Q4 2021 Viomi Technology Co Ltd Earnings Call
Hello, Ladies and gentlemen, thank you for standing by for the <unk> Technology Company Limited earnings conference call for the fourth quarter and full year 'twenty 'twenty. One at this time all participants are in listen only mode. Today's conference call is being recorded.
We will now turn the call over to your host Ms. Cecilia Li the IR director of the company. Please go ahead Cecilia.
Thank you operator.
And it won't come to Bombay technology call I mean earnings conference call for the fourth quarter and full year 'twenty 'twenty. One as a reminder, this conference is being recorded to carry financial and operating results were issue in your passport as earlier today in a healthy online you can download the earnings press release and sign up so they can be seen mail distribution list by visiting the IR.
Friction at the company's website at IR <unk> com participating in today's call are mystery shopping chance the founder chairman of the board of Directors and Chief Executive Officer and Mr. Wei <unk>.
The head of our Finance Department, the company's management will begin with prepared remarks, and no call will conclude with a Q&A session.
Before we continue please note today's discussion will contain forward looking statements made Andrew the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involve inherent risks and uncertainties as such the company's actual results may be materially different from the views.
Expressed today further information regarding these and other risks and uncertainties is included in the annual report on form 20-F, and other filings as filed with the U S. S E C to.
The company doesn't assume any obligation to update any forward looking statements, except as required by law.
Please also note, but I'll Miss earnings.
Press release and this conference call include discussions of the audited GAAP financial information as well as Oh, they didn't don't GAAP financial measures.
This press release contains a reconciliation at the end.
non-GAAP measures to the most directly comparable GAAP measure.
I will now turn the call of Burger to our founder and CEO . Mr. Xiaoping Chen Mr. Chen will deliver his remarks in Chinese followed immediately by English translation Mr. Joseph.
Oh.
Oh man.
And he said you too.
Yeah, well, we distribute or Shanghai children's who was the son.
Because I know if I need it maybe tell bornemann agenda.
I'm not saying it won't be.
Salaries will dress shirt and chunky Luciano that you see because it is how do you get a you toppled with Danielle I'm sure Monday hunting Jacobs that's for sure.
Aluminum <unk> already hurting your distributable cash at Philadelphia tissue that can be teach them say Arnie our union.
Hello, actually I would've thought you would've maldini camino ones that haven't been eating petty UGG and children that don't confuse them.
So do you think you, though UE embolic, which I'll put you on the topic, which I know Santana Cleveland say women should equal your ankle just haven't been harping on corner. Joe. He says you don't quit polygamy, well then Kendall I'm here to tell him be glad you did your outreach pool would say three children with GWG hope would that go into the future you do children, who.
Shall we didnt leave any initial will furnish the guide does that Joshua Joshua Young you didn't go up.
Hey, Andrew Anish will just actually tortured onto obviously on the grid mod that should've caught up already.
In the Army Army Etonian.
That along with Jim Barber, either hung agreement.
Our R&M, Andy Jones, how hard you can't eat it hung up anymore.
I see.
It didn't go down Schnuelle Global Monday actually you can follow up why don't you talk quite potash foods, they're talking Chico judo piece, because that's what all you can do going forward with regarding chunk when it comes to the Belden sure. They already are and indeed, although with Keybanc, Jason already jammed go down to only one data showed the jargon Goldman P. C I'm a challenge along.
She called Sheldon entry, Michelle financing, where gender quota I'm, sorry, Unfortunately, and you're actually getting that job in pushing out what do you want to talk to you this year.
I'll teach our children Jackie good is that.
So what I'm trying to teach them.
That kind of off <unk> told US you don't doesn't she mentioned at all by that.
So he has all Xiaomi father I'll keep you don't guide to that she is well then Tom Arlington, Yeah, Hi, Chip would you eat actually that you own. It you don't get your fine changed with a phone call with Janssen channel would that have any jet well Jan he treated with all AI actually I won't you don't see Anna Shenandoah being just wanted to get Oh, I'm, sorry, I didn't hear the tundra excuse me, probably Josh Babula changing you said that you thought you'd actually see I won't you don't do it.
Yeah Fine you don't tell.
Oh, My Gosh, Jamaica chocolate.
E G I L T. The jockey, but doesn't give you John how bout with angle sensor and Debbie I'll chime in.
But you don't judge it can definitely come in general.
That would be all challenged you don't you have to find a home that really stood out.
Vocal who've gone to work, who don't you know who Yangon jugal Joe Moore.
Well I mean, that's actually an attempted mediation shan.
Shannon will show base. So don't go up when things actually end up on LIBOR laid off most of them are biopsy clean pretty dilutive.
Net debt as long as I don't know.
Now I'll review some of the issues, you're trying to actually come down a little boy, who know pretty easily July when we use that one then can you tell me a nice just yet.
There'll be agenda. She was concluded she mentioned.
So don't know Tinder suggests there will be that we don't you know for me as I do that I'm going to enjoy going on because I know for sure, but again doing jobs didn't even sooner.
I mean, you're right. It's just that the element, where you're putting considerable bohol sandwiches on that bond strategy, okay shouldn't be possibly NTT east them to you.
Well, then shouldn't we talking or chatting with them without having watched how would you want to pay the fine needle with that why don't you kind of a pattern.
Studying boutique will not load up all on that Sundar tells you that you don't have I don't wish it didn't really thought income Michelle Jones General calls all day people not ours, Joanna, especially you know how to say don't want a house you bought E. G E.
He answered the issue into the science around China.
So that's what I'm gonna toss your bonds because that we don't go down the hill, who thought though homebuilding Giovanni I actually don't have the mill Creek handle with the lead triangle.
So we will see how long she's on the outreach. This year well then let me see if absolutely actually Halloween was 18, two walk right. Yeah, Yeah, Yeah L T J G Shinji and coming on lithium.
She's got a publicly known well known popular chicken wages and watch them do think Aldo you see did a governor on how many total.
When the Donkey I Couldnt help editing modality, because you're shipping bulk water pool or do you want to judge you end up Chinese Chinese people know, who they are cool Sunday Higa, Ed I'm not sure that Germany's yeah, Collyn, Sean Bichon boss EG.
We keep all of it you don't stand up.
That doesn't change LNG <unk>, if he she didn't actually don't judge.
New zinc coated at being about home competitive block Hydro Sunday, then yesterday Goldman Sachs Cushing Cushing syndrome, MISO cyber Archie Dunham well my popular code on something bad cooking. She tried I thought one of them being vocal at Ingalls right now William.
Yeah, something Michelle do you guys see that AI, she won't put him. He EG team Galliani I'm not really a porsche their AI suncal, usually don't know do you already have well I'm not sure I'm pretty sure unless you're a woman that she shops, you don't bother them. So Unfortunately, we actually gave me Matt well Leticia tracing back on Sunday Night should all told you now I'm, having somebody who might be in digital.
Andy and Terry to agenda, he or she have you seen as you and I am sure. We can afford them tens I could you talk how does she met anyway, so you're going to launch on the cauldron channel once you launch into yet.
Well it means that tissue washout and Susan later, when she talked about how many vehicles being strange I'm comparing Joe Almeida Shine because you don't really know we sound like your opinion on the women changed your thought about them well then that opinion. So we cannot comment upon things that pingo dwarfs. The Wyndham since she'd I'll talk about later when you shop for social well, then switching kashi, you're watching shoulder to shoulder to shoulder and Jackson got uncovered a lot of it had been.
I'll kill it she bought other needle shy about could you talk about I shouldn't you got to connect with all opinion, formerly syngas and border, which all but she also I'm, particularly quickly a woman.
Sundar you talked to in a coupon some of that you've got a two block you pill, but could you talk how does he have cooking.
Honda DMT DMT may chip, maybe I won't call Soundwalk, Shanghai, Ghansham chip and pin pad I shouldn't go to adopt torture it all the way there.
Tell them when the time be stunned NUCYNTA could you talk about if he mentioned Telemundo Shelby doesn't mean to bore select one day I rush it out, but you don't find that Oh man installation letting that well then I'm sorry. If you said you do report on Bulldog, all he's already but I'm glad that I stopped well, let me as a quota flashing if that's really easy so honestly I'm not sure that you don't have.
Could you address what did your daddy or money they owe dogwood and studied our talking about his hometown Christian do you want me to say that I'm seeing.
Yeah, well, yeah of course with our product towards the channel, maybe I shouldn't say, India, well mean that he thought he like how much in G&A Eugenius I have been kind of Shan Shan Shan couldn't go to old OEM I shouldn't say Indians that Xiaomi finance you don't mean.
That should all Eugene you've done really well then suddenly Saddam she told since that's on the border down women of Sudan, Fuji, She endured and Daiichi sankyo and aren't you that kind of how that should unfold on industrial in Michigan countries. Another truly valuable to oncor to that my company saw my junior bonds, well then I just wanted to children Jaguar I want you to assume more shoes, but we don't know why I'm Shannon vulnerable you mean.
Actually I would say Don did you find the country not only hofuf Keystone could you talk about the color on what I've seen but I didn't want to do you got us well when John talked about that yeah, Ryan, Yes, sorry, pardon me <unk> G U haul them in Etame, Jim did I ask you how would you quantify that.
Oh.
Thank you Mr. Kim Clay can you translate our fondest remarks before discussing our financial performance.
And full year, 2020 one.
Hello, everyone and thank you for joining our fourth quarter and full year of 2020 One earnings conference call.
Our fourth quarter net revenues reached approximately $1 33 billion RMB, beating our previous guidance as we discussed earlier our year over year.
The decline was mainly due to the significant <expletive> Tracy in the south of Xiaomi branded sweeper robots, thanks to our ongoing product quality and definitely we achieved a gross margin of 25, 6% for the fourth quarter maintaining consecutive year over year growth since the fourth quarter of 2020 and it once again demonstrating.
The strength of our product lineup going brand recognition as well as the improvement that's our operating hot heat.
We incurred in the third quarter out 2021 well it means substantial investments in R&D and marketing budget resumed profitability during the fourth quarter as a result of stringent cost control measures.
The smart home industry, if the Belgian rapidly accelerated by the industry's aldborough transformation increasingly mature and Iot technology popularization of five G. National policies part is small at lifestyle changes if the pills knottiest generation to make smart home consumer go according to statistics from Yadkin.
See I consulting China's smartphone market has been continuously expanding doubling in size between 2016 in 2021 to reach 500, even a T. Feeling oriented it is expected to exceed 650 billion RMB by the end of 2020 two.
Not the April 16 government agencies, including the Ministry of industry and information technology jointly issued guiding our opinions on accelerating the development of digital homes, and improving living Coty, which requires a salary company to set out paid at your home related policies and standards to be established by the end of 'twenty two.
Once you as well as it did at home can you assist him to be in place by the end of 2020 . Five we also see that consumers who use. This is my home front desk are transforming from a small group of people to the mass market.
Well my good half year and her practice from various sectors. It's actually I tell my communication Internet intrigued Iot smart home and trading quick succession targeting industry segments, such as hardware put dogs, Iot Tibet and platforms and operating systems as one of the first enterprises do you focused on.
It is my home area, we have been offering washed out by O T home solutions. Since 2017, we have rapidly and waste out were washed out biotech part of life and then now developing a premium customized helmet.
And to bring Iot My home solutions to next level.
First I'd like to discuss our most our latest product innovations as well as our copyrighted washed out of Iot home solutions why.
Why aren't you called two and 40 for which we unveiled at our strategy can you put a lunch inbound at Mt. 144 leverage is three components to synergistic of light provides users with a seamless customer customize both smart home experience.
They are all in one but it was down for a lot of comprehensive product quality and smart home of Palestinians and home devices that Charles Haulm scenarios.
The first of fall they presented the four majors my home kind of betas and the whole map, including automatic now working active taligent spatial awareness and natural infection.
We have already achieved the one click home home device and you are working with our smart home screen devices to support home. That's C. I S. Spatial awareness kept entities like developing outback, our self developed millimeter wave radar module, how fast can sense uses presents and it moves mountains check trajectory without.
Zero contact providing battery user privacy protection compared to with the liberal sensitive.
Going forward what is the integrity of the axiom two hour predicts a.
Some channels such as automatic five control sleeping monitoring the safety monitoring to truly achieve back teeth device taligent.
We are also each riding our production voice interaction function to enable naturally interactions between users and devices.
And that can afford a reappraise downfall additional services, we offer to our users, including the smart home solution design O T. A I agree a membership system and value added services.
We have I'll say and waste our bond is smart home solution offerings with packages designed so darius types of households, including our 60000 to 80000 R&D Super packages for large apartments, which are a woman or M. D. I was 200000 RMB spaced packages for penthouses.
And our 300000 RMB rally a serious so houses valeant over 100 million RMB, which they embrace a premium customized AI experience toward high end market.
And like others, My Iot home comedies, which specialized in type bonus or operating systems, we use our smart home products as a carrier to bring our users and have a great day, how home Iot experience.
Well as optimized the product functionality through software and AI application.
That's the marching band.
Introduced the Crs and Pi in production without incurring tooling noted the bulk of your technology and your scoring our champion technology branding positioning. This new products include our all basically I air Conditioner space Pro which utilizes active montney too heavily in move formaldehyde.
Our AI business refrigerator it quite the way three D. Some auto sensors sensors super to our 2000 gallon large blocks water purifier, which uses ultra micro bubbles to removed agricultural rescue and.
I didn't hear theorists smart home devices, such as a home had an.
Well, our AI, scoring best control interesting sidebar to teach our smart lock with three D. A facial recognition at a major fashion.
We also launched several new product.
Premier brand cooking.
Including the rally of pro Crs Cabo, scoring refrigerated priced at 50000 RMB derailleur.
You'll see ourselves eight days very intact team smog screens pressed at 40000 oriented.
And it really youll see ourselves AI clean to a washing machine is priced at 20000 RMB.
I'd like to share with you our progress in developing our off like counting all the other step here.
That's a few months, we have continued to affect our larger store better merchant channel strategy. The at any addition, no immersive up lifestyle income passing over 200 or 300 square meters in tier one tier two and new tier one cities, yeah, hows that were tending technology branding positioning as well as provide out cast.
With the more comprehensive and premium smart home experience.
Third we optimized our product product profile, you on new content channels and continue to improve our brand marketing during the quarter.
It's weighted to third quarter earnings conference call.
The weekday establishment of a dedicated content marketing and sales team flower new channels, such as Pandora and dealt with them last year, we have continually refined our product categories. These channels by adding higher gross margin product.
Mid and high end position codecs.
Yeah. Thank God. We also continued to stress in our champion to knowledge and brand awareness and increase our exposure. These new channels through kill al like screening and recommendations as well as other marketing activities.
In 2022 way will increase additional investments on marketing in channels, where they brought in our omni channel marketing and advertising activities, including online promotions, which has seen path for them I'll kill al and taboo recommendations and social media and all.
By promotions, such as the elevator advertising and printing media.
In addition to enhance awareness and exposure to our brand in hundreds of cities. Our marketing strategy will promote rounded message of counting 10 knowledge to consumers through multiple marketing channels.
Finally, we also made some progress is on overseas market expansion in the fourth quarter, we entered into my kids, even Singapore, Germany, Italy, and the other countries.
Our stuffed channel transformation.
Progressing smoothly sheep team, partially some small distributions to international agents, leading to new partnerships.
This large scale agency in northern Europe , and Germany, well modest Ah, we outbreaks county, ourself, a pregnant mother to newer business markets along with the U F absence door. We launched last August we opened our self operated Kansas Star in Italy in March this year.
Oh It was additional step operating European the source to come into service in the coming months.
But it's challenging shifting from selling pro dex to selling should solutions, we have pioneered a new bits of smoothing. This smart home industry, while also improving our small codex Iot capabilities and services for our work they'll biotech home solutions, we have also tests and our.
10 knowledge branding as we entered the high end market.
Going forward.
We'll continue to increase our investment in R&D, particularly in AI software in our alkaloid them all we're optimizing to put a line.
Have a great day at K U to deliver healthy long term growth.
That concludes our formal remarks, that's now changed to our detailed fourth quarter and full year 2021 find issue reviews as.
Well at the first quarter 2022 Alec.
Net revenues were $1 33, beginning RMB compared to $1 89.
R&D for the fourth quarter up out of 'twenty 'twenty net revenues exceeded the company's previous guidance and the year over year decrease was mainly due to the continued significant decrease in sales of Xiaomi branded sweeper robot together with product portfolio of gas mains for margin expansion in other categories.
Although you'll wake her consumer demands in certain categories.
Revenues from Iot and home portfolio decreased by 37.9, Chris Young she was 692 menu items from all from one plant 11 billing or it would be for the fourth quarter of 2020. The decline was primarily due to the crazy himself with Xiaomi branded sweeper, all boats and the continued product quality adjustments for Martin.
Fishing in some categories, both of which contributed to the overall gross margin improvement for Iot Tom Farley.
Revenues from our home water solutions decreased by 27.5% U 263.3 mini RMB from 363 me now R&D for the fourth quarter of 2020. The decline was primarily due to the weaker consumer demand for the industry upper of during the quarter.
Well as well as the product quality adjustments, we made by decreasing the propulsion up small that's water purifiers and our pud that makes as a result of poor that colleague has meant the company once again achieved a year over year gross margin recovery for this category.
Revenues from consumer both decreased by 24.8% to $120 4 million R&D from wind or 60 points human error and before the fourth quarter of 2020, primarily due to decreased demand for pure fire future products.
Some of them are small towns to salvage it increased by two 3% to 257.1. Many R. M. B from 251.2, meaning R&D for the fourth quarter of 2020 gross profit was 341.5, many R&D compared to $443 8 million RMB for the fourth.
F 'twenty 'twenty gross margin increased to 25.6 Christiana from 23.5% for the fourth quarter of 2020, primarily driven by the Companys continued efforts to shift our business and the part that makes towards higher gross margin products.
Total operating expenses increased by 2.7 press down to 344, selling many R&D year over year.
Primarily due to the increase in R&D expenses and the G&A expenses.
For more details.
R&D expenses increased by 5.1% to 97 point and many around B from 93.1 of many R&D for the fourth quarter of 2020, mainly due to the increase in R&D experts and their related to salaries and expenses.
Marketing expenses decreased by 1.2% to $214 8 million of R&D from 10 to $17 four.
R&D a year ago.
G&A expenses increased by $31 four per se on to 'twenty mini RMB compared to $21 3 million RMB for the fourth quarter of 2020, primarily due to the increase in related to personnel salaries and expenses.
Net income contribute go to ordinary shareholders of the county was 22.7, many R&D and non-GAAP net income attributable to ordinary shareholders of the company was 33.5 many of our M D.
Additionally, our balance sheet remained healthy as of December 31st 2021, we had cash and cash equivalents of 587 million RMB restricted kashyap that 5.8, mini RMB and surety investments of $828 9 million RMB.
Nextgen lets briefly discuss more key financial results for the full year 2020 one.
Net revenues for full year, 'twenty, 'twenty, one where 5.3 pinning RMB compared to 5.83 billion RMB $4 20.
Revenues from Iot home portfolio decreased by seven 4% to $3 4 billion RMB from $3 67 billion RMB for 2020 revenues from our cold water solutions decreased by 15 points night person two 742.9 mini RMB from 883.
Pour through many R&D for 2021 .
Revenues from consumables decreased by 4.1% to 760 Sevens, many or M. B from 382 point 19 yarn before 2020.
Revenues from small town Susie other stake rose by 10.7% to 900 to 792.9 mini RMB from $887 7 million of R&D for 2020.
Gross profit was 1.2 billion RMB compared to 1.08 billing RMB fall 'twenty 'twenty, our gross margin improved to 22, 6% from 18, 6% a year ago.
Total operating expenses increased by 24, 6% to 116 be anywhere and if I'm not handwritten 31 point to add many around before 'twenty 'twenty.
Yes.
In more detail R&D expenses increased by 17, 4% to 311 point Amy on your M. B a from.
<unk> $265 7 million RMB for 'twenty 'twenty.
Selling and marketing expenses increased by 25, 8% to 751 mini RMB from 597 point to many R&D a year ago.
G&A expenses increased by 41, 8% to 97.7 mini RMB compared to 58.9, many R&D for 2020.
Net income attributable to ordinary shareholder if the company was $88 6 million or N B and non-GAAP net income attributable to ordinary shareholders County was 136 million RMB.
Now, let's turn to our outlook for the first quarter 'twenty 'twenty. We currently that in net revenues to be between 618 million RMB 713 million RMB.
Oh, we estimate data your over your change in the first quarter, our revenue will be mainly due to the high basis out of Xiaomi branded sweeper robot business for the first quarter of 2021 with Cook County has been subsequently scaled back that business as well the obvious is marketing patio spreads.
In the first quarter of 2022.
The above outlook is based on current market conditions and arithmetic come the Caribbean preliminary estimates my kids and operating conditions and customer demands, which are all scattered challenge.
This concludes our prepared remarks, and we will now open the call for the Q&A session. The head of our Finance Department, Mr, which sounds high will joined officially announced the crowd cheers.
Operator, Please go ahead.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
If you are using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
For the benefit of our participants on today's call.
You wish to ask your question to the company's management and Chinese. Please immediately repeat your question in English.
Time, we will pause momentarily to assemble our roster.
The first question comes from Hildy Ling with Morgan Stanley . Please go ahead.
Oh, Thank you Ani horseshoes, yes, you're gonna, Utah, No Ah well shouldn't goes on when she goes a challenge you know Oh, Yeah, we don't know what's like in Chicago, not agile Hugo's Oh gosh people also yoga.
Oh the chance you thought you said that you do email when we get kind of your nickel Maldives or yoga mentioned, though we forno no ucci Lasalle Lindsay Shanxi Joy shattered the diesel when she chose should chunky jewellery jobs on the army in young Philadelphian, but no woman she's Ah shall move the tracers should somebody Aldo eager Hershey, China towards you shouldn't do those so D G.
You didn't say coordinate equal why does she's hungry man Carnival and she said that she gets onshore which is a 413. Once you go beyond just what the Eagle with T.
When she not usually go shoot.
He got to my Tonya on your on your shoulder the heat cool go type work.
So what we usually get shakes and cut our Washington coordination sounded good.
It seems like Oh, yeah, well the equal Vega product like women are you would you go.
Uh huh.
B are going to eat so who you go when she nacho cheese yoga and you use them all EZ Io gene different either you could cut five not well when you go to Macau Dai Ichi to do them. All you do you'll what you should team you're going to give you an argument that's a kind of she'll be a schulman shouldn't say oh.
Oh gosh, it could be a call and he can touch on your tongue out sometimes it's behind I will tell you.
It'd be hard to the woman. So so you don't need somebody who can you sell them or to them I'll give you how your team doing due to.
Nutrition.
So taco, which was a single shot with.
Let me repeat repeat all these in English first so congratulate company on a very decent fourth quarter results and a very visible gross margin expansion that a couple of questions. So the first one is what about the can we have some color off the shelves trends, yes year to date in particular, the sweeper robots.
The domestic and overseas market.
And the second question is about also about the revenue outlook, but that's all for the full year 2022 how shall we think about it for the overseas business and also the domestic business and also can we have a little bit of color of each product category segments as well and the final question is just about the margin of the gross margin that we should the operating margins.
First quarter 2022 and also for the full year 2022 and how should we think about divulging all commodity prices raw material causes and also the oil prices how would that affect on watching Oh look.
When will you see a more visible trend or an inflection point. So that's all for my question just Joe Schwartz I always felt when he shares.
Okay.
Okay. Thanks for Hill discussion.
40, 40 sounds churn up today, we saw the overall consumer demand is relatively weak compared to the same period of 2021, while we saw all products and channel portfolio is trending more diversified and healthier.
Firstly, we saw the sales contribution of high end products is increasing.
Our introduction of a SKU is a premium product and all.
40 product portfolio adjustments.
Secondly, we saw the south on our new channels such as people go to war until you increasing very fast.
Increasingly additional mid to high end products and products with higher margins.
This channels.
We expect the south on these new channels to increase food as well and help us to enhance brand awareness.
And for the slipped below book.
For both domestic and overseas market, we saw weaker consumer demand for the whole industry compared to the first quarter of 2021, when we achieved a very robust growth in sweep of walnuts.
Particularly for the overseas market due to the International War and COVID-19, the market demand for smartphones premium cleaning products all impacted despite.
Despite the overall macro environment.
The introduction of U S to use put them on optimization and overseas channel expansion in mind, there's always put patients.
Chris in terms of SKU you, we recently introduced our new self cleaning sweep of Robo Alpha fleet in January and.
We see a fast growing and sells them received.
Feedback from the market.
And the reason recent new product launch event, we also introduced our new Watson dry they come clean the cyber pro and swipe, it too which is equipped with double brushes photos.
So towards the launch of sensor and.
Oh tier upgrade functions.
Second the sales contribution of high end Skus are increasing.
How should we drive dippold online towards premium to self contribution of our high end products, such as alpha to pro and over two plus <unk>.
Three increased.
Food.
Just discuss the overseas market, we successfully step into a new market in Singapore, Germany, Italy and other countries.
Further our new cooperation with largest go international agents are smooth and we expanded our self operated model.
Along with the U S. Amazon store, we launched last August we opened Amazon store in Italy.
We will open more self operated stores in Europe in the coming months.
Oh boy.
So we view as temporary.
Temporary market fluctuations.
We still expect our Cleveland business in 2022 to achieve.
And the put along to churn more diversified.
Yeah for the second question about the south of all local 2022 are generally before the so structure, we could refer to destruct off Q4, 2021 .
Like Oh two.
Our home portfolio me, maybe accounted for half of the total portfolio and home water solution accounted for around 20, 20% has more sense.
And others accounted for around 20% and consumables accounted for 10% of Iraq.
For the overseas business, we spot.
High single digit of the total revenue.
<unk> to the market changes and the company's adjustment later.
Hum.
Good question about the margin and price we saw the price of raw materials was relatively stable when entering into the fourth quarter of last year.
Due to the war and a series of economic Restructures the price went up in the first quarter.
The increased price that's been partially reflected in our E S piece.
So it is partially offset by the increase asp's.
In addition, we have done some price agreements with suppliers in the wireless so Paul we don't just buy the silicon price of raw materials to cause material impact on our gross margin on that product margin side.
All botanize more influenced by the extent of our investments in our R&D and marketing expenses.
To deliver mid to long term golf, that's we as well as to strengthen our branding of one stop home solutions, we will consider to increase the additional investments in masking marketing in channels.
How should we already saw benefits of our market down in temperatures like we did on the third quarter of last year. We have confidence. This is much much with help promote our news jet engine products and enhance our brand image.
Hum.
Image.
Yeah. Thank you.
Yeah.
The next question comes from Rudy way with TICC. Please go ahead.
Okay. So thank you very much for their management's presentation and I have two questions here. The first is about our promotion and our brand building strategy.
Not just that a company has launched many new products just two weeks ago and in most of the products are targeted at our high end customers. So how do you plan to improve the brand image and then make the customers willing to pay for those new products are also in your hours spokesperson, though it has some problems.
Finally, so how serious is the influence yet.
Now, which I didn't know how I should take it all at once you with him in the ecological its Angeles, you're glad you have mentioned that he thought we will have ups and I can't show up I'm Gonna. Let you go with what you like kind of going to see it shouldn't go without really can't match it up with anybody that thinks that you might actually go down there.
Now going through that sends out a cheeky chassis that J P E. A whole round sounds like a young they just yeah. It does.
I'll call that you said that.
And now you can tell from Yang Wei Lin sitting at shoot with any given to not do that you're going to eat up that that you'll do with that.
Yeah.
Okay.
I'm in a league of why it is.
Macquarie and I kind of just see the cause I'm Joshua Dicker to go financial pressure to stop them without you that you shouldn't go with little tempting to Laguardia and nurture talent Union shop, I mean, because it's pretty kind of major civil litigation, which I shouldn't pie, which is I'll comment we saw big outdoor digital please.
I'm always wrong, we'd say don't go on to other drone insurance what you do the geometric we talk I'm Gonna telephone do you ever just to say as you can see injunction.
We've shown pretty Shanghai, Louisiana, Sheehan I'm sure she'll give them jobs.
Did he Michigan insurance he chooses to leave them to ship can I actually I'm going to go.
So you go from in many ways you were planning to do there.
Uh huh.
Two the Thunder and the diversity not only should you don't want them, but just the JV that you don't want me to answer that she can put all kinds of Iot gradual quite at Sheila. So your woman geology. There. There's what you don't want me you'll notice a J. This is just a little I think all of them.
You can now use without that alone we used with or without.
Sure.
Well it hasn't been anything you would either city market, particularly in the course of the month I sort of read on quiet because it was losing I thought she got Louisiana Museum, unless you can tell me how much of the Chicago, because I Wonder if you might have gone and what some of your medical I don't want you to you Jamie.
He was shown as a financing plan with all cool magical challenging them for the time being I'm pretty sure that you show on swapping either you're going to go I don't want to get caught up nonetheless, hunting store and digital channel, which it on their calls you wanted who show who don't function, new one bylaw arthritis and rheumatology.
Students prefer to watch you to put on the cover of different financing until he meant to address your transactions as you called on an engine. That's what Lindsay agenda can go the June basically on who I will vote on their own bought into a little extra.
Shankle of them that you don't they don't you don't bother to talk to the beauty of it or so it wasn't just.
Can you help me out what exactly it's all come to what Ashish.
Oh, I don't like to translate our fonder feedback.
The branding I established for your questions. So first of all we are saying I'm turning point for the consumer group, who buy deal with might help pradaxa and we see the market has been transformed from a small group of people and have them on T and if it's very important for our industry and that's how we are doing a lot.
Well, we're continuing to do more in additional marketing and advertising, especially in some cities.
There's like a young people our culture, even like Disney one tier one and tier two cities and for your question about it doesn't that doesn't have an issue.
We responded very.
Very quickly and very efficiently. So this issue didn't cause any material impact at all our brands.
And ask me with bombed out quickly and which give us a very traditional and more exposure on the market at the intrinsic sum of wasteful.
Even though we are toward out. Unfortunately, we are tuning our brand positioning to more premium.
No it should be that our rates and product launches by introducing more premium, but still purchase solutions offerings to our high end markets, including the 300000 B solutions to 'twenty are the 200000 R&D spaced packages, all followed premium consumers and the way that you do.
Such groups are increasing our mahwah users.
Oh, that's the answer from our field.
Hi, This is any downfall with Dr. Robinson, you sure Guang Yang and you know what you're saying is that wings are arguing that that want to work on hey, do you want to go a lot Nigel when he thought wasn't doing anything because you are in your mid single I think I'm glad you weight them, a cat nausea, but once you're in the army are yet and if there's anything going on within the Gilead human car at all.
O'neill and daughter Dino there so that's the logic.
So that shouldn't go faster I mean, that's a shame.
So that's all.
I will repeat the question in English so what's your outlook for the competition in 'twenty or 'twenty to how do you evaluate the market competition situation will become more years. Thank you.
Oh, well watch tune to the cause or social digital because you don't you're going to kind of all mankind legal for a minute. What you should do the change you want them all to the contracts you're shallow hasher immunities here, which really is important and that's.
Don't you have on digital.
It's I honestly, especially I just watch entity, the Galena and I should I get back to what else can I do whatever you want but they don't tell you that when we never leave to go to this year, how should we even had one question on the tissue does so you've got two other form in the Oklahoma City.
Tuesday, Xuzhou <unk> Xuzhou to the home it should go home in cone closer attention. She just features Apache audience, what dish it off to pay dividends.
A shelby to shove it either watch how big is your usual initially with yeah.
Can you pin pinching his opinion that you mentioned.
What does that tell you that must go to Taiwan is what she says gosh it shall be not actually what you just said it sounds like is it because you knew woman Juno amount almost usual judicial.
Judicial among them to the junior Duncan I'll need to come from.
Oh I got you.
Cause that athletes, who can do this year.
Who shall akhunzada she thought with your friends.
Got you.
Do you have that kind of went through there are some good timing and I kind of thought she says women's right. So she and petticoat Ahmad Jamal either got it Sean if you want the Libre two teams you've got kind of what she said how should ease off how should we not even beyond just doesn't go down because you're trying to do the children.
Don't get it how much is it a function of real good I'm, just going on something else, probably like a Jimmy told them one of them quite sort of cheese soy peanuts.
Yeah, I'm going to ask what are your children, who knows actually played out with Joshua.
I'll quickly translate so photographs really can't elaborate from two sides. The first is from a sub paint channel side as feed ads Xerox to you because there are many uncertainties globally.
But supply chain capabilities do you very needed and a mandate are mainly concentrated in China. So we are now very concerned about this point and from the other side. So about the consumer demands we see that from the fourth quarter of last year, the consumer demand became a relatively weak Indo.
I think that you'll see that there are a lot like also some big giant companies about overall during the period down to consumer demand between.
Your line called more competitive situations the amount of players around the top of his mind do you a lot of additional adult instead.
Install king and the promotional activities.
So one of them as we are like shipped per day.
And fitness towards pre meal, and we are maintaining the level of gross margin and increasing R&D and to do a lot of branding activities were comping down to go through these challenges and deliver long term growth. Thank you.
Thank you very much that's all from my side.
As there are no further questions now I'd like to turn the call back over to the company for closing remarks.
Yes.
Thank you once again for joining US today. If you have further questions. Please contact me with the contact information on our website or in the past and agree Obama Investor Relations can thought him. Thank you all have a good night. Thank you.
You see it.
This concludes this conference call you May now disconnect. Your line. Thank you.
Thank you bye.
[noise] [music].