Q1 2022 Yunji Inc Earnings Call
Okay.
Good morning, and good evening, ladies and gentlemen, thank you and welcome to the Angi <unk> first quarter 2022 earnings conference call.
With us today are Mr. Shangri, Yeah, Chairman and Chief Executive Officer, Mr. Paul Zane.
Vice President of Finance and MS. Caitlin <unk> Investor Relations director of the company.
Now I would like to hand, the conflict over to our first speaker today Ms. Caitlin I already of Yunji. Please go ahead ma'am.
Hello, everyone welcome to our first quarter 2022 earnings call before we start. Please note that this call will contain forward looking demand within the meaning of the private Securities Litigation Reform Act of 1995 that are based on current expectations that current market operating conditions and related NASDAQ no no noise.
So I can speak and other factors.
Its industry.
These forward looking statements can be identified by terminology such as well.
Anticipate continue or other similar expression, but due to a discussion of these risks and uncertainties. Please refer to all related documents filed with SEC any forward looking statements that we make on this call are based on assumptions.
Perfect Alright.
Early by cautionary statements risk factors and details of the company filing with SEC.
Thank you does not undertake any obligation to update.
These statements it's Beth.
I think along with that I will now turn over to Sean So chairman and CEO of <unk>.
Okay.
But that doesn't mean you already are a key to the Thai baht and Holly.
Hello, everyone and welcome sure Sanjay transport had a tiny tiny.
Okay.
Finally agenda, we have a slew hall.
I'm going to change what our kids only on the junior side in genetic kidney and who.
So why aren't they can lift into the kimpton Saturday of teaching a team with SMT.
If you do indeed did you say, it's huntington's, it's on value, particularly in Asia.
It indicates to.
Me too.
Use it sounds good.
You don't show you the Moody sorry, I'll tell you can you can sponsor nickel metal into something.
Two weeks ago on May 16.
We celebrated our.
With anywhere between here and kind of when you come in here. We further refine the program curation strategy, we have been acting in the conversation.
We're investing in that.
Last quarter, we continue.
A replay gap currently and launch the EOG black simplification.
R&D program once a week, we are slightly more stringent quality exactly I'm glad he asked you already got interaction.
But if I just heard actually D.
And Jason on the label and ensure peace of mind to our mandate.
Thank you Patrick.
Bye for now.
We need to have something to single silver champions.
Well it may still be seniors housing TSA check.
It comes out to a suite makes it iron the ticket so what.
Can you do that went into it so you've got this what would that way too.
Jay is that made you said into the <unk>.
You see we came at once it will be a reality.
So again I mean, it's right here.
It is it is the boarder. She is the home of the 14th week, hopefully a little bit about that yeah, yeah simple answer our name change to that.
If a patient when it comes back to the usual detailed user feedback and are beginning to abate and collect data through our platform during the lease rates go down the review and indications.
The interest for the key performance indicator.
Carolyn volume probably at that recommendation refreshing break it out.
It's funny everybody.
In 90 days.
Recommendations.
The final item.
And then Mark again, a sachet per day during the week.
So promotion every Wednesday.
Hey, Matt.
To access the health and nutrition.
And as managers and then debt.
Lifestyle and a write down on how to lead a healthy cash balance.
So I mean, what you saw you said genius someone yet web, but instead it exceeded our.
But you didn't see the U N D well Mackenzie can you get through it.
But as usual let me.
See the knee.
Can you really see that in the chart that an example done towards the central PA. Since you put the Dakota silly decisions could be made a Christmas you'll have it during the first half of this year.
Mhm challenging microeconomic uncertainty, we respond in a minute.
And the answer will be elaborating our diversified.
Strong supply chain management kind of Orange and.
And optimize.
Going forward, we will continue with Needham Your line is fine the other sports.
Well, our scoring innovating with strategy.
Well all of our for that segment.
All right.
So they're easier to catch it.
And so women pool for similar compounds with Silicon metal you can tell your offices that fell short of what one can do they can be shot.
And you still think that there's some PVA Neal well yes.
Yes, the golf Joseph I'll call you out.
Having the cutoff for service impact.
So Daiichi John takes us through yesterday I guess.
Isn't it.
Do you cause I mean, Kevin stadiums in the second quarter of <unk> Yeah.
That Peter resulting in production for that.
Our manufacturing partner and then our own private label not willing to relieve pressure is high that.
We haven't guided for our private label in terms of pretax <unk> imaging Susquehanna.
Susquehanna.
<unk> seen some Wilson, our new Kodak involvement production and a restocking.
I'll tell you. This the woman that give me I'm yet to pilots <unk> Yoshi two may slip, but that did come through and that that kind of thought Tim below in the dead Gulf in 2012 in country for them and of course yet.
I mean, the country on Pizza Tyson, who you believe youll, usually that you'll be back on track.
The woman that seem to kind of ask yourself because you are hopeful to.
Yes, yes, congratulation few doors in the Balkan.
The woman that had been haunting me that European pet pizza.
Oh ball Jaco AT&T, because it seems as you're asking labor. That's the those are put on chart two infill as Jim call Me, if you look at it.
You will note that Johan <unk> session.
Although it seems that a lot of time here.
In terms of the Hudson.
The good news is that the progress we've made over the past few years.
Private label.
Thank you ladies and category demand.
Food and how is that going on.
Totally compensated Atlas.
In high purchase frequency.
Fortified by our robust fountain product.
Product development channel.
We successfully launched <unk> for that.
Even during the pandemic.
Oh, it's ablation.
ZIP code.
Okay.
Rationally and kind of seamless save our category for example, our private label how exactly in that category.
We introduced a slew of Purdue.
<unk> multi vitamin can be the only ones out there and two <unk>.
Equally attractive design.
Desirable.
And the beauty brand.
I guess the angle you can gradually see demographic trends were piled up in our member community in a greenhouse radical so presently that we were able to easily achieve he can go over 8 million RMB sales go ahead.
Okay.
So nationally well known Cantala Houston.
Unit fulsome issue. So that is the hinting he man who can do portfolio.
Sushi Hall.
My mom and the tangible.
Tens of thousands of pounds in the DRP will may see Gen. Hudson you all nominees behind.
And then beyond that do that and you'll have to name will become Beaumont in particular EDC you can pack.
Morley illustrating on that did you put on your own that she didn't know Katherine golf Calia chemical said she'd until late <unk> didn't say, so youll, who appeared yet male content. So single Yang <unk> debt ceiling was wrong because it doesn't do that.
So they can go out and check could you foresee.
In the club.
Current category, we have a development of our novel sequel that such as specialty Italian pack.
The main Chinese pancake.
We're bringing a greater variety of entry.
Okay on Monday, and ABB and theaters that are 35 years average.
We have 19 senior at a house and a nutrition that is going to be placed on demand Paypal protecting the O&M for example, where you recognize.
And that colonial.
Private label over to add one.
We will examine all times high nutrition no value in our Medicaid spending.
And also under the <unk> classification programs, we recommend they simply can't realize the fast Act III often antibiotics.
Sure.
For the entire family.
Indonesian to tell that means you may assume.
Since you saw assuming largest share this over to the east.
Yoplait is Honda Global yourself you are in the food you need Egypt ballroom, something that tango downturn due to synergies.
You bet.
Especially when we are freezing okay, if you're a woman Sonya so sort of going into <unk>.
And you saw you heard assistant echoing.
Echoing Tom's damnations easily easily so you need a demand for the whole that centrally.
Did I hear you tell that shelter at home.
I don't know if possible the Colgate is locked down.
And besides that we have the Shanghai was upheld.
Upheld our social responsibility and are responding differently.
Okay.
Yes.
Cut fruit atmel supplier of outlet.
Consolidated facility in Shanghai.
Somehow broaden our service manager to embark on a group of countries campaign and fulfilled orders totaling close to one really R&D remains stable.
I would like to take this opportunity to.
I'll briefly describe sort of IP to refinance plan for its own labor reinforced to me Angie Santiago Shanghai base to do that.
Apply has been cooperating with US you know fluid a big meaningful yet that's why in popularity with our new debt as primary.
Our sales were kind of over 10 million RMB with even a single day.
So it isn't a hard also to let you what that will mean JJ tends to what she is on the kind of let's put that well machine dumping literally shameful towards density Ito bundling you'd still be rather major switch are starting to see it on the Shanghai, a little and then putting our troops Italian pool.
Turning to Luisa. So we had some had some units which had she's on jamie's Italian switching portfolio.
<unk> seen a dynamic between the existing Cook, Jamie just feel good about that one kombucha so that depends on the book in that short term that would be intact.
Well, you know yourself Wow the terms on that.
I can take that offline promotional activity, we have proactively actual toll Kennedy, okay, it's coming out.
Our online marketing.
Third party platform.
Having children that are your cosmetics.
Category <unk>.
Like with shopper marketing teams, especially Humpty Atlanta, and then it's probably going to be working on from our private label product.
The refinance only high quality content.
That's cool.
And also completion and increase your legacy I'm wondering assuming this is validated by this is S. K.
So again, our private label.
So the category market leader produced by our last remaining team.
And the beauty of the online lease debt.
Shortly you about them.
In General <unk> got married annuity WWE and I'm traveling across the continent.
As of now our private label program.
We achieved the vast majority of their public accounts.
Third party on a streaming platform.
<unk> sales volume.
Well, then if I really look at what you need it turns up since you do you will attend <unk> elephant thought she had a flow don't.
Just didn't know the patient who opened yet.
Sure.
But didn't you put to cause on trades are linked to the Chinese diving. She is a free shot Hudson waterfront.
Some of them are fortunate central alarm cook without using <unk> one turns out.
Okay.
Happy Halloween.
Government mandates.
Okay.
During the past few months.
Your complaint with kind of like a restriction we were forced to Panther menu.
Non event.
You've already happening between online we have continued to be out of work and knowledge sharing and asset interaction fashion lifestyle.
<unk> sorry about.
700.
Online education improved at scale and globally.
Please.
Well the thing is that it doesn't it doesn't apply anymore. When the tariff was on pet downhole. She hasn't read that athletes on tablet issue with that I will turn the call ratio means of Hong Zhang our banks like yours in Oklahoma to voluntary their financial results physical it. Thank you.
Thank you Tony Hello, everyone before I go through our financial results. Please note that all numbers stated during the following remarks are in RMB terms.
And all comparisons and send your changes.
Hold on a unit basis, unless otherwise noted.
It has been a difficult start to 2022.
The recurrence of call it clothing, lockdowns in Shanghai and a stricter.
Prevention and control measures in many other regions.
Challenging market condition.
Our repurchase rate remained stable at 82% and our gross margin improved both on a quarter over quarter and year over year basis.
We managed our cost efficiently by diligently optimizing the cost structure of our self operated private label products.
Thus demonstrating our business really is the resilience in the face of macro headwinds and the supply interruption.
As a result of this resilience, we will able to achieve positive operating margin of 12, 6% for this quarter compared to a negative operating margin of two 9% a year ago.
In addition to achieving breakeven to positive operating margins for four consecutive quarters. Our cash position is strong enough to allow us to navigate through the market downturn and uncertain macro environment.
Now, let's take a closer look at our financials.
Total revenues were 343 million compared to 675 million a year ago revenue from sales of merchandise were $291 million and revenue from our marketplace business were $4 7 million.
This decrease was primarily due to outbreaks of Covid. During early 2022. This COVID-19 outbreak led to temporary lockdowns and delays in production and operation of our supplier, especially private label supplier of third party merchant.
Party logistics service providers and the other business partners.
This has created a temporary shortages of certain.
You mentioned, the merchandize and delays in logistics service, that's worth delays to our private label supplier research and development of new product launch potentially.
This has negatively affected and may continue.
To negatively affect our revenues and the operation during 2022 depending on the future direction of the pandemic.
Nevertheless, we improved our gross margin to 44% compared to.
35% a year ago as a result of successful execution of our product curation strategy and excellent performance out of our private label products.
Now, let's take a look at all our operation.
Expenses.
Fulfillment expenses were 49 million compared to 65 million a year ago. This was primarily due to reduced personnel cost as we refine our staffing structure and lower service fees charged by third party payment settlement platform.
And marketing expenses were 50 $51 million.
Compared to 96 million a year ago, mainly due to the decrease in member.
Management fee.
Technology and content expenses were 24 million compared to 38 million a year ago. The decrease was mainly due to reduced service silver costs and lower personnel costs as we optimize our staffing structure.
General and.
Administrative expenses were $31 million compared to 74 million a year ago.
This was primarily due to a decrease in share based compensation expenses and reduce the personnel cost.
We will refine our staffing structure.
Total operating expenses in the first quarter decreased to.
155 million from $273 million in the same period of 2021 we.
We recorded an income from operations of $2 million compared to a loss of 20 million a year ago net.
Net loss was.
So there's $7 million.
Compared with net loss of 4 million a year ago and adjusted net loss was 31 million compared with adjusted net income of 17 million a year ago.
This was due to financial law law, which was the mark to market investment law, rather than a catch it all.
Basic and diluted net loss per share attributable to ordinary share holder, where both too.
Compared with New York in the same period of 2021.
Moving on to liquidity.
As of March 31st.
2022 with a total 743 million in cash and cash equivalents restricted cash and short term investments on our balance sheet.
Our accounts payable reduced to RMB $203 million.
As of March 31st 2022, compared with RMB 255 million as of December 31st 2021.
Our liquid assets was sufficient to cover our payable obligations.
And we do not hold any long term bank loan or debt on our balance sheet.
Despite near term macro uncertainties, we are confident that our resilient business model and our new product curation has supply chain depreciation strategy will allow us to optimize our entire business cost structure and help us to navigate through the current challenges through agile and flexible operations.
This concludes our prepared remarks for today operator, we are now ready to take questions.
Thank you.
We will now begin the question and answer session to ask a question you May Press Star then one and you touched on San Juan if youre using a speakerphone. Please pick up your handset before pressing Keith Kimmel.
To withdraw your question. Please press Star then two.
When asking a question. Please state your question in Chinese first and repeat your question in English for the convenience of everyone on the call.
At this time, we will pause momentarily to assemble our roster.
Okay.
The first question today comes from journey Chan a private investor. Please go ahead.
Oh, I shall give you by any chance and show what it wasn't yet our bodies have siobhan and good Ty Johnson change enough I will do my I'll go through the year, what you'll see in the meantime, so he can go up on a shelf placements more emotion mkapa yet.
Let me quickly translate myself can management comment about the impact of the pandemic to our business performance in seven quarters and can you share your views on the recovery of consumption. After the epidemic. Thank you.
Our opinion in the venture.
Thank you for a question you can argue the Asia merchant you know you'll find out if we're trading but of course it goes to a play a part of <unk> total year, which it should have been G homes, the only well when units how it's useful for millercoors in the knee DSL.
Great.
Without the impact of goods epidemic.
Okay.
Many operated efficiently right.
Thank you for attending offering very.
Various statements.
Also we had a solid financial foundation.
Great.
You mean as a general rule you the chassis pool is the so called pace into the political yes to your point that India will meet your Gwen reached an excellent at HUD each other in Townsville Hall.
No leave Pudovkin bullish officer.
Hum.
The recovery of our campaign.
Florida accommodation in there as well.
<unk>.
Pay close attention to the epidemic situation and that is you have to warehousing.
Oh, Hey, Dave will jump in coffee according to you.
Okay.
Is it a more argued who already assumed in the current fossil painful so the IDIOM.
Getting to know the Isa English singular gymboree.
Gymboree Cheng Sanjaya hurdle for that sort of going through the town Hall magazine in the Virgin Media in time. This is truly at Covanta. So that's all to the city called top door phone. So you can just look towards with IL 10.
You should tell you how will you shouldn't the shallow woman who for him to the Caf I hope before it just says you don't Quad Yehuda jumping you Sonya you idiots into the Pizza <unk> Nanda.
Laurie William will tell you at all but <unk> been put on Pilatus deal came back but in that changing kind of out of yodlee.
Yes, you do lose your Tor <unk> trim board totaled two at present.
Interesting.
Yeah, and you'll see South Dakota.
And importantly.
Julien Donkey Osama <unk>.
The government is off a windy.
Yeah.
Undergone multiple horizontal wells for the company.
Each new Kodak will go through or answer any questions.
Multiparty evaluation on multiple critical for him to talk about.
Okay.
And I'm talking now for example from our new Kodak.
And in some form or shape.
For example.
And also these days.
Fortunately after two years of.
Heart walk.
Oh teams operating in Providence.
Different category challenging crashing program development.
Yeah. Thank you had that money you put out in Brooklyn.
It's always easier for Shelby facility, when we use potentially colloquial disarming Thiago Alicia can do without pointing to the desktop with each other that do use patch issue in there.
Or do.
Do you need to see G. U D. R. Horton the concert you can atone call should you have turned out.
Our AUM of information, you'll keep that her queenstown political that you Lenny Mandel shove it Jim Costa you May ship, the Shaw well when she said that we will do a tomahawk and Lasalle Kimball could you the shelf as a social media tool. So that gives you an issue.
Regarding recovery on kind of an assumption.
Absolutely.
Hmm.
On the commodity infrastructure in a short time according to the national view on that.
Okay.
I think the demand.
Yeah.
The epidemic.
Demand was also a coffee and I'm focused on.
Absolutely.
And in India private label.
I mean to me talking about the demand for healthy.
We look really good doesn't really mean, just one market.
As you know pretty much all over the country often looking to come along.
Thank you.
Yeah.
Okay.
Since there appears to be no further questions at this time I'd like to hand back to management for any closing remarks.
Okay.
Thank you for joining us today.
Hesitate to compare I think you have any further questions and we look forward to talking with you next corner right.
This conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.