Q2 2023 Yunji Inc Earnings Call
Okay.
Good morning, and good evening, ladies and gentlemen, thank you for standing by and welcome to <unk> second quarter 'twenty twenty-three earnings conference call.
With us today are Mr. Shang.
Now Chairman and Chief Executive Officer, Mr. Peng Jong Vice President of Finance.
MS Kay Liu Investor Relations director of the company.
As a reminder, this conference call is being recorded.
Now I would like to hand, the conference over to our first speaker today, Ms. Kay Liu Investor Relations Director of Young G. Please go ahead ma'am.
Yeah.
Hello, everyone welcome to our second quarter.
Earnings call I've always thought please know that this call will contain forward looking statement, we're going to me of private Securities Litigation Reform Act of 95, that's what based on our current expectations and current market operating conditions and relate to events involving all on long Lake.
These and other factors how can you be in this industry.
These forward looking statements can be identified by terminology, Richard well expect anticipate unless.
That's been my expression well detailed discussion of these risk and uncertainty. Please refer to our latest document filed with U S. D. C. Any forward looking statements that we may find this call are based on assumptions as of today and the press and qualify the entirety by cautionary statements risk factors and details of our company filing with the T V.
It means.
<unk> does not undertake any obligation to update these statements. If that's okay I think about it all.
With that I will now turn over to Charlotte yourself, chairman and CEO of being too.
Okay.
Yeah.
Thank God.
Hello, everyone and welcome to the ancient exactly two.
<unk> hundred three earnings call.
And South East Queensland, Yeah. She doesn't know me you know when somebody says she and the team. So he handles the shelving.
So we didn't even know what all the things out so it makes it even that much on Tony Hawk, and then you go Matt well done down.
This is where the Kochi Neil hockey I E T.
So we've not yet been made you go you have to get there in the first half of this year with consumption gradually and sadly recovery.
Okay notable trends much Chris in terms of the consumption habits.
And that makes the.
Coffee more mobility triggered if I transition away from stockpiling lots of good towards a preference for it even though country.
To capitalize on these we will further enhance our supply chain. So that we are better equipped to address.
I drank even though of course you might demand.
In time, we will optimize our marketing campaigns to sharpen their focus on holiday season, no conversations and those are correct.
Close up and it sounds like yeah, its 14th Internet services on this hot weather look without them for the day.
Well no no no. It just means you made she was telling me that you guys seem to be quite good.
The lineage drinkable.
Sends to the shares that they have so that you don't do a whole cast of cobalt go through turnkey she's ozone and Philippine backend. So that's suitable for the <unk> session. They were doing some pretty cool ambitions. These shifts.
We have also other down the line.
Surgeons no coke amongst the services in a consumption landscape.
And he's got a stunt show of support pieces that are there.
Jordan five National policy do you convert them to track presents an exciting opportunity for our two main food strategy.
Over the course of the second quarter, we found ways, though now our main food products.
Local neighborhood groups and online offline community, a sudden second and third.
T O D.
It probably won't be forgotten cool, especially popular gradually generating notable levels.
The repeat purchases.
Well, we have one might argue the relative yourself.
And of course, the journal of chocolate that well I'm just.
Let us get through this.
Correct, Yeah and cognizant of.
What do you mean, such entablature come with the Ddos and yet on the phone what do you want me he hasn't okay, you're only protiviti and say you told well he's a geisha pivotal squamous Charlotte North West shelf at all how long he got some empathy.
Can you talk about that you didn't know who he knows how about can you get to see.
You all know combo partner Philips Shanghai.
Is there any second quarter, we have noted a trend of weird.
The number of pharma companies have adopted a price war strategy, absolutely also stimulating consumption. It is crucial to highlight that in G adhere to them.
That show healthy.
Orange is saatchi, rather than merely burning money right, we're sweating tirasemtiv or adopting a low price strategy.
Prudent approach is centered around finding all operations.
Our songs for subsidies and leveraging our highly curated product range and then economy. The failed to also use this unparalleled value. He a resounding success off of our private label range underpins our confidence that we can offer you a day course, if I could hamper that.
Without even starting to price wars.
No that's really it.
So I'm going to ask him.
Since then she now you saw what he she says that at least what you're actually asking Pat So complementary Heath I don't have any in the public with that.
Switching back to what you put out T G I.
So it isn't that how have you bought anything here for them.
So do you see let's say is hey, if it is popular Ali Husain Kung Fu bags, so closer so we actually had to India.
If you could relate to he and our private label beauty brands.
It's the 13th anniversary, we exaggerate it is milestone by holding.
In Shenzhen, we the thing off in China peptide new attitude dearly celebration. So yeah I'm Bell is ladies for that White peptide 3.0 marketing, they're doing all of the new euro aimed at addressing the specific of skin care needs of the Chinese people in one way.
So you have signed a strategic agreement with our latest damasse supplier of the raw material for cosmetics.
So yes, it means they're really it's plenty twenty-three anti aging white paper and I welcome. The first groups of cosmetics to it offline. If you are in store.
Where do you usually like a whole lot of a lot of chips. It doesn't really assume yeah can be it depends on the song called yet means you just feel came back and said she and contract though you towards that where you are with that I can kind of shelf essentially almost equally awful somebody's talking you can't kind of either you pay on keying off of what she.
So the old way, who changed out a lot of times I can call, but the impact to the al portfolio Hospital.
Hello, easing shelter, if you pull out yeah, yeah E. So you're getting paid for the for me culture. So it's it so fast that says even though they are.
Recognizing the pledge any market potential created by an aging population over the last decade, our private label are continuously expanding their presence within the health care sector delivery and in house consumption spirit.
With our kind of England chaired smelting housing lifestyle, we actively encourage.
Encourage your debt to shoulder responsibility for their families.
And that's really good habits and be.
Well every family members as a result of these efforts all health care brand to maintain.
Maintained a former accumulated.
Accumulated uphill I O T cells exceeding 200 million RMB ambition, our newly introduced the coenzyme Q10 crews that sold out within the first 31 minutes off of its launch.
So you saw that we're missing there.
Can you parse out into that well.
Well, let me see I'll go through a list yesterday it was tender.
Power Tennis's, yet I'm sure Al will make your quarterly as you can get caught up some of your short term debt. Although those are the ones that use it a little but he used to defense up shape look like in terms of our marketing initiatives. We are fully cognizant that in the age of information overload.
When you face a limited window for capturing gears attention to open like I'll use a visa crashes tight it is and in some show to maximize Eaton has any efficiency often our connection.
By establishing an effective pardon me now collecting such a time you know necessitates an effective blend of high quality content and finally distributions.
Here's a little something some kind of joke all.
So of course, the paper out that most of that you don't want to put them together a little part of me and set up total Destocking Dorothy Thompson bulk was supposed to them support she needs to work through it that well see it doesn't install you totally buyback geely wholly that's number.
To me the challenging often high horsepower.
Let's see.
Yourself.
As a I launch scare motor technology going forward, we will intensify our company last month, and a sport innovative approaches, including and I did your human body screaming and accomplishing weaken virtual presented we have already launched our digital human and times Premier English teams.
Rick is the labor and material costs.
Well I mean, I feel its impact on peak, you Hitachi and contact me.
What about matching he can haul that yes, I mean as soon as a cause of the pools out rfps tied to a boy himself.
I mean, you just have one for you Tim This is Johnny modeling so could can go on to other things. She says that you can get.
Tempting, though.
Have a good media turnkey full autonomy is Juliet tezuka phone call.
There's a little bit younger a little time bogie so all of that.
Food you need people will tell you what I mean, it's OK and then go Yahoo teaching total Google Hotel in Paris.
Okay, Yeah, I think on who at least for Jimmy Choo fishing pool genius whole, Montana. So they use a little St will have PC, maybe what's your desktop video with a N T.
I came home one pounds of food you need to do a shelf of a concern.
Because I'll tell you how long until you got out that wasn't the Murcia crashes.
Well, Jackie Hudson Valley, So cheap.
Our private label products, especially those in health care that can naturally resonate with young man hour.
Or if you're right, it's a paradox and more effectively promote aided by service manage it and then by influenza for marketing of how capture that the computer special lines, the retail and the mortgage fishing information dissemination by engaging and collaborating predominate research and.
The development of processes.
How do they do a more thorough understanding of our product. Furthermore, by tracing a region, where you can generate a richer and more authentic content. These high quality content and then disseminate a cure thousands of them service manager, who having other foreign professional retail training.
Are you able to engage in many important action with you guys.
Instead as managers equipped with high quality content, we predict any special like crazy with the bank.
We're able to address the majority of them to use the inquiry to voting power outstanding managers, we haven't give up and AI house advised them that they can cost out to tackle more specialized inquiry. These motor off the special lines Retell combined with AI technology is better aligned with.
The needs of the Chinese household and local community.
What does he younger does anytime you're playing wellness health of their pet somehow we're definitely trying to tell the truth is that I will turn the call over to Mr. John .
Right now I'm asking both in the financial results.
Thank you Tony Hello, everyone before I go through our financial results. Please note that all numbers stated during the following remarks I RMB tons.
And all comparisons on pause then he changed somewhat year over year basis, unless otherwise noted.
The macro environment continues to present challenges that demand oh careful attention and the adaptability consumer.
Sentiment and purchasing power still need additional momentum before they completely recover Meanwhile, consumer preferences involving swiftly based on all the existing marketing data awestruck strategic pivot towards health care and.
Nutritional product yields.
The yield from promising result, this shift has not only a lineup changing consumer preferences, but also bolstered our financial performance.
That takes it to extending our product selection of neutering, all private label offerings and ensuring that we stay at the forefront of must be trim and maintain our competitive edge.
We remain committed to optimizing our cost structure and the accounting efficient operational efficiency by doing so we were four fortify our resilience against the economic fluctuation reinforced all capacity to weather uncertainty and then prosper regardless of the economic cycle.
Now, let's take a closer look at our financials total revenues were 167 million compared to 284 million a year ago revenues from sales of merchandise were 131 million and revenues from our marketplace business was 34 million. The main driver behind the changes with our consistent improvements to our product.
Wrench across all categories, coupled with the optimization of our supply a merchant.
Network, which lead to a short term impact on himself.
These challenges we grew our gross margin to 51, 6% compared to 46% a year ago. This was a result of the 10 customer loyalty to our private label and our effective product tuition studies now.
Now, let's take a look.
Take a look at our operating expenses.
Fulfillment expenses were 13 million compared to 43 million a year ago. This was primarily due to decreased warehousing and logistics expenses because of lower merchandise sales and lower personnel costs due to staffing structural refinement.
Sales and marketing expenses were 33 million compared to 58 million a year ago. This was primarily a result of streamlining staffing structure, leading to reduce the personnel cost line was the decline in member management piece and decreased business business promotion expenses.
Alejandra contained expenses were 14 million compared to 24 million a year ago. The decrease was mainly due to a reduction in personnel cost as a result of staffing structure refinements.
General and administrative expenses were 33 million compared to 32 million a year ago. This was mainly due to a higher allowance for credit losses, partially.
Mitigated by lower personnel costs, resulting from staffing structure of assignments as well as a decrease in share based compensation expenses.
Total operating expense it seems the second quarter decreased to 111 million from 157 million in the same period 2022.
Loss from operations was 12 million compared to 7 million a year ago net loss was 42 million compared with 25 million a year ago.
While adjusted net loss was 40 million.
Compared with 17 million a year ago basic and diluted net loss per share.
The per share attributable to ordinary shareholders were both too.
Compared with one in the same period of 2022 we'll be able to liquidity as of June 30.
Chinese Ministry.
Total 583 million in cash and cash equivalents.
Tricky question short term investments on our balance sheet.
Two 669 million as of December 31st plenty of tenants, who are liquid SaaS was sufficient to cover all payable obligations. We do not hold any long term bank loans or desk or balance sheet in the near future. We are proactively exploring investment opportunities and asking helping all supply chain capabilities.
Capabilities too.
To conclude that.
The macro environment dynamics, we're pleased to witness the growing synergies between offline and online retail opportunities during the post Covid era, which we believe provide us excellent opportunities for us to develop all private label as we continue to optimize our cost structure, we are confident in our ability to.
Thrive minister the variety, where he felt ignored economy cycle I would also like to let you know that I have somebody is my resignation and my last working day will be August 25th suddenly.
<unk> hundred three.
Have children, who stepped down due to personal reasons and my responsibilities will be transitioned to team our senior financial director My journey with <unk> has been five years during which I have experienced significant personal growth.
Fool Coffey does induce exceptionally well.
Abilities in managing complex financial operations Center strategic planning to ensure a seamless transition I will continue to serve as a consultant.
This concludes our prepared remarks for today, operator, we're now ready to take questions.
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 are using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two.
When asking a question. Please state your question in Chinese first then repeat your question in English for the convenience of everyone on the call.
Once again that was star then one to ask a question at this time, we will pause momentarily to assemble our roster.
Okay.
Okay.
And our first question comes from Ethan You Oh first trust. Please go ahead.
Okay.
Uh huh.
Good.
Well, one thing that I should say a core job both for pharma and to be seen as Josh I'll say the topic in Washington D. C O smoked kind of armour trading through the year, we should probably go to my name is John excuse me about any time.
Thanks for taking my question the Chinese government has repeatedly some policies to stimulate offline clean adoption.
I'm wondering what's the management.
Perspective on this issue and.
And does it have any impact on our business. Thank you.
Yeah.
Susan you mentioned well now have you gotten kind of shelf as a tool then quit.
Clinical quality feature in the hospital.
Well, then ginger Yahoo, Borgata Senator Schumer mingle these change out the self imposed real choice for me.
One woman there shows the Apache who are shrinking the shelf, which is sort of Tas signed their children. Do you think are you thinking theyre going to you for Chunghwa timetable has also been got fooled she's really really neat.
Thank you for your question, we are delighted to see coffee mate gradually regaining their vitality and the pressure in <unk>.
Suddenly supported national policy.
He has contributed to the recovery of offline consumption currently we haven't made adjustments.
We've kind of seen a trend that you're asking.
Even though new paradigm in housing sales tailored to the specific scenario and including our E. P is looking pretty good.
Have you been at all time. She tells you in terms of your studio for the Hershey silo for the non food Union Lingo can mediate anti young woman. There's something may also cause shelf at T. A consistent theme so fleet plus the need to put their citizens Joseph intact How're you unless you do it three option package. So now in the neighborhood of Oakland Golf, Womanish also which you changed.
So indeed as surround food you need timber shambaugh Cushing since that since you're not even really a good chunk out of each other's mandate women she'd every now and then she is she is financed with Schindler caliche.
Furthermore, we have hosted a various offline events, including a regional training and P P and I for lung data.
Allowing all my sales manager to gain a deeper understanding of the product is in trying to make our productive descriptions more authentic persuasive anyhow.
You might be at risk.
He is more than just an online sales platform, we have many private label, which provide us with greater flexibility our Dallas Rage. These times beyond the online market and we manage that Eric.
One country doesn't manager across cities nationwide, which corresponds to a robust local therapy. When you look forward to exploring new possibilities.
Offline well in the future.
Yeah.
Thank you.
Yeah.
This is helpful.
No question.
Yeah.
Yeah.
Okay.
Okay.
This concludes our question and answer session I'd like to hand, the conference back to management for closing remarks.
Okay.
Thank you for joining us today, please do not have their needs to contact us. If you have any further questions and we look forward to talking with you next corner hi.
Yeah.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
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