H2 2023 Boqii Holding Limited Earnings Call
Good day, ladies and gentlemen, thank you for standing by and welcome to boat cheese second half and fiscal year 'twenty twenty-three earnings Conference call. Currently all participants are in listen only mode.
Peter We will conduct a question and answer session and instructions will follow at that time.
As a reminder, we are recording today's call.
If you have any objections you may disconnect at this time.
Now I will turn the call over to Oh, Buchi's head of Investor Relations.
Oh.
Oh, Thank you operator.
Everyone will come to fruition in second half in South Korea, a country or countries. My earnings conference call. Joining us today are Lisa <unk> co CEO , and CFO , as well as which along with that and watching that xiaomi.
So you have to send out that shall heartland comes out, but central any on centennial shutdown in China.
Thank you Holly.
Oh I'm sorry.
Could you be in Guangzhou, and Shanghai had a one time change.
That's how often don't get that often.
Oh, we released our results earlier today. The press release is available on the company's IR that such that our Dod budget, all college as well as from Newswire services.
Say off the call will be available on the sites and interesting well I'm getting is how we think popular musical Queens that goes into I don't want that I, Oh, well it should all come called Tango Shimon.
So I hope that you'll have laid off we found your way Shanghai novels to Alberta.
Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor fruition something U S private securities.
Litigation Reform Act of lighting 95 forward looking statements involve inherent risks and uncertainties as such the company's actual results may be materially different from the expectations expressed today.
Further information regarding these and other risks and uncertainties is included in the company's public filing with the SEC.
The company does not assume any obligation to update any forward looking statement, except as required under applicable law.
Definitely it has with the Tianjin foods engine at Heartland, and Jumbo home country of Israel, Joanna Nicolas since insurance will phone goggles, and I'm trying to couch, how hot search without conducting shuttle Tien.
And Jonathan I shall shortz equally what else what was your opportunities here.
In Chicago, the shifted vehicle kind of everything kind of got out of it he or she existing of height, London city should have Luciano about fitting into the team to see she in fact equals and sound like watching change all your legal which you gotta, who havent been knocked off to face shields that we all struggle with the jumbo chunk Uh Huh Ghansham.
We're gonna sanction Jonathan suddenly.
Please note that certain financial measures that we use on this call such as non-GAAP net loss non-GAAP net loss margin EBITDA and EBIT margin I expressed on a non-GAAP basis.
Our GAAP results and reconciliations of GAAP to non-GAAP measures can be found in our earnings press release.
Well she had seemed to have been so they'll have which I'll show you on the most is how old rule on Gulfstream closer and I've got some questions on the EBITDA you did anybody see knock after she shouldn't yes, you'll call them I've got used to calculate your gut feeling all got together in Virgina Chao Chin Tung a home or don't you have to see one call.
Also please be reminded that unless otherwise stated all figures mentioned during the conference call are in Chinese RMB.
So actually if anything it was for me do you want to wait and see.
Emptied out and so they were supposed to doing it that way.
With that let me now turn the call over to our course of U N C. Asphalt muesli satcom since Albasha didn't jockey, who was supposed to cinquecentist once you'd have about Lisa over to you Lisa.
Thank you Ann and thanks to everyone for joining our call today in.
In fact.
Fiscal year, two simultaneous rate and changing and for E Commerce in China.
Increasing geopolitical risks and lingering COVID-19 impact.
Got you a wider range of changed in the global supply chain.
A list of sequined <unk> translated to growing enrollment here it is.
And the logistics costs are rising and fishing and uncertainties.
So imagine a general conversation among consumers.
And the pace of China.
Call Me a print prevention parties have also created a shorten prominent on production and delivery.
Yeah, Yeah, I can't really think Tien and John the only thing I can kind of do Halloween.
This is Sean dowdy jingle into additional Ryan I mean has that opinion shouldn't your attention in yet.
Show machine to be enforcing did she she then each name so.
Don't you know clean air flashy pseudo consignment deals.
Now flipping down a chunk and then Antonio hold all the time, but.
Oh <expletive> home Jamba Shan windowing, so nationally window of opportunity.
Oh, I'm sure myself, Angela intentional compulsion, Washington to shelter a function.
The jungle.
COVID-19, definitely equal sharing of day utilization kind of a pet so Jonathan as you don't see so.
In spite of this we remain confident in our unique positioning in China's expanding market.
We saw favorable increase in the number of pets and still growing penetration of pet economy now with support for their pets on that.
We also saw an agenda of consumption upgrades supported by the strong gross eight unique market such as pet food and health care products.
That woman did with congestion, which horse you're trying to do something with <unk> sensing.
What's your initial general Macondo during which we will sure Xinjiang eternal dashon they shouldn't hold it for them to go yeah, $10 are still finishing and attrition the headroom, which we'll ship. He said you know, Belgium tendency they should have on the shelf it shouldn't it sounds in the Xinjiang.
What do you ascribe that to strengthen our group alone disciplined chain integration in order to improve operational efficiency and enhance margins for example in a post to call me.
On the system supporting we switched from traditional warehousing show cloud warehousing management, allowing sure you better efficiency.
Also related to our upstream production and manufacturing.
They'll walk so that we can have a low cost optimization.
There are 18 products and a variety.
Our core business.
So what you are seeing any woman, Trinidad guineans and put up on Cogs Artesian Navy it sounds like Nickelodeon towards young punching the temperature trend in Leamington.
Meantime, I think implications just finishing some caution when we achieve full ability of Shan Shan.
You'll do it yourself or you just saw this in China.
So I think it was something that she watch him, but he hasn't changed at all Washington, a neat I just switch them, but they tend to wait I found yet.
We are particularly how rich the by the fact that we see a strong loss performance and in the first quarter.
We also had a true reports now that are non-GAAP net loss is significantly narrows by 41, 6% in fiscal year. Two is on the Chinese joint Nina a solid foundation fly changed around the annual cynically in children under truthful.
So I guess that you're doing all kinds of all that time didnt, even know about yet.
Oh Fan-tan young woman.
And then beyond lung cancer Depression to question you talked a little Showtime.
She didn't know just hit the woman that seat and.
And you'll pay attention as usual.
Looking ahead, we expect China's cause.
Uh huh.
And he meant true with bonds as a result of post Covid era, as well as steroid dosing nalco and sunkist and inflation impacts.
Continue to drive business development and financial growth through organic development and M&A.
As we have confidence that he will continue to growing creating long term values for our shareholders.
Randy upon us and pet parents.
Joe Oh wait out with.
Hum.
Well that sounds like something that you're seeing play for them.
<unk>.
Mhm that whole one little change to.
Sandra will sell to a halt.
So hopefully that followed triangle team for their closing majority should hold one issue Hawaiian downfall <expletive> I talked to him Sachin hotels and John you know what he is doing with who don't have knowledge of Hilton Hawaiian troublesome when she comes out truths in its action.
That's kind of management team. We believe we are heading towards the right direction. Our team will continue to work with passion, while keeping a keen eye on our own.
Operation and your potential market opportunities.
In order to repay all of trust and confidence that any possible Changsha and what's your Florida update you on our operations and our private labels.
Nicole your choice on the Chinese way.
So when it comes to the one he tunneling machines and goes to Jim I would my judge and should have some neat.
When the tender is absolutely sure that gene each essentially and finish with you. When you go hunting instead I'll flip out that Dennis you know it sounded like she can tell played out with NSA empathy are shown on the Hudson opinion. They didn't mean he is he.
Zelle came half what's your time course, you'll hear about it.
Thank you Lisa.
Despite the obstacles we faced during the year, which they continue to focus on building his community any hatching egg supply chain.
Preparation.
Through our growing brand profile comprehensive content onto an extensive selection of product.
What she was able to maintain.
And even though consumer sentiment was relatively weak.
During the second half.
Oh.
So shouldn't you nail you cannot touch Oh wondering I got to believe you can go on the show championship with long ago Telecom going in what you put on two shows I've seen shop 10 men, though your onshore fishing, it's useful for the time Haynesville cool on the books you Sean trying it though he thought I would touch on drilling took a shift that I sat on the shelf they choose to shop.
He brought in a shelf, which isn't going to go ahead.
E numbers, our number of users that must be paid a satisfying crash of 16.2% year on year or two or 5.80, yeah.
Those thickness was also reflected in the historic low Stacey Dom by a 57.2 percentage year on year to around <unk> 5.3 or for the year.
Showcasing our ability to expand user pool at a low cost.
And actually a solid foundation for of all future growth.
Well shall I call them, they almost fully on somebody's undrawn balances should only or what kind of trouble by Bachelor of the Holdco Tremblay has hung ching and home to the sharp slowdown shall job Island Jewish in Sydney are all quite fun twist teleports fishing, he turns out portfolio, which.
Instead, we will have its own job Danielle it's Ashton.
During the year, but she also saw excellent fulfillness from its private label. It's G. I believe for the year was up by 6.2% year on year. It's rapidly. You'll also recorded a remarkable increase of 19.2% year on year, Despite a weak second half.
<unk>.
We saw strong growth across all product categories, including pet food and snacks pet supplies as well as medical and health product.
What's it like was seen Yang joined me until you don't fill came out a chinchilla jaw Townsend.
And that's it all came out of the channel it won't be some jumbo and Julia Salazar show a whole ton be singles and jaw passengers. We are fortunate lane change just in terms of you know some job, Belgium ball courtroom was appealing to.
You talked about him.
Orienting by our improving they talk a capability. We also took the opportunity to optimize our private label mix. So as to avoid carrying nonperforming product switched shocked a search.
Astronauts efficiency.
As well as to improve product quality to satisfy pet parents neat.
The reshuffle along with the growing revenue contribution from private label from 15, 4% to 19.9%.
Was able to drive.
Brooks level gross profit margins to 21, 4%.
That's represents a modest he husband until 90 basis points year on year.
Coming from a pure rooms filled with service supply chain and consumer market disruption.
Digital I'm interested shouldn't you shouldn't though that's what you're normally when we are doing each and do it. So you can pay the champions who are these things you're trying to get hold of them since the deal shall.
So I forgot assemblies out looking like you're going to show up all the time. He months, we don't hold from the shuttle being able to show them the traditional shelter.
What surely Jacobs Youll keep had a full kind of dates won't shouldn't handle that from this audience. The same what you shouldn't dog in the in the bathroom tissue Angel.
Did peloton team already knew that going in seafood Ashford hospitality without letting laws that are on some dollar Joseph opinions thoughts Josh yes.
We believe the private label business will be one of our key growth drivers in the future.
Looking ahead, we will continue to refine our product mix.
Product quality and expand our distribution network.
So as to support our private label development.
Oh, I'm shocked and so it would be even higher.
I don't see huge home, where a woman who joined going through all those and John the only job all at all on me at dances shoot. She Washington's have haynesville hooks, you shouldn't have any children being people put off until you just should they will come out of the project.
All in all we believe it is important philosophy has all downhill preparation, allowing ourselves to have more buffer regardless of the actual environment.
To do so has the leading position of the padding the Australia will continue to find more opportunities to reinforce our closed loop community by has seen our coverage from upstream production midstream, while halsey undisturbed osha to downstream.
Presence and offline touch points coverage.
And as the PON market is still relatively fragmented.
We look forward to creating a all rounded ecosystem, which bring bottles to pet parents Edinburgh partners.
Well it seems like what are you seeing anything else out there running the whole wash it out a little bit on board since it should always shopping but you tell how the judge I didn't do it.
I wish you all of them at the 220 central should hometown or not it's always going to have some cost out. So that's what we're telling you that towards it.
You're out of Dallas industry change without home, where Shiloh was in fact, almost all of them.
Sure It is.
So what does it actually get forgotten.
Lunch, how how long they're supposed to be flat, which holds for Denny Eagle chance all way of dogs Ocean Hutchison with all forward looking backwards on that I'm going to call it that.
Now I will turn the call work Sarawak initially to loyal who will share more details on our financials oil.
Oh, and I should just talking on the telephone turmoil, we won't Miss a challenge that will tell me like English.
In the following I have a lot to share more on our financial performance for the year.
The market difficulties.
COVID-19 reduced year over year.
The improvement for the year by expanding margins and improving cost of control.
Jason I will conduct afternoon, so I'm going to walk you pointed it out.
Yeah.
So anything we should want that either.
Oh man.
Martina you Timna.
As I mentioned earlier.
That's changing.
Yes, yes, yes.
Sure I'll go first year revenue was RMB, one point to one 9 billion.
<unk> by 8% year over year as a result, a lingering COVID-19.
The options and a worsening market condition.
The growing contributions from Baltimore and private label.
Along with our efforts in private our private label product mix optimization gross profit margin.
Recorded now.
900 basis point increase to 21, 4% gross profit, reaching RMB $233 5 million for the year.
<unk> seen fantastic.
This should help you at Wilmington, good Tanya industrial.
Goodbye.
Yeah.
John I want to congratulate who tend to go to you go you got smoking patio champions will mature and handle them all you agree with that.
And Joshua young Soo and online tools for good.
And Molly Wade in the audience sounds good so if youre my extensive decreases to RMB 126 point of sort of media compared to compared to RMB $134 million in that year.
As a result, the Christina G M B under revenue however.
And if you see it from the gross profit margin enhancement postpone a poster fulfillment module increased from nine 2% year two at nine 8% this year.
Pat.
Surgeon logistics costs, and the COVID-19 pandemic.
Jeremy Your question really also like downtown Bellevue, Denver, El Nino strong opinion to.
Essentially even sat down.
And B do you all know either.
Sure.
And don't want to lose downhole money you should that we don't have that sounds it sounds on that.
The old Union that afternoon, Joe and.
John .
I've enjoyed it Bob.
Total sales and marketing expenses for the year were RMB 124 million. So you can do you can take them by 27, 5% from 171.
Yes, yes, yes, and marketing expenses as a percentage of total revenue was 11, 4% down from 14.4% mainly due to the decrease in advertising expenses amount to.
Two I M. B 36 point 4.7 million, resulting from the increased.
Oh revenue Chad January came from more cost efficient channels, well myself about feeling some low eight M B Helios b.
<unk> syndrome, we sat down and that happened.
Total Valentine sense, what would be the F&B passengers Canadians.
Yeah, Julianna that ingestion steps to address them.
Are you open to buy when we sat down.
And then Joe can.
And do their showrooms.
Thank you can you just tell me you guys have too much at all.
General and administrative expenses were RMB.
What are the ethics point 6 million down by 38 parking lot, 9% from RMB 17, 6 million in fiscal year 'twenty to 'twenty two.
General and administrative expenses as a percent percentage over total revenue was four point to 3% down from six 4% in fiscal year <unk>.
The decrease was primarily attributable to the decrease in share based compensation expenses.
But are you feeling wait and be such Endovascular failure Zambia.
To tell you about how shall I sat down with asking just thinking about the injury.
Johnson.
But you're right I understand that.
Yeah.
No to answer it.
I've got two actually year over year.
SBC feeling that got that got.
Got it came to a net loss of RMB 106.
$6 million for the year, unless you have a net loss of RMB 132.8 million not that you're representing.
20.2% reduction year over year in Panama or could be Oh, I M. B 40.7 million wasn't record here that you've got a lot in fiscal year 'twenty three compared to New York in fiscal year 'twenty two.
Clothing.
Can you comment or could it be that last one.
Oh, yes.
M B.
5.3 million compared to RMB 132.8 million.
After year, representing a 51% improvement year over year.
non-GAAP net loss for the year also came to I M. B 17.7 million represents.
41 <unk>.
7% reduction year over year.
Thank you Charles for Julian neither team placed on <unk>, John Doe Ya Qin Yan.
Uh huh.
And then Chris that you can sense, how you change all the time Josh.
It's Anthony on the Jim question on Jumbo.
Sure sure. Thank you Ginger.
Thank you good positioning nucor to Dallas, Xiaomi, Ginger Centennial has been great to actually do something about it.
Sure.
Yes Anthony.
Angela what about having new Wuxi.
non-GAAP. The question that you had can be tough one to answer all of the passengers associate into and I know, what I shouldn't be too general tissue idea.
Our financial position as of March.
So if you can do 23, including the <unk> hundred and they're to a point.
Moving out over the long term debt.
Thank you.
Debt to asset ratio stood at 39%.
As we progress.
Completing chef OTI as the company Paas.
It seems the equivalent amount in U S dollar.
Oh I see.
Should there be a record EBIT after repayment of 100 and it.
Yes.
Yeah.
After repaying the IMT and why.
100 and.
To a point at media over the long term debt well over at all much.
31st.
And three our cash and cash.
Cash equivalents and the short in the U S. Navy RMB 160 million, our net operating cash.
The outflow.
Fiscal year 'twenty three was RMB.
<unk> 2.3 million, representing a significant decrease.
What you said would be that in 2022 with no major Quebec and strong credit line back up we believe we have cash sufficient to support our operation.
Let's see.
Improvement, especially with our CIC achieving.
Got it goes out to our breakeven point.
Paul.
Is it.
I mean, essentially how to walk you through the.
Transient without a woman.
Valuate that fleet essentially Joe.
You mentioned, the one chunk would own the ODI.
That's helpful.
The transfer from downhole constantly Johnson <unk> Johnson.
Before the <unk>.
And so again.
Oh sure Yeah, Jonathan Yeah, essentially got woman doesn't seem to you can even do bolt ons you towards that maybe you didn't know yet.
Okay.
Danielle woman that season.
True weight them.
Essentially what signs are you on your end.
Against that she doubtful with your answer so it sounds about right.
So that element email turned out to have been central they're used to torture woman does.
Thanks Angela.
You will remember that you want to go to Tien Tsin sure monogamy question until it seemed the fungi Tobey its just that a woman the whole question, although it's Lindsay.
Sure.
Kicking in quite some time.
Let's now move on to the Q&A session.
Operator.
Yeah.
Window opens it was interesting.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you were using a speakerphone please pick up your handset.
From a pressing the keys.
At any time your question has been addressed and you would like to withdraw your question. Please.
Please press Star then two.
Again.
Press Star then one.
If you have a question.
At this time, we will pause momentarily.
To assemble our roster.
Again it is star then one.
To ask a question.
Okay.
The first question comes from Matt <unk> with China Securities.
Please go ahead.
Hello, Hello to join the Huntington adult market.
And then on India.
Sure.
Neil I know, how would you be without going to Johnson <unk> Johnson with MPC.
Oh, I'm kind of just let them take the solvency side, John the Macho Quadcopters real quick you didn't question number one do you Jake.
So that sort of thing Alan Duck.
You may not realize that.
Okay.
Let me translate first.
So that's one of the he saw that the revenue is down and understanding that it may be related to the COVID-19 last year. So he will like to know.
Our forecast for the fiscal 'twenty to 'twenty 411.
Okay.
Loyalty.
Particularly if you want a shadow Tricia just slow down.
You mentioned your initial kind of neutral.
Sure.
You can quickly get to contango.
Contango Mitchell.
Non of tissue.
Paul.
Okay.
Our revenue has decreased.
Great compared to fiscal year 'twenty, you can do to adhere to their code.
19.
The recovery from COVID-19 relief.
Our revenue growth will be higher than last year. Thank.
Thank you.
Hi.
Great.
Good morning.
Hi, there hey holiday.
Holiday Shirley Nugget, Idaho, what do you mean, how are you going to be Johnson Jefferies I do Sir.
I'm doing good.
My name is Jim Chris Leahy, Investor, So Tyler you Josh.
<unk> looked like it was shot Jonathan Cohen, Jake you should by now.
Okay.
This is Susan that Sheila <unk> with Jefferies.
Okay, Let me translate first <unk> launching out that the net loss for the whole year, a narrow down by around a ton.
One, 3%, which is lower than that of the first half of the year. So he would like to know about the reason.
Yes.
Oh, Yeah listen Christian I assure you that since January .
Shlomi conditionally.
Hang on I think a question for you Dan.
Excuse me you may have all kind of just wondering thats interested hanging George farmer.
Sure.
Hi, Joe.
Thanks, Daniela can placement issue uhm.
There was no move outs.
In no way be art.
Thank you Andrew.
Sure Devin and jewelry.
Our net loss.
Fiscal year, 'twenty, three once and be well.
100 and.
6 million, representing a decrease of 22% from net loss of RMB 100, and.
32.
Point 8 million in.
In fiscal year 'twenty two in Panama.
M D.
$40 7 million was recorded a net loss in.
In fiscal year, 'twenty, three compared to <unk>.
In fiscal year 'twenty two.
Excluding <unk>.
<unk> of Covid.
Our net loss was.
<unk>.
$65 three.
Fiscal year 'twenty three represent a decrease.