Q2 2023 Dingdong (Cayman) Limited Earnings Call

[music].

Song Wang, Unknown Executive, Thomas Chong [inaudible] Lixin Ju, Liang Changlin, Wang, Unknown Executive, Thomas Chong, Lixin Ju Liang Changlin, Wang, Unknown Executive, Thomas Chong, Lixin Ju, Liang Changlin, Wang, Unknown Executive, Thomas Chong, Lixin [inaudible] Liang Changlin, Wang, Unknown Executive, Thomas Chong, Lixin Ju [inaudible]

Good morning, and good evening, ladies and gentlemen, thank you for standing by and welcome to the Ding-dong Limited second quarter 'twenty two 'twenty three earnings conference call. At this time, all participants are in a listen only mode.

Speaker 1: Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to the Ding Dong Limited second quarter 2023 earnings conference call. At this time, all participants are in a listen only mode. Please note that this event is being recorded.

Please note that this event is being recorded.

Speaker 1: I will now turn the conference over to the first speaker today, Nicky Zhang, Director of Investor Relations. Please go ahead, sir.

I will now turn the conference over to the first speaker today, Nikki Zhang Director of Investor Relations. Please go ahead Sir.

Speaker 2: Thank you. Hello everyone and welcome to Dingdong's second quarter 2023 earnings call.

Thank you.

Hello, everyone and welcome to <unk> second quarter 2010 years three earnings call.

Speaker 2: With us today are Mr. Changlin Liang, our founder and CEO , and Mr. Song Wang, our Senior Vice President.

US today are Mr. Tony Yeah, our founder and CEO and Mr Song Wang <unk>.

Our senior Vice President.

Speaker 2: You can refer to your second quarter 2023 financial results on our IR website at IR.100.me.

You can refer to our second quarter 2020 straight financial results.

On our IR website at IR <unk> hundred I E.

Speaker 2: You can also access a replay of this call on our IR website when it becomes available a few hours later after its conclusion.

You can also access a replay of this call on our IR site when they become available a few hours later after its conclusion.

Speaker 2: For today's call, management will provide their prepower remarks first, and then we will be hosting a question in the session.

But today's call management will provide they'll pay Pal the remarks first and then we will be hosting a question and answer session.

Before we continue I would like to refer you to our safe Harbor statement in our earnings press release.

Speaker 2: Before we continue, I would like to refer you to our Safe Harbor statement in our earnings press release.

Which also applies to this call.

Speaker 2: As we will be making forward looking statements, please note that all numbers stated in the following management prepared remarks are in R&B terms.

As we will be making forward looking statements pace now that all numbers stated in the following management prepared remarks are in RMB terms.

Speaker 2: And we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported in your earnings release.

And we will discuss non-GAAP measures today, which are more thoroughly explained and that really comes out that you'd be most comparable measures very politic.

Volatility in your earnings release and filings with the SEC.

I will now turn the call to your office desk speaker today, the founder and CEO of being don't Miss that down.

Speaker 2: I will now turn the call to our first speaker today, the founder and CEO of Dingdong, Mr. Liang GPU indicating the build and@@@@@@@@ victor, he will be going to discuss the next segment

This is ya.

Uh huh.

Speaker 3: To be continued, follow nongmai ocean as it is Follow us know Thank you.

Hey, How's it going.

Go ahead.

You'll find out.

Oh, My God I mean, all of a sudden you yeah, how about when you would well know instead of actually I know it was a Sunday oncology itchy.

So if you want a welcome.

Speaker 3: Hello everyone and welcome to Jingdong's 2023 second quarter earnings call. I'll stand by by providing I'll start by providing a brief overview of our operating performance in Q2 2023. In the second quarter, we recorded 4.84 billion RMB in revenue with a non-get net profit margin of 0.2%. We were profitable on a gap basis. At the same time, if we exclude the impact of year-end bonuses issued in Q2, we were operating cash flow positive. This strong performance reflects our sex act commitment to our efficiency first with due consideration of scale approach, which has resulted in three consecutive quarters of non-get profitability. [inaudible]

Speaker 4: Hello everyone and welcome to Zingdong's 2023 second quarter earnings call. I'll stand by by providing, I'll start by providing a brief overview of our operating performance in Q2 2023.

Hello, everyone and welcome to <unk> 2023, second quarter earnings call I will standby by providing I'll start by providing a brief overview of our operating performance in Q2 2023.

Speaker 3: As you know, Bangreddit deals with low downtown city markets.Mon wanting to upgrade and add new characteristics to Aer Hey Long time no see.

So core I've been always high so can you just sort of obviously you're at last got local building shell Cheniere bagged in India.

Ruble it should hold true.

Oh My God, we're building chatter unique pulses was huge will cool off on that.

Yeah, and you know Joe G.

So you do a show they always say in general when would a father and son has sued reaching well maybe you said it sounds like you do non-GAAP recurring Java you meet.

In the second quarter, we recorded 4.84 billion RMB in revenue with a non-GAAP net profit margin of 0.2%.

Speaker 4: is excluding one time expenses, we were profitable on a get-

Excluding one time expenses, we were profitable on a GAAP basis.

Speaker 4: At the same time, if we exclude the impact of year-end bonuses issued in Q2, we were operating cash flow possible.

At the same time, if we exclude the impact of year end bonuses issue in Q2, we were operating cash flow positive.

Speaker 4: This strong performance reflects our set-fast commitment to our efficiency first with due consideration of scale approach, which has resulted in three consecutive quarters of non-gap profitability.

This strong performance reflects our steadfast commitment to our efficiency first with due consideration of scale approach, which has resulted in three consecutive quarters of non-GAAP profitability.

You know my attack Corrado, Jim me away, whereas Sunday.

Speaker 3: Do know MAT RA cha way way or res ania. Are that those the in Co eating C? Do not MAT minasa coverof onia you in tonommala, whe beinging some powerble often that J? ul you one in the shoice, you ual in the CH? Consider haback.

That those at all that <unk> do not maritime puzzled why you saw couple of going out.

We love being simple, who often die to judge what are you watching myself as usual you slipped that it should have posted a high bet, that's well meant that junior high pass this off Jamie.

Speaker 3: Song Cute It's generally We got 4% in the same way to get AT Sach We practice everyday to practice better D laser

It's not that they're not tobi she's helped by a new war.

[laughter], you'll wow, yeah Tobey.

Pulse Oh, yes.

And Alex you said core.

W. Baird all up avenues for Tobey.

So it means that you see all the time about watching a body shop, you call women should do that so many of her.

Sure.

Let me yes.

Speaker 3: For how you who tun other switual jenty ating canll out. You're go ating really and side switis, or when you need that's you are.

Uh Huh Jung, who was telling us how the Citral J E T thing that stood out.

And in fact, you said well below your salaries that city you want.

Speaker 4: RGMV reached $5.32 billion RMB in Q2. A year ago, at the height of the pandemic, we successfully met Surgeon Consumer Demand by quickly adapting to difficulties across out the Pline Chain and Operations, which resulted in a strong operational performance.

Archie M V reached five.

0.3, 2 billion RMB in Q2, a year ago at the height of the pandemic, we successfully met surge in consumer demand by quickly adapting to difficulties across our supply chain and operations, which resulted in a strong operational performance.

Speaker 4: Despite the high-based effect set in Q2 last year, we managed to achieve a 5% year-on-year increase in monthly order frequency, surpassing four times per month for the first time. In addition, our ARPU increased by 8% year-on-year, and our member penetration rate improved greatly with members contributing 54% of the total GMV. This is a 10%-page point year-on-year increase.

Despite the high base effect is that in Q2 last year, we managed to achieve a 5% year on year increase in monthly order frequency, surpassing four times per month for the first time.

Additionally, our ARPA increased by 8% year on year, and I'll remember penetration rate improved greatly with members contributing 54% of the total G. M D.

This is a 10 percentage points year on year increase thanks.

Speaker 4: Thanks to our product development capabilities and full chain operational capacity, we also make continuous improvements to overall order quality and user stickiness. Even with the retail environment normalized post-pandemic.

Thanks to our product development capabilities and full chain operational capacity. We also made continuous improvements to overall order quality and user stickiness, even with the retail environment normalize post pandemic.

Speaker 4: This reflects our commitment to optimizing operational efficiency to meet the evolving needs of our users.

This reflects our commitment to optimizing operational efficiency to meet the evolving needs of our users.

Speaker 4: Next, I would like to briefly introduce the progress in the product area. Since we have made product strength the core driving force of the company's development, we have established a very strong competitive barrier in the product field. Our private label brands are increasingly popular with users, and we have also developed many unique Dingdong specialty products. This quarter, we launched the Dingdong Delicious Kirin List channel to gather the most popular products on the Dingdong platform. Every product in the Delicious Kirin channel is selected by numerous evaluation experts and user representatives from multiple dimensions. The products combine many advantages such as deliciousness, uniqueness, low additives, and zero increase. With the launch of the Delicious Kirin channel, it also brings more growth opportunities for our good products. Next, let's evaluate the progress of the product fund. Our special product development capability is an important growth driver, allowing us to achieve a rich competitive advantage. We have developed many Dingdong specialty products, and our brand is gaining popularity with users. This quarter, we launched the Delicious Kirin List, which enhances the richness of products. Evaluation experts and user evaluations include deliciousness, uniqueness, low additives, etc. This enhances the growth opportunities of products. For example, our native black chicken, since entering the Delicious Kirin channel in April , has seen its average monthly exposure double in three months, and transaction volume increased by 3.6 times. At the same time, the 30-day repurchase rate of users increased by 5.4 percentage points. Our private label, Paul Workshop's Tiger Skin Mochi Roll, has seen its weekly exposure increase by 80% and weekly revenue more than double since entering the Delicious Kirin channel for more than a month. We believe that more and more users will discover and recognize our Dingdong products in the future. At the same time, we attach great importance to improving our user experience. As of June this year, for our Green Card users in the East China region, we have customized nearly 100 high-quality member-exclusive products to meet the higher quality consumption needs of member users. In addition to existing free dishes, member-exclusive products, member-exclusive discounts, and Super Member Day benefits, we will continue to introduce more new member benefits in the future to further reward our member users. In the second quarter of this year, the GNV share of our Green Card members increased by 10 percentage points year-on-year and 2.4 percentage points quarter-on-quarter. At the same time, the order evaluation of our member users increased by 9.0% year-on-year and 5.2% quarter-on-quarter. Considering last year, even considering the impact of the pandemic last year, the quarterly up of member users also achieved a year-on-year growth of more than 10%.

So that was all about.

Speaker 3: Thank you for your attention.

Yes, that's something we're finding that ginger so it's all of them in general.

Speaker 3: Changing So when there are sudden or concied Inter like there, suddenly iana fade down some hold in om billing or' lookingking by year. So you, my havevalpment, or real way, didn't further.

It goes into the only Eli Lilly.

Although you didn't see any of the $3. So there shouldn't be like well minutes. The open by you and I saw that you know Hawaii puzzle might have all up at all.

I didn't know until there's something but two door machine people not even though maybe we shouldn't even bumping Dr. Don I wanted you all mentioned knocking those off so.

Speaker 3: But she do maing. People think know, may wait, cy bking you apose menttain clein da to the high something mayine pino e may you some ching go to the thingser. Ya, you would idea. So do the weido P either some sil may wait, see. So Kenya Ling, then y the she do you IA. So do Maine PO year GI over the house. Am the eran do the anyou.

So you'll find that something maybe Chilean pinned Ali that maybe you've lost all those important all the time.

So you know what the ideal so bogo, we do apologize for that.

So I mean, Hello may wait and see the south pinata dress shoes, only audience Sudan made she didn't pan out as usual you do them in the house, all my daughter Sundar Joy.

Speaker 4: Next, let me review our progress on the product front. Our exceptional product development capabilities are a key growth driver, enabling us to establish robust competitive advantages. We have developed numerous products that are unique to Dengdong, and our brand is gaining popularity among users.

Next let me review our progress on the product line.

No part of development capabilities are a key growth driver, enabling us to establish robust competitive advantages. We have developed numerous products that are unique to Ding dong and our brand is gaining popularity among users.

Speaker 4: This quarter, we launched the delicious Keeling Ranking, which highlights top-rated products that have been reviewed by experts and select users, assessing everything, including deliciousness, uniqueness, any amount of additives.

This quarter, we launched the delicious keeling ranking which highlights top rated products that have been reviewed by experts and so like users, that's actually everything including delicious and the uniqueness and the amount of additives.

Speaker 4: This feature is creating significant growth opportunities throughout outstanding products. This feature is creating significant growth opportunities throughout outstanding products.

Feature is creating significant growth opportunities for all outstanding products.

Well, Amanda who would you there's I'll say, a general made shouldn't P&L realized Sunday, yeah, Yeah yeah.

Speaker 3: first of all I only a Thank you for watching.

Well one sundar.

Joe you us and all of sudden you a little bit closer to the.

What are you what are you still got out of India, well I mean, that's the whole thing by Paul Rubin, who P. Mod who do that she didn't want makes you know you can only have like Georgia, Paul one else and job I've No buses dolgin Sotos, yeah, Yeah, Linda or Michel would you well you already got audio who jammed in zinc home that didn't know how lumpy.

Speaker 3: The income of the Chinese military has increased by more than twice. We believe that more and more users will discover and recognize our Dingdong Good Products in the future.

Thanks for your range silky chicken was attitude of delicious, killing ranking in April we have seen a remarkable increase in exposure transaction volume and customer loyalty.

Speaker 4: Since free range soupy chicken was added to the delicious killing ranking in April , we have seen a remarkable increase in exposure, transaction volume and customer loyalty. Our average monthly exposure has surged by 200%. While monthly average transaction volumes have skyrocketed by 360%. Additionally, the 30-day re-purchase rate increased by 5.4% each point.

Average monthly exposure has surged by 200% well monthly average transaction volumes have skyrocketed by 360%.

Additionally, the 30 day, where you purchase rate increased by five four percentage point.

I'm not a product that has grown at thanks, Judith delicious carrying ranking is our private label striped Marcelo my bounds bakery.

Speaker 4: In the space of just one month, its average weekly exposure increased by 80%, and its average weekly revenue more than doubled.

In the space of just one month average weekly exposure increased by 80%.

Average weekly revenue more than doubled.

Speaker 4: filled by this new promotional channel, we're confident that more and more consumers will discover and appreciate our high quality products in the future.

By this new promotional channel, we're confident that more and more consumers will discover and appreciate all high quality product in the future.

Speaker 3: I hope you enjoyed this video. Please subscribe to my channel. And if you like this video, please subscribe to my channel. Thank you for watching.

Oh, well I'm afraid the answer was the T cell, but then you want to choose a junior anywhere yet they all know bottomed at Sidoti, Ohio, who normally G due to the change.

<unk> got to do something you might as well quit anyone who can you go to the shelf as usual.

Yeah, I think Todd who don't judge on P O.

Just so cool told you we ended the doi on trains or one way.

Could you walk indoors Sundar, we actually like the table when we all know who I am a whole generic well remember you got Terry Duffy.

He told me that you just spoke about.

Yeah, well I mean the.

Speaker 3: the North China Sea was stimulated by a shutdown of the china's drought in the first place.

Yeah, I'll say I spoke about in Tulsa.

Well, mostly I don't want to shut that came to the pumping Chiseller, Japan did go Daddy.

Quite a bit but I wonder what they are called <unk>.

Just a call. It you know is it usually eyal, who I know who they are but yes, let's hope I'm just sort of can be summed up.

Speaker 3: We continuously strive to enhance user experience. For our download members, our team has worked hard to design nearly a hundred high-quality products to meet the unique needs of our members in East China. We offer member benefits such as free menus, member-exclusive products, member-exclusive discounts, and Super Member Days, which are just the beginning. We will continue to provide more benefits. Next, I would like to talk about our progress in the supply chain. In recent quarters, we have been able to maintain profitability. Besides the contribution of our product strength, a large part of this success is due to our continuous investment in R&D technology. We have always adhered to a long-term business philosophy, continuously upgrading and optimizing every aspect of the supply chain. Leveraging our operational experience, we have successfully managed the entire supply chain from procurement, production processing, warehousing, fulfillment, and delivery, as well as the management of people, goods, and transportation in every scenario. In terms of operational efficiency, supported by our self-developed data algorithms, our system can also use AI technology to predict order sizes, plan categories, search for pricing, recommend products, and manage intelligent replenishment and allocation of inventory. Thanks to our continuous investment in system and algorithm capabilities, we have thousands of front warehouses in our supply chain. Even with the daily handling of millions of FDC to SKU, we have significantly improved the operational efficiency of the supply chain. Taking a key indicator in the fresh food industry, the full-chain loss rate, as an example, our overall category loss rate has continuously decreased by nearly one percentage point each year over the past three years. Currently, we have successfully controlled the unsold loss rate to around 0.5%, which is a very rare achievement in the entire fresh food industry. Next, I would like to update everyone on our progress in the supply chain. The improvement of our supply chain is key to our recent profitability. Combined with our product development capabilities, we have always taken a long-term approach to every aspect of our operations. Through continuous investment in R&D and technology, and constant upgrades to every link in the supply chain, we can now digitally manage shopping, production, processing, operations, fulfillment, and distribution, covering everything from people, goods, materials, and operations. Our local system allows us to predict order sizes using AI technology, plan arrangements, optimize pricing, provide search suggestions, replan goods, and manage inventory. Even with tens of thousands of front-line fulfillment stations handling millions of FDC to FPU daily, we are still able to improve our plans to continuously enhance operational efficiency, resulting in a nearly one percentage point reduction in the full-line fulfillment station loss rate over the past three years. Our fulfillment station loss rate has decreased by 0.5%, which is a classic achievement in FreshFood E-Commerce.

Speaker 4: We're constantly striving to improve the user experience for our valued members. Our team has been hard at work, customizing nearly 100 high quality products exclusively to meet the unique needs of our members in each China.

We're constantly striving to improve the user experience for all download members. Our team has been hard at work customizing nearly 100 high quality product exclusively to meet the unique needs of our members in east China.

Speaker 4: Our existing member benefits, such as free dishes, member exclusive products, member exclusive discounts, and super member days are just the beginning.

Our existing member benefits such as free dishes member exclusive product member exclusive discounts and Super remember days are just the beginning.

Speaker 4: We'll continue introducing even more benefits to incentivize and reward our loyal members.

We'll continue introducing even more benefits to incentivize and reward our loyal members.

Speaker 4: We're proud to share that in the second quarter of this year, members GMV increased by 10 percentage points year on year and 2.4 percentage points sequentially. While their order frequency increased by 9% year on year and 5.2% sequentially.

We're proud to share that in the second quarter of this year remember G. M. D increased by 10 percentage points year on year, and 2.4 percentage points sequentially, while their order frequency increased by 9% year on year and five 2% sequentially. Despite the high base effect created by the pandemic last year.

Speaker 4: Despite the high basis act created by the pandemic last year, quarterly member ARPUL increased by more than 10% year on year.

Quarterly member ARPA increased by more than 10% year on year.

Yeah.

Speaker 3: Go generating. So you didn't T see that you go sus PO some you need go here, not going to you woman that advir fam et holdlo e being tender CH to e that. Yet going mayga it put send are or when kill the center. He on from tigo. You are going town TR. You pid on going. It is four youing.

Yes.

So he didn't know either on the local partner.

What are some of the musical here why not you know not yet we've only you on wins that you had about you will find me. That's three total almost Egypt being tender challenges will be that union, yet so it's going in amigo and yourself does that well do I send you off well then to Sundar.

Yes, again G at $10 for telephone tango shouldn't that yard well how to do that peso cents Cornell O U G zone for you how many how long do you there so don't worry clean from yes that woman for do you have a father.

Speaker 3: How may go H in the suar Valley, clear vian and feir women, little young father. Should you some accesses that or the you Don T hypalo air issue.

You saw that truth is that although she is all high appeal to you as usual.

Speaker 3: The nation is not shouting ourit your own sauce

Don't worry I'm watching him.

Hard thing John Sottile with P J.

Speaker 3: Children P money coman, you come ment to see the whole su it. It hold lo. So montonia, you change, changes some Med Ian, truly every C as K. So privan she that she want in a acconian the union she.

Sure.

Bill why don't you put what you call them when they see the horse Love Island. She had total so I'm, calling it out you would change the change itself, but yet fully after U S appeal, So bad right now and she said she wash out.

G T cell have gone down there you Shelley you said you were going into about 20 or so so how do you really do.

Speaker 3: You see you were going into the chney also holly reallyil cour sunrenia, or champing lad on holly mananally adjanging yougo babindia. Tell lewoman when D ner Jun also hol canong condollar band in India which So finanwer how putora feeda hand gender.

So now all the Champions League. So Hardy mainly interested you shot John Jim you called out India Toyama when dinner, Josh as Jos already 10 won't hold it all up I'm in India on what's really sort of bias towards afraid I'll have Jim Dutch LNG.

Speaker 4: Next, I would like to update you on the progress we have made in our supply chain. Our supply chain improvement has been a key driver of our recent profitability, alongside our product development capabilities. We have always adopted a long-term approach to every aspect of our operation.

Next I would like to update you on the progress we have made in our supply chain our supply chain improvements have been a key driver of our recent profitability alongside our product development capabilities. We have always adopted a long term approach to every aspect of our operations.

Speaker 4: Those sustained investment in R&D and technology and continuous upgrades to every link in a supply chain, we now can digitally manage procurement, production, processing, warehousing, fulfillment and distribution, covering everything from people, good logistics and warehouse.

Sustained investment in R&D and technology and continuous upgrades to every link in our supply chain. We now can get just really managed procurement production processing warehousing fulfillment and distribution covering everything from people good logistics and warehousing.

Speaker 4: Our proprietary algorithms enable us to predict order size with AI technology, perform category planning, optimize pricing, provide search recommendations, replenish supplies, and manage inventory.

Our proprietary algorithms enable us to predict order size with AI technology performed category planning optimize pricing for that.

My search recommendations with plenty of supplies and manage inventory, even with thousands of frontline fulfillment stations processing millions of F. D. C. She can use daily we still manage to upgrade all out with them to drive consistent improvement in operational efficiency, resulting in a decrease of nearly one percentage point.

Speaker 4: Even with thousands of frontline fulfillment stations processing millions of FDCs to FCUs daily, we still manage to upgrade our algorithm to drive consistent improvement in operational efficiency, resulting in a decrease of nearly 1% point in the full chain loss rate of all categories in each of the past three years.

In the full chain loss rate of all categories in each of the past three years, our loss rate unusable goods has been carefully manage down to less than 0.5% away our chief many of the fresh food e-commerce industry.

Speaker 4: Our loss rate of unusable goods has been carefully managed down to less than 0.5%. A rare achievement in the fresh food e-commerce industry.

Speaker 4: In the second quarter, our order volume increased by 2.3% quarter-on-quarter. At the same time, we believe there is still significant growth potential in the East China region, and we are continuously investing in and optimizing the current power supply network layout. Our daily order volume in the East China region increased by 5% quarter-on-quarter. In the first half of this year, we upgraded, split, and optimized the layout of nearly a hundred submarine warehouses in East China based on the coverage area and order density between sites, further improving our out-of-stock rate and enhancing our fulfillment efficiency. Finally, let's look ahead to the full year of 2023. We remain very confident in achieving profitability under the non-GAAP metric for the full year, continuing to achieve healthy and high-growth development. That concludes my remarks. Thank you, everyone. Now, please welcome our company's Chief Financial Officer, Senior Vice President Wang Song, to introduce the company's financial situation. Thank you, Mr. Liang. Hello, everyone. Before introducing our financial situation, let me first clarify that all our figures are in RMB. Thank you, Mr. Liang. Our company's Chief Financial Officer Wang Song, in the full year under the non-GAAP metric, and the full year high-quality financial officer Wang Song, in the full year under the non-GAAP metric, and the full year high-quality financial officer Wang Song, in the full year under the non-GAAP metric, and the full year high-quality financial officer Wang Song, in the full year under the non-GAAP metric. Thank you, Mr. Liang. Hello, everyone. Before introducing our financial situation, let me first clarify that all our figures are in RMB. In 2023 QR, we continue to adhere to the path of high-quality growth, firmly advancing the strategy of prioritizing efficiency while balancing scale. With the continuous improvement of operational efficiency and ongoing optimization of costs and expenses, we have achieved profitability under the non-GAAP metric for three consecutive quarters. QR non-GAAP net profit was 0.2%. Additionally, excluding one-time expenses, we also achieved profitability under the GAAP metric. Next, let's look at the specific performance of 2023 QR. Dingdong Maicai's GMA for 2023 QR was 5.32 billion yuan, a year-on-year decrease of 25.2%. Revenue was 4.84 billion yuan, a year-on-year decrease of 27%. The main reason for the revenue decline is the high base formed by the pandemic in the same period last year. As shown in the previous two charts, the performance under the QR non-GAAP metric decreased by 25.2% year-on-year. The main reason for the revenue decline is the high base formed by the pandemic in the same period last year. As mentioned earlier, regions such as Shanghai suffered severe pandemics in the same period last year. Dingdong Maicai overcame various supply chain and operational difficulties, accommodating the surge in consumer demand from most users, resulting in the high base of the same period last year. Considering the high base caused by the pandemic and short-term macroeconomic impacts, our AOA also saw a year-on-year and quarter-on-quarter decline. However, we still believe that with the continuous optimization of our products and the gradual improvement of the macroeconomic environment, AOA still has significant growth potential.

Speaker 3: A total of 5.5% of our time. As of last year, we continued testing champions, and you will learn to identify the someone who'd counted the number cheering

Or is it or do you think that out that'd be it.

The audience that postal Michelle you bottomed the hydro fleet under 10000, yet you got total or you're watching a cornea in a tomo Unfortunately, well most model town.

I'll be cheering up I'm do junior if somebody else can you tell me again, the Hawkeye G are hurting that need to do a bottle that you buy a good churn does Alex you can essentially yeah, yeah sure you'll walk Fuji Jimbo's guys, how well we're not sure what are you being cheap so Amanda you Shelley.

Our volume was up two 3% sequentially. We're confident that there is still room for additional growth in the east China region and are working hard to optimize the network layout of our existing frontline fulfillment station.

Speaker 4: Our order volume was up 2.3% sequentially. We're confident that there is still room for additional growth in the East China region and are working hard to optimize the network layout of our existing frontline fulfillment station.

Speaker 4: Outfront lines for filmensations in East China saw a 5% increase in average daily order volume sequentially. In the first half of this year, we upgraded, split, and optimized the layout of nearly 100 font line for filmensations in East China, which has improved both our out of stock rate and for film and efficient.

All frontline fulfillment stations in East China saw a 5% increase in average daily order volume sequentially in the first half of this year, we have graded split and optimize the layout of nearly 100 frontline fulfillment stations in east, China, which has improved both our out of stock rate and fulfillment efficiency.

Speaker 3: So you want to give us your opinion in any way. We will continue to work in combat. All of our

So my last Oh, Yeah, that's right.

Well I'm afraid iOS Ngls again trend here now as guy because he had a unique C C.

Yeah, Jim got hooked cultural project or the fire and thoughts with you as well.

So I mean, IGN causes how often called difficult well, it's the only Ikea, who says how what's involved.

Speaker 4: We're confident that we can achieve full-year non-get profitability in 2023, and that we will maintain healthy and high-quality growth throughout the year. Thank you all. That concludes my remarks. Next, I would like to invite Wang Song, our Senior Vice President and Head of Finance, to review the company's financial performance.

We're confident that we can achieve our full year non-GAAP profitability in 2023, and that we will maintain a healthy and high quality growth throughout the year. Thank you. All that concludes my remarks next I would like them by one film our senior Vice President and head of Finance to review the company's financial performance.

Speaker 5: Thank you, President Liang. Hello everyone. Before we introduce our materials, let me first tell you all of our data are for the human rights.

She said uncle, but I'll try to address all of them that have worked in concert can she has told me shop. One would've thought also to those of you let me be like Dominator.

Speaker 4: Thank you, Miss Siliam. Hello, everyone. Before I review our financial performance, please note that all of our figures are in R&B.

Thank you Mr. Lynn Hello, everyone before I review, our financial performance. Please note that all of our figures are in RMB.

Speaker 5: I an CH were in ul ouns on the LOUIS J 20 shly O an jam mother, the family apa. So me show you that ise she T ber very on the put on your were main Gen and she's you donot each other. You need CH, not about jmuline. Where India happens are India heart Co, UN. So local TR. So fication for your were may soci ga eachother you need.

Finally on slot limitations Hinton golfs that haven't been done.

Oh, Gee gentium twitching, Shelly Oceana genco claim on that side of it.

You show me that's the shoot you said tender and so you end up with I O agents. They actually say that you do not have to go to each other unique cool knockout about Chilean earthquake, India happens with India up close.

Lugo truthfully, especially I'd say well, maybe it's the channel got it doesn't show that you need.

During Q2, we remained committed to achieving high quality growth by following our efficiency friends with due consideration of scout strategy, we have achieved non-GAAP profitability for three consecutive quarters through our ongoing efforts to improve operating operational efficiency and optimize costs.

Speaker 4: During Q2, we remain committed to achieving high quality growth by following our efficiency first with due consideration of scale strategy. We have achieved non-gap profitability for three consecutive quarters through our ongoing efforts to improve operational efficiency and optimize cost and expense.

Expenses, we also achieved a non-GAAP net profit margin of 0.2%. Additionally, if we exclude one time expenses, we were profitable on a GAAP basis.

Speaker 4: We also achieved a non-GAAP net profit margin of 0.2%. Additionally, if we exclude one-time expenses, we were profitable on a GAAPI.

Speaker 5: Next, let's look at the case of Q22023's Q2. The case is sold in China. The Q22023's Q2 is 5.2 million. The score is 25.2% The score is 48.4 million. The score is 27%

July one when I kind of shot.

So our Doctor T O clock didn't on my part.

Daniel Chan Leeway with Society are you there.

So I don't know if I think I told you.

It's also the buyback so you there when they shut down all the buttons on the cheap.

Speaker 5: So I T allow the UN twent UN e was end the high est no cham also So trun I have been true also U each.

That's what all that means that Shunyata crunchy changed Washington to hybrid solutions and also saw chances I'm sure you saw it in true. There's also a lot yes, it's all about your checks and all my tie a couple of going into ankle I mean, it sounds that sounds like quite a lot to ingest all I'll start with Jason that shelf a huge hole.

Speaker 5: In though my entire couple of goingian, some terms of planannot and just top of a young is't the shop est futual 5000 ryans Che up highest.

I'd also like chanting showed a high base.

Speaker 5: We then had our mistakes in???. the During the marketing process and

Got it all your channel called lunch, it always sounds awesome, Doug I'll do so well.

Oh, it won't be a whole bunch of people shut down dial woman doesn't I shall we say.

Faithfulness Duncan got tissue, you'll Oh, I'm glad you enjoy your lunch and total book I thought ill. They they all have been talking to him.

Speaker 5:

Now, let's dive in in Q2 P. M. D was 5.32 billion RMB a decrease of 25, 2% from the same time last year, while revenue was 4.84 billion RMB a drop of 27%.

Speaker 4: Now let's dive in. Include two, GMV was 5.32 billion RMB, a decrease of 25.2% from the same time last year. While revenue was 4.84 billion RMB, a drop of 27%. As previously mentioned by Mr. Liang, the primary reason for the decrease was the high base effect created during the same period last year, when the pandemic restrictions were impacting Shanghai and other regions.

As previously mentioned by Mr. Now the primary reason for the decrease was the high base effect created during the same period last year when the pandemic restrictions were impacting Shanghai another region.

Speaker 4: During that period, we successfully navigated supply chain and operational challenges to fulfill the search in consumer demand. Given the basis act and short-term macro-heavyings, we experienced a decrease in average auto-value or AOV on a year-on-year and sequential basis. However, we remain confident that with the continued optimization of our product offerings and a gradually improving macroeconomic environment, AOV still has the central room for growth.

During that period, we successfully navigated supply chain and operational challenges to fulfill the surge in consumer demand.

Given the base effect and short term macro headwinds, we experienced a decrease in average order value or a L. D on a year on year and sequential basis. However, we remain confident that with the continued optimization of our product offerings and a gradually improving macroeconomic environment.

You still have substantial room for growth.

Speaker 5: Ch module away back in the's. She about 17 India. You go go back IND IA where last three should chn can. So it comes to the question to only going there. So she for y heart from the she purchase it run up and the need y Che going sh ly to tem for show mach chine, the jnle americ, don't my have the gym. Be like to those, a heart and Union and.

So I don't want anyway, and decides to eat a chance on shape out somewhat in Q.

Yeah, I really wish I don't know if you'll go back and deal with that.

Homeaway tissue Jonathan Okay.

I believe some can go into that tissue to essentially all of them.

So to sum it up in a neat essentially going down to I mean, surely totally depends on where you want that tissue, you'll walk well Michelle Qi So Jonathan.

Jim didn't delay being told what the Houghton going through it sounds like you need any.

Speaker 4: Although gross margin decrease by 0.6 percentage points year on year into two, it remains stable overall at 31%. To achieve sustainable growth, we plan to continue focusing on product development as our core driver and deepen our supply chain engagement.

Although gross margin decreased by 0.6 percentage point year on year in Q2. It remained stable overall at 31% to achieve sustainable growth. We plan to continue focusing on product development is a core driver and deepen our supply chain engagement.

Speaker 4: upgrading and optimizing our systems and algorithms will help improve operational efficiency in our supply chain, lower costs and increase profitability.

Upgrading and optimizing all systems and algorithms will help improve operational efficiency in our supply chain lower costs and increase profitability.

Speaker 4: We aim to establish this as our competitive advantage, resulting in stronger profitability in the long term.

We aim to establish this as a competitive advantage, resulting in stronger profitability in the long term.

Speaker 5: The Luev is 23.7% The score is 0.4% This is the effect of the Luev's high base But our single Luev is 7.8% This means that Luev's efficiency is still increasing We have been working hard to increase the efficiency of Luev For example, our limited-scale cloud efficiency is obvious But for example, our single Luev Compact is about 8.4%

Got it.

Right.

Thank you Qi <unk>.

So some of them.

So go back to India, because they all your tenure to I saw your change in Washington to elevate a hybrid.

Yes.

You shut down a lot back into that she didn't ball. That's all my Thunder Sheldon said that tissue to send the money at the time, what he and she says you are makeup anja Shelly.

Sure.

Yeah, So it's yeah gotcha.

So you can be shut down by things about it.

Speaker 5: Second Office????? has been there throughout the day and still in response to the National Aid T What does the Parliament handle the testing of 1997-661

Well, that's all don't fault, that's all yeah, He's got Utah JV up on Bob <unk>.

I thought you would be shut down look I think just the chi downhill.

Speaker 4: For human expense ratio increased by 0.4 percentage points year on year to 23.7%. This was due to last year's pandemic, which created a high ALB base effect. Despite this, our average order fulfillment costs decreased by 7.8% year on year, indicating continued improvement in our efficiency on the fulfillment side.

Fulfillment expense ratio increased by 0.4 percentage points year on year to 23, 7%. This was due to last year's pandemic, which created a high it'll be base effects.

This our average order fulfillment costs decreased by seven 8% year on year, indicating continued improvement in our efficiency on the fulfillment side.

Speaker 4: We're committed to enhancing efficiency across every aspect of the fulfillment process, which is reflected in the significantly improved efficiency of our mainline logistics and transportation units. Everage mainline logistics costs per order dropped by 8.4% year-on-year. Additionally, we're passionate about conservation and environmental protection and achieved a 17.6% year-on-year reduction in the cost of packaging consumables per order.

We're committed to enhancing efficiency across every aspect of the fulfillment process, which is reflected in the significantly improved efficiency of our mainline logistics and transportation units averaged.

Average mainline logistic cost per order dropped by eight 4% year on year. Additionally, we're passionate about conservation and environmental protection and achieved a 17, 6% year on year reduction in the cost of packaging consumables per order.

Speaker 4: The marketing expense ratio for QI is 1.8%, which is an improvement of 0.4 percentage points compared to the same period last year. This indicates that product strength has become a source of traffic for Dingdong, and Dingdong's differentiated and unique good products are increasingly attracting and retaining users. The management expense ratio for QI is 1.8%, which is an improvement of 0.5 percentage points compared to the same period last year, and the R&D expense ratio is 4.2%, an increase of 0.3 percentage points compared to the same period last year. Our foundational investments in these areas have improved the efficiency of cloud aggregation, and we have also adopted internet computing, big data, internet shopping, and supply chain applications to adjust our systems and reduce prices. As a result, the product service price of cloud aggregation decreased by 23.7% annually in Q2, while maintaining rich service quality and system stability. In Q2 2020, we achieved a net profit of 0.2% under the non-GET caliber. As mentioned earlier, after deducting one-time expenses, we also achieved profitability under the GET caliber. This fully demonstrates that in the post-pandemic return to a normalized operating environment, we have the ability to continuously enhance product strength and full-chain supply chain capabilities, as well as continuously improve our operational efficiency and profitability. In Q2 2020, we achieved a net profit of 0.2% under the non-GET caliber. As mentioned earlier, after deducting one-time expenses, we also achieved profitability under the GET caliber. This fully demonstrates that in the post-pandemic return to a normalized operating environment, we have the ability to continuously enhance product strength and full-chain supply chain capabilities, as well as continuously improve our operational efficiency and profitability. In Q2 2023, the operating cash outflow was 178 million. After excluding the annual bonus for 2022 paid in Q2, we achieved positive operating cash flow in Q2. As of the end of Q2 2023, the balance of cash and cash equivalents, short-term restricted funds, and short-term investments was 5.52 billion yuan. In Q2, we proactively optimized the financing structure, and under the premise of ensuring sufficient operating funds and continuing to serve suppliers well through supply chain finance, we proactively reduced short-term borrowings and supply chain financial loans, with the loan balance decreasing by 127 million yuan compared to the end of Q1. This is also the main reason for the decrease in the balance of cash and cash equivalents, short-term restricted funds, and short-term investments at the end of Q2 compared to the end of Q1.

Speaker 5: QLiren is 1.8% due to costs $ 4% Due to the improved balance, the residents' fuel consumption and separately improvement will reduce??

Florida and shelf life back into it you Didnt Bob.

I'm sure you'll have that index will go back and do so for me, it's all getting each until they can do it.

And I'll tell you what the hotel to a halt dumping.

She and her family.

So we of course caught up I think the only way back then that you Didnt, Bob George Union Hall, Chief Johann and then we'll go back and do you have on your way back into the City Hall gel Tunyaz Vinci single, all India kind of go back and get.

Speaker 5: Claire is the only way by things that he can, but to advancing to you or vice hell or vice situation. Thank you for watching.

Speaker 5: We broadcast the songs of the yuan paper to Yu-Ru in Game?! Bake in rusty SPEEDMATON Fan Gu Yana will receive complete emails to the site public development team.

Commvault JV why I'm bothering to John would you want that that opinion ball no yeah, Koji Pacifico soldiers signs off and format. So sure Jackie Yeah, Bob Hello Akshay.

Speaker 5: From township like a mech is some the CH also to do an. Can T the chance to counil So y on the chance mission and the shel about 10 food carossship conventendation, counil me Don about inches 2, th and ches also CH ance con Ian the he the socishow in or your shel ump ens.

Well Michelle shouldn't you saw in terms of appointment that just all sorts of total John Josh I don't get it on the agenda you also answer.

Oh, Yeah, I found the Nissan that Chad, So, yes, Hello, Michelle Shelby Tusa diet, Baltimore bullets at all cost you're talking about additional things that well talk about eight inches up towards your dancers will sell it to the cheesecake is all going on out there.

I'm not so sure you'll walk Jamie I know youll shelter jumping vishal.

Speaker 5: In Q2, our I7 service fee is equal to 23.7%

Sure women are achievable, but pumping chunky it off by them, but at the time that Chi.

Marketing expense ratio was one 8% down 0.4 percentage point compared to the same time last year. This highlights our success in using part of development as our main source of traffic by creating distinct and unique products that attract a greater number of target customers and boost our user.

Speaker 4: Marketing expense ratio was 1.8%, down 0.4% compared to the same time last year. This highlights our success in using product development as our main source of traffic by creating the stints of and unique products that attract a greater number of target customers and boost user retention. We're also pleased to report that our GNA expense ratio decreased by 0.5% percentage points compared to last year and is now at 1.8.

Tension. We're also pleased to report that our G&A expense ratio decreased by 0.5 percentage point compared to last year and is now at one 8%.

Speaker 4: our R&D expense while our R&D expense ratio increased by 0.3 percentage points year on year to 4.2 percent we remain committed to investing in food R&D agricultural technology and our algorithms while advocating for conservation and environmental protection.

Our R&D expense, while our R&D expense ratio increased by 0.3 percentage points year on year to four 2%, we remain committed to investing in food R&D agricultural technology and algorithms, while advocating for our conservation and environmental protection. These.

Speaker 4: These investments will strengthen our competitive advantage in the long run.

These investments will strengthen our competitive advantage in the long run.

Speaker 4: Our infrastructure investment in these areas has already yielded significant efficiency improvements, and we have also adopted cloud computing, big data, e-commerce, and supply chain applications to optimize our systems and reduce costs.

Our infrastructure investment in these areas has already yielded significant efficiency improvement and we have also adopted cloud computing big data e-commerce and supply chain applications to optimize our systems and the Jews call.

Speaker 4: as a result, IT service costs decreased by 23.7% year on year in Q2 while maintaining consistent service quality and system stability.

As a result, our I T service costs decreased by 23, 7% year on year in Q2, while maintaining consistent service quality and system stability.

Speaker 5: I other Q, not AP coing char, the IND IA H Gen you, which I mention all close to ficion for your whole apical Co. yes gener, you need call for without town time, arking and Ing when only need itis and something need is channel the going ion and need you itis M woman show need.

Are they not going to I'm, calling this a shallow knock up a cogent shop presence in India at a junior debt.

I meant it all cultural especially in for your whole ethical change out yes. The shallow you need that's always told me a lot that you can call. It all time high of octane shop, when they own their knee, especially with youth and so I'm Sandeep did you chanelle.

Josh So shouldn't you don't mean shall we call internally.

During Q2, we achieved a non-GAAP net profit margin of 0.2% as previously mentioned after excluding one time expenses, we were profitable on a GAAP basis. This demonstrates that we can continuously improve our product development unfold chain capabilities, leading to better operational efficiency.

Speaker 4: During Q2, we achieved a non-get net profit margin of 0.2%. As previously mentioned, after excluding one-time expenses, we were profitable on a gap basis. This demonstrates that we can continuously improve our product development and full chain capabilities, leading to better operational efficiency and profitability, even in the post-pandemic environment.

<unk> ability even in the post pandemic environment.

Alright, Thanks, a lot Jean J O tool that you didn't ship I truthful, Oklahoma, if all blah blah are there in China and in Arizona, a whole well mature so shall I say something about change in Shenzhen Jason.

Speaker 5: Office runway."

Speaker 5: Let the dry pareil Internet fave the

Speaker 5: So I iz more changing, changing y CH soci Ing the you are woman to don't know halllow into go about. Turn to the Ing U you going engine. You found chentisia to don't trans or trans iter her going engine on that part. But time you job to you more trans all ie.

Tania I'm too I'm, all Shenzhen Jewish agenda, Joe, Brian Shea associated with Chipotle.

You're supposed to do all that well so what do you are you there.

Clark why don't you follow them to juggle Guy Baber in total that means a G. G. You know what do you want to talk about going into a general fall when you're talking about champion shop. So don't you have a bunch of jackpot going into a general diaper side point of view our job to you more chances, although you didn't achieve it.

Speaker 5: So if's the C more changeing, changing than JB to an CH So enging. But Don she total you job. Show you more CH out in.

Shenzhen Shenzhen Gotcha.

Gotcha.

Why don't you talk to you off Joe So you're more chance all of that so yeah all game.

Speaker 5: Operating cash outflow was $178 million. We achieved positive operating cash flow when excluding the payment of year-end bonuses for 2022. Our cash and cash equivalent, short-term restricted cash, and short-term investment totaled $5.52 billion at the end of Q2. We proactively optimized our financing structure by reducing short-term and supply chain financial loans, which decreased the loan balance by $127 million. Although this was the main reason for the decrease in our balance of cash, we have ensured sufficient operating funds to serve our suppliers with supply chain finance. Finally, we estimate the data for the remainder of 2023. We are very confident in achieving quarterly Non-GAAP profitability in both Q3 and Q4, as well as achieving full-year Non-GAAP profitability for 2023. This concludes our remarks for today. Operator, we can now enter the Q&A session. We will begin the Q&A. When asking a question, you can press the bell. If you are using a speakerphone, please place your hand on the handle first, then press the bell. If you are using a teleprompter, please place your hand on the handle first, then press the bell. Entering the Q&A session, you can choose the rub machine. In the rub machine, please place your hand on the handle first, then press the bell. If a question in the rub machine has been answered, please place your hand on the handle first, then press the bell. When asking a question in the rub machine, please first write the description in Chinese, then write the description in English in the rub machine, to accept the handle in the handle. At this time, we will pause the rub machine and combine the handle in the rub machine. The first question comes from Thomas Chong and Jeffries, please accept the handle. Good evening, thank you to the management for accepting my question. Mr. Liang, congratulations on the company achieving Long Gap profitability for three consecutive quarters. Can you introduce the development situation of Bingdongxing in different regions, and the tracking points in different regions? Hello, Mr. Liang, congratulations on achieving Long Gap advantages for three quarters. Can you introduce the company's development situation in different regions, and the tracking points in different regions? Thank you. Thank you for your question. To address the challenges of the pandemic, we made strategic priority efforts in Shanghai during the first half of the year. As we enter the third and fourth quarters, we shifted our focus to Jiangsu and Zhejiang. Our plan is to make strategic priority efforts in Shanghai during the first half of the year. As we enter the third and fourth quarters, we shifted our focus to Jiangsu and Zhejiang. Our plan is to make strategic priority efforts in Shanghai during the first half of the year. We can focus on action indicators in the north and south, and develop in new cities.

Speaker 4: Operating cash outflow was 178 million. We achieved positive operating cash flow when excluding the payment of year end bonuses for 2022.

Operating cash outflow was 178 million, we achieved positive operating cash flow when excluding the payment of year end bonuses for 2020 two.

Speaker 4: Alcash and cash equivalent, short-term restricted cash, and short-term investment totaled $5.52 billion at the end of Q2. We collectively optimize our financing structure by reducing short-term and supply chain financial loans, which decrease the loan balance by 127 million.

Our cash and cash equivalents short term restricted cash and short term investments totaled 5.52 billion at the end of Q2.

We proactively optimize our financing structure by reducing short term and supply chain financial lungs, which decreased the loan balance by 127 million.

Speaker 4: Although this was the main reason for the decrease in our balance of cash, we have ensured sufficient operating funds to serve our suppliers with supply and chain finance.

This was the main reason for the decrease in our balance of cash and you have to ensure sufficient operating funds to serve our suppliers and supply chain finance.

Okay Gotcha.

Speaker 5: Finally, the new technology is back there in 2030. We are celavers now in kah interpreters with the Hybridelas or VI have theiendo competition that finishes beef?ent Tahal's focus on climbing, which continues with pulling the Personal Market which the forest is gluing the top? capabilities, so Now the video finished, please front the window.

Now of course, Sheila soldier township, well, Memphis, I always fishing, sorry Tucson.

Okay.

But you do justice, yes, judo knockout approach and try to get me pause. This yeah Ali tenure tenure knock out that could change how they are neat.

Can you identify your adult T cell.

Sean could you Joe Cleveland yellow.

We are highly confident in our ability to obtain non-GAAP profitability in the remaining quarters and for the full year of 2023. This concludes all speeches today operator now we can enter the Q&A session.

Speaker 4: We are highly confident in our ability to attain non-gap profitability in the remaining quarters and for the full year of 2023. This concludes our speeches today. Operator, now we can enter the QA session.

Speaker 1: 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're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two.

We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys.

Any time your question has been addressed and you would like to withdraw your question. Please press Star then two.

Speaker 1: When asking the question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call.

You're asking the question. Please state your question in Chinese first then repeat your question in English for the convenience of everyone on the call.

Speaker 1: At this time, we will pause momentarily to assemble our Ross.

At this time, we will pause momentarily to assemble our roster.

Speaker 1: The first question comes from Thomas Chong with Jeffries.

The first question comes from Thomas Chong with Jefferies.

Please go ahead.

Speaker 5: Once a, how say on each hunes over the he then Jo, how con to go C C, you's the de the long g coings are in the CRE are always have dont side that will conte their bs. And how hio to conte the children.

Well, it's a hot fishify needs homogeneous all while the Pea Lynn mentioned no consequences.

She was trying to do with that law and get Cogent shopping.

Can you do some shopping don't change.

There are pockets in long Io type, who don't choose the children.

Speaker 5: Hello Mr. Nair. Congratulations on achieving three consecutive quarters of long gap profitability. Can you introduce the current development of the company in different regions? What is your specific focus in different regions? Thank you.

Hello, Mr. Neil Congratulations on achieving three consecutive quarters Hoffmann GAAP profitability. Okay. You introduced the Cowen you read them on behalf of the company in different regions. What you saw specific focus in different regions. Thank you.

How should any of the win T.

Speaker 3: In the last Yu??? period, we carried out the development of EVions and business projects. We then mentioned investmentower and action narrative to autor??is. We didn't alreadyoit a freeliest experiment. Innovation was important to the financial success. Invest establishing, vi Battagifting Company accepted an experiment that makes the market attractive to our community. The company which was working right now must be responsible how we can take good care of the company.

Sooner or somebody in Colorado aside that your tender useful all about watching your father of Shanghai, but hold you to tour, our Coosa Codell well.

It's only a father of a challenge.

Oh Gee, well Miss you all that the yogurt shoot you guys Shouldnt devoting a.

Oh, what Joe autumn shoot them already told you what didn't go towards their downstream needs you don't that Bobby shooter genre seems about right.

Speaker 3: If you want to see more of our videos, please subscribe to our channel. Please subscribe to our channel.

We like to put out though she does finishes up.

Speaker 4: Thank you for your question. To address the challenges presented by the pandemic, we strategically prioritized our efforts in Shanghai during the first half of last year. As we progressed into Q3 and Q4, we shifted our focus to Jiangsu and Zhejiang. Our plan was to optimize efficiency.

Thank you for your question to address the challenges presented by the pandemic, we strategically power ties out efforts in Shanghai during the first half of last year as we progressed into Q3 and Q4, we shifted our focus to jump through and towards young our plan was to optimize efficiency and hence the order density and increase ROI.

Speaker 4: enhanced order density and increased ROI in our existing focus areas before expanding further.

And all existing focus areas before expanding better once the gross profit margin stabilize in east China. We could then concentrate on improving operational indicators in north and south China and expanding to new cities.

Speaker 4: Once the growth profit margins stabilize in each China, we could then concentrate on improving our original indicators in North and South China and expanding to new cities.

Speaker 4: It now appears that our previous strategy was completely correct. The Jiangsu, Zhejiang, and Shanghai regions have gradually matured, and all three regions have achieved stable profitability for three consecutive quarters. From the operational data, the daily order volume in Jiangsu and Zhejiang has increased by 27% and 21% year-on-year, respectively. A series of indicators show that we have firmly rooted ourselves in the East China region and are building stronger day by day. At the same time, our product strength in this region is also getting stronger. We not only have product development capabilities but can also quickly analyze different feedback from users in different regions and iterate rapidly. This is one of the reasons we have achieved success in different regions. Considering that the opening time in North and South China is not as long as in the Jiangsu, Zhejiang, and Shanghai regions, there is still room for further growth, and the penetration space in these regions is still very large. What we need to do next is to continue to consolidate our market share in the advantageous East China region and further enhance our scale. Using East China as a good business driver, we will promote the development of the North and South China regions and establish a strong presence in these areas. After all, we have seen the important growth potential in these regions. In summary, we will focus on providing support in every mature market in China to support the north-south economic operations of China. The next question is from Mr. Yang from the East China advantageous region. Good evening, I am Joyce from Meilin. I would like to ask, we have also noticed that the company closed some sites in the Sichuan and Chongqing regions this quarter. I want to ask if the company has strategically abandoned the Southwest region market. How should we interpret this strategic change in these regions? Let me translate it myself. Okay, thank you for your question. In May this year, we adjusted our business in the Chongqing and Chengdu regions. After thoroughly evaluating the overall return on investment in the area, we suspended services in the relevant regions. The business volume in the Sichuan and Chongqing regions currently accounts for a small portion of our overall business and is not expected to be profitable in the short term. Additionally, the short-term urban agglomeration is not sufficient to support large-scale operations in the area. Therefore, we chose to exit temporarily. For cost reduction and increase considerations, we will continue to focus on existing regions and consider business expansion in new areas after maintaining stable and large-scale profits in the region. However, we will continue to maintain deep cooperation with excellent food enterprises in the Sichuan and Chongqing regions. Thank you.

Speaker 3: 19. the bisquil round 7 of Columbus and inside all 121%

Sure.

Well most agenda tortillas.

Oh did she June 20th century conjecture thought she does suggest that there's a dash. It sounds that you do though one of your soldiers soldier lifetime, Joe So Joe Telemundo.

That'd be a tuneup.

Are you still here, that's the buildup beyond the old without bottom shoot long.

I'll Post Olympics Jeannie Chu. There's so many is that pitch out what would you you always tell me I'm I'll, Let me Yeah. Let me. She is we'll finish it but don't see them, who do you saw me put it that way she was old gear that Jean Silva melons, but I'm sure you chew the tons either your aims at Colorado, Fabio Paula and Qiagen suggest would you don't know who she you'll either Io achievable path.

Speaker 3: In retrospect, our strategic approach has proven to be well-founded. The juncture, the jun and Shanghai regions of all experience steady growth was each contributing stable profit for three-consensus quarters.

Vodafone get closer to your Chi Seung hoon, Yeah, Yeah sure John.

Oh sure I saw that you said about why don't you want to cheat sheets. Your houses for downtown D. C. In which you said you wanted to just yourself.

Oh.

While I'm sure about that.

Speaker 4: In retrospect, our strategic approach has proven to be well-founded. The Jiangsu, Kuo Jiang, and Shanghai regions of all experience steady growth with each contributing stable profits for three-consensus quarters. Based on operational data, the early auto volume in Jiangsu and Kuo Jiang has increased by 27% and 21% year-on-year respectively.

In retrospect, our strategic approach has proven to be well founded the Townsville towards young and Shanghai regions have all experienced steady growth with each contributing stable profits for three consecutive quarters based on operational data than the auto volume in Jiangsu and Georgetown has increased by 27.

Sent and 21% year on year, respectively.

Speaker 4: These key performance indicators also demonstrate our ongoing success in each China. Our product development capabilities in this region continue to improve, and we have developed the ability to rapidly analyze user feedback and iterate accordingly. This has contributed significantly to our ability to achieve results across different regions.

These key performance indicators also demonstrate our ongoing success in east China.

Product development capabilities in this region to continue to improve and we have developed the ability to rapidly analyze user feedback and iterate. Accordingly. This has contributed.

<unk> significantly to our ability to achieve results across different regions.

Speaker 4: Since operations in North and South China began after those in East China, we expect that it will take some time for us to ramp up the Unia economics and establish a strong presence in these areas.

Since operations in North and South China began after dose in east China, We expect that it will take some time for us to ramp up the unit economics and establish a strong presence in these areas.

Speaker 4: Nevertheless, we see significant potential for growth in these regions.

Nevertheless, we see significant potential for growth in these regions in some we will focus on consolidating our market share in mature markets in east China to provide support for the development of our operations in North and South China.

Speaker 4: In some, we will focus on consolidating our market sharing, mature markets in each China to provide support for the development of our operations in North and South China.

Speaker 1: The next question comes from Joyce Dew with Think of America. Please go ahead.

The next question comes from Joyce Ju with Bank of America. Please go ahead.

Speaker 6: Don't how make a portion gover many choice. The Ministry woman told out, say J to do it me one day. Lay friend, you children, J can be young, thousand own push approach from. Should something some and through the <expletive> have woman I also down J J frum up cour to.

I'll make a proportion he go immediately.

You want me to eat out you're just going to say.

Say Pete.

And when you're trying to teach you don't keep a 10 gig.

Ooh Ooh I should approach one should just won't.

Okay.

Sure Kyle.

Okay.

Sounds.

Hum.

Speaker 6: So the evening, we noted that the company acted the suit on and the team regions off-light. Just in the two check, if the company has given up on the market to bring the South West region, how shall we understand the strategy direction, the strategic direction going forward? Thanks.

Good evening, we noticed that the company at the end.

Looking region off late.

I want to check if the company has given up on the market in the South last week and I'm sure we understand the strategy direction strategic direction going forward. Thank you.

How soon do you know when to you Oh, we don't know what you're.

Speaker 3: How is an innovenity senior? We are now woman- to changuning Nu yoorgengeneral calate.

Are you talking to loot you you would your hotels. It. So I said it'll pingo look I teach Houston. She does so you'll play ball home and something to look somewhere else to the target.

Speaker 3: So said pring all OK, didach you 20, So you home and somewhere through the war time get. Did in know year chilllong, which thousand 20 year, which ourselves? You see time poilliamly P here twent two trans have put's and OK, is suyou on end up mobile Ing in film. Which are the 20 people?

She now which entitlements into your which I'll show you shoot us as L. A buoyant.

You got to change the trio I put Sweden buttons will go teach you can end up with Mojave insulin, we shouldn't try to pick tool to a job and so you have a cardio or isolate just your son going show Chi softball to choose what do you need a whole set of polishing schreder youll towards that.

Speaker 3: two example: color H way is you send's to powerw to one game mobile in a whole IR coloragu, since through the y to that, that mal, which is you powerw, you tryain to the y O havein here doesn't know ho.

Which of your fall until you try to do as usual should ensure the single digits.

Speaker 3: Thank you for your question. We decided to suspend our services in Chongqing and Chengdu in May of this year, following our extensive evaluation of the overall return from the region. The business volume from the Sichuan Chongqing area comprised a small portion of our overall business and was not expected to be profitable anytime soon. Moreover, we determined that the surrounding city hubs will not support large-scale supply chain operations in the short term. As a result, we decided to exit the region temporarily. Our focus now is on cost reduction and efficiency improvement. We'll continue to focus on building a stable and profitable business in our core existing markets and consider expansion into new regions afterwards. Despite the exit, we will continue to maintain in-depth cooperation with leading food companies in Sichuan and Chongqing. Thank you. Thank you. The next question comes from Robin Liu with Taiwan. Please go ahead. [inaudible] Can you elaborate on your efforts in this area? Thank you. Thank you. Thank you for your question. Our primary focus is on product development capability as our core competitive advantage and growth driver. To achieve this, we've made the following specific optimizations. We have made extensive efforts on the supply chain funds. We cover a long and comprehensive section of the supply chain, sourcing over 80% of fresh products directly from the origin, including through a contract farming in the production areas. We have established de-gap standards for growers specifying protocols for fertilizer and testifying use, among other things, to ensure product quality and stability. This allows us to place orders before planting season as fixed price and volumes while controlling upstream quality. For instance, our red river valley blueberries achieved tremendous success generating nearly 15 million GMB and over 400,000 purchases in just one month of online sales. This success was attributable to our extensive collaboration with purchases and growers to ensure optimal planting technology, management, quality control, taste and packaging. We secured 600 acres of production through contract farming, restoring in our best-selling products of the season.

Speaker 4: Thank you for your question. We decided to suspend our services in Chongqing and Chengdu in May of this year, following our extensive evaluation of the overall return from the region.

Thank you for your question, we decided to suspend all services in Chongqing in Chengdu in May of this year. Following an extensive evaluation of the overall return from the region, but this is volume from the Sichuan Chongqing area comprise a small portion of our overall business and was not expected to be profitable anytime soon.

Speaker 4: The business volume from the Sichuan Chongqing area comprised a small portion of our overall business and was not expected to be profitable anytime soon.

Speaker 4: Moreover, we determined that the surrounding city hubs will not support large-scale supply chain operations in the short term. As a result, we decided to exit the region temporarily. Our focus now is on cost reduction and efficiency improvement.

Moreover, we determined that the surrounding city hubs would not support large scale and supply chain operations in the short term as a result, we decided to exit the region temporarily I'll focus now is on cost reduction and efficiency improvement will continue to focus on building a stable and profitable business in our core.

Speaker 4: We'll continue to focus on building a stable and profitable business in our core existing markets and consider expansion into new regions afterwards. Despite the exit, we will continue to maintain in-depth cooperation with leading food companies in Sichuan and Chongqing. Thank you.

Our existing markets and consider expansion into new regions afterwards.

That said, we will continue to maintain in the cooperation with leading food companies in Sichuan and Chongqing. Thank you.

Yeah.

Yes.

The next question comes from Robin Leung with Daiwa. Please go ahead.

Speaker 1: The next question comes from Robin Lyong with Daiwa. Please go ahead.

Speaker 5: Can you elaborate on your efforts in this area? Thank you.

Oh, Yeah, Yeah, what's your dog eat dog Chang Qi don't die.

Uh huh.

Chunk out house them all chomping.

Can you talk to us even in China, where you know how can be short notice you're two months you said.

So now I understand that it has been emphasizing development.

Development capabilities and quality you.

Can you elaborate on your efforts in this area. Thank you.

Speaker 3: Okay, thank you. We have made some optimizations around Shang Mingli as the core competitiveness and the first driving force. First of all, at the supply chain end, we have covered a very long and complete part of the supply chain. Fresh production, value-added ratio.

Hollywood, Yeah, Oh, sorry.

So the Huntington Anyhow, you could own either solar inside your you'll walk so joe's going into almost forgot Laconia freed ontology of why did they go up. So you guys had did just happy Dude.

Speaker 3: to more than 80%. We have done a lot of things related to the agricultural industry in the production area. Farm owners have to follow our DGAG standards, such as how to use pesticides and fertilizers, and how much to use to ensure the quality of the product. This way, we can decide the time, price, and quantity of the product before we distribute it, ensuring the stability of supply and price, and controlling the quality from above. For example, in the first half of this year, we sold 1,500,000 yuan worth of CNVs in Honghe, Shanggu, Bobo, Cui, and Lanmei in just one month. More than 400,000 people bought them. We communicated with the buyers repeatedly through orders, agriculture, and locking 600 acres of land from the production area, varieties, planting technology, management level, quality control, taste, and packaging.

No policy you saw well besides have you sold all of her daughter didn't alloy actually I'll, let us long time to tell a swing as you know Amanda.

Peru somebody else, Illinois, all figured out.

The fossil F Dalton.

Joe are you there.

Portal to check didn't go with tritium Susanna trading jogger with Trillium shortly out of town, but they're not going to give her job Ottawa yeah. Good job little taller Guangzhou Sanya opening to their home or would you do something that a whole softwood pulp Australia.

Yeah, So Virginia, you'll hear that she wanted yeah, Jeremy about all that.

Tell me about what you told us what it's like Oh, My God tells me that don't have deep kingdom towards as usual quite easily.

Pink on Colgate total than Volvo, where you do tie it goes on just all five will go down.

Now let me ask for the annual buy them would be so you don't talk about all that.

Speaker 3: Finally, Zhong accent this button

Okay.

Thank you for your question.

Speaker 4: Thank you for your question. Our primary focus is on product development capability as our core competitive advantage and growth driver. To achieve this, we have made the following specific optimization.

Oh pardon me sofas is on product development capability is a core competitive advantage and growth driver for the achievements. We have made the following specific optimizations. We have made extensive efforts on the supply chain funds, we cover a long and comprehensive section after supply chain sourcing over 80% of fresh products directly from them.

Speaker 4: We have made extensive efforts on the supply chain funds. We cover a long and comprehensive section of the supply chain, sourcing over 80% of fresh products directly from the origin, including through a contract farming in the production areas. We have established de-gap centers for growers, specifying protocols for fertilizer and pesticide use, among other things, to ensure product quality and stability.

The origin, including through a contract farming in the production areas. We have established D. GAAP standards for growers specifying protocols for fertilizer and pesticide use among other things to ensure product quality and stability.

Speaker 4: This allows us to place orders before planting season at 6 pints and volumes while controlling upstream quality.

This allows us to place orders before planting season at fixed price and volumes, while controlling upstream quality for instance, I'll, let wieberg value blueberries achieved tremendous success generating nearly 15 million G M B and over 400000 patches in just one month of online sales.

Speaker 4: For instance, our Red River Valley blueberries achieved tremendous success, generating nearly 15 million GMB and over 400,000 purchases in just one month of online sales.

Speaker 4: This success was equitable to, attributable to our extensive collaboration with purchases and growers to ensure optimal planting technology, management, quality control, taste and packages.

This success with them after the ball to attributable to our extensive collaboration with purchases and growers to ensure optimal planting technology management quality control taste and packaging, we secured 600 acres of production through contract farming, resulting in our best selling product.

Speaker 4: We secured 600 acres of production through contract farming, restoring in our best selling products of the season.

Speaker 4: Secondly, we have done more related to private label products. Currently, most private label products are generally produced through OEM methods, but our private label products are more self-developed and processed. We are more involved in the R&D and production stages, which allows us to achieve differentiation while ensuring product quality, improve production efficiency, enjoy the gross profit from the production side, and control the production schedule. This quarter, it has increased to 19%, and in the future, we hope to increase it to 30%. At the same time, the gross profit margin of private labels has also increased by more than three points compared to the same period last year. We have adopted a unique method for professional product sales, with a weekly GMV value of nearly 600 million and a weekly repurchase rate of 35%. Our private label products accounted for 16% of GMV last year and 19% this week. We plan to increase it to 30% in the future. Additionally, our product business profit has increased by more than three points compared to the same period last year. Thirdly, as we mentioned before, there must always be innovation, especially in food innovation, where we need to increase investment. We have developed more new categories of products that are more in line with consumer trends, such as pre-prepared dishes, baking, and craft beer. Not only do these categories have a higher unit price compared to others, but they also have higher gross margins. At the same time, these categories have also brought in some new users. From past data, the GMV share of these categories is also continuously increasing. Our pre-prepared dishes have officially entered the era of Healthy Pre-prepared Dishes 2.0 this year. Our GMV has also officially entered the era of Healthy Pre-prepared Dishes 2.0 this year. We will combine the current consumer demand for nutrition and health to develop more distinctive, high-quality, and differentiated pre-prepared dish products.

The season.

Yeah, well, that's all a good audience searching but I saw him in Shanghai. This is J J you always also looking back compared to what we haven't done a woman so kudos to.

Speaker 3: Secondly on

Speaker 3: L The previous software on my channel has been strictly implemented in the presssung and the purpose of our products has been to facilitate products development and power supply run sales. We focus on entertainment and urban development, and in order not to Beyonce maintain the number of communication skills and report on technical phenomena and actual productivity in hands of business customers.

So, yes, sometimes jargon.

No children about why isn't that why do you say.

Sorry about that tenant Pinterest, Youtube, which I'll show you, how that's how you watch and listen that Shelley, yeah pretty sharp so listen done inside of the body that wasn't that didn't do well then so how do I handle could you parse what does well so.

Speaker 3: This system has very low volume property especially at university But our full capacity is less than 600? yuan

So do you want to change yeah, So youre, hoping duck visual CDR, there's something that's sort of what she wants to choose all children, sometimes well below you towards the Sundance how old was awful.

Q2 was steady at that level.

But you do see I mean, yeah, let's talk about what you can do about it.

Speaker 3: To the fl bology and badistan woman's sound being theory. chunior gident, either bad n or your tribut is. She is not I, mr.

But at this time.

Well, Ben Slocum rationale being Jeremy its union didn't teed up by the pseudo soil temperatures always followed by Mr. Zhou reliable Ms. Sue Arlen tuned up by necessity told us they want to embed them already shown you all your channel due to the ease up.

Speaker 3: This year we hope to try to sell all generations of the products more physically and as opposed to social media we would be expecting to do the price launching with the Kim still developing and the company's six concentrate for some reason back, just as thankfully what our company had made so CORREA is at the same peak need for future

We have taken a unique approach to our private label products distinguishing us from our peers, we usually rely on OEM.

Speaker 4: We have taken a unique approach to our private labor products distinguishing us from our peers, who usually rely on OEMs. At our company, we power ties in-house R&D and production, resulting in better product quality, differentiation, and higher production efficiency, as well as greater control over production rhythm.

And all company, we powered hoist in house, R&D and production, resulting in better product quality differentiation and higher production efficiency as well as greater control over production rhythm.

Speaker 4: Now connecting the front end back ends of our business enables us to respond promptly to customer demands based on data and user feedback. You'll do a Treesheng Yian Firewood Tosu, a low-unit price product, is a prime example of the success.

Now connecting the front and back ends of our business enables us to respond promptly to customer demands based on data and user feedback you'll do Jewish against firewood tofu, a low unit price part I is a prime example of the success with a corner and G. M. D of nearly 6 million and accordingly repurchase rate of 35%.

Speaker 4: with a quarterly DMV of nearly 6 million and a quarterly repurchase rate of 35%. Our private label products accounted for 16% of total DMV last year and 19% is quarter. And we aim to increase that to 30% in the future.

Our private label products accounted for 16% of total G. M V last year and 19% this quarter and we aim to increase that to 30% in the future. Additionally around product gross profit margin increased by over three percentage points compared to the same period last year.

Speaker 4: Additionally, our own product close product and margin increased by over 3% points compared to the same period last year.

Is that the wrong once a handful of soda you only I always polishing Tobey. This is this will be.

Speaker 3: Third, as we said before, innovation is a must, especially when it comes to food innovation. We have made more and more new products that are more suitable for consumers' consumption trends, such as jade dishes, baked goods, and high-calorie beer. Not only are the simple prices higher than other products, but also the margin is higher. At the same time, these products also bring some new users. Based on past data, the GMA ratio of these products is also constantly increasing.

Talk to you a job although almost all are good dogs, who shall be it's usually the simple example, bill you decide at home, but she now could you do with them, but do you intend that Josh.

So that can lead to the golf ball you couldn't go totally clear yet.

So of course it is looking like.

So you can either.

They put out you said, although you did that you that you can manage to the Portage and all you do that I didn't answer that well most John C. J. So we do see another shoe show kind of odd country Coast Gulping tie you bought it you just said that.

Speaker 3: Although you say, is that she poor TI know you. To that ance of that almost chance her change, shall me do the year n havev. Could T CLO gop into the tie. Part you that.

Third we have always advocated innovation empower tightened investment in food R&D, we can better aligned with consumption trends and attract new users by developing new product categories like preparing meals bakery items and cross border deal.

Speaker 4: Third, we have always advocated innovation and power-tice investment in fruit R&D. We can better align with consumption trends and attract new users by developing new products categories, like prepare meals, bakery items, and cross-beer. These categories not only commend higher unit prices, but also offer higher-grows-profit modules.

These categories not only come on higher unit prices, but also offer higher gross profit margins as a result G. M. D. In these categories is on the rise specifically, our preparing meals business officially launched healthy preparing meals 2.0, this year aiming to meet growing customer demands around nutrition and health we will.

Speaker 4: As a result, the NV and D's carer gore uses on the right.

Speaker 4: Specifically, our prepare meals business officially launched healthy prepare meals 2.0 this year aiming to meet growing customer demands around nutrition and health. We will develop distinctive high quality and differentiated prepare meals in mind with this trend.

Develop distinctive high quality and differentiated prepared meals in mind with this trend.

Speaker 4: Fourth, we have optimized the category structure for our existing categories. For the same category, while maintaining some well-known products, we have added more mid-to-high-end products. For example, vegetables are our traditional strong category. Previously, we focused more on L1 well-known products, but now we have added L2 and L3 products, such as organic vegetables, high-altitude vegetables, and specialty mid-to-high-end products like vegetables from Jiangsu's Rugao, known as the hometown of trees. These are also products with relatively high unit prices. We have focused on local fresh and specialty vegetable types, and our quarterly GMV has reached nearly 30 million. We will further improve our category structure, focusing on enhancing our existing categories. While maintaining some major production volume products, we have also added more high-end meat categories. For example, our vegetable category is the highest, and we will continue to increase L1 and L3 products, which are the highest-end products. We are currently operating L1 indoor currency, and in future production volumes, we will further enhance our categories. We will also continue to enhance L1 indoor currency. These are our indoor currencies. We will continue to enhance L1 indoor currency. We are currently further improving, and we will continue to enhance our indoor currency. Looking back over the past year, our gross profit margin has been continuously improving, and the overall expense ratio has narrowed, with noticeable effects. As our product strength becomes the main source of traffic, our reliance on external traffic will correspondingly decrease. In other words, we have built a moat of our own. Thank you. The next question is from Yang Jingchen. Could you please tell us about the impact of further improving our indoor currency on our customers? You understand that we are further improving our customers. Will it have any impact on our customers? Yang, hello, I am Chen Jiajing from ZTE. Thank you for giving me this opportunity. We have seen that Dingdong has maintained profitability for three consecutive quarters. How does the company plan to maintain profitability in the future? Let me translate it myself. Hello, Mr. Liang, thank you for giving me the opportunity to ask this question. We have seen that Dingdong has maintained profitability for three consecutive quarters. What is your plan to maintain future profitability? Thank you. Okay, thank you for your question. I would like to invite our CFO , Wang Song, to answer this question. Thank you, Mr. Yang. With the continuous advancement of the efficiency-first and scale-balanced development strategy, we have achieved continuous profitability since Q4 2022. This quarter, if we consider excluding the one-time impact of adjustments, we have also achieved profitability. This is mainly due to our continuous focus on building product strength and full-chain operational capabilities, serving the current needs of users. The overall order quality and user stickiness are still continuously improving, and our operational efficiency is continuously optimizing.

You said it well.

Speaker 3: Please hurry up, let's go to the proper place what

It's all up Kelly simpler you'll walk.

Speaker 3: We are building a lot of fresh products in the market In addition to more high-end products, such as food, traditional and You So we are doing more than the R.E.L. Fresh products Now we will add to the project of the R.E.L. Fresh products such asGo-shan material, Computer industrial products, and??asy of unseren masters entertainment companies, such as high-end products, such as government movement anduclearization, such as high quality industrial standards such as animal protection Shanghai True- basic products such as measures that cannot be purchased, minor and serious economic parts were produced in the American Carrier? achieved

So tell me a little bit that falls this year being soon so I'm gonna, let yourself Joe look good to talk with all of them yourself, because what I saw when triangle. You also currently not also noticed all the L. B.

Suddenly the zombies Oh my God.

Sadly that failure, which is hot Gordon.

What kind of all the channels all rubles households was down there so that someone.

Speaker 3: So you gener know. Then you gotus on your much two talence, but dsaid soci uing through O y parabo in the cent.

So as you know you got us on me what drove that up in D. C. It could slow dilution suitable Jeremy you thought I'll send you a lot.

Speaker 4: We've also taken steps to optimize our category structure, specifically focusing on enhancing our odor category.

We've also taken steps to optimize all carefully sector, specifically focusing on enhancing our older categories, while maintaining stomach central livelihood commodities, we have incorporated a greater range of mid to high end products for instance, our vegetable category has been a top performer previously it primarily.

Speaker 4: While maintaining some essential livelihood commodities, we have incorporated a greater range of meat to high-end products. For instance, our vegetable category has been a top performer. Previously, it primarily consisted of L1 goods for everyday use. However, we have now expanded to L2 and L3 categories, such as organic vegetables and specialty vegetables from high altitude and Lugal the village of longevity in Jiangsu.

Consistent L. One gifts for everyday use however, we have now expanded to IL, two and L. Three categories, such as organic vegetables, and specialty vegetables from high altitude and who got the village of longevity in Jiangsu.

Speaker 4: These additions are medium and high end products, with relatively higher unit price.

These additions are medium and high end products as well as the hydro unit prices. Additionally, our quarterly G M before local specialty vegetables meat and poultry has reached nearly 30 million.

Speaker 4: Additionally, our quarterly GMVs for local specialty vegetables, needs and poultry has routinely set a million.

Speaker 3: Looking back at the past year, our gross profit rate has been constantly increasing. The overall cost-cutting effect is also more obvious. After our commodity power is the main source of traffic, our dependence on external traffic will also be reduced accordingly. In other words, we have built our own shelter. Thank you.

We will of course union anesthesia, although about it is that she says it shouldn't be a family of suicide. So he said well my somebody who's going to reorder.

Our whole month do you what do you like what are you studying chunky what did you what I saw when cordiality I'll say all this is you don't want to sit here.

Speaker 4: This lifting on the path here worth roll to report a continuous increase in our growth profit margin and a mallowed overall cost ratio. This achievement can be attributed to our successful utilization of product development capabilities as the primary source of traffic resulting in reduced reliance on external traffic. In essence, we have successfully established a competitive mode. Thank you.

Reflecting on the past here, we're thrilled to report a continuous increase in our gross profit margin and about overall cost ratio. This achievement can be attributed to our successful utilization of part of development capabilities as the primary our primary source of traffic, resulting in a reduced reliance on external traffic.

In essence, we have successfully established a competitive moat.

Okay.

Speaker 1: The next question comes from Yardine Ken with CICC. Please go ahead.

The next question comes from you all.

So gene Chen with TICC.

Please go ahead.

Speaker 7: Hello, Mr. Liang. I'm Chen Jiajing from ZTE. Thank you for giving me this opportunity. We can see that Dingdong has maintained profits for three consecutive quarters. How will the company continue to maintain profits? Let me translate myself. Hello, Mr. Liang. Thank you for giving me the opportunity to ask the question. We've seen that Dingdong has been profitable for three consecutive quarters. What is your strategy to ensure sustained profitability in the future? Thank you.

Well, if you don't even have to Nancy and Mike I think I would check in and see what kind on which I think the only thing he and she found when she's watching Vela and Sheila I'll shoot them. Since you have oh shoot wage meeting shrinking them and then be transparent translate myself, how long you've turned out. Thank you for giving me the opportunity to after.

We've seen that being don't have been profitable for three consecutive quarters. What is your strategy to ensure sustained profitability in the future.

Speaker 3: Okay, thank you for your question. Next, I would like to invite our financial manager, Wang Song, to answer this question. Thank you, Mr. Zhang. With the continuous promotion of efficiency-priority, solid-scale development strategy, we have achieved continuous profits in the last three quarters since Q4 of 2022.

Oh sure.

70, wheelchair almost how often they're they'll also want I forgot who live in tea.

Oh, so as I shall read Osha jungle away most of our time talking about the Fisher told you call them regions are they in closely your lives the general industry. It sounds like you do not have looked at each other too frequently but you do the walk Hollywood truthful, we're trying to tell them that you're fishing and as you're all well.

Speaker 3: But due to lookucal, how Che to try re tell the you fishing in one may's Ana cap the other you need, So to you also you, you want issue you Jo the assumption, the trian with the ree, the ne chancesto for how you to dch out the sho, then you can dancewer the you the learn that toisit en when may you show you that to show your heart.

Yes, the shallow got hit by this rather unique.

So your view on the tissue to a gel that assumption do you mean.

And I need a chance for how you might go with domiciled as usual don't you didn't answer it out.

The land that tissue, she says well maybe in Charlotte that tissue Johan.

Speaker 3: Thank you for your question, our Chief Financial Officer will take your question. Okay, thank you, Mr. Liang. We continue to prioritize scale strategy and efficiency. Since Q4 2022, we have achieved three phases of non-tax reduction benefits. We have also achieved tax reduction benefits, except for the one-time impact of these four phases. This is mainly because we continue to focus on expanding our product development capabilities and improving our operational capabilities to better serve users. Our overall quality and user confidence are improving, and we are optimizing operational efficiency. Specifically, since the strategic adjustment in 2021, we have continuously optimized the structure proportion of our products. The proportion of non-fresh GMA has increased by more than 7 percentage points, with the proportion of fish and vegetable increasing by more than 4 percentage points. The proportion of private label GMA has increased by nearly 13 percentage points, providing more diverse product choices that better match consumer needs. The number of national products has increased by nearly 500 compared to 2021, with Shanghai increasing by more than 1,000, mainly concentrated in non-fresh and fish and vegetable categories. With the optimization of product structure and richer product supply, we are driving continuous improvement in our customer unit price and gross profit margin. In the first half of 2023, the national customer unit price increased to 72.9 yuan, with Shanghai increasing to 75.8 yuan. The gross profit margin has remained stable at around 31% since last year. Specifically, since the strategic adjustment in 2021, we have adjusted our quotas. While adjusting the overall market structure, we continue to deepen the penetration and profitability improvement of the East China regional market. Since achieving overall profitability in the Shanghai region in 2022 QE, Jiangsu and Zhejiang have also achieved continuous profitability for three consecutive quarters since Q4 2022. In terms of growth in mature markets, Jiangsu and Zhejiang have continued to achieve double-digit year-on-year growth in average daily volume. Although the Shanghai region experienced a year-on-year decline due to the impact of the epidemic last year, it still achieved growth compared to QE, reaching an average daily volume level of 1,300 to 1,400. With the overall continuous profitability of the East China region providing more resource reserves for the company, on the one hand, we will further deepen the growth of the East China region. Compared to Shanghai, there is still room for further improvement in order penetration and average daily volume in Jiangsu and Zhejiang. In addition, we will also focus on improving operational capabilities in North and South China in the second half of the year.

Speaker 4: Thank you for your question. I'll read our head of finance is going to take this question. All right, thank you, Mr. Liang. As we continue to execute our efficiency first with due consideration of scale strategy, we have achieved three consecutive quarters of non-gap profitability since Q4 2022.

Thank you for your question I'll leave our head of finance is going to take his question I. Thank you. Mr. Now as we continue to execute on our efficiency first with due consideration of scale strategy. We have achieved three consecutive quarters of non-GAAP profitability. Since Q4 2022, we've also achieved GAAP profitability.

Speaker 4: We've also achieved depth profitability, excluding the one-time impact of Sichuan Chongqing adjustment this quarter. This is mainly due to our continued focus on honing our product development capabilities and improving our operational capacity to serve users better. Our overall order quality and user loyalty are improving as we optimize operational efficiency.

Excluding the one time impact of Sichuan Chongqing adjustment. This quarter. This is mainly due to our continued focus on honing our product development capabilities and improving our operational capacity to serve these are better overall order quality and user loyalty are improving as we optimize operational efficiency.

Speaker 3: tre jah. So something je goes out to ionions and you tell them you ly. So she tell you something that jacgo Amp plac and J is't a Che ath self is the type and is' T's the bath self.

Patricia and I jumped somewhat talking Joe goes up, but it's not going to tell them in your life album tissue Italian assumptions that check all the time.

And generally that would be something that should go back and getting yourself.

She says up I've been getting yourself.

Speaker 3: three OC, five J and y CH? Ch to Sang the back and IA chick dok face shop or shoshould something F? sh.

IGN rated countries to St. James So I can go back and do it.

Couldn't DAK in PVA shop, it's a huge hold the sampling first with wish I thought.

Speaker 3: yn Chaos Lor mild All right, Mario Wcl Kristian An U r Non

Chunghwa assumptions about foundry ask you Shelby our unions in Georgia, we back up she don't fight in judging you tend to go towards you don't die Facings Jaco you decided that lane.

So.

So sometimes you'll go to a <unk>.

Sam can consult with our country channel woman I'll cut on job home I'll leave you with that tissue as I thought.

Speaker 3: I mean isania and sombania chm, and J is chis Ps radial. She's all psentchis chis, quite bar molu the trunia ulike's U and did that butons's or order.

Tanya and somebody a chunk all cut on job. She sends her she's arracacha shingle side. She sends her she's eyeball Molly junior Eli, especially when it gets hot buttons as science to easily order taking.

Specifically since our strategic adjustment in 2020, one we have adjusted our category mix in terms of G. M. V. This has led to a seven percentage point increase in the proportion of non fresh food and particularly prepared meals, whose proportion increased by four percentage points and private label products.

Speaker 4: Specifically, since our strategic adjustment in 2021, we have adjusted our category mix. In terms of GMV, this has led to a 7 percentage point increase in the proportion of non-fresh foods and particularly prepared meals whose proportion increased by 4 percentage points and private label products whose proportion increased by nearly 13 percentage points, enriching the range of products available to consumers.

He was a proportionate increase by nearly 13 percentage points enriching the range of products available to consumers.

Speaker 4: Additionally, the number of SKUs per station has increased nationwide by around 500 of Shanghai seeing an increase of over 1000 SKUs compared to 2021. The new additions are mainly prepared meals and non-fresh products.

Actually the number of mosquitoes per station has increased nationwide by around 500 of Shanghai seeing an increase of over 1000 teus compared to 2021, the new additions are mainly preparing meals and non fresh products.

Speaker 4: Of these changes, the ALV has increased to 72.9 R&B nationwide in the first half of the year of Shanghai seeing an increase to 75.8 R&B. While the growth-polymer margin nationwide has been remained stable at around 31% since last year.

These changes daily has increased to 72.9 RMB nationwide in the first half of the year the Shanghai seeing an increased to 75.8 RMB, while the gross profit margin nationwide has remained stable at around 31% since last year.

Speaker 3: At the same time, we continue to deepen the penetration and profitability of the East China region market. Since Q1 2022, the overall profit of the Shanghai region has been achieved. Jiangsu and Zhejiang have also achieved three consecutive quarters of continuous profit since Q4 2022.

And you'll go and tell them that Huntsville, Alabama tissue isn't going up I don't choose to sit on the central Oh, you mean no need he says.

Yeah until we saw how truth into Eli Johnson outdoor jaw on.

And yeah, and CUSIP, especially I really understood. It sounded that you do that's for sure.

Speaker 3: So's also's out up. John herur, sociher town jint Dan. The n? pompi song's turned up. So I saw I TR in chuna or each Chu, So the in n pompi yyour soci Al IA that one B? U turned up. That it chance by chancered by's town jint anian.

And it's also something that sends off Tom Johnson, Dow Jones tissues foundry and <unk> NAND.

Dan can be summarized with Endo said I saw high treated in junior you'll you changed sort of your shop, Yeah. Toby you always watch out there don't want be Cui.

And then does that all what it shows them by chance if I've done the accounting the gin Danielle sapiens. So don't shoot that Vinci tissue you need to make them. So they can do it until you until you're talking about well my Virginia. Thank goodness I don't you shouldn't be sought genre that didn't doesn't coal a tangent downhill play or change what you signed up in July.

Speaker 3: So if don't sho Sue you need you make, do the three ay. If I'm me, M coching put sing I don't sho shall be so high. Jump the th? ance and talk transent down you. Your changeing put is in the conjent to ly may always sharp ent your bit Co one and be in the new kens up.

July well nice job on your entry Jonathan Barbette coupon end up being in your two cents.

Speaker 3: In rebuilding the international market, we focus on expanding in the East China region and increasing profits there. Shanghai has achieved full profitability since Q1 2022, while Jiangsu and Zhejiang have reached three stages of profitability since Q4 2022. In terms of growth in mature markets, Jiangsu and Zhejiang have recorded double-digit growth in order volume for each metro annually. Despite the impact of the pandemic last year, Shanghai experienced positive growth in Q1, reaching an order volume of 1300 to 1400 per day. As the East China region becomes more profitable, we focus on expansion. In Jiangsu and Zhejiang, the growth in order volume for each metro has improved compared to Shanghai. Additionally, we plan to enhance operational capacity in North China and South China in the second half of the year. Meanwhile, while focusing on optimizing the overall structure and regional growth, we will also focus on improving end-to-end operational capabilities. On one hand, we continue to invest firmly on the industry side, relying on system and algorithm capabilities to enhance our end-to-end operational efficiency, and we are also continuously improving operational efficiency in stages. As mentioned earlier, the platform's end-to-end loss, including processing loss, has continued to converge and has stabilized at less than 1.5% in I3. At the same time, while focusing on optimizing the overall structure and regional growth, we will also focus on improving end-to-end operational capabilities. On one hand, we continue to invest firmly on the industry side, relying on system and algorithm capabilities to enhance our end-to-end operational efficiency, and we are also continuously improving operational efficiency in stages. As mentioned earlier, the platform's end-to-end loss, including processing loss, has continued to converge and has stabilized at less than 1.5% in I3. In terms of end-to-end fulfillment efficiency, since the regional stability after the impact of the pandemic in 2020, we have continuously optimized the layout planning of sorting centers and adjusted the reserve of warehouse area. At the same time, based on algorithm optimization, we have improved the distribution efficiency of trunk logistics, and the standard operational capability of front warehouses is continuously improving. After excluding the significant impact of the pandemic, the overall operational efficiency inside and outside the warehouse is also steadily improving. Based on the above, despite one-time costs during the adjustment process and the impact of the pandemic last year, the annual fulfillment cost continues to improve, with the fulfillment rate in the first half of the year optimized by 1.2 percentage points year-on-year, and the average fulfillment cost per order optimized by 9.2% year-on-year. Based on the above, Dingdong will further deepen its focus on the East China market under the guidance of a development strategy that prioritizes efficiency while considering scale, while optimizing product structure and improving operations in the North and South China regional markets. We continue to focus on building product strength and end-to-end operational capabilities. Based on this, we are very confident in continuing to achieve quarterly profitability under non-capitalism in Q3 and Q4, thereby achieving full-year profitability under non-capitalism in 2023.

Speaker 4: While restructuring the nation's national market, we focused on expanding in East China region and increasing profitability there. Shanghai achieved overall profitability since Q1 2022, and Jiangsu and Zhuo Jiang have achieved three consecutive quarters of profitability since Q4 2022.

While restructuring the nation the national market, we focused on expanding in the east China region, and increasing profitability der Shanghai achieved overall profitability since Q1, 2022, and Zhengzhou and Chongqing has achieved three consecutive quarters of profitability since Q4 2022 in.

Speaker 4: In terms of mature market growth, Jiangsu and Zhejiang recorded double-digit year-on-year growth in daily order volume per station.

In terms of the mature market growth jumped to enjoy gang recorded double digit year on year growth in daily order volume for station is.

Speaker 4: Despite the pandemic impact last year, Shanghai had a positive Q1, reaching an average JL volume of 1300 to 1400.

Like the pandemic impact last year, Shanghai had a positive Q1, reaching an average J D O. The volume off that 200 to 1400 S. The east China region becomes more profitable well focused on expanding it there is room for improvement in order penetration and average order volume per station in Jiangsu and Georgetown compared to Sham.

Speaker 4: As the East China region becomes more profitable, we're focused on expanding it. There is room for improvement in order penetration and average order volume per station in Jiangsu and Geng compared to Shanghai. Additionally, we plan to improve our operating capabilities in North China and South China in the second half of the year.

Hi, Additionally, we plan to improve our operating capabilities in North, China, and South China in the second half of the year.

I'm, sorry, what was that.

Speaker 3: When that who and J O child you her shooes on a thil, more ones who Chen in the new tason. If I'm a toisshoe P chamian tou you can sheot home person other than me. kis woman 1000, the UN Ian you cha me that tell she is on the issue. isan home chamions or young H? J ges from how the pin I have done, not done somehow to isshoe. So I's if human GS back into e young we.

So without trying to go with her she isn't on a computer or mobile.

Guangzhou, China, along with I mean, she says if I'm at tissues that opinion until agenda in total you called some of.

And the neat Tucson woman bundled under Union shall you chip for me I thought I should try this on the tissue guys thought punch I mean I'm.

I'm juggling some hold up your entire bundle done somehow tissue sodium <unk> human skin type items that you don't need it.

Speaker 4: Meanwhile, we're working to improve our full chain operational capability. On one hand, we're investing in IT innovation to improve the systems and algorithms that can boost our end-to-end operational efficiency. And we have already seen some promising early results from this. As mentioned above, the plus ones end-to-end loss, including processing loss, continuous scenario, and has stabilized within 1.5% in 2023.

Meanwhile, we're working to improve our full chain operational capability on one hand, we are investing in 19 innovation to improve the systems and algorithms that can boost our N. Two went operational efficiency.

And we have already seen some promising early results from this as mentioned above.

Plus one and two and loss, including processing loss continues to narrow and has stabilized with even one 5% in 2023.

Speaker 3: The I do well I will see you in the next week I will see you in the next week I will see you in the next week

But I'm not I'm doing it ought to shutdown.

Any change on true I'm doing whole women's tissue Italian old patients and docs, how long would you say about telephone Paolo you mentioned auto, but Tulsa, Jamie just sounds I'll tell you what one I've got you I don't know they'll pay someone shout it tends to Tom Felton and underneath that so should she says tell me how long they shop, that's useful he changed the ancient whole Cynthia the shelf, yes, I wouldnt put too soon.

E C O telephone questions on pushing tons up petunia change all generally it sounds like especially with I thought somebody asked me yesterday to pumping Johan if I go back and get done.

Speaker 3: chena do your tem, sitsue right up. Somebody now do your faing to pumpy your heart. If your AR go back. India, B Jing, do your tem, but pumpy your heart by's of Georgia.

But it won't be five into Jodi off.

Speaker 4: As the post-pandemic situation stabilizes this year, we optimize our regional network layout, adjusted front-line fulfillment station, shock, and improved mainline delivery efficiency with algorithms for end-to-end order fulfillment.

As opposed to pandemic situation stabilized and here, we optimize all regional network lay out adjusted frontline fulfillment station sock and improved mainline delivery efficiency with algorithms for an end to end order fulfillment.

Speaker 4: Sunline station operational capabilities are also continuously improving. After excluding the impact of the pandemic, the efficiency of personnel both inside and outside the line station has steadily improved. This light initial adjustment costs and the impact on the pandemic. Fulfillment costs improved throughout the year, resulting in a 1.2 percentage points decrease year on year during the first half of this year, and a 9.2 percent decrease year on year in cost per order.

My mind station operational capabilities are also continuously improving after excluding the impact of the pandemic. The efficiency of personnel are both inside and outside frontline patients has steadily improved despite initial adjustment costs and the impact on the pandemic fulfillment costs improved throughout the year, resulting in a 1.2.

Percentage points decrease year on year during the first half of this year and a nine 2% decrease year on year in cost per order.

Speaker 3: She y think don't quite change, because that I ocean, J Ing mother, the F your produdo. So she some Girl father, consider your father, one cho Chang something, J O Toyo, herby T sho, woman jum something. Her China will be in the ne chcer. She, my ocean, issues U for close, ly young you do, and to not put eachother. You need twice now the ania China, not put need.

G songs didn't don't quite change without a shoulder osha in general women with a father I'm, telling you it's without shop tissues, So I'm going to Miss the top Pennsylvania, Bobby Kwon I'm curious Lasalle kitchen, stumping Genco toil hugging two shop woman's tissue, which also can be coached on yellow dot being the new Genco jusuf well my face.

In tissues that too is also closely down could you do that.

Non chemical change either you need twice as yet.

Kenya, now chemical gingiva unique.

Speaker 3: That said, the company will continue to prioritize efficiency in the East China market and optimize product structure while improving operational efficiency in the north and south China regional markets. Our focus will remain on product development and building full-chain operational capacity. Based on this, we're confident that we'll continue achieving non-depth profitability in Q3 and Q4 and for the 4th year of 2023. As there are no further questions, I'd like to hand the conference back to our management for closing remarks. Thank you again for joining our call today. If you have further questions, please feel free to contact us or request through our website. We look forward to speaking with everyone in our next earnings call. Have a good day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

That said the company will continue to prioritize sufficiency in the east China market and optimize product structure, while improving operational efficiency in the north and South China regional markets.

Speaker 4: That said, the company will continue to prioritize efficiency in the East China market and optimize product structure while improving operational efficiency in the North and South China regional markets.

Speaker 4: our focus will remain on product development and building full chain operational capacity. Based on this, we're confident that we'll continue achieving non-GAAP profitability in Q3 and Q4 and for the full year of 2023.

I'll focus will remain on product development and building full chain operational capacity based on this we're confident that we'll continue achieving non-GAAP profitability in Q3, and Q4 and for the full year of 2023.

Speaker 1: As there are no further questions, I'd like to hand the conference back to our management for closing remarks.

As there are no further questions I'd like to hand, the conference back to our management for closing remarks.

Speaker 2: Thank you again for joining our call today. If you have further questions, please feel free to contact us or request through our website.

Thank you again for joining our call today. If you have further questions. Please feel free to contact there is a big class this year.

Right.

Speaker 2: We look forward to speaking with everyone the next earnings call. Have a good day.

We look forward to speaking with everyone next earnings call have a good day.

Speaker 1: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Yeah.

Yeah.

[music].

Speaker 8: But it.

Speaker 8: I and.

Speaker 8: C cation sur.

Speaker 8: Two.