bring to them. So of course, it's on to your products and and better service experience and and we hope that a day couldn't.

The sale contract and our platform what they are buying our product compared to other platforms.

So when we if I can and will monopoly and EMEA your free somebody of way more of the Chengdu punish him on to more Quinella, Steve Some sort of cabin me come as you ramp and woefully along the share on the attention the Jewish and nimble footed shy of negotiations of the switch out the way and then Gulf and day, if and to the chatting with the Red Sea.

D C and lay the Tioga yokel and because of the financial other Seeger William on the cogent selling and linear will Michelle lingo bundled how much debt.

The T. The G. R. J F <unk> Shaw, who goes on of the shipping late on him of Florida change other than me.

The lingo cohort up to me and you go you could ship on the Utah.

Many of the Iris Bureau of downtime on bundled payments and me made on each piece.

The symbion and patterns as you sit there and who can change it and make jumped out at the time and to.

To me T and calling you'd be symbiont, a passenger to sit there and two can tell you that she and called out of it is lack of bundled him on what does it.

And that you have on the Juliet downtime and NGO, who they are and T. Minnesota.

Of course, you know and when do you take quite a caf on the.

Each of the two the two.

The women and women.

On a woman does a share bald mountain.

And Tim will play of all come to the attitude of almost get a commentary tour of the Ping lay of the wholesale at home and Pet order do you see the.

The shots of the accounting that's the.

The loss and the Endo and were quite high sell it fashion and whats the Fujian the ICA.

And then go your profit so the can do it if the.

Tell me more and this evening, the change out and say well Michelle Woman-to-woman, the Turkey tempting.

Oh on the cyclicality of patient tissue mango pay on can do the transaction the.

Think of forging the hold on him and so far the.

Full time and definitely a lot of Thunder the sheer face.

And also we find that.

And logical and profane our customers and our members actually they have and a lot of the wishes for example of what they would like to change their destiny and increase their income and generate more of a social value for themselves and also share responsibility to go to a waste of their spouse.

For the surgical and profile cost and that we hope to activate code of provide and the profession and I've said it and are still provide and the platform. So as they could have be a professional or expert and there are differentiated and Iran and for example, and central.

Some of that or sales manager they couldn't have a better knowledge and cosmetic, albeit of a product and 90% of and the people around this person is on the two.

He he share of connectivity of professional and so the same is afford and professionals and and health care part.

So we're gonna waste could and in this way helped them to increase their income and and gave them. The internet of based the employment and also in the past several years and we thought we have of provided to <unk>.

A large number of FTE or products for those group of friends and sales managers and then we find out and they are they were busy promoting the product, but they cannot get too much income so in the last of two or three years.

We had to find out.

Only by providing the professional knowledge of for this group of funds the sales managers kind of day become the professionals in their differentiated and Iran, and and so we're gonna to provide them more Medicaid part outs and also provide and the professional training. So they could have become the Po.

Fashion on the service manager and their differential and day.

Eight of the area. So there are going to have more interaction with your fans and dealer sales and increase their sales and income.

In the U S. Thank you for your questions.

Thank you. Thank you.

Once again, if you wish to ask questions the.

Mr. Scott why don't you tell us when the <unk> pet grade feed name to be announced.

You wish to cancel the of breakfast respond perhaps.

Please ask your question and Mandarin.

And repeat the question of English again, thank you.

Once again, if you wish to ask the question. Please press star one on the telephone keypad and wait for the name to.

We announced.

Asked the question of Mandarin and tourists and repeat.

The question that Jim and English. Thank you.

Yeah.

Is there no further questions I would like to hand, the call back to the presenters for any closing remarks. Thank you.

Thank you for joining us today, please do not hesitate to contact us. If you have any further questions and we look forward to talking to you next quarter. Thanks.

Thank you, ladies and gentlemen that does conclude the conference for today. Thank you for participating and you build it.

Connect and.

Thank you.

[music].

Okay.