Full Year 2023 Viomi Technology Co Ltd Earnings Call
Hello, ladies and gentlemen.
Operator: Thank you for standing by for Viomi Technology Co. Limited's earnings conference call for the second half and full year of 2023. At this time, all participants are in listen-only mode.
Speaker Change: Thank you for standing by for <unk> Technology Company Limited earnings Conference call for the second half and full year of 'twenty three.
Speaker Change: At this time, all participants are in listen only mode.
Operator: Today's conference call is being recorded. I will now turn the call over to your host, Ms. Claire Ji, the IR Director of the company. Please go ahead, Claire.
Speaker Change: Today's conference call is being recorded.
Ms Clergy: I will now turn the call over to your host Ms clergy.
Ms Clergy: Our director of the company. Please go ahead and close.
Clergy: Thank you Hello, everyone and welcome to Valley Technology Company Limited earnings Conference call for the second half and the full year of tiny tiny story. As a reminder, this conference is being recorded the company's financial and operating results were issued in a press release earlier today and are posted online.
Claire Ji: Thank you. Hello, everyone, and welcome to Viomi Technology Co. Limited's earnings conference call for the second half and the full year of 2023. As a reminder, this conference is being recorded. The company's financial and operating results were issued in a price release earlier today and are posted online. You can download the earnings price release and sign up for the company's email distribution list by visiting the Investor Relations section of the company's website at ir.viomi.com.
Clergy: It kind of download the earnings press release and sign up for the company's E.
Clergy: Mail distribution list by visiting the IR section of the company's website.
I, our adult the I O and Mike Dotcom.
Claire Ji: Participants in today's call are Mr. Xiaoping Chen, the founder, chairman of the board of directors, and chief executive officer, and Mr. Sam Yang, the head of the capital market and strategy department. The company's management will begin with prepared remarks.
Clergy: Ladies and pending todays call are Mr. Xiaoping, Chen the founder Chairman of the board of Directors, and Chief Executive Officer and Mr.
Speaker Change: So yeah, the head of our capital market strategy departments, the Companys management, well begin with prepared remarks, and well continue with the Q&A session.
Claire Ji: We will continue with the Q&A session. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995.
Speaker Change: Before we continue.
Speaker Change: Please note that today's discussion will contain forward looking statements made under the safe Harbor provision of the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involve inherent risks and uncertainties as such the combination actual results may be materially different from the views expressed today.
Claire Ji: Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's annual report on Form 20-F and other filings made with the U.S. Securities and Exchange Commission. And the company does not assume any obligation to update any forward-looking statements except as required by law.
Speaker Change: Further information regarding this and other risks and uncertainties is included in the Companys annual report on form 20-F, and other filings filed with the U S Securities.
Speaker Change: <unk> Commission.
Speaker Change: The company does not assume any obligation to update any forward looking statements, except as required by law.
Speaker Change: Please also know that well my earnings calls of our press release and this conference call include discussions of Oddities GAAP financial information as well as unaudited non-GAAP financial measures.
Claire Ji: Please also note that Wellmate's earnings conference press release and this conference call includes discussions of unaudited gap financial information as well as unaudited non-gap financial measures. In addition, Wellmate's press release contains a reconciliation of the unaudited non-gap measures to the unaudited most directly comparable gap measures. I will now turn the call over to our founder and CEO, Mr. Xiaoping Chen. Mr. Chen will deliver his remarks in Chinese, followed immediately by an English translation. Mr. Chen, please go ahead. Hello, everyone.
Speaker Change: Nation, well nice press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measure.
Speaker Change: I will now turn the call over to our founder and CEO. Mr. Xiaoping Chen Mr. Chen will deliver his remarks in Chinese followed immediately by English translation. Mr. Chen. Please go ahead.
So it's not at all.
Xiaoping Chen: Thank you, Doug I'll, let Sanjay woman Sonya and Siobhan Yankees fan you need you can't walk away.
Xiaoping Chen: I am Xiaoping Chen. Thank you for coming to our second half of the year and the full-year sales and marketing call. In 2023, we will continue to focus on our strategy to further optimize our company's product structure. The results of our sales and sales calls have significantly improved. The annual revenue of our pure water and logistics products has increased from 32.2% in 2022 to 36.8%. At the same time, we are pleased with the continuous improvement of our revenue, and the efficiency of our sales and sales calls has also improved significantly. In the second half of the year, the net profit rate increased by 2.2% at the same time as last year, and the net cost fell by 33.4% compared with the same time last year. The net loss rate was reduced by 2.7%.
Xiaoping Chen: As Daniela Mielke against you teach out are generally closer to how many do you go to a dog eat whether you are seeing that Jaguar and Nissan that got shot Dania and Chi foods Geologize attempting mutual we've done some deals early on you and that's actually already artesian dollars. How should we think about Oh geez do each issue that somebody says Oh, you need to show to you is with Apple due to catch up.
Xiaoping Chen: Siobhan Union to Diebold, each all Chilean Pucci, Samsung, India, GDP jumping to once you start your own misunderstanding.
Xiaoping Chen: The top because it shows that you have not a cheap generic.
Xiaoping Chen: The union constant teaching them about telecom Tycho to comment to that is you cannot be charged on taco what they tell me. If that's all homes Jamba does she cannot bunion that John Nicols was saying, yeah jump I'll come to the U T shirt show mutually Woody the sandy achievable jump on way to teach them cheaper yen Thai shouldnt meat seafood Apple G T J codes.
Xiaoping Chen: It's usually cool Iot at home she hadn't bought on that note I hope I'm glad he's on Georgetown L. T at home leaching Shaw from food Challenge along as you define move up which was eating ADHD. So there's hope that you're probably going to see some relief in Shanghai.
Xiaoping Chen: In the past year, our company has made some progress in many aspects by actively embracing challenges. First, we have strengthened strategic cooperation with major customers and signed a three-year strategic cooperation agreement with Xiaomi. Second, the entire company's business has been upgraded from pure water to an independent strategic business department. In order to improve the sale of pure water, the entire industry chain of pure water has been actively deployed to build the two major business blocks of pure water and IoT at home. Third, we have strengthened the construction of the IoT at home. We have a rich and comprehensive smart solution to embrace uncertainty and face the challenges of the future. Fourth, we have significantly improved the influence of cloud-based brands. After signing the agreement in 1995, Tian Xiwei, a new generation actor, became the global brand spokesperson.
Xiaoping Chen: Oh, so that one day you in tissue easily change would be the standard do catch you don't go to once you launch E train speed all the usual geez you called out how actually Tom do you Tanya and she can talk all day give me could you ask Arlene Oh, sorry, do you see your attempts you told us that you're catching me. She said that it's always easier to use.
Xiaoping Chen: Well many of them, you'll how nearly agenda.
Xiaoping Chen: NTT kind of what how are you thinking of Coty Jesely Cobaltite yourself a week, maybe you shouldn't you don't eat Hellboy, because nobody's young hopefully well, but it's easy to see if you didn't what do you generally like what do you want them back sure E. M. Bostrom tackling each others, who did not go see in the U P, creating gender she got yourself.
Xiaoping Chen: Well I need all of it can be and finally, keeping Gordon said a child to see.
Xiaoping Chen: I mean, you don't see is with happiness, you don't you don't eat sorry, it's easier to tie it into them well then she thought that thought which essentially agenda cheesecake totally.
Xiaoping Chen: Gutierrez, Jay so the tongue in cheek local county, it'd be like deep Bob kidney housed within the.
Xiaoping Chen: He told me that if you maybe could you add a metallic tuesday's haven't been sometime since he can't be cool sounds cool, but would you then climb teach you don't all Toledo, Toledo and she you'll show the junk deal I forgot what he calls from that Shelley.
Xiaoping Chen: Fifth, we have expanded the sales of the entire network and channels and expanded the overseas market. Sixth, after three years of hard work, we officially invested in cloud technology and started the new era of cloud technology in November 2023. As a leader in the pure water industry, we have an industry-leading production system, and we have advanced filtration technology and material production technology. We have submitted more than 1,300 patents. At the same time, our pure water business department has established an independent, complete design, R&D, production, and marketing organization to attract a group of industry-leading market marketers. Thank you. Thank you.
Xiaoping Chen: You'll see agenda, we don't watch them why that's usually isn't that yet. Thank you Glenda and put you in a snap on GH and you'll see them.
Xiaoping Chen: What do each and sometimes told you that you don't have to call a crazy, but we don't know Washington, Gucci coach engine, because all that income is done well Mcdonald's gene, but that he or she to associate the tissue shouldn't why she's not here that's a little charge on close you may begin to see in two times. So it's again I mean, what are you telling you like what you can call. It began to change the company do you go about them.
Xiaoping Chen: Hey, How's your home still comes out well, then Tien tsin and before that he comes out of language I think genco Genco social.
Xiaoping Chen: It's not even sure that comes you seem to be probably some popular gloomy agenda.
Xiaoping Chen: Saturday Hanmi ball Ada I teach without simply canceling our bikes she can't be chatting.
Xiaoping Chen: With Genzyme with the gel would you push it out she can go before you guys who've been ball golf balls, and the Guangdong and they'll go up until you could get harder going into China and that didn't come so who shot him the unchecked wuxi, especially about the neo Sikang gosh I think the people that you Joe well the people shouldn't you, though you touched on once you launch it you bought tasteful Atocha your dialogue with you and I'm going to talk to you when he stopped with the chicken.
Xiaoping Chen: Xiaoping Chen, Unknown Executive, Marcus Liang, Jinling Zhang, Viomi Technology Co. We hope that the global market will have a huge potential and opportunity in 2024. We will continue to improve business in four aspects. First, we will continue to provide a solution for healthy water, so that users can enjoy a variety of water quality and texture.
Xiaoping Chen: And then jumps on P weight.
Xiaoping Chen: Cause you all consider them back I mean to your home.
Xiaoping Chen: Well I mean at coupons trial once you transfer that you do see some teammates without the whole she streamed at who don't have left you don't talk Google Qualcomm Shanghai Rush Dunckel, you end up coming to light weight with me. How are you that I seem to have been done between Shanghai, where you without comprehensively select women, Poland toggled without somebody told which without somebody tell me, if there's a bunch of little sheep and debate.
Xiaoping Chen: We will further strengthen the relationship with our strategic partners and further build a global water and water super factory to improve the industry chain. We will further expand the channel and expand the overseas market, and further strengthen the whole-levelization process of the profit-making brand. Finally, we will continue to improve the system efficiency, the balance of science, the scale of growth, the optimization of organization, and the growth of efficiency and financial improvement and help the company further restore its profit-making ability, achieve sustainable development, and bring great value to users and shareholders. Thank you.
Xiaoping Chen: So yeah, you should see but the tier ones that highlight social club orderly looking weird I highly yoda cartridges is enough.
Xiaoping Chen: Got it won't hurt us.
Xiaoping Chen: Angelus Saddam you'll you'll choose out of Chile, Chile Women's young this is almost think of them in cash 19 shows Yan Jin chips, you're going to see in country that you're about JD advanced selling them push Angelo Gordon tragical cold on their phone bill.
Xiaoping Chen: So I'm, telling you we're trying to put a hold on a crunchy without solid central it usually tells you can call them I can tell you that.
Xiaoping Chen: Jeep with a whole bunch of adult bean.
Xiaoping Chen: And how else you got deep without telling you you need to change a lot as you can tell Joe and then tissue tissue that you go you just dissolve closer to the people who most of them you'll watch old vehicle. So there's another call. It you can catch up to what he calls a jeep with the quick will you need to meet the Genesee unconquered cause you to buy that way you'll work, we don't tell the country the country policy.
Claire Ji: Thank you, Mr. Chen. I will quickly translate our founder's remarks before discussing our financial performance for the second half and full year of 2023. Hello, everyone.
Xiaoping Chen: Okay.
Speaker Change: Thank you Mr. Chang I will quickly translate our found us very much before discussing our financial performance for the second half on a full year of 2023.
Hello, everyone and thank you for joining us today on our earnings conference call for the second half and the full year of 2023.
Claire Ji: Thank you for joining us today on our earnings conference call for the second half and the full year of 2023. In 2023, we will continue to advance our focus strategy, optimizing our product mix, and improving our operating performance through strong strategic execution. Driven by the restructuring of our product mix, the revenue contribution of home water solutions and consumable products increased to 36.8% in 2023 from 32.2% in 2022. Additionally, through cost optimization and operating efficiency improvement, our gross margin increased by 2.2 percentage points, while operating expenses decreased by 33.4%.
Speaker Change: Tiny commentary, we continue to advance our focused strategy optimizing our product mix and improving our operating performance. He was strong strategic execution driven by the restructuring of our product mix. The revenue contribution from water solutions and our consumable products increase there to start.
Speaker Change: Six 8% in 2000 times grew from 32.2% in 2022.
Speaker Change: Through cost optimization and operating efficiency improvement our gross margin increased by two two percentage points well operating expenses.
Speaker Change: By 33, 4% in the second half of 2023 compared to the prior year period, leading to a significantly reduced net loss margin of 2.7%.
Claire Ji: In the second half of 2023, compared to the prior year period, leading to a significantly reduced net loss margin of 2.7%. Over the past years, we have demonstrated resilience in overcoming challenges and achieving significant progress in various areas. First, we deepened strategic collaboration with major clients, including the renewal of a three-year strategic cooperation agreement with Xiaomi. Second, we reorganized our business structure and elevated our water purification department to an independent strategic business unit, comprehensively enhancing our R&D, production, and sales capabilities across the entire water purification industrial chain. Through this strategic move, we now boost two major business segments, AI Water and AIoT at Home, enabling synergistically, Third, we strengthened our capabilities across AIoT Homes and enriched our whole house with packaging solutions to address uncertainties and challenges from industry giants. Fourth, we boosted Viomi's brand influence with the appointment of Ms. Shi Weitian, a well-known actress in China, as our global brand spokesperson.
Speaker Change: Over the past year, we have demonstrated.
Speaker Change: Resilience and overcoming challenges and achieved significant.
Speaker Change: Progress in various areas.
Speaker Change: Well it depends.
Speaker Change: T J collaboration with major clients, including the renewable almost three year strategic cooperation agreement with Xiaomi.
Speaker Change: We were organized our business structure and elevated our water purification department to independent stretch strategic business unit.
Speaker Change: Rehearsal, leading housing our R&D production and south capabilities across the entire water purification industrial channel.
Speaker Change: This strategic move we now post two major business segments, and I want her I'm, a iot at home, enabling for Sina drastically.
Speaker Change: Development.
Speaker Change: Third we strengthened our capability as a problem AI Iot home and enrich our whole housing housing solution to address uncertainties and challenges from industry Giants.
Speaker Change: Fourth what boosted the wellness brand influence when is the appointment of MS. Xiaowei Chen of well known actress in China, Although our global brand spokesperson.
Speaker Change: On the distribution side, we extended both our online self now work on offline channel footprint well actively pursuing.
Claire Ji: On the distribution side, we expanded both our online sales network and offline channel footprint. We are actively pursuing overseas markets. Finally, Viomi's IoT Technology Park, meticulously constructed over three years, was officially inaugurated in November 2023, ushering in a new era for Viomi.
Speaker Change: Overseas market.
Speaker Change: Unlike wellness I want you to have knowledge of Parker particular.
Speaker Change: Contracted over three years.
Speaker Change: Officially.
Speaker Change: We rented in November 2023, ushering in a new era of well me.
Speaker Change: As a leading company in the water purification sector represents the industries, most extensive manufacturing and R&D facilities and have cumulatively applied for over 1300 patents in this field by leveraging our expertise in advanced filtration technology, and then material production.
Claire Ji: As a leading company in the water purification sector, we possess the industry's most extensive manufacturing and R&D facilities and have cumulatively applied for over 1,300 patents in this field by leveraging our expertise in advanced filtration technology and material production methods. Meanwhile, we have independently established a comprehensive organizational framework and assembled an outstanding team of top talents across management, marketing, product development, and quality control, encompassing product design, R&D, manufacturing, and marketing, further improving the market competitiveness of our water purification products. We have also established solid industrial advantages and competitive barriers by building a water purification industrial chain anchored by our world-leading water purification super factory. First, we have centralized water purification product component production. They are reaching our cutting-edge AIoT technology park and have seamlessly integrated both upstream and downstream functions. We performed machine assembly, testing, warehousing, and logistics in a single building in the park, effectively reducing logistics costs and improving production efficiency.
Speaker Change: Matt or me.
Speaker Change: Meanwhile, we have independently established a comprehensive organizational frameworks and assembled an outstanding team of top talent across management marketing product development and quality control income passing product design, R&D manufacturing and marketing further improving the market competitiveness.
Speaker Change: Our water purification products.
Speaker Change: We have also established solid industrial advantages and the competitive barriers by building our water purification industrial channel anchored by our world, leading water purification Super battery.
Speaker Change: First we have centralized water purification product component production.
Speaker Change: Leveraging our.
Speaker Change: Cutting edge AI, Iot technology Park, and seamlessly integrating both upstream and downstream functions, we perform machine assembling testing warehousing and the logistics in a single building in the park effectively reducing logistic costs and improving production efficiency.
Claire Ji: Second, we have constructed the industry's leading automated and intelligent production lines for water purification products, featuring a fully automated dock factory for manufacturing certain key components. Comprehensive, intelligent collection and analysis of production data further empowers us to constantly improve the production process. Going forward, we will continue to, Capitalize on our infrastructure supported by our IoT technology park, deepen our investment in the water purification industry chain, and strengthen our, In-house capabilities across research, production, and inception of core components to provide users with high-quality water purification products. Regarding our AIoT home business, we have adhered to the concept of AI helpful and concentrated on monitoring and safeguarding family health. During our recent Spring Product Launch Event on March 12, we unveiled Alpha-X, a cardiorespiratory detection radar equipped with millimeter wave radar technology.
Speaker Change: Second we have contracted the in south Korea's leading automated and intelligent production lines for water purification products, featuring a fully automated dock factory for manufacturing certain key components.
Speaker Change: Comprehensive intelligent collection and allies of production data further empowers us to constantly improve the production process.
Speaker Change: Going forward, we will continue that.
Capitalized on our infrastructure supported by our Iot Technology Park deepen our investment in the water purification industrial Champ and strengthen our.
Speaker Change: In how people that it is a cross research production and.
Speaker Change: Inception of core components to provide users with high quality of water purification products.
Speaker Change: Regarding two hour.
Speaker Change: Our home business, we have adhered to the concept of a helpful and concentrated our monitoring and safe guarding family House during our recent spring product launch event on March <unk>, we unveiled.
Speaker Change: Alpha acts of cardio respiratory detection radar equipped the waves of millimeter wave radar technology. This technology enables continuous comprehensive contaminates monitors all my family member's House.
Alpha provides users with intelligent function such as one click a report generation and active alert empowering them to improve health tracking and safety. Meanwhile, the demand for improved leaving increases through all the housing market. We have further upgraded our Iot.
Claire Ji: This technology enables continuous, comprehensive, contactless monitoring of family members' health. AlphaX provides users with intelligent functions such as one-click report generation and active alerts, empowering them to improve health tracking and safety. Meanwhile, as demand for improved living increases throughout the housing market, we have further upgraded our one-stop IoT home solution with the launch of our Minimum Solar, Space Series, which provides consumers with a stylish, customized, and more intelligent product experience. Meanwhile, we have expanded our distribution network and global channels, growing domestic channels while propelling breakthroughs in overseas markets. We have gradually extended the range of product offers to overseas markets, which has spurred new growth in our overseas business and strengthened its resilience to have a win-win. Furthermore, Wyoming has established strategic partnerships with leading local channels in various countries, utilizing their local resources to further enhance our overseas sales and service capabilities and promote sustainable growth of our overseas business in the future.
Speaker Change: One stop Iot home solution.
Speaker Change: With the launch of our many email.
Speaker Change: Sure.
Speaker Change: Space series, which provides consumers with a salary cut.
Speaker Change: Compromise and a more intelligent product experience.
Speaker Change: Well, we have expanded our distribution network and global channels.
Speaker Change: Growing the domestic channels well propelling breakthroughs in oversea market, we have gradually expanded the range of products offered to our oversea market, which had spurned.
Speaker Change: New growth in our overseas business and strength and resilience to Halloween Rick.
Speaker Change: Furthermore, well Manhattan, Cerberus strategic partnerships with leading local channels in various countries.
Speaker Change: Rising their local resources, so further enhancing our overseas sales and service capabilities and promote sustainable growth of our overseas business in the future.
Speaker Change: Looking forward, we see immense potential and opportunities in the global market and therefore, we will continue to refine our operations across four areas first we remain committed to providing our users with healthy water solutions, allowing them to enjoy an area of water quality and flavor.
Speaker Change: Sure.
Speaker Change: Second we will reinforce collaborations with our strategic business partners continue to build out our world, leading water purification supermarket Super factory.
Claire Ji: Looking forward, we see immense potential and opportunities in the global market, and therefore, we will continue to refine our operations across four areas. First, we remain committed to providing our users with healthy water solutions, allowing them to enjoy an array of water quality and flavor options. Second, we will reinforce collaborations with our strategic business partners, continue to build out our world-leading water purification supermarkets, super factories, and strengthen the industrial chain. Third, to further accelerate the globalization of the Viomi brand, we will continuously develop the South Channel and expand overseas markets.
Speaker Change: And for instance, the industrial channel start to further accelerate the globalization ophthalmic Brenda we will continuously develop.
Speaker Change: <unk> channel and expand overseas market.
Speaker Change: Emily we will continue to improve quality and efficiency. So I cannot precise violence between scout expansion organizational optimization and operational efficiency enhancements harnessing that transit well further restore profitability drain on healthy and sustainable development.
Claire Ji: Finally, we will continue to improve quality and efficiency, striking a precise balance between scale expansion, organizational optimization, and operational efficiency enhancements. Harnessing these strengths, we will further restore profitability, drive healthy and sustainable development, and create long-term values for users and shareholders. Thank you. That concludes our funder's remarks, and I will now turn the call over to our head of capital markets and strategy, Mr. Sam Yang, to discuss our financial performance. Thank you. Ms. Chen and Claire.
Speaker Change: And the great long term value for users and shareholders. Thank you.
Speaker Change: That concludes our founder's remarks, and I will now turn the call over to our head of capital markets and strategy, Mr. Sam Yeah to discuss our financial performance.
Thank you.
Sam Yeah: Chen and clear.
Sam Yeah: Thank you to everyone for making time to join us.
Sam Yeah: For the earnings conference call today.
Sam Yeah: Over our unaudited financial results for the second half and the full year 2023.
Sam Yeah: Net revenues were $1 billion.
Sam Yeah: 100.
Sam Yeah: 89, meaning renminbi.
Sam Yeah: We added two one failing 596.4, meaning renminbi for the second half of 'twenty two.
Sam Yang: Thank you everyone for making time to join us. For the earnings conference call today, I will go over our unaudited financial results for the second half and the full year of 2023. Their revenues were one billion, 189 million renminbi compared to one billion, 596.4 million renminbi for the second half of 2022. The decrease was mainly due to a decrease in revenues from the IoT at Home portfolio as well as from small appliances and others. Revenues from the IoT at Home portfolio decreased by 28% to 529.1 million renminbi from 735.2 million renminbi for the second half of 2022. The decrease was primarily due to the streamlining of product offerings, which was achieved by reducing the selling SKUs of smart white goods, such as smart refrigerators, smart air conditioners, and smart washing machines.
Sam Yeah: The decrease was mainly due to a decrease in revenues from Iot at home portfolio as well.
Sam Yeah: Small appliances and others.
Sam Yeah: Revenues from Iot at home portfolio decreased by 28% to five <unk>.
Sam Yeah: 20, 911 mailing renminbi.
Sam Yeah: $735 2 million RMB for the second half of the 10 to 22.
Sam Yeah: The decrease was primarily due to the streamlining our product offerings.
Sam Yeah: It was achieved by reducing sitting as skus of small white goods.
Such as our smart referenced graders small air conditioners, Dennis my washing machines.
Sam Yeah: Revenues from home water solutions decreased by 25% to 370 point for many renminbi.
Sam Yeah: Mm 390 99.
Sam Yeah: 99.1.
Sam Yeah: In renminbi for second half of the 20th any to the <unk>.
Sam Yeah: Decrease was due to the lower volume of water purifiers, so to Xiaomi cooperation.
Revenues from consumables decreased by four 2% to 178 5 million renminbi from $186 4 million renminbi for the second half of the 20th me too.
Sam Yang: Revenues from home water solutions decreased by 20.5% to 370.4 million renminbi from 399.1 million renminbi in the second half of 2022. The decrease was due to the lower volume of water purified so that Xiaomi Corporation. Revenues from consumables decreased by 4.2% to 178.5 million renminbi from 186.4 million renminbi for the second half of 2022. The decrease was primarily due to the lower volume of water purified filters.
Sam Yeah: The decrease was primarily due to the lower volume of water purified filters.
Sam Yeah: So to Xiaomi Corporation.
Sam Yeah: Partially offset by the increase of self draw me, Brian water purifier theaters.
Sam Yeah: Revenues from Smart appliances, I know others have decreased by 41, 5%.
Sam Yeah: 164 million renminbi from 275.6 million renminbi photos taken half of the 20th of new too.
Sam Yang: So to Xiaomi Corporation. Partially offset by the increase in cells, vomit, brine, and water purified filters. Revenues from small appliances on orders decreased by 40.5% to 164 million renminbi from 275.6 million renminbi for the second half of 2022, primarily due to the ongoing product portfolio adjustment within this category. Cost profit was 282.7 million renminbi compared to 345.6 million renminbi for the second half of 2022. The cost margin was 23.8% compared to 21.6% for the second half of 2022.
Sam Yeah: Primarily due to the ongoing product portfolio a discipline within this category.
Sam Yeah: Gross profit.
Sam Yeah: It was 282.7 million renminbi compared to 345 upon a fix meaning renminbi for the second half off of 200 and Youtube.
Sam Yeah: Gross margin was 23, 8%.
Sam Yeah: Compared to a 21, 6% for the second half of 'twenty to 'twenty two.
Sam Yeah: The increase was primarily driven by the company's effort to shifted the product mix.
Sam Yeah: The higher gross margin products.
Sam Yeah: Such as the water purified and filters and then partially offset by a decrease in the selling price upsetting clearance part of.
Sam Yeah: As a result of the part of portfolio adjustment.
Sam Yeah: Due to operating expenses decreased by 33 Forks that's N two.
344.3 million Renminbi from 517.1 billion renminbi for the second half of 292.
Sam Yang: The increase was primarily driven by the company's effort to shift the product portfolio toward higher gross margin products such as water purifiers and filters, and partially offset by a decrease in the selling price of certain clearance products. As a result of the product portfolio adjustment, operating expenses decreased by 33.4% to R344.3 million RMB from R517.1 million RMB for the second half of 2022. Primarily attributable to the streamlining of the organizational structure and overall improved operational efficiency. Details included.
Primarily attributable to dow's streamlined the organizational structure and overall improved operational efficiency.
Sam Yeah: In greater detail.
Sam Yeah: R&D expense decreased by 19, 7% to 113 point for our mailing renminbi from 141 2 million renminbi pledge taken a half off of 'twenty to 'twenty two.
Sam Yeah: Mainly due to a decrease in R&D expertise and are related to salaries and expenses.
Sam Yeah: Selling and marketing expenses decreased by 36.
Sam Yeah: 1% to one <unk>.
Sam Yang: R&D expense decreased by 19.7% to 113.4 million renminbi from 141.2 million renminbi for the second half of 2022, mainly due to a decrease in R&D experts and related salaries and expenses. Selling and marketing expenses are decreased by 36%. For the first two years, I've been working with 188.2 million renminbi from 294.1 million renminbi for the second half of 2022. Many due to decreased online platform services, logistics expenses, and sales-related personnel costs. GNAA expenses decreased by 47.8%, to 42.7 million renminbi from 81.8 million renminbi for the second half of 2022. Primarily due to the fact that a significant amount of additional expected credit loss allowance was made against a third party, So customer actually in the second half of 2022. The net loss attributable to ordinary shareholders of the company was 28.7 million renminbi, and the non-GAAP net attributable to ordinary shareholders of the company was 30.9 million renminbi.
Sam Yeah: I'm Gonna 80, 88, eight plus 2 million renminbi from 294 upon one maybe remedy for the second half of 292.
Sam Yeah: Mainly due to a decrease.
Sam Yeah: Online platform, serving as a logistic expenses and the sales related personnel costs.
Sam Yeah: G&A expenses decreased by 47, 8%.
Sam Yeah: Two four to one 7 million renminbi from 81.8 men and women being for the second half opportunity on Youtube.
Sam Yeah: Primarily due to the fact that a significant amount of additional expected credit loss allowance was made against a third party.
Sam Yeah: So customer actually in the second half of 2022.
Sam Yeah: Net loss attributable to ordinary shareholders of the company. It was 28 7 billion Renminbi and then our non-GAAP net loss attributable to ordinary shareholders of the company or 31 9 million renminbi. Despite the decrease in revenue scales.
Sam Yeah: Our net loss attributable to ordinary shareholders of the company narrowed by 84 apartment.
Sam Yeah: Person.
Demonstrating improvement in your niche operational efficiency.
Sam Yeah: Additionally, our balance sheet remains healthy.
Sam Yeah: As of December 31st 223, the company had a cash and cash equivalent alpha.
Sam Yeah: 491, 7 million renminbi restricted cash off of 144.6 million Renminbi short term deposit of <unk>.
Sam Yang: Despite the decrease in revenue scales, our net loss attributable to ordinary shareholders of the company narrowed by 84.5%, percent, demonstrating improvement in our operational efficiency. Additionally, our embalming sheet remains healthy. As of December 31st, 2023, the company had cash and a cash equivalent of $1,000. The $491.7 million renminbi restricts the cash of $144.6 million renminbi, the short-term deposit of 365.8 million renminbi, and a short-term investment of 38.4 million renminbi. Next It's brief, these guys.
365.8.
Sam Yeah: 8 million Renminbi, and short term investment of 34 million renminbi.
Sam Yeah: Next.
Sam Yeah: And as these guys.
Sam Yeah: Key financial results for the full year, it's kind of 23.
Sam Yeah: Net revenues were two billing from hundred money.
Sam Yeah: Three for mailing renminbi.
Sam Yeah: Compared to a three billing 232 upon the 7 million renminbi for turning in.
Sam Yeah: Q2.
Revenues from Iot at home portfolio decreased by 24.6 to one billing 220 <unk>.
Sam Yeah: One to 9 million renminbi pharma, one billing $619 9 million Renminbi was 292.
Sam Yeah: Revenues from home water solutions decreased by 11, 3%.
Sam Yeah: Two 604 million rune be if all of them.
Sam Yang: Key financial result for the full year of 2023. Their revenues were $2 billion, from $193 million. 3.4 million renminbi compared to 3,232.7 million renminbi for 2022. However, revenues from the IoT at Home portfolio decreased by 24.6 to $1,220,000. 0.9 million renminbi from 1,619.9 million renminbi for 2022. However, revenues from home water solutions decreased by 11.3%, to 604 million renminbi from 681.1 million renminbi for 2022. Revenues from consumables decreased by 12.3% to 314.4 million renminbi from 358.4 million renminbi in 2022. Meanwhile, revenues from small appliances and orders decreased by 38.2% to 340.
Sam Yeah: 681.1, mainly renminbi for 202.
Sam Yeah: Revenues from consumables decreased by 12, 3% to 314 point to for our mailing Renminbi pharma 358 for me in the room before time doing it too.
Sam Yeah: Revenues from small appliances, and others decreased by 38, 2%.
Sam Yeah: Two or 340.
Sam Yeah: Four.
Sam Yeah: 54, 1 million renminbi from.
Sam Yeah: 500 in the third.
Sam Yeah: 73.3, meaning renminbi for 202.
Sam Yeah: Gross profit was 569 5 million renminbi compared to 737 1 million renminbi for 292.
Sam Yeah: Margin was 2020.
Sam Yeah: <unk> 28 per cent equals.
Sam Yeah: The same as our tendering too.
Sam Yeah: So the operation.
Expenses decreased by 31, 9% to $706 2 million renminbi from a one billing and a 36 five.
Sam Yeah: Meaning.
Sam Yeah: Yeah.
Sam Yeah: Yeah.
Sam Yeah: Brendan B for 282.
Sam Yeah: In greater detail.
Sam Yeah: R&D expenses decreased by 25, 7% to 220 to one 9 million renminbi from 300 million renminbi floor at 292, selling and marketing expenses decreased by 34 upon seven to 401.
Sam Yang: Four. 54.1 million renminbi from 573.3 million renminbi for 2022. Gross profit was 569.5 million renminbi compared to 737.1 million renminbi for 2022. Gross margin was 2028. 20.8% equals, The same as the Tencent tube. Total operation expense was decreased by 31.9% to 706.2 million RMB from 1 billion and 36.5 million.
Sam Yeah: Milling renminbi from 614.9, many renminbi for 292.
Sam Yeah: <unk> expenses decreased by <unk>.
33% too.
Sam Yeah: 281.
Sam Yeah: 5 million Renminbi, $121 7 billion Renminbi 492.
Sam Yeah: Net loss attributable to ordinary shareholders of the company was $84 7 million renminbi and non-GAAP net loss attributable to ordinary shareholders of the company was $84 6 million.
Sam Yang: Rem B, Fall 2022. In greater detail. R&D expense decreased by 25.7% to 222.9 million renminbi from 300 million renminbi for 2022. Selling and marketing expenses decreased by 34.7 to 401.8 million RMB from 614.9 million RMB for 2022. G&A expense decreased by 33%, to 81.5 million renminbi from 121.7 million renminbi for 2022. The net loss attributable to ordinary shareholders of the company was 84.7 million RMB. And the non-GAAP net loss attributable to ordinary shareholders of the company was 84.6.
Sam Yeah: Million renminbi.
Speaker Change: Yeah. This concludes our prepared remarks, and we will now open the call for Q&A, Mr. Chen our fonder and Mr. Sam Yeah, our head of capital markets and strategy will join this session for questions. Operator. Please go ahead.
Speaker Change: Thank you we will now begin the question and answer session.
Speaker Change: I'll ask a question you May press Star then one on your telephone keypad.
Speaker Change: The reason I speaker phone, we ask you please pick up your handset.
Speaker Change: He's to withdraw your question. Please press Star then two.
Speaker Change: And for everyone on today's conference call. If you wish to ask a question to management in Chinese. Please immediately repeat your question in English, we will pause for just a moment with some of our roster.
Speaker Change: And today's first question comes from Hunter Diamond Diamond Equity Research. Please go ahead.
Claire Ji: Million Remembrance. This concludes our prepared remarks, and we will now open the call for Q&A. Mr. Chen, our founder, and Mr. Sam Yang, our head of capital markets and strategy, will join this session and answer questions. Operators, please go ahead.
Hunter Diamond: Hi, everyone. Firstly congratulations on the results. My question is with the recent strategic moves are relocating the smart water purification system facility to the buy on the Internet of things Technology Park can you provide insights into the new product development pipeline more specifically what innovative.
Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys.
Hunter Diamond: Launches can stakeholders anticipate in the water purification segment over the next two quarters and how do these in line with my own these broader innovation and growth strategy.
Claire Ji: To withdraw your question, please press star then 2. And for everyone on today's conference call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. We will pause for just a moment while we assemble our rosters, and today's first question comes from Hunter Diamond at Diamond Equity Research. Please go ahead. Hi everyone. Firstly, congratulations on the results. My question is, with the recent strategic move of relocating the smart water purification system facility to the Viomi Internet of Things Technology Park, can you provide insights into the new product development pipeline? More specifically, what innovative product launches can stakeholders anticipate in the water purification segment over the next two quarters, and how do these align with Viomi's broader innovation and growth strategy?
Speaker Change: Okay. Thank you hunger our briefly translate the question to a Chinese.
Speaker Change: G trading down to say Oh.
Speaker Change: I don't think that Ghansham trunk line of Iot.
Speaker Change: Could you I understand it's hard to.
Speaker Change: Consonantal chicken wing tips are going to have some carve out it isn't yet I want you to and I'm sure you know.
Speaker Change: That is really you could take on that system.
Speaker Change: Claims about this question Mr. Sam well I'll answer the question.
Speaker Change: Represent after management.
Speaker Change: Recently.
Speaker Change: We proudly released at all our new products.
Speaker Change: Minor rural water purified quinolone.
Speaker Change: We launched technology technical method and are strictly select high quality minority which sources.
Speaker Change: The successful realize.
Speaker Change: The slow.
Speaker Change: Hey, Pete patients also Monterey yourself purification for you what are you seeing a long lasting and a steady state.
Speaker Change: Which makes the filter water content fixed Ken of beneficiary.
Claire Ji: Okay, thank you, Hunter. I will briefly translate the questions into Chinese. Based on the recent integration of smart water plants into IoT, about this question, Mr. Sam will answer the question in the presence of the management. Recently, we proudly released our new product, Viomi AI Mineral Water Purify Kunlun. With advanced technical methods and strictly selected high-quality maneuver resources, we successfully realized the slow precipitation of minerals from purification filters in a long-lasting and steady state, which makes the filter water contains six kinds of beneficiary mineral elements.
ROE element.
Speaker Change: And also the same as the natural.
Speaker Change: Mineral water <unk>.
Especially.
Speaker Change: The strong Chilean content in our filter is water can reach the level of a twice of the national standard four national mineral water.
Speaker Change: The consumption of upgrading the pulp popular Irish and of the concept of healthy drinking water.
Speaker Change: Demand for <unk>.
Speaker Change: Drinking water gradually changed.
Speaker Change: Now from clean water to a healthy water.
Speaker Change: By launch of Quinolone, we aim to leave the train.
Speaker Change: And breakthrough the development of the water purified.
Speaker Change: The industry.
Speaker Change: <unk> added the new generation.
Sam Yang: And also the same as the natural water, Thank you. The strong TLEM content in our filters water can reach the level of twice the national standard for national mineral water. With the consumption of upgrading the population on the concept of healthy drinking water, people's demand for drinking water gradually changed from clean water to healthy water. By launching Kunlun, we aim to lead the trend and break through the development of the water purification industry, targeting the new generation of consumers pursuing a healthy lifestyle. Moving forward, we will follow the rules for producing mineral water, enrich the related product, and make, and provide customers with healthy water solutions for different scenarios. In addition, we have built the Viomi Water Purification Super Factory to achieve a highly integrated industrial chain. Filtering a fully automated duct factory for manufacturing key components which will improve our production efficiency and hence the cost and other values.
Speaker Change: Consumers pursuing a healthy lifestyle.
Speaker Change: Moving forward we.
Speaker Change: I'll follow the road telco are producing mineral water enraged the related part up.
Speaker Change: Mix.
Speaker Change: And provide customers.
Speaker Change: With healthy water solutions for different scenarios.
Speaker Change: In addition, we have built into the army water purification sugar factory to achieve a highly integrated industrial chain future in a fully automated factory.
Speaker Change: Well manufacturing key component.
Speaker Change: Which will improve.
Speaker Change: Our production efficiency on our hands that caused an automatic.
Furthermore, the comprehensive intelligent connection and our analysis of production data empowers us to concentrate in the in profile.
Speaker Change: Doug.
Speaker Change: Production progress progress.
Speaker Change: And there are achieved the technology.
Speaker Change: Two called breakthroughs.
Speaker Change: Our leasing.
Speaker Change: Combine it together.
Speaker Change: For us to continually provide better solutions for our use of major demand and they establish solid in this show advantages and the competitive barriers.
Sam Yang: Furthermore, the comprehensive intelligent connection and analysis of production data empowers us to constantly improve our, for Dr. Production Progress and their chief, the technology to call breakthroughs. Addison, and combine them together, support us to continually provide better solutions for our users' major demands and establish solid industrial advantages and competitive barriers. Thank you. Peace go ahead.
Speaker Change: Thank you.
Speaker Change: Please go ahead.
Speaker Change: Thank you and then the next question just moving beyond the water purification segment can you shed some light on Bambi strategic initiatives for its existing product segments. So what key developments or strategic pivots are you planning to drive growth enhance the internet of thing integration and maintain the competitive advantage across your existing port.
Claire Ji: Thank you. And then the next question, just moving beyond the water purification segment, can you shed some light on Viomi's strategic initiatives for its existing product segment? So what key developments or strategic pivots are you planning to drive growth, enhance internet of things integration, and maintain the competitive advantage across your existing portfolio? Hunter, your question is, in addition to the water-based field, can you introduce some strategies in the existing IoT product field? And in order to promote growth, strengthen IoT integration, and maintain the competitive advantage of existing product combinations, what are the key actions and progress of the company's plan? This question is also answered by Mr. Sam. Thank you, Hunter and Claire.
Speaker Change: Palio.
Our homes are going to have the ones you're her church and selling you also know, though that there is a that's Daniel dos and killing casually they just heard it.
Well it could on Xinjiang <unk> Iot trunk club voucher, it's Daniel Cummins, alleging drillship, well did you widen that yes, Tom Yes, you always said one thing they said Oh, I'm, sorry, I didn't get.
Speaker Change: Oh sure Yeah sure Mr sent light snack radar.
Speaker Change: Thank you Hunter.
Hunter unclear.
Speaker Change: I will answer this question.
Speaker Change: It's more and more players scatter in this field of whole housing intelligence with the different solutions to present and the integrity of the content.
Sam Yang: I will answer this question. As more and more players gather in this field of whole housing intelligence with different solutions to present and interpret the content, each player has to face growing challenges as well as opportunities in this industry. Viomi has built up unique one-stop AIT at home solutions, combined hardware, software, Thank you. And the number of cumulative household uses has reached 8.4 million.
Speaker Change: Each players has to face growing challenges as well as opportunities in the in this industry.
Speaker Change: The Army has built up unique one stop it.
Speaker Change: At home solutions combined hardware software.
Speaker Change: Solutions design and Sylvia.
Speaker Change: And the number of accumulative household users has reached.
Speaker Change: 8.4 mailing.
Sam Yang: Globally, we adhere to the concept of AI helpful, continuously upgrading our solutions from the dimensions of health, intelligence, and security. And this segment stands, we keep. Optimizing our product portfolio and focusing our product differentiation, in the second half of 2023, we launched a series of outstanding new products. Like the upgrade, Viomi AI air conditioner Super 3, which can intelligently adjust the ambient, Thank you.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Globally.
Speaker Change: We adhere to the concept of the AI are helpful.
Speaker Change: Yeah.
Speaker Change: Continually upgrading our solutions from the dimensions of our health intelligence and security.
Speaker Change: And these segments to the instance, we keep.
Speaker Change: Optimizing our product portfolio and focusing our product different shape.
Speaker Change: In the second half of 'twenty to 'twenty, three we launched a theory of outstanding new products.
Speaker Change: Like the upgrade.
Speaker Change: Air conditioning.
Speaker Change: Ed can shneur, <unk>, III, which can intelligently adjusted.
Speaker Change: Op, Inc.
Speaker Change: <unk> according to the different stage of sleep.
Sam Yang: Improving the comfort level and sleep quality. In addition, we unveiled Alpha X, The CART, a card detection reader.
Improving the comfort level and the sleep call it.
Speaker Change: In addition, we unveiled Alpha X.
Speaker Change: The card.
Speaker Change: Our card detection reader.
Sam Yang: Equipment with the Minimeter Wave Reader Technology, which realized the continuously comprehensive Contactless monitoring of family members, Health. BapaX provided users with intelligence functions such as one-click report generation and Active Alert. We empower them to improve health track and safety. We also launched the new intelligence thought lock, MASTER3 Max, which is equipped with the prime van recognition technology, providing uses from a higher level of security guarding. Meanwhile, as the demand for improved living increases throughout the housing market, we have further upgraded our one-stop AIT at-home solution with the launch of a $40 million space series, which provides the customer with a stylish and customized and more intelligent product experience. Thank you. Great
Speaker Change: With.
Speaker Change: Many meter wave reader technology.
Speaker Change: We should realize that are continuously comprehensive.
Contact and contactless monitoring of family members.
Speaker Change: Hello.
Speaker Change: Uh-huh ex light users with the intelligence functions such as one click report generation.
Speaker Change: And active alert.
Speaker Change: We empower them to improve.
Speaker Change: E trike and the 50.
Speaker Change: We also launched a new intelligence thought lock Mazda three Max which is the equipment with a problem then Rick recognition technology, providing users from a higher level of security got it.
Speaker Change: Meanwhile.
Speaker Change: The demand for improved air leaving increased throughout the housing market. We have further upgraded all of our one stop AI care at home solution with the launch of a multi million dollar space theories, which provided the customer with the stylish and the customer lives and more.
Speaker Change: Intelligent product experience.
Speaker Change: Thank you.
Speaker Change: Great. Thank you for taking my questions and again congratulations on the results.
Operator: Thank you for taking my questions. And again, congratulations on the results. Thank you. And our next question comes from Li Jingxin with CICC. Please go ahead.
Speaker Change: Thank you and our next question comes from leasing season.
Speaker Change: Sir Please go ahead.
Speaker Change: Yes.
Li Jingxin: Hello. Thank you, Claire. Congratulations on the results. I'm Li Jingxin from CLCC, and I have three questions, and I'll ask them one by one. My first question is, I wonder how the quarterly revenue performed in Q3 and in Q4, and have we seen any improvement in the IoT business, except for the water purifier? Which categories are doing so well in 2023? That's my first question. Thank you. Q3 and Q4 revenue, what are the differences?
Speaker Change: Hello.
Leasing Season: Congratulations for the results.
Leasing Season: Well everything from D and I have three questions and I'll ask them one by one and my first question is I Wonder how did the quarterly revenue perform in Q3 and in Q4 and have we seen any improvement of Iot business.
Leasing Season: Except for the water purifier, which categories are also well into anything to me and that's my first question. Thank you.
Leasing Season: Oh, Hello, just forgot how long do you hear a song says a lot kind of hockey was out of kilter. There shows M Dias amount of team.
Claire Ji: Are there any improvements in the business of AIoT? Besides the water purifier, which other products will be sold better in 2023? Mr. Sam, please go ahead.
Leasing Season: It is your fault sought out here.
Speaker Change: Yeah, well Langer he still got shot you just relaxing Tracy sanya.
Speaker Change: Tanya Hudson on efficiently social with Dol.
Speaker Change: Mr son, Please go ahead.
Speaker Change: Thank you.
Sam Yang: Thank you. I will answer these questions shortly. In general, the performance of Q3 and Q4 both achieved optimization in gross margin, reaching 23.8%, 2.2% higher than the second half of 2022, and 1.8% higher than the first half of 2023. On the product side, other than the water purification product, we saw an increase in revenue contribution rate among our smart kitchen and bathroom appliances, especially the water heaters, as we released several new products in this segment. And we've received positive feedback from the market. At our spring launch event in March 2023, we released the MAST 3 Pro gas, Electric Hybrid AI Water Heater, which brings uses new batting. We have a very interesting experience with the rapid heating, constant water temperature. In terms of the number of users, the number of globally cumulative householder users is increasing steadily.
Speaker Change: Okay.
Speaker Change: These question.
Speaker Change: In general the performance off the Q3 and in Q4 are both are achieved.
Speaker Change: Optimization in gross margin, reaching 23, 8% with two two percentage points higher than the second half of 2022 and a one eight.
Speaker Change: Eight percentage points higher than the first half opportunity to turn this week.
Speaker Change: Plus I other than their water purification plant, we saw an increased revenue contribution.
Speaker Change: Ray among our smart kitchen, and bathroom appliances, especially the water heaters as we released several new products. Among these segment.
Speaker Change: In a way.
Speaker Change: We received a positive feedback from the market.
At all of our spring launch event in March 2023, we released the marked three pro our gas.
Speaker Change: Electric hybrid AI water feature which brings users new batting.
Speaker Change: Experience with the rabbit hating constant water temperature and essentially is solid.
Speaker Change: In terms of the number of users the number of globally accumulate even half Hillary users increasing steadily.
Speaker Change: And as a percentage of our household or uses with at least the two connected products reached at 23% by the end of 'twenty to 'twenty three.
Sam Yang: And the percentage of householder users with at least two connected products reached 23% by the end of 2023. Thank you. Okay, thank you. And my second question is, what is our operating strategy in 2024? And will it focus on products or focus on channel operations? And what is the whole business outlook for 2024? Thank you. Okay.
Speaker Change: Thank you.
Speaker Change: Okay. Thank you and my second question is Oh, what is our operating strategies and strategy in place anymore and with its focus on our products our focus on channel operation and what is the hallo business outlook full attention and Nicole. Thank you.
Okay.
Okay. Let me just rented this directly.
Sam Yang: Our strategy for 2024 will still be focusing on our core product and aiming for high quality development. We will devote our effort to product differentiation and China's diversity. On the product side, we will further focus on our product category with differentiation. With respect to water purification products, we introduced the new AI Mineral Water Purifying Coil at our spring launch event in March 2024, redefine water purification with our advanced technology.
Speaker Change: Our strategy for 294.
Speaker Change: Focusing on our core product.
Speaker Change: And aiming for a high quality development.
Speaker Change: We will devote our EF or on product differentiation and their channel diversity.
Speaker Change: On the.
Speaker Change: Potash Si we will further focus on a product category.
Speaker Change: The Asian with respect to water purify Acacia in potash. So we introduced the new <unk> matter, where water purify quinlan.
Speaker Change: Our spring launch event in March 294 really fine.
Speaker Change: Water purifier vacation week.
Speaker Change: Alright advanced technology, we have.
Sam Yang: We put more effort on water heaters and kettles, alongside the concept of whole house water systems, and talk about the Chinese side. We will focus on improving the return on investment for online channels and actively develop new channels both online and offline, House Horse Racing Mechanics, to establish Wing Wing's business. We will further utilize a professional business operating team on the major online channels to improve the ROI and enhance the company's operational efficiency. Now, let's talk about the overseas side.
Speaker Change: Put them more airports, all water heaters and a catalyst alongside of the concept of whole house water systems.
Speaker Change: And talking about the China side.
Speaker Change: We will focus on improving.
Speaker Change: Return on investment off of our online channels.
Speaker Change: And actively develop new channels, both online and offline.
Speaker Change: House Horse racing mechanic.
Speaker Change: To establish wing wing business.
Speaker Change: We will have further utilize the professional business operating team on the major online channels to improve the OE.
Speaker Change: He has the company's operational efficiency.
Speaker Change: Let's talk about the overseas Si in addition.
Sam Yang: In addition, to enrich the product category we offer, we have deepened our strategy of cooperation with the leading local channels. In various countries, utilizing resources to further enhance our overseas sales and service capacity. And I will also promote our sustainable goals. I'll follow up. Overseas business in the future. In conclusion, we aim to refine our operations in the following aspects. First, we will continue to optimize our revenue structure, increasing the revenue contribution of our core product and further optimizing cost margin. Second, we will further deepen collaboration with Xiaomi, supporting the recovery of our revenue skills. We expect to see faster growth in overseas channels, no social media channels, and offline channels, which will further diversify our revenue sources. Okay, thank you. Please.
Speaker Change: To enriching the product category, we offered we have deepened strategy strategy copper.
Speaker Change: Cooperation with a leading local channels.
Speaker Change: In various countries.
Speaker Change: I think their resources to further enhance our oldest itself and our service capacity.
Speaker Change: And also promote our.
Speaker Change: Sustainable goals.
Speaker Change: All forward.
Speaker Change: Overseas business in the future.
In conclusion, we aim to refine our operations getting follow aspects first.
Speaker Change: We'll continue to optimize our revenue structure, increasing the revenue contribution of all four of our core products.
Speaker Change: And to further optimize gross margin.
Speaker Change: Second we are further deepening collaboration with Xiaomi supporting the recovery of our revenue skills.
Speaker Change: Third.
Speaker Change: We expect to see faster growth in overseas, China with no social media channels and the offline channels, which will further diversify our revenue sources.
Speaker Change: Yeah.
Speaker Change: Okay. Thank you please.
Speaker Change: Okay and my last question is I Wonder what is the expense plan for tiny tiny Ford and which areas should be improved more resources and money on and that's all for my question. Thank you.
Li Jingxin: Okay, and my last question is, I wonder what the expense plan for 2024 is and which areas we should put more resources and money into. And that's all for my question. Thank you. Okay, thank you. Let me just answer you directly. We will stick to strict cost control methods and severely monitor the return of investment, ensuring the further optimization of our operational performance in 2024.
Okay. Thank you and let me just.
Speaker Change: So I heard you correctly.
Speaker Change: We will stick to strict cost control method and severely monitored the return of investment issuing their further optimization of our operational performance in 2024.
Sam Yang: We will allocate the resources to target key channels first. We will put weight on investment in water purification products, new social media channels such as Douyin, and reinforce the brand recognition among users and increase the market position and penetration of our products. Second, at the offline channel end, we will jointly develop the sales channels and promote the AI transformation of our home appliance. In cooperation with the major shopping centers for home appliances, as well as the JD Offline stores and other e-commerce platforms. With respect to water purification products, we are also exploring China's relatively independent from each category in order to, Thank you.
Speaker Change: Allocated the resources singing target key channels first we all put weight on investment in water purification plot in.
Speaker Change: In online new social media channels, such as stoking and.
Speaker Change: Quite show to reinforce the brand recognition among the users and you increase the market pause.
Speaker Change: Penetration of our products.
Speaker Change: Second.
Speaker Change: Edit offline, China, and we were currently they've lapped the sales channels and promote the AI transform transformation, Oklahoma appliance.
Speaker Change: In cooperation with the major shopping centers for home appliances, as well so the JD offline stores and the other e-commerce platforms with respect to water purification partners. We are also exploring.
Speaker Change: China's relatively independent from each category.
Speaker Change: In order to.
Speaker Change: Provide customer better.
Sam Yang: Product demonstration and long-term service support. Last but not least, for the overseas market, we are strengthening our cooperation with, and support to, local distributors, upgrading the intelligence level, and increasing the brand exposure of products offered in the overseas market.
Speaker Change: Product demonstration under long term service support.
Speaker Change: Lost.
Speaker Change: But not at least about the oldest whose market we are strengthening our cooperation with and.
Speaker Change: And our support to local distributors.
Speaker Change: Greeting the intelligence level and the increasing the brand exposure all products offered in the overseas market.
Speaker Change: Thank you.
Claire Ji: Thank you. This concludes our question and answer session. I would like to turn the conference back over to management for any additional or closing comments. Okay, thank you once again for joining us today. If you have any further questions, please feel free to contact us through the contact information on our website or our investor relations consultant, the PS&T Group.
Speaker Change: Okay. Thank you.
Speaker Change: This concludes our question and answer session.
Speaker Change: I'd like to turn the conference back over to management for any additional or closing comments.
Speaker Change: Okay. Thank you once again for joining us today. It doesn't have any further questions. Please feel free to contact us sort of contact information on our website or our investor relations consultant the Piacente group.
Claire Ji: And thank you all for the... Thank you. Thank you. This concludes today's conference call. You may now disconnect your lines and have a wonderful day.
Speaker Change: Thank you all.
Speaker Change: Got it.
Speaker Change: For the conference.
Speaker Change: Thank you.
Speaker Change: Thank you. This concludes today's conference call you May now disconnect your lines and have a wonderful day.
Speaker Change: Okay.
Speaker Change: I'll see if I can.
Speaker Change: Yeah.