Q2 2024 Yatsen Holding Ltd Earnings Call

August 20, 2024

Operator: to the Yatsen Second Quarter 2024 Earnings Conference Call.

Operator: to the Yatsen 2nd quarter, 2024, earning conference call. Today's conference is being recorded.

Speaker Change: Ladies and gentlemen, good day, and welcome to the Yatsen Second Quarter 2024 Earnings Conference Call. Today's conference is being recorded.

Operator: Today's conference is being recorded.

Irene Lyu: At this time, I would like to turn the conference over to Irene Lyu, Vice President, Head of Strategic Investment, and Capital Markets. Please go ahead.

Operator: 今天這個會議正在錄製, At this time, I would like to turn the conference over to Irene Lyu, Vice President, Head of Strategic Investment and Capital Markets.

Operator: At this time, I would like to turn the conference over to Irene Lyu, Vice President,

Speaker Change: At this time, I would like to turn the conference over to Irene Lyu, Vice President, Head of Strategic Investment and Capital Markets. Please go ahead.

Operator: Head of Strategic Investment and Capital Markets.

Operator: Please go ahead.

Irene Lyu: Thank you, operator.

Irene Lyu: Thank you, Operator.

Irene Lyu: Thank you, operator. Please note that discussion today will contain four Muslim statements relating to the company's future performance and are intended to qualify for the safe harbor from liability, as established by the U.S. private security certification reform act. Such statements are not guaranteed of future performance and are subject to certain risks and uncertainty, assumptions, and other factors. Some of these risks are beyond complete control, and the cost actual results differ materially from those mentioned.

Irene Lyu: Please note that discussion today will contain four looking statements relating, to the company's future performance and are intended to qualify for the safe harbor from liabilities as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject, to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond company's control and could cause actual results, that differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect Yatsen's business, and financial results is included in certain filings of the company with the Securities and Exchange Commission.

Irene Lyu: Please note the discussion today will contain four looking statements relating to the company's future performance and are intended to qualify for the safe harbor from liabilities as established by the US Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect Yatsen's business and financial results is included in certain filings of the company with the Securities and Exchange Commission.

Speaker Change: Thank you, Operator. Please note that discussion today will contain four local statements relating to the company's future performance and are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act.

Speaker Change: Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors.

Speaker Change: Some of these risks are beyond company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion.

Irene Lyu: And today's press release ended this discussion.

Irene Lyu: A general discussion of the risk factors that could affect Yatsen's business of financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligations to update this for additional information, except as required by law.

Speaker Change: A general discussion of the risk factors that could affect Yatsen's business and financial results is included in certain filings of the company with the Securities and Exchange Commission.

Irene Lyu: The company does not undertake any obligation to update this forward-looking information except as required by law.

Irene Lyu: The company does not undertake any obligation to update this board, with information except as required by law.

Speaker Change: The company does not undertake any obligation to update this portal to information except as required by law.

Irene Lyu: Your case call, management, and social discuss, certain non-GAAP financial measures and comparison purposes. Please see the earnings release. This is today for a definition of non-gap financial measures and a reconciliation of gap to non-gap financial results.

Irene Lyu: During today's call, management will also discuss certain non-GAAP financial measures, for comparison purposes only. Please see the earnings release issued earlier today for a definition

Irene Lyu: On today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. Please see the earnings release issued earlier today for a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results.

Speaker Change: During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. Please see the earnings release issued earlier today for a definition of non-GAAP financial measures.

Irene Lyu: of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results.

Irene Lyu: We will have today on the call from Yatsen's senior management, our Mr. Zunfong, our founder, chairman, and CEO. Mr. Zohoyang, our CFO and Director. Management will begin with the term remarks, and the call will conclude with a QA session.

Speaker Change: and a reconciliation of gap to non- GAAP financial results.

Irene Lyu: Joining us today on the call from Yatsen Senior Management are Mr. Jinfeng Huang, our Founder, Chairman and CEO, and Mr. Donghao Yang, our CFO and Director.

Irene Lyu: Joining us today on the call from Yatsen's senior management are Mr. Jinfeng Huang, our founder, chairman, and CEO, and Mr. Donghao Yang, our CFO and director.

Speaker Change: Joining us today on the call from Yatsen's senior management are Mr. Jinfeng Huang, our founder, chairman, and CEO , and Mr. Donghao Yang, our CFO and director. Management will begin with prepared remarks.

Irene Lyu: Management will begin with prepared remarks, This call will conclude with a Q&A session.

Irene Lyu: Management will begin with prepared remarks and the call will conclude with a Q&A session.

Irene Lyu: After a reminder, this conference is being recorded. In addition, a webcast replay of this call will be available on Yatsen's semester relations website. Iar.Yatsen Global.com.

Operator: As a reminder, this conference is being recorded.

Speaker Change: And the call will conclude with a Q&A session.

Operator: In addition, a webcast replay of this conference call will be available on Yatsen's investor relations website at ir.yatsenglobal.com.

Operator: In addition, a webcast replay of the conference call will be available, on Yatsen's investor relations website at ir.yatsenglobal.com.

Speaker Change: As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on Yatsen's investor relations website at ir.yatsenglobal.com.

Donghao Yang: I'll now turn the call over to Mr. Zohoyang. Thank you, Irene. And thank you, everyone, for participating in Yatsen's second quarter 2024 earnings conference call today. I'll just start with an overview of the Marco environment and our key financial metrics before moving on to the strategy, right? And the quarter update.

Irene Lyu: I'll now turn the call over to Mr. Jinfeng Huang to introduce Yatsen.

Jinfeng Huang: I will now turn the call over to Mr. Jinfeng Huang.

Speaker Change: I'll now turn the call over to Mr. Jinfeng Huang.

Jinfeng Huang: Thank you, Irene.

Jinfeng Huang: Thank you, Irene, and thank you everyone for participating, in Yatsen's second quarter 2024 earnings conference call today.

Jinfeng Huang: And thank you, everyone, for participating in Yatsen's second quarter, 2024 Earnings Conference Quarterly.

Marchin Footballs: Thank you, Irene. And thank you everyone for participating in Yatsen's second quarter, 2024, earnings conference quarterday.

Jinfeng Huang: I will start with an overview of the Marco environment and all key financial metrics before moving on to the strategy, brand and product updates.

Jinfeng Huang: I will start with an overview of the macro environment and all key financial metrics before, moving on to the strategy, plans, and product updates.

Marchin Footballs: I will start with an overview of the macro environment and all key financial metrics before moving on to the strategy, brand and product updates.

Jinfeng Huang: China's beauty industry has a subdued second quarter.

Jinfeng Huang: Charlotte Beauty Industries has operated on the roof section, 並牽涉 Hateeen Sub International 4any sorts of expectations According to the adjusted data published by China's National Bureau of Statistics, 50 retail sales rebounded in May, likely due to the early start of the 6-18 festival and the cancellation of pre-sales, followed by a significant year-over-year decline in June.

Donghao Yang: Thomas Building Industry has submitted the second call. It's the 18 shop-infestible 40% of the expectations. According to the adjusted data published by China's National Bureau of Statistics, the retail sales rebounded in May, likely due to the early start of the 618 festival and the cancellation of pre-set. Followed by significant year-over-year decline in June. For the full second quarter, the agency retail sales decreased by 1.2% year-over-year, lacking the overall market. We're total retail sales of a consumer goods group by 2.7% year-over-year. In addition, online beauty sales remained muted. While Timo and Napoleon's combined beauty sales recorded year-over-year growth in the second quarter, the growth rate was significantly lower than in the entire year period.

Speaker Change: China's beauty industry has completed its second quarter. With the 618 shopping festival, all sorts of expectations

Jinfeng Huang: It's the 6-18 shopping festival, falling short of expectations. According to the adjusted data published by China's National Bureau of Statistics, beauty retail sales rebounded in May, likely due to the early start of the 6-18 festival and the cancellation of pre-sales, followed by a significant year-over-year decline in June.

Speaker Change: According to the adjusted data published by China's National Bureau of Statistics,

Speaker Change: Indie retail sales rebounded in May, likely due to the early start of the 6-18 festival and the cancellation of pre-sales, followed by a significant year-over-year decline in June .

Jinfeng Huang: For the full second quarter, Gucci retail sales decreased by 1.2% year over year, lacking the overall market.

Jinfeng Huang: For the full second quarter, beauty retail sales decreased by 1.2% year-over-year, lacking the overall market.

Speaker Change: For the full second quarter, Gucci retail sales decreased by 1.2% year-over-year, lacking the overall market.

Jinfeng Huang: 整體銷售顧客商品的銷售額增長了2.7%年來, 此外,網上美妝品的銷售仍然停止 while Timo and the doyens combine beauty styles.

Jinfeng Huang: Rare total retail sales of consumer goods grew by 2.7% year-over-year.

Speaker Change: Rare total retail sales of consumer goods grew by 2.7% year-over-year.

Jinfeng Huang: In addition, online beauty sales remained muted. While Timo and Douyin's combined beauty sales recorded year-over-year growth in the second quarter, the growth rate was significantly lower than in the prior year period.

Speaker Change: In addition, online beauty sales remained muted. While Timo and Douyin's combined beauty sales

Jinfeng Huang: Recorded year-over-year growth in the second quarter, the growth rate was significantly lower than in the prior year period.

Speaker Change: With quality over year growth in the second quarter, the growth rate was significantly lower than in the prior year period.

Donghao Yang: The structural performance of China's beauty market impacted our revenue. Problem is to revise our revenue guidance in July. Although net revenues for the second quarter were RMB 794.5 million, reflecting a 7.5% year-over-year decline in line with our revised expectations. Net revenues for our skincare brand were basically flat year-over-year. While combined revenues from Kalaniq was a wool energy-blown by 5% year-over-year, all of our cosmetic brands never revenues between by 11.4% year-over-year. Primarily due to the ongoing strategy transformation of the subsidiary brand. In both flagship quarter line, the biolip essence is performing well as the brand continues to build its new quarter line-up.

Jinfeng Huang: The substantial performance of China's beauty market impacted our revenue, prompting us to revise our revenue guidance in July. Total net revenues for the second quarter were RMB 794.5 million, reflecting a 7.5% year-over-year decline, in line with our revised expectations. Net revenues from our skincare brand were basically flat year-over-year, while combined revenues from Glanique, Dr. Wu, and Yvlon grew by 5% year-over-year.

Jinfeng Huang: 中國的衛生市場的穩定表現影響了我們的利潤, compliment to revise our revenue guidance in July.

Speaker Change: The substantial performance of China's goods market impacted our revenue.

Jinfeng Huang: 总额利润第二季是RMB794.5亿, reflecting a 7.5% year-over-year decline in line with our revised expectations.

Speaker Change: humble us to revise our revenue guidance in July .

Speaker Change: Total net revenues for the second quarter will RMB 794.5 million.

Speaker Change: reflecting a 7.5% year-over-year decline in line with our revised expectations.

Jinfeng Huang: That revenues from our skin care brand were basically flat year over year. While combined revenues from Gelenic, Dr. Wu and Yif Long grew by 5% year over year.

Speaker Change: Net revenues from our skincare brand were basically flat year-over-year While combined revenues from Glanique, Dr. Wu, and Yvlon grew by 5% year-over-year

Jinfeng Huang: Colour Cosmetic's brand's net revenues decreased by 11.4% year-over-year, primarily due to the ongoing strategy transformation of the perfidiary brand.

Jinfeng Huang: Colour Cosmetics brand's net revenues increased by 11.4% year-over-year, primarily due to the ongoing strategy transformation of the perfidiary brand.

Speaker Change: Color Cosmetics brand's net revenues decreased by 11.4% year-over-year, primarily due to the ongoing strategy transformation of the subsidiary brand.

Jinfeng Huang: The sole flagship product line, the Bioleaf Essence series, is performing well as the brand continues to build its new product line-up. On the profitability side, our overall growth margin increased to 76.7%, from 17.47% for the prior year period, thanks to an increased contribution from high-growth margin products.

Jinfeng Huang: We supposed plastic portal lines the biolead essence, 在品牌继续建立新的品牌团队的过去一段时间, On the profitability side, our overall growth margin increased to 17.47% from 17.47% for the prior year period, thanks to an increased contribution from high-growth marginal products.

Speaker Change: We spoke last week for the line, the Bioleaf Essences. Thank you.

Donghao Yang: On the profitability side, our overall growth margin increased to 17.7% from 17.47% for the prior year period. Thanks to an increased contribution from high growth margin products. Our net growth margin also narrowed by 1.9% to 10.8%, from 10.6% for the prior year period. Our long-cap net growth margin, however, increased to 94%, from 5.4% for the prior year period. The year-over-year increase in our long-cap net growth margin was mainly due to higher channel traffic expenses, as a result of a low-income growing contribution, sales, and our investment in marketing events, expensive brand equity in the second quarter.

Speaker Change: is performing well as the brand continues to build its new product line-up.

Speaker Change: On the profitability side, our overall growth margin increased to 17.47% from 17.47% for the prior year period.

Jinfeng Huang: Our net loss margin also narrowed by 1.9% to 10.8% from 10.6% for the prior year period.

Jinfeng Huang: Our net loss margin also narrowed by 1.9% points to 10.8%, from 10.6% for the prior year period.

Speaker Change: Thank you and increase the contribution from high-growth marginal products.

Speaker Change: Our net loss margin also narrowed by 1.9% points to 10.8% from 10.6% for the prior year period.

Jinfeng Huang: Our long gap net loose margin, however, increased to 9.4% from 5.4% for the prior year period. The year-over-year increase in our long-gap net loss margin was mainly due to higher channel traffic expenses as a result of Douyin's growing contribution to sales, and our investment in marketing events to strengthen brand equity in the second quarter.

Jinfeng Huang: Our long-gap net loss margin, however, increased to 9.4%, from 5.4% for the prior year period. The year-over-year increase in our long-gap net loss margin, was mainly due to higher channel traffic expenses as a result of Douyin's growing contribution to sales, and our investments in marketing events to strengthen brand equity in the second quarter.

Speaker Change: Our long gap net loose margin, however, increased to 9.4% from 5.4% for the prior year period.

Speaker Change: The year-over-year increase in our non-gap net loss margin was mainly due to higher channel traffic expenses as a result of Douyin's growing contribution to sales and our investments in marketing events to strengthen brand equity in the second quarter.

Jinfeng Huang: Given the challenges in the industry and where we are in our strategy transformation plan, we will remain focused on improving our channel mix and optimizing our cost structure to reduce losses for the remainder of the year.

Jinfeng Huang: Given the challenges in the industry and where we are in our strategy transformation plan, we will remain focused on improving our channel mix and optimising our cost structure to reduce losses for the remainder of the year.

Donghao Yang: Given the challenges in the industry and where we are in our strategy transformation plan, we will remain focused on our channel mix and optimizing our cost structure to reduce the losses of the remainder of the year. Meanwhile, we will maintain our investments in brand building and R&D and future sustainable growth paths. Our skincare brand delivered another study performance in the second quarter. It was not only by our hero products, but also by an increasingly diverse and extensive product quality. As long as we new-world treatment oil gained significant visibility on the Dau-Yin platform, after being featured in all the actions in a life-saving room, successfully boosting the product revenue contribution, the Linux also experienced growing sales from its Vivian, integrating micro-mask.

Speaker Change: Given the challenges in the industry and where we are in our strategy transformation plan, we will remain focused on improving our channel mix and optimising our core structure to reduce losses for the remainder of the year.

Jinfeng Huang: Meanwhile, we will maintain our investments in brand building and R&D, and we pursue a sustainable growth path. Our skincare brand delivered another steady performance during the second quarter, not only by our hero products, but also by an increasingly diverse and extensive product portfolio.

Jinfeng Huang: Meanwhile, we will maintain our investments in brand building and R&D, and we will pursue a sustainable growth path. Our Skincare brand delivered another steady performance during the second quarter, given not only by our hero products, but also by an increasingly diverse and expansive product portfolio.

Speaker Change: Meanwhile, we will maintain our investments in brand building and R&D, and we pursue a sustainable growth path.

Speaker Change: Our skincare brand delivered another steady performance during the second quarter, not only by our hero products, but also by an increasingly diverse and expansive product portfolio.

Jinfeng Huang: Yifond's renewable treatment oil gained significant visibility on the Douyin platform, after being featured in the Renewed Edges Museum's live streaming room, successfully boosting the product's revenue contribution.

Jinfeng Huang: Yif Long's Renewal Treatment Oil gained significant visibility on the Douyin platform after being featured in the Renewed Edges Museum's live streaming room, successfully boosting the product's revenue contributions.

Speaker Change: Yif Long's Renewable Treatment Oil gained significant visibility on the Douyin platform after being featured in a remote actress' museum's live streaming room.

Jinfeng Huang: Dalanique also experienced a growing sales from its viewership, invigorating Michael Musk.

Jinfeng Huang: Dalanick also experienced the growing sales from his VVC, exhilibrating Michael Mosk.

Speaker Change: Successfully boosting the product's revenue contribution, Dalanique also experienced a growing sales from its VVVIP, integrating MycoMask.

Jinfeng Huang: Our cosmetic brands also continued to develop and launch standout products in the second quarter. Solidarity introduced multiple power products, including a translucent, glaring long-wear cushion foundation while Little Ondine brought the Born Wild dual-ended glow gel pen and the Go compact powder to market.

Donghao Yang: Our product of my friends also continue to develop and launch stand-up products in the second quarter. We are introduced out of our products, including a translucent, learning long-ware cushion foundation. While little on-limbs brought the form-wild, dual-ended, raw gel pan and the dual-compact powder market. Also, for the very highly-ethan-slip thick region, we want to go award in the beauty and personal care categories as a thick, highly-row award. So, we think our effective brand will be positioning in a peeling hero product. The third quarter will also include it. A host of brand-building opportunities across our brand portfolio, Yatsen participated in the 2024 China Conference of Cosmetic Science at Silicon Valley, as well as the related 15th Academic Symposium.

Jinfeng Huang: Our telcosmetic brand also continued to develop and launch standout products in the second quarter.

Speaker Change: Our top cosmetic brands also continue to develop and launch standout products in the second quarter.

Jinfeng Huang: Solidary introduced multiple powered products including a translucent earring longwear Cushion Foundation.

Speaker Change: We have already introduced multiple power products, including a translucent layering long-wear cushion foundation.

Jinfeng Huang: While Little Ondine brought the warm while dual-ended glow gel pen and the gold compact powder to market.

Speaker Change: while little on them brought the form while do you end it roj pan and the to canamp compared the powder market

Jinfeng Huang: Also, Providare's Bio-Essence Lipstick recently won the Go Award, in the Beauty and Personal Care category at the Fifth Kaiser Royal Awards, showcasing our effective brand repositioning and appealing hero products.

Jinfeng Huang: Also, Providare's Bio-Essence Lipstick recently won the Gold Award in the Beauty and Personal Care category at the Big Eyebrow Awards, showcasing our effective brand repositioning and appealing hero products.

Speaker Change: Also, Providaric Bio-Essence Lipstick is a Wonder Go Award in the Beauty and Personal Care category.

Jinfeng Huang: Two times the world's top beauty brand, Dalanique hiking the trends known as Hero, with the most global mood, a host of brand building opportunities across our brand portfolio.

Speaker Change: are the Role Awards, showcasing our effective brand repositioning and appealing hero products. The second quarter also included

Jinfeng Huang: The second quarter also included, a host of brand building opportunities across our brand portfolio.

Jinfeng Huang: In May, Yatsen participated in the 2024 China Conference of Cosmetic Science and Technology, as well as the related 15th Academic, Symposium. During the event, Private Diary released its latest scientific research report compiled in collaboration with the China Association of Brands, Labor and Cosmetic Industries, and the Regent Hospital of Shanghai Jiao Tong University School of Medicine.

Jinfeng Huang: In May, Yatsen participated in the 2024 China Conference of Cosmetic Science and Technology, as well as the related 15th Academic Symposium.

Speaker Change: a host of brand building opportunities across our brand portfolio. In May, Yatsen participated in the 2024 China Conference of Cosmetic Science and Technology, as well as the related 15th Academic Symposium.

Operator: Apakah acaranya?

Donghao Yang: During the event, Pervisari released his scientific research report on how to incorporate in collaboration with the China Association of Brothers, Labour and Cosmetic Industry at the Region Hospital of Shanghai Jialong University School of Medicine. On the skincare front, I think it helped a major brand event in Bali in collaboration with GQ featuring several experts and KOLs. I think it also announced the swimming world champion, Zhang Yufei, as his new brand ambassador in the quarter. For the more, Dr. Wu participated in the 13th Asia Stomachology Congress, the both widely attended and representative event in the field of the pathology in Asia, focusing on Asian skin's unique anti-aging needs.

Operator: This is a scientific research report compiled in collaboration with the China Association of Fragrance. Labor and Cosmetic Industries, and the Regent Hospital of Shanghai Jiao Tong University School of Medicine.

Speaker Change: really the event everybody released

Speaker Change: This is a scientific research report compiled in collaboration with the China Association of Fragrance.

Speaker Change: labor and the cosmetic industry.

Speaker Change: and the Regent Hospital of Shanghai Jiao Tong University School of Medicine.

Operator: 在健身房上,格雷尼克在巴黎舉辦了一項重要的品牌活動。 in collaboration with GQ, featuring several experts and KOLs.

Jinfeng Huang: On the skin care front, Glenick held a major brand event in Bali, in collaboration with GQ, featuring several experts and KOLs.

Speaker Change: On the skincare front, Scalenec held a major brand event in Bali.

Jinfeng Huang: Glenick also announced Swimming World Champion Ms. Zhang Yufei as its new brand ambassador during the quarter.

Speaker Change: in collaboration with GQ, featuring several experts and KOLs.

Operator: The Ladies also announced Swimming World Champion Zhang Yufei as its new brand ambassador during the quarter.

Speaker Change: The Latinx also announced swimming world champion Zhang Yufei as its new brand ambassador during the quarter.

Jinfeng Huang: Furthermore, Dr. Wu participated in the 13th Asia Dermatology Congress, the most widely attended and representative event in the field of dermatology, in Asia, focusing on Asian skin's unique anti-aging needs.

Operator: Furthermore, Dr. Wu participated in the 13th Asia Dermatology Congress, the most widely attended and representative event in the field of dermatology in Asia, focusing on Asian skin's unique anti-aging needs. Dr. Wu collaborated with top industry experts to present the latest advancements in anti-aging treatments and demonstrate the effectiveness of anti-aging treatments.

Speaker Change: Furthermore, Dr. Wu participated in the 13th Asia Dermatological Congress.

Speaker Change: The most widely attended and representative event in the field of dermatology in Asia, focusing on Asian skin's unique anti-aging needs.

Donghao Yang: Dr. Wu collaborated with top industry experts to present the latest advancement in anti-aging incoferment serenity efficacy.

Jinfeng Huang: Dr. Wu collaborated with top industry experts to present the latest advancements in anti-aging treatments and demonstrate new to retinal anti-wrinkle firming serum's efficacy.

Speaker Change: Dr. Wu collaborated with top industry experts to present the latest advancements in anti-aging treatments and demonstrate

Operator: New to Retinal Anti-Wrinkle Firming Serum's Efficacy.

Jinfeng Huang: So before I wrap up, an update on R&D.

Speaker Change: Neo Triretino Anti-Wrinkle Firming Serum Efficacy

Donghao Yang: Before I wrap up, an update on R&D: I'm proud to share that on May 28th, the Yatsen Global Innovation R&D Center was officially inaugurated in Shanghai, marking one of the first global R&D hubs for a national beauty brand. With nearly 4,000 square meters of R&D space, the center's successful completion and operational launch will provide robust support for Yatsen's portal development as a technological advancement. In conclusion, the second quarter was challenging from a macro perspective. We will remain focused on the factors we can control. Having continued improvement in our launch margin through COP at efficiency optimizations, while in taking our channel mix and advancing portal development.

Jinfeng Huang: So before I wrap up, an update on R&D.

Jinfeng Huang: I'm proud to share that on May 28th, the Yatsen Global Innovation R&D Center was officially inaugurated in Shanghai, marking China's first global R&D hub for a national beauty brand. With nearly 4,000 square meters of R&D space, the center's successful completion and operational launch will provide robust support for Yatsen's product development and technological advancement.

Jinfeng Huang: I'm proud to share that on May 28, the Yatsen Global Innovation R&D Center was officially inaugurated in Shanghai, marking China's first global R&D hub for a national beauty brand. With nearly 4,000 square meters of R&D space, the center's successful completion and operational launch will provide robust support for Yatsen's product development and technological advancement.

Speaker Change: So before I wrap up, an update on R&D.

Speaker Change: I'm proud to share that on May 28th, the Yatsen Global Innovation R&D Center was officially inaugurated in Shanghai, marking China's first global R&D hub for a national beauty brand.

Speaker Change: With nearly 4,000 square meters of R&D space, the center's successful completion and operational launch will provide robust support for Yatsen's product development and technological advancement.

Jinfeng Huang: In conclusion, the second quarter was challenging from a macro perspective.

Speaker Change: In conclusion, the second quarter was challenging from a muscle perspective.

Jinfeng Huang: We will remain focus on the factors we can control, driving continued improvement in our loss margin through cost and efficiency optimization, while enhancing our channel mix and advancing product development.

Jinfeng Huang: We will remain focused on the factors we can control, driving continued improvement in our launch margin through cost and efficiency optimizations, while impacting our channel mix and advancing product development.

Speaker Change: We will remain focused on the factors we can control, driving continued improvement in our loss margin through cost and efficiency optimizations.

Jinfeng Huang: With that, I will now turn the call over to our CFO Dong Haoyang to discuss our financial performance.

Donghao Yang: Is that?

Speaker Change: while inspecting our channel mix and advancing product development.

Jinfeng Huang: With that, I will now turn the call over to our CFO, Dong Haoyang, to discuss our financial performance.

Donghao Yang: I will now turn the call over to our CFO, Dong Hao Yang, to discuss our financial performance. Thank you, everyone. Thank you, David.

ourpoonhaam: With that, I will now turn the call over to our CFO Dong Haoyang to discuss our financial performance.

Jinfeng Huang: Thank you, everyone.

Jinfeng Huang: Thank you everyone.

Donghao Yang: Thank you, David, and hello, everyone.

Donghao Yang: Hello, everyone. Before I get started, I would like to clarify that all financial numbers presented today are an Indian amount, and our percentage changes are close to year-to-year changes, and this otherwise knows it. Total net revenues for the second quarter of 2024 decreased by 7.5%. The 700 and 94.5 million from 800 and 58.5 million to the prior year period. The decrease was primarily due to 11.4% year-to-year increase in net revenues from color, cosmetic brands. Growth profit for the second quarter of 2024 decreased by 5%. To 600 and 9.4 million from 600 and 41.6 million for the prior year period.

Donghao Yang: Before I get started, I would like to clarify that all financial numbers presented today are in the amount, and all percentage changes refer to year-over-year changes unless otherwise noted.

ourpoonhaam: Thank you, everyone.

Donghao Yang: Thank you, David, and hello, everyone.

poonhaam: Thank you, David. Hello, everyone. Before I get started, I would like to clarify that all financial numbers presented today are in the amount and all percentage changes refer to year-over-year changes unless otherwise noted.

Donghao Yang: Total net revenues for the second quarter of 2024 decreased by 7.5 percent to $794.5 million from $858.6 million for the prior year period. This decrease was primarily due to an 11.4 percent year-over-year decrease in net revenues from color cosmetic brands.

Donghao Yang: Total net revenues for the second quarter of 2024 decreased by 7.5%, to $794.5 million from $858.6, million for the prior year period. This decrease was primarily due to an 11.4% year-over-year decrease in net revenues from color cosmetic brands.

Speaker Change: Total net revenue for the second quarter of 2024 increased by 7.5%, to $794.5 million from $858.6 million for the prior period.

Speaker Change: The decrease was primarily due to an 11.4% year-over-year decrease in net revenue from color cosmetic brands.

Operator: to the Yatsen 2nd quarter, 2024, earning conference call.

Operator: to the Yatsen 2nd quarter, 2024, earning conference call. Today's conference is being recorded.

Donghao Yang: Gross profit for the second quarter of 2024 decreased by 5 percent to $609.4 million from $641.6 million for the prior year period.

Operator: Today's conference is being recorded.

Donghao Yang: Gross profit for the second quarter of 2024 decreased by 5%, to $609.4 million from $641.6 million for the prior year period.

Irene Lyu: At this time, I would like to turn the conference over to Irene Lyu, vice president, head of strategic investment, and capital markets.

Irene Lyu: At this time, I would like to turn the conference over to Irene Lyu, vice president, head of strategic investment, and capital markets. Please go ahead. Thank you, operator. Please note that discussion today will contain four Muslim statements relating to the company's future performance and are intended to qualify for the safe harbor from liability, as established by the U.S, private security certification reform act. Such statements are not guaranteed of future performance and are subject to certain risks and uncertainty, assumptions, and other factors. Some of these risks are beyond complete control and the cost actual results differ materially from those mentioned.

Speaker Change: Gross profit for the second quarter of 2024 decreased by 5%.

Speaker Change: to six hundred and nine point four million from six hundred and forty-one.

Operator: Please go ahead.

Donghao Yang: Growth margin for the second quarter of 2024 increased to 76.7% from 74.7% for the prior year period. The increase was primarily driven by an increase in sales of higher growth margin products. Total operating expenses for the second quarter of 2024 decreased by 4.1%. The 744.6 million from 776.7 million to the prior year period. As a percentage of photo net revenues, total operating expenses for the second quarter of 2024 were 93.7% compared with 90.5% for the prior year period. Total operating expenses for the second quarter of 2024 were 51.2 million, as compared with 68.3 million to the prior year period.

Donghao Yang: Gross margin for the second quarter of 2024 increased to 76.7 percent from 74.7 percent for the prior year period. The increase was primarily driven by an increase in sales of higher gross margin products.

Donghao Yang: Gross, margin for the second quarter of 2024 increased to 76.7%, from 74.7% for the prior year period. The increase was primarily driven by an increase in sales of higher gross margin products.

Speaker Change: $1.6 million for the prior year period. Growth margin for the second quarter of 2024 increased to 76.7% from 74.7% for the prior year period.

Irene Lyu: Thank you, operator.

Irene Lyu: Please note that discussion today will contain four Muslim statements relating to the company's future performance and are intended to qualify for the safe harbor from liability, as established by the U.S, private security certification reform act. Such statements are not guaranteed of future performance and are subject to certain risks and uncertainty, assumptions, and other factors. Some of these risks are beyond complete control and the cost actual results differ materially from those mentioned.

Speaker Change: The increase is primarily driven by an increase in sales of higher gross margin products.

Donghao Yang: Total operating expenses for the second quarter of 2024 decreased by 4.1 percent to $744.6 million from $776.7 million for the prior year period.

Donghao Yang: Total, operating expenses for the second quarter of 2024 decreased by 4.1%, to $744.6 million from $776.7 million for the prior year period.

Speaker Change: Total operating expenses for the second quarter of 2024 decreased by 4.1% to $744.6 million from $776.7 million for the prior year period.

Donghao Yang: As a percentage of total net revenues, total operating expenses for the second quarter of 2024 were 93.7 percent as compared with 90.5 percent for the prior year period. Procurement expenses for the second quarter of 2024 were $51.2 million as compared with $58.3 million for the prior year period. As a percentage of total net revenues, procurement expenses for the second quarter of 2024 decreased to 6.4 percent from 6.8 percent for the prior year period.

Irene Lyu: And today's press release ended this discussion.

Irene Lyu: And today's press release ended this discussion. A general discussion of the risk factors that could affect Yatsen's business of financial results is included in certain filings of the company with the security bank change commission. The company does not undertake any obligations to update this for additional information except as required by law. Your case call, management, and social discuss, certain non-gap financial measures and comparison purposes, please see the earnings release. This is today for a definition of non-gap financial measures and a reconciliation of gap to non-gap financial results.

Donghao Yang: As a percentage of total net revenues, total operating expenses for the second quarter of 2024 were 93.7%, as compared with 90.5% for the prior year period. Procurement expenses for the second quarter of 2024 were $51.2 million, as compared with $58.3 million for the prior year period.

Irene Lyu: A general discussion of the risk factors that could affect Yatsen's business of financial results is included in certain filings of the company with the security bank change commission.

Irene Lyu: The company does not undertake any obligations to update this for additional information except as required by law.

Speaker Change: Fulfillment expenses for the second quarter of 2024 were $51.2 million as compared with $58.3 million for the prior year period.

Irene Lyu: Your case call, management, and social discuss, certain non-gap financial measures and comparison purposes, please see the earnings release.

Donghao Yang: As a percentage of total net revenues, procurement expenses for the second quarter of 2024 decreased to 6.4%, from 6.8% for the prior year period. The decrease was primarily due to an increase in overall average selling price of our products, as well as further improvements in logistics efficiency.

Donghao Yang: As a percentage of photo net revenues, total operating expenses for the second quarter of 2024 decreased to 6.4% from 6.8% to the prior year period. The decrease was primarily due to an increase in overall average falling price of products, as well as photo improvement in the statistics and statistics. Rolling and marketing expenses for the second quarter of 2024 were 544.7 million, as compared with 542.8 million for the prior year period. As a percentage of photo net revenues, total operating expenses for the second quarter of 2024 increased to 6.6% from 6.3% to the prior year period.

Speaker Change: As a percentage of total net revenues, procurement expenses for the second quarter of 2024 decreased to 6.4% from 6.8% for the prior year period.

Irene Lyu: This is today for a definition of non-gap financial measures and a reconciliation of gap to non-gap financial results.

Donghao Yang: The decrease was primarily due to an increase in overall average selling price of our products as well as further improvement in logistics efficiency.

Donghao Yang: We will have today on the call from Yatsen's senior management, our Mr. Zunfong, our founder, chairman, and CEO.

Irene Lyu: We will have today on the call from Yatsen's senior management, our Mr. Zunfong, our founder, chairman, and CEO.

Speaker Change: The decrease was primarily due to an increase in overall average selling price of our products, as well as further improvements in logistics efficiency.

Donghao Yang: Mr. Zohoyang, our CFO and director.

Irene Lyu: Mr. Zohoyang, our CFO and director. Management will begin with the term remarks and the call will conclude with a QA session. After a reminder, this conference is being recorded. In addition, a webcast replay of this call will be available on Yatsen's semester relations website. Iar.Yatsen Global.com.

Donghao Yang: Selling and marketing expenses for the second quarter of 2024 were $544.7 million as compared with $542.8 million for the prior year period. As a percentage of total net revenues, selling and marketing expenses for the second quarter of 2024 increased to 68.6 percent from 63.2 percent for the prior year period. The increase was primarily due to increased investment in the Billing platform in line with the growing revenue contribution from Billing as well as our investment in new product launches and building brand equity across our portfolio.

Donghao Yang: Selling and marketing expenses for the second quarter of 2024 were $544.7 million, as compared with $542.8 million for the prior year period. As a percentage of total net revenues, selling and marketing expenses for the second quarter of 2024 increased to 68.6%, from 63.2% for the prior year period. The increase was primarily due to increased investment in the Billing platform, in line with the growing revenue contribution from Billing, as well as our investment in new product launches and building brand equity across our portfolio.

Irene Lyu: Management will begin with the term remarks and the call will conclude with a QA session.

Speaker Change: Selling and marketing expenses for the second quarter of 2024 were $544.7 million, as compared with $542.8 million for the prior year period.

Operator: After a reminder, this conference is being recorded.

Speaker Change: as a percentage of total net revenues.

Speaker Change: Selling and marketing expenses for the second quarter of 2024 increased to...

Donghao Yang: I'll now turn the call over to Mr. Zohoyang. Thank you, Irene. And thank you, everyone, for participating in Yatsen's second quarter, 2024, earnings conference call today.

Speaker Change: sixty eight point six per cent from sixty three point two percent

Donghao Yang: The increase was primarily due to an increase in investment in the Korean platform in line with the growing revenue contribution from those, as well as our investments in new product launches and building brand equity across our portfolio. General and administrative expenses for the second quarter of 2024 were 119.1 million, as compared with 149.7 million to the prior year period. The increase was primarily attributable to the investment of operation of our global innovation R&D Center in Shanghai on May 28. The last time operation for the second quarter of 2024 was 135.2 million, as compared to 135.1 million for the prior period.

Operator: In addition, a webcast replay of this call will be available on Yatsen's semester relations website.

Speaker Change: for the five-year period.

Speaker Change: The increase was primarily due to increased investment in the Douyin platform, in line with the growing revenue contribution from Douyin, as well as our investment in new product launches and building brand equity across our portfolio.

Operator: Iar.

Donghao Yang: I'll just start with an overview of the Marco environment and our key financial metrics before moving on to the strategy, right? And the quarter update. Thomas Building Industry has submitted the second call. It's the 18 shop-infestible 40% of the expectations. According to the adjusted data published by China's National Bureau of Statistics, the retail sales rebounded in May, likely due to the early start of the 618 festival, and the cancellation of pre-set.

Operator: Yatsen Global.com.

Donghao Yang: I'll now turn the call over to Mr. Zohoyang.

Donghao Yang: General and administrative expenses for the second quarter of 2024 were $119.1 million as compared with $149.7 million for the prior year period. As a percentage of total net revenues, general and administrative expenses for the second quarter of 2024 decreased to 15 percent from 17.4 percent for the prior year period. The decrease was primarily attributable to a reduction in share-based compensation as a result of the reversal of recognized share-based compensation expenses due to the forfeiture of uninvested awards granted to certain former employees.

Donghao Yang: General and administrative expenses for the second quarter of 2024 were $119.1 million, as compared with $149.7 million for the prior year period. As a percentage of total net revenues, general and administrative expenses for the second quarter of 2024 decreased to 15%, from 17.4% for the prior year period. The decrease was primarily attributable to a reduction in share-based compensation as a result of the reversal of recognized share-based compensation expenses due to the forfeiture of uninvested awards granted to certain former employees.

Speaker Change: General and administrative expenses for the second quarter of 2024 were $119.1 million as compared with $149.7 million for the prior year period.

Donghao Yang: Thank you, Irene.

Speaker Change: As a percentage of total net revenue, general and administrative expenses for the second quarter of 2024 decreased to 15%, from 17.4% for the prior year period.

Donghao Yang: And thank you, everyone, for participating in Yatsen's second quarter, 2024, earnings conference call today.

Donghao Yang: Followed by significant year-over-year decline in June. For the full second quarter, the agency retail sales decreased by 1.2% year-over-year, lacking the overall market. We're total retail sales of a consumer goods group by 2.7% year-over-year. In addition, online beauty sales remained muted. While Timo and Napoleon's combined beauty sales recorded year-over-year growth in the second quarter, the growth rate was significantly lower than in the entire year period. The structural performance of China's beauty market impacted our revenue.

Donghao Yang: I'll just start with an overview of the Marco environment and our key financial metrics before moving on to the strategy, right? And the quarter update.

Speaker Change: The decrease was primarily attributable...

Speaker Change: to a reduction in share-based compensation as a result of the reversal of recognized share-based compensation expenses due to the forfeiture of uninvested awards granted to certain former employees.

Donghao Yang: Thomas Building Industry has submitted the second call.

Donghao Yang: It's the 18 shop-infestible 40% of the expectations.

Donghao Yang: Research and development expenses for the second quarter of 2024 were $29.7 million, as compared with $25.9 million for the prior year period. As a percentage of total net revenues, research and development expenses for the second quarter of 2024 increased to 3.7%, from 3% for the prior year period. The increase was primarily attributable to the commencement of operations of our Global Innovation R&D Center in Shanghai on May 28.

Donghao Yang: Research and development expenses for the second quarter of 2024 were $29.7 million as compared with $25.9 million for the prior year period. The increase was primarily attributable to the commencement of operations of our Global Innovation R&D Center in Shanghai on May 28.

Donghao Yang: According to the adjusted data published by China's National Bureau of Statistics, the retail sales rebounded in May, likely due to the early start of the 618 festival, and the cancellation of pre-set.

Speaker Change: Research and development expenses for the second quarter of 2024

Speaker Change: were $29.7 million as compared with $25.9 million for the prior year's period.

Speaker Change: As a percentage of total net revenue, the Fairtrade development percentage for the second quarter of 2024

Donghao Yang: Problem is to revise our revenue guidance in July. Although net revenues for the second quarter were RMB 794.5 million, reflecting a 7.5% year-over-year decline in line with our revised expectations. Net revenues for our skincare brand were basically flat year-over-year. While combined revenues from Kalaniq was a wool energy-blown by 5% year-over-year, all of our cosmetic brands never revenues between by 11.4% year-over-year. Primarily due to the ongoing strategy transformation of the subsidiary brand.

Donghao Yang: Followed by significant year-over-year decline in June.

Speaker Change: increased to 3.7% from 3% for the prior year. The increase was primarily attributable to the commencement of operations of our Global Innovation R&D Center in Shanghai on May 28.

Donghao Yang: Lost on operations for the second quarter of 2024 was $135.2 million as compared with $135.1 million for the prior year period. Operating loss margin was 17% as compared with 16.7% for the prior year period.

Donghao Yang: 二零二四, 在2024年第二季發生了135.2億輸入與前一季的135.1億輸入相比, Operating loss margin was 17% as compared with 16.7% for the prior year period.

Donghao Yang: For the full second quarter, the agency retail sales decreased by 1.2% year-over-year, lacking the overall market.

Speaker Change: i two thousand from the four

Donghao Yang: We're total retail sales of a consumer goods group by 2.7% year-over-year.

Speaker Change: Last time operations for the second quarter of 2024 was 135.2 million as compared with 135.1 million for the prior period.

Donghao Yang: Operating lock margin was 17 percent as compared to 16.7 percent for the prior period. Now the gap lost from operation for the second quarter of 2024 was 111.9 million, as compared to 74.6 million for the prior period. Now the gap operating last margin was 14.1 percent, as compared to 8.7 percent for the prior period. Net lock for the second quarter of 2024 decreased by 21.2 percent to 85.5 million from 108.5 million for the prior period. Net lock margin was 10.8 percent as compared with 12.6 percent for the prior period. Net lock at 7.2 million for the prior period.

Donghao Yang: In addition, online beauty sales remained muted. While Timo and Napoleon's combined beauty sales recorded year-over-year growth in the second quarter, the growth rate was significantly lower than in the entire year period.

Speaker Change: Operating loss margin was 17% as compared with 15.7% for the prior year period.

Donghao Yang: In both flagship quarter line, the biolip essence is performing well as the brand continues to build its new quarter line-up. On the profitability side, our overall growth margin increased to 17.7%, from 17.47% for the prior year period. Thanks to an increased contribution from high growth margin products. Our net growth margin also narrowed by 1.9% to 10.8%, from 10.6% for the prior year period. Our long-cap net growth margin, however, increased to 94%, from 5.4% for the prior year period.

Donghao Yang: Non-jet loss from operations for the second quarter of 2024 was $111.9 million, as compared with $74.6 million for the prior year period.

Speaker Change: Non-jet loss from operations for the second quarter of 2024 was $111.9 million, as compared with $74.6 million for the prior two years.

Donghao Yang: None, yet, operating loss margin was 14.1%, as compared with 8.7% for the prior two years. Net loss for the second quarter of 2024 decreased by 21.2% to $85.5 million from $108.5 million for the prior year period.

Speaker Change: none guest operating lo margin were fourteen point one percent as compared with eight point seven percent for the prior year period

Donghao Yang: Net loss for the second quarter of 2024 decreased by 21.2% to $85.5 million from $108.5 million for the prior year period.

Speaker Change: Net loss for the second quarter of 2024 decreased by 21.2%.

Speaker Change: to $85.5 million from $108.5 million for the prior year period.

Donghao Yang: Net loss margin was 10.8% as compared with 12.6% for the prior year period. Net loss attributable to Yatsen Hldg for diluted EDOs for the second quarter of 2024 was $0.77 RMB as compared with $0.99 RMB for the prior year period.

Donghao Yang: Net loss margin was 10.8% as compared with 12.6% for the prior year period.

Donghao Yang: The year-over-year increase in our long-cap net growth margin was mainly due to higher channel traffic expenses, as a result of a low-income growing contribution, sales and our investment in marketing events, expensive brand equity in the second quarter.

Speaker Change: Net loss margin was 10.8%.

Speaker Change: as compared with 12.6% for the prior year period.

Donghao Yang: Net loss attributable to Yatsen Hldg for diluted EPA for the second quarter of 2024 was 0.77 RMB as compared with 0.99 RMB for the prior year period.

Speaker Change: net lo a civical to yes an excordordinary shareholders for that lo ed eight years for the second quarter of three thousand twenty four was wherepoint seven seven r b as comfederwith year point nine nine or b for the pri two

Donghao Yang: The structural performance of China's beauty market impacted our revenue.

Donghao Yang: Non-guests net loss for the second quarter of 2024 was $74.9 million, as compared with $46.3 million for the prior two years.

Speaker Change: Non-guests net loss for the second quarter of 2024 was $74.9 million, as compared with $46.3 million for the prior two years.

Donghao Yang: Net lock margin was 9.4 percent as compared with 5.4 percent for the prior period. Net lock at 7.2 million for the prior period.

Donghao Yang: Not as yet, net loss margin was 9.4% as compared with 5.4% for the prior year period.

Speaker Change: None, yet, met loss margin with 9.4%, as compared with 5.4% for the prior year period.

Donghao Yang: None of the gaps left attributable to Yatsen's ordinary shareholder, the diluted ABS for the second quarter of 2024 was 0.67 RMB, as compared with 0.41 RMB for the prior year period.

Speaker Change: None gaps left attributable to Yatsen's ordinary shareholder, the diluted ABS for the second quarter of 2024 with 0.67 RMB, as compared with 0.41 RMB for the prior year period.

Donghao Yang: As long as we new-world treatment oil gained significant visibility on the Dau-Yin platform, after being featured in all the actions in a life-saving room, successfully boosting the product revenue contribution, the Linux also experienced growing sales from its Vivian, integrating micro-mask. Our product of my friends also continue to develop and launch stand-up products in the second quarter. We are introduced out of our products, including a translucent, learning long-ware cushion foundation. While little on-limbs brought the form-wild, dual-ended, raw gel pan and the dual-compact powder market.

Donghao Yang: 是在30號飛機上的, 2024.

Donghao Yang: We have cash, restricted cash, and short-term investment, have $1.58 billion as compared with $2.08 billion as of December 31, 2023.

Speaker Change: as a room althiris

Speaker Change: In 2024, we had cash, restricted cash, and portfolio investments at $1.58 billion, as compared with $2.08 billion as of December 31, 2023.

Donghao Yang: Net cash used in operating activities for the second quarter of 2024 was $148.2 million as compared with $14.4 million for the prior year period. Looking at our business outlook for the third quarter of 2024, we expect our total net revenues to be between $646.3 million and $718.1 million, representing a year-over-year decrease of approximately 0% to 10%. These forecasts reflect our current and preliminary views on the market and operational conditions, which are subject to change.

Donghao Yang: Net cash used in operating activities for the second quarter of 2024 was $148.2 million as compared to $14.4 million for the prior period.

Speaker Change: Net cash used in operating activities for the second quarter of 2024 was $148.2 million as compared with $14.4 million for the prior period.

Donghao Yang: Looking at our business outlook for the third quarter of 2024, we expect our total net revenues, 646.3 million and 718.1 million, representing a year-over-year decrease of approximately 0% to 10%.

Speaker Change: Looking at our business outlook for the third quarter of 2024, we expect our total net revenue

Donghao Yang: Also, for the very highly-ethan-slip thick region, we want to go award in the beauty and personal care categories as a thick, highly-row award. So, we think our effective brand will be positioning in a peeling hero product. The third quarter will also include it.

Speaker Change: to be between $646.3 million and $718.1 million, representing a year-over-year T-base of approximately...

Speaker Change: your deoff to temper them

Donghao Yang: A host of a brand-building opportunities across our brand portfolio, Yatsen participated in the 2024 China Conference of Cosmetic Science at the Silicon Valley, as well as the related 15th academic symposium. During the event, Pervisari released his scientific research report on how to incorporate in collaboration with the China Association of Brothers, Labour and Cosmetic Industry at the Region Hospital of Shanghai Jialong University School of Medicine. On the skincare front, I think it helped a major brand event in Bali in collaboration with GQ featuring several experts and KOLs.

Speaker Change: These forecasts reflect our current and preliminary views on the market and operational conditions, which are subject to change. With that, I would now like to open the call to Q&A. Operator?

Donghao Yang: With that, I would now like to open the call to Q&A.

Donghao Yang: 这些预测反映了市场上的极端变化和经济状况, 這就是我們今天要討論的題目, With that, I would now like to open the call to Q&A.

Operator: Operator?

Donghao Yang: Thank you.

Operator: Thank you.

Operator: So now I'll begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speaker phone, we ask you please pick up your handset before pressing the keys.

Operator: We will now begin the question and answer session.

Operator: Thank you.

Speaker Change: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, we ask you please pick up your handset before pressing the keys.

Operator: To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the key.

Operator: We will now begin the question-and-answer session.

Operator: 如果您有任何疑问,请按下2号按钮。 And if you do wish to ask, if you, for the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

Operator: To withdraw your question, please press star them two. And if you do wish to ask, if you for the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. And once again, that's star them one if you have a question.

Speaker Change: To withdraw your question, please press star then 2.

Speaker Change: And if you do wish to ask, for the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

Operator: To ask a, question, you may press star then one on your telephone keypad.

Operator: And once again, that's Starz and Wan if you have a question.

Operator: If you're using a speakerphone, we ask that you please pick up your handset before pressing the keys.

Maggie Huang: Our first question comes from Maggie Huang with CITC. Please go ahead. Thank you for the question.

Operator: Our first question comes from Maggie Huang with CITC.

Speaker Change: And once again, that's stars and one if you have a question.

Maggie Huang: Please go ahead.

Donghao Yang: I think it also announced the swimming world champion, Zhang Yufei, as his new brand ambassador in the quarter. For the more, Dr. Wu participated in the 13th Asia Stomachology Congress, the both widely attended and representative event in the field of the pathology in Asia, focusing on Asian skin's unique anti-aging needs. Dr. Wu collaborated with top industry experts to present the latest advancement in anti-aging incoferment serenity efficacy.

maggie hun: Our first question comes from Maggie Huang with CITC. Please go ahead.

Operator: To withdraw your question, please press star then two.

Maggie Huang: Thank you for taking my question.

Maggie Huang: This is Maggie Huang from JICC. I have two questions. The first question is that what is our plan for product development and channel expansion for telecosmetic and in-care brands respectively? And my second question is that what is our promotion strategy in the second half of the year and how to balance our revenue growth and profitability? That's my question. Thank you.

maggie hun: This is Maggie Huang from CICC. I have two questions. The first question is that what is our plan for product development and channel expansion for cosmetic and skincare brands respectively? And my second question is that what is our promotion strategy in the second half of the year and how to balance our revenue growth and profitability? That's my question. Thank you.

Maggie Huang: This is Maggie Huang from JICC.

Operator: And if you do wish to ask, if you, for the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

Donghao Yang: Before I wrap up, an update on R&D, I'm proud to share that on May 28th, the Yatsen Global Innovation R&D Center was officially inaugurated in Shanghai, marking one of the first global R&D hub for a national beauty breadth. With nearly 4,000 square meters of R&D space, the center's successful completion and operational launch will provide robust support for Yatsen's portal development as a technological advancement.

Donghao Yang: Thank you, Maggie, for the question. So for the question, I'll plan for a product development and channel strategy. So, well, we are friendly to find you our product mix and also channel mix. On the product side, we have a very robust EU product pipeline for the second half of the year for both our color and skincare side. So we continue to have a number of EU products; for example, for Dominic and Dr. Wu, they will have new, very active and functional skincare products launched in the later half of this year. And also on the color side, we have a list of new pipelines including new lipsticks and foundation products, you know, for public gallery and local audience.

Maggie Huang: I have two questions.

Speaker Change: Thank you, Maggie, for the question. So for the first question, I'll plan for a product development kind of strategy.

Operator: And once again, that's star then one if you have a question.

Maggie Huang: The first question is that, what is our plan for product development and channel expansion for kind of cosmetic and skincare brands, respectively?

Speaker Change: certain our string this see um

Speaker Change: to fine-tune our product mix and also channel mix.

Operator: Our first question comes from Maggie Huang with CITC.

Speaker Change: On the product side, we have a very robust new product pipeline for the second week.

Speaker Change: of the year for both our color and skincare side.

Maggie Huang: Please go ahead.

Speaker Change: So we continue to have a number of new products, for example for Galenic and Dr. Wu, they will have new, very active and functional skincare products launched in later half of this year.

Maggie Huang: This is Maggie Huang from CITC.

Donghao Yang: In conclusion, the second quarter was challenging, from a macro perspective. We will remain focused on the factors we can control. Having continued improvement in our launch margin through COP at efficiency optimizations, while in taking our channel mix and advancing portal development. Is that?

Maggie Huang: I have two questions.

Maggie Huang: The first question is that, what is our plan for product development and channel expansion for kind of cosmetic and skincare brands respectively?

Speaker Change: And also on the color side, we have a list of new pipelines, including new lipsticks and foundation products, you know, for Perfect Diary and Little Orangey. And then in terms of channels,

Maggie Huang: And my second question is that, what is our promotion strategy in the second half of the year and how to balance our revenue growth and profitability?

Donghao Yang: And then, in terms of channels, we have been talking about depending on more to be channels of currently very high concentrations. So by increasing the concentration or the weighting of the to be channel, we'll have more room for growth and also a better profitability mix in future.

Speaker Change: We have been talking about expanding into more TV channels on top of currently very high concentration of TV channels.

Donghao Yang: I will now turn the call over to our CFO, Dong Hao Yang, to discuss our financial performance. Thank you, everyone. Thank you, David. Hello, everyone. Before I get started, I would like to clarify that all financial numbers presented today are an Indian amount, and our percentage changes to close to year-to-year changes and this otherwise knows it. Total net revenues for the second quarter of 2024 decreased by 7.5%. The 700 and 94.5 million from 800 and 58.5 million to the prior year period.

Maggie Huang: That's my question.

Speaker Change: So, by increasing the concentration or the weighting of the 2D channels, we will have more room for growth and also a better probability mix in future.

Donghao Yang: While combined revenues from Kalaniq was a wool energy-blown by 5% year-over-year, all of our cosmetic brands never revenues between by 11.4% year-over-year.

Maggie Huang: Thank

Maggie Huang: And my second question is that, what is our promotion strategy in the second half of the year and how to balance our revenue growth and profitability?

Donghao Yang: Okay, very second question. The promotion strategy for the second half of the year, I don't think there will be a substantial changes in terms of promotion strategy. You know, we're going to have February 11 and at the other event from now until the end of the year. So we will primarily focus on optimizing our channel mix and products mix. And in terms of revenue of profitability value. I think as to talking about the year, we're going to be focusing more on cutting loss. You know, achieving a possibility of service possible. In terms of revenue, you know, we're going to see more glassers in terms of new products.

Speaker Change: Okay, the second question is the promotion strategy for the second half of the year. I don't think there will be substantial changes in terms of promotion strategies.

Maggie Huang: That's my question.

Maggie Huang: Thank you.

Maggie Huang: you.

Jinfeng Huang: Thank you Maggie for the question.

Speaker Change: We're going to have W11 and a few other events from now until the end of the year.

Jinfeng Huang: So for the first question I'll plan for a product development kind of strategy.

Jinfeng Huang: WOW, 請稍等請稍等, Thank you very much.

Jinfeng Huang: We continue to have a number of new products, for example, for Galenic, and Dr. Wu, they will have new, very active and functional skincare products launched in the later half of this year.

Jinfeng Huang: And also, on the color side, we have a list of new pipelines, including new lipsticks and foundation products, you know, for Perfect Diary and Makeup On.

Jinfeng Huang: 字幕由Amara.org社区提供, I have been talking about expanding into more TV channels on top of currently very high concentration of...

Jinfeng Huang: So by increasing the concentration or the weighting of the 2D channels, we'll have more room for growth and also a better probability.

Donghao Yang: The decrease was primarily due to 11.4% year-to-year increase in net revenues from color, cosmetic brands. Growth profit for the second quarter of 2024 decreased by 5%. To 600 and 9.4 million from 600 and 41.6 million for the prior year period. Growth margin for the second quarter of 2024 increased to 76.7% from 74.7% for the prior year period. The increase was primarily driven by an increase in sales of higher growth margin products.

Jinfeng Huang: MING PAO CANADA // MING PAO TORONTO, Okay, the second question is the promotion strategy for the second half of the year.

Donghao Yang: Thank you, Maggie, for the question.

Jinfeng Huang: I don't think there will be substantial changes in terms of promotion strategies.

Donghao Yang: So for the first question, our plan for product development and channel strategy.

Jinfeng Huang: We're going to have W11 and a few other events from now until the end of the year.

Speaker Change: are primarily focused on optimizing our channel mix and product mix as Irene has just mentioned.

Jinfeng Huang: So we will primarily focus on optimizing our channel NIST and product NIST as Irene has just mentioned.

Jinfeng Huang: In terms of revenue, we're going to be more aggressive in terms of new product development, and Channel Mix, so that we can grow our revenue as fast as possible.

Speaker Change: And in terms of revenue profitability...

Speaker Change: all balance

Speaker Change: I think at the second half of the year, we're going to be focusing more on cutting loss

Speaker Change: In terms of revenue, we're going to be more aggressive in terms of new product development.

Donghao Yang: Currently, our strategy is to fine-tune our product mix and also channel mix.

Donghao Yang: On the product side, we have a very robust new product pipeline for the second half of the year for both our color and skincare side. So we continue to have a number of new products, for example, for Galenic and Dr. Wu, they will have new, very active and functional skincare products launched in later half this year.

Donghao Yang: and Kennell Nyx, so that we can grow our revenue as far as possible. But to the meantime, we're going to be focusing on achieving a profitable revenue growth and be profitable as soon as possible.

Donghao Yang: And also on the color side, we have a list of new pipelines including new lipsticks and foundation products, you know, for Perfect Diary and Little Ongi.

Donghao Yang: And then in terms of channels, we have been talking about expanding into more 2D channels on top of currently very high concentration of 2D channels. So by increasing the, concentration or the weighting of the 2D channels, we will have more room for growth and also a better profitability mix in the future.

Donghao Yang: Okay, for the second question, the promotion strategy for the second half of the year, I don't think there will be substantial changes in terms of promotion strategy. You know, we're going to have W11 and a few other events from now until the end of the year.

Speaker Change: and Channel Nick, so that we can grow our revenue as fast as possible. But in the meantime, we're going to be focusing on achieving a profitable revenue growth and be profitable as soon as possible.

Jinfeng Huang: But in the meantime, you know, we're going to be focusing on achieving a profitable revenue growth.

Maggie Huang: Thank you very much and I have no more questions.

Donghao Yang: Total operating expenses for the second quarter of 2024 decreased by 4.1%. The 744.6 million from 776.7 million to the prior year period. As a percentage of photo net revenues, total operating expenses for the second quarter of 2024 were 93.7% compared with 90.5% for the prior year period. Total operating expenses for the second quarter of 2024 were 51.2 million as compared with 68.3 million to the prior year period. As a percentage of photo net revenues, total operating expenses for the second quarter of 2024 decreased to 6.4% from 6.8% to the prior year period.

Maggie Huang: Thank you very much, and I have no more questions. Thank you.

Speaker Change: Okay, that is very helpful. Thank you very much and I have no more questions.

Operator: Thank you.

Donghao Yang: This concludes our question and answer session.

Operator: This concludes our question and answer session.

Donghao Yang: So we will primarily focus on optimizing, our channel mix and product mix as Irene has just mentioned.

Operator: I'd like to turn the conference back over to management for closing remarks.

Speaker Change: Thank you.

Donghao Yang: I'd like to turn the conference back over to management for closing remarks. Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Yatsen directly or PSL Financial Communications. A contact information for IR in both China and the US can be found in today's press release. Thank you, and have a great day. Thank you.

Donghao Yang: And in terms of revenue and profitability balance, I think in the second half of the year, we're going to be focusing more on cutting loss and, you know, achieving profitability as soon as possible.

Speaker Change: Thank you. This concludes our question and answer session. I'd like to turn the conference back over to management for closing remarks.

Donghao Yang: In terms of revenue, you know, we're going to be more aggressive in terms of new product development, and Channel Mix so that we can grow our revenue as fast as possible.

Donghao Yang: But in the meantime, you know, we're going to be focusing on achieving a profitable revenue growth and be profitable, you know, as soon as possible.

Maggie Huang: Thank you very much and I have no more questions.

Operator: Thank you once again for joining us today.

Operator: If you have any further questions, please feel free to contact us at Yatsen directly or PSOF Financial Communications. Our contact information for IR in both China and the U.S. can be found in today's press release.

Speaker Change: Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Yatsen directly.

Speaker Change: or PSL Financial Communications.

Speaker Change: Our contact information for IR in both China and the U.S. can be found in today's press release. Thank you and have a great day.

Operator: Thank you and have a great day.

Operator: Thank you.

Maggie Huang: Thank you.

Operator: This concludes today's conference call.

Operator: This concludes today's conference call. We thank you all for attending today's presentation.

Operator: This concludes our question and answer session.

Operator: I'd like to turn the conference back over to management for closing remarks.

Operator: Thank you once again for joining us today.

Operator: We thank you all for attending today's presentation.

Operator: If you have any further questions, please feel free to contact us at Yatsen directly or PSOB Financial Communications.

Speaker Change: Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Operator: Our contact information for IR in both China and the U.S. can be found in today's press release.

Operator: Thank you and have a great day.

Operator: You may now disconnect your lines and have a wonderful day.

Operator: You may now disconnect your lines and have a wonderful day. Thank you very much.

Operator: Thank you.

Donghao Yang: The decrease was primarily due to an increase in overall average falling price of products, as well as photo improvement in the statistics and statistics. Rolling and marketing expenses for the second quarter of 2024 were 544.7 million as compared with 542.8 million for the prior year period. As a percentage of photo net revenues, total operating expenses for the second quarter of 2024 increased to 6.6% from 6.3% to the prior year period. The increase was primarily due to an increase in investment in the Korean platform in line with the growing revenue contribution from those as well as our investments in new product launches and building brand equity across our portfolio.

Operator: This concludes today's conference call.

Operator: We thank you all for attending today's presentation.

Donghao Yang: Primarily due to the ongoing strategy transformation of the subsidiary brand.

Donghao Yang: In both flagship quarter line, the biolip essence is performing well as the brand continues to build its new quarter line-up.

Donghao Yang: General and administrative expenses for the second quarter of 2024 were 119.1 million as compared with 149.7 million to the prior year period. The increase was primarily attributable to the investment of operation of our global innovation R&D Center in Shanghai on May 28, by 2024. Last time operations for the second quarter of 2024 was 135.2 million as compared with 135.1 million for the prior period. Operating lock margin was 17%, as compared with 15.7% for the prior period.

Donghao Yang: On the profitability side, our overall growth margin increased to 17.7%, from 17.47% for the prior year period. Thanks to an increased contribution from high growth margin products.

Donghao Yang: Now the Yats lost from operation for the second quarter of 2024 was 111.9 million as compared with 74.6 million for the prior period. Now the Yats operating lock margin was 14.1% as compared with 8.7% for the prior period. Net lock for the second quarter of 2024 decreased by 21.2% to 85.5 million from 108.5 million for the prior period. Net lock margin was 10.8% as compared with 12.6% for the prior period.

Donghao Yang: Our net growth margin also narrowed by 1.9% to 10.8%, from 10.6% for the prior year period.

Donghao Yang: Our long-cap net growth margin, however, increased to 94%, from 5.4% for the prior year period.

Donghao Yang: Net lock[inaudible] Thank you.

Operator: So now I'll begin the question and answer session. To ask a question you may press star them one on your telephone keypad. If you're using a speaker phone, we ask you please pick up your handset before pressing the keys.

Maggie Huang: Our first question comes from Maggie Huang with CITC. Please go ahead. Thank you for the question.

Donghao Yang: This is Maggie Huang from JICC. I have two questions. The first question is that what is our plan for product development and channel expansion for telecosmetic and in-care brands respectively? And my second question is that what is our promotion strategy in the second half of the year and how to balance our revenue growth and profitability? That's my question. Thank you. Thank you, Maggie, for the question. So for the question, I'll plan for a product development and channel strategy.

Donghao Yang: So, well, we are friendly to find you our product mix and also channel mix. On the product side, we have a very robust EU product pipeline for the second half of the year for both our color and skincare side. So we continue to have a number of EU products, for example, for Dominic and Dr. Wu, they will have new, very active and functional skincare products launched in later half this year. And also on the color side, we have a list of new pipelines including new lipsticks and foundation products, you know, for public gallery and local audience.

Donghao Yang: And then terms of channels, we have been talking about depending on more to be channels of currently very high concentrations. So by increasing the concentration or the weighting of the to be channel, we'll have more room for growth and also a better profitability mix in future.

Donghao Yang: Meanwhile, we will maintain our investments in brand building and R&D and future sustainable growth paths.

Donghao Yang: You know, achieving a possibility of service possible. In terms of revenue, you know, we're going to see more glassers in terms of new products, and Kennell Nyx, so that we can grow our revenue as far as possible, but to the meantime, we're going to be focusing on achieving a profitable revenue growth and be profitable as soon as possible. Thank you very much and I have no more questions. Thank you.

Donghao Yang: Our skincare brand delivered another study performance in the second quarter. It was not only by our hero products, but also by an increasingly diverse and extensive product quality.

Donghao Yang: Our product of my friends also continue to develop and launch stand-up products in the second quarter.

Donghao Yang: We are introduced out of our products, including a translucent, learning long-ware cushion foundation.

Donghao Yang: While little on-limbs brought the form-wild, dual-ended, raw gel pan and the dual-compact powder market.

Donghao Yang: Also, for the very highly-ethan-slip thick region, we want to go award in the beauty and personal care categories as a thick, highly-row award.

Irene Lyu: This concludes our question and answer session. I'd like to turn the conference back over to management for closing remarks. Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Yatsen directly or PSL Financial Communications. A contact information for IR in both China and the US can be found in today's press release. Thank you and have a great day. Thank you.

Donghao Yang: So, we think our effective brand will be positioning in a peeling hero product.

Donghao Yang: The third quarter will also include it.

Donghao Yang: On the skincare front, I think it helped a major brand event in Bali in collaboration with GQ featuring several experts and KOLs.

Donghao Yang: I think it also announced the swimming world champion, Zhang Yufei, as his new brand ambassador in the quarter.

Donghao Yang: For the more, Dr. Wu participated in the 13th Asia Stomachology Congress, the both widely attended and representative event in the field of the pathology in Asia, focusing on Asian skin's unique anti-aging needs.

Operator: This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day. Thank you very much.

Donghao Yang: Dr. Wu collaborated with top industry experts to present the latest advancement in anti-aging incoferment serenity efficacy.

Donghao Yang: In conclusion, the second quarter was challenging, from a macro perspective.

Donghao Yang: We will remain focused on the factors we can control.

Donghao Yang: Having continued improvement in our launch margin through COP at efficiency optimizations, while in taking our channel mix and advancing portal development.

Donghao Yang: Is that?

Donghao Yang: I will now turn the call over to our CFO, Dong Hao Yang, to discuss our financial performance.

Donghao Yang: Thank you, everyone.

Donghao Yang: Thank you, David.

Donghao Yang: Hello, everyone.

Donghao Yang: Before I get started, I would like to clarify that all financial numbers presented today are an Indian amount, and our percentage changes to close to year-to-year changes and this otherwise knows it.

Donghao Yang: Total net revenues for the second quarter of 2024 decreased by 7.5%.

Donghao Yang: The 700 and 94.5 million from 800 and 58.5 million to the prior year period.

Donghao Yang: The decrease was primarily due to 11.4% year-to-year increase in net revenues from color, cosmetic brands.

Donghao Yang: Growth profit for the second quarter of 2024 decreased by 5%.

Donghao Yang: To 600 and 9.4 million from 600 and 41.6 million for the prior year period.

Donghao Yang: Total operating expenses for the second quarter of 2024 decreased by 4.1%.

Donghao Yang: The 744.6 million from 776.7 million to the prior year period.

Donghao Yang: As a percentage of photo net revenues, total operating expenses for the second quarter of 2024 were 93.7% compared with 90.5% for the prior year period. Total operating expenses for the second quarter of 2024 were 51.2 million as compared with 68.3 million to the prior year period.

Donghao Yang: As a percentage of photo net revenues, total operating expenses for the second quarter of 2024 decreased to 6.4% from 6.8% to the prior year period.

Donghao Yang: The decrease was primarily due to an increase in overall average falling price of products, as well as photo improvement in the statistics and statistics.

Donghao Yang: Rolling and marketing expenses for the second quarter of 2024 were 544.7 million as compared with 542.8 million for the prior year period.

Donghao Yang: As a percentage of photo net revenues, total operating expenses for the second quarter of 2024 increased to 6.6% from 6.3% to the prior year period. The increase was primarily due to an increase in investment in the Korean platform in line with the growing revenue contribution from those as well as our investments in new product launches and building brand equity across our portfolio.

Donghao Yang: General and administrative expenses for the second quarter of 2024 were 119.1 million as compared with 149.7 million to the prior year period.

Donghao Yang: The increase was primarily attributable to the investment of operation of our global innovation R&D Center in Shanghai on May 28, by 2024.

Donghao Yang: Last time operations for the second quarter of 2024 was 135.2 million as compared with 135.1 million for the prior period. Operating lock margin was 17%, as compared with 15.7% for the prior period.

Donghao Yang: Now the Yats lost from operation for the second quarter of 2024 was 111.9 million as compared with 74.6 million for the prior period.

Donghao Yang: Now the Yats operating lock margin was 14.1% as compared with 8.7% for the prior period. Net lock for the second quarter of 2024 decreased by 21.2% to 85.5 million from 108.5 million for the prior period.

Donghao Yang: Net lock margin was 10.8% as compared with 12.6% for the prior period.

Donghao Yang: Net lock[inaudible] Thank you.

Operator: So now I'll begin the question and answer session.

Operator: To ask a question you may press star them one on your telephone keypad.

Operator: If you're using a speaker phone, we ask you please pick up your handset before pressing the keys.

Operator: To withdraw your question, please press star them two.

Operator: And if you do wish to ask, if you for the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

Operator: And once again, that's star them one if you have a question.

Maggie Huang: Our first question comes from Maggie Huang with CITC.

Maggie Huang: Please go ahead.

Maggie Huang: Thank you for the question.

Maggie Huang: This is Maggie Huang from JICC.

Maggie Huang: I have two questions.

Maggie Huang: The first question is that what is our plan for product development and channel expansion for telecosmetic and in-care brands respectively?

Maggie Huang: And my second question is that what is our promotion strategy in the second half of the year and how to balance our revenue growth and profitability?

Maggie Huang: That's my question.

Maggie Huang: Thank you.

Donghao Yang: Thank you, Maggie, for the question.

Donghao Yang: So for the question, I'll plan for a product development and channel strategy.

Donghao Yang: So, well, we are friendly to find you our product mix and also channel mix.

Donghao Yang: On the product side, we have a very robust EU product pipeline for the second half of the year for both our color and skincare side.

Donghao Yang: So we continue to have a number of EU products, for example, for Dominic and Dr. Wu, they will have new, very active and functional skincare products launched in later half this year.

Donghao Yang: And also on the color side, we have a list of new pipelines including new lipsticks and foundation products, you know, for public gallery and local audience.

Donghao Yang: And then terms of channels, we have been talking about depending on more to be channels of currently very high concentrations.

Donghao Yang: So by increasing the concentration or the weighting of the to be channel, we'll have more room for growth and also a better profitability mix in future.

Donghao Yang: Okay, very second question.

Donghao Yang: The promotion strategy for the second half of the year, I don't think there will be a substantial changes in terms of promotion strategy.

Donghao Yang: You know, we're going to have February 11 and at the other event from now until the end of the year.

Donghao Yang: So we will primarily focus on optimizing our channel mix and products mix.

Donghao Yang: And in terms of revenue of profitability value.

Donghao Yang: I think as to talking about the year, we're going to be focusing more on cutting loss.

Donghao Yang: You know, achieving a possibility of service possible.

Donghao Yang: In terms of revenue, you know, we're going to see more glassers in terms of new products, and Kennell Nyx, so that we can grow our revenue as far as possible, but to the meantime, we're going to be focusing on achieving a profitable revenue growth and be profitable as soon as possible.

Maggie Huang: Thank you very much and I have no more questions.

Operator: Thank you.

Operator: This concludes our question and answer session.

Operator: I'd like to turn the conference back over to management for closing remarks.

Operator: Thank you once again for joining us today.

Operator: If you have any further questions, please feel free to contact us at Yatsen directly or PSL Financial Communications. A contact information for IR in both China and the US can be found in today's press release.

Operator: Thank you and have a great day.

Operator: Thank you.

Operator: This concludes today's conference call.

Operator: We thank you all for attending today's presentation.

Operator: You may now disconnect your lines and have a wonderful day.

Operator: Thank you very much.

Q2 2024 Yatsen Holding Ltd Earnings Call

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