Q3 2023 PDD Holdings Inc Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to P. E. B D Holdings, Inc, third quarter, well need twenty-three earnings conference call.

At this time all participants are in a listen only mode.

There will be a presentation, followed by a question and answer session.

Which time, if you wish to ask a question you will need to press Star then one on your telephone.

Please be advised with todays conference is being recorded.

I would now like to hand, the conference over to your host today. Please go ahead.

Thank you operator, Hello, everyone and thank you for joining us today.

<unk> Holdings earnings release was distributed earlier and is available on our website at Investor PDD Holdings Dotcom as well right.

Global Newswire services.

Before we begin I would like to refer you to our safe Harbor statement.

Hi, Judy.

Tied to this call as we will make certain forward looking statements.

So let's call. It includes discussions of certain non-GAAP financial measures.

Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to GAAP measures.

Joining us today on the call Mr Shan, Li our chairman and co CEO.

Hello, John.

Our executive director and co CEO.

Right.

Our VP of finance.

Les and Joe will make some general remarks on our performance for the past quarter.

And our strategic focus.

Gene will then walk us through.

As a result for the third quarter ended September 32023.

During the Q&A session layer on Doug Young will answer your questions in Chinese.

I'll help translate.

Please note that the English translation equal reference only.

Okay any discrepancy managements statements in the original language should prevail.

Now, it's my pleasure to introduce our chairman and co CEO Charlie.

Please go ahead.

Hello, everyone.

Thank you for joining our earnings call for the third quarter of 2023.

I will start by keeping our overview of our third quarter results.

In Q C a T.

Total revenue of $68 8 billion RMB.

94% year on year increase.

This is sort of resolved awfully improving consumer sentiment.

Our efforts to carrying out the high quality Department strategy.

So one of the largest e-commerce platform in China.

We clearly felt a continuous recovery of the economy as well as a potential and the resilience of our consumption market.

With the introduction of a series of policies to support consumption.

We're also seeing robust demand for consumption upgrade.

Consumer behavior is telling us that consumption upgrade it's not just about quality, but equally about price.

It's a balance of quality and price that consumers care most about.

This is a nice thing this trend.

We are more confident about our value proposition of more savings and better services.

And in Q3, we continue to invest perhaps the resources to make it easier for our users.

Joey and ever greater selections.

Quality product.

The prices and with great satisfaction.

In Q3, we continued exploring new ways of I'll use a special promotions.

Through a series of campaigns such as tour to a harvest Festival Nash.

National Brands Festival, total redo models and National day sales.

Consumers get to enjoy attractive price is typically only available a few times the year Julian shopping festivals.

We have always been closeted English mentality of China's consumer market.

Well, we are laser focused on the shopping experience.

After that go beyond the surface.

Investing in technology innovation is the key to achieving high quality development.

In Q3, we continue to invest decisively in areas, such as accurate Tac supply trends and technology and our core R&D capabilities.

Our investment in RMB, two 8 billion RMB setting a new high.

Technology innovation is at the core driving force behind our pursuit of high quality development.

And we will continue to step up investments in this area.

Allison Cai.

We are proactively taking more social responsibilities.

In August.

<unk> was hit by severe weather.

We immediately went into action and donated 30 billion RMB to the China Charity Federation to support the affected region.

At the same time, we launched a dedicated relieve campaigns and charity life streaming events to support affected companies.

For example to how book merchants, England region, Brazil normal operations.

We setup a dedicated China, all our platform and provided relief measures such as traffic support and Zero Commission policy.

In Q3, we went back to places in several properties and hosted a series of reading for you booked on Asia events.

We also donated food and help build fiber rohit for schools and cancelled in the Hubei provinces.

We are hopeful that soon these efforts we can do what we can to broaden our horizons awfully young people and helping us achieve a brighter future.

I'm pleased to report that we were awarded to US trying to challenge The award is September.

This is in recognition of our efforts in rural revitalization dissolved belief and knowledge sharing.

Although our business I'll say I'll try now it's still early stage.

He has made a meaningful progress since its launch a year ago.

Joining unless the pricing capabilities.

We have accumulated over the years, we are able to assist many manufacturers expanding their presence and to directly engage with consumers.

Sure Tim.

Cross border services, no help manufacturers grids consumers.

Over 40 countries.

Well, we have broadened our reach the burden is still in its early stage and it will face uncertainties.

We are excited and intrigued palette opportunities and challenges and columnist international developments.

We look forward to working with more manufacturers and all our partners to create a next generation supply chain as shocking spirits. Please.

Paula evolving trends.

Thanks.

Our mission is to serve all benefit all and to empower consumers all around the world to live their best lives.

This is a year of recovery and also a year of heightened competition.

As always we will manage our strategic direction and focus only execution.

High quality development strategy.

We will keep.

Our sales of La Daiwa mentality.

Explore new and better ways to serve our users.

Through rapid prototype iterations and feedback cycles.

We will gain valuable insights that enable sustainable high quality growth.

Through our efforts, we hope we can better align with our users and bring about positive trends to award us a hole.

Toward this goal.

<unk> had steadily and tirelessly.

And now I'll hand, it over to co CEO of <unk>.

He will talk more about our high quality development strategy.

Yes, Helane, what's bad then I cannot announce Honda element.

Yes.

Thank you Li Hello, everyone. Thank you all for joining this earnings call.

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In the first three quarters market vitality has continued to improve as the fact, though consumption support policies gradually work its way into the economy, we are seeing stronger demand for consumption upgrades.

This backdrop in Q3, we launched a series of promotions such as the summer Carnival total Harvest Festival National Brands Festival and total Redeemer.

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More savings and better services.

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I believe you opened a great mall.

And during this year's Singles' day, we continue to simplify our promotions.

The first time, we operate directly price reduction on top of our 10 billion program.

I'll also cover many imported goods under the 10 billion program, bringing our users a wider selection of quality products at reasonable prices.

As a result of our efforts we saw good momentum during Singles' day and over $620 million consumer it's benefited from the 10 billion program.

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Our singles day promotion is one aspect of our high quality development strategy with the goal of creating incremental value for the consumers and to the society, we focus relentlessly on execution to deliver high quality assumption.

Quality supply and to improve platform governance and merchant ecosystem.

So right now what that might not continue.

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Taking that you talk to that.

Now let me walk you through the key initiatives my team and I worked on during Q3.

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Chancellor Provost again anytime you on that.

So the way the EBIT guidance.

We also are going to be the waiting.

Firstly, we're focused on high quality consumption. Since Q3, we continued to work on improving our core capabilities and operating more savings embedded services by adopting appropriate platform policies and incentives, we are constantly making them affordable quality products more accessible to the public.

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Our global controller.

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Take the total harvest festival as an example.

In September as the largest agricultural platform in China.

The 1 billion platform resources and partnered with over 300000, agriculture merchant and more than 1000 production regions across the country launch the total harvest festival at.

At the same time, we expanded 10 billion program to cover the full selection of participating agriculture product categories.

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Yes. It is that you have implemented.

Oh, Yeah, that's easy, but yet we've continued to invest to support quality agriculture products and English process, we help farmers participate in the national market and grow the income from our merchant are encouraged by the results we receive on our platform and our ever more committed to our career agriculture.

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Yeah.

In addition to the total harvest festival, which was dedicated to agricultural products. In Q3. We also collaborated with over one 100 Chinese national brands to launch the National Grid Festival in partnership with CCTV.

Top Chinese brand such as Shanghai So.

361, co Phoenix and Cook, we're invited to live streaming sessions hosted on our 10 billion program to showcase their products and tell the brand story to a nationwide audience.

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The consumer demand was boosted by our various support measures such as featured Livestream events 10 billion program and large group buying we're pleased to see that some national brands achieved rapid growth in partnership with us some even experienced at 40 times growth in the past two years and the business is still growing quickly.

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The high quality supply is the foundation of our high quality consumption. In Q3, we continued investing in our supply chain capabilities, which in turn enable more local manufacturing and agriculture producers to emerge as leaders of certain product categories and expand internationally uneven global market.

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In the third quarter, our team returns with key agricultural production areas, such as Delta with a haircut and northwest for foods.

Ricardo Cloud initiative, we brought digital solutions to local producers to improve the resilience and competitiveness of the local supply chain in recent years with a helpful window door. We are happy to see that the new generation of growers and farmers is emerging in these new regions.

Among them are 19th Finance Master degree OTA, who said no to investment banking and devoted himself to the hydro crop trait and up close to 58 relic director, who help to commerce to sell 4 million kilograms up threep today over three.

Three years, they are playing a vital role in driving growth.

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Innovation is a crucial element of the agricultural value chain in Q3, we continue to promote digital inclusion and technology adoption agriculture.

To this end, we hosted at Qdoba Academy growing competition, but the second year, which serves as a platform to bring wider recognition for innovative tech driven agricultural practices across the nation.

This year's event attracted 96 research teams at.

At the same time, our platform also provided strong traffic support and coupons for Agri Tech enabled products championed by participating teams. This is to promote standardization brand building and Digitization that we're culture.

As opposed to cover the wide range of products.

<unk> oranges, citrus's lamp and Kiwi fruit from top production regions.

These are the ones in the San Diego will then tissue I sound, a little crazy because most of the turnkey Julie Guangdong downtime, though honestly.

Cause Hyundai is outlining exactly.

Johnson.

So <unk> Joseph it doesn't look like how you achieved.

In the third quarter, we continue the rapid business model innovation for our global initiative, we made it easier than ever for manufacturers to reach consumers in over 40 countries and regions worldwide. We now serve more than 10000 manufacturers from over 100 industrial about across London, Joe down Shandong provinces.

Provinces.

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Constant dollar Yoga tour down.

In our pursuit of high quality development.

Quality ecosystem the foundation that nurtures, the mutually beneficial environment that supports the growth of the platform and its participants.

Daniel will then tissue tranches with an UN bongo.

And yes, the RMB social Airlines E vehicle, we count on Kansas.

Cynthia.

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While minutes I'll hop off.

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<unk> nine trading.

Trading gains so I can't comment on it.

In the past quarter, we improved the protection mechanism behind us and now I'll cover the account verification searching browsing all the research restrictions and content management.

We also deepened our commitment to copyright protection through a series of dedicated campaigns. We are proactively looking for areas, where we can take on more social responsibilities as we strive for a greener and healthier platform ecosystem.

Finally in Pinot noir Kubala Ottonian.

We're going to go on a new 10, well mentally think guidance, yes, I don't think so.

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These documents to the E U.

Diesel targeting tradeoff, yes. Thank you.

Downtown behind city.

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Last month <unk> celebrated its <unk> anniversary looking back on the journey, we sincerely. Thank the consumers farmers motions investors and other stakeholders for their support we received looking ahead, we will move forward with a relentless focus on execution of our high quality development strategy on the demand side.

We will continue to be consumer oriented to provide more savings and better services on.

On the supply side will remain firmly rooted in the real economy driving industrial modernization through innovation.

Platform ecosystem, we're allocating more resources to upgrade cycle and governance support quality I think that your merchant and foster a healthy and mutually beneficial environment.

Absolutely.

So in highway talking against ourselves and that's how we got here.

Now, let me hand, it over to Jim sure I'll provide you with an update on that show performance.

Thank you Jan.

Hello, everyone. Let me walk you through our financial performance for the third quarter ended September 32.

2023.

In terms of income statement.

Okay.

Revenues increased 19, 4%.

The $68 8 million.

This was mainly driven by the continued recovery in consumer sentiment.

Hurricanes results from executing our high quality development strategy.

Revenues from online marketing services and others were RMB nine 7 billion this quarter.

39% from the same quarter of 2022.

Revenues from transaction services were RMB 2009 1 billion.

315% from the same quarter last year.

When we I'll kick off on expenses.

Our total cost of revenues increased to six 2% from RMB seven 4 billion.

2022 to RMB 26 $8 billion this quarter.

Mainly due to an increase in fulfillment fee payment processing.

<unk> and.

<unk> expenses.

On a GAAP basis.

Total operating expenses.

With a 44% to RMB 2000.

$25 4 billion.

From RMB 17, 7 billion in the second quarter of 2022.

On a non-GAAP basis.

Total operating expenses increased to RMB 23, 9 million this quarter.

RMB 15 8 billion in Q3 2022.

And the first quarter guided by our high quality development strategy.

We invested decisively and responsibility to your strategy.

Initiative.

Our total non-GAAP operating expenses as a percentage of total revenue this quarter with 35%.

Compared to 44% in the same quarter last year.

Looking just specific expense items.

Our non-GAAP sales and marketing expenses this quarter.

At 21 3 billion.

58%.

Yeah.

Our non-GAAP basis.

Sales and marketing expenses as a sustained AGL solid revenue this quarter was 31%.

8% same quarter last year.

Throughout the past quarter, we continue to give back to your casinos and those I was just curious.

During the campaign.

I've seen data consumer feedback to our.

Asset.

non-GAAP general and administrative expenses were RMB $403 3 million.

That's just under $226 3 million.

2022.

Our research and development expenses were RMB, two 2 billion this quarter.

On GAAP basis.

And under two 8 billion on a GAAP basis.

And a new high.

Technology is at the heart of that.

And creation.

And it will be a long term focus for us.

We're committed to stepping up our <unk>.

Investment areas, such as agriculture technology.

My chain and our core R&D capability.

Operating profit for the quarter was RMB 16, 7 billion on a GAAP basis.

Compared with RMB 10, 4 billion in the same quarter last year.

non-GAAP operating profit was RMB 18 1 billion.

<unk> 3 billion in the same quarter last year.

non-GAAP operating profit margin was 20.

Is that in this quarter compared with 35% with same quarter last year.

Net income attributable to ordinary shareholders was RMB 15, 5 billion for the quarter.

Two 5% to 10 6 billion in the second quarter last year.

Basic earnings per ads was RMB 11 eight.

And diluted earnings per ads was RMB 10 2016.

The asset base.

Basic earnings per ads of RMB eight eight.

Eight and diluted earnings so.

So if RMB 734 in the second quarter of 2022.

non-GAAP net income attributable to ordinary shareholders was RMB 17 billion.

And the $12 4 billion in the second quarter last year.

non-GAAP diluted earnings per ads was RMB 11, 61 does this RMB 862, and our second quarter of 2020.

The delay that is fully financial results in the past quarter.

Looking ahead, we will continue to invest patiently to ask our high quality Department strategy.

That completes the income statement.

Yeah.

Now, let me move on to cash flow.

Our net cash generated from operating activities was RMB two 5 billion.

Compared with RMB 11, 7 billion in the same quarter last year.

As of September 32020 feet.

RMB $202 8 billion in cash cash equivalents and short term investments.

Thank you. This concludes my prepared remarks.

Okay.

Thank you Jim next we will move on to the Q&A session. Today's Q&A session, ladies that Joe and Jim will take questions from analysts on the line, who could take a maximum of two questions from each analyst.

Les and Joe will answer questions in Chinese I will help translate for convenience purposes.

We are open for questions.

Ladies and gentlemen, we will now begin the question and answer session.

If you would if you wish to ask a question. Please press Star then one on your telephone and wait for your name to be announced.

If you wish to cancel your request. Please press Star then two.

Participants are requested to restrict themselves to two questions at a time.

Your first question will come from Natalie <unk> of high Tong International. Please go ahead.

So Russia harsh CFO any congestion with the win T mobile.

Or would you then go now Glenn T gigawatt, Tina Schiel Glenn agenda.

What you know agility to consider that up with religion John.

Does that is your lag when he penned a gymnasium Dan to actually place all day Natty Kubota Tim Jack.

Dan Le <unk>, Dan you don't drill.

Thiago <unk>.

<unk> does have download Yoshida friedhelm joab attending.

And then with Chipotle Tiguan attention she is happy holidays.

Ladies and then Sean Tony you guys.

Thank you and I'll get off.

P J E.

Hi Chi.

Thank you Jay.

<unk> financial maturity that you Raj.

Okay go ahead Tim.

Hello, Zack Gucci that chicken that you already knew that she has got you took.

The Chancellor myself.

Thanks for taking my question I have two here.

First of all you said regarding the.

Company strategy.

How does management think about the ask Jackie to priorities.

Business showed nice John.

Momentum in the past quarter shelf.

So from a forward looking perspective.

Wondering what what are the key strategies on the top of the <unk>.

Line of management and my second question. My second question is regarding the agriculture.

We understand that agriculture has always being a call.

Merchandise camaguey floor being neutral. So just wondering can management elaborate on why this category is key to our platform.

And we recently learned that after so many years.

Such anger in this sector. This product category has continued to perform well and folks are meaningful calls in the past quarter.

Can management give us some color on what.

What are some of the key initiatives you have implemented in agriculture, so as to achieve that Klaus. Thank you.

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And as we mentioned last quarter, starting this year, we are entering a stage of high quality development and for US. This is not an empty category.

We are implementing in every aspect of our business.

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How many you use or with another OEM.

And we have a union achieved with the same game.

John could you did you pay it off.

Boundless at Houston woman lung campaigner <unk> or could you have now.

And first on the on the supply side.

On the one hand, we are strengthening our capabilities in agriculture.

And going forward, we will continue to invest in <unk> and in supporting infrastructure. This.

This is to improve the overall quality of the products that are.

On our platform.

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Matt.

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Awesome on boarder pay Downs Johnson.

And at the same time, we launched a 10 billion ecosystem already this year to support the high quality merchants and other ecosystem the ecosystem partners doing business with us.

This is to provide the right kind of incentives to facilitate the high quality of your bottom end of the ecosystem.

And at the same time, we are working very hard.

Improved improving our platform governance efforts, which is one of our top priorities since I took office.

We are making steady progress in areas such as minor protection and also product safety.

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Element <unk>.

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Deep economic loss it sounds like the passwords or people doing the value because you're able to bring more useful.

No holiday season will be on ways to them they brought with it.

Yeah.

Yes, Jonathan E B E.

<unk> done this is uniquely you got straight as if I'm in women employees when we hit.

And from the consumer side.

First I wanted to say that our 10 billion program is making some of the higher ticket items more accessible to our consumers.

And during the most recent Singles' day.

The number of users who benefited from the <unk> program.

Over $620 million.

A positive user mindshare is our most valuable asset and it takes years of efforts to build up one order at the time, but could be easily destroyed very quickly. So we will not relax in this area.

Maybe if I may know women to nudge heavy trading harpoon.

Yes, you know in our portfolio.

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Steve Wood, CEO, who the counter to that.

It's not a thing that half would've delivered machines at Dawn Jaffray. Doug I know you got the nine two times of endorsing the some A&P made full.

Oh.

So it wasn't too much on this Utah.

And from the consumer side, secondly, we have been improving our capabilities.

To provide better services to our users since the beginning of this year and so far we've received positive feedback.

Over the long run.

Through better service satisfaction, we hope to strengthen users' trust with our platform and deepen the better services mindshare.

And by doing so consumers will be more likely to try new product categories on our platform.

We can also.

Diverse needs.

So let me kind of a non adjacent to <unk>.

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We are prepared to work long and hard for the high quality of the environment.

Our business in our pipeline we.

We are very pleased to see that the strategy is starting to deliver results.

Given its sooner than we had hoped.

And you guys have element is alitalia.

Understood.

And do it in the chiller content.

So medallion loans.

Is that what it does not take away again excuse me.

And also coming back to your question.

Our strategic priority.

<unk> management team adopted the high quality development strategy when I took office earlier this year.

This will continue to be our focus during my tenure. Thank you.

Hello Helane.

So what else did you ask.

<unk>.

Hi, This is Kelly I will answer this question on agriculture strategy.

Until those hunting when people don't I assume this is below 70%.

This is Joe <unk>.

Hmm.

I'm curious was this a long time, Inc.

<unk> hi.

Mr. Tor <unk> hunting for you Peter.

But how much do you know what it was that a few days ago.

And so as I was sitting here thinking I kind of anytime in the southeast.

<unk> traditionally.

As you mentioned agriculture is of strategic importance to US we started out in agriculture and Thats. How many users first came to know us we're able to retain those users by serving them well through our agriculture offerings today, the online penetration of agriculture products is.

Still relatively low so there remains huge potential in this product category.

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Things will wind down.

When we bought it shows all the time to.

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Do it once they're on the phone so that won't bias you towards two of an old social.

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Okay.

So that's all good.

You too.

Do you see something Ashish.

But let's assume that those are all inside.

Looking at unit.

<unk> told me in the release.

Yes.

Last quarter, we launched the total harvest festival and broth agriculture products directly from more than one thousands of productive regions to consumers across the country, we allocate even more platform of resources to improve the quality of agricultural products and shopping experiences on our platform.

Also brought many regional specialties to the national market for the first time by connection farmers with suitable logistic resources.

In doing so we were able to better address consumers amount for high quality fresh and healthy agricultural products.

What we have been doing to improve the quality and efficiency of the supply chain for agricultural products.

So close to the Dol.

Total symptom good thus.

Therefore, the Eagle Mountain view.

Sure Charles Sherwood liquidity is promising.

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Gordon hunting density.

At the same time, we understand that improving supply chain is just one aspect of agricultural modernisation.

Also need to accelerate the adoption of Agri tech innovation to improve productivity and product quality.

Let's see.

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So usually the Tweedledee Chen Tong.

<unk> and <unk>.

Yes.

And was that clear so what's the question.

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We normally anti TNF.

Yes sure.

Thanks <unk>.

As we enter into one of our team.

So that seems a little different.

When we got to work with <unk>.

So Jonathan <unk> amongst the <unk>.

And really we had a quality issue.

This year, we hosted the third smart agricultural competition and the second thing total Academy growing competition to promo Agri Tech innovation.

Adoption.

We also supported talent specializing in agricultural areas and help farmers increase productivity and reduce losses. Meanwhile, we recognize the importance of fundamental research in may with the Navy 100, meaning RMB to establish a dedicated research found at China Agriculture University to address critic.

You'll need the agricultural research.

In my opinion.

Yes.

What is linear unbelievably.

Well Hello woman that windows.

So I apologize.

And then we are clearly following that hold without anything valuable function.

<unk> plus <unk>.

In August we were pleased to welcome Yvonne to our board as an independent director Ivan is expert in agriculture in a foot 50 with her on board, we will be more targeted in our investment agricultural research. Our goal is to utilize cutting edge research.

To solve practical problems in China.

Yeah.

Good morning.

<unk> also filed by industrial lobbies Lydia.

Good morning.

So could you.

Julie hunting.

A few suite truly need of course is promising.

John.

And marketing due to the accounting that piece.

Today's all phases.

Okay.

Thanks for your assistance I'm, sorry that.

So this is Jeff.

Yeah.

Going forward agriculture will remain a cornerstone of our high quality development strategy, we will continue to leverage our advantages in technology and platform resources to streamline their supply chain of agriculture products promote every tech innovation and adoption and bring more quality products.

Clearly from farm to table, thereby creating tangible benefits to our pharma merchants. Thank you all.

It's all good.

Thank you.

Operator, we can move on to the next analyst on the line.

The next question comes from Ronald Keung of Goldman Sachs. Please go ahead.

[laughter] Glenys huh.

<unk> and gentlemen, 19 annualized kind of only <unk> gala in Derby Champ.

Maybe I shall shallow in datacom.

Yeah.

Tom Tom on the P&I, Shanghai, Dan can go wrong.

<unk> Tom.

Tom.

Yeah, sure Todd that easier too.

<unk> hung yeh at San Antonio.

Yeah, Sean seen plenty of companies.

So plenty of onsite Sheila yes.

<unk> taken Joan.

Dr. Glenn Glenn you Chantal quite a year.

On Constitution, who could central <unk> Xiang Guan.

Glenn.

Now, let me add to Ito, which union costs.

Jim.

Geez, Alex you know where to find out for you Jonathan.

Now a couple of feet him plenty Thompson.

Hi, <unk>.

They hold.

Cool.

The ECS John.

Paul.

Connie till June Th, Duke, Ohio, Ohio, Shanghai, Yonder Chartwell now.

Alright. Thank you management for taking my question. So my first question is that since the beginning of this year. Many of your competitors have been putting more emphasis on value for money merchandise and made it easier for manufacturers to set up a storefront on those platforms.

And some of the PSA have observed some stone user and merchant momentum. So how would you evaluate the competitive landscape and what are some of the key initiatives to defend your competitive position in this empowerment and my second question is that we've seen your global business <unk> got a good strong momentum since launch.

A little over a year ago. So can you share with us the latest development strategy for this business going forward and what's your vision for the business in the near to medium term. Thank you.

Yeah.

What does that then.

Yeah.

And I think John's element the Hyatt Chicago.

This is Jim. Thank you for your question and let me share my thoughts on it.

Competition.

Okay got it.

I don't know.

Thank you Danielle.

Yes.

Yeah.

<unk> sounds like there's it depends on the loyalty go down you're not being accurate, but we cannot only do.

Excluding as I mentioned in the Savannah.

So these are the one or two of them in Pima cotton.

As Les just mentioned this year is a year of recovery, but it's also a year of heightened competition.

As the macros, we project policies gradually rolled out we are not surprised that our industrial carriers have been increasing investments to boost consumption.

And then sort of the high end.

So again, yes.

Anytime a job well done.

Thanks, Jonathan.

On the acquisition.

I think Vince would pick opinions that pay us to Shao Lee.

I mean, I think Dan mentioned isn't mail data.

So that's it caught up with you soon.

Put on that Houston, Susan Hardy.

Yeah, Hi, innocent now about Egypt.

I'm not going out of town.

Hum.

Our industry needs to say.

Directly the constantly evolving consumer needs.

Consumers nowadays have deeper pipeline to truth phone so.

So competition is inevitable.

There is no permanent solution to dealing with competition.

Instead, we are we're always thinking about how to improve our core competencies and worked with ecosystem partners to create greater value for our consumers.

And that's aunty Donna.

Tissue out the door.

All.

And I'm just wondering in Basel.

Inventory turns.

<unk>, let me telling me that you can draw.

Guyana Sandeep <unk>.

You can have it go with yet.

In the third quarter, we continue to be innovative.

Promoting more savings and better services and to offer more quality and affordable product to our consumers and Edison 10 time, but great shopping experience.

Well, let me say a long time.

<unk> doses equation.

To listen.

Is there anything that has seen it.

Does that seem.

I mean that he made.

Yes, <unk>, we shall we send you the switchover.

Well, we are continuing to deepen the more savings mindshare.

Which we which is our strong suit traditionally we hope we can also deepen consumers' trust.

Like one five combined.

Providing better services.

This will hopefully, but more users to explore new product categories on our platform. So we can better serve our users demand for our consumption upgrades.

And then could you don't know what burnt tissue that's pretty easy.

We can put that gen one could do that.

Yeah.

And that should give you a citizen's issues.

Oh Gee download com in bogs hunting really income losses, it tends to get a coffee though.

Good Lord is sometimes done on the Moe announced would be eating at home.

Don't get in horizontal employee salaries of the coalition.

And on the on the supply side, we continue to be rooted in real economy and to promote digital inclusion agriculture and manufacturing sectors across the nation.

By helping the producers to other products directly to consumers.

And China and now globally.

We enable more producers to India.

Troy the benefits of digital economy and at the same time broaden merchandise selection on our platform.

Well, let me repeat and assume that each of those within the TT.

They all kind of seen a little that wasn't terribly.

She also.

Sanjay I Wouldnt penalize Televisa send you that St. Joe Hutch uses on the agenda.

I think what you said.

In our garden apartment in salary.

Again, Dan.

That's it.

Our approach to competition has always been clear.

Which is we don't focus on what our competitors too, but on what consumers need.

<unk> been seeing a clear trend of consumption upgrades among our users and.

And against this backdrop, we formulated that high quality department strategy to better adapt to this trend.

The idea is very simple a simple does not mean.

So there's a lot of time now.

Then you are assuming then.

There's a whole E.

Yeah.

Thank you I believe you said it was two times anyway it sounds good.

Now, let me address two of the holiday and Mcdonald's.

I'd be lying to you guys kudos to all.

He was working with Eagle Ottawa you spoke.

Oh, that's embark on a whole benji I kind of figured.

Got it as a homeless when they get their new demand.

No I think obviously go with powerful godfather equal I mean, you get it.

There's also a downhole pump paid equaled GAAP only run on their own to dissolve cocoanuts alternative.

There is both healthy and militia competition.

Sometimes competition can easily you bought an unhealthy market practices.

And those who do well we're always attracted attached.

For example, we noted that the short seller report on a company where they issued in early September.

The allegations in the report are totally tasteless and.

In the short seller had spotty.

<unk> track record and.

And on the state that report was published with the intent to create panic and to drive down the stock prices and enabling the firm to the short seller to profit from sharp division.

No I'd say that without constantly.

Yeah, Bob I'll Behold, the appraisal to do yoga local finishing way.

I don't see now so in Utah languishing away from Indonesia.

Humana cannot.

Yeah. So can you talk about being one of the only G. P. J you are kind of trying to how it can be difficult.

As we investigated further we found out that they were actually more a follow up actions taken by the integrators behind their reports.

Their motives.

And as usual actions are quite apparent.

We are encouraged to see that most investors understood the underlying motive and sell through the Columbus acquisitions.

Does that I know of Macquarie tissue that normally the $2 that when they shop at the alumina, causing a pause on it.

<unk> <unk> got it all seems.

Jim will then.

And their choices without heart failure.

It tells me, though building by emitting non Gil just to get us that way.

You sound like you're somewhat behind it.

Just yet.

Looking forward we are.

We're continuing to focus on.

Tumors.

Our high quality development strategy with a clear and focused mine, we will relentlessly focused on execution and in the end, we believe consumers will vote with their wallets.

Our view on competition. Thank you.

Thank you Jane Thanks, Paul Let me take your question on global business.

For our global business.

<unk> reached a supply chain expertise accumulated over the years to create a new form of China and the sugar next to it.

This is directly connect the factories, Wisconsin man and it's based on a flexible supply chain.

Currently.

Consumers from over 40 countries with prices cash with backgrounds.

Sure parishes directly from high quality factories cloud services.

However, this is still in a very early stage.

Many of our initiatives are in the beta testing phase.

Our team is absolutely learning about the defense market and customer needs around about.

This will be iterative process.

Where were challenging.

Same time interesting.

Well look forward to working with marketing partners.

Partners in this journey.

The lives of consumers around about more enjoyable.

Yes.

Yeah.

And operator, I think we have time for one more analyst.

The next question comes from Ellie Jiang of Macquarie. Please go ahead.

Go ahead please.

I wanted to see what where do you go in Houston.

Ladies and Sudan, No Macondo open to go international.

And it sounds all of that infrastructure.

A couple of things one is open.

Alright.

So Josh I don't actually know Permian.

So actually it all potential goldfish and listen to your answer.

Hum.

Thank you Paul.

And I think Ashish.

Sure.

Yes.

Yeah, Lindsay you should really kick in once you're kind of going to the Italy really Tony <unk>.

Now My tongue Conference calls you said that you do something at the autonomy and cannot hold rules now do Andy sat down 14, Genco Oh Glenn.

Glenn is asking Glenys, Kathleen Nealon Neogen la.

Let me translate myself two questions first is on the revenue.

The company achieved robust revenue growth up 94%, you'll be yet what do you think contributed to this growth and what do you think you'll have done right in the past quarter and how long do you think about the growth sustainability into the fourth and next year.

And then the next is about the margin we've noticed that your margin decreased on a year over year and quarter over quarter basis, what are the some of the key investment areas that you are putting your resources into.

Is this related to the competition how is your global business impacting your profitability and how should we think about the trend for the margin in the next few quarters. Thank you.

I mean was it back then.

What can I played havoc with pointed out of a job.

Hi, This is Charlie.

Start by addressing the question about growth.

I'm kind of timeline.

Don't see with Aloha, and they can do to be yet.

So I think thats for sure.

<unk> Finance Corp.

Thank you Hugo.

As Larry mentioned earlier, our financial performance. This quarter is the combined result of the.

Improving consumer sentiment and the execution of our high quality Department strategy.

Once we did icon sandeep liquidity chemo in fact chocolate and the fact that we can.

Hopefully you Chi.

Instead, it's been working.

Now when liquidity exactly now another truthfully, it internally, which obviously.

I want to be it's always changing so depending on your email.

Well, that's a very fruitful.

Yet maintain guncotton module hammer.

And in the past quarter, driven by consumption recovery. The Chinese economy grew at a rate that went over a market expectation.

Which demonstrates the resilience of the Chinese economy.

What we have.

We are seeing on our platform also confirms the potential of the consumer market.

We have confidence in the Chinese consumption market.

There remains much to be done to better serve the consumer demands.

So as it goes through.

San Diego's down the unions without tool.

One that you feel on that beam, Tim hinted out of convenience. So as you know that.

But the enzyme that way somebody is.

That she does it go from.

With ammunition.

Both of them.

Hainan Island therefore.

Well, maybe you can pass on that.

Just wanted to come back.

We achieved good though here that will corrugated sheet in womens polo proteins that bought them and they would be not too bad.

Yes, Craig and welcome to the board.

I was hoping panna tango event at all.

This season.

And they see that that's what's debate isn't done.

Although the industry players do not have any major promotions client during Q3, we still practiced everyday low price philosophy and worked hard to provide consumers with a wider selection of quality products at affordable prices.

And this is to deepen our savings value proposition.

And while we serve the basic needs of our consumers our cooperation with branded merchants also generated good results.

The National goods Festival reinvested in coupons and also invested time and resources to help more national brands to quickly gained popularity.

In partnership with our platform some brands, we're able to achieve multiple growth in the past year or two.

Let me a commvault correlated either pinta peanuts.

Well then thank you.

King.

You've seen how you to draw that that's also quite helpful.

Now, let me hand Guardian condo Yoko nowadays.

Or do you you're not going to call.

What I always found gas even when they couldn't do it if that's where the Kuwait.

Now you say, you're getting you back to work.

And we put in place the appropriate policies and offered a platform of resources to incentivize our immersion to work with us together.

To provide a more savings and better services.

Im very pleased to see growing interest in our platform and higher user activities, which in turn provide more sales opportunities for the merchants and motions. They in turn are naturally more willing to increase the investment.

Truckload.

Does that count.

So you saw a nice highway some kind of tight gas.

Cool.

So is there anything meat.

<unk> found that causes a pause Anthony this.

This is Pat.

<unk> seen.

Let me.

Remember when it was ordered bonds with a strong balance sheet that you told that piece of it.

Okay.

We have been saying that revenue is a natural outcome of the value we create for our.

Ecosystem partners.

Maintaining our strategic direction and focus on the execution of the high quality Department strategy.

And instead of paying too much attention to short term revenue trends, we will direct our attention to work on improving our core capabilities.

For serving our consumers and merchants. Thank you.

This is Jay Thanks Ali for your question I will answer your question about profitability.

First and foremost we are still in at about let's say profitability initial wrong, it's not <unk>.

That our team is laser focused on.

Executing our high quality Department strategy.

We hope we can.

Increase the value of the platform in the long run.

In the past quarter.

Guided by the high quality apartment strategy will step up invest in key areas such as promotion activities and so as upgrade.

And now more savings and added services share.

We're also further built on our supply chain because of their teeth and ecosystem improvement.

We are seeing encouraging results from our execution and we'll be contingent bass family. When we see there are.

<unk> potential.

In terms of future trends.

We're operating the spot market environment.

In vascular opportunity change on a daily basis.

Because of this our business execution will not match the financial reporting schedule.

And I'm going to fill that.

<unk> ability to continue to not trade on a call.

20 basis.

Thank you.

Okay.

And thank you all once again for joining us today.

About time, and if you have any further questions. Please reach out to our IR team. Thank you and see you next quarter.

Ladies and gentlemen that does conclude our conference for today. Thank you for participating and you may now disconnect.

[music].

Yes.

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Yes.

Okay.

[music].

[music].

[music].

Ladies and gentlemen, thank you for standing by and welcome to P. E. B D Holdings, Inc, third quarter, well need twenty-three earnings conference call.

At this time all participants are in a listen only mode.

There will be a presentation, followed by a question and answer session.

At which time if you wish to ask a question you will need to press Star then one on your telephone.

Please be advised with todays conference is being recorded.

I would now like to hand, the conference over to your host today. Please go ahead.

Thank you operator, Hello, everyone and thank you for joining us today.

Holdings' earnings release was distributed earlier and is available on our website at Investor PDD holding stock comp that's right.

Two new global Newswire services.

Before we begin I would like to refer you to our safe Harbor statement.

Criteria.

Which applies to this call as we will make certain forward looking statements.

Oh, so let's call. It includes discussions of certain non-GAAP financial measures.

Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to GAAP measures.

Joining us today on the call Mr Shan, Li our chairman and co CEO.

Mr. Joe John.

The director and co CEO.

That's right Mitch <unk>, our VP of finance.

Lay on Dow Jones will make some general remarks on our performance for the past quarter.

And our strategic focus.

Gene will then walk us through our.

As a result for the third quarter ended September 32023.

During the Q&A session layer on Dow Jones to answer your questions in Chinese.

I'll help translate please.

Please note the English translation is for reference only.

In case of any discrepancy managements damage in the original language should prevail.

Now, it's my pleasure to introduce our chairman and co CEO Charlie Lake.

Please go ahead.

Hello, everyone.

Thank you all for joining our earnings call for the third quarter of 2023.

I will start by giving a brief overview of our third quarter results.

In Q3.

A total revenue of $68 8 billion RMB.

Representing 94% year on year increase.

This is a result of improving consumer sentiment.

Our efforts to carrying out the high quality development strategy.

So one of the largest e-commerce platforms in China.

We clearly felt a continuous recovery of the economy as well as <unk>.

Initial and the resilience of the consumption market.

With the introduction of a series of policies to support consumption.

We are also seeing robust demand for consumption upgrade.

Consumer behavior is telling us that consumption upgrade it's not just about quality, but equally about price.

It is a balance of quality apprise that consumers care most about.

This is a nice thing this trend.

We are more confident about our value proposition of more savings and better services.

And in Q3, we continue to invest profitable resources to make it easier for our users to enjoy an ever greater selections.

Quality products.

The prices and with great satisfaction.

In Q3, we continued exploring new ways to offer our users a special promotions.

Through a series of campaigns, such as total Harvest Festival Nash.

National Brands Festival, total redo models and national day's sales.

Thank you always get to enjoy attractive price is.

Typically only available a few times the year Julian shopping festivals.

We have always been confident ingot vitality, our China consumer markets.

While we are laser focused on the shopping experience.

Golar youngest Fas.

Investing in technology innovation is the key to achieving high quality development.

In Q3, we continue to invest decisively in areas such as accurate Tac.

The prior trend technology, and our core R&D capabilities.

Our investment in R&D reached two 8 billion RMB setting a new high.

Technology innovation is the core driving force behind our pursuit of high quality development.

And we will continue to step up investments in this area.

Allison Cai.

Actively taking more social responsibilities.

In August it seems in the area was hit by severe weather.

We immediately went into action and donated 30 billion RMB to the China Charity Federation to support the affected region.

At the same time, we launched a dedicated relieve campaigns and charity live streaming events.

Effective capital needs.

For example to help merchants, England region, Brazil double operation.

We setup a dedicated China platform <unk>.

Provided relief measures such as traffic support and Zero Commission policy.

In Q3, we went back to places in several provinces and hosted a series of reading for you booked on Asia events.

We also donated food and help build fiber rohit for schools and cancel and Hubei provinces.

We are hopeful that soon this effort we can do what we can to broaden our horizons awfully young people.

<unk> achieved a brighter future.

I am pleased to report that we were awarded.

China Challenge Award this September.

This is in recognition of our App.

For us to hurdle revitalization.

The leap and knowledge sharing.

Although our business also I will try now.

At this stage.

She has made a meaningful progress since its launch a year ago.

Drawing less prior to and capabilities we have.

Accumulated over the years, we are able to assist many manufacturers.

Pending their presence and to directly engage consumers.

Total <unk> cross border services now help manufacturers <unk> consumers in over 40 countries.

Well, we have broadened our reach.

<unk> is still in its early stage and it will face uncertainties.

We are excited and intrigued.

Opportunities and challenges that callaway's international deleverage.

We look forward to working with more manufacturers and all our partners to create our next generations prior trend as shopping experience.

Paula evolving trends our tox.

Our mission is to serve all and penetrate all and to empower consumers all around the word to live their best lives.

This year is a year of recovery and also a year of heightened competition.

As always.

We will manage our strategic direction and focus only execution.

High quality development strategy.

We will keep.

Our sales of La Daiwa mentality.

Explore new and better ways to serve our users.

So we grabbed it protect iterations and feedback cycle.

We will gain valuable insights that enable sustainable high quality growth.

Through our efforts, we hope we can better align with our users and bring about positive trends to award at the hold.

Towards this goal we will move ahead steadily and tirelessly.

And now I'll hand, it over.

To close the year with the others.

We will talk more about our high quality development strategy.

Yes, Helane once there then.

<unk>.

Right.

Thank you Li Hello, everyone. This is Scott.

Thank you all for joining this earnings call.

Okay.

Two calibrated in terms of what you an example of that.

This is our earliest Xinjiang <unk>, Canada.

Saturday unabated.

So needlewoman waiting for LTE to be central to.

Challenging online yet so the hotel while worldwide yet total total yet hit a hurdle.

So I got a little room, so as Hugo Chavez as you're going to notice the way Kahala pool.

In the first three quarters market vitality has continued to improve as the fact that our consumption per policies gradually work its way into the economy, we are seeing stronger demand for consumption upgrades.

Against this backdrop in Q3, we launched a series of promotions such as the summer Carnival total Harvest Festival National Brands Festival and dollar reading mode.

<unk> principal zibo and benefit all with stepped up our investment to offer more savings and better services.

And I'm hopeful that we will then being bundled with <unk>.

But it is not yet.

Ron.

Cleaned out on galore.

The holiday.

We have not opened up yet.

<unk>.

So it's really an agenda.

And a chunk of the ATM P&I.

My question Linda.

I believe you opened a great mall.

E.

And during this year's Singles' day, we continue to simplify our promotions for the first time, we operate directly price reduction on top of our 10 billion program we.

Now also cover many imported goods under the 10 billion program, bringing our users a wider selection of quality products at reasonable prices.

As a result of our efforts we saw good momentum during Singles' day, and over 620 million consumer it's benefited from the 10 billion program.

The announcement on cylinder TD says the cargo.

Jim yet.

Andy rely on women and densities and calling it out by that.

We are guarded unhealthy cognizant conine Julie.

Felipe Santos and at that time in Canada.

That will lead us towards.

Okay. So it sounds like another dynamic.

The singles day promotion is one aspect of our high quality development strategy with the goal of creating incremental value for the consumers and the society, we focus relentlessly on execution to deliver high quality assumption.

Quality supply and to improve platform governance and merchant ecosystem.

Now with that might not continue.

100, <unk> hundred five.

Taking that you talk to that.

Now let me walk you through the key initiatives my team and I worked on during Q3.

So again to the garden is healthy.

I will let tissue in July towards the Central unit.

Towards the end of the Tanger outlet Tees.

So the way the EBIT guide.

We also don't be waiting.

Firstly, we're focused on high quality consumption. Since Q3, we continued to work on improving our core capabilities and operating more savings embedded services by adopting appropriate platform policies and incentives, we are constantly making them affordable quality products more accessible to the public.

You sound like you know the wholesale arena.

Sure.

I think similar to what we will see you guys.

Dan recognized milestone understand uhm was how he turned on Apache.

We'll do a controlled launch.

Hi, Ebrahim.

The wholesale partner made annual general meeting.

The team down there so it's actually more than double counting.

Take the total harvest festival as an example in September as the largest agricultural platform in China.

The $1 1 billion platform resources and partnered with over 300000, agriculture merchant and more than 1000 production regions across the country launch that total harvest Festival.

At the same time, we expanded <unk> 10 billion program to cover the full selection of participating agriculture product categories.

<unk> been pleased by the market.

And on the nickel knowledge and losses.

So again the whole Danielle Consol.

And on top of it as a way to comment not simply Johan.

Yes, Thank you haven't implemented.

Thats easy for yet, we're continuing to invest to support quality agriculture products and in this process, we help farmers participate in the national market and grow the income.

From a merchant are encouraged by the results we receive on our platform.

We're more committed to our career agriculture.

There's been no time in the funnel again, well, let's I want.

Due to the highly unpopular APAC yaacov <unk> high currency rates, even though you therefore the adoption.

<unk>, yes.

<unk> was about <unk> bye bye equal here, so again, yes.

We all the science is all sorry, Neil Young Kopelman Cowen <unk> co.

Maybe one other one.

Yes, yes.

Our user.

<unk> been able to.

In addition to the total harvest festival, which was dedicated to agricultural products. In Q3. We also collaborated with over one 100 Chinese national brands to launch the National Grid Festival in partnership with CCTV more than 50 top Chinese brand such as Shanghai.

361, co Phoenix and <unk> were invited to live streaming sessions hosted on our 10 billion program to showcase their products until their brand stories to our nationwide audience.

Got it towards a more by it with here.

Gardner <unk> told you guys.

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Are you on the helium guarded I taught me that Utah equals forgotten. The answer you can anticipate it's been down.

I think all of the handle <unk>.

Consumer demand was boosted by our various support measures such as featured Livestream event 10 billion program and large group buying we're pleased to see that some national brands achieved rapid growth in partnership with us.

Some even experienced at 40 times growth in the past two years and the business is still growing quickly.

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And then <unk> Kaul, who will talk about that either you can call you out.

<unk> done these higher dose <unk> is essential.

The high quality supply is the foundation of our high quality consumption. In Q3, we continued investing in our supply chain capabilities, which in turn enable more local manufacturing and agriculture producers to emerge as leaders of certain product categories and expand internationally uneven global market.

Sandy do while the party that nobody's known shareholders download that you mentioned.

They're not handy.

Pretty downbeat about can do anything but lead us through the model.

Peter and I know that that can go wrong. So you get <unk> 10 to <unk>.

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<unk>, who bought it aligns the homes with that I will turn to revenue and you don't need as you noted.

<unk>.

Yes, followed up by nearly $1 billion.

In the third quarter, our team returns a key agricultural production areas, such as Delta, Ohio class and northwest for foods.

Hydro cloud initiative, we brought digital solutions to local producers to improve the resilience and competitiveness of the local supply chain in recent years with the help of window door. We are happy to see that the new generation of growers and farmers is emerging in these new regions. Among them are 19th Finance Master degree OTA, who said no to investment banking.

And devoted himself to the hydro crop trait and up close to 58 relic director, who helped to commerce to sell 4 million kilograms up three three.

Three years, they are playing a vital role in driving growth recommendation.

So if you are talking to us and we have tightened.

We had a truly ascending dose we've talked now clients similar to offline.

Thank you.

<unk> <unk> equity.

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In that channel, what Youll do that based on GAAP.

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Neil.

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Innovation is a crucial element of agricultural value chain in Q3 continued to promote digital inclusion and technology adoption agriculture.

We hope that that window, the economy growing competition, but the second year, which serves as a platform to bring wider recognition for innovative tech driven agricultural practices across the nation. This year's event attracted 96 research teams.

At the same time, our platform also provided strong traffic support and coupons for Agri Tech enabled products championed by participating teams. This is to promote it standardization brand building and Digitization agriculture.

<unk> covered a wide range of products.

<unk> orangeade, Citrus's lamp and acuity foods from top production regions.

Using constant sandy.

Tissue loss and global cutting the most of the fine.

Julie equal so.

No downtime no honestly.

Because hyundai is outlining Datacom Tom Johnson.

And Josef it doesn't look like.

In the third quarter, we continued the rapid business model innovation for our global initiatives.

Made it easier than ever for manufacturers to reach consumers over 40 countries and regions worldwide. We now serve more than 10000 manufacturers from over 100 industrial belts across Guangdong.

Shandong.

Provinces.

Hi, Jan Carlson, I'm, sorry panel equipment, Donna Garden, our Turnpike <unk>.

Yes.

In our pursuit of high quality development.

High quality ecosystem to the foundation.

Is that mutually beneficial environment that supports the growth of the platform and its participants.

Daniel will then tissue trying team with an UN bundle for at least the.

RMB social rollout E vehicle, which are nine Kansas.

Cynthia.

Hi, Jane.

Hello.

And then some hospitals.

How about some peanut city hub off with us.

<unk> A&P, neither new trading gears, let me so I can talk to that product and that's an impact.

In the past quarter, we improved the protection mechanism for miners now I'll cover the account verification searching browsing all the research restrictions and content management.

We also deepened our commitment to copyright protection through a series of dedicated campaigns.

We are proactively looking for areas, where it can take a more social responsibilities as we strive for a greener and healthier platform ecosystem.

Suddenly Pinot noir Tupolev Ottonian.

Whereas they will go on a new 10, well mentally think Jonathan.

Sanjay causes the disease.

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John Darwin Tradings again garden on finance Andrea.

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Sometimes you cannot count behind city.

Southern California, yogurt sample, excluding its impact <unk>.

Last month <unk> celebrated its <unk> anniversary looking back on the journey, we sincerely. Thank the consumers farmers merchant investors and other stakeholders for their support we received.

We will move forward.

With a relentless focus on execution of our high quality development strategy on.

On the demand side, we will continue to be consumer oriented to provide more savings and better services.

The supply side will remain firmly rooted in the real economy, driving industrial modernization food innovation.

Platform ecosystem, we're allocating more resources to upgrade platform governance support.

Quality, SME merchants, and foster a healthy and mutually beneficial environment.

He said I hope absolutely something LG.

I guess I'll ask Calvin Thats, how we got here now.

Now, let me hand, it over to Jean <unk> will provide you with an update on our talent show performance.

Thank you Karen.

Hello, everyone. Let me walk you through our financial performance for the third quarter ended September 32023.

In terms of income statement.

In the third quarter, our total revenues increased 19, 4% to.

To RMB $68 8 million.

This was mainly driven by the continued recovery in consumer sentiment.

And encouraging results from executing our high quality development strategy.

Revenues from online marketing services and others were RMB nine 7 billion this quarter.

Up 39% from the same quarter of 2022.

Revenues from transaction services were RMB $29 1 billion.

315% from the same quarter last year.

When we I'll kick off on expenses.

Our total cost of revenues increased 268, 2% from RMB seven 4 billion in Q.

2022.

RMB 26 8 billion this quarter.

Mainly due to increase in fulfillment fee payment processing mature.

Makena is core and call center expenses.

On a GAAP basis.

Total operating expenses.

8% to 44% to RMB 2000.

$25 4 billion.

From RMB 17, 7 billion in the second quarter of 2022.

Our non-GAAP basis.

Total operating expenses increased to RMB 23, 9% this quarter.

RMB 15 8 billion in Q3 2019.

And the first quarter guided by our high quality development strategy.

We invested decisively and responsible in key strategic initiatives.

Our total non-GAAP operating expenses as a percentage of total revenue this quarter with 35%.

Compelled to 44% in the same quarter last year.

Looking to specific expense items.

Our non-GAAP sales and marketing expenses this quarter were RMB.

A 21 3 billion.

58%.

In quarter two yes.

Our non-GAAP basis.

Sales and marketing expenses as a percentage of our revenue this quarter with 31%.

38% with same quarter last year.

Throughout the past quarter, we continue to give back to consumers and those out just curious.

During the campaign.

Data consumer feedback to our assets.

Our non-GAAP general and administrative expenses were RMB $403 3 million.

Versus RMB $226 3 million in the third quarter of 2022.

Our research and development expenses were RMB, two 2 billion this quarter.

non-GAAP basis.

And under $2 8 billion on a GAAP basis.

And a new high.

The technologies are the heart of that.

Value creation, and it will be a long term focus for us.

We're committed to stepping up.

All investment areas, such as agriculture technology supply chain and our core R&D capabilities.

Operating profit for the quarter was RMB 16, 7 billion on a GAAP basis.

Compared with RMB 10, 4 billion in the same quarter last year.

non-GAAP operating profit was RMB 18 1 billion.

Does this RMB Cove Cleveland in the same quarter last year.

non-GAAP operating profit margin was 26%.

This quarter compared with 35% with same quarter last year.

Net income attributable to ordinary shareholders was RMB 15, 5 billion for the quarter compared to $10 6 billion.

Quarter last year.

Basic earnings per ads was RMB 11 points.

And dilute any ABS was RMB 10 60.

Thank you.

And if the ABS of RMB eight eight.

And diluted earnings so.

So of RMB 734 in the second quarter of 2022.

non-GAAP net income attributable to ordinary shareholders was RMB 17 billion.

Does this RMB 12, 4 billion same quarter last year.

non-GAAP diluted earnings per ads was RMB 11, 61 does this RMB eight six to Q and a second quarter of 2020.

The deliberate fully financial results.

Quarter.

Looking ahead, we will continue to invest patiently to ask our high quality Department strategy.

That concludes the income statement.

Now, let me move on to cash flow.

Our net cash generated from operating activities was RMB two 5 billion.

Compared with RMB 11, 7 billion same quarter last year.

As of September 32020 fee will have.

RMB $202 8 billion in cash cash equivalents and short term investments.

Thank you. This concludes my prepared remarks.

Thank you Jim next we will move on to the Q&A session. Today's Q&A session. Later in June we will take questions from analysts on the line, we could take a maximum of two questions on each item.

Les and Joe answer questions in Chinese I will help translate for convenience purposes.

Operator, we're open for questions.

Ladies and gentlemen, we will now begin the question and answer session.

If you would if you wish to ask a question. Please press Star then one on your telephone and wait for your name to be announced.

If you wish to cancel your request. Please press Star then two.

Participants are requested to restrict themselves to two questions at a time.

Your first question will come from Natalie <unk> of high Tong International please.

Please go ahead.

So Russia.

Glen you can give a little more keybanc go now Glenn.

Diego Martinez your agenda and one question.

<unk> nano Putra Jin Jiang.

Dunkin' does Jefferies ally, Glenn tender, John as you and Dan to I'm sure with all the Natty cope with Jonathan Zack.

Thank you Jen <unk>.

Thiago in keynote <unk> <unk>.

I will detail shortly our niches anytime Donal Yoshida Friedhelm Joanna.

And then they'll ship, okay, Glenn attend Jefferies happy holidays.

ETE when attendance, Sean Tony you guys.

And then since you are now dead.

Yes.

Richie <unk>.

Joseph <unk> Joseph <unk>.

Today, you guys from Moshe <unk> with Zacks, Gucci that chicken that you really need HCA swaps you took.

Let me translate myself.

Thanks for taking my question I have two here.

First of all you said regarding the.

The Companys strategy.

How does management think about the off Jeff Dziedzic.

Alrighty.

Business showed nice John.

Momentum in the past quarter, so strong a forward looking perspective.

Just wondering what what are the key strategies on the top of the.

Mine of management and my second question. My second question is regarding the agriculture.

Standout agriculture has always being a call.

Merchandise <unk>. So just wondering can management elaborate on why this category is key to our platform.

And we recently learned that after so many years outlook.

In this sector. This product category has continued to perform well and booked meaningful calls in the past quarter Ken.

Can management give us some color on.

What are some of the key initiatives you have implemented in agriculture for us too.

We achieved that growth. Thank you.

Without a doubt.

Anytime you got that went down because it sounded LNG.

Does it start out Dan Let me take this question on strategy.

Well that sounds like <unk>.

And then just on the <unk>, so down you'll retain that caused it off on that yet.

<unk> gotten a python proceeded to co op <unk>.

Yes.

Find me a minute.

As we mentioned last quarter, starting this year, we are entering a stage of high quality development and for US. This is not an empty category.

We are implementing it on every aspect of our business.

So on the lagoon is an excellent.

Now let me on people.

How many user with a lot of Mohan <unk> would've been good for.

Don could you did you pay for that.

Boundless at Houston woman Lockdown painters, because then detection.

Yeah.

And first on the on the supply side.

On the one hand, we are strengthening our capabilities in agriculture.

Going forward, we will continue to invest in <unk> and in supporting infrastructure.

This is to improve the overall quality of the agriculture products.

<unk> on our platform.

And if I may now, whether they actually don't want about eastern pad against them.

Sunday Consol posted foolhardy Sanjay.

So let me finish on the heap with Cvs and Aetna carved it out further.

For me, it's really that trading what's that.

Tied to the Ehow content.

Got it.

Of course on the <unk> notes issued a unique bathroom on boarder pay downs.

And at the same time, we launched the 10 billion ecosystem already this year to support the high quality merchants and other ecosystem ecosystem partners doing business with us.

This is to provide the right kind of incentives to facilitate the high quality development after all ecosystem.

And at the same time, we are working very hard.

Improved improving our platform governance efforts, which is one of our top priorities since I took office we.

We are making steady progress in areas such as minor protection and also product safety.

So it sounds like my last one if I may on women combo on Bayou Bridge.

Oh God.

Also the call got at Dunkin'.

Got it.

And of course, it is something that wholesaler people doing that even getting opened up <unk>, Utah.

No holiday season will be in line with it.

Yeah.

Yes sure.

<unk> E <unk>.

You bet.

When the employees when we hit.

And from the consumer side first.

First I wanted to say that our 10 billion program is making some of the higher ticket items more accessible to our consumers.

During the most recent Singles' day.

The number of users who benefited from the <unk> program.

We went over $620 million.

And.

Positive user mindshare is our most valuable asset.

It takes years of efforts that buildup, one order at the time, but could be easily destroyed very quickly.

So we will not relax in this area.

If I may know women too much heavy trading harpoon.

Yes.

How should I kind of know where Ms. Sheila <unk>.

Thank you Steve would tend to yield the kind of senior debt.

Dana half would've delivered machines.

Thank you operator, I know Youre talking nine two times at the invoicing does some A&P made full Hollywood.

So important to that Jonathan future.

And from the consumer side, secondly, we have been improving our capabilities.

To provide better services to our users since the beginning of this year and so far we've received positive feedback.

Over the long run.

To better service satisfaction, we hope to strengthen users' trust with our platform and deepen the better services mindshare and.

By doing so consumers will be more likely to try new product categories on our platform.

But we can also.

The diverse needs.

Callahan non adjacent so <unk> gotten off either because.

Thank you that's in the battalion of Weibo content contact fuel mix on the higher lighting pilot.

We are prepared to work long and hard for the high quality development.

Our business in our pipeline, we are very pleased to see that this strategy is starting to deliver results.

Even sooner than we had hoped.

And you guys have element is alitalia.

Has it gone silent.

Obviously, not a wonderful and do it.

Being chiller content.

So medallion loans without that one time.

Again.

And also coming back to your question on our strategic priorities.

And the management team adopted the high quality development strategy. When I took office earlier this year and this will continue to be our focus during my tenure. Thank you.

Thank you Paul.

Hey, guys.

It sounds good.

Hi, This is Charlie I will answer this question on agriculture strategy.

Some of those hunting when people don't I assume this would be a 70 year old.

This is Joe again, having CCI, though.

So no time, Inc. CFO.

<unk> will go through the pain and we will.

Mr. Tor means hunting for you Peter you want to know.

About how much visibility or was that a few days ago.

Thank you Cynthia that kind of an incoming CFO, Paul do should not be copied.

Hi, Thank you will traditionally.

As you mentioned agriculture is of strategic importance to US we started out in agriculture and Thats. How many users first came to know US we are able to retain those users by serving them well through our agricultural offerings today, the online penetration of agriculture products.

<unk> relatively low so there remains huge potential in this product category.

Let's start with your daughter.

It's Alex here.

Sure.

Each of those countries, it's really.

Okay last thing what is hopefully to.

We've got the option either through a total piece of <unk>.

<unk> capex yet.

Tim.

And what kind of the same John please listen to it.

I'll answer that one bias you towards.

So just one last one.

Okay.

So what I was talking to you.

You can see kind of if you.

I think the future.

Those organs.

And company leukemia.

Q2, <unk> told me and that is how can somebody just switch.

Last quarter, we launched the total harvest festival and drugs agriculture products directly from more than 1000 productive regions to consumers across the country, we allocate even more platform of resources to improve the quality of agricultural products and shopping experiences on our platform.

Many regional specialties to the national market for the first time by connection farmers, we still go logistic resources in doing so we were able to better address consumers' demand for high quality fresh and healthy agricultural products.

What we have been doing to improve the quality and efficiency of the supply chain for agricultural production.

So close though again it is star.

All told this in some good yes, you got that far.

The Eagle Ford here.

As you all know it's also with liquidity just wanted to see the utility.

And I'll tell you I think horizontal <unk>.

Gordon hunting, Pennsylvania.

At the same time, we understand that improving supply chain is just one aspect of agricultural modernisation.

No need to accelerate the adoption of Agri tech innovation to improve productivity and product quality.

Let's see.

Total OEM could you got that.

Penal debate could itself.

So just a tweet on Shenandoah and we could see Tom is seeing input.

No.

Hi.

Is that clear so what you.

Look when we see it we normally take Australia tiers all Shaw.

So I know.

And with this we are just asking.

Yes, it will be somewhat linear doshier Joey so thank you Jonathan.

Joining us on <unk>.

Thanks Ph unit, clearly, we had a quality issue.

This year, we hosted the third smart agricultural competition and the second <unk> Academy growing competition to promote innovation and adoption.

We also supported talent specializing in agricultural areas and help farmers increase productivity and reduce losses. Meanwhile, we recognized the importance of fundamental research in may with the Navy 100, meaning RMB to establish a dedicated research at China Agriculture University to address Chris.

Vehicle needs agricultural research.

In my opinion as well.

<unk> seen a yardstick dollar.

Lineage.

Until we can get you want to label that windows.

Hello, Joe.

And then we are clearly finding that's holding anything.

<unk> do you function <unk>.

Yes.

In August we were pleased to welcome Yvonne to our board as an independent director Ivan is expert.

Ultra and a foot 50 with her on board, we will be more targeted in our Investor Me Agricultural research.

<unk> is to utilize cutting edge research to solve practical problems in China.

Good morning.

<unk> also they have thought about and thats something that we can be.

Okay.

Intuit could be yours truly.

Julien pumping.

A few suite choosing maybe acuity is pharmacy.

John.

And marketing due to the accounting that.

Today's topic.

Yes.

Thank you Susie thanks, either so it was a joke.

Going forward agriculture will remain a cornerstone of our high quality development strategy, we will continue to leverage our advantages in technology and platform resources to streamline their supply chain of agriculture products for them.

Boat every type of innovation and adoption and bring more quality products that are clearly from farm to table, thereby creating tangible benefits to our pharma merchants. Thank you all.

Albert.

King.

Thank you Matt.

Operator, we can move on to the next analyst on the line.

The next question comes from Ronald Keung of Goldman Sachs. Please go ahead.

Glenn it.

Would it be <unk> for clients in Jonah 19 annualized kind of only <unk> <unk>.

<unk> be the charm.

<unk>, maybe I should only shallow and other going forward.

Sure.

You're welcome Tom Tom on the P&I, Shanghai, Dan can go wrong.

Thanks <unk>.

Tom.

So whether you want Sean sorry that easier too.

<unk> hung yeh at San Antonio.

It sounds corny telephones. Thank you Scott Jean <unk> Bunnies onsite Sheila yes.

<unk> taken Joan.

Now Dr. Glenn Glenn you change all of the year.

<unk> sure Tom Tom Glenn too.

Now, let me add to Ito, which <unk>.

Yes.

Geez, Alex you know where to find out if youre chomping a couple.

A couple of feet him plenty Thompson.

Hi, <unk>.

They hold.

When I talk to you at the Super Bowl.

<unk> on its own John Bryant key change.

Hi, Yo Yo shop.

Yes, John well now <unk> got it thank.

Thank you management for taking my question. So my first question is that since the beginning of this year. Many of your competitors have been putting more emphasis.

On value for money merchandise and made it easier for manufacturers to setup a storefront on those platforms.

And some of the PSA have observed some stone user and merchant momentum. So how would you evaluate the competitive landscape and what are some of the key initiatives to defend your competitive position in this empowerment and my second question is that we've seen your global business.

Good strong momentum since launch.

So over a year ago. So can you share with us the latest development strategy for this business going forward and what's your vision for the business in the near to medium term. Thank you.

On Johan what does that then.

Yeah.

Hey, guys how women the heightened in these accounts.

Thank you for your question and let me share my thoughts on <unk>.

Competition.

Okay.

I don't know.

That's all thank you Danielle.

Exactly yes.

Within the chocolate it depends on the loyalty so that they're not being accurate, but we thought about at all either.

Yes.

And as Stephane.

Hi, this is <unk>.

Okay.

As Les just mentioned this year is a year of recovery, but it's also a year of heightened competition.

As the macro to project policies gradually rollout. We are we are not surprised that our industry peers have been increasing investments to boost consumption.

Well, there's sort of the high end.

So again, yes.

Thanks, Amit.

Thanks, Jonathan.

Hi creation.

I think Vince Leukopenia pay it's the high end of our two Shan Li.

I mean, it seems and lunches and mail.

Operator.

So thats what caught us with you soon.

I'll put on that Houston is in the Hudson Valley.

The high end isn't that well about each and every day.

Our industry needs to say directly.

Constantly evolving consumer needs.

Consumers nowadays have different platforms to truth phone so competition is inevitable.

There is no permanent solution to dealing with competition.

Instead, we are we're always thinking about how to improve our core competencies and worked with ecosystem partners to create greater value for our consumers.

And Thats antitumor.

<unk>.

I was wondering in Basel, yes.

Essentially Chilean tons in Q2, let me telling me that you can draw.

Sandy <unk>.

You can go with yet.

In the third quarter, we continue to be innovative and provide promoting more savings and better services.

And to offer more quality and affordable product to our consumers and Edison 10 time, but great shopping experience.

Well, let me see one died without harmful doses equation.

To listen you helpful. Disney countries do anything that <unk> seen it.

Okay does that impact so as Sheila mentioned Nate.

So <unk>, we shall we send you the switchover.

Well, we are continuing to deepen the more savings mindshare.

Which we which is our strong suit traditionally we hope we can also deepen consumers' trust in our platform by combining <unk>.

Riding better services.

Hopefully, but more users to explore new product categories on our platform. So we can better serve our users demand for consumption upgrade.

And then good news on the burnt tissue density.

We can put that gen one could do that.

Yeah.

Yes, yes, yes.

Download com in hunting really engine loss is a chance we can get a catheter.

It's going to depend hands on on the boat announced would be the Kendall.

Again telecom full employee salaries of the Golar to Shandong.

And on the supply side, we continue to be rooted in real economy and to promote digital inclusion agriculture and manufacturing sectors across the nation.

By helping the producers to other products directly to consumers both in China and now globally.

Enable more producers to enjoy the benefits of digital economy and.

At the same time broaden merchandise selection on our platform.

Well, let me repeat and assume that each of those within the TT.

We all kind of seen a little that wasn't right.

She also.

Sanjay.

Visa <unk> on each end.

Okay.

It will move within a garden apartment in salary.

Again that doesn't occur.

Thank you.

Our approach to competition has always been clear.

Which is we don't focus on what our competitors too, but what how are consumers.

We have been seeing a clear trend of consumption upgrades among our users.

And against this backdrop, we formulated that high quality department strategy to better adapt to this trend.

The idea is very simple.

<unk> does not mean.

So that $10 million.

Then assuming then.

That's a whole you can see then.

Yes.

Thank you I'll quickly.

Thank you.

Now, let me address to the holiday with all of that.

Do you like you guys kudos to all.

Equivalent of Eagle Ottawa.

Let's talk about all the different background Hogan.

Okay. Thank God, it's all Homo assuming it's annuity Bang Bang.

I think obviously eagle comparable GAAP I'm honored to equal <unk>.

This is also paid.

Paid equaled GAAP only.

These Olympics, so clinical trial.

There is both healthy and militia competition.

Sometimes competition can easily evolve into unhealthy market practices.

And those who do well we're always attractive attach.

For example, we noted that the Shoretel, we report on a company where they issued in early September.

Allegations in the report are totally platelets and the short seller had spot.

Spotty track record.

And on this page that report was published with the intent to create panic and to drive down stock prices and enabling the firm to the short seller to profit from short position.

Now, let's say a dominant theme without constantly.

Yeah, Bob I'll, Behold trade zones to neocon locals anyway.

So a few comments, what we're seeing away from Indonesia.

You may now come up.

So that hopefully.

We'll come back, albeit one that only G P J, a country and how it can be difficult.

As we investigated further we found out that they were actually more a follow up actions taken by the integrators behind the reports.

They are motive.

Unusual actions are quite apparent.

We are encouraged to see that most investors understood underlying motive and <unk> the comdata acquisition.

Jason I know I'm always issued a $2.

And when I shop window.

And that caused it up or down in San Diego.

<unk> <unk>.

While in Hong Kong at all.

Jim will power the advisory fee then.

And then the choice of the Gogo salary.

So I think tells me, though Cleveland <unk>.

You sound like you're somewhat behind you.

Just yet.

Looking forward we are.

We continue to focus on our consumers and our high quality development strategy.

The clear and focused mine.

We will relentlessly focused on execution.

In the end, we believe consumers will.

Both with volumes and.

This is our view on competition. Thank you.

Thank you Jane Thanks for all that.

Let me take your question on global business.

For our global business.

<unk> reached a supply chain expertise accumulated over the years.

To create a new form of China, and the shopping experience.

We directly connect the factories with customers and it's priced on a flexible supply chain.

Currently.

Consumers from over 40 countries with prices cultural backgrounds are able to purchase directly from high quality factories.

Jonathan.

This is still in a very early stage.

Many of our initiatives are in the beta testing phase.

Our team is absolutely learning about the defense market.

Human needs around about.

This will be iterative process.

Yes.

Will be challenging.

Same time interesting.

We'll look forward to working with our marketing partners on this journey.

The lives of consumers Roundabouts more enjoyable.

Sure.

And operator, I think we have time for one more analyst.

The next question comes from Ellie Jiang of Macquarie. Please go ahead.

Please go on to Q1.

And even when Houston Shanghai Channel.

Ladies Sudano Macondo open data will go to initially will be held this year and it sounds all of that institution.

Couple of things one is open John.

Alright.

So Josh as showed on that slide.

Let me talk potential conclusion, let's say two months. Thank you.

And I think Ashish Nicole.

Nicole Richie.

Thank you too.

The LNG supply isn't really Julien when Mr kind of going to the Italy really Tony <unk>, Joe Namath Tung Heng Douglas Susan Mcgee two clouds.

Tony and step out holes.

Andy kind of Delek with Tianjin <unk>.

Glen Johnson, Glenn and company go ahead Cathy.

Thank you gentlemen.

Let me translate myself two questions first is on the revenue.

The company achieved robust revenue growth of 94% year over year.

What did you think contributed to this growth and what do you think that you would have done right in the past quarter and how would you think about the growth sustainability into the fourth and next year.

And then the next is about the margin we've noticed that your margin decreased on a year over year and quarter over quarter basis. What are the some of the key investment areas that you are putting your resources into is this related to the competition. How is your global business impacting your profitability and how should we think about the trend for the margin.

In the next few quarters. Thank you.

Now what does that then.

What kind of played out as having been appointed John.

Hi, This is Scott.

Start by addressing the question about growth.

That timeline.

Don't see it Aloha.

The <unk> charter.

Got it.

<unk> Sciences.

Thank you Hugo.

As Larry mentioned earlier, our financial performance. This quarter is the combined result of the.

Improving consumer sentiment and the execution of our high quality Department strategy.

Once we did icon sandeep liquidity in fact chocolate and at times when you can.

Possibly achieve.

So they'll be looking at.

Now when liquidity exactly.

Truthfully it internally because obviously.

Obviously.

B.

It's always been attending so depending on your email.

<unk> does have a huge hole.

<unk> bin Kim with Hana.

In the quarter driven by consumption recovery the Chinese economy grew at a rate that went over market expectation.

Which demonstrates the resilience of the Chinese economy.

What we.

We are seeing on our platform also confirms the potential of the consumer market we.

Competent in the Chinese consumption market, there remains much to be done to better serve the consumer demands.

So he'll go through and you got to Wonder Sandy.

<unk> with that tool.

One that you feel on that being emptied out of convenience.

Ooh.

But the enzyme that Qi <unk>.

Sure.

Okay.

Pink Diamond therefore.

Key protocols.

Well, maybe you can parse it up with one.

So we will look at it you Dan women are all up with the board and then that would be nice.

Yes.

For the kitchen.

I was hoping China total event cannot waterflood.

A lot of things.

Yes.

This debate has been done.

Although the industry players do not have any major promotions client during Q3.

Steel practice everyday low price philosophy and worked hard to provide consumers with a wider selection of quality products at affordable prices.

This is to deepen our savings value proposition.

And while we serve the basic needs of our consumers our cooperation with branded merchants also generated good results during.

During the National Food Festival, we invested in coupons and also invested time and resources to help more national brands to quickly gained popularity.

In partnership with our platform some brands, we're able to achieve multiple growth.

Yes.

Let me add cobalt correlated either pinta Buffy Nancy <unk>.

Well then thank you Keith.

<unk> draw that that's also helpful.

Now, let me hand Guardian Candelaria opened nine days now.

Okay.

I'll tell you.

What I always found gas, even when they couldn't get access or the Kuwait.

Yes, you bet.

Sure.

And we put in place the appropriate policies and offered a platform of resources to incentivize our motion to work with us together.

Provide a more savings embedded services, we are very pleased to see growing interest in our platform and higher user activities, which in turn provide more sales opportunities for the merchants and.

Unfortunately in turn are naturally more willing to increase the investment.

Sure.

Does that count.

Sonus team.

And kind of how you're trying to get to that goal.

Hey, Bob So is there anything in the <unk>.

<unk> found that caused this impact.

We need a T cell <unk>.

I think that need.

One order one two a strong balance sheet utilities.

Yes.

We have been saying that revenue is a natural outcome of the value we create for our.

Ecosystem partners, we all.

Maintained our strategic direction and focus on the execution of the high quality Department strategy.

Instead of paying too much attention to short term revenue trends.

We will direct our attention to work on improving our core capabilities.

For serving our consumers and merchants. Thank you.

This is Jay Thanks Ali for your question I will answer your question about profitability.

First and foremost we are still ended about let's say profitability initial wrong, it's not <unk>.

Our team is laser focused on.

Executing our high quality Department strategy.

We hope we increased the value of the platform and among them.

In the past quarter.

Got it by the high quality development strategy will step up over invest in key areas such as promotion activities.

And so as upgrades.

The panel.

Our savings and added services share.

We're also further built on our supply chain because of their teeth and ecosystem improvement.

We are seeing encouraging results from our execution and we will be contingent fast friendly.

There are potential.

In terms of future trends.

We're operating the spot.

The market environment.

In Boston the opportunities change on a daily basis.

Because of this our business execution will not match the financial reporting shattered.

And then going until that.

Our profitability May continue to fluctuate on a quarterly basis.

Okay.

Okay.

And thank you all once again for joining US today, it's about time and if you have any further questions. Please reach out to our IR team. Thank you and see you next quarter.

Ladies and gentlemen that does conclude our conference for today. Thank you for participating and you may now disconnect.