Q3 2021 Yunji Inc Earnings Call
Good morning, and good evening, ladies and gentlemen.
Thank you and welcome to <unk> third quarter 2021 earnings conference call with US today are Mr. Shang Neal Shah Chairman and Chief Executive Officer, Mr. Cheng Cheng.
Rice President of finance, and that's K, Liu Investor Relations director of the company.
Now I would like to hand, the conference over to your first speaker today, It's great you I Rd of Yunji.
Please go ahead ma'am.
Hello, everyone. We are controlling Socotra truth I can tell you our earnings call before we start our piece now that is call it.
Forward looking statements within the meaning of private Security Litigation Act up 1995 that are based on our current expression and current market operating conditions and relate to events that involve known and unknown risks uncertainties and other factors.
Industry.
These forward looking statements can be identified by terminology, such as well expect anticipate continue or other similar expressions, but detailed discussion of these recent uncertainties piece you refer to our latest documents filed with U S. S E T and forward looking statements that we make on this call are based on assumptions as of <unk>.
A day and that person he qualified in their entirety by cautionary statements risk factors and details of the company filing with SEC.
<unk> does not undertake any obligation to update these statements expect as required under applicable law.
Is that I will now turn over to Sean Healey, Chairman and CEO of <unk>.
Oh.
Uh huh.
Oh wait and let al <unk> al you.
He says you told us how about you halfway.
Hello, everyone and welcome to <unk> third quarter, 2021 earnings call.
Ginny argued though.
All women, who get into job yeah, we if we achieve above a god given should this suggests woman she's calculus is adhesion barrier quite easy Georgia.
Are you getting to the table than consensus when would he says you Saturday so much bought year to date in 2000 with all made Deutsche Bahn base. How many should may will should tankage doable, you'll show that on a shout out hopefully in the two newest hotel.
Saatchi <unk> saatchi's, unless you don't buy lunch impact dumping.
Dante good cushion is so hip atlantean peso.
You also utilize the woman that European pack EG.
I do.
During the second quarter of D C and we successfully launched our holiday if you read or heard down selection gene 99 special sales portal E. G 99 portal, enabling us to improve the focus of our studies and help our members to save time when selecting.
Mac heater product fully over one quarter's efforts promoting lean gene 1999, and we haven't seen a steady improvement in sales per display. In addition, our live streaming business stealing chief platform or on third party live streaming platforms is gradually getting on track we now.
More than 100 light programs focus on food beauty and cosmetics.
And the other topics every week is actually driving sales in our members' time spent on our platform. During these years double 11 shopping festival thinking 99, curated mini Mac heater, France and Italy.
Nationally is that many of these brands and products come from ourselves and the co development.
So I enjoyed your tele sell women's it sounds like you didn't assume that don't tell them they shouldn't be competing Nissan.
Well Miss you want to put your hood of Telnet, Jimmy Choo woman that Yahoo seems that telling me he should be any change on what.
He knew what to Polish your door. Good did a long time to the entire D pen.
<unk> tell us don't you that TBM issue Chichi Mesa Torchy TNT chain in the U T near about changes to your sofa Don will continue.
Job may should already be.
Well Miss you wanted to know who yet.
So the big change on this shift towards it sits with genco chisel mainly owner.
I Wonder I read in June 1990 strategy staring in the face of our development.
Just on the food category, we hope that.
Oh usage will become aware that she's platform. They are able to try to do some Oliver China do in D. C and I visited agricultural products places of our region across the country. They stay the same as local cruising started pulling every innovation and have gained a greater understanding of the most.
Cutting edge nutrition as function and preservation techniques.
This experience is how made me even more determined that a food will be lean G. Tough category. Our dream is sort of a mandate to be able to eat delicious food is on all over the world without leaving home as in time eat healthily to become more beautiful.
Mr. <unk> will then leave about chip portion that Julie.
As it relates to European by the Susan G nearby.
Uh Huh equals 11, Kim told you can stop at BBB tissue changes European passionately in tissue of origin tender.
But turning to your new seat. So I told me Jacob Ginger and do you feel about.
March into the future no matter what material Youll with few choices on th.
Th locking door, Jim how many ships you need the European back. So you can better turnkey rupiah said negotiated Joe told you got your son, Joe Giuffre tough football timeshare.
So I was joking about that.
Housekeeping deal at a time.
Okay.
Total north Huntingdon, Yoshi Java cohort of people pretty well Gerhard Italian Jacqueline.
Also as usual to meet you Paul Cheng Hershey Golden Jay how should hit all of them are near to the dental tools with anybody here to look at out there.
Ian This is Jenny.
Yes.
What you've got.
Let me.
The photos on the food category, we have a room pleasing passing some of them not only each brands, including Jim on my shelf in August of D. C and things you're teamed up with in China Asia listed in milk powder is Super brand.
To launch a new private label Skus how.
And so I'm just a musician holidays school children, focusing on doing nourishment and house of the children over 60 years old and catering to the requirements of the parents. Furthermore, based on consumer demand and market research. We have launched a more healthy food have hurt us probably the labor pool.
So she has some variations wolfberry poorly and then peer pays to have approved to be met heats. Once they reach the shelves over one 1 billion sales, we have been slowly and developing these products with batteries formulas more advanced material processing techniques and in nutrition.
Preservation, Tony we successfully transformed the agricultural raw materials into me.
Healthy food products that are easier to process and a more convenient to eat how old are you Barton brand opinion leaders really sausages ham being widely acclaimed and repurchased if I remember it since their launch at the beginning of EPS.
Well not all of them and appointed to the consent.
Hum.
You can call me as well.
Joan Keith Jensen zero competitive juices.
Yeah.
We all measure Genco, who makes all of the therapy.
Uh Huh Jackie.
Baidu Yahoo boiler for the future.
Healthy food is not the only way to let our members eating more healthy we continue to adhere to establishing our private label brand metrics and continue to focus on three high degree food.
And of course well.
Well also meeting deep household really needs often is it.
We did see European Union meet who aren't anybody it's hardly like is this the news who can tell you that Yahoo.
And the Genco, but as soon as you get help people tell you too that you said you had them Bezeq guangxu shelf is that the whole team.
Neogen comes in by the Doctor and how both content and courseware using cafes with diverse typing.
I mean, you'll have found great pieces of tissue Cushing <unk> hotel at good how the Colgate can go to yes, good chicken the people.
Since the establishment Hudson, our private label, you'll need really in 2018.
We have been committed to carrying for the health of our members in a more professional manner continuously upgrading productive formulas.
I wouldn't really long shows probiotics and protein powders have been well received by consumers. We have already developed a seventh generation often our private labels menhaden foods and candy. He says second generation product is based on user feedback and leveraging technological.
<unk> to deliver a better taste the wisdom better for them in the design at a more advanced product formula.
Well many times Kimpton pass through yet.
Imagine I shouldn't see mobile conversion shop cabbage industry won't cause the judges.
Jay It's handy ships go harder for them and if we get no cause I think.
Anything that you can parse out so we will continue to carefully.
Oh, well, yeah about two upgraded oven ever.
Solar life, so as to enrich its run image. We're also planning to launch a new professional product line wisdom, hi alone on in the Formula as such we will provide a better services and products to our members, allowing members to enjoy more refined he isn't carrying services.
Safer and more secure environment.
Although that may soon into the shoes that said too that you show.
So I think that's a jumbled at the level you can talk with homelessness.
It's European Pet you may ship.
Thank you Michelle.
When we're thinking about how you how convenient Italian billions yet.
Thank you Ms. Natasha Lee go through Tivo.
One could argue that.
Turning to our efforts to cultivate using my sat tells US foods scattering Aileen Chi we are leveraging the short video and then last for me ecommerce phenomenon by promoting our private labels in different forms and with unique content on both our LNG platform and third party like streaming platforms.
G food and third party live streaming platform generated traffic are interconnected through our problem.
Slavery, and a differentiated supply chain strategy, enabling us to generate huge profit well simultaneously promoting lean Chi Fu content.
Possibly win at home in the Fujian Lingo.
Are you still can buy some P codelco within the suite. So it's all gone hopefully woman that Chinese hauling Julie.
T J.
So you have patients up say to.
Women Palmaceous involved what he said about one single into the patient who somehow diminishes IP you intended to suit her CT follow up it's a huge issue.
This is usually she wanted to also.
And then go cohort publicly yet short term issue.
It pay off we are.
Well it seems that the Jim Collins his opinion shop, well Merchandised Ginnie didn't call me else's hands on TC cover sizing choosing the yeah. So that could change your ginger and do them in a food you couldn't get it done yet.
Finally in order for our service managers to generate more stable income and to create common prosperity by promoting our label private label credits, we have been refining our operations in specialized retail resistance with a particular focus on specialized training in order to further.
Our food category, we have a trainer food intelligence I think that our food intelligent offices honestly.
We're training courses, such as creating balanced meals knowledge of the place of a region with evercore to protest and cooking methodology before being officially on boarded brightness.
These training can how are sales managers.
To include they were eating habit. He will also leverage their knowledge to help our members to enjoy food and quite a bit of a mendes mindset to lead healthier lives.
In addition on the house vertical category, we're establishing and dietitian development in Houston, and a 383 to sunstone dietitian courses to help all of a sudden mismanage it become more professional.
Well it doesn't change it doesn't weigh on the tie up with those had something she says to me that Gafisa tab. This call with that I will turn the call over to Mr. Cheng Zhejiang our vice.
Vice President finance to go through the financial results.
[noise]. Thank you Sammy.
Hello, everyone before I go through our financial results. Please note that all numbers basically the following remarks.
Beautiful.
All comparisons and the percentage change.
On a year over year basis.
Unless otherwise noted.
Starting this year, we are committed to enhancing our supply chain differentiation strategy.
Upgrading our product selection with our.
My kids product curation strategy.
We're finding our membership imagine this is true.
More specifically, we launched a series of private label products with our depreciated.
Sure.
Our branded products hazardous you've got great.
Great reception from the market reflected by our high repeat repurchase rate, which reached 80.6% you. The 12 months ended September 30, 2021.
In addition, we will continue to further improve our efficiency at the link employee structure.
He also spent about long term growth.
After several quarters overall adjustments or refine the operations has resulted I used to go maybe COVID-19 you've proven in profitability. Despite some fluctuations in our quarterly sales.
During this quarter, we recorded operating income of 18 million compared with operating loss of 20, a formula a year ago.
In addition, we are delighted to see that our strategy of.
Cultivating ourself.
Developed brands has achieved a certain level of progress as evidenced by the addition strategic investors.
As a result, we recognized the 110 million.
Operating income from the investment so far.
It's growing very brand completed during this quarter.
Net income in the third quarter was 61 million compared with a net loss of 44 million a year ago.
Now, let's take a closer look at our financials.
Total revenue more 438 million compared to 1060 7 million yokel.
Revenues from so much size was $366 million in revenue from our marketplace business was $65 million.
We further.
<unk> optimized our philosophy of suppliers and the merchants in accordance with our renewed a long term growth strategy, which caused a near term revenue decrease you both though.
Both of our marketplace business and the merchandise sales during this quarter.
Nevertheless, our gross margin and operating efficiencies at both improved substantially.
Demonstrating the success.
This strategic shift.
Importantly, we're not.
Yeah, the asking maybe you're going to increase in gross margin to 43 percentage compared to a certain percentage of your uncle during this quarter, we improved our operational efficiency by carefully selecting suppliers and products and focusing on all the depreciated of Patriot and the <unk>.
<unk> product offerings.
Julien our private labels and exclusive products.
A combination of all these efforts produced the corresponding gross margin improvement.
Turning to our operating expenses fulfillment expenses were 41 billion or nine 3% of total revenue compared to 19 1 million or eight 5% of total revenue.
<unk>.
This was mainly attributed to reduced warehousing at the largest experience.
Argue from lower merchandise sales reduced personnel cost due to staff restarts restructure refinement and the feel of a service fee charged by third party payment settlement platforms.
Sales and marketing expenses or six timberland compare.
There are two 169 billion a year ago.
The percentage of total revenues sales and marketing expense were reduced.
13, 7% from 14, 9% in the same period last year.
The decline was due to the improvements we made it you know all of them for Medicare.
The efficiency.
It should lead to a decrease in business promotion expense in.
The amendment fees.
His knowledge and the content experience.
9 million or six 5% of total revenues compared to 42 million or four.
Percentage of total revenues a year ago.
The decrease was mainly due to the improvement we made it.
Our fee structure that led to a decrease.
Crazy in personnel cost as well as the crazy so their costs.
General and administrative expenses.
With two 5 million or 14 point to 8% of total revenues compared to 52 million or four 9% of total revenues a year ago.
The increase was mainly due to an increase in share based compensation expenses.
Total operating expenses in the third quarter to 194 million as a result, we recorded income from operating over $18 million as compared to a loss of 24 million a year ago.
The adjusted income from operations was <unk> three.
3 million compared to an adjusted loss from operation of <unk>.
17 million a year ago.
Net income was $61 million compared with a net loss of 44 million a year ago.
Adjusted net income was $70 6 million compared with <unk>.
And it will also <unk> 6 million a year ago.
Basic and diluted net income per share attributable to ordinary shares will both.
0.03, compared with basic and diluted net loss.
Loss per share attributable to.
Ordinary shareholders of <unk> Sim.
I did I did.
Moving on to liquidity.
As of September 30th tribute onto what we have.
The total of 1 billion in cash and cash fluids re studio cash and short term investments.
Our balance sheet.
Oh accounts payable reduced to 298 million as of September 30, 'twenty or 'twenty, one comparable with.
500, and the <unk>.
<unk> million as of December 31st Tokyo 20.
Our liquid assets was sufficient enough to cover our payable obligations and we do not hold any long term bank loans.
At all.
Sheets.
Going forward, we will.
Continue to execute our market for that two region strategy, expanding our range of private label product.
So operating efficiency and leverage our differentiated as a play chip to continue driving our long term growth and profitability.
We remain confident that our strategic direction and operational.
<unk> will continue to deliver sustainable and the healthy growth for our shareholders in the long term.
This concludes our prepared remarks for today.
Peter we are now ready to take questions.
Sure.
Thank you.
Ladies and gentlemen to ask a question you will need to press star one on your telephone give a dry a question. Please press the pound the hash key.
Please stand by while we compile the Q&A in Austin and asking the question. Please state your question in Chinese first and repeat your question in English for the convenience of everyone on the call.
Once again to ask a question at Star one on your telephone.
The first question comes from the line of Ethan.
For stress Cook. Please go ahead.
Oh, Hi, good evening and thanks for taking my question.
She said when anytime you want.
What don't you don't seem to always juggling, some with a C O P HIFU.
You did say you didn't do.
So that's how you performed there you'll need your GT the choices, we like the sound of malware or something else.
Hmm.
Well, how can we the Oakland subsided towards the phone manual sorts Anshul and then hopefully plenty of times that women are totally colors on that.
Yes.
But let me tell quick translation could you give us more details about our private label product incubation.
Incubation and featured actions to differentiate them from our from other.
Other competitor I've also noticed is that the company has made some achievements in investments.
Share more colors about the companys investment strategy and expectations.
Thanks.
Uh huh.
Uh huh.
D Vanessa.
Well Ms Sheila onshore.
When would you tell us the loonie lingo that sit on the shelf as a human was won't lingo Ginnie.
Now of course uses Union Oh.
A woman can a woman who's out well then to get the NDA. This country meet see bunzl for some change yet sure do better you could tell me how the code on the Trulia, yes, the woman that you're chasing the phone shop, the more fashion the tissue rueful attack.
So you got 10 identified in Chile that is a leader in the NGO Qdoba deemed a father.
On a pillow horses shelf is identical at home.
Well then it's in Goodyear and Jonathan Good has a good day to do the you did announce yet almost fashion.
May shoot so cool cool hat.
You may be tell me it useful to shop as a lessor co membership.
<unk>.
Diesel champion hedges Emil Henry with Janney.
With me are kind of all women Tech foods onto diner usage, just to cope with the shortfall you know it will move fast yet.
Two slipping depth and pallet.
Colby.
You can buy it at the moment, we're in a more sure but since.
Your T cell office on border.
We are pretty much the same.
So even though EMEA foods, how Sheila if I'm in the go sit on the shelf at the low G&A Commendation.
<unk> never had upon our EMEA to warm the queer eye woman day here.
Yes.
What are your thought that this year may should pin pad and then go to them and put them in a full sell and go to Yankee candle.
So it just made sure Julie.
Julie to India, the deep challenges shallow assortment of ginger and send it to go you can see it and saw the toga.
So thank you for your question and the way home.
We could make more of that has to come out today, ranging mindset to D C and a cross connect during the past several years, we have keep the contact and a close collaboration with our suppliers. So we help them to make profit in their cooperation with us and these are going on.
The hour in Asciano communication strategy, and we will speak to this strategy in the future and it also we haven't noticed that in search on.
Series competing e-commerce industry, if youre going to keep a stable development you have to have.
Nation, we sent the customers and we have done with the survey for the T. One e-commerce platforms, where you find that currently no first Detroit food advocacy platform for our customers. So we hope that the way you could make more effort in this area. So one.
Customers will wait to buy the food at adequacy, they will choose <unk> as their first choice platform and also we have find out and about.
About the delicacy then.
I'm going to ask the mouse is more important than the brands there yourself and also here in Asia, we have a large number of the mandate. So we're gonna to promote our platform and our food to our customers.
So for <unk>, we would like to try hard to be deferred Detroit 40 Cosmos. It. If we were gonna see variety delicious food and also we are gonna to cooperate more with our sharing Monday entities.
Providers don't ask you to make more.
And promote modulation food brands through our cooperation and in R&D to our users. So that is in a way that's a priority we're going to make it an LNG the mm sizes of choice for our prognosis for the selection of these.
Delicious food and also the food is going to be around the category.
The total amount of shipping many women yoyo Colby Scott you pin pad.
Uh Huh Indiantown, there youll see that definitely India sounds at Galena.
You mean, what meal Dunion fusan does it depend on tissue her patient tissue that yes or no.
Fourth on the common shall be bidding you then go to her harder to do that for us.
Some be chunky.
To switch all may jumped in late fees I'll show you that the Chinese have Florida, So yeah arpin bought him healing.
Yes sure.
Then the Chinese have four that are well known so good that you can imagine.
Tourists each artist.
<unk> made sure Julian with Macy's.
She's doing a woman's European back half how they got so there's a lot of your phone shop that Houston, one more way to do something Jeff Ruda tooling. It usually means also Jan Hendrik will mirror each other one zero compared with GSO.
A woman the convenience so its about a fifth on the co founder C D.
See what Melissa can pay women then go towards us.
Somebody has liquidity Schinder no it does.
So this is Ted.
So it says that she made to the <unk>.
The minute they don't shop.
One daughter charging pin pad turns out to that number with me has shrunk lingo, you'll see we didn't see it taught him him by central corridor.
<unk>.
Well call them and she doesn't have her door o'meara schmo, usually when they can go.
<unk> saw him him back then you can see here telling them you can pay you couldn't town shoe that tell you that GSO as well.
So in addition to these should give them.
And then also in the food category, we know about the word of mouth is more important than the brand itself.
And to that to work on as you know that we have a quite a mature cultivation and training session for the cosmetics and then supplement.
Especially in those two areas, we needed the service and professional service 40 use it and doesn't so in lean. She said private label development, we are going to have a one class to strategy.
This one is in the food can.
To be the priority for our private label development 42 that is in the cosmetics and in addition to the supplement we're gonna to promote the product classes that a strategy photos to night race and we know currently in Vinci our supply chain.
It's quite open so probably we have a linear development offer do you private label and also we haven't noticed that their emerge many emerging brands supported by the new media development. So we not only want to cooperate with et cetera emerging brands, but also we'd like to invest in it.
You don't want to have any long term development.
<unk> will have the one yes as you can tell us again, well known Covid agenda, we Indians on neupogen pencil well known jewelry, Bob May issue. So the woman does cause indulge him the merchandise to the peso the curtains, all or mostly Churchill fueled by the GSM will matsuoka matches the function on the solar.
Secondly, Moshe measure may draw.
King.
She is getting into it.
And in conclusion in a NASA five or more years without going on too.
Like more contribution for the development of the membership base the social E. Commerce platform and also we are gonna to focus on three areas for the government private labels that food cosmetics and that's definitely min. Thank you for your question.
Yeah.
Maybe I mean, just going to say.
Thank you.
Ladies and gentlemen to ask a question press star one on your telephone and key.
As there are no further questions at this time.
I would now like to transfer the call back to management for any closing remarks. Please go ahead. Thank you.
Thank you for joining us today decent not hesitate to contact us if you have any further questions and we looking forward to talking with you next quarter.
Thank you.
The conference for today. Thank you for your participation you may all disconnect. Your lines now thank you.
Yeah.
Okay.
[music].