Q3 2023 ATRenew Inc Earnings Call
Speaker 1: Good morning.
Good morning, and good evening, ladies and gentlemen.
Speaker 2: Thank you for standing by and welcome to ATRenews Incorporated's third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. We'll be hosting a question and answer session after management's prepared remarks. Please note, today's event is being recorded. I would now like to turn the call over to the first speaker today, Mr. Jeremy Gee, Director of Corporate Development and Investor Relations of the company. Please go ahead, sir.
Thank you for standing by and welcome to a Tee renews Incorporated's third quarter 2023 earnings conference call.
At this time all participants are in a listen only mode. We will be hosting a question and answer session. After management's prepared remarks. Please note today's event is being recorded.
I would now like to turn the call over to the first speaker today, Mr. Jeremy G director of corporate development and Investor Relations of the company. Please go ahead Sir.
Speaker 3: Thank you, Jason. Hello, everyone, and welcome to AT&T News third quarter 2023 earnings conference call.
Thank you Jason.
Hello, everyone and welcome to <unk> third quarter 2023 earnings Conference call speaking first today is Carrie Chen our founder chairman and CEO and he'll be followed by <unk>.
Speaker 3: Beginning first today is Kerry Chen, our founder, chairman, and CEO . And he will be followed by Rex Chen, our CFO . After that, we'll open the call to questions from...
CFO after that we'll open the call to questions from analysts.
Speaker 3: The third quarter 2023 financial results were released earlier today.
Third quarter 2023 financial results were released earlier today.
Speaker 3: The earnings release and investor slides accompanying this call are available at our website, ir.atrenew.com.
The earnings release and Investor slides accompanying this call are available at our website, our torchy renew until call. It will also be a transcript falling this call for your convenience.
Speaker 3: There will also be a transcript following this call for you all.
Speaker 3: For today's agenda, Kerry will share his thoughts of our quarterly performance and business strategy.
For today's agenda, Kevin will share his thoughts.
The coach lease.
Formats and business strategy.
Speaker 3: followed by Rex, who will address the financial highlights. Both Carrie and Rex will join the Q&A session.
By Rex, who will address the financial highlights those carry <unk>, who will join the Q&A session.
Let me cover Safe Harbor statements.
Speaker 3: Some of the information you hear during our discussion today will consist of overlooking
Some of the information you'll hear during our discussion today will consist of forward looking statements and I refer you to our safe Harbor statements in the earnings press release.
Speaker 3: And I refer you to our safe harbor statements in the earnings price.
Speaker 3: Any forward-looking statements that management makes on this call are based on assumptions as of today. And that's it. You're new to so take any obligations to upgrade our assumptions on this call.
Any forward looking statements that management makes on this call are based on assumptions as of today and that each of your new to sort take any obligations to upgrade our assumptions on these statements.
Speaker 3: Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings price release, which contains a reconciliation of non-GAAP measures to GAAP measures.
Also this call includes discussion of certain non-GAAP financial measures.
Refer to our earnings press release, which contains a reconciliation of non-GAAP measures to GAAP measures. Finally, please note that our lives otherwise stated all figures mentioned during his conference call RMB and all comparisons.
Speaker 3: Finally, please note that, as Liza otherwise stated, all figures mentioned during this conference call are in RNB and all comparisons are on a year-over-year basis.
Year over year basis.
I'd now like to turn the call over to Kerry for business and strategy updates.
Speaker 3: I'd now like to turn the call over to Kerry for business and strategy.
Speaker 4: Hello, investors and analysts. Welcome to the third quarter of 2023.
Those are the sort of thing.
<unk> got one more synergies on the author.
And yet <unk>.
Speaker 5: Hello everyone, and welcome to ATRA News' 3rd Quarter 2023 Earnings Conference Call.
Hello, everyone and welcome to <unk> third quarter 2023 earnings Conference call.
San Diego, while we in zone.
Speaker 4: In the third quarter, WanWenXinZheng surpassed expectations again and achieved growth in income and profits.
So leaving that Sundar.
Speaker 4: So assimply shefaces how fary tanun CER, but also hung isand cul terms up. We you told ghter.
Jim Keane shelf is just how far the <unk> will also ease agricultural jumped up.
Yes.
So each operation.
Speaker 4: They go. mapp also something. Pin Chun it way, you don't sum fun.
Ken Doug going back to the ASO something been junkies really simple function.
Speaker 4: From work C out she has RA 20 Fe. Do the F.
Oh gosh, how she is sort of towards the end of the country.
Speaker 4: and industry-leading automated technology. We have confidence in continuing to lead the development of the second-hand industry.
Hi, any schinder sort of what you saw on me or me.
So she unique awesome.
Yeah.
Speaker 4: In this quarter, the total revenue of the group increased by 32.6 billion RMB to 28.4%, exceeding
But you don't do it until a showroom.
So it's really I mean.
<unk> turns on patterns or us.
Yes.
<unk> <unk> Goldman <unk>.
Speaker 4: chantyou Don' show Josie and beat home. Beats up vengers, stands up for the. So you woman tanney, and should that?
Chin certainty to Johnny Chou C. B Colby turns off the path into the sensor.
So women's at an intruder you cheat.
Speaker 4: In the first half of the quarter, thanks to the support of JD and Apple, the government has started to pay more attention to resources. In 2023, the overall revenue growth will be more certain.
That's largely due to the warranty.
In Donuts Pingo <unk> your question suggest that Charles.
So Nick Chin yen sung <unk>, so in terms of the change in <unk>.
But Jim collagen gene you should wait she changed somewhat parcel out here that maybe didn't charge of gene path into the audience.
Jim sorry, its current Cingal.
Speaker 4: We have further verified the ability of everything to be automated and scale-up to improve operating efficiency. In the first three quarters, the overall operating profit margin has exceeded expected to reach 1.9%.
Deep well, yes.
So don't watch out.
<unk> shall be lumpy.
Since then Keytruda chunky Jean Charlton.
Jean <unk>.
She thought about that in the EDA Angel.
During the third quarter, we once again exceeded expectations in terms of both revenue and profit the fast growth in new product sales did not adversely impact our business.
Speaker 5: During the third quarter, we once again exceeded expectations in terms of both revenue and profit. The fast growth in new product sales did not adversely impact our business.
Speaker 5: Importantly, second-hand industry continues to thrive, with more people choosing to trade in and buy high-quality pre-owned products for new lifestyles.
Importantly, secondhand industry continues to thrive with more people choosing to trade in and buy high quality pre owned product for a new lifestyle.
Speaker 5: with efficient organization, a dedicated team, and industry linear automation technology capability.
What's efficient authorization, our dedicated team and industry, leading automation technology capabilities. We are confident in offerings in the new era as a leader in the secondhand industry.
Speaker 5: We are confident in offering in the new era as a leader in the second hand in the
Speaker 5: In the quarter, our total revenues reached 3.26 billion RMB, representing a 28.4% year-over-year increase, surpassing our guidance. Total revenues for the first three quarters amounted to 9.1 billion RMB, marking a 32% year-over-year increase and exceeding our initial expectations at the beginning of the year.
In the quarter, our total revenues reached $3 26 billion RMB, representing a 28, 4% year over year increase surpassing our guidance total revenue for the first three quarters amounted to <unk> 1 billion RMB, Mark marking a 32% year over year increase in exceeding our.
Initial expectations at the beginning of the year.
Speaker 5: During the festive fourth quarter, bolstered by JD.com's support and our inclusion in Apple's official trading program, the outlook for our overall revenue growth in 2023 is increasingly clear.
During the first day of fourth quarter bolstered by JD com support and our inclusion in apples official trading program the outlook for our overall revenue growth in 2023 is increasingly clear.
Speaker 5: During the quarter, adjusted operating income reached 73.8 million RMB with an adjusted operating margin of 2.3%, setting a new record and further confirming our ability to improve operational efficiency through automation technology and economies of scale.
During the quarter adjusted operating income reached $73 8 million RMB with adjusted operating margin of two 3% setting a new record and further confirming our ability to improve operational efficiency through automation and technology and economies of scale.
Speaker 5: The adjusted operating margin for nine months and September 30th was 1.9% ahead of our schedule.
Adjusted operating margin for nine months ended September 30 was one 9% ahead of our schedule.
Speaker 4: The third quarter's performance exceeded expected expectations due to the expansion of second-hand recycling and transactions, and the continued growth of the industry. Among them, the development of our 1P self-sustaining recycling business is still the strategic center of the group's overall growth, and the main engine of growth. Thank you.
Sandy do yeah. She told US she got some movie and so also what your so called Joe you'd agree module.
So she sushi.
Sure.
The E Z inquiries will yield a font.
So you'd want some details on the Chinese don't see.
Turned on the <unk>.
Some key.
That's helpful. Peter can I tell you that for all of <unk> sons.
Speaker 4: The ability of platform transactions to serve for a long time is the driving force of support and assistance.
Uh huh.
<unk>.
Our quarterly results surpassed expectations. This was primarily attributable to the growing scale of the recycling and waste business, which consistently drives industry expansion.
Speaker 5: Within this context, the development of our 1P business remains our core strategic focus, serving as the primary driver of our growth. At the same time, enhancing the service capabilities of our 3P platform business to encourage long-term merchant engagement serves as an important supplementary driver.
Within this context, the development of our one <unk> business remains our core strategic focus.
As the primary driver of our growth.
At the same time, the whole thing and the service capabilities of our three P platform business to encourage long term March on engagement survey serve as important supplementary driver.
San Diego.
Hum.
Speaker 4: The self-sustaining business has increased by 31.4% to RMB 2.9 billion. On the one hand, our existing C2B core business recovery, we have increased by RMB 2.9 billion. On the other hand, our existing C2B core business recovery, we have increased by RMB 2.9 billion.
Competent patterns of Sun's agents to ask Jodi <unk>.
And then maybe if I'm, yet or Michelle Sidoti <unk> co CEO <unk> Chen Luo.
Speaker 4: chaenbol sening you the gym. Y Chang am man de to which is who GU thousand V way was over the cursam.
Ginger did towards useful guide Thompson T.
Chris I'm, Indeed, teasing youll do it thoughtfully, we sold it in two chunks.
Speaker 4: to enhance the user's awareness of multi-product recycling and enhance the user mentality of the national recycling brand that loves to recycle. At the recycling end, we provide users with an attractive price to cover the recycling scene with convenience and trustworthiness, gaining more users' trust and locking in more recipients.
Was hoping by the machines.
So if it was all done with <unk>.
You can either E.
<unk>, who is sitting idle well he soltani forget in gorilla glass volume.
So it can do the whole year.
Do you employee so.
Speaker 4: Play Don not shop their and child Please. Chamber the junky for young, younger E P three.
Cleveland shocked in shoulder, but the chunky.
Please go eat pizza, a year with our Suzhou ambiance.
Speaker 4: The first is that in the third quarter of this year, our users will be able to log in directly.
<unk> suddenly do when when Youre walking through the <unk>.
Speaker 4: Semiconductor consumer income trade rose by 6%.
Oh, yeah, so tend to win what you saw with the PD <unk>.
We will go back in queue.
Speaker 4: So me I was OP I D self into the each nat.
So I mean, I was hoping to dive.
Obviously, you don't need T cells.
Speaker 4: The second data highlight is that in October this year, the second round of recovery in Beijing and Shanghai has exceeded 100 million yuan in a single month.
I guess would you don't get sort of genius.
Without that Beijing, Shanghai Tang.
Yes, we do.
So jin kubala, even need somebody sees.
Speaker 4: So you rogo the hourwasom in two P 14, nine Qu. Only my challin hour was so that gauscientions to the tember Qu IE.
So you can do that.
I was hoping to get acute pain bloating equally so lonely wont, but it doesn't seem.
So that goes into them so they could keep with you soon.
Speaker 5: During the third quarter, our 1P business revenue grew by 31.4% year-over-year to 2.92 billion RMB. Within our core C2B business, we leveraged our existing network of nearly 2,000 nationwide offline stores and upgraded some into premier stores.
During the third quarter, our <unk> business revenue grew by 31, 4% year over year to $2 92 billion RMB within all of course, it will be business, we leveraged our existing network of nearly 2000 national wide offline stores and upgraded some into Premier story.
Speaker 5: These stores are designed to raise user awareness of multi-category recycling and AHS Recycle as a national brand.
These stores are designed to raise awareness of multi catch where recycling and Hs recycle as a national brand alongside a competitive cost we offer to users our convenient and reliable services have attracted a larger customer base and secured a greater supply of pre owned products, which further increases store performed.
Speaker 5: Alongside the competitive cost we offer to users, our convenient and reliable services have attracted a larger customer base and secured a greater supply of pre-owned products, which further increases store performance while reducing costs.
While reducing cost.
I'd like to share two noteworthy highlights, resulting from the strategic strategic upgrade first in the aspect of walking revenue as a percentage of course it will be revenues. There has been a 6% year over year increase during the quarter underscoring the increasing strength of our <unk> brand and its in.
Speaker 5: I'd like to share two noteworthy highlights resulting from this strategic upgrade. First, in the aspect of working revenue as a percentage of all core C2B revenues, there has been a 6% year-over-year increase during the quarter, underscoring the increasing strength of our AHS brand and its impact on consumers.
<unk> on consumers.
Speaker 5: Second, during October , the monthly recycling values in Beijing and Shanghai both exceeded 100 million RMB. We believe that as more AHS recycle stores are equipped with multi-category recycling capabilities, the ceiling of our C2B business in higher tier cities will be further raised.
During October the monthly recycling values in Beijing, and Shanghai, both exceeded 100 million RMB, we believe that as more ahl's recycle stores are equipped with Arctic cat, where recycling capabilities the filling of our CTV business in higher tier cities will be further raised.
Wholesale <unk> when the BTC impact PREPA, you should really be some been some doa Oems yet.
Speaker 4: At the same time, in July of this year, our B2C retail brand, Paipai Co., Ltd., will be integrated into Aihuishou and upgraded to Aihuishou Co., Ltd. to strengthen the service ability of C-level users, enhance the quality and reliability of Aihuishou's main brand.
Do you see it on your own code of fall and meet Chunghwa, so to compare that to <unk>.
Sure.
Speaker 4: Pu up CY you one E. you put a lot who not time in here household hhome C? D is a lot of P two C ocean being, So that one Jan P 1, John two C also. So you lead.
<unk> put a lot on that titanium wholesaler CDO vehicles, so b to C. Youll shipping so that wasn't just jumping in Piedmont.
John to see social leader among People's home.
Speaker 4: In terms of returning to the core business, the overall contribution of the third quarter has reached 200 million yuan. For more e-products to realize the cycle of rebirth, give a higher use value.
So quickly frankly, new Permian Sunday to turnkey.
Yes.
We couldnt do it at the end of the time being.
So she has she wants wholesome food Couldnt go see on Johnson <unk>.
Speaker 4: At the end of July , we signed Huawei's official authorization for maintenance and explored the ability of many Android products to be renewed. With controllable maintenance costs, the overall driving force increased by 4% to 5%, providing users with more diversified renewal.
Well the chance or the highway the Guangdong ratio so Chen.
Stoller broker I'm talking about attempting fundamentally you Cook home that where you saw some but the total impact from the Maldives and John.
Campbell.
Good boy on product partnership punch into the Gourmet <expletive> zone.
Speaker 4: In terms of industry standards, we are the main initiator in the third quarter.
How do you build them from your Sunday to all the employees to other parties at the center and the kids at home.
Speaker 4: and the Shenzhen E-Industry Association jointly drafted the second-hand mobile phone trading standards. At the same time, we worked with the Shenzhen E-Industry Association to establish China's second-hand e-commerce center.
She's she's Halle, Oh, social E G.
<unk> built it.
Punchy.
Center gets a hot issue.
Colin Powell, Tom Miller to go also against Joey Thompson.
Speaker 4: to promote the integration of the Tai Chi and the offline industry, and jointly promote the return of the two-handed trade.
Hi Tech Hong Kong Shanghai Tang.
Hold on pricing.
Also tell you, though hopefully once you account for that.
Yeah.
Starting in July of this year, our B to C. Retail brand high selection was integrated into the <unk> main brand, which was renamed Asia selection.
Speaker 5: Starting in July this year, our B2C retail brand, PiPi Selection, was integrated into the AHS main brand, which was renamed AHS Selection. This strategic initiative is intended to provide enhanced services for our retail users and bolster the quality and trustworthiness of the AHS recycle brand.
Strategic initiative is intended to provide enhanced services for our retail users and bolster the quality and trustworthiness of the EHS recycled brand.
Speaker 5: This brand upgrade further solidifies our second-hand retail value chain from C2B to B2C by complementing the closed loop with direct-to-consumer sales capability.
This Brent operate further solidifies, our secondhand retail value chain from Cedar B to B to C. By complementing the closed loop with direct to consumer sales capabilities in <unk>.
Speaker 5: In terms of compliance refurbishment, in the third quarter, the compliance refurbished business contributed a total of 200 million RMB in revenue, adding greater value to more models of pre-owned electronic products.
Terms of compliant refurbishment in the third quarter. The complex refurbished business contributed a total of 200 million RMB in revenue, adding greater value to more model for electronic products.
Speaker 5: Since the end of July , we have been authorized to recondition Huawei products while exploring the refurbishment capabilities of multiple Android products. With controllable costs, we could gain a marginal gross profit of 4% to 5%.
Since the end of July we have been authorized to recommendation of OE products, while exploring the refurbishment capabilities of multiple Android products, which controllable costs, we could gain a margin gross margin of gross profit our 4% to 5%.
Speaker 5: and consumers will further benefit from a greater variety of refurbished products. In terms of industry standards, in the third quarter, as the main sponsor, we jointly drafted the secondhand mobile phone transaction group standard with the Shenzhen Electronics Industry Association.
And consumers will further benefit from a greater variety of golf refurbished products in terms of industry standards in the third quarter as the main sponsor, which actually dropped at the secondhand mobile phone transaction group standard with the Shanghai Electronics Industry Association.
Speaker 5: At the same time, in collaboration with the association, the China Secondhand Electronic Trading Center was jointly established to promote online and offline integration and to promote healthy development of secondhand transactions.
At the same time in collaboration with their association the China Secondhand Electronic trading Center was frankly established to promote online and offline integration and to promote healthy development of secondhand transactions.
Speaker 4: On the other hand, regarding Apple's official recycling cooperation, our recycling business is rapidly moving into Apple's Chinese retail market.
Leave quietly pinkwater quite frankly, social tool well monopoly so quite soon to pingo, that's ongoing so tea sheet food that Ingo groundwater Shannon Sharpe she didn't get enough what you sold your consumer.
Speaker 4: to serve the users of Apple's official website, offline flagship stores, and old and new devices. Starting in November this year, we have made further efforts to acquire the mainstream N-1 and N-2 generation products. Users can use the iPhone 13 and 14, which are the mainstream models, to restore and update their devices in Apple's directional channels. After Apple completes the pre-registering process, the old devices will be handed over to second-hand recycling. This is a big step forward for our supply chain.
The genius of your franchise.
While <unk> soon to Toyota and Jay and Jim all of that.
G O.
Pingo <unk>.
IPhone iPhone.
The total dosing half what you sold.
Joe G Youll Pingo <unk> Cheng Cheng.
Joey I was OLED.
Just to do a woman conveniently.
Turning to our service is embedded in a post office or channels.
Speaker 5: Turning to our services embedded in Apple's official channel.
Speaker 5: Our recycling business has been rapidly integrated into Apple's retail network in China, providing recycling and trading services on Apple's official website and in its offline flagship stores.
Recycling business has been rapidly integrated into Apple's retail network in China, providing recycling and trading services are apples official website is offline flagship stores.
Speaker 5: During November this year, we obtained a qualification that allows us to recycle the two most recent generations of iPhone lineups, especially
During November of this year, we obtained a qualification that allows them allows us to recycle the most recent generation of iPhone lineup, especially especially.
Speaker 5: Specifically, when a user trades in an iPhone 13 or iPhone 14 for a new iPhone 15 Liya product through Apple's official website and storefronts, their used devices go to AHS Recycle for further handling.
So the fifth specifically when a user tracing and iPhone 13, or iPhone 14 for a new iPhone 15 lineup product through.
Official website and storefronts their youth devices go to H has recycled for further handling.
Speaker 5: This presents a significant recognition of our supply chain capabilities.
This presents a significant recognition of our supply chain capabilities.
Kinda fill me in.
Speaker 4: Our service capability continues to improve. The income of 3P has increased by 7.3% to 3.3 billion yuan. The total service charge has reached 5.4%.
Well I'm going to fall and needs to do some some peter so it can be turned off patent and the Chilean cents Sundance Sundance.
<unk> Tau for Solvay, Lou you talked about that from the audience.
Well mix issue is charged on the project hung Sun's out for now.
Speaker 4: We continue to strengthen the incompetence of Python customers, and with the Tdatxian 2 variant of advis cession terminal, we are conducting some federal research for the recruit options from consumers, possessing proprietary internal management tools to systematize the mining operations, seamlessly decoding mining, analyzing and leveraging data in the mountain base. As an average scientist, these objectives are firmly routed and designed politically, to allow customers to choose between the preferred operation and the traditional management
So I'll finish it.
One way is sung Jong trying shrunk.
Peter I'm, sorry go through cool quantity.
Jesus Korchman.
Jim friendship.
Speaker 4: to help business owners save time and labor costs and improve business efficiency. After many years of development, the Tai Chi Party B2B trading platform has become the foundation for the 3C mobile phone industry. It is a benchmark for the price of the industry.
Onto some doubts here since again closing ghansham, but T cell C showing jingo Ottonian project.
<unk> you can attack it in some way also so essentially how many of the teachers.
So Hong you chunk from jump young.
Speaker 4: Since the end of the third quarter, the total number of registered merchants in Taiwan has exceeded 530,000, and the number of trading merchants has increased by 15.4%.
San Diego move.
Towards close on Torchwood Toco somewhat Joe your son Jostle compete some patterns.
Yes.
In terms of our marketplaces, we are continually improving our service capabilities.
Speaker 5: In terms of our marketplaces, we are continuously improving our service capabilities. During the quarter, 3P revenue increased by 7.3% year-over-year to 330 million RMB, with an overall take rate of 5.4%.
During the quarter <unk> revenue increased by seven 3% year over year to 330 million RMB with our overall take rate of five 4% rig.
Speaker 5: Regarding our PJT marketplace, we have improved our services for merchants and equipped them with Device Hero, our portable quality inspection terminal. The proprietary features embedded significantly enhance their bulk purchasing and shipping management capability.
Regarding our P J T marketplace.
We have improved our services for merchants and equipped them with device hero our portfolio quality inspection terminal. The proprietary features embedded significantly enhance their bulk purchasing and shaping management capabilities.
Speaker 5: The device also leads to the burden of real-time inventory management and business analysis, reducing time and labor costs while realizing faster turnover.
The device also leads to the BARDA off real time inventory management and business analysis, reducing time and labor costs, while realizing faster turnover.
Speaker 5: PJT Marketplace has become an infrastructure of B2B transactions.
P. J D marketplace has become the infrastructure of PCB transaction.
Speaker 5: By the end of the third quarter, PJT had amassed over 530,000 registered users while the number of active users increased by 15.4% year-over-year during the period.
At the end of the third quarter. He does he had amassed over 530000 registered users while the number of active users increased by 15, 4% year over year during the period.
Pat Pat <unk>.
Speaker 4: Under the premise of guaranteeing quality, we continue to provide consumers with a second-hand commodity purchase option that is cheap and beautiful. We support JD's low-priced strategy of retail sales and adjust the placement and grade of platform goods as a whole. It is reasonable to strengthen the adaptation of retail pricing system to users' low-cost consumption preferences.
Paul Tomkins, who tend to shop women's sushi way, so Victor Hugo woman, Jonathan but also some people go much into them.
So teach outs annually chunky tells them that pin kind of some business.
The trees, yet hoodie touch on so Chunghwa telecom Yahoo Dot Sofia Kim.
But as soon as you kind of happy to see teammate Youll Melissa.
Speaker 4: In this quarter, we have upgraded the PaiPai B2C business model, opened the main station in JD, and achieved the separation of supply and sales, and reduced the entry, supply, and operating costs for small and medium-sized businesses in the main station in JD.
So schindler cohort so sort of for me John dealer shelves on jobs that didn't go to agenda.
Hi, Jim.
Speaker 4: Postal come work in K con Su jet guani, So you Re not going UT, So they bottom.
Pulse co <unk>.
So as you are not going to call it solely on thoughts on.
Speaker 4: This innovative model greatly reduces the barrier for small business owners to participate in retail shopping and provides a rich supply of goods to the platform, while fully ensuring the quality of goods and the consumer experience of buyers.
So as long as seamless a thoughtful tone dealer tongue at shops on the other being so cohorts have been.
We can tag team on the phone for the whole year Gucci pulses telephone calls on some pizza.
My job as a free tier.
Yeah.
Oh, Hi, Mark to say it continues to allow us to meet a broader consumer demand for cost efficient high quality pre owned products.
Speaker 5: Our PiPi marketplace continues to allow us to meet broader consumer demand for cost-efficient, high-quality pre-owned products.
Speaker 5: We support JD's low-price retail strategy by enhancing our retail price system through adjustments to product grade ranges to align with users' preferences for more affordable goods.
We supported with low priced retail strategy by housing our retail price system through adjustments to product great rent ranges to align with users' preferences for more affordable goods.
Speaker 5: During the quarter, we upgraded PiPi's B2C confinement business model on JD's main site. This further opened up the platform to small and medium-sized merchants to join, provide supplies, and operate on JD.com. Our platform ensures quality with a unified quality system.
During the quarter, we upgraded pipe high speed, you'll see consignment business model on Jd's means that the further opening up the platform to small and medium sized merchants to join provide supplies and operate on JD dot com.
Our platform insurance policy with a unified quality system.
Okay.
Speaker 5: Such an innovative model substantially reduces the entry barriers for small retail businesses in the industry, providing them with ample and easy access to platform resources while ensuring product quality and buyer satisfaction.
Substantially reduces the entire entry barriers for small retail businesses in the industry, providing them with MTO and easy access to platform resources.
Swearing product quality and buyer satisfaction.
So kind of timber.
So as you know a woman so she's done to tell.
Speaker 4: First, we have continually lowered therestrial expense to prevent shareholding incentives, and formal cartridge expense.
Tell them the new USA.
Sunday to headquarter in TV for Ya.
So sometimes you'll have the D M field.
Speaker 4: 8.7% and 2.0% at the same time last year.
Jean tells them to give a whole new way back in the balance sheet. So Chilean potent she shutdown that F&B.
F&B.
Speaker 4: Duty like, if I'm mean, would of it, judge your concreiterial, your iterial bvenders, se lab the Chun or total. portryyou that your heart.
Judy that kind of if I mean, what I'll say, Joe Junior punchy.
I really do.
See lots of churn GUL total poultry that youll need.
Speaker 4: On the other hand, we continue to play a large part in the automation of self-checking technology and scale advantage based on the Matrix 3.0 automated self-checking system. Due to the error of self-checking, the return loss is reduced by 20.5% compared to the same loss.
What if I knew what you're familiar women's shoes.
That's when the surgeon tissue modules.
Key metrics and getting to go onto digital.
So just so it's also about three horse.
Chunky happened to also deal.
Speaker 4: The second is the optimization of the sales fee rate, which is adjusted to reduce the sales fee rate by 2.8% to 7%.
Jesus show, so feel new that Johan didn't.
Jean Charles Joseph Palm Beach shutdown or the embargo.
I'm going to cheat.
Speaker 4: This optimization mainly comes from 1. further improvement of recycling brand power, increasing the free recycling channels for free payment and marketing costs. 2. We have flattened the high-efficiency organization structure, further improving the work output efficiency of the city and major areas of land and sales teams.
So it's been so you'll watch C E O.
In parallel the T booties.
So we should see each of you.
We saw some be Samsung.
Olympia Pink I wish her the tools the genco cheap which is on the tongue slip out.
Social going towards her two children.
Turning to our expenses Firstly, we continue to lower the non-GAAP fulfillment expense ratio to eight 7% by two percentage points year on year. This was primarily due to an 11% year over year decrease in logistics expenses, thanks to our updated national operation station footprint.
Speaker 5: Turning to our expenses. Firstly, we continue to lower the non-gap fulfillment expense ratio to 8.7% by 2 percentage points year-on-year. This was primarily due to an 11% year-over-year decrease in logistics expenses, thanks to our updated National Operations Station footprint.
Speaker 5: Return losses from testing errors saw a 20.5% year-over-year reduction thanks to the technological and efficiency advantages provided by our automated operation centers, especially the Matrix 3.0 system.
Let me kind of losses from Tufting Arris saw a 25% year over year reduction thanks to the technological and efficiency advantages provided by our automated operation centers, especially the matrix 3.0 system.
Speaker 5: Secondly, we obtained optimization in ROI for selling and marketing expenses. During the third quarter, adjusted selling and marketing expenses as a percentage of revenues were 7%, representing a year-over-year decrease of 2.8 percentage points.
Secondly, we obtained optimization you Roy for selling and marketing expenses during the third quarter, adjusted selling and marketing expenses as a percentage of revenues were 7% representing a year over year decrease of two eight percentage points.
Speaker 5: The strength of our brand name played a key role as we had a higher percentage of 1P recycling channels that required fewer selling expenses.
The strength of our brand name played a key role as we had a higher percentage of one P recycling channels that required if you were selling expenses.
Speaker 5: We also streamlined our regional sales team and increased our sales output.
We also streamlined our regional sales team and increased ourselves uphold.
Speaker 4: Due to the certainty of the growth and profit of the mobile phone 3C big disk business, we have also accelerated the development of multi-platform business, testing and incubating new media.
So <unk> Santo Cleveland kidney issue or my job quite a book in the year with a father.
For she made somehow Richardson.
Speaker 4: In terms of multi-product strategy, the total revenue of the third quarter has reached RMB3.5 billion, which is a rapid increase in the scale of business in several quarters in a row.
Stopping me, telling you if I'm in San Diego, Joan talked about Sunday.
In Chicago, So shouldn't you win with a quite shorten.
Speaker 4: Face ancy for his o you that I was all your opportunities on quon fander. Why she don't? He yes, told out that you.
For the phase <unk>.
So it was all Youll footprint, you don't quote unquote Fender play.
Yes.
So it's sort of been Quesada, Oh did T M from yen sung Kim will shoot some job one job is to keep it short.
Speaker 4: In terms of the recharging experience of luxury goods, the time for goods to be purchased at the dealer's end is further shortened, the user's satisfaction with the price is further increased, and the refund is further accelerated. Through the trust and service experience advantage of face-to-face recharging of Lijiumen store,
<unk> please.
<unk> T with Jaguar.
These women gender yeah.
You saw that she didn't go up 40.
<unk>.
Speaker 4: We believe that if we continue to do this, we will open up more space for us to recover business and improve service quality and power efficiency.
Well Michelle Tom So you want George that you jumped back higher woman.
Here with us.
Vincente some fourteens.
Sure.
Speaker 4: In addition, as an adjustment to internal marketing resources and support for recycling business in multi-products, we have cultivated the flow of new media accounts.
Truth of the web so enabled each LC and culture could be looking at.
This woman pay Yamamah.
She makes it soft holiday.
So im certain that she didn't but the whole ethane Dupont made on towards some buildup. They don't show tool time, so pending some inquiries total Yahoo closer. She waits is around five gene. She told me about 10 P M.
Speaker 4: In the short video platform, we launch the local number of our store, and use local content to make low-cost content output, showing the user story of visiting and returning the store. Based on the unknown algorithm, we attract users around the store to experience the store.
Joey.
She made you go down the lease and they will pay up in sheet being way transmission to the social for Ya.
Speaker 4: The ability of the new media to flow is an internal cultivation, and there is no significant cost of sales in this period.
Speaker 5: Building on our robust growth in consumer electronics categories, we actively diversify our multi-category recycling business and explore marketing opportunities through new media. The recycling volume of our multi-category business amounted to 350 million RMB in the third quarter. This is a testament to the rapid growth over the past quarter.
Building on our robust growth in consumer electronics category.
The active fleet diversify our multi category with our can business and explore marketing opportunities through new media.
Volume off our multi category business amounted to 350 million RMB in the third quarter. This is a testament to the rapid growth over the past quarters.
Speaker 5: Non-consumer electronics recycling services have gained wide popularity among the AHS user community. Experience is the most important part of our flywheel. We shortened the waiting time for in-store pricing of luxury goods recycling for the advancing user experience.
Consumer electronics for a second and services have gained wide popularity among the age of two of their community.
<unk> is the most important part of our flywheel, we shortened the waiting time for in store pricing of luxury goods with recycling photo and user experience.
Speaker 5: User satisfaction with the quotation was improved, and payments were made even faster. Through trust and service experience advantages of in-store face-to-face fulfillment, we are able to break the glass ceiling while uplifting service frequency and UE of our stores.
That's in fact satisfaction with the quotation was improved and payments were made even faster.
And service experience advantages of historically two phase fulfillment, we are able to break the glass ceiling uplifting service frequency and <unk> of our stores.
Speaker 5: Furthermore, as part of our internal marketing resource allocation and to support a multi-category recycling business, we test the water off-traffic drainage.
Furthermore, as part of our internal marketing resource allocation and to support a multi category recycling business.
We'd have to water of traffic generation from new media.
We have already like local accounts for our offline stores on short video platforms, where we create cost effective localized content that showcases user experiences while exploring our stores and utilizing doorstops recycling by leveraging location algorithm, we attract a higher number of local users to our stores faster.
Speaker 5: We have already launched local accounts for our offline stores on short video platforms where we create cost-effective localized content that showcases user experiences while exploring our stores and utilizing doorsteps recycling. By leveraging location algorithms, we attract a higher number of local users to our stores. Since the content is developed in-house, we didn't have any significant expense.
Content is developed in house, we didn't have any significant expenses.
You saw assortment the tung.
Speaker 4: Is So woman do tongin me J coinian me. chares rme hung his and rechance to the gym.
John Kleeman neat charts useful Amit.
She's on mute Jim So the Jacob.
Speaker 4: These results also verify the large-scale and long-term value of the second-hand consumer goods industry. Once again, I would like to thank our team.
Cause you Jacob yes on the ASO shelf had been calling you clean more charters how can she loves sushi.
Sure well I'm in that country.
Speaker 4: and their commitment in solving the climate crisis.
Pardon.
You did have enough force, who no one wishes won't be a huge cause you the turnkey.
So hope it.
Speaker 4: Finally, I would like to add that in September this year, WanWuXinSheng joined the United Nations Global Cooperation Agreement.
It goes to that closer to neutral.
So Charles Lula, Google Chenzhou, Chile.
So April and May also shelf at Dinnertime, Pincock soldier charter cargo Chi Tung.
So look so quite using local one gene femoral patch is going to be with us about your Enzo concludes.
Further can G E Chi Tung she's for me.
Speaker 5: In summary, these results came from our shared strategies of occupying precise scenes, consolidating supply chain capabilities, and underlining a tech-driven business. The results also verify the second-hand industry's substantial potential for scale and enduring value. I would like to thank our united and hardworking team again for their tireless efforts.
In summary, this result came from our sat Fi strategy of occupying precise things consolidating supply chain capabilities.
No whining attack driven business.
Also verify the secondhand industries substantial potential for scale and enduring value I'd like to thank all of our United and hard working team again for their tireless efforts.
Speaker 5: Finally, I would like to provide an update on our sustainability efforts. In September 2023, as a Chinese company from the pre-owned consumer electronics industry, we are honored to become the first signatory to join the United Nations Global Compact.
Finally, I'd like to provide an update on our sustainability efforts at September 20th anniversary as a Chinese company from the consumer electronics industry. We are honored to become the first signatory to the United Nations Global compact.
Speaker 5: We are committed to upholding the 10 universally accepted principles in the areas of human rights, labor, environment, and anti-corruption. This commitment strengthens the foundation for our company's sustainable development and aligns with our long-term mission.
We are committed to upholding the tenant universally accepted principles in the areas of human rights labor environment and anticorruption.
<unk> strengthened the foundation for our company's sustainable development and aligns with our long term mission.
<unk> goes to the CFO regs suggest housing law.
Speaker 4: ??????CFO Rex ?????????
Speaker 5: Now, I'd like to turn the call over to our CFO , Rex, for financial updates.
Now I'd like to turn the call over to our CFO for financial update.
Speaker 4: Thank you. Hello, everyone. We are pleased to report another profitable quarter as we achieved yet another new record in the GAAP operating income on revenues that exceeded the top end of our guidance.
Thank you Hello, everyone. We are pleased to report another profitable quarter.
Achieved another new record non-GAAP operating income on revenues that exceeded the top end of our guidance.
Speaker 4: Before going into our financial details, please note that all amounts are in RMB and our comparisons are on a year-over-year basis, unless otherwise stated.
Before going into our financial details personnel subtle hormones.
And all comparisons.
Year over year basis, unless otherwise stated.
Speaker 4: In the third quarter, total revenues increased by 28.4% to $3,256.8 million, mainly driven by growth in net product revenues.
Third quarter total revenues increased by eight 4% to <unk> $256 8 million, mainly driven by growth in net product revenues net product revenues increased approximately one 4% through 2970 4 million, while net service revenues increased by seven 3%.
Speaker 4: Net product revenues increased by 31.4% to 2,924 million, while net service revenues increased by 7.3% to 332.8 million. Growth in net product revenues was primarily driven by an increase in sales of pre-owned consumer electronics both through the company's online and offline channels.
$332 8 million.
<unk> net product revenues was primarily driven by an increase.
Sales of chrome to consumer electronics, both shows a confidence online and offline channels.
Speaker 4: Sales of 1P refurbished devices totaled $2 billion, more than doubled compared with the same period last year.
So soft wuxi refurbished devices totaled 2 billion more than doubled compared with the same period last year.
Speaker 4: The increase in service revenues was primarily due to the recovery of PiPi and the PJT marketplaces from COVID-19 pandemic influence during 2022 and an increase in the overall ticker rate which grew to 5.4% from 4.45%.
The increase in service revenues was primarily due to the recovery of pipeline and the P. J T market crisis from the COVID-19 pandemic influenced during 2022 and an increase in the warranty group, two which grow to five 4% from 445% to neutral our operating expenses.
Speaker 4: Turning to our operating expenses, to provide greater clarity on the trends in our actual operating-based expenses, we will also discuss our non-cash operating expenses, which better reflect how management views our results of operations.
To provide greater clarity on retrenching, our actual protein based expenses. We will also discuss our non-GAAP operating expenses, which better reflect how management views our results from operations. So.
Speaker 4: The reconciliations of GAAP-N and GAAP-Results are available in our early release and the corresponding form 6-K, finished with the SEC.
Reconciliations of GAAP and non-GAAP results are available in our earnings release and corresponding form 6K furnished with the FCC.
Speaker 4: Merchandise costs increased by 35.1% to $2,611. The increase was in line with the growth in product sales revenue.
Merchandise costs increased approximately five 1% to two songs $611 million. The increase was in line with the growth in product sales revenues.
Speaker 6: Gross margin at the group level was 19.8% in the third quarter. Gross margin for our O&P business was 10.7%.
Gross margin at the group level was 19, 8% quarterly gross margin for our <unk> business was 10, 7%.
Speaker 6: Fulfillment expenses increased by 3.8% to $287.7 million.
Fulfillment expenses increased by three 8% to 257 7 million <unk>.
Speaker 6: excluding share-based compensation expenses, which we will refer to as SPC, from PLR. Land Gap Fulfillment Expenses increased by 4.2% to $282.3 million under the Land GAAP measures . The increase was primarily due to an increase in personnel costs as the company's recycling activities developed compared with the same period of 2022.
Excluding share based compensation expenses, which we will refer to as an SPC from Bureau.
Fulfillment expenses increased by four 2% to $282 3 million under the non-GAAP measures. So increase was primarily due to an increase in personnel costs.
The companys recycling activities develop.
Compare that we've assumed <unk> plenty of time to chew.
Speaker 6: Nangak Fulfillment Expenses as a percentage of total revenues decreased to 8.7% from 10.7% in the same period last year.
non-GAAP fulfillment expenses as a percentage of total revenues decreased eight 7% from 10, 7% in the same period last year.
Selling and marketing expenses decreased apart Cove point of 1% to 299 5 million.
Speaker 6: Selling and marketing expenses decreased by 12.1% to $299.5 million, excluding SBC expenses and amortization of intangible assets. Land-gap selling and marketing expenses decreased by 8.7% to $227.9 million, primarily due to a decrease in expenses in relation to marketing activities.
Cruising SPC expenses and amortization of intangible assets, non-GAAP, selling and marketing expenses decreased by <unk>, 7%.
$27 9 million.
Primarily due to a decrease in expenses in relation to marketing activities.
Speaker 6: Then gap study and the marketing expenses as a percentage of total revenues decreased to 7% from 9.8% in the same period last year.
Selling and marketing expenses as a percentage of total revenues decreased two 7% from nine 8% same period last year.
Speaker 6: GNA expenses increased by 9.7% to 69.8 million.
G&A expenses increased by nine 7% to $69 million, excluding SBC expenses.
Speaker 6: excluding SBC expenses, NGAP GNA expenses increased by 9.3% to $15.6 million. NGAP GNA expenses as a percentage of total revenues decreased to 1.6% from 1.8% in the same period last year.
G&A expenses increased by nine 3% to 56 million men cappuccino expenses as a percentage of total revenues decreased to one 6% from a one 8% in the same period last year.
Speaker 6: Technology and content expenses decreased by 21.3% to $39.4 million.
And origin of content expenses decreased by 23% is within that $4 million.
Speaker 6: including SBC expenses and amortization of intangible assets, NANDGAP technology and content expenses decreased by 23.2% to 33.7 million. This was primarily due to the decreasing technological expenses as the confidence platforms matured. NANDGAP technology and content expenses as a percentage of total revenues decreased to 1% from 1.7% in the same period last year.
Excluding SBC expenses.
Amortization of intangible assets.
Technology and content expenses decreased by <unk>, 2% to $3 2 million.
This was primarily due to the decreasing theological expensive as a covenants platform's matured.
Technology and content expenses as a percentage of total revenues decreased two 1% from a one 7% in the same period last year.
As a result, our non-GAAP operating income was RMB 73, 8 million for the quarter off premise mystery men kept our operating profit margin was two 3% markdown unit qualify and then Cabo.
Speaker 6: As a result, our NGAP operating income was RMB73.8 million in the third quarter of 2023. NGAP operating profit margin was 2.3%, marking a new record high. The NGAP operating margin was 0.4% in the same period last year.
Operating margin was seven 4% same period last year.
Speaker 6: As of September 30, 2023, cash and cash requirements, restricted cash, short-term investments and funds receivable from third-party payment service providers totaled $2.3 billion.
As of September 30th Panic in the streets cash and cash equivalents restricted cash and short term investments in the funds receivable from sort of pocket payment service providers total.
The $2 3 billion, our sufficient cash on hand safeguards are sustainable growth archrock.
Speaker 6: our sufficient cash on hand safeguards a sustainable growth outlook.
During the quarter, our plans on the street, we repurchased one 6 million tea juices in the open market for a total cash consideration of 4 million your stores as of September 30th container Street.
Speaker 6: During the third quarter of 2023, we repurchased 1.6 million ADSes in the open market for a total cash consideration of 4 million US dollars. As of September 30, 2023, we had repurchased a total of 13.8 million ADSes for approximately 48.4 million US dollars under our shared repurchase program.
We repurchased a total of $13 86.
Six for approximately 44 million U S Doris and share purchase programs.
Now turning to the business outlook for the fourth quarter of Thomson Street. The company currently expects total revenues to be between <unk> 716 million industry saw that hit $113 million, representing a year on year increase of 25, 1% to 28, 5%. This fall.
Speaker 6: For the fourth quarter of 2023, the company currently expects its total earnings to be between $3,730 million and $3,830 million, representing a year-on-year increase of 25.1% to 28.5%.
Speaker 6: This forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change. This concludes our prepared remarks for today. Operator, we are now ready to take questions.
Cross border reflects our current and preliminary views on the marketing approach.
Conditions, which are subject to change. This concludes our prepared remarks for today operator, we are now ready to take questions.
Speaker 2: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you're 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 in the call. At this time, we'll pause momentarily to assemble our roster.
Thank you we will now begin the question and answer session.
I ask a question you May press Star then one on your Touchtone phone.
If youre 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 in the call at.
At this time, we will pause momentarily to assemble our roster.
Okay.
Our first question comes from Victor Tang from Goldman Sachs. Please go ahead.
Speaker 2: Our first question comes from Victor Tang from Goldman Sachs. Please go ahead.
Speaker 7: Thank you, Guan Yicheng. This is my question. I will ask Guan Yicheng a question on behalf of Ronald Kuhn, the Internet Analyst at Gaosheng. Can you share with us the progress of the company's double 11 this year and our expectations for the next 20 years? I would also like to ask Guan Yicheng to give us a brief introduction.
Thank you for your question I think all of that.
You are talking about we often do see Ronald Q.
Hey, guys into it.
Okay sounds good.
P value.
Q4, you can see in Guangdong and Zhejiang.
Got it all right. Thank you for your question.
Oh My God you, Yeah, obviously, it's Joe.
Yes.
Thank you for taking my question I'm asking question on behalf of <unk>.
On behalf of our catalysts Manav you.
Can management share some color on that.
He'd Singles' day Grand promotion performance and one of the things and take on the outlook for 2024.
Speaker 7: The management also provide an update on operations inclusion in Apple's official channel in mainland China and will the recent revival of Huawei's cell phone impact your recycling performance. Thank you, manager.
Can management also provide an update on acquisitions and fusion apples official channel in mainland China at well the reason revival.
Always cellphone impact recycling performance. Thank you. Thank you.
Yeah.
Our tissue Victor.
Speaker 4: During this year's Double 11, we have seen a very high return on users and a very high enthusiasm for exchange. During the Double 11 opening, our C2B return achieved a 60% discount policy.
<unk>, she had kind of a young.
Well you took place you know Luciano is on <unk>.
So obviously, you're coming home CDN or <unk> are you so should allow palm beach pattern to dose schedule turns up.
Speaker 4: Shanghai and Beijing have reached a monthly recovery of more than 100 million yuan in October .
Beijing neurological suite to suite Jim.
Can you please tell us how cola UN PW someday.
Well I'm happy to see that you shall see cheese, yet until that change at all to in general to Paula you didn't know you and then maybe can be summed up in the us.
Speaker 4: Our B2C business has broken the 1.6 billion RMB trading volume during the double 11 period, and has grown by 24%. Our recovery and B2C sales performance is widely recognized by users of Apple. It also proves the resilience of the circular economy business model and the huge growth potential of the industry.
So huh.
We do see shows a year. So I was hoping Pat is unclear.
It suddenly not show on Ginger Sarnia more should the generation Hungary tuned on chimney.
Speaker 4: At the end of November , we issued a total revenue value of RMB3.7 billion to RMB38.3 billion for the quarter of 2023, corresponding to a growth interval of 25.1% to 28.5%.
So you had always some woman to you all.
All of a sudden you get a true sense of cheating sang UN <unk>.
But in saying that.
I mean, Peter Jones soda loosely.
The only pattern also would've thought back in the body that can be summed up to Jim.
Speaker 4: As for the fiscal year of 2024, we maintain a positive expectation of the development of the circular economy. We are actively working on the group strategy, especially on Apple's official full-channel recovery and global rejuvenation, multi-product recovery strategy, profit-making contribution, and more prominent rejuvenation strategy, automation technology, and strategy for scale efficiency improvement.
On the Austin Young Chinese women participation on Ginger fungi tradition that GTA V cheat on D. G. PON is.
Pingo <unk> trends you talk but you saw a drop in net leasehold target lesions of course in conjunction to the question.
So the watch issue too.
Greenwood Shelby she's almost too much issue.
Throughout this year. Thank you Sir for your question.
Speaker 5: Throughout this year's, thank you, Victor, for your question. Throughout this year's W11, we observed a surge in user enthusiasm for recycling and trade-in.
Well this years double 11, we observed a thursday user enthusiasm for recycling and trading during the pre sell curate after grand promotion. The total value of all seem to be restocking orders increased significantly by 60% year on year, both Shanghai and Beijing also reached the 100 million RMB milestone in single.
Speaker 5: During the pre-sale period of the grant promotion, the total value of C2B recycling orders increased significantly by 60% year-on-year. Both Shanghai and Beijing also reached the 100 million RMB milestone in single-month transaction values in October .
The transaction values in October.
Speaker 5: and our B2C sales on November the 11th across all channels total 160 million RMB, representing an increase of 24% year-on-year. Our recycling business performance speaks volumes about user loyalty towards the IHS recycle brand and the scoring resilience and immense growth potential of our business model within the circular economy.
And our C b to C sales in the on November the 11th across all channels totaled 160 million RMB, representing an increase of 24% year on year.
Our second Brazil performance speaks volumes about user loyalty towards the IHS recycle Brent and the pouring of the resilience and enough growth potential of our business model within the circular economy.
Speaker 5: As we approach the end of November , our guidance for total revenue in the fourth quarter of 2023 ranges from 3,730 million RMB to 3,830 million RMB, reflecting 25.1% to 28.5% year-over-year growth.
As we approached the end of November our guidance for total revenue in the fourth quarter of 'twenty to 'twenty three ranges from 3000 713 million RMB, two 3000 830 million RMB, reflecting 25, 1% to 28, 5% year over year growth looking.
Speaker 5: Looking ahead to fiscal year 2024, we remain confident in the promising evolution trends of the circular economy and our business strategies. We are confident in executing our strategy to realize higher profitability from our compliant refurbished business.
I had two fiscal year 2024, we remain confident in the promising evolution trend after a circular economy and our business strategies. We are confident in executing our strategy to realize higher profitability from our compliant refurbished business.
Speaker 5: Our involvement in Apple's official recycling and training programs, expansion of our multi-category recycling, and efficiency enhancement from automation technology.
Our involvement in apples official results and training programs expansion of our multi category recycling and the efficiency of Hoffman from automation technology.
Pingo <unk> sawmill also so sung <unk>.
Speaker 4: Apple is one of the most important brands in our second-hand mobile phone 3C business market. It retains a 60% share of our main business revenue.
Having done the trick to me how that impacts the settlement to end up with so little setback.
So Patrick the loose Toyota Sandy.
Well, Michelle shooting or either so essentially you'll push at a pin pad. So that's all good news on the tool is unpopular GMT pink.
Speaker 4: Apple products' retention and retention rates are still leading, and there is room for further improvement to revive service penetration rates.
<unk> has been the pyoderma football league either meet yet.
The only O T boot season, you'll find Q4 shouldn't hold with a question.
Well move through Penguin, maybe Kuala Lumpur, Guangdong, she didn't delta a little tongue in battle.
Speaker 4: We have opened the business process of Apple's mainland official website and official flagship store. We experienced the first business phase at the end of the third quarter, and accumulated 30 million RMB in sales revenue in the period when the number of new machines was released and the number of replacement machines was relatively limited.
<unk> do more gene meter so what's your thought.
Shinji fossil to hold out.
As Joe mentioned someday, you'll shed that chicken the Chilean central pit.
Pete shall social rule EOG.
Speaker 4: this video.
Youll find a single woman Natala.
Speaker 4: N-1 and N-2 models. This means that iRecycle can directly support Apple's official iPhone 14 to iPhone 15 and iPhone 13 to iPhone 15 service orders, so that we can significantly increase the volume of mainstream models.
J E N J O that tissue.
So seeing how.
It was I was all cleats <unk> associates in Japan golf game vantage.
IPhone.
IPhone EG iPhone iPhone soda 14 that level of accretion to the phone back to the rotation that we sold them.
Apple remains a key brand for our premium consumer electronics recycling business accounting for 60% share of one P recycling business revenues.
Speaker 5: Apple remains a key brand for our premium consumer electronics recycling business, accounting for 60% share of 1P recycling business revenue.
Speaker 5: iPhone sales in mainland China continue to be robust, reflecting Apple's sustained popularity among consumers. The number of Apple products in circulation is huge, and the value retention rate is still industry-leading. There is room to further increase the penetration rate of trading services.
IPhone sales in mainland China continued to be robust, reflecting sustained popularity among consumers the number of Apple products in circulation is huge and the value of retention rate is still industry, leading there is room to further increase the penetration rate of trading services.
Our services for apples official website and flagship stores in mainland China began in the third quarter generating 30 million RMB in itself. Despite limited new phone shipments and training others. During the period in the fourth quarter, we secured qualifications that allow us to recycle the tumultuous.
Speaker 5: Our services for Apple's official website and flagship stores in mainland China began in the third quarter, generating 30 million RMB in sales, despite limited new phone shipments and trading orders during the period.
Recent generations of iphones, which means we can have iPhone 13, lineups and 14 land for the new iPhone 15 lives. This allows us to significantly scale up the amount of recycling mainstream product.
Speaker 5: This allows us to significantly scale up the amount of recycling mainstream products.
Okay.
Orexigen.
For the question.
Speaker 2: The next question comes from Jiajing Chen from CICC. Please go ahead.
The next question comes from <unk> Chen from C. ICC. Please go ahead.
Okay.
Speaker 8: I would like to ask, what are your plans for the use of cash, and how will the company handle the re-purchase of the shares? Thanks management for taking my question. Could management talk about the use of cash and how you are handling the shares repurchased? Thank you.
Thank you Mani and thinking about what that team is off by 10.
Patients in the <unk>.
What are your telecom goodbye and thank you Donal Quaid coma.
Thanks, Doug.
I got to tell now.
Hi, Thanks management for taking my question could management talk about the use of cash and how you are handling of shares repurchased in Q.
Speaker 6: Okay. Thank you for the question. As of September 30, 2023, our total cash and cash recurrence, restricted cash, short-term investments, and the funds receivable from third-party payment service providers
Okay. Thank you for the question.
September Citrix continue street, our total cash and cash recurrence restricted cash short term investments in the funds receivable from third party payment service providers.
Speaker 6: summed to 2.3 billion RMB to support our long-term strategic and business development.
Some of the two to stripping at <unk>.
To support our long term structural trend finished development.
Speaker 6: So, first, for the main business of pre-owned consumer electronics, we will continue to strengthen the control of the use of cash, improve the operating cash flow, and increase the positive cash inflow from core mature business.
So first for the maintenance of prolonged consumer electronics, we will continue to have chosen as a control of the use of cash improved operating cash flow and increase the positive cash inflow from coal much happiness.
Speaker 6: Second, we will deploy cash in a disciplined manner into areas with long-term potential, especially multi-category business based on existing AHS recycle stocks. We believe that the enhanced operational cash flow and prudent capital expenditure will be conducive to the further strengthening of the company's competitive advantages and long-term value to shareholders.
Second we will deploy.
Caching Undisciplined amendment to address with the long term potential, especially more true category finished based on existing Asia recycled stores. We believe so enhanced operational cash flow and prudent capital expenditure would be conducive to the further strengthening of the company's competitive advantages in the long term value.
Two shareholders.
Speaker 6: We have been continuously repurchasing our shares since later 2021.
Have been continuously repurchasing our shares since later appointing a new one.
Speaker 6: through the share repurchase programs we adopted. Repurchased stocks are boxed as charity stocks which are devoid of rights to dividends or voting.
Through the share repurchase programs, we adopted.
Repurchase the spokes.
As charter stock, which are toward of rights to dividends are voting.
Speaker 6: By the end of the third quarter of 2023, a total of US$48.4 million had been spent through the share repurchase program since December 2021. We plan to continue to conduct stock repurchase in the foreseeable future. Thank you for your question.
By the end of quarter three a total of $48 4 million at your stores Havent been spent through the share repurchase program. Since December 21, we plan to continue to conduct stock repurchase is a foreseeable future.
For your question.
Yes.
Yes.
Speaker 5: There is another question from Joy Ju of Bank of America, but due to technological issues, I'll read out her question on behalf of her.
And there is one another question from Troy <unk> of Bank of America, but due to the technological you chose our radar with her question on behalf of her.
Speaker 5: Thank you. Congratulations to the company for exceeding the expected three-quarter performance. My first question is about the profit margin. Can the management team provide more analysis on the profit margin of??? and Zangap? The second question is, can the management team make some comments on the progress and expectations of the new business of He Guifan? Thank you.
Of course, it was closer to <unk>.
What does he go when he is a guy who never data quality phone call for two of them are really cool and then got seemingly really people who converted to heat.
They are going T shirt, while it sounds crazy.
I think that's exactly right.
Yes.
Speaker 5: Congrats on another strong quarter. My first question is about margins. Can management share more color on gross profit margin and your non-gap OT margin? What's the outlook for your margins? My second question is on refurbishment. Can management comment on the progress and expectations of the compliant refurbishment business? Thank you.
Congrats on another strong quarter. My first question is about margin can management share more color on gross profit margin in your non-GAAP op margin, what's the outlook for my second.
Question is on refurbishment can management comment on the progress and expectations of the complaint we furbished meant business. Thank you.
Speaker 6: Okay, thank you. Thank you for the question. So in the third quarter of 2023, World Gross Profit Margin was 19.8 percent, which was a year-over-year decline due to our strategic shift in revenue-making.
Okay. Since Q2 follow up question for you is sort of a quarter of container Street. So both gross profit margin was 19, 3%, which was a year over year decline due to our structural shift in revenue mix.
Speaker 6: Over the past five quarters, we have focused on bolstering our 1P businesses, and as such, the 3P service revenues, which involves several costs, contributed 10.2% to our total revenues, downsizing by 2% year-over-year.
Over the past five quarters, we have focused on bolstering, our wuxi businesses and Thats.
Such as a <unk> service revenues, which involves several cost contributed 10, 2% to our total revenues downsizing by 2% year over year.
Speaker 6: So taking a detailed view of the gross profit of the 1P business.
So taking a.
Future view also gross profit officer wouldn't happiness.
Speaker 6: The third quarter gross profit margin stood at 10.7%. This aligned with our expectations that 1G gross profit margin would contract this quarter. So there are two reasons behind this. First, during the new phone sales season in September , we proactively adjusted our sales price of refurbished devices in preparation for seasonal margin fluctuation. We also adjusted two finished product selling prices.
Third quarter gross profit margin stood at 10, 7%. This online with our expectation is that the <unk> gross profit margin contracted this quarter sorry, two reasons behind it is first to reach a new phone. So season September we proactively adjusted our sales price of refurbished devices in preparation for seasonal.
Market fluctuation. We also added to the two finished product selling prices such adjustments aimed to meet the demand.
Speaker 6: Such adjustments aim to meet the demands of merchants by reducing their procurement costs and ensuring their profitability.
Merchants by reducing their procurement costs and ensuring <unk> profits.
Profitability.
Speaker 6: Second, to supplement our supply, we procured second-hand devices from industry partners, resulting in a relatively lower gross margin for that supply. However, as our automation technology further improves our fulfillment efficiencies, along with optimize the selling and the marketing cost efficiency, our fulfillment expenses ratio and the selling and the marketing expense ratio against the total revenues dropped to 8.7% and 7%.
Secondly to supplement our supply we procured secondhand devices from industry partners, resulting in relatively lower gross margin for subs.
However, as our automation technology to further improve our fulfillment efficiencies along with optimized for selling and marketing cost efficiency, our fulfillment expenses ratio in the sitting in our marketing expense ratio against the total revenue chocolate to.
Four 7% and 7%.
Speaker 6: delivering an NGAP OP margin of 2.3%. Although OP gross margin decreased, we were able to provide consumers with more competitive recycling prices and a job for experiences. In the third quarter, our compliant refurbishment service business generated 2 billion RMB in revenue, reflecting notable user acceptance of pre-owned electronic devices, especially pre-owned Apple devices.
Delivering on non-GAAP op margin of two 3%, although we'll see gross margin decreased we were able to provide consumers with more competitive recycling prices.
Joyful experiences.
So the quarter compliant refurbishments to finish generally two 2 billion RMB revenue refractory multiple user acceptance of chromed electronic devices, especially prone to airport devices.
Speaker 6: Research suggests that an iPhone's lifespan can reach up to 8 years, with 50% of globally activated iPhones being put on the devices.
The switches suggest such an iPhone spin can reach up to eight years with 50% of globally activity activated iPhone being prolonged with devices.
Speaker 6: while the domestic compliant refurbishment market is still in its early stages.
The domestic a compliant refurbishment market is too early stages, our refurbishment opinions shows promising growth potential.
Speaker 6: Our refurbishment business shows promising growth potential. We anticipate an improvement in overall adjusted operating margins attributable to the growth of refurbished business and Apple businesses.
We anticipate an improvement in overall operating margins attributable to the growth.
With business and finishes cintra.
Thank you for the question.
Okay.
Speaker 2: As there are no further questions at this time, I'd like to hand the conference back to management for closing remarks.
As there are no further questions at this time I'd like to hand, the conference back to management for closing remarks.
Speaker 3: Thank you. Thank you all again for joining us. A replay of today's call will be available on our IR website shortly, followed by a transcript when ready. If you have any additional questions, please feel free to email us at ir at hrenew.com. Have a nice day.
Thank you. Thank you all again for joining us.
Play with today's call will be available on our IR.
Our web site shortly followed by a treasury we're ready.
If you have any additional questions. Please feel free to email us at IR at <unk> Com have a nice day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker 2: conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
[music].