Q1 2023 Yunji Inc Earnings Call
Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to UNG's first quarter 2023 earnings conference call. With us today are Mr. Xiong Lers Dao, Chairman and Chief Executive Officer.
Japan Pong Song, Vice President of Finance
and Ms. Kay Liu, Investor Relations Director of the company.
As a reminder, this conference call is being recorded.
Now I would like to hand the conference over to our first speaker today, Ms. Kay Liu, investor relations director of UNG. Please go ahead ma'am.
Hello everyone. Welcome to our first quarter of the 2023 earnings call. Before we start, please note that this call will contain a forward looking statement within the meaning of the private security litigation reform act of 1995 that are based on current expectations and current market operating conditions. Thank you for your related biomedical advice.
He moves no known risks, uncertainties, and other factors to the Chinese industry. This low-looking statement can be identified by terminologies such as well, expects, anticipates, and continues all other similar expressions. For a detailed discussion of these risks and uncertainties, please refer to our latest document file with the US SBC.
Any forward-looking statement that we make on this call are based on assumptions as of today.
I personally qualified entirely by cautioning this statement, risk factors, and details of the company filing with ICC. Linxi does not undertake any obligation to update this statement except as required for applicable law. With that, I will now turn it over to Zhang Ruizhou, Chairman and CEO of Linxi.
Time technical enriched. Hello, everyone. the first court said 2023 earnings call.
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I'm delighted to announce that we celebrated our eighth corporate anniversary on May 16, 2023. It has now been three years since the outbreak of COVID, and during the first half of this year consumption has been gradually...
brand and ready for community service competitive advantages. We will embark on a comprehensive exploration of gourmet food, beauty and healthcare. We will delve into the interconnectedness of these categories and their role in enhancing quality of life.
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that all our educational sessions will continue throughout the time zone of quarantine and will be in double Yes or no? Asisa explain, there are many uses for this measures. Wepi Group before during the quarantine phase are a region withuzzing
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In learning yet local community services have emerged as a new growth trend in the consumption sphere. In line with this trend, during March, we integrated our existing food and neighborhood groups into our community in the commerce service silver supply chain.
This service offers exclusive products to users with a particular focus on the gourmet food category. SuperSub1Chain leverages the super community leaders to bring a wide selection of affordable gourmet food from all over the country and around the world to users' doorsteps.
Under this model, every super community leader is closely connected to users residing within a 500-meter radius, facilitating high-frequency interactions on a daily or even hourly basis. We encourage repeat purchases. The most popular products featured in super supply chain are the
will subsequently become available for redwood purchase. Furthermore, we have set up an innovation department dedicated to expanding the reach of our community e-commerce service beyond our current community. This department will ask for community e-commerce in untapped commercial networks and actually connect with new group leaders.
Beyond expanding the scope of our services, these initiatives will build brand awareness, drive sales and interact to deliver more comprehensive global community services.
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Through our recent offline events, I had a privilege of meeting service managers from all over the country. I was highly impressed by their professionalism, a vibrant passion for beauty and a zeal for life. To bring home some support for them, we are committed to developing and expanding our range of private label products.
that address both external and internal beauty needs. At present, our diverse portfolio of private label products encompasses natural supplements, body management, oral care, hair loss, prevention, skin care, personal care, and more. Looking forward, we will actively explore further opportunities and possibilities.
in the realm of beauty and ensuring that we continue to meet evolving needs of our users.
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In line with our strategy of developing mass market, private label products that cater to a broader range of families and their diverse needs, we recently launched a brand new consumer product, Everyday Light Oil. The product is a next generation healthy cooking oil with a...
revolutionary change in the edible oil industry. Recognizing that healthy cooking oil is a relatively novel concept, we employed a number of strategies to promote it as a new and healthy lifestyle choice to our community and among our users. These strategies include as we love live presentations.
offline events and a combination of graphics, informative articles and engaging short videos. Thanks to these efforts, everyday Lion Oils launch with a resounding success, where Zells is leading 5 million units on its first launch.
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A real phenomenon is people's increasing consciousness of the importance of boosting their own immune sequence. Capitalizing on this trend, we are intensifying our efforts to develop healthcare products for our private labor portfolio.
These products empower individuals to pivot from a reactive healthcare approach to actually nurturing their health and well-being. During the first quarter, we saw a significant surge in user demand for healthcare products with the Ting Zhi Yang probe by Altis and in calcium pellets proving to be exactly what we currently see.
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On the marketing front, we energized the community engagement in the first half of the year by holding a range of offline events, including the loans, production, sign-in, and a new product launch ceremony. During the month of March alone, our activities are
garner the participation of more than two sound service managers. Since February , we have organized a variety of events, including the Milling Sale Delention Plan, offline kickoff meeting in Changsha, and visit Xinjiang where Owen used private label milk as source.
For our everyday life, we held a 1000 person study tour in Vietnam, giving participants a deeper understanding of the product. These events also foster mutual support and inspire individuals to embrace a healthy lifestyle, cultivating a strong sense of belonging and a collective pride among our service members.
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In line with our commitment to technological innovation and Development Department.
is actively engaged in exploring and developing AI nutritionists, AI customer support, and AI community management. We aim to gradually roll out these initiatives during the second quarter, delivering a fresh experience and a more efficient round-of-clock service.
to our users and service managers. Upon their introduction, our AI nutritionists will provide personalized nutrition advice, ensuring that users receive tailored recommendations for their individual needs. By implementing AI customer service, we will rapidly and accurately.
With tens of thousands of service managers and vast collection of graphical, textual, and visual video content, we present an intensive set of resources that was set as a real-world training center for our AI power services. By fully leveraging these resources, we can apply AI more.
For our service managers, we provide more than just adults. We prevent a pathway to achieving a harmonious work-life balance. We are also committed to providing for-death services that enable our users to live more healthily.
Moreover, we are dedicated to offering opportunities to ordinary individuals while making it easier for people to lead better and more fulfilling lives. With that, I will turn the corner over to Mr. Peng Zhang, our Vice President of Finance, to go through the financial results.
Thank you, Xiongliu. Hello, everyone. Before I go through our financial results, please note that all numbers stated in the following remarks are in RMB terms, and all comparisons and presenting changes are on a yearly basis or as otherwise noted.
After navigating the challenges of last year, we spent the first quarter of 2023 implementing a number of strategic upgrades to adapt to the post-COVID environment. Responding to shifting consumer trends, we refocused our private labor product development to capture growing interest in immunity in conflict, allocating more resources for the environment.
cultivation of healthcare and nutritional therapy products.
This initiative, combined with other efforts such as online repurchase reminders, contributed to an 80.2% repurchase rate during the quarter. Meanwhile, our growth margin improved to 47.7% as our attempts to enhance user loyalty for food.
Despite pressure on our top line from our ongoing product mix refinement and optimization efforts, our net loss narrowed by 37.8% from the same period last year, and we recorded the operating profit for the quarter. We are confident that our emphasis on efficiency and our ability to respond to emerging consumer trends
leave us well positioned for the future. Now let's take a closer look at our financials. Total revenues were 179 million compared to 343 million a year ago. Revenues from sales and merchandise were 143 million and revenues from our marketplace business were 33 million.
This change was primarily due to our continuous strategy to refine our product selection across all categories and optimize our selection of suppliers and merchants, which had a near-term impact on sales.
Meanwhile, consumer confidence and spending power still have yet to fully recover.
Despite these challenges, we improved our gross margin to 47.7% compared to 44.2% a year ago. This was the result of sustained consumer loyalty to our private labels and our effective product curation strategy. Now let's take a look at our operating expenses.
Fulfillment in the expenses were 27 million compared to 49 million a year ago. This was primarily due to reduced warehousing and logistic expenses due to lower merchandise sales, reduced personnel costs as a result of staffing structure refinements, and a decrease in share-based compensation expenses. The total amount of $3.7 million in total was $30 million compared to $51 million a year ago.
This was mainly due to a reduction in personnel costs as a result of staffing structure requirements, a decreasing member management fees and the reduce personnel costs.
business promotion extensive. Technology and content extensive were 13 million compared to 24 million a year ago. The decrease was mainly due to a reduction in personnel costs as a result of staffing structure requirements and reduced cloud service server costs.
General and administrative expenses were 15 million compared to 31 million a year ago. This was mainly due to reduced personnel costs as a result of staffing structure requirements, lower professional service fees and decreasing share-based compensation expenses.
Total operating expenses in the first quarter decreased to $85 million from $155 million in the same period of 2022. We recorded the income from operations of $1 million compared to $2 million a year ago.
Net loss was 23 million compared with 37 million a year ago. While adjusting, net loss was 27 million compared with 31 million a year ago.
Basic and diluted net loss per share attributable to ordinary shareholders were both 1 cent, compared with 2 cents in the same period of 2022.
Moving on to liquidity, as of March 31, 2023, we had a total of 568 million in cash and cash equivalents, restricted cash and short-term investments on our balance sheet. Compared to 669 million as of December 31, 2022, our liquid assets were sufficient to cover our payable obligations and we did not hold any downturn banknotes or debts on our balance sheet.
Looking ahead, we will take advantage of the post-COVID recovery trend by cultivating our private label products while continuing to emphasize operational efficiency. We will foster synergistic collaborations between our online and offline initiatives with the goal of enhancing customer loyalty and attracting new users.
These strategic approaches will lay a strong foundation for future development and will position us to deliver mountain value to our shareholders. This concludes our prepared remarks for today. Operator, we are now ready to take questions. We will now begin the question and answer session.
please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call.
Once again, that was star then one to ask a question. And at this time, we will pause momentarily to assemble the roster. And our first question will come from Ethan Yu of First Trust China. Please go ahead.
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We have observed rapid recovery in offline economic, tourism, and intercity mobility. But overall, the consumer confidence remains unstable. How does this impact your business and what specific measures has the company taken? Additionally, what specific initiatives has your company implemented or planned to implement to enhance your business?
Thank you for your attention.
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Thank you for your question. WINGI believes in the connection between people, both online and offline, has its own advantages. Before the pandemic, WINGI operated with a marketing model that combines online communities and offline salons. The offline salons helped bridge the gap.
between the company service managers and the customers, fostering trust and providing a better experience with our products. This became even more important as we developed more private labels, as cultivating customer trust and education became paramount.
Thank you.
Our private labels adhere to the principle of providing customers with a peace of mind and high quality products. We insist on sourcing directly from the place of origin and have deep partnerships with leading companies and factories. This allows us to inspect and trace the production and processing of our goods.
As the city has received their flow, we have invited some top service managers to join us in exploring and learning, witnessing the birth of many UNG manufacturers and sharing authentic experiences with virtual communities.
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Furthermore, we are establishing a new brand center in Hangzhou, setting as a hub to display our private label capabilities. We hope to attract more private brands and incubate more private label products.
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And for some quite mature drawing to label products, we are going to make more education to our customers by the middle level.
influencers from the top platforms. And we are going to take a better view of those offline media through the advertising and publicity of the products based on our existing customers and the intensity of our customers.
from city to city, we're going to do the test then to do the promotion of the joint label products and so for our publicity we mainly will use four channels, the existing online channels and the self-made content and the mid-level influencers online and also the offline media.
Thank you for your question.
As there are no further questions at this time, I'd like to hand the conference back to the management for closing remarks.
Thank you for joining us today. Please do not hesitate to contact us if you have any further questions. We look forward to talking with you next quarter. Bye.
The conference is now concluded. Thank you for attending today's presentation and you may now disconnect.