Q4 2022 Li Auto Inc Earnings Call

Thank you for standing by and welcome to the Lee Auto Inc. Fourth quarter and full year 2022 earnings conference call.

Participants are in a listen only mode.

There'll be a presentation followed by a question and answer session if.

If you wish to ask a question you will need to practice snarky, but went by the number one on your telephone keypad.

I'd like to hand, the conference over to MS. Janet Lee.

Lee <unk> IR director. Please go ahead.

Thank you operator, good evening and good morning, everyone welcome to <unk> fourth quarter and full year 2022 earnings conference call. The company's financial and operating results were published in the press release earlier today, you know post gate on the Companys IR website on today's call we have added.

Founder Chairman and CEO , Mr. Shao, Lee and our CFO , Mr. Johnny Chile begin with prepared remarks, our president Mr. <unk> <unk>.

Our CTO Mr. Yang.

Joining for the Q&A discussion.

Before I continue please be reminded that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involve encourage risks and as of today.

Such the company's actual results may be materially different from the views expressed today.

Further information regarding risks and uncertainties is included in certain company filings with the U S Securities and Exchange Commission and the Hong Kong Stock Exchange. The company does not assume any obligation to update any forward looking statements except as required.

By law.

Please also note that <unk> earnings press release, and this conference call include discussions of an audited GAAP financial information as well as audited non-GAAP financial measures. Please refer to <unk> disclosure documents on the IR section of our <unk>, which contains a reconciliation.

<unk> of the unaudited non-GAAP measures to comparable GAAP measures, our CFO will start our remarks in Chinese for about five minutes. There will be English translation follows. After he finish all his remarks with that I will now turn the call over to our CEO . Mr. Shao Lee. Please go ahead.

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Hi, everyone and thank you for joining our call today.

2022 was another year of explosive growth for new energy vehicles in China, as well consumers embrace on Evs.

According to the China passenger car association the past the penetration rate of new LNG passenger vehicles reached 31, 7% in Q4 2022 compared to 14, 8% in 2021 and 29.0% in Q3 2022.

Our business continued to grow rapidly and lessen the year, we launched three new models L mind and outside of fully covering the family SUV market between RMB 300000 and 500000.

This launch has further solidified our market leadership.

In the meantime, we continue to fortify our foundation across R&D supply chain and sales and service networks, we've upgraded our overall business processes and org structure to prepare for ourself in the one to 10 states.

Let's move on to deliveries and recent updates.

In December 2020, we delivered more than 220000 vehicles.

Setting another record not only for ourselves, but also all emerging automakers in China, putting us in a very good position for 2023.

While Lee L. Nine has been dominating the full size SUV monthly sales chart and China ever since its release in <unk>.

<unk> sorry in September .

<unk> continued the one sale success, becoming the top seller of all large Suvs in December 2022, we.

We delivered 46319, new vehicle in Q4, 2022, and 2022 annual deliveries reached 133246 units.

In December 2022, according to the insurance and registration data from Chinese.

Autumn motive technology and research Center, we ranked first in both the SUV and <unk> market and the price range of 300000, RMB two 500000 RMB istar.

Establishing ourselves as one of the go to brand for all premium SUV shop shoppers.

Furthermore, in the first quarter a typical off season first vehicle sale, we maintained strong order intake showcasing the competitiveness of our products and services.

I would like to hear bye, thank all of our users and their families for their trust and support along the way.

Our revenues reached RMB.

$917 65 billion in Q4, and $45 to $9 billion for the full year of 2022 up 66, 2% and 67, 7% year on year, respectively.

With our cost management stability and operational efficiency, we maintain a healthy gross margin of 22% and free cash flow of $3 to 6 billion RMB in Q4 2022.

Moving onto our product lineup.

On February eight we officially launched <unk> seven or <unk> flagship family SUV with test drive starting the day after.

<unk> features exceptional second row space, a comfortable interior and a long list of standard features.

Equipped with our in house.

All wheel drive range extension system, the <unk> range of 1315 kilometers and zero to a 100 kilometers per hour acceleration and $5 three <unk>.

<unk>.

Developed with a G rating, the highest possible rating and the <unk>, 25% overlap.

Crushed us for both the driver and passenger side.

And also features a constantly evolving space and infotainment system and our driver assistance system.

<unk> is available in three trim levels are pro and Max fully covering the 300 to 400000 RMB price range.

Alongside the L. Seven release, we also released an air model to our <unk> lineup, which succeeded Lee one in the same segment.

Which covers a 300 to 350000 RMB price range we.

We will commence deliveries of leaf <unk> pro in back in early March and delivery of <unk> Air and <unk> Air will start in early April this year.

With the introduction of these new models, we have completed the default the deployment of <unk> L eight and nine.

For the entire 300 to 500, RMB RMB SUV market.

<unk> also allowed us to reach a broader audience base.

The <unk> not only received rave reviews from customer test drive, but also brought in more diverse family users into our stores, which further led to new leaves and orders for DLH.

On December 16, <unk> was awarded the car of the year and the <unk> Shanghai Award.

It is organized by the auto business review in Australia <unk> consulting.

Award is widely reward are regarded as the Academy award in the Chinese auto industry.

With <unk> continued its strong performance and the addition of <unk> to our family we will set ourselves a stretch goal of 20% market share in a 300 to 500000 RMB premium SUV segment this year.

Against this backdrop, we expect first quarter deliveries to be in the range of 52000 to 55000 units.

Next onto supply chain.

Despite continued supply chain challenges, our deliveries for both <unk> and <unk>.

It exceeded 10000 units in their first full month that deliberately.

This was only possible with the support of our suppliers and this was also a testament to our solid supply chain management capabilities.

We remain confident of our parts supply in 2023, as we further improve our planning risk management and cost management capabilities to cope with potential challenges and risks.

We take a modular awry modularized approach to supply chain management.

While we work closely with our supplier base. We have also strategically identified core area of our in house development and vertical integration in order to strike a good balance between cost and risk.

Over the past three years, we have been deploying.

Deploying a series of manufacturing facilities and the range extender.

Electric drive unit.

Let's move on to the sales network.

In Q4, 2022, we continue to strengthen our direct sales and services network and to increase our user outreach and brand awareness in order to bolster our commercial capabilities and drive growth.

As of January 31, 2023, we operated 296 retail stores covering 123 cities as well as 320, <unk> service centers and Lee auto authorized body shops, and 222 cities.

In 2022, we expand.

Expanding our sales network, we focused on upgrading our existing retail stores to house multiple models in order to reach more different types of families.

In the coming quarters as our brand continues to gain momentum we have more multifunction stores, we will have more multifunction stores and our sales network.

After more than three years of operation. The direct sales model has proven to provide better user experience and at a lower cost.

Which will remain our long term commitment as the premium car brand.

In 2022, our SG&A expenses were already lower than our R&D expenses, and we expect to further reduce our selling expenses as a percentage of revenue in 2020.

In terms of R&D.

I have always been a cornerstone of our value creation process for family users.

Some user.

Research and development capabilities have not only allowed us to standout in the energy market, but also will ultimately allow us to emerge as a world class Tech company in 2022, we made great strides in research and development.

On the electric drive unit R. L series vehicles are powered by our in house, all new range extension to point out a system with our one five liter four cylinder turbocharged engine posting a maximum of thermal.

Efficiency of 14, 45% and coupled with our proprietary fiber one driving it has significantly enhanced the overall noise vibration harshness performance.

Supported by our proprietary hardware and software the leap magic carpet air suspension provide top notch ride and handling.

And in particular, our own ex Cu vehicle controller is capable of handling complex vehicle information at high speed, enabling many second grade vehicle control.

Our smart space continues to evolve. These outcomes here for instance has evolved with a new generation device cloud integrated architecture and has been rolled out to all of our L series model.

Featuring our in house inference engine for in car scenario, Lisa <unk> can.

It provides a solid foundation for the in car deployment of more powerful of complex algorithms.

Moreover, we have made remarkable progress in our voice and vision based interaction algorithms on the <unk> side.

With our innovative Nemo met algorithm that can accurately isolate different human voices in multiple zone with our voice recognition algorithm.

MSC net retail activation and recognition accuracy, both reached 98% in real world testing.

These rates remain at over 90% in various demanding scenarios, including high noise low voices and children's voices.

On the mission side, our MBS neck algorithm can accurately recognize gestures of all occupancy combined with innovative summed by gesture technology and makes interactions through gestures easier and more natural allowing our whole family to enjoy the superpower of making contact and taking control over the air.

In terms of autonomous driving we adopted the fusion BV algorithm framework jointly proposed to by Shanghai University.

Which can be flexibly deployed with the Macs and <unk> different hardware configurations.

Our in House Highway MLA prediction algorithm enables organic automated lane change and a smooth acceleration deceleration experience.

As of now over 220000 family users have used our highway MLA features covering 100 million kilometers of distance.

During the 2023 Chinese new year holiday alone.

Our highway MLA mileage of all models reached almost 8 million kilometers.

This year, we will further expand our MLA features into urban driving scenarios with beta testing for early bird users plan.

<unk> in the first quarter of this year.

In addition, we created the industry's first AEP function with Lidar applications on the Max and extended the lightest algorithms safety scenario for major traffic participants such as vehicle cyclists and pedestrians to cover irregular scenarios, including special vehicles as well as night driving theme.

Going forward we.

We'll continue to focus on developing our core <unk> and BV technologies in house and further elevating our products level intelligence.

So that it we will consistently direct our R&D resources.

<unk> platform and system, a few of our long term growth.

In summary, we view our long term success as a function of our continued investment in R&D and our business capabilities, which will support the accretion of more head model enhance our brand value and serve as critical pillars of our business flywheel.

'twenty three will be another year of rapid development of the industry and for Lee audio in particular, we have full confidence that we will be able to build an increasingly innovative and diverse model lineup and deliver outstanding products and services that will continue to exceed our users.

Users' needs.

With that I will turnover the call to CFO , our CFO jonny for a deep dive into our financial performance.

Thank you Vishal Hello, everyone I'll now review some of our 2017 fourth.

Fourth quarter often articles.

So the more time for the Q&A session.

Our financial highlights here.

Hydro to you to refer to our earnings press release.

More detail.

Our total revenues in the fourth quarter of 2014.

For RMB.

17.

<unk> 5 billion to $5 6 billion U S dollar.

<unk>, an increase of 66, 2% year over year.

The increase of 88, 9% cultural culture at.

These included RMB 17 pardon two seven.

<unk>, beating our $2 <unk> U S dollar.

Vehicle sales.

Which was.

<unk>.

Ah 60 fixed fall year over year and 90.

90.9% HOKA will color the increase was mainly attributable to the increase in vehicle delivery.

As well as higher.

Starting price fuel.

Fuel to our delivery of the <unk>.

Starting in late August and Lee eight starting in November .

Revenues from other sales and revenue were RMB.

381, 5 million or $55 3 million U S dollar in the fourth quarter.

Representing an increase of 55.

9% year over year.

And our increased all spot.

7%.

Although work harder the increase was mainly due to the increase.

Sales of accessories and services in line with higher acute.

Accumulated.

Vehicle sales.

Our cost of sales in the fourth quarter was RMB.

Forging pardon.

Zero 8 billion or $2.04 billion, representing an increase of seven.

79%.

Year over year, and the increase of 472.

6% cultural we'll call it out.

Our gross profit in the fourth quarter of 2022, both RMB three.

<unk> 7 billion.

517, one meeting U S dollar.

Erosion.

49, 8% comparable.

The fourth quarter of last year and 201.

7% comparable with the third quarter.

Of this year.

2022.

Our vehicle margin in the fourth quarter of 2022, 2%.

Comparable.

Two 3% in the fourth quarter of 2000.

'twenty, one and 12% in the third quarter of 2022.

Decrease the vehicle market over the fourth quarter of 2021 was mainly due to the different product mix between the two quarters.

The increase in vehicle marketing over the third quarter.

It was mainly attributable to the losses on purchase commitments related to the U S in third quarter of 2022.

Gross margin in the fourth quarter of 2022.

22%.

Compared with 22, 4% in the fourth quarter of 2021.

And 12, 7% in the third quarter of 2000.

Operating expenses in the fourth quarter of 2022 were RMB, three 7 billion or 536 fault meter U S dollar.

Presenting an increase of.

47, 1% year over year and the increase of 11.

7% quarter over quarter.

R&D expenses in the fourth quarter of 2022, while RMB full part zero seven.

<unk> 7 billion.

Our three high growth one.

One meeting U S dollar.

68, 3% year over year, and 14, seven cultural culture at <unk>.

Increase was primarily driven by increased.

Processed food.

To support our expanding product portfolios as well as increased employee compensation.

As a result of our growing number of staff.

Selling general and administrative expenses in the fourth quarter of 2022 were RMB one three.

To repeat it all 230 basis points.

III, meaning U S dollar representing.

Presenting a increase of 44, 8% year over year and an increase of eight 1% cultural culture. The increase was primarily driven by increased employee compensation as a result of our growing number of staff.

As well as increased rental expenses.

With the expansion of our sales and servicing network.

Loss from operations in the fourth quarter of 2022, while it's RMB 133 points meeting.

19 point fall meeting U S. Dollar comparable is RMB 20 ballpark, one meeting income from operations in the fourth quarter of 2021.

And the result in a decrease of <unk>.

97.

Net of three 7%.

RMB pool.

<unk> one <unk>.

3 billion loss.

From operations in the third quarter of 2022.

Net income in the fourth quarter of 2020 was RMB.

265 3 million.

$38 5 million U S dollar.

Presenting a decrease of <unk>.

<unk>, 2% from <unk>.

RMB 200.

I think five five meaning net income for the same period in 2021.

Paraguay is RMB.

One pardon.

Six 5 billion net loss in the third quarter of 2022.

Turning to our balance sheet.

On cash flow.

Our balance of cash and cash equivalents.

<unk> cash and short term investment.

Was RMB 58 part.

Qualifiers bidding.

Our eight point.

<unk> hundred seven beating U S dollar.

At December 31st 2022.

Net cash provided by operating activities in the fourth quarter of 2022 was RMB.

Ballpark nine 3 billion.

<unk> hundred 14, 1 million U S dollar.

Free cash flow was RMB.

Three point Paul.

Thanks Billy.

470, <unk> III meeting U S dollar in the fourth quarter of 2020.

As of December .

31 two.

2022, we had a total.

19396 employees.

Some of our 2022 full year financials.

Please refer to our earnings press release for more detail.

And now for our business outlook for the first quarter of 2023.

<unk>.

<unk> to be between.

50 50.

<unk> 2000 and.

55000 vehicles, representing an increase of <unk>.

Paul.

Presenting to 73, 4% from the first quarter of 2022.

Company also expect.

First quarter total revenues to be between RMB 17 point.

<unk> four 5 billion.

The RMB 18.45 billion or.

Our U S dollar coupon five <unk> in the U S dollar full 0.8, beating <unk> increased off.

82, 5%.

93% from the first quarter of 2022.

This business outlook assumes.

<unk>.

Macroeconomic condition.

<unk> no significant disruption in the supply chain and reflect company's current and the preliminary.

Eminem review.

Only spaces situation and market conditions, which is subject to change.

I will now turn the call over to the operator to start our Q&A session.

Thank you.

If you wish to ask a question. Please press Star then one on your telephone and wait for your name to be announced.

If you wish to cancel your request please.

Sure then too.

Your line is speakerphone, please pick up your handset ask your question.

When asking a question in Chinese please translate your question in English the convenience of everyone on the call.

The first question today.

Comes from Ken Zerbe with Morgan Stanley . Please go ahead.

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I think the team, especially in kind of just over <unk> <unk>.

So if you could go down yet which is on CSA pay television.

And then what you mentioned it was down quite a bit.

Now I'll, just say it will be a <unk> <unk>.

No changes at all.

<unk>, which are holding the HC.

They see the huge all familiar okay, great. That's all I wanted to touch it.

31 party.

Two the cheek here.

With the whole year.

That also in <unk> mobile.

It's a good jumps witnesses who will take time.

It's been cool syndicates and what he said cannibalization when you tell them to easy to ship out you think yourself with either sandys upon.

<unk> done, which is open to east <unk>.

<unk> you could think.

And I felt we'd have seen what that at all.

<unk> had either uhm predictable bill now which Alan.

Okay sounds good.

Tissue Queenstown typically cool.

<unk> Queenstown.

Assuming nickel peso, which it <unk> it sounds to the Twitcher who is it.

Thin cushion Chelsea dependency.

So the KH.

Yes.

So my first question is about <unk>.

Nick.

We noticed that previously the management share the monthly deliveries.

Could add lives to reach 25000 <unk> outstanding.

<unk> started.

With a further decline to 30000 accuray to hear versions of our <unk> eight.

Example, so just wanted to double commentary is that how we come up with such a strong targets.

Based on the pace of the new <unk> order backlog.

Our assessment of the total addressable market of ISI <unk>.

<unk> SUV and how fast it's.

Murphy deliveries reached and stabilized as such level.

And more importantly, because of supply chain.

<unk> ramp up the output is such a rapid pace.

The D C.

No.

But as you go into here.

Okay.

Well now go suddenly on the agenda.

So when did you really don't you know hows that arguably the industry's yet.

So he has a question within our sheet outgrow a magnitude that igo ahead on the job for a year now.

As usual with minority tangible at Eagle.

So can you just without <unk>.

So 25% to 30000 orders, it's our internal goal and we expect to reach this level. In Q2. This is April is the first full month, where we deliver the L. Seven pro and Max and May will be the first month, we delivered to air version of <unk> in all eight.

Okay.

<unk> also integrated channel, coupled with or without <unk>.

Yes, <unk> heard VW here.

The usual Michel good dealt with you, but there is also good.

The way that we're looking at that we're doing that now Joseph we're down year to.

Good morning.

And how do you say 300 data.

If I may I know that Chilean salmon here on the phone.

Thank you Giorgio.

Hello, My perpetuation, how millennium with total liquidity sheet on future natural.

Silver that Ciena <unk> E <unk>, John on the neutral nationally.

Chip I will let me know.

I hope I mean, it's sort of Luke Colton.

That's a good our China ultra cautious and you've got the culture now.

We will have in EMEA, while hotspots from yet.

Good.

Hello, Jeff Wood from yet.

Without going down at the moment when you go deep.

Hey, <unk>.

How young the gondola economics from yoga.

Generally the season will magoon political volatility.

So we had a tissue culture also equal to appeal to all of us at <unk>.

Good a neutral for them, but also that you mentioned.

But from the second.

About our ramp up.

Admittedly, we experienced some issues in the <unk>.

Second half of 2022 with our deliveries and we attributed really to two things. One is because we have a set of very aggressive delivery goal because we're seeing really good order intake. So that leaves a lot of pressure on the supply chain and the second cause. It was we were switching from a single model to multiple models at which again.

Place a lot of pressure on our sales sales and service networks. So across Q4 and Q1 of this year we have been.

Going through a long process of upgrading our sales and service and manufacturing systems. So that now we have a very robust system all the way from planning to delivery to manufacturing and sales. So that we can handle really stress that comes in.

With our strong order intake and that really helps us to make three things a lot better than the first one is resource allocation, we could really allocate the best resource to whereas most need it and the second one is our employees will feel more fulfilled as they achieve these goals.

Third is that it also appliance suppliers to retire efficiency on their side.

First on same store sales conversation with Eric <unk> C U E.

Tycho.

<unk> contingent Unde's culture.

In cancer, killing Jonathan you could talk about either.

Yeah, No I was just.

Can you kind of weigh against your thoughts on China, It sounds out of his house.

And I think the key to the east.

<unk> seen an interesting pipeline the Isa <unk>.

Shlomo.

So look on that.

Against the sheets, one Chuck <unk>.

Thank you.

Dana to each at high Teen engine two machines from OLED.

Sure.

So the cancer center, a good chunk of the <unk>.

I can say, so, Michigan, jds, <unk>, but it sounds like which I think the <unk> assumption.

Okay.

<unk> telco machine to Greenwood.

So just curious.

So my second question is battery procurement cost and the potential impact to the margin.

So strong likelihood that that.

Battery prices, which continue the downstream this year and previously local media outlets have reported like category and likely others are rallying to offer some aggressive pricing.

Exchange for long term contracts.

<unk> and other top notes TV makers so.

The management team comment on potential collaboration with battery makers and how should we think about how the contribution to the <unk> to a strict veeco margin improvement.

In the following quarters in terms of scale and timing.

This current level.

Thanks.

What's your model.

<unk>.

What is sure to be calling on the high shares entitled.

Thanks, Jack whether you got into the future our material erosion of low downturn shared the juggler without you already hinted yet tell you what.

Houston and Chicago, Chicago due to leap is you don't actually touch on.

Although going into the huddle shifted off the shelf.

Do you believe your top hydrophilic sheath.

<unk> done some good job.

So in terms of battery pricing.

There are many factors at play including the.

<unk> mines and <unk>.

Better pricing mechanisms, but in general our belief is that.

Battery costs continue to approach a more reasonable level, we think it's good for the industry not only for us as Oems, but also for suppliers of battery manufacturers.

So we do a machine to machine.

Shut down the <unk> the ultimate solution to.

<unk> 12 <unk>.

That's kind of our duties on future <unk>.

Sure.

Understood.

If I may how should we element.

Thank you.

She made a man who some of the cap.

So as we expand to more models and as our sales continue to ramp up we believe battery is a very strategic asset and we will continue to commit to a multi supplier strategy for two reasons. One is for not only for the stability of our supply chain, but also to meet the time requirements for developing <unk>.

Out of our models at the same time.

Toyota I kind of wanted some good fully again.

Actually our doctors will shoot.

Also it gives you that one of his hand up.

The telco channel.

Not at all a for sure.

John Good deals for the Chaco quit award.

Okay.

Holmgren cyclical.

Okay.

Which end of our annual Bullishness, you don't have people.

In the long term, we believe the battery prices will continue to move towards a more reasonable level as you can see in the past few days the price of lithium carbonate has already reached a 400000 RMB per ton and we believe the long term trend is still for the price to go down.

We will continue to work with suppliers to negotiate a good term.

But there is not much detail details I can share at this point.

Yeah.

Oh, hey, thanks cancellations over the only thing to future. Thank you very much for the update thank you.

The next question comes from Paul Gong with UBS. Please go ahead.

Sure.

What's the typical winter conditions, when you're going into <unk> and those who continue to launch with remotely do the Hudson.

Since a few women tissue issues. Once you do Joseph a decent one social wheat shipments sumitomo due to how you deal with Eep's consolidated.

So in a few weeks, including somewhat the desalination with one point too soon.

Hopefully your funds on some questions on <unk>.

We will continue our children's home OTT companies.

2%.

That's on contract itself.

No.

In terms of sorts each at enclave place onto these types of immune cells such as <unk>.

2 million tons in syndication.

First question is regarding the gross margin.

I think for this quarter.

Vehicle gross margin.

Tim has been 21 zero percent, which you saw.

Two one percentage points lower than second quarter and 2%.

So lower than first quarter.

I think Justin.

<unk> <unk> Hudson mentioned this was due to the product mix change, but my understanding.

<unk> contributed.

About 60% of the volume for this quarter, which should be positive for the margin is it due to the initial ramping up stage.

Or any other reasons you can see this is my first question.

Okay.

Thank you Paul.

Got it.

On the call today.

<unk>.

Gross margin.

As healthy and consistent with our guidance.

The.

Starting from the fourth quarter.

Our revenue and gross margin.

As the mix all fall.

<unk>.

Our stock offering.

The.

<unk> Hill, a sales volume comes from.

Nine.

Alright.

And.

Both productive under.

The ramp up period.

Period.

As you know.

Our supply chain neutral.

Grubhub with that.

Perry.

Relief.

The gross margin.

Yes.

Tom.

In the coming quarter.

Our R series.

The overall gross margin.

Okay.

Paul.

Material.

Great.

In the future.

Okay.

Oh sure no one <unk> going to be too soon.

But you can see.

$2 million.

No.

Simpson's Atkinson.

Please go ahead.

Thank you Matthew.

We thank you Sir.

Thank you Ms Suzy syndrome.

You've got some dental national women's home.

Relational.

Uh huh.

So for Nicole.

Sure.

Syntheses.

Thank you <unk>.

You can see.

Ashish.

Got you.

<unk>.

Without those loss isn't quite so we saw some of that.

Im pushing lease it seems for you.

Hum.

Okay.

Hum.

SUV.

We can with the female consumer.

No.

You choose Houston.

Sure.

MTV.

Since mid.

My second question is regarding to your common Purion entry.

Perhaps on MTV.

On the selling points might be charging.

We also see some compared to some peers.

Charging EV models recently launched you see them to be.

Sydney.

<unk> expectation, so how shall we be final products.

I mean the competitiveness.

We're trying to achieve some margins comparable to our <unk>.

<unk> products.

No.

So that's a major sponsor.

That will command higher yet.

General industrial in terms of additional LNG to do it.

I'll give you that <unk> used.

Users can should come in golf.

The average issue hopefully on that one.

Huntington.

Jonathan billable.

Bill Womens shoes that interested in clinical you.

Yes.

Yes.

What else did you need them.

The 10-K.

To congratulate Lynn teacher younger.

Diego Hull women NGO.

Domino to Hugo <unk> of that volume did you figure that we should not forget he actually become Linda.

Hello <unk>.

Julie Lithosol E C.

The suggested you're bullish on Jeep.

With that argument.

Sure sure.

Jean Marie.

<unk> should be doing all of that.

Kita inventory.

Congrats on the Netherlands here, we have a tremendous team they are not well known <unk>, albeit amounts again downtown algorithm will kind of gone up.

Women felt.

David It's Tony It's you don't know Linda.

So that's a little bit too soon.

So the whole nation.

So sort of how you go to any degree what gives you the Toyota <unk> Toyota either the Hull tunnel under the 2017, we're not going to create additional partnership was an interesting idea.

<unk> actually done.

We don't see anything unusual there.

Typically with either with.

The negotiated over the PDGF hopefully in listening to you for the amount of.

Over the immediate and future outcome.

That will come about.

Corona, John that you're going to you.

So good that you said it should be that Honeywell no majority of them to two of them are equal and that was really the MPA El Dorado Youll go down either.

Tuck in telco entered MTS under the 101 data showed that for Ya <unk>.

Obviously it can be.

So the answer to this question on three levels. So I'll start off with why are we start deciding to build <unk> in the first day.

It was really two things right. One is because battery costs were very high and second was charging was difficult at the time for electric vehicles.

Not only difficult to find charging patients, but also very slow to charge. So moving over to Evs. We also intend to solve the three issues. The first one is about charging.

With <unk>, our strategy has been to use gas on highways and use electricity in the local environment. So EV. We saw the same issue by charging rapidly charging 400 kilometers of range in 10 minutes, which is very comparable to gas cars.

But that's not the complete picture.

Like when we had <unk> mobile phones, but if we don't only have <unk> networks. It's still in work. So another piece of the puzzle infrastructure.

Carve out charging capabilities and infrastructure, we are able to.

To provide a level of targeted experience comparable to our evs are cast vehicles.

And second one is cost.

As you can see we've invested a lot on our 800 volt high voltage architecture as well as our own in house Silicon Carbide factory and many of these innovations combined allow us to significantly increase the efficiency of our EV architecture.

<unk> two 400 volt <unk> systems, we observe almost 15% of energy efficiency compared to similar models, almost 400 volt architecture and that saves a significant amount of battery and therefore cost of the vehicle and the third level I want to talk about it as a product.

<unk>.

I can assure you that on on our EV product lineup, we will be able to provide a similar level of product and experience differentiation that significantly exceed our user expectations, even more so than our RGB models.

Okay.

Yes.

Okay. Thank you so much.

Yes.

The next question comes from <unk> <unk> with Credit Suisse. Please go ahead.

Since you're going to end up with.

Lindsay deal announcing that being done now.

Now some of you guys should gymkhana Dr.

So Maria which entity that can lead to Katrina.

It's incumbent on shipments and I think that new popular in a packer and obviously with it.

On Shan Shan Shan Shan.

Sure.

You've got just beyond that so we can continue to shine.

And I think balancing clump <unk> seal.

I mean do you essentially you guys aren't going to either new.

Kitchen.

Somewhat weak monthly contract associated with tufting machines with auction.

On T bunch Constancia two chipping.

<unk>.

Once you've done that I think I showed one question made to enhance the scope and the notional that Hello. This is <unk>.

Kimball Nissan one until the cycle <unk> absolutely.

Number one is that still.

I wanted to sneak them in company ones I assume will bump <unk>.

Chuckled at Timberlake.

Okay.

It's a whole new subpoena, we accomplished Lucas I should say on the on our aluminum <unk> digital outstanding amount of unique to ship auto shop.

Well.

Actually I've got two question number one.

I'll take the order.

Adam you said before and I'll say.

<unk> and 'twenty.

Units.

Soon after that kind of thing.

Some of the units which means.

If I came from.

So kind of in the.

And as Stephen will be.

Taken in total of the pro forma.

Hi.

A question about it.

In a statement I think.

Second question on our margin actually tried to quantify the margin impact in the number of full quarter because we.

Pakistan, but why is that and this impact actually interesting.

Fourth quarter comparable number three increasing from 400000 units maybe pretend to O&M.

Sure.

<unk>.

Is that going to be the number one reason number two it's about <unk>.

Promotion in Pune and the one we stood out in the last two quarters last year two months that we still around 1000 units on day. One so does that create a inventory second we can widen our margins did not increase instead of one.

Component supply normally will comeback.

Amongst the city can you actually have a higher cost after typically have lower cost. So that's the reason I'm trying to understand what's the margin trend in the first quarter next year.

Thank you.

Yes.

Okay, So long as business obviously.

Okay. Okay.

I think Paul.

New.

<unk>.

And Bureau, we feel need.

We still need some time to ramp up.

Q1.

Alright.

<unk>.

Oh.

Several.

Yes.

Oh seven.

Most of the interim will be still be.

Alright.

And.

As we mentioned.

April may it will be.

The whole months, we deliver our.

Our theories including air.

So we have some.

Ill.

R R.

Other.

No the arrow worsen.

Thus far it hasnt.

Paul.

A lot of the customer needs to be touched by it.

The mix.

No.

Steve from ops.

April .

And second question I think all the factors you mentioned.

Almost.

The better at that.

Our tangible effects.

Gross margin in the fourth quarter.

And.

All of this.

As a whole the impact.

2%.

Marketing.

I don't want.

To break the two.

You too.

Much detail.

And for this year.

<unk>.

The market conditions.

We want to keep our guidance.

To be.

Sure.

With that.

Okay. Thank you so much.

The next question comes from <unk> Li with Bank of America. Please go ahead.

This is Andy.

Not for now.

<unk>.

Yes.

Alright.

Jim by the way.

No.

So do not.

So that gives you confidence also tend to be done.

Prudential.

And as soon as the sensor.

And to the.

Gentlemen, you sometimes do somehow.

Youre doing kind of thing.

<unk> of women.

All businesses, you'll do that.

United took a jump.

Once you do this.

200 <unk>.

Quite a you can put him on synergies.

Just with the <unk>.

My first question is regarding.

My sense is tight policy change in Shanghai.

Sales contribution.

From Shanghai <unk> in.

In 2022 2023.

Hum.

How many percentage of scanner.

Consumers this year Houston currently licensed to <unk>.

Hi.

Our product.

<unk>.

Good morning, gentlemen.

Julien Dominion that timetable.

So switching.

Can you guys like would you choose.

No no no.

Hi, Julie.

In Q2.

Did the MPV.

If we could we had seen plenty that da Vinci.

The ego Dr Guide that you.

Attempting to pipeline now so this is Tim.

<unk> now.

Just dosage ideas. So anytime you see a kind of a way to do the.

Thompson.

Diego.

My second question is regarding.

That pipeline so the first question.

Hugh.

Lunch.

<unk> this year.

For the NPV and also for your new product pipeline.

Elisa.

The launch in next.

<unk> and <unk>.

So.

Besides <unk>.

<unk> BV product.

You start to launch more.

Other planned out for example.

We will deal with it.

Xena.

Okay.

Also our recently spoke with Eagle in here.

I kind of use the novartis unit hunting that there'll be a vision in the EMEA.

Throughout the day.

As I started with MBT changed your pharma.

Hi.

Financing to the personnel playful elements Anita how easily can get 10.

<unk> will go to Julien how should be the natural in 200 countries.

Well listen you the tundra Hasan Youll.

Sure that fit to recruit Sheila I'll leave how're you.

Nevada, two issues hunting via debt will notice where there can be a deal now challenging them.

So in the tissue I mean, how do you size the hull.

Thats all done that.

<unk> by the agency.

There you go.

Some of them got 10 in Houston.

Thank you.

In terms of the orders in Shanghai that generally order flow was not very good.

That was understandable because most of that demand was released in the November and December last year, but we haven't seen a very significant recovery since February and.

And over the long term, we look at this issue from a market share standpoint, and we believe the steady state market share in Shanghai will be comparable to that in Beijing, because going forward immediately in these markets.

Our EV purchase will be incentivized by a free license plates. So we think Shanghai will eventually.

Move towards a market share similar to that in Beijing.

Yes.

While maliciously intended fabulous year hotel for the deviation yet ctrip gain here sibling entity, if we choose to Bobby.

This also drove it hasn't yet.

The bond business and in the future hopefully that Ian if I don't know how you got to allow that you got from the Gulf of Navarre dual.

Thank you Ben.

And then the Ocado baidu.

<unk> highlights in Newcastle earlier, Cushing, Midland, yet and I'll slip on the gene booties with overseas and Glenda, although I believe on him.

Doug.

I'm, just telling you that the hull.

Yes agenda.

So <unk> been on the job.

This is a woman.

Who do they publish at the end of <unk>.

Hum.

Again, they won't tissue issue on fish Indian Dot should get you the syngenta anything unusual.

You don't get anything like this and we had to pull that off alcohol women generally Fernando could you.

Hello.

It's the RCD oscillation in the champion that's why you should know each other mines.

Hi, Doug.

Guaranteed yet.

I was asking you about the future.

First of all in terms of our flagship <unk> product.

Timing of the product releases highly tied to the cycle of technology innovations and.

In particular in this case at.

At the end of this year, there will be a big milestone well Qualcomm will be releasing their 895.

Chips.

The delay in our EV product is highly tied to this because we want to meet the development cycle. So that we can release.

Fracture vehicle with the new chip as early as possible, we cannot have our flagship model.

We carry the last generation chip when it comes to market and the second one in terms of the EV lineup.

EV lineup will basically mirror something similar to what we have with the IL series, which fully covers the 200 to 500000 RMB price range.

Okay.

Yeah.

Thank you.

The next question comes from Ian Rossouw with Ti T. ICR. Please go ahead.

Thank you.

Google Lindsay. This is we'll go to bill Warmington with balance sheet that Shandong wish you wanted to ask about <unk>.

The market share.

This was on display this is Doug I should we should think that that didn't 71, I think that's showing up now.

Got it okay.

To conclude I wanted to do so.

Real quick.

And in Chile.

The conference is now covering you guys a question on wireless.

Number one you will come back.

Okay.

My first question comes from.

It is.

Hi.

Just now we mentioned that we aim to get 20% market share.

I assume the market with the price between.

Great.

To 500000.

So my question is that how.

How we have confidence.

Thanks, Martin and could you please talk about a little bit more on how we can think about that.

Martin.

We will be between 200000 to 300000.

Your first question.

Yeah.

Okay.

But this agenda.

All of the R&D that essentially we've done that.

I will say goodbye and digital world.

Hello. This is on the Union.

That of course is that EBIT bridge and I know you guys.

Thank you Dan.

Particularly in the auto insurance.

As an adult mature about Roger Shaffer limited liquidity beyond that deal not with without tickets EBITDA isolate shutdown the ego.

Additionally.

And we'll go to the Eagle Ford shale.

Alright.

This is bill my infusion alluded to another thing we'll Miss you.

Hello, good mortality.

Now I'll take even without obviously, Los Angeles agenda <unk> yet.

First one about the 300 500000 price range.

We're at a market share of nine 5% last year as you mentioned and this year, we expect the whole market size to be between one four to one 5 million units and our goal is to double the share because we believe at 20% share is where we could reasonably steady steadily stay as the brand champion.

And Thats kind of how <unk> came about.

The 200 to 300 market is a lot more competitive so our plan is to achieve the market.

The market at a second stage, where we have much greater economies of scale and a stronger core competencies.

Okay.

When it comes.

So it's Sanjay.

Please go.

Go ahead Andrew.

No.

Okay.

Yes.

No I'm sorry, Tom.

So it does give us that that will come back when you tour that Josh Thats a tornado.

So can you ensure that Jonathan.

Sean can we go with you.

Conoco dilemma.

Can you talk to what CECO Regan quick question I'm sorry, Joe.

Sure.

And I'll go got Cheng with.

Hey, Scott.

My second question, there that considering the January to January .

During the propylene price Walmart.

Knowledge he has influenced.

In different.

Thanks, Jeff.

So my question is how will that alright.

Auto industry, we are.

Walking now.

Future, how cannot influence and for the consumer for the users.

Kind of what kind of change we can experience Scott. Thank you.

Okay.

Hello <unk>. This is Ian let me take your question, we have invested in the development of AI based cognitive technologies for quite a long time, especially the conversational AI and the gesture recognition.

They are very important in small space and risky.

Customers now have a good user experience.

Reasonably we are paying close attention to chat GBT and we think it's technology the technology behind like lots of language models and pre trained models are very similar to what we are doing right now in small space.

So we also believe that these technologies have good potentials in visual tasks like self driving.

And then related to startup and the development is doing program.

Michelle.

Right.

The next question comes from new client gain with HSBC. Please go ahead.

The other thing is I'll call. It took us let me now just you haven't done that you just can't do it.

No.

Go ahead.

Montana Sunglass, you'll be talking to the end of <unk>.

Thank you.

But anytime you cut that potentially could then that I think are attending.

Lasalle timeshare chemical wellness choices about what tenant business shutdowns and so on as.

As you can see again Tonight.

You said something that says Baghdad.

And I called it out, but it sounds like that didn't come in.

Okay.

Now mind you in detail.

Now I'll, let Michael jump.

In fact that come in that take a range of as high as in already.

Clearly it sounds that sounds good.

I only got one question is that within our current suite of modern portfolio, how do we evaluate the potential cannibalization given by different version of different model pricing client overlap and should these three models combined.

Between 2013.

Okay.

What is the roughly margin range, we would expect given decently SUV models have the shed the cost base.

No one else is that the eagle that's easier.

Okay.

Archie robot Nathan.

Nathan language, you sell a industry leader to the geopolitical launches.

Got you without passenger they will put on tissue healthy meals.

Thank you Adam.

Our Cheetah Yahoo.

Two years ago.

<unk> done our boxes.

At our materials.

John the industry show Kindred, our Cheetah, David our Cheetah mobile.

Well, we can look at that on or about 10 nanometer.

As you know Archie.

So with that you can tell that tango forgot allocation short term goal getting a yugo.

Yes, I think thats, having them all.

Can you just go you go.

Adult Trent Juliet, how the Jack in the ICU, we opened as usual.

Yoga Yoga charity General, Bob, but our history on how as you are about.

Sure Youll will now mature.

We don't teach out of beta impact, we did just show them and Thats it.

The <unk> agenda.

On the utility.

In fact in practice, we've seen very clear user base differentiation between El Salmonella.

There hasnt been as much overlap as we had been expecting.

As we've seen in showrooms the El <unk> is really attracting families with a two to three members one kit and <unk> eight and subtracting either families with two kits are those at a free generation is under the same roof.

Another good thing is that the interest in <unk>. Seven has also helped for a few quarters for <unk>.

So with <unk> <unk> seven in online.

We really formed as not just a product line, but in fact the product network.

We want any family who is willing to buy an SUV, we will come to our network and fine.

Think about whether it's <unk> or <unk> that they should buy rather than comparing us to other brands and pick which brand to buy.

That has been our core product philosophy with the product lineup of Salmonella here in Melbourne.

Yes.

For the cross marketing.

As we just mentioned.

Our service.

Platform with all of this product offering and with Tom.

On gross profit.

Our profit margin.

After that.

<unk>.

This year.

Battery price and also a macroeconomic we still want to keep our.

Okay.

Yes.

Thank you.

Okay.

There are no further questions at this time I'll now hand back to Ms. Zhang for any closing remarks.

Thank you once again for joining US today. If you have further questions. Please feel free to contact <unk> Investor Relations team.

You May then that's all for today you may disconnect your lines. Thank you.

Okay.

That does conclude our conference for today. Thank you for participating you may now.

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Yeah.

Thank you for standing by and welcome to the Lee ATA, Inc, fourth quarter and full year 2022 earnings conference call.

Participants are in a listen only mode. There will be a presentation followed by a question and answer session.

If you wish to ask a question you will need to press the snarky not only by the number one on your telephone keypad.

I would now like to hand, the conference over to MS. Janet Chen.

All right.

Our director. Please go ahead.

Thank you operator, good evening and good morning, everyone. Welcome Julianna <unk> fourth quarter and full year 2022 earnings conference call. The company's financial and operating results were published in the press release earlier today.

Jake on the Companys IR website.

Today's call, we have our founder chairman and CEO , Mr. Kelly and average CFO , Mr. John and Kelly begin with <unk>, our president Mr. Doping.

Our CTO Mr. Yang.

Joining for the Q&A discussion.

Before I continue please be reminded that today's discussion will contain forward looking statements made under the safe Harbor utilization of the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involve encourage risks and uncertainty.

As such the company's actual results may be materially different from the views expressed today.

Information regarding risks and uncertainties is included in certain company filings with the U S Securities and Exchange Commission and the Hong Kong Stock Exchange. The company does not assume any obligation to update any forward looking statements except as required.

By law.

Please also note that <unk> earnings press release, and this conference call include discussions of agitate GAAP financial information as well as non-GAAP .

Financial Magic, please refer to it.

Disclosure documents on the IR section of our site, which contains a reconciliation of the.

non-GAAP measures to comparable GAAP measures.

Our CFO list Gagger remarks in Chinese.

There will be English translation.

After he's finished I'll hit rate Mark.

That I will now turn the call over to our CEO Mr. Shan Li Please go ahead.

Yes.

I think though that kind of detail.

You don't have any.

<unk> been working to anti tumor tissue.

Thank you Cynthia.

Going back to them.

Cool.

Towards the numbers with you.

Leon Yes, you do.

Thank you Joe.

<unk>.

Yes.

Basically the idea in yet.

And then you'd also neutral.

<unk> got to do.

That's the biggest job while maturities coming up like what you put out here. This is Ernie. Thank you for you to listen to audio.

Archie I want to add.

You're welcome.

So essentially yes.

So not much from that.

<unk> from <unk> BBA.

Let me touch on Yantai.

Yes sort of.

Well, Jim Yes, so hopefully youll also yellow carnitas.

We will go down a little bit.

Let me jump in.

Sure Yes.

So hopefully I covered.

Our strong growth also essentially the least we can go.

Great.

Daniela Egencia that's useful.

And you'll hear that these are our dual <unk> <unk>.

Yes, John on the <unk>.

These are that Youre getting these online that's only on television.

Yes sure.

And that's the way they are starting with you.

Hi, Darren.

Well, Jeff Hello, Hello, Hello, Chad that message.

They are an ancient angelopoulos Susanna thank you Cecilia.

You don't see I talked to analysts would you this article.

Yes sure.

So I do it with you.

Thank you.

Thank you sure.

How does EMEA.

I think the whole IPO Ed.

Yes.

Hi, Sheila.

<unk> global lithium that.

Tanya <unk> two other tuck in Florida generally.

He has to deal with.

Yolanda Thank you.

Got it.

She is a producer.

<unk> to total EBIT.

You bet.

<unk> <unk> afternoon.

Alright.

Total that all up.

So that would argue R E D.

Let me go now with TNT.

Come on closure cooking.

Largely in a modular way back.

Yeah.

Hello, Daniel.

Thanks Mindy.

Randy.

What are your target.

Are you a buyer.

Jackie will go together.

Archie.

Yes.

Our teams are drilling into our heads India.

<unk> is it on what's again the pages.

And since you've been there.

Thank you Bob.

<unk> people working on it and I'll, let Jeff I just want one.

Hi, good morning, Gaslog NGL Danielle.

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Hi, Hello, Tricia tuned on natural opened yet, but the non cash here.

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What do you think Ola <unk>.

Lisa.

Yes.

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On the food each amendment term.

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Lola.

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Tien tsin.

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Yes.

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What you didn't get the outcome.

Hi, Jonathan it's easy to look up.

Our bankers are talking about here is EBITDA.

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Peter why don't you take that John Gingell I'll bet.

<unk> got a little launching <unk>.

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Thiago Fernando.

No.

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At Golden impact anyway.

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Danielle.

Tissue guys that sort of that's already in Italy.

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This year.

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In Northern Ontario women goodwill.

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Paul if I misstated.

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The loan growth.

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Thank you Jackie.

Hugo.

Our team did a simple comparison again.

Kitano women.

Tony on the podium Lisa Archie.

Could you give us some telco for us.

So that.

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Listen you don't want me.

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John that's a chipotle seamlessly I know it used to be.

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That should put us on the inside of a question for.

I think it was about.

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Sure.

Yes.

Yes.

<unk> got an unusual result, especially.

Yes, Jason.

Because it seems to be trying to conclude so which resulted in English.

Yes.

So sure quite unusual.

With us at all.

Okay.

So Coca Cola totally understandable.

While many outlets being with us.

Keytruda from grocery E waste.

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But mostly on the Gulf oil.

Can you go on our sources of Kodiak, Kodiak, well jet travel.

Doug.

We will also enable now.

Total early thoughts with regards here <unk> equally is that alright Danielle.

It also doesn't yet so the tricky on total return.

Bob I'm going to be.

Yes, let me jump into about the hospital without the money not tertiary Tanya.

That is the digital channel.

The Max Python, Tokyo, and Osaka kosher.

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That's sort of a 100, Honeywell controller, particularly strong throughout the low hanging fruit or not but you can go to any of the progress with you again how are you.

Dani that familiarity issue when we don't see shipping as you know.

So going out looking to you to the financial year excuse me if you don't <unk> don't know.

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Bill.

I mean, it's housekeeping Judy.

Hello <unk>.

Women you women, although tinder.

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So have you made yesterday tricky dropdown.

We're not done yet in Antigua EOG to listen Peter Costa with patent.

While mitigating these particular attention to 'twenty goodwill by the time you did.

Tony could you talk about <unk>.

Hi, everyone and thank you for joining our call today.

2022 was another year of explosive growth for new energy vehicles in China, as well consumers embrace nev.

According to the China passenger car association the path the penetration rate of new energy passenger vehicles reached 31, 7% in Q4 2022 compared to 14, 8% in 2021 and 29.0% in Q3 2022.

Our business continued to grow rapidly.

Yes in the year, we launched three new models <unk> and <unk>.

Fully covering the family SUV market between RMB 300, and 500000 these.

These launches further solidified our market leadership.

In the meantime, we continue to fortify our foundation across R&D supply chain and sales and service networks, we've upgraded our overall business processes and org structure to prepare for ourself in the 1% to 10 states.

Next moving on to deliveries and recent updates.

In December 2020, we.

We delivered more than 220000 vehicles.

Setting another record not only for ourselves, but also all emerging automakers in China, putting us in a very good position for 2023.

<unk> has been dominating the full size SUV monthly sales chart and China ever since its release in December .

Sorry in September <unk> continued the one sale success, becoming the top seller of all large Suvs in December 2022.

We delivered 46319, new vehicle in Q4, 2022, and 2022 annual deliveries reached 133246 units.

In December 2022, according to the insurance registration data from Chinese.

Adam motive technology and research Center, we ranked first in both to SUV and <unk> market and the price range of 300000, RMB two 500000 RMB istar.

Establishing ourselves as one of the go to brand for all premium SUV shop shoppers.

Furthermore, in the first quarter, a typical off season for vehicle sale, we maintained strong order intake.

Okay, seeing the competitiveness of our products and services.

I would like to hear bye, thank all of our users and their families for their trust and support along the way.

Our revenues reached RMB.

$917 65 billion in Q4, and $45 to $9 billion for the full year of 2022 up 66, 2% and 67, 7% year on year, respectively.

With our cost management capability and operational efficiency, we maintained a healthy gross margin of 22% and free cash flow of $3. Two 6 billion RMB in Q4 2022.

Moving onto our product lineup.

On February eight we officially launched <unk> seven or five flagship family SUV with test drive starting the day after.

<unk> features exceptional second row space, a comparable interior and a long list of standard features.

Equipped with our in house.

Develop all wheel drive range extension system. The <unk> has a <unk> range of 1315 kilometers and zero to a 100 kilometers per hour acceleration and five three <unk>.

<unk>.

<unk> with a G rating the highest possible rating <unk>, 25% overlap crushed us for both the driver and passenger side.

It also features the constantly evolving marketplace and infotainment system and our driver assistance system.

<unk> is available in three trim levels are.

Our pro and Max fully covering the 300 to 400000 RMB price range.

Alongside the L. Seven release, we also released an air model to our <unk> lineup, which succeeded Lee one in the same segment.

Cover the 300 to 350000 RMB price range we.

We'll commence deliveries of leased seven pro in back in early March and delivery of VL seven Air and <unk> Air will start in early April this year.

With the introduction of these new model, we have completed the default the deployment of <unk> LTE and all nine four.

For the entire 300 to 500, RMB RMB SUV market.

<unk> also allowed us to reach a broader audience base.

The <unk> not only received rave reviews from customer test drive, but also brought in more diverse family users into our stores, which further led to new lease and orders for the <unk>.

On December 16, <unk> was awarded the car of the year and the <unk> Shanghai Award.

It is organized by the auto business review in Austria based consulting the Spirit Award is widely reward are regarded as the Academy award in the Chinese auto industry.

With <unk> continued its strong performance and the addition of <unk> to our family we will set ourselves a stretch goal of 20% market share in the 300 to 500000 RMB premium SUV segment this year.

Against this backdrop, we expect first quarter deliveries to be in the range of 50 to 55000 units.

Next onto the supply chain.

Despite continued supply chain challenges, our deliveries for both <unk> and <unk>.

Allied exceeded 10000 units in the first four months of deliberately.

The only possible with the support of our suppliers and this was also a testament to our solid supply chain management capabilities, we remain confident of our parts supply in 2023, as we further improve our planning risk management and cost management capability to cope with potential challenges and risks.

We take a modular awry modularized approach to supply chain management.

While we work closely with our supplier base. We have also strategically identified core area of our in house development and vertical integration in order to strike a good balance between cost and drill.

Over the past three years, we have been deploying a series of.

Our manufacturing facilities and the range extender.

Electric drive unit.

Let's move on to the sales network in Q4 2022, we continue to strengthen our direct sales and services network and to increase our user outreach and brand awareness in order to bolster our commercial capabilities and drive growth.

As of January 31, 2023, we operated 296 retail stores covering 123 cities as well as 320, <unk> service centers and the auto authorized body shops in 222 city.

In 2022, we expand while expanding our sales network, we focused on upgrading our existing retail stores to have multiple models in order to reach more different types of family.

In the coming quarters as our brand continues to gain momentum we have more multifunction stores, we will have more multifunction stores and our sales network.

After more than three years of operation that direct sales model has proven to provide better user experience and at a lower cost.

Which will remain our long term commitment as the premium car brand.

In 2022, our SG&A expenses were already lower than our R&D expenses, and we expect to further reduce our selling expenses as a percentage of revenue in 2020.

In terms of R&D.

It's always been a cornerstone of our value creation process for family users.

Excellent user.

Research and development capabilities have not only allowed us to stand out in the energy market, but also will ultimately allow us to emerge as a world class Tech company in 2022, we made great strides in research and development.

On the electric drive unit R. L series vehicles are powered by our in house, all new range extension to our system with our one five liter four cylinder turbocharged engine boasting a maximum of thermal.

Efficiency of 14, 45% and coupled with our proprietary fiber one drive either has significantly enhanced the overall noise vibration and harshness performance.

Supported by our proprietary hardware and software the leap magic carpet air suspension provide top notch ride and handling.

And in particular, our own ex Cu vehicle controller is capable of handling complex vehicle information at high speed, enabling many second grade vehicle control.

Our smart space continues to evolve. These outcomes here for instance has evolved with our new generation device cloud integrated architecture and has been rolled out to all of our L series model.

Featuring our in house inference engine for in car scenario, Lisa <unk> and provides a solid foundation for the in car deployment of more powerful and complex algorithms.

Moreover, we have made remarkable progress in our voice and vision based interaction algorithms on the steel side.

With our innovative Midland that algorithm that can accurately isolate different human voices in multiple zone with our voice recognition algorithm.

MSC net these are those who have activation and recognition accuracy, both reached 98% in real world testing.

These rates remain at over 90% in various demanding scenarios, including high noise low voices and children's voices.

On the vision side, our MBS net algorithm can accurately recognize gestures of all occupancy combined with innovative summed by gesture technology and makes interaction through gestures easier and more natural allowing our whole family to enjoy the superpower of making contact and taking control over the year.

In terms of autonomous driving we adopted the fusion BV algorithm framework jointly proposed by Xinhua University.

The us which can be flexibly deployed with the <unk> and <unk> different hardware configurations.

Our in House Highway MLA prediction algorithm enables organic automated lane change and a smooth acceleration deceleration experience.

As of now over 220000 family users have used our highway MLA features covering 100 million kilometers of distance.

During the 2023 Chinese new year holiday alone our highway MLA mileage of all models reached almost 8 million kilometers.

This year, we'll further expand our MLA features into urban driving scenarios with beta testing for early bird users plan and on the <unk>.

<unk> in the first quarter of this year.

In addition, we created the industry's first AEP function with Lidar applications, our lead <unk>, Max and extended the light of algorithms safety scenario for a major traffic participants such as vehicles cyclists and pedestrians to cover irregular scenarios, including special vehicles as well as the night driving theme.

Going forward, we will continue to focus on developing our core <unk> and BV technologies in house and further elevating our products level intelligence.

We will consistently direct our R&D resources across product platform and system, a few of our long term growth.

In summary, we view our long term success as a function of our continued investment in R&D and our business capabilities, which will support the creation of more head model enhance our brand value and serve as critical pillars of our business flywheel.

2023 will be another year of rapid development of the industry and for Lee Auto in particular, we have full confidence that we will be able to build an increasingly innovative and diverse model lineup and deliver outstanding products and services that will continue to exceed our.

Users' needs.

With that ill turnover the call to CFO , our CFO jonny for a deep dive into our financial performance.

Thank you Alicia Hello, everyone I'll now review some of our 2022 fourth.

Fourth quarter, often articles to leave more time for the Q&A session.

Our financial highlights here.

Higher to you to refer to our earnings press release.

More detail.

Total revenues in the fourth quarter of 2014.

For RMB.

<unk> takes.

<unk> 5 billion to $5 6 billion U S dollar.

<unk>, an increase of 66, 2% year over year.

The increase of 88, 9% automobile culture.

Included RMB 17 point.

<unk>, beating our $2 five heating U S dollar from vehicle sales.

Which was.

<unk> 50.

<unk> 50 fixed fall year over year and.

90.9% HOKA will color the increase was mainly attributable to the increase in vehicle delivery.

As well as higher.

Starting price.

Due to our delivery of the <unk>.

Alright.

In late August and <unk> eight.

Great.

In November <unk>.

Revenues from other sales and revenue were RMB.

$381 5 million or $55 3 million U S dollar in the fourth quarter.

Representing an increase of 55.

9% year over year.

And our increased off spot.

Eight seven.

7% quarter over quarter. The increase was mainly due to the increased sales of accessories and services in line with higher.

Accumulated.

Vehicle sales.

Our cost of sales in the fourth quarter was RMB.

Forging pardon.

Zero 8 billion or $2.04 billion, representing an increase of $79.

Perfect year over year, and the increase of 72.

6% quarter over quarter.

Our gross profit in the fourth quarter of 2022, both RMB three.

Five 7 billion.

517, one meeting U S dollar.

Brian .

49, 8% comparable.

The fourth quarter of last year, and 201, 7% comparable with the third quarter.

Of this year of 2022.

Our vehicle margin in the fourth quarter of 2022 was perfect.

Comparable.

Pool partners III protect in the fourth quarter of 2000.

'twenty, one and 12% in the third quarter of 2022.

Decrease the vehicle market over the fourth quarter of 2021 was mainly due to the different product mix between the two quarters.

The increase in vehicle marketing over the third quarter.

It was mainly attributable to the loss on purchase commitments related to the U S in third quarter of 2022.

Gross margin in the fourth quarter of 2020% to 22%.

<unk> printed coupon, 4% in the fourth quarter of 2021, and 12, 7% in the third quarter of 2000.

Operating expenses in the fourth quarter of 2022 were RMB three 7 billion.

536 fault meter U S dollar.

Reflecting an increase of.

47, 1% year over year, and an increase of 11.

7% quarter over quarter.

R&D expenses in the fourth quarter of 2022, while RMB full part zero seven.

<unk> 7 billion.

Our three high growth one.

One meeting U S dollar.

58, 3% year over year and 14 seven our first.

Cargo recovery.

The increase was primarily driven by increased.

Dave.

To support our expanding product portfolios as well as increased employee compensation.

As a result of our growing number of staff.

Selling general and administrative expenses in the fourth quarter of 2022 were RMB. One pilot speaks to repeat it all 230 basis points III, meaning U S dollar representing a increase of 44, 8% year over year and an increase.

Golf.

Eight 1% cultural culture, the increase was primarily driven by increased.

E Commerce season, as a result of our growing number of staff.

As well as increased rental expenses.

With the expansion of our sales and servicing network.

Loss from operations in the fourth quarter of 2022.

RMB 133 part of the meeting.

<unk> 19, 4 million U S. Dollar comparable is RMB 20 ballpark, one meeting income from operations in the fourth quarter of 2021.

The resulting in a decrease of.

97.

Three 7% from RMB pool.

<unk> was.

<unk> 3 billion loss.

From operations in the third quarter of 2022.

Net income in the fourth quarter of 2020 was RMB.

265 3 million.

$38 5 million U S dollar.

Presenting a decrease of <unk>.

<unk>, 2% from <unk>.

RMB 200.

I think five five meaning net income for the same period in 2021.

Paraguay is RMB.

One pardon.

Fixed 5 billion net loss in the third quarter of 2022.

Turning to our balance sheet.

On cash flow.

Our balance of cash and cash equivalents.

<unk> cash time deposit and short term investments.

Was RMB 58 part.

Qualifiers bidding.

<unk> eight point.

407, beating U S dollar.

December 31st 2022.

Net cash provided by operating activities in the fourth quarter of 2022 was RMB.

Ballpark nine 3 billion.

<unk> <unk> hundred 14, 1 million U S dollar.

Free cash flow was RMB.

Three point.

<unk>.

Feeding all 470, <unk> III meeting U S dollar in the fourth quarter of 2020.

As of December .

32.

2022, we had a total.

19396 employees.

Some of our 2022 full year financials.

Please refer to our earnings press release for more detail.

And now for our business outlook for the first quarter of 2023.

Company facts.

<unk> to be between.

50 50.

<unk> 2000 and.

55000 vehicles, representing an increase of 54.

Put that to 73, 4% from the first quarter of 2022.

Company also expect.

First quarter total revenues to be between RMB 17 point.

<unk> four 5 billion.

The RMB 18 point, Paul <unk>, beating our.

Our U S dollar coupon five three beating in the U S dollar pupae in HPT.

Increased off.

82, 5%.

93% from the first quarter of 2022.

This outlook assumes supportive.

Macroeconomic condition.

No significant disruption in the supply chain.

And reflect company's current and preliminary preliminary view.

Spaces situation and market conditions, which is subject to change.

I will now turn the call.

Over to the operator to start our Q&A session.

Thank you.

If you wish to ask a question. Please press Star then one on your telephone.

For your name to be announced.

If you wish to cancel your request. Please press Star then two.

Your line is speakerphone, please pick up your handset.

Your question.

When asking a question in Chinese please translate your question in English for the convenience of everyone on the call.

The first question today.

Comes from Ken <unk> with Morgan Stanley . Please go ahead.

Quite simply.

Similar to that <unk> switching kind of cancer with <unk>.

So, yes, you cannot cancel them.

<unk>, which is on CSA pay TV go.

You mentioned it was down quite a bit.

Yeah.

As you say when you kind of thought that you are quality quality center changes yet.

And <unk>, which are holding the HP.

And Keith I see the huge all familiar okay, great. That's all I wanted to touch one party.

I would say to achieve partial here and they need help with circle K that also in <unk> mobile.

It's a good jump witnesses who will take time.

And cool syndicates and what he said cannibalization I guess, how long until you see the Chabat you change.

Thank you Charles would either sandys upon.

<unk> done, which is open to east <unk>.

It turns out <unk> gotcha.

And I felt we'd have seen what that all of us who had either uhm predictable Gil.

So I'm going to take all the tissue Queen suddenly you can see from Egypt.

So we sat down to Houston, which is shot queen cell into the sort of nickel pig.

<unk> it sounds to the Twitcher causes.

It pulls in Cushing Chelsea.

So the K H.

Yes.

So my first question is about the outlook.

We noticed that previously the management share the monthly deliveries.

At least reached 25000 <unk>, Alex having started.

With a free Theres climbed to 30000 accuray to hear versions of <unk> eight.

Available. So just wanted to double commentary is that how we come up with such a strong target.

Based on the pace of the new <unk> order backlog.

Our assessment of total addressable market of 5% senior.

<unk> SUV and how fast.

MS Murphy deliveries reached and stabilized as such level.

And more importantly, because of supply chain.

<unk> ramp up the output has such a rapid pace constant because of weather.

Lindsay.

No.

Can you go into here.

Okay.

Now suddenly you're good neighbor there you go.

How do you feel women said, you really don't you know hows that arguably neutral it yet.

So, yes, especially within our sheet outgrow a magnitude that igo ahead on the job for you.

We also have visual minority tangible ego.

So you just put.

Without a legal review.

So 25 to 30000 orders, it's our internal goal and we expect to reach this level. In Q2. This is April is the first full month, where we deliver the L. Seven protein Max and main will be the first month, we delivered the air version of <unk> in all eight.

Okay.

When he'd also long term, whether China. Both on me I know, what you're doing on the DAU hernia.

And you heard me dollar here.

The usual Mitchell dealt with your hot rolled coil.

The way that we're looking at that.

In that geography were down the year to.

Good morning.

And how do you say 300 data.

If I may I know that Chilean salmon little tiny.

Thank you Giorgio.

Hello, Matt Perpetuation, how we'll manage it with the total of all the tissue architecture. How you may know NASDAQ silver that Chinas <unk> E <unk>, John the Neutrolin shortly.

<unk> came out with that.

I hope I mean, there's sort of a group called <unk>.

Good Ah <unk> cartridges, and you've got the culture now.

We will have EMEA, while husky bottom yet.

Good.

With some yes.

Now, we'll go to without going out at the market when you go deep.

Hey, Greg.

<unk> now.

How young the gondola economics from yoga.

Schedule, a T cell <unk> political panettone.

Well of course, you also you patricio elements at some good a neutral but many of them yet, but also that you mentioned.

But from your tone.

Second question about our ramp up.

Admittedly, we experienced some issues in the second half of 2022 with our deliveries and we attributed really to two things. One is because we had to set a very aggressive delivery goal because we're seeing really good order intake. So that plays a lot of pressure on the supply chain and the second cause. It was we were switching from a single.

Model to multiple models at which again.

Place a lot of pressure on our sales sales and service networks. So across Q4 and Q1 of this year we have.

Going through a long process of upgrading our sales and service and manufacturing systems. So that now we have a very robust system all the way from planning to delivery to manufacturing and sales. So that we can handle really stress that comes in.

With our strong order intake and that really helps us to make three things a lot better at the first one is resource allocation, we could really allocate the best resource to whereas most need it and the second one is our employees will feel more fulfilled as they achieve these goals.

Third is that it also appliance suppliers to retire efficiency on their side.

So it seems like this is all of those things I don't know what Derek <unk> C U E.

Tycho.

Ian <unk>.

Sure.

In cancer cell and Jonathan you could talk about just yet.

I was just I was thinking you kind of equate against your thoughts on China.

The challenge is obviously I think AEG to ease this is how the chin senior interest in Python Isa Chengdu Chongqing Shanghai.

Sounds great.

So what kind of debt.

Against Shaquille and shop.

Tom can you talk to the Dana to each at high <unk>.

Sure.

So the cancer center, a good chunk of it depends on the.

So, Michigan, because she answered them already but it sounds like which I think the <unk> assumption.

Each of the <unk> that you can take a machine to Greenwood.

So as we can.

So my second question is how battery procurement cost and potentially impacting the margin.

We saw strong likelihood of that.

Battery prices, which continue the downstream this year and previously local media also reported like category and like the others are willing to offer some aggressive pricing.

Exchange for long term contracts.

<unk> and other top notes TV makers so.

Could the management team comment on the potential collaboration with battery makers and how should we think about how the contribution to the <unk> margin improvement.

In the following quarters in terms of scale and timing versus current level.

Thanks.

Sure Okay.

<unk>.

We'll share decline on the high share of goods hotel.

Entry job, whether you're going into the future our materially Roche and novo downturn shared the juggler what are you going to essentially get to.

Qunar and Ctrip, Chicago due to leap year.

Can you touch on me.

And we're going into the huddle shifting their strategy.

So what do you believe your top hydrogel to Congress.

Good job.

So in terms of battery pricing.

There are many factors at play, including the <unk> mines and battery pricing mechanisms, but in general our belief is that.

Battery costs continue to approach a more reasonable level, we think it's good for the industry not only for us as Oems, but also for suppliers of battery manufacturers.

So you'll have much interest you can shut down that you saw there.

Ultimately it all up.

Thank you to all fixed rental and other people.

I'll try not to distant future.

Sure.

Now if I may how should we element unchanging.

<unk> done that with some of the cap.

So as we expand to more models and as our sales continue to ramp up we believe battery is a very strategic asset and we will continue to commit to a multi supplier strategy for two reasons. One is for not only for the stability of our supply chain, but also to meet the time requirements for developing multiple.

Model at the same time.

Toyota I've had some good again, we can re queue.

Your doctors will shoot also retention.

Tension the juggler shutdown tend to hover at almost for sure.

No Jim got into the Chaco quite laudable.

<unk> and <unk>.

And the whole clinical profile.

Okay.

Which end of our annual completions you don't have people.

In the long term, we believe the battery prices will continue to move towards a more reasonable level as you can see in the past few days the price of lithium carbonate has already reached a 400000 RMB per ton and we believe the long term trend is still for the price to go down and.

And we will continue to work with suppliers to negotiate a good term.

Theres not much detail details I can share at this point.

Yeah.

Oh, Hey, thanks, guys. So it sounds as though there's always going to feature. Thank you very much for the update thank you.

The next question comes from Paul Gong with UBS. Please go ahead.

Oh excuse me.

It was in Q1 with the vehicle when two conditions.

Do you do with them soon.

Q2, automotive do the questions on <unk> since a few women tissue easy to launch at Joseph a decent one so we should assume some ODT.

Yes.

Between the coupon on sort of a few weeks.

The desalination with one way too soon.

Hopefully you find on some questions on <unk>.

We will continue our children's home ODB industrial companies in Q1, 2%.

Oh, that's on contract itself.

<unk>.

And just switching to the Argentine peso to U S interest in time somebody doesn't go switch it on <unk>.

You may have some conservatism. So my first question is regarding the gross margin.

I think for this quarter the vehicle gross margin.

<unk>.

Has it been 20.0%, which is up about one percentage points lower than second quarter, and two percentage points lower than first quarter.

Justin.

<unk> <unk> Hudson mentioned this was due to the product mix change, but my understanding.

<unk> contributed about.

About 60% of the volume for this quarter, which should be positive for the margin is it due to the initial run counts.

Or any other reasons you can see this is my first question.

Okay.

Thank you Paul.

Got it.

From the company.

Our first.

Gross margin.

On <unk> and <unk>.

With our guidance.

<unk>.

Starting from the fourth quarter.

Our revenue and gross margin.

As the mix all fall.

Different.

Without offering.

And.

The majority of our sales volume comes from.

Nine.

Alright.

<unk>.

Most productive under.

They are ramping up.

Right.

As you know.

Our supply chain new tool.

Grubhub with that.

All carriers and to release.

The gross margin.

So.

Tom.

In the coming quarter.

Our R series.

The overall gross margin.

Okay.

Yes.

Material.

Alright.

In the future.

Okay.

Oh sure no one <unk> going to be too soon.

And you can see.

<unk> 2 million.

Truly no motion.

Question with the Simpsons and citizens.

Thank you Matthew we chatted with them.

<unk> seen them.

<unk> got some dental national women's home.

Relational Haynes.

So for nickel.

Persistency.

<unk>.

You can see Indianism Ashish.

Sure.

Got you.

With Andy and those launches are quite soon.

<unk> you.

Hmm.

Okay.

So.

So we've got some nice UV.

Okay.

Assuming that you can share.

No.

You choose Houston.

Sure.

MTV.

I assume that you guys into mid <unk>.

My second question is regarding to your upcoming Purion entry.

Perhaps on MTV.

The selling points might be charging.

We also see some competitive noise from some peers fast charging EV models recently launched given to me.

Any expectation.

Expectation.

With the final quarter.

I mean the competitiveness.

Trying to achieve some margins hopefully on comparable to ours.

<unk> products.

Okay.

So that's a major sponsor.

General industrial in Central Asia, LNG to do I'll give you. Unfortunately.

Users can show coming up.

Sure.

Huntington.

Cynthia Bill Womens Iona to that interested in clinical data yet.

Yes.

Yeah.

Now what else is scheduled until.

The 10-K.

To congratulate Lynn teacher younger.

Diego Hogan and NGO.

Domino to Hugo <unk>.

A figure that we showed us don't forget he actually become Linda.

What about the people the win in India.

Julie lasers on E C.

The city of hope to show Jeep.

Is that argument.

Sure sure.

<unk> should be doing all of that.

Peter.

Congrats on the London team we have.

Sure Truman empty their novel <unk>.

That will be to be able to get it all kind of algorithm will kind of go into Asia.

A woman.

David It's a bit of attorney general tremendous detail table nutrition and.

And as usual the whole nation.

How youre Trinidad what gives you the Toyota survive without Toyota at either the Hull tunnel under the 2017.

Egyptian partnership would it be interesting.

And actually the April actually.

We don't see anything unusual there or there are typically bid Ida with eylea.

The negotiated over the <unk> hopefully living here for the amount of.

Over the medium into trauma and I'll come and gone.

Kudos to John that you're going to you're not so good that.

You said it should be the timetable the Amazon channel due to them are equal.

That MPA El Dorado, Youll go down either to do.

<unk> calculated Ot Ed on the 100 Ohm Chiyoda Toyo you've got <unk>.

LCD at the company.

So the answer to this question on three levels. So I'll start off with why are we start deciding to build <unk> in the first day.

It was really two things right. One is because battery costs are very high and second was charging was difficult at the time for electric vehicles.

Not only difficult to find charging patients, but also very slow to charge so moving over to evs.

We also intend to solve the three issues. The first one is about charging.

With <unk>, our strategy has been to use gas on highways and used.

Christy and the local environment. So EV, we saw the same issue by charging rapidly charging 400 kilometers of range in 10 minutes, which is very comparable to gas cars.

But that's not the complete picture.

When we had <unk> mobile phones, but if we don't only have <unk> networks is still doing well.

So another piece of the puzzle infrastructure, so with <unk>.

Carve out charging capabilities and infrastructure, we are able to.

To provide a level of charges experienced comparable to our evs are cast vehicles.

And second one is cost.

As you can see we've invested a lot on our 800 volt high voltage architecture as well as our own in house Silicon Carbide factory and many of these innovations combined allow us to significantly increase the efficiency of our EV architecture.

Compared to 400 volt <unk> systems, we observe almost 15% of energy efficiency compared to similar models on a 400 volt architecture and that saves a significant amount of battery and therefore cost of the vehicle and the third level I want to talk about it as a product.

I can assure you that on our EV product lineup, we will be able to provide a similar level of product and experience differentiation that significantly exceed our user expectations, even more so than our our EV models.

Okay.

Okay.

Thank you so much.

Yes.

The next question comes from <unk> <unk> with Credit Suisse. Please go ahead.

So <unk> you are going to announce anything done Gulf of chicken right now kind of weakness that you guys should gymkhana, Josh as you wish.

One Santana, particularly with Maria which anything that can be taken at genus hygiene.

So it shouldn't come behind not shipped until I think that you talked about and obviously with it.

And then on Samsung Sanyo conductor share.

<unk> got just beyond that so we can control, which is I think balancing quad <unk>.

Since you've talked about going to either need to make.

Or should we.

It sounds like you're still even without the machines with auctions.

On <unk> and you do that.

Chip.

<unk>.

Once you've done that then I show My question May two in tons through the <unk>, the notional that shovel dig into doing social functioning.

Kimball Nissan one that I think a simple single some actually one question on switching.

Number one is that.

So I'm going to sneak them in company.

Once I assume will bump additional dewey.

<unk>.

Okay.

It's a whole new Super sure, we accomplish that and then Lukas just down the hall.

Aluminum GE digital outstanding amount of unique to ship on hoping auto shop.

Well.

Actually I've got two question number one.

I'll take the order.

Adults online before.

And a stable regime, you've got 25 units.

Units.

Soon after that.

Some of the units which means.

We'll be <unk> from Stephens.

So I'll.

I will grow and our seven will be.

Taken in total order flow.

Hi.

First question about the order for an unstable state.

A quick question on our margin actually tried to quantify the margin impact and the number four corner because we see a few Pakistan, but why is that and this impact actually interesting.

Taking that into full quarter comparable number three.

<unk> 400000 units.

B <unk> to 500000 per ton.

Is that going to be the number one reason number tweets about that.

Promotion and the one we stood out in the last two quarters last year two months that were still around 1000 units on day. One so does that create an inventory that can be done when a margin increase instead of one.

Component supply normally will comeback.

Amongst the city can you actually have a higher cost after typically have lower cost. So that's the reason I'm trying to understand what's the margin trend in the first quarter next year 2023. Thank you.

Yeah.

Okay ammonia business obviously.

Okay. Okay.

I think Paul.

New Zealand.

Simon.

Yes.

As euro we still need.

We'll need some time to ramp up.

The Q1.

No.

<unk>.

Yes.

Several.

Yes.

Kevin.

Most of the interim will be still be.

Alright.

<unk>.

As we mentioned.

April .

<unk> will be the whole the whole months, we deliver our.

Our theories including air.

Paul.

We have some.

Sure.

R R.

Other as you know the erosion.

Hi.

Paul.

And I'll talk to customer needs will be touched by it.

The mix.

No.

A few from us.

Weibo.

And second question I think all the factors you mentioned.

What was.

Yes.

The better at that.

Our tangible effects.

Paul.

Marketing in the fourth quarter and.

All of this.

As a whole the impact too.

2%.

Marketing.

I don't want to break it to two.

You too much detail.

And for this year.

<unk>.

The market conditions, we still want to keep our guidance.

To be.

100%.

Okay. Thank you so much.

The next question comes from <unk> Li with Bank of America. Please go ahead.

These are the leader.

With <unk> <unk>.

Oh, sorry.

Alright.

Jim by the way.

No I understand that it is.

Sure.

Those who attended.

Is it really sounds like Keytruda doing single tenant.

Presenting to you.

Suggestion as soon as the guidance.

Right into the heart.

Gentlemen, if you sometimes do somehow.

As you can kind of think that Tucson.

Women do.

To consolidate doses youll doesn't how United took a jump high.

200 <unk>.

Quite a you can put him so nudges judges.

Just with the <unk>. So my first question is regarding.

My sense is tight.

Policy change in Shanghai, So what is the sales contribution.

From Shanghai.

In 2022, and 2023 and the amount that.

How many percentage of scanner.

Consumers this year the Houston currently licensed to buy.

Our product.

<unk> <unk> <unk>.

Good morning, gentlemen.

Dominion that timetable.

Jim.

Glen can you guys like would you choose.

No no no.

I don't see in Q2.

Did the MPV.

Yes.

Can we assume that demand can be.

Indian to igo.

Attempting to Patronise not.

So this is vincent.

<unk> now.

Yes.

So anytime you see a case of wait to see the telephones.

Diego.

My second question is regarding.

That pipeline so first question.

Will you.

Lunch.

The PV this year.

For the NPV and also for your new product pipeline.

Elisa.

Let's be launching next year.

Also for the besides.

Next year from the BV product.

You start to launch more other products for example.

Okay.

No doubt.

Okay.

Our recently spoke with digital and.

I wish I had that kind of user navarre tissue hunting that there'll be a vision that Amy.

Throughout the day.

He has been charged with IBP to industry pharma.

Hi, Ethan.

And do the Petrodelta falloff no isn't either.

So it can get.

10 gig will go to Julien how should we think that that's going to other countries.

Phil.

Hasan Youll get on it.

Sure.

To recruit Sheila I'll leave How're, you calculate you either do it yourself.

Nobody can be deal junkies.

So in the tissue.

Go ahead Ian.

That's all done.

By the AGM will now look for there you go.

One question on Houston.

But other <unk> in terms of the orders in Shanghai. The January order flow was not very good.

That was understandable because most of that demand was released in the November and December last year, but we haven't seen a very significant recovery since February .

And over the long term, we look at this issue from a market share standpoint, and we believe the steady state market share in Shanghai will be comparable to that in Beijing, because going forward. Neither in these markets.

Our EV purchase will be incentivized by a free license plates. So we think Shanghai will eventually.

Move towards a market share similar to that in Beijing.

Yes.

While in the Chilean attempting the fabulous year hotel for distribution, yet CDO gains here, so you're going to have the team from tissue Bobby.

The <unk> zone yet.

Okay.

In the diesel fuel I believe that if I don't know how you got to add that you got from the Gulf on the Baidu CLO paper and tissue.

The Ocado Baidu, how Glenn D&O, Tim Good luck ipads in Newcastle earlier, Coachability and yet and then I'll flip on the team booties with overseas and Glenda, Although open notable even here Doug.

Yes.

I'm, just telling you that now.

At Tds agenda.

Do you have it on the shelf so tissue to women.

You could either published at the end of <unk>.

How are you going to Ian.

Jude issue on fish Indian Dodge again Peter.

Anything unusual.

Patricia.

Let me make this familiar in tissue Hogan, our popular Halloween generally Fernando Tokyo mutual.

Sure.

No no.

I'll leave the RCD.

And then your champion.

Why you shouldn't I'm going to tell them.

Without a doubt, particularly guaranteed yet fund.

I was asking you for the future.

First of all in terms of our flagship <unk> product.

The timing of the product releases highly tied to the cycle of technology innovations and.

In particular in this case.

At the end of this year, there will be a big milestone Qualcomm will be releasing their 895.

Chips.

The delay in our EV product is highly tied to this because we want to meet the development cycle. So that we can release frac.

Fracture vehicle with the new chip as early as possible, we cannot have our flagship model and only carry the last generation chip when it comes to market and the second one in terms of the EV lineup.

The EV lineup will basically mirror something similar to what we have with the ISO series, which fully covers the 200 to 500000 RMB price range.

Yes.

Yeah.

Thank you.

The next question comes from Ian Rossouw with Ti Ti's, Yes. Please go ahead.

Thank you.

We'll go to Paul well, Linda Mcneill, Chief essential under which one this is Jeff.

The market share with our next question, Doug I should we should think about that.

And then one on Mako.

Now lets move along well.

Got it.

To conclude I wanted to do so.

With that I'd like to go back to Josh.

Correct.

You guys a question on wireless.

Number one you will come back.

Thank you Michelle.

My first question comes from.

It is.

Just now we mentioned that we aim to GAAP accounting.

And market share on them actively market with the price between.

Great.

To 500000.

So my question is that.

How we have confidence.

And could you please talk about a little bit more how we consider about that.

Martin.

It will be between 200000 to 300000 my first question.

Yeah.

Hmm.

With this agenda.

All of that Harley Harley.

Thanks, Rich and we've done that.

I will say about in Israel.

Hello, This is how the union.

That of course at the EBIT figure that out.

So that antigen.

Now this is also true.

As an adult mature so it is it could be beyond the deal not with without tickets EBITDA isolate shutdown the yugo.

Additionally.

And we'll go to the Eagle Ford.

Alright.

This is bill hi, infusion diluted to another.

Michel you couldn't have been more Tony Hawk, and I'll say again without obviously, Los Angeles agenda igo to negotiate.

First of all about the 300 500000 price range.

We were at a market share of nine 5% last year as you mentioned and this year, we expect the whole market size to be between one four to one 5 million units and our goal is to double the share because we believe at 20% share is where we could reasonably steady steadily stay as the brand champion.

And Thats kind of our goal came about.

The 200 to 300 market is a lot more competitive so our plan is to achieve the market approach to the market at a second phase, where we have much greater economy of scale and a stronger core competencies.

Okay.

When it does go into that Mr. Sanjay.

Sanjay.

Please go.

Thank you.

Okay.

Yeah.

No I'm sorry.

Tom.

So it does give us that.

I will jump back when you talk to him Josh.

That you are now.

So can you ensure that Johnson with codelco.

With that I know.

Can you talk to what CECO Regan quick question for Joe.

So for your research and nickel got Shanghai, which at the end of.

My second question, there that considering the generator trends January .

During the pre trained times Walmart.

Technology has influenced.

And different and Goldman Sachs.

So my question is how will that Alcoa.

Alto industry.

Im walking now.

Future, how can that in place and for the consumer for the users.

What kind of what kind of change we can experience Scott. Thank you.

Okay.

Hello. This is <unk>, let me take your question, we have invested in the development of AI based cognitive technologies for quite a long time, especially the conversational AI and the gesture recognition.

They are very important in smart space in this game.

Customers now have a good user experience.

Recently, we are paying close attention to and chat GBT and we think it's technology technologically behind like larger language models and pre trained models are very similar to what we are doing right now in small space.

So we also believe that these technologies have good potentials in visual tasks like self driving.

And then related to study and develop them in these doing program.

Okay.

Okay.

The next question comes from New client Deng with HSBC. Please go ahead.

Although no one tcf.

No.

Well number one tenant sunglass, you'll be talking to the end of <unk>.

I think that by the time, we will come back because you didn't comment that I think are pending.

Wholesale timeshare semi warm it sounds like so think about what percentage of the shutdowns and so on.

As you can see Tien tsin.

You said something that says that that they got that way.

And I called it out, but it sounds like that being cut.

And I think both on the outdoor <unk> action, which is to say yes.

Hum.

But.

And that does impact that come in that take a range of as high as an R&D company.

It sounds that sounds good.

I only got one question is that within our current Newsweek SUV model portfolio, how do we evaluate the potential cannibalization given by different version of different models the pricing point overlap.

These three models combined.

Between now.

Okay.

What is the roughly margin range, we would expect given the you can see SUV models have the shed the cost base.

No one else without the Eagle.

Hello.

Archie robot Nathan.

Nathan language, you sell a industry leader to the geopolitical uncertainty.

Passenger vehicle down tissue, hoping we would get done.

Archie the Yahoo.

<unk> Hello, Nicole.

<unk> done our boxes.

Not materially.

John the industry Joel.

Our Cheetah David Archie.

Well, we can do is that on or about 10 nanometer.

As you know Archie about also whether you can tell that tango forgot altitude shortly.

Yes, I think it was kind of minimal Shimon can you just go.

Okay, essentially myself Juliet how the Jack in the duopoly as usual.

Okay.

Sure Jarrod, Hi, John or Bob.

I heard your hygiene are about.

And with your market share and how Youll will now mature.

They don't teach out of beta impact, we did just show them and Thats it.

The whole economy agenda.

On the utility.

Yeah.

In fact in practice, we've seen very clear user base differentiation between now Salmonella.

There hasnt been as much overlap as we had been expecting.

As we've seen in showrooms. The <unk> is really attracting families with a two to three members one kit and <unk> eight and subtracting either families with toolkits or those that are free generation is under the same roof.

Another good thing is that the interest Enel <unk> has also held for a few quarters for <unk>.

So with <unk> <unk> seven in online.

Really formed as not just a product line, but in fact the product network.

We want any family who is willing to buy an SUV will come to our network and fine.

And I think about whether it's <unk> or <unk> that they should buy rather than comparing us to other brands and pick which brand to buy.

That has been our core product philosophy with the product lineup of Salmonella here in Melbourne.

Okay.

For the gross margin.

As we just mentioned.

Both our service.

Platform with all of this product offering.

With some inability to define cross property.

Our profit margin.

Yes.

Considering.

This year.

Battery price and also of macroeconomic we still want to keep our guidance.

Okay.

Okay.

Okay.

There are no further questions at this time I will now.

I hand back to Ms. Zhang for any closing remarks.

Thank you once again for joining US today. If you have further questions. Please feel free to contact <unk> Investor Relations team.

And then that's all for today you may disconnect your lines. Thank you.

Okay.

That does conclude our conference for today. Thank you for participating you may now.