Q2 2024 Smart Share Global Ltd Earnings Call

August 22, 2024

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Operator: Hello and thank you for standing by for Energy Monster's second quarter 2024 earnings conference call.

Operator: Hello, and thank you for standing by for Energy Monsters' second quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. Today's conference is being recorded. If you have any objections, you may disconnect at this time.

Speaker Change: Hello, and thank you for standing by for Energy Monster second quarter, 'twenty 'twenty four earnings conference call.

Operator: At this time, all participants are in listen-only mode. Today's conference is being recorded.

Maria Xun: Once again, thank you for joining us today.

Operator: Thank you for your participation in today's conference.

Speaker Change: At this time all participants are in listen only married to.

Speaker Change: Today's conference is being recorded if you have any objections you may disconnect at this time.

Operator: If you have any objections, you may disconnect at this time.

Hansen Shi: I would like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Hansen Shi. Thank you. Welcome to our 2024 second quarter earnings conference call. Joining me on the call today are Mars Cai, Energy Monsters Chairman and Chief Executive Officer, and Maria Xin, Chief Financial Officer. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2024.

Handsome Chi: I would now like to turn the meeting over to your host for today's conference call Director of Investor Relations Handsome Chi.

Operator: I would now like to

Maria Xun: Please don't hesitate to contact us if you have any further questions.

Operator: This concludes the presentation.

Speaker Change: Thank you.

Speaker Change: Welcome to our 2024 second quarter earnings Conference call. Joining me on the call today are Marc Hi, Energy Monsters, Chairman and Chief Executive Officer, and Maria Shields, Chief Financial Officer for today's agenda management will discuss business updates operation highlights and financial performance for the second quarter of 2000.

Operator: You may now disconnect.

Hansen Shi: Before we continue, I refer you to our safe harbor statement in the earnings press release, which will slide through this call, as we will make forward-looking statements. Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that, unless otherwise stated, all figures mentioned during this call are in R&B.

Speaker Change: 24, before we continue I refer you to our Safe Harbor statement in the earnings press release, which applies to this call as we will make forward looking statements. Also this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly.

Speaker Change: Parable GAAP measures.

Speaker Change: Please note that unless otherwise stated all theaters mentioned during this call are in RMB.

Operator: turn the meeting over to your host for today's conference call, Director of Investor Relations,

Mars Cai: I would now like to turn the call over to our Chairman and Chief Executive Officer, Mars Cai, for the business and operation highlights. Thank you very much, Hansen. Good day, everyone. Welcome to our 2024 second quarter earnings call. I'm pleased to report that Energy Monsters has demonstrated solid resilience in the second quarter, despite a softer, the expected consumption environment here in China. We managed to return to gap profitability, with net income reaching 9 million R&B in the quarter. They returned to gap profitability, marks the strength and adaptability of our business model, especially given our overall transition towards the network partner model.

I would now like to turn the call over to our chairman and Chief Executive Officer, Mark for the business and operational highlights.

Hansen Shi: Hansen Shi.

Maria Xun: Thank you for your continued support, and we look forward to speaking with you in the coming months.

Operator: Good day.

Mark: Thank you very much Hamzah good day, everyone welcome to our 2024 second quarter earnings call.

Hansen Shi: Thank you.

Maria Xun: Thank you.

Operator: Thank you for your participation in today's conference.

Operator: This concludes the presentation.

Mark: I'm pleased to report that energy Monster has demonstrated solid resilience in the second quarter, despite a softer than expected consumption environment here in China.

Hansen Shi: Welcome to our 2024 second quarter earnings conference call.

Operator: You may now disconnect.

Hansen Shi: Joining me on the call today are Mars Cai, Energy Monster's Chairman and Chief Executive Officer, and Maria Xun, Chief Financial Officer.

Operator: Good day.

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Mark: We managed to return to GAAP profitability with net income, reaching 9 million RMB in the quarter.

Hansen Shi: For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2024.

Operator: Hello, and thank you for standing by for Energy Monster's second quarter 2024 earnings conference call.

Mark: We returned to GAAP profitability marks the strength and adaptability of our business model.

Hansen Shi: Before we continue, I refer you to our Safe Harbor Statement in the earnings press release, which applies to this call, as we will make four linking statements.

Mark: Specialty given our overall transition towards the network partner model.

Hansen Shi: Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.

Mars Cai: This also marks the six consecutive quarters of non-GAAP profitability, since the reopening from the pandemic in early 2023. This achievement reflects the effectiveness of our strategic initiatives and our ability to stay resilient, even amid challenging consumption conditions. Now, in terms of the impact of the consumption power on our operation, our mobile device charging service GME experienced a year-over-year decrease due to the softness of the consumption. Breaking down the quarter sequentially, the GND decreased in April, increased in May, decreased in June, and then increased again in July on a month or month basis. While the impact of holidays and hotter-than-usual weather also served as factors in oscillating the results.

Mark: This also marks the sixth constitute two consecutive quarters of non-GAAP profitability since the reopening from the pandemic in early 2023.

Hansen Shi: Finally, please note that, unless otherwise stated, all figures mentioned during this call

Operator: At this time, all participants are in listen-only mode. Today's conference is being recorded.

Operator: If you have any objections, you may disconnect at this time.

Mark: This achievement reflects the effectiveness of our strategic initiatives and our ability to stay resilient, even amidst challenging consumption condition.

Hansen Shi: are in RMB.

Operator: I would now like to turn the meeting over to your host for today's conference call, Director of Investor Relations,

Hansen Shi: I would now like to turn the call over to our Chairman and Chief Executive Officer, Mars Cai, for the business and operation highlights.

Mark: Now in terms of the impact of the consumption power on I appreciate it.

Speaker Change: Mobile device charging service <unk> experienced a year over year decrease due to the softness of the consumption.

Speaker Change: Breaking down the quarter sequentially, but <unk> decreased in April increased in May decrease in June and then increase again in July on a month on month basis.

Speaker Change: While the impact of holidays and hotter than usual weather.

Speaker Change: Also said asbestos and Oh silly isolating the results.

Mars Cai: The primary season for the lower than usual demand is due to the weaker consumption power going into the summer holidays, which historically has been our peak season. This decline in consumer activity and consumer confidence going into the summer can be seen across the consumer sectors and especially in offline locations. In terms of performance across different cities, we continue to observe trends that highlight the diversification of our mobile device charging network. Contributions from lower-tier cities continue to drive our network expansion, as our expansion into third and lower-tier cities continues to bear fruit. POI count in third and lower-tier cities increased by more than 20% year-over-year as of the end of the second quarter.

Speaker Change: The primary season for the lower than usual demand is due to the weaker consumption power going into the summer holidays, which historically has been our peak season.

Speaker Change: This decline in consumer activity and consumer confidence going into the summer can be seen across the consumer sectors, and especially offline location.

Speaker Change: In terms of performance across different city tiers, we continue to observe trends that highlights the diversification of our mobile device charging network.

Contribution from lower tier cities continue to drive our network expansion is our expansion into third and lower tier cities continues to bear fruit.

Speaker Change: I count in third and lower tier cities increased by more than 20% year over year as of the end of the second quarter is our network partner model continued to allow us to effectively branch into lower tier cities.

Mars Cai: As our network partner model continued to allow us to effectively branch into lower-tier cities, first-tier city POI count maintained a slight increase year-over-year, despite the reduction in our direct model. Our diverse POI categories also showcased varying levels of performances; the restaurant, shopping, beauty, and transportation segments displayed resilience with quarter-over-quarter increases in terms of mobile device charging service GME. Conversely, entertainment and hotel experience quarter-over-quarter declines. While these sectors remain important to our portfolio, the fluctuations reflect the broader economic conditions and consumer behavior patterns in the current consumer climate. Our expansion strategies have allowed us to continue to improve the network effect of our portion, which drives the self-reinforcing cycle between the growth of our POI count and user count, while the market conditions have slowed our pace of expansion.

Speaker Change: First tier city P O I's count maintained a slight increase year over year. Despite the reduction I would go back to model.

Speaker Change: Our diverse categories also showcased varying levels of performance as the restaurants shopping beauty and transportation segments displayed resilience with quarter over quarter increases in terms of mobile device charging service GMB.

Speaker Change: Conversely, entertainment and hotel experienced quarter over quarter declines.

Speaker Change: While these sectors remain important to our portfolio.

Fluctuations reflect the broad economic conditions and consumer behavior patterns in the current consumer climate.

Speaker Change: Our expansion strategies allow us to continue to improve the network effect of our portion.

Speaker Change: Which drives a self reinforcing cycle between the growth of up your white count and user count while the market conditions have slowed our pace of expansion.

Mars Cai: Thank you very much, Hansen.

Mars Cai: I'm proud to see that we continue to reach new operational milestones. Our POI coverage now encompasses a record high 1.27 million POIs, highlighting our relentless drives to enhance service availability and user convenience across a wider geographic region. In parallel, our user base has grown alongside the growth in coverage as we landed at over 400 and 17.1 million cumulative registered users as of the end of the second quarter and an increase of 12.8 million users. Additionally, I would like to note that these operational milestones were achieved even during our strategic rebalancing between our operation models. We were able to expand the contribution of our network partner model while maintaining our core direct model portfolios.

Speaker Change: I'm proud to see that we continue to reach new operational milestones.

Mars Cai: Good day, everyone.

Speaker Change: <unk>, which now encompass a record high one seven.

Speaker Change: 1.27 million <unk>.

Speaker Change: Highlighting our relentless drive to enhance service availability and user convenience across a wider geographic region in.

Speaker Change: Our user base has grown alongside the growth in coverage as we landed at over $417 1 million accumulative registered users as of the end of the second quarter, an increase of $12 8 million users.

Speaker Change: Additionally, I would like to note that these operational milestones achieved even drilling our strategic rebalancing between our operation models.

Speaker Change: We were able to expand the contribution of our network partner model, while maintaining our core direct model portfolios.

Mars Cai: Although the shift in contribution between our business models have imposed short-term impact on our new PUI expansion rate, we remain confident in our long-term prospect. We are already seeing the reduction in our direct model operations, not only lower our operational expenses, but also enhance the contribution from the higher module network partner model. Financially, our cash and cash equivalents remain robust, providing us with the financial stability necessary to continue pursuing strategic initiatives and investing in future growth opportunities. Our new initiatives that leverages energy monsters existing capabilities will unlock new avenues for growth. During the second quarter, other revenue outside of our core business grew by over 400% year-over-year as new business segments began to make more meaningful contributions to our financials.

Although the shift in contribution between our business models have imposed short term impact on our new P Y expansion rate, we remain confident in our long term prospect.

Speaker Change: We're already seeing the reduction in our direct model operations, not only lower our operational expenses, but also enhance the contribution from the higher margin network partner model.

Speaker Change: Financially, our cash and cash equivalents remains robust providing us with the financial stability necessary to continue pursuing strategic initiatives and investing in future growth opportunities.

Speaker Change: Initiatives that Leverages energy amongst its existing capabilities will unlock new avenues for growth.

Speaker Change: During the second quarter other revenue outside of our core business grew by over 400% year over year as new business segments, the game to make more meaningful contribution to our financials.

Mars Cai: These assets are essential as we aim to realize our full growth potential and, consistently, deliver sustain the value to our shareholders.

Speaker Change: <unk> assets are essential as we aim to realize our full growth potential and consistently deliver sustained value to our shareholders.

Mars Cai: Welcome to our 2024 second quarter earnings calls.

Hansen Shi: Hansen Shi.

Mars Cai: Now, let me walk you through our key initiatives in coverage and efficiency. First is our strategies in coverage expansion, in light of the ongoing transition in our operational model. Our commitment to expanding our POI network is driven by the immense potential we see in entire regions and categories throughout China. This expansion is not just about increasing numbers; it's about strategic growth that aligns with our long-term vision of building a mobile device charging infrastructure network capable of fulfilling users' needs anywhere and anytime. We continue to take a balanced approach in our expansion efforts, leveraging both our network partner model and the direct model.

Speaker Change: Now, let me walk you through our key initiatives and coverage and efficiency.

Hansen Shi: Thank you.

Hansen Shi: Welcome to our 2024 second quarter earnings conference call.

Speaker Change: First is our strategies in coverage expansion in light of the ongoing transition in our operational model.

Hansen Shi: Joining me on the call today are Mars Cai, Energy Monster's Chairman and Chief Executive Officer, and Maria Xun, Chief Financial Officer.

Hansen Shi: For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2024.

Hansen Shi: Before we continue, I refer you to our Safe Harbor Statement in the earnings press release, which applies to this call, as we will make four linking statements.

Hansen Shi: Finally, please note that, unless otherwise stated, all figures mentioned during this call, are in RMB.

Hansen Shi: I would now like to turn the call over to our Chairman and Chief Executive Officer,

Mars Cai: Mars Cai, for the business and operation highlights.

Speaker Change: Our commitment to expanding our network, it's driven by the immense.

Potential, we see untapped regions and categories throughout China.

Mars Cai: Thank you very much, Hansen.

Speaker Change: This expansion is not just about increasing numbers, it's about strategic growth that aligns with our long term vision of building a mobile device charging infrastructure network capable of fulfilling users' needs anywhere and anytime.

Mars Cai: Good day, everyone.

Mars Cai: Welcome to our 2024 second quarter earnings call.

Speaker Change: We continue to take a balanced approach in our expansion efforts leveraging both our network partner model and a direct model the.

Mars Cai: The network partner model offers distinct advantages in providing comprehensive coverage across all regions, seamlessly complementing our direct model strength. The direct model remains particularly effective in high-year locations within higher tiers and key accounts. A significant component of our expansion strategy is the ongoing transition to network partner model. This transition is being executed with precision, balancing the rate of transition with quality and operational efficiency. By the end of the second quarter, 89.2% of our POI were operated under the network partner model. A substantial increase from 79.7% at the end of the first quarter and 62% at the end of the same time last year.

Speaker Change: The network partner model offers distinct advantages in providing comprehensive coverage across all regions seamlessly complementing our direct model strength. The direct model remains particularly affect effective in high yield locations within higher tier cities and key accounts.

A significant component of our expansion strategy is the ongoing transition to network partner modal. This transition has been executed with precision balancing the rates of transition with quality and operational efficiency.

Speaker Change: By the end of the second quarter 89, 2% of all P. O Y were operated under network partner model a substantial increase from 79, 7% at the end of the first quarter and a 62% at the end of the same time last year.

Mars Cai: The pace at which we have rebalanced our operations between the direct model and network partner model has exceeded our initial expectations and will continue to take place going into the second half of 2024. We also now have over 12,000 network partners and an increase of more than 1,000 things at the end of the first quarter and an increase of around 3,700 year-over-year. This growth in network partners allows Energy Monster to develop a robust and dynamic distribution capability that drives our market participation and service reach. The increase in network partner count has allowed us to broaden the reach of our cooperation as we expanded into more than 50 new county-level areas this quarter.

Speaker Change: The pace at which we have rebalanced our operations between the direct model and that's what partner model has exceeded our initial expectations.

Speaker Change: And we'll continue to take place going into the second half of 2024.

Operator: Hello, and thank you for standing by for Energy Monsters' second quarter, 2024 earnings conference call.

Operator: Hello, and thank you for standing by for Energy Monsters' second quarter, 2024 earnings conference call. At this time, all participants are in listen-only mode. Today's conference is being recorded.

Speaker Change: We also now have over 12000 network partners, an increase of more than a thousand things to end of first quarter and an increase of around 3700 year over year.

Operator: At this time, all participants are in listen-only mode. Today's conference is being recorded.

Operator: If you have any objections, you may disconnect at this time.

Speaker Change: This growth in network partners allow energy amongst or to develop a robust and dynamic distribution capability that drives our market penetration and service reach the.

Hansen Shi: I would like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Hansen Shi.

Hansen Shi: I would like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Hansen Shi. Thank you. Welcome to our 2024 second quarter earnings conference call. Joining me on the call today are Mars Cai, Energy Monsters Chairman, and Chief Executive Officer, and Maria Xin, Chief Financial Officer. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2024. Before we continue, I refer you to our safe harbor statement in the earnings press release, which will slide through this call, as we will make forward-looking statements.

Hansen Shi: Thank you.

Speaker Change: The increase in network partner Count has allowed us to broaden the reach of our corporation as we expanded into more than 50, new comedy level areas. This quarter for a total coverage of more than 2000, and 100 county level cities.

Mars Cai: For total coverage of more than 2,100 county-level cities. The improved reach of our service has also translated into access to new users, as we are able to attract 12.8 million new registered users during the second quarter of 2024. Our network partner support team continue to play a crucial role, providing hand-on guidance and direct support for everyday needs. Our network partner team continue to improve the standardization of our hardware, software, and operational support for our partners. This is crucial as the number of network partners continues to grow. We have to provide more comprehensive support for all case scenarios for network partners with all levels of experience.

Speaker Change: The improved the reach of our service and it's also translated into access to new users as we are able to attract $12 8 million new registered users during the second quarter of 2024.

Speaker Change: Our network partner support team continued to play a crucial role providing hand on guidance and direct support for everyday needs.

Hansen Shi: Also, this call includes discussion of certain non-gap financial measures. Please refer to our earnings release, which contains a reconciliation of non-gap measures to the most directly comparable gap measures. Finally, please note that, unless otherwise stated, all figures mentioned during this call are in R&B.

Speaker Change: Our network partner team continue to improve the standardization of our hardware software and operational support for our partners. This is crucial as the number of network partners continue to grow.

Speaker Change: We have to provide more comprehensive support for all case scenarios for network partners with all levels of experience.

Hansen Shi: Welcome to our 2024 second quarter earnings conference call.

Mars Cai: These initiatives are designed to ensure that our partners not only feel supported but also empowered to achieve their full potential, as we want every single one of them to be successful. The positive reception of the comprehensive support system to our partners is a strong validation of our approach, and we will continue to refine and enhance these support mechanisms to further strengthen our network partner model. By being able to support our network partner to more quickly launch a profitable operation, we are enhancing Energy Monster's own competitive advantages.

Speaker Change: These initiatives are designed to ensure that our partners not only feel supported was also empowered to achieve their full potential as we walk every single one of them.

Hansen Shi: Joining me on the call today are Mars Cai, Energy Monsters Chairman, and Chief Executive Officer, and Maria Xin, Chief Financial Officer.

Hansen Shi: For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2024.

Speaker Change: To be successful.

Speaker Change: The positive reception of the comprehensive support system to our partners is a strong validation of our approach and we will continue to refine and he has the support and the Canada to further strengthen our network partner model.

Hansen Shi: Before we continue, I refer you to our safe harbor statement in the earnings press release, which will slide through this call, as we will make forward-looking statements.

Mars Cai: They returned to gap profitability, marks the strength and adaptability of our business model, especially given our overall transition towards the network partner model. This also marks the six consecutive quarters of non-gap profitability, since the reopening from the pandemic in early 2023. This achievement reflects the effectiveness of our strategic initiatives and our ability to stay resilient, even amid challenging consumption conditions. Now, in terms of the impact of the consumption power on our operation, our mobile device charging service GME experienced a year-over-year decrease, due to the softness of the consumption.

Speaker Change: Being able to support our network pollo to more quickly launch a profitable operation, we are enhancing energy amongst us own competitive advantages.

Mars Cai: In addition to expanding our network, we continue to optimize low efficiency and under-performing POIs under direct model. This process involves a rigorous review of each POI's performance based on current user traffic and other key metrics. By transitioning under-performing POIs to our network partner model, we can optimize our portfolio for maximum effectiveness and long-term profitability. During the second quarter, our direct model sales team continue to secure and expand partnerships with leading KHA chains and in hospitality, convenience stores, and restaurant industries. These high-profile partnerships are instrumental in boosting our brand visibility and driving our engagement, particularly in high-tier cities where brand influence is critical.

Speaker Change: In addition to expanding our network, we continue to optimize low efficiency and underperforming <unk> under director model.

Hansen Shi: Finally, please note that, unless otherwise stated, all figures mentioned during this call are in R&B.

Speaker Change: This process involves a rigorous review of each pof's performance based on currently user traffic and other key metrics.

Mars Cai: I would now like to turn the call over to our Chairman and Chief Executive Officer, Mars Cai, for the business and operation highlights.

Speaker Change: By transitioning underperforming P O I's to our network partner model, we can optimize our portfolio for maximum effectiveness and long term profitability.

Mars Cai: Thank you very much, Hansen.

Mars Cai: Breaking down the quarter sequentially, the GND decreased in April, increased in May, decreased in June, and then increased again in July, on a month or month basis. While the impact of holidays and hotter than usual weather also served as factors in oscillating the results. The primary season for the lower than usual demand is due to the weaker consumption power going into the summer holidays, which historically has been our peak season. This decline in consumer activity and consumer confidence going into the summer can be seen across the consumer sectors and especially in offline locations.

Speaker Change: During the second quarter, our net to our direct model sales team continue to secure and extend partnerships with leading K, a change and in hospitality convenience stores and restaurant industries.

Mars Cai: Good day, everyone.

Speaker Change: These high profile partnerships are instrumental in boosting our brand visibility and driving our engagement, particularly in high tier cities, where brand influence is critical.

Mars Cai: Welcome to our 2024 second quarter earnings call.

Mars Cai: For the remainder of 2024, in terms of our expansionary strategies, we will continue to emphasize the network partner model as the core driver for growth here in China, while the direct model will focus on high-tier cities and major key accounts.

Speaker Change: For the remainder of 2024 in terms of.

Speaker Change: Ex pension and <unk> strategies, we will continue to emphasize network partner model as the core driver for growth here in China, while the direct model with folks on the high tier cities and major key accounts.

Mars Cai: I'm pleased to report that Energy Monsters has demonstrated solid resilience in the second quarter, despite a softer, the expected consumption environment here in China.

Mars Cai: Additionally, this quarter, we have proactively begun exploring opportunities in beyond China as a way to diversify our operations. We are seeing more and more countries outside of China having the demand for our service and have the suitable infrastructure in place for mobile device charging service to take off. We believe our on-the-ground experience and hardware and software capabilities in China will expand into the international market. In the future, it will serve as one of our new drivers of growth and, in the long run, serve as a way to diversify our operations geographically.

Mars Cai: In terms of performance across different cities, we continue to observe trends that highlight the diversification of our mobile device charging network. Contributions from lower-tier cities continue to drive our network expansion, as our expansion into third and lower-tier cities continues to bear fruit. POI count in third and lower-tier cities increased by more than 20% year-over-year as of the end of the second quarter. As our network partner model continued to allow us to effectively branch into lower-tier cities, first-tier city POI count maintained a slight increase year-over-year, despite the reduction in our direct model.

Speaker Change: Additionally, this quarter, we have proactively begun exploring opportunities beyond China as a way to diversify our operation we are seeing more and more countries outside of China, having the demand for service and have the suitable infrastructure in place for mobile device charging said.

Speaker Change: To take off.

Speaker Change: We believe our on the ground experience in hardware and software capabilities in China will extend into the international market.

Speaker Change: In the future it will serve as one of our new drivers of growth and in the long run and serve as a way to diversify our operation geographically.

Mars Cai: In terms of operational efficiency, we have made significant strides in optimizing our contract structures under the direct model. During the second quarter, we continue to transition thousands of PUIs from the direct model to the network partner model. This transition, while incurring from one time card, is a strategic move that will enhance the financial health for our company in the long run. By optimizing the structure of our own direct model PUIs, we are ensuring that the direct model portfolio is aligned with our broader growth of efficiency and profitable. also, notably, the reduction in direct model contribution is also directly translating into a smaller workforce of direct model BD personnel, driving the reduction of our operational expenses.

Speaker Change: In terms of operational efficiency, we have made significant strides in optimizing our contract structures under the direct model during the second quarter. We continued to transition thousands of P lives from director model to network partner model. This transition while incurring some one time costs.

Mars Cai: Our diverse POI categories also showcased varying levels of performances, the restaurant, shopping, beauty, and transportation segments displayed resilience with quarter-over-quarter increases in terms of mobile device charging service GME. Conversely, entertainment and hotel experience quarter-over-quarter declines. While these sectors remain important to our portfolio, the fluctuations reflect the broader economic conditions and consumer behavior patterns in the current consumer climate. Our expansion strategies have allowed us to continue to improve the network effect of our portion, which drives the self-reinforcing cycle between the growth of our POI count and user count, while the market conditions have slowed our pace of expansion.

Speaker Change: It's a strategic move that will enhance the financial health of our company in a long long by optimizing.

Speaker Change: <unk> the structure of our own direct model P. Wise, we are ensuring that the direct model portfolio is aligned with our broader growth efficiency and profitability.

Speaker Change: Also notably the reduction indirect model contribution is also directly translate into a smaller workforce of direct model BD personnel driving the reduction of our operational expenses.

Mars Cai: On the other side of the press for equal equation, the efficiency of our network partner operations remains stellar. With the network partner count growing by 41 percent a year over year, while the size of our team has grown only at a fraction of that rate. The operational leverage highlights the scalability of our network partner model and our ability to drive both without an increase in operational overheads.

Speaker Change: On the other side of the crisp equation the efficiency of our network partner operations remains stellar with a network partner count growing by 41% year over year, while the size of our team has grown only at a fraction of that rate.

Mars Cai: I'm proud to see that we continue to reach new operational milestones. Our POI coverage now encompass a record high 1.27 million POIs highlighting our relentless drives to enhance service availability and user convenience across a wider geographic region. In parallel, our user base has grown alongside the growth in coverage as we landed at over 400 and 17.1 million cumulative registered users as of the end of the second quarter and increase of 12.8 million users.

Speaker Change: Operational leverage highlights the scalability of our network partner model and our ability to drive both without preparation an increase in operational overheads.

Mars Cai: In addition to optimizing our existing operation, we are also committed to innovation. We continue to dedicate ourselves to the development of new series of cabinets and power banks with improved durability and new experience. This sustained and meticulous attention to every detail has led improvement to our hardware before and will continue to do so going into the future. This progress is crucial as our cabinets are placed across China in all types of locations and in all types of environmental conditions. Improved durability will help reduce the maintenance requirement for both the company and all of our partners, increasing the efficiency across all segments.

Speaker Change: In addition to optimizing our existing operations. We are also committed to innovation, we continue to dedicate ourselves to the development of new series of cabinets and power banks with improved durability and end user experience.

Speaker Change: This sustained and meticulous attention to every detail has led important improvement to our hardware before and it will continue to do so going into the future.

Mars Cai: Additionally, I would like to note that these operational milestones were achieved even during our strategic rebalancing between our operation models. We were able to expand the contribution of our network partner model while maintaining our core direct model portfolios. Although the shift in contribution between our business models have imposed short-term impact on our new PUI expansion rate, we remain confident in our long-term prospect. We are already seeing the reduction in our direct model operations, not only lower our operational expenses, but also enhance the contribution from the higher module network partner model.

Speaker Change: This progress is crucial as all companies placed across China.

Speaker Change: In all types of locations and all types of environmental conditions.

<unk> durability will help reduce that maintains requirement for both the company and all of our partners increasing efficiency across all segments.

Mars Cai: We are confident that our initiatives in operational efficiency and innovation will unlock our growth and value potential in the foreseeable future.

Speaker Change: We are confident that our initiatives and operational efficiency and innovation will unlock outgrowth in a value potential in the foreseeable future.

Mars Cai: In conclusion, the sustained profitability is a clear indicator of the robustness of our business model and the effectiveness of our strategic vision. The ongoing optimization of our developed model, coupled with expansion of network partner model, positions energy monster for continued growth and success. Although the second quarter and current trajectory of the third quarter showed signs of weaker than expected consumption, we remain confident in the long-term recovery of the consumer spending here in China. As we enter the second half of the year, we will continue to focus on strengthening our operational scale and efficiency. With a particular emphasis on expanding network partner coverage and support, key account acquisition and our direct operations, and optimizing POI quality to enhance our margins.

Speaker Change: In conclusion.

Mars Cai: We managed to return to gap profitability, with net income reaching 9 million R&B in the quarter. They returned to gap profitability, marks the strength and adaptability of our business model, especially given our overall transition towards the network partner model.

Mars Cai: Financially, our cash and cash equivalents remain robust, providing us with financial stability necessary to continue pursuing strategic initiatives and investing in future growth opportunities. Our new initiatives that leverages energy monsters existing capabilities will unlock new avenues for growth. During the second quarter, other revenue outside of our core business grew by over 400% year-over-year as new business segments began to make more meaningful contribution to our financials. These assets are essential as we aim to realize our full growth potential and, consistently, deliver sustain the value to our shareholders.

Speaker Change: The sustained profitability is a clear indicator of the robustness.

Speaker Change: Our business model.

Speaker Change: And the effectiveness of our strategic vision.

The ongoing optimization without direct model, coupled with expansion of network partner model positions energy Monster for continued growth and success.

Mars Cai: This also marks the six consecutive quarters of non-gap profitability, since the reopening from the pandemic in early 2023.

Mars Cai: I'm pleased to report that Energy Monster has demonstrated solid resilience in the second quarter, despite a softer than, expected consumption environment here in China.

Mars Cai: This achievement reflects the effectiveness of our strategic initiatives and our ability to stay resilient, even amid challenging consumption conditions.

Speaker Change: Although the second quarter and current trajectory of the third quarter showed signs of weaker than expected consumption. We remain confident in the long term recovery of the consumer spending here in China.

Mars Cai: We managed to return to GAAP probability, with net income reaching 9 million RMB in the quarter. The return to GAAP probability marks the strength and adaptability of our business model, especially given our overall transition towards the network partner model.

Speaker Change: As we enter the second half of the year, we will continue to focus on strengthening our operational scale and efficiency with a particular emphasis on expanding that to upon our coverage and support key account acquisition and now with Iraq operations, and optimizing toi quality to enhance our margins.

Mars Cai: We managed to return to GAAP profitability with net income reaching RMB9 million in the quarter. The return to GAAP profitability marks the strength and adaptability of our business model, especially given our overall transition towards the network partner model. This also marks the sixth consecutive quarters of non-GAAP profitability since the reopening from the pandemic in early 2023.

Mars Cai: Now, in terms of the impact of the consumption power on our operation, our mobile device charging service GME experienced a year-over-year decrease, due to the softness of the consumption.

Mars Cai: Now, let me walk you through our key initiatives in coverage and efficiency. First is our strategies in coverage expansion, in light of the ongoing transition in our operational model. Our commitment to expanding our POI network is driven by the immense potential we see in entire regions and categories throughout China. This expansion is not just about increasing numbers, it's about strategic growth that aligns with our long-term vision of building a mobile device charging infrastructure network capable of fulfilling users' needs anywhere and anytime.

Mars Cai: This achievement reflects the effectiveness of our strategic initiatives and our ability to stay resilient, even amid challenging consumption conditions.

Mars Cai: Breaking down the quarter sequentially, the GND decreased in April, increased in May, decreased in June, and then increased again in July, on a month or month basis.

Mars Cai: We need to continue sharpening our competitive edge with the network partner model, which already delivers healthy unit economics but has the potential to achieve even greater efficiencies and returns. To that end, we will continue to improve the stimulation of our product and service for our natural partners and providing enhanced support and experience to ensure their continued success. We will continue to develop a new hardware, including next-generation power banks and cabinets, designed to be more durable while the same time featuring reduced costs. These initiatives are designed to ensure that we remain at the forefront of innovation and further strengthen our competitive advantages under the network partner model.

Speaker Change: We need to continue sharpening our competitive edge with a network partner model, which already delivers healthy unit economics, but has the potential to achieve even greater efficiencies and returns.

Speaker Change: To that end, we will continue to improve the standardization of our product and service for our network partners and providing enhanced support and experience to ensure their continued success.

Speaker Change: We will continue developing new hardware, including next generation power banks in cabinets.

Mars Cai: We continue to take a balanced approach in our expansion efforts, leveraging both our network partner model and the direct model. The network partner model offers distinct advantages in providing comprehensive coverage across all regions, seamlessly complementing our direct model strength. The direct model remains particularly effective in high-year locations within higher tiers and key accounts. A significant component of our expansion strategy is the ongoing transition to network partner model. This transition is being executed with precision, balancing the rate of transition with quality and operational efficiency.

Speaker Change: I wanted to be more durable while at the same time of featuring reduced costs.

Speaker Change: These initiatives are designed to ensure that we remain at the forefront of innovation and to further strengthen our competitive advantages under the network partner model.

Mars Cai: In summary, we are optimistic about the future of the market in China and beyond. And the monster is where position the fall sustained development. As the transition between direct and network partner models will help refine the quality of our direct model portfolio, while network partner model continues to feel growth. Once the transition is complete, our business model and financials will be even healthier. Our robust cash reserves and cash flow provide a solid foundation for driving continued growth and value creation for shareholders. We are also pleased to see that the seeds of new initiatives in renewable energy are starting to take form, while the expansion towards international market will be a new capitalist in the future.

Speaker Change: In summary, we are optimistic about the future of the market in China and beyond and it amounts to is we're positioned for sustained development.

Speaker Change: The transition between direct and network partner models will help refine the quality of out there that the motor portfolio, while the network partner model continues to fuel growth.

Speaker Change: Once the transition is complete our business model and the financials will be even healthier our robust cash reserves and cash flow provide a solid foundation for driving continued growth and value creation for its shareholders.

Mars Cai: By the end of the second quarter, 89.2% of our POI were operated under network partner model. A substantial increase from 79.7% at the end of the first quarter and 62% at the end of the same time last year. The pace at which we have rebalanced our operations between the direct model and network partner model has exceeded our initial expectations and will continue to take place going into the second half of 2024.

Speaker Change: We are also pleased to see that the seeds of our new initiatives in renewable energy is starting to take form while the expansion towards international market will be a new catalyst in the future would.

Mars Cai: We believe all of these strategies and positioning will allow us to deliver improved value to Energy Monsters shareholders in the future. Thank you very much.

Speaker Change: We believe all of these strategies and positioning will allow us to deliver improved value to energy amongst its shareholders in the future. Thank.

Mars Cai: We also now have over 12,000 network partners and increase of more than 1,000 things at the end of the first quarter and an increase of around 3,700 year-over-year. This growth in network partners allow energy monster to develop a robust and dynamic distribution capability that drives our market participation and service reach. The increase in network partner count has allowed us to broaden the reach of our cooperation as we expanded into more than 50 new county-level areas this quarter.

Speaker Change: Thank you very much I'll now turn the call to Maria <unk>, Our Chief Financial Officer for the financial details.

Maria Xin: I will now turn the call to Maria, our Chief Financial Officer, for the financial details. Thank you, Mars. Now let me work you through the second quarter, 2024 financial results in greater detail. For the second quarter of 2024, revenues were 432.9 million, representing a 35.3 percent year-over-year decrease. Mobile device charging revenues, which consists of revenues generating from both direct and network partner models for 410.6 million and accounted for 88.7 percent of our total revenues for the quarter. Revenue generated from direct model, which comprise a mobile device charging service of 115.9 million and part bank sales of 2.2 million, were 118.1 million for the second quarter of 2024, down 60.7 percent year-old year.

Maria: Thank you Mark.

Mars Cai: Now, in terms of the impact of the consumption power on our operation, our mobile device charging service, GNV, experienced a year-over-year decrease due to the softness of the consumption. Breaking down the quarter sequentially, the GNV decreased in April, increased in May, decreased in June, and then increased again in July on a month-to-month basis, while the impact of holidays and hotter-than-usual weather also served as factors in the oscillating results.

Maria: Now, let me walk you through the second quarter 2020 for financial results in greater detail.

Mars Cai: The primary season for the lower-than-usual demand is due to the weaker consumption power going into the summer holidays, which historically has been our peak season. This decline in consumer activity and consumer confidence going into the summer can be seen across the consumer sectors and especially in offline locations.

Maria: For the second quarter of 2024 revenues were 472 9 million.

Maria: We then here 55 points representing year over year decrease.

Mars Cai: In terms of performance across different tiers, we continue to observe trends that highlight, the diversification of our mobile device charging network. Contribution from lower tier cities continue to drive our network expansion, as our expansion, into third and lower tier cities continues to bear fruit. POI count in third and lower tier cities increased by more than 20% year-over-year as of the, end of the second quarter, as our network partner model continued to allow us to effectively branch into lower tier cities.

Speaker Change: Mobile device charging Avenue Leach consists of revenue generating from Iraq, and that's what's happening our model for 410 points since many and accounted for 88, 7% of our total revenue for the quarter.

Mars Cai: For total coverage of more than 2,100 county-level cities. The improved reach of our service has also translated into access to new users as we are able to attract 12.8 million new registered users during the second quarter of 2024. Our network partner support team continue to play a crucial role, providing hand-on guidance and direct support for everyday needs. Our network partner team continue to improve the standardization of our hardware, software and operational support for our partners.

Mars Cai: First tier city POIs count maintained a slight increase year-over-year, despite the reduction, in our direct model. Our diverse POI categories also showcased varying levels of performances. The restaurant, shopping, beauty, and transportation segments displayed resilience with quarter-over-quarter, increases in terms of mobile device charging service GMV.

Speaker Change: Revenue generated from direct model they should comprised of mobile device charging solvency of $115 9 million and pop back up to a one to many well that hundred and 18.1, many for the second quarter of 2024 down 16 point.

Mars Cai: Conversely, entertainment and hotel experience quarter-over-quarter declines.

Mars Cai: While these sectors remain important to our portfolio, the fluctuations reflect the broader, economic conditions and consumer behavior patterns in the current consumer climate.

Speaker Change: 7% all year. The decrease was primarily due to the decrease in number of appeal is operating and is a direct model.

Mars Cai: This is crucial as the number of network partners continue to grow. We have to provide more comprehensive support for all case scenarios for network partners with all levels of experience. These initiatives are designed to ensure that our partners not only feel supported but also empowered to achieve their full potential as we want every single one of them to be successful. The positive reception of the comprehensive support system to our partners is a strong validation of our approach and we will continue to refine and enhance these support mechanisms to further strengthen our network partner model.

Maria Xin: The decrease was primarily due to the decrease in number of POIs of rated enders of direct model. Revenue generated from network partner model, which comprise a mobile device charging solution which increased 14.3 percent year-old year to 61.5 million and part bank cabinet and other related sales, which decreased 65.6 percent year-old year to 131 million, decreased by 59.7 percent to 292.5 million for the second quarter of 2024. The decrease was primarily due to the certain one-time adjustments in mobile device charging revenues for the second quarter of 2023 as a result of the change in the contractual arrangement with network partners.

Mars Cai: Our expansion strategies have allowed us to continue to improve the network effect of, our portion, which drives a self-reinforcing cycle between the growth of our POI count and user count.

Mars Cai: While the market conditions have slowed our pace of expansion, I'm proud to see that we, continue to reach new operational milestones. Our POI coverage now encompasses a record high 1.27 million POIs, highlighting our relentless, drive to enhance service availability and user convenience across a wider geographic region.

Mars Cai: In parallel, our user base has grown alongside the growth in coverage as we landed at over, 417.1 million cumulative registered users as of the end of the second quarter, an increase of 12.8 million users.

Speaker Change: Revenue generated from Nalco, a part in our model, which comprised of mobile device charging solution Z.

Mars Cai: Additionally, I would like to note that these operational milestones were achieved even, during our strategic rebalancing between our operation models.

Speaker Change: <unk> increased 14, 3% year over year to 61 quantify minting and part Bang type cabinet and other related himself.

Mars Cai: We were able to expand the contribution of our network partner model while maintaining, our core direct model portfolios.

Mars Cai: Although the shift in contribution between our business models have imposed short-term, impact on our new POI expansion rate, we remain confident in our long-term prospect. We are already seeing the reduction in our direct model operations, not only lower our, operational expenses but also enhance the contribution from the higher margin network partner model.

Mars Cai: Financially, our cash and cash equivalents remain robust, providing us with financial, stability necessary to continue pursuing strategic initiatives and investing in future growth opportunities.

Mars Cai: Our new initiative that leverages Energy Monster's existing capabilities will unlock new avenues, for growth.

Speaker Change: <unk> decreased 65, 6% year, two 171 million.

Speaker Change: Decreased by 59, 7% to 219 two points by many for the second quarter of 2024.

Speaker Change: The decrease was primarily due to the certain onetime adjustments in mobile device charging revenues for the second quarter of 2023 as a result of the change in the contractual arrangements.

Mars Cai: By being able to support our network partner to more quickly launch a profitable operation, we are enhancing energy monster's own competitive advantages. In addition to expanding our network, we continue to optimize low efficiency and under-performing POIs, under direct model. This process involves a rigorous review of each POIs performance based on current user traffic and other key metrics. By transitioning under-performing POIs to our network partner model, we can optimize our portfolio for maximum effectiveness and long-term profitability.

Mars Cai: While the impact of holidays and hotter than usual weather also served as factors in oscillating the results.

Maria Xin: Other revenues, which account for 11.3 percent of our total revenues, which are 52.3 million for the second quarter of 2024, are 433.7 percent year-old year. The increase was primarily attributable to the new business initiative. of Ram News was done 67.2% year-year to 219.6 million for the second quarter of 2024. The decrease was primarily due to the one-time adjustment in mobile device charging in the cost of Ram News for the second quarter of 2023 as a result of the change in contractual arrangement with network partners and the decrease in depreciation as a result of the decrease in number of POIs of rated and their direct model.

Speaker Change: Patterns.

Speaker Change: Other revenues, which account for 11 points or 8% of our total revenues reached <unk>.

52 points of remaining for the second quarter of 2024 of 453.7% a year.

Mars Cai: During the second quarter, other revenue outside of our core business grew by over 400% year-over-year, as new business segments began to make more meaningful contributions to our financials.

Mars Cai: These efforts are essential as we aim to realize our full growth potential, and consistently deliver sustained value to our shareholders.

Mars Cai: Now let me walk you through our key initiatives in coverage and efficiency.

Speaker Change: The increase was primarily attributable to the new business initiatives.

Mars Cai: First is our strategies in coverage expansion in light of the ongoing transition in our operational model. Our commitment to expanding our POI network is driven by the immense potential we see in untapped regions and categories throughout China.

Mars Cai: This expansion is not just about increasing numbers. It's about strategic growth that aligns with our long-term vision of building a mobile device charging infrastructure network, capable of fulfilling users' needs anywhere and anytime.

Mars Cai: We continue to take a balanced approach in our expansion efforts, leveraging both our network partner model and the direct model. The network partner model offers distinct advantages in providing comprehensive coverage across all regions, seamlessly complementing our direct model strength. The direct model remains particularly effective in high-yield locations within higher tier cities and key accounts. A significant component of our expansion strategy is the ongoing transition to the network partner model. This transition is being executed with precision, balancing the rate of transition with quality and operational efficiency.

Mars Cai: By the end of the second quarter, 89.2% of our POI were operated under the network partner model, a substantial increase from 79.7% at the end of the first quarter and 62% at the end of the same time last year.

Speaker Change: Cost of revenues was down 57, 2% year to 219.6, meaning for the second quarter of 2024.

Mars Cai: The pace at which we have rebalanced our operations between the direct model and network partner model has exceeded our initial expectations, and will continue to take place going into the second half of 2024. We also now have over 12,000 network partners, an increase of more than 1,000 since the end of first quarter, and an increase of around 3,700 year-over-year. This growth in network partners allow Energy Monster to develop a robust and dynamic distribution capability, that drives our market participation and service reach.

Mars Cai: The increase in network partner count has allowed us to broaden the reach of our corporation, as we expanded into more than 50 new county-level areas this quarter for a total coverage of more than 2,100 county-level cities. The improved reach of our service has also translated into access to new users, as we are able to attract 12.8 million new registered users during the second quarter of 2024.

Mars Cai: During the second quarter, our direct model sales team continue to secure and expand partnerships with leading KHA chains and in hospitality, convenience stores, and restaurant industries. These high-profile partnerships are instrumental in boosting our brand visibility and driving our engagement, particularly in high-tier cities where brand influence is critical. For the remainder of 2024 in terms of our expansionary strategies, we will continue to emphasize the network partner model as the core driver for growth here in China, while the direct model will focus on high-tier cities and major key accounts.

Mars Cai: Our network partner support team continues to play a crucial role, providing hands-on guidance and direct support for everyday needs.

Speaker Change: The decrease was primarily due to the one time.

Speaker Change: Adjustments in mobile device charging in cost of revenue for the second quarter of 2023 as a result of the change in contractual arrangement with a partner and a decrease in depreciation as a result of the decrease in number appeal I operated and there's a direct model.

Maria Xin: Ghost profit was down 33.7% year-year to 214.3 million for the second quarter of 2024. Operating expenses for the second quarter of 2024 were 249.3 million, down 29.5% year-to-year. Excluding share-based accommodations, non-cap operating expenses were 243.3 million, representing a year-to-year decrease of 30.1%. Research and development expenses for the second quarter of 2024 were 20.8 million, up 11.6% year-to-year. The decrease was primarily due to the decrease in personnel-related expenses. Self and marketing expenses for the second quarter of 2024 were 118.9 million, down 38.7% year-to-year. The decrease was primarily due to the decrease in incentive fees paid to location partners and their direct model and personnel-related expenses.

Speaker Change: Gross profit was down 33.7% year over year to 243 plants remaining for the second quarter of 2024.

Mars Cai: Additionally, this quarter, we have proactively begun exploring opportunities in beyond China as a way to diversify our operations. We are seeing more and more countries outside of China having the demand for our service and have the suitable infrastructure in place for mobile device charging service to take off. We believe our on-the-ground experience and hardware and software capabilities in China will expand into the international market. In the future, it will serve as one of our new drivers of growth and in the long run serve as a way to diversify our operations geographically.

Speaker Change: Operating expenses for the second quarter of 2024, or 249 clients remaining down 29, 5% you know a year excluding share based compensation non-GAAP operating expenses of 243 clients are remaining.

Speaker Change: And you know a year or year, a decrease of 31%.

Speaker Change: Research and development expenses for the second quarter of 2024 or 28.8, meaning.

Speaker Change: One 6% year over year.

Speaker Change: The decrease was primarily due to the increase in personnel related expenses.

Speaker Change: South on the marketing expenses for the second quarter of 2024, well that Henry and 18, nine meaning down 38.7% year over year. The decrease was primarily due to the decrease in incentive fees paid to locations has a nurse and there's a direct model.

Mars Cai: In terms of operational efficiency, we have made significant strides in optimizing our contract structures under the direct model. During the second quarter, we continue to transition thousands of PUIs from the direct model to the network partner model. This transition, while incurring from one time card, is a strategic move that will enhance the financial health for our company in long run. By optimizing the structure of our own direct model PUIs, we are ensuring that the direct model portfolio is aligned with our broader growth of efficiency and profitable, also, notably, the reduction in direct model contribution is also directly translating into a smaller workforce of direct model BD personnel, driving the reduction of our operational expenses.

Speaker Change: And the personnel related expenses.

Maria Xin: Journal and administrative expenses for the second quarter of 2024 were 39.5 million, up 26.8% year-to-year. The increase was primarily due to the increase in reserve for the duck-for-cum in relation to the increase in contribution of network partner models. Gloves from operations were safe milling and operating margins for the second quarter of 2024 was negative 1.3%. Net income was 9.2 million in the second quarter of 2024 compared to a net income of 24.1 million in the same period this last year. Net margin for the second quarter of 2024 was 2% compared to a net margin of 2.4% in the same period last year.

Speaker Change: General and administrative expenses for the second quarter of 2024 was $39 5 million up 26, 8% year over year.

Speaker Change: The increase was primarily due to the increase in reserve for that that Qualcomm in relation to the increasing contribution of network partner model.

Speaker Change: Loss from operations was milling and operating margins for the second quarter of 2024 was negative one 3%.

Net income was 91 too many in the second quarter of 2024 compared to a net income of 24 point my money in the same period last year.

Speaker Change: Thanks, Martin for the second quarter of 2024 hour two per cent compared to a net margin of 214% in the same period last year.

Maria Xin: Net income, which is flu share-based accommodation expenses, was 15.2 million in the second quarter of 2024 compared to a non-government income of 13.1 million in the same period last year. As of June 30, 2024, the company had cash and cash equivalents, restrictive cash, and a short-term investment of 3.2 million in the same period. Cash flow from use in operations for the second quarter of 2024 was 6.7 million. Capital expenditures for the second quarter of 2024 were 1.4 million.

Speaker Change: None of that net income, which excludes share based compensation expenses was 15 point to me in the second quarter of 2024 compared to a non-GAAP net income of 34 and what many in the same period last year.

Mars Cai: We continue to dedicate ourselves to the development of new series of cabinets and power banks with improved durability and new experience. This sustained and meticulous attention to every detail has led improvement to our hardware before and will continue to do so going into the future. This progress is crucial as our cabinets are placed across China in all types of locations and in all types of environmental conditions. Improved durability will help reduce the maintenance requirement for both the company and all of our partners, increasing the efficiency across all segments. We are confident that our initiatives in operational efficiency and innovation will unlock our growth and value potential in the foreseeable future.

Speaker Change: As of June 32024, the company had a cash and cash equivalents.

Speaker Change: Cash and short term investments.

3.2 fitting.

Speaker Change: Cash flow from.

Speaker Change: Used in operations for the second quarter of 2024 was 617 million capital expenditure for the second quarter of 2024 or one one for many.

Maria Xin: Thank you for letting me. We are now ready for your questions.

Speaker Change: Thank you for letting me we are now ready for your questions operator.

Operator: Operator. Thank you. The question and answer session of this conference call will start in a moment.

Speaker Change: Thank you the question and answer session at this conference call will start in a moment.

Operator: In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the queue again after your first question has been addressed. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speaker phone, please pick up your handset to ask your question.

Speaker Change: In order to be fair to all callers, who wish to ask questions. We will take one question at a time from each caller.

Speaker Change: If you have more than one question. Please request to join the queue again. After your first question has been addressed.

Speaker Change: If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced.

Speaker Change: If you wish to cancel your request please press star two.

Speaker Change: You're on a speakerphone please pick up your handset to ask your question.

Dickie Wei: Your first question comes from Dickie Wei from City, please go ahead. Hi management, thanks for taking my question. Would you please share a bit more color about the progress of the second half this year, both in terms of the power band business and other initiatives? It seems like other revenue is growing quickly, but from a financial perspective, how should we think of modern outlook this year? Thank you. Thanks, Dickie.

Speaker Change: Our first question comes from Vicky Wei from Citi. Please go ahead.

Vicky Wei: Hi management. Thanks for taking my question would you please shed a bit.

Mars Cai: In terms of performance across different cities, we continue to observe trends that highlight the diversification of our mobile device charging network.

Mars Cai: As we enter the second half of the year, we will continue to focus on strengthening our operational scale and efficiency. With a particular emphasis on expanding network partner coverage and support, key account acquisition and our direct operations and optimizing POI quality to enhance our margins. We need to continue sharpening our competitive edge with the network partner model, which already delivers healthy unit economics, but has the potential to achieve even greater efficiencies and returns.

Vicky Wei: More color about the progress of the second half this year, both in terms of the Paul been business and other initiatives. It seems like other revenue is growing quickly.

Mars Cai: Contributions from lower-tier cities continue to drive our network expansion, as our expansion into third and lower-tier cities continues to bear fruit. POI count in third and lower-tier cities increased by more than 20% year-over-year as of the end of the second quarter.

Speaker Change: Quickly, but from a financial perspective, how should we think of margin outlook. This year. Thank you.

Speaker Change: Thanks, Vicky, Yes, I will take the first part of the question I think the market in the second quarter was a pretty challenging.

Mars Cai: Yes, I will take the first part of the question. I think the market in the second quarter was pretty challenging. Like I mentioned earlier, results are oscillating with no definitive trend of rebound as of the end of the second quarter. This again, I think, is due to a number of factors that include the consumer confidence and somewhat extreme weather conditions, and their impact has bring cold down to the overall consumer sector. There isn't too much visibility, actually, for the second half of 2024, in terms of our core business. The current numbers in July don't show much science over rebound in the peak third quarter season, but at the same time, our other initiative is training up pretty quickly, and there is definitely potential; it's being a driver of growth in the longer term.

Like I mentioned earlier results are oscillating with no definitely.

Mars Cai: To that end, we will continue to improve the stimulation of our product and service for our natural partners and providing enhanced support and experience to ensure their continued success. We will continue to develop a new hardware including next-generation power banks and cabinets, designed to be more durable while the same time of featuring reduced costs. These initiatives are designed to ensure that we remain at the forefront of innovation and further strengthen our competitive advantages under the network partner model.

Speaker Change: Definitely the trend of a rebound as of the end of the second quarter.

Speaker Change: This again I think is due to a number of factors that include the consumer confidence and somewhat extreme weather conditions and their impact has bring codes down to the old ball consumer sector.

Speaker Change: There isn't too much visibility actually for the second half of 'twenty 'twenty four in terms of our coal business.

Speaker Change: The current numbers in July it doesn't show much signs of a rebound in the peak third quarter season.

Speaker Change: But after the tie at same time, our other initiatives is training up pretty quickly and there is definitely potential.

Speaker Change: It's being a driver of growth in the longer term.

Mars Cai: Now again, at the end of the day, I think we need to focus back into things that are in our own hand, specifically our focus on strengthening our operational scale and efficiency, especially in expanding natural partner coverage and providing more comprehensive support, key account acquisition under the direct model, and optimizing POI quality to enhance our margins. At the same time, diversifying ourselves with initiatives in renewable energy and plans for the international market will serve as drivers for tomorrow.

Speaker Change: Now again at the end of the day I think we need to folks back into things that are in our own hands.

Mars Cai: Our network partner team continues to improve the standardization of our hardware, software and operational support for our partners. This is crucial as the number of network partners continues to grow.

Mars Cai: This also marks the sixth consecutive quarters of non-GAAP probability since the reopening from the pandemic in early 2023.

Speaker Change: Specifically, our focus on strengthening our operational scale and efficiency.

Mars Cai: We have to provide more comprehensive support for all case scenarios for network partners with all levels of experience. These initiatives are designed to ensure that our partners not only feel supported but also empowered to achieve their full potential as we want every single one of them to be successful.

Speaker Change: Specialty in expanding network partner coverage and providing more comprehensive support key account acquisition under the direct model and optimizing <unk> quality to enhance our margins at the same time diversifying ourselves with initiatives in renewable energy and plans for the international market.

Mars Cai: We are also pleased to see that the seeds of new initiatives in renewable energy is starting to take form, while the expansion towards international market will be a new capitalist in the future. We believe all of these strategies and positioning will allow us to deliver improved value to energy monsters shareholders in the future. Thank you very much.

Mars Cai: This achievement reflects the effectiveness of our strategic initiatives and our ability to stay resilient, even amid challenging consumption conditions.

Speaker Change: <unk> will serve as drivers for tomorrow.

Mars Cai: Overall, I'm confident that these strategies collectively positions Energy Monster for long-term success.

Speaker Change: Overall I'm confident that these strategies are collectively positions energy most of it for long term success.

Maria Xin: Yeah, I will now let Maria take the second part of the question. Hi, VK. Our revenue mainly from our initiatives in renewable energy has been growing quickly in this quarter. It's a sector with a large market opportunities as well as clear business model. As of July, this new initiative is already at a brief even point with a small amount of profits. The margin going forward will really depend on the scale, but the industry standard for this model is around 8 to 10% growth margin and 3 to 5% net margin. It will take a bit of time to reach that margin level, but we are definitely excited about it.

Speaker Change: Yeah.

Speaker Change: Maria I take the second part of the question.

Maria Xin: I will now turn the call to Maria, our chief financial officer for the financial details. Thank you, Mars. Now let me work you through the second quarter, 2024 financial results in greater details. For the second quarter of 2024, revenues were 432.9 million, representing a 35.3 percent year-old year decrease. Mobile device charging revenues, which consists of revenues generating from both direct and network partner models for 410.6 million and accounted for 88.7 percent of our total revenues for the quarter.

Mars Cai: Now, in terms of the impact of the consumption power on our operation, our mobile device charging, service GNV experienced a year-over-year decrease due to the softness of the consumption. Breaking down the quarter sequentially, the GNV decreased in April, increased in May, decreased in June, and then increased again in July on a month-on-month basis. Now, the impact of holidays and hotter-than-usual weather also served as factors in oscillating the results.

Maria: Hi, Ricky our other revenue mainly from our initiatives in renewable energy has.

Mars Cai: Conversely, entertainment and hotel experience quarter-over-quarter declines.

Maria: Been growing quickly in this quarter is it a sector with a large market opportunities as well as clear business model.

Mars Cai: While these sectors remain important to our portfolio, the fluctuations reflect the broader economic conditions and consumer behavior patterns in the current consumer climate.

Maria: As of July This new initiative is arriving at a break even point is a small amount of it.

Mars Cai: Our expansion strategies have allowed us to continue to improve the network effect of our portion, which drives the self-reinforcing cycle between the growth of our POI count and user count, while the market conditions have slowed our pace of expansion.

Speaker Change: The margins going forward they'll really depends on the scale by the industry standards, but this model is around 8% to 10% gross margin and a 3% to 5% in that market.

Speaker Change: It will take a bit of time to reach that market level, but we are definitely excited about that.

Maria Xin: Revenue generated from direct model, which comprise a mobile device charging service of 115.9 million and part bank sales of 2.2 million were 118.1 million for the second quarter of 2024, down 60.7 percent year-old year. The decrease was primarily due to the decrease in number of POIs of rated enders of direct model. Revenue generated from network partner model, which comprise a mobile device charging solution which increased 14.3 percent year-old year to 61.5 million and part bank cabinet and other related sales, which decreased 65.6 percent year-old year to 131 million decreased by 59.7 percent to 292.5 million for the second quarter of 2024.

Maria Xin: Thank you.

Speaker Change: Thank you. Thank you.

Speaker Change: Thank you once again, if you wish to ask a question. Please press star one on your telephone.

Operator: Once again, if you wish to ask a question, please press star one on your telephone.

Charlie Chen: Your next question comes from Charlie Chen from China Renaissance.

Speaker Change: Your next question comes from Charlie Chen from China Renaissance. Please go ahead.

Charlie Chen: Please go ahead. Hi, Mars. Hi, Maria. Thanks for taking my question. It seems like we are executing the transition pretty quickly, so I just want you to understand what would be the equilibrium for the direct and the partner model in the near future. And also just a quick slide question, how exactly do you work with KAs in the future if most of your regions are on the network partner model? Thank you. Thanks, Charlie. Great questions. The vast majority of our POIs and GND will be from the network partner model. That trend is undeniable. I think the balance will be around 5 to 10% of GND by the end of this year if I have to give a rough estimate, but this number really depends on a number of facts.

Mars Cai: In parallel, our user base has grown alongside the growth in coverage as we landed at over 400 and 17.1 million cumulative registered users as of the end of the second quarter and increase of 12.8 million users.

Charlie Chen: Hi, Mark Hi, Maria Thanks.

Charlie Chen: Thanks for taking my question. It seems like we are executing the transition pretty quickly. So I just want to understand what would be the equilibrium for the direct and the partner model in the near future and also just a quick final question, how exactly do you work with <unk> in the future. If most of your regions are already in that.

Charlie Chen: Upon the model. Thank you.

Speaker Change: Thanks, Charlie Great questions. The vast majority of our <unk> and <unk> will be from the natural part of the model.

Speaker Change: That trend is undeniable.

Speaker Change: I think the balance would be around 5% to 10% of <unk> by the end of this year, if I had to give a rough estimate but this number really depends on a number of effects are.

Maria Xin: The decrease was primarily due to the certain one-time adjustments in mobile device charging revenues for the second quarter of 2023 as a result of the change in the contractual arrangement with network partners. Other revenues which account for 11.3 percent of our total revenues which are 52.3 million for the second quarter of 2024 are 433.7 percent year-old year. The increase was primarily attributable to the new business initiative, of Ram News was done 67.2% year-year to 219.6 million for the second quarter of 2024.

Mars Cai: Things like the efficiency of our direct model portfolio and the team all contribute to the end without. What is clear is currently that the economics of the network partner model is still superior to that of the direct one. And thus, we will continue forward with the rebalancing going into the second half of this year.

Speaker Change: Things like the efficiency of our direct model portfolio and the team all contribute to that and without.

Speaker Change: What is clear is currently.

Speaker Change: That's the economics of natural part of the model is still superior to that of the direct when and.

Speaker Change: And thus we will continue forward with the rebalancing going into the second half of this year.

Mars Cai: As for your question on KA, that's something we definitely thought through before we start this transition. The KA team currently closely work with the network partner team to continue expanding our penetration of key accounts. For certain new KAs, our KA team first secures the collaboration with a major brand. And then our network partner team finds a suitable network partner with extensive experience and a proven track record of maintenance capability to jointly work with the KA. This allows us to continue expanding our KA footprint either in lower tier cities or other regions where our direct model doesn't appear that.

Speaker Change: And as for your question on K, a that's something we definitely through thought through before we start this transition the K team currently closely work with the network upon the team to continue expanding our penetration with key accounts.

Maria Xin: The decrease was primarily due to the one-time adjustment in mobile device charging in the cost of Ram News for the second quarter of 2023 as a result of the change in contractual arrangement with network partners and the decrease in depreciation as a result of the decrease in number of POIs of rated and their direct model. Ghost profit was down 33.7% year-year to 214.3 million for the second quarter of 2024. Operating expenses for the second quarter of 2024 were 249.3 million down 29.5% year-to-year, excluding share-based accommodations, non-cap operating expenses were 243.3 million, representing a year-to-year decrease of 30.1%.

Speaker Change: For certain U K ace Okay team first secures the collaboration with a major brand and then our network partner team to find a suitable network partner with extensive experience and a proven track record of maintaining its capability to jointly work read the K. This allows us to continue expanding.

Okay footprint, either in lower tier cities or other regions, where our direct model doesn't.

Speaker Change: A peer that.

Mars Cai: In terms of our service and the maintenance commitment to the KAs, the marketing campaigns between their brand and ours, and the tailored cabinets and power banks, nothing has changed. All of the bells and whistles that comes with working with EnergyMonster will remain the same for our current and future K partners. Given that, we remain very confident in our very proposition to our partners and ability to continue onboarding leading KAs to our mobile device network. Thank you very much.

Speaker Change: In terms of our service and the maintenance commitments to the case.

Speaker Change: The marketing campaigns between.

Speaker Change: Their brand in hours.

Speaker Change: And the tailored cabinets and power banks nothing has changed all of the bells and whistles that comes with working with energy Monster will remain the same for our current and future K partners.

Speaker Change: That's we remain very confident in our value proposition to our partners and the ability to continue on boarding leading case to extend our mobile device network.

Maria Xin: Research and development expenses for the second quarter of 2024 were 20.8 million up 11.6% year-to-year. The decrease was primarily due to the decrease in personnel related expenses. Self and marketing expenses for the second quarter of 2024 were 118.9 million down 38.7% year-to-year. The decrease was primarily due to the decrease in incentive fees paid to location partners and their direct model and personnel related expenses. Journal and administrative expenses for the second quarter of 2024 were 39.5 million up 26.8% year-to-year.

Speaker Change: I very much hope that answers your question.

Charlie Chen: Hope that answers your questions.

Speaker Change: That's great. Thank you.

Speaker Change: Yeah.

Operator: We are now approaching the end of the conference hall.

tonnage amongst: Thank you we are now approaching the end of the conference call I will now turn the call over tonnage amongst with TSA hadn't really isn't for closing remarks.

Maria Xin: I will now attend the call over to Energy Month's CSR at Maria's in the closing remarks. Once again, thank you for joining us today. Please do not hesitate to contact us if you have any further questions. Thank you for your continuous support, and we look forward to speaking with you in the coming months. Thank you.

Naji Moujaes: Once again, thank you for joining US today, please don't hesitate to contact us. If you have any further questions. Thank you for your continued support and we look forward to speaking with you in the coming months. Thank you.

Operator: Thank you for your participation in today's conference.

Speaker Change: Thank you for your participation in today's conference. This concludes the presentation you may now disconnect good day.

Operator: This concludes the presentation. You may now disconnect.

Operator: Good day. .

Speaker Change: Okay.

Maria Xin: The increase was primarily due to the increase in reserve for the duck-for-cum in relation to the increase in contribution of network partner models. Gloves from operations were safe milling and operating margins for the second quarter of 2024 was negative 1.3%. Net income was 9.2 million in the second quarter of 2024 compared to a net income of 24.1 million in the same period this last year. Net margin for the second quarter of 2024 was 2% compared to a net margin of 2.4% in the same period last year.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Speaker Change: Yeah.

Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

[music].

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Maria Xin: Net income which is flu share-based accommodation expenses was 15.2 million in the second quarter of 2024 compared to a non-government income of 13.1 million in the same period last year. As of June 30, 2024, the company had cash and cash equivalence, restrictive cash and a short-term investment of 3.2 million in the same period. Cash flow from use in operations for the second quarter of 2024 was 6.7 million capital expenditures for the second quarter of 2024 were 1.4 million.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Okay.

Operator: Thank you for letting me, we are now ready for your questions. Operator. Thank you. The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the queue, again after your first question has been addressed. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speaker phone, please pick up your handset to ask your question.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah.

Okay.

Yeah.

Mars Cai: Our new initiatives that leverages energy monsters existing capabilities will unlock new avenues for growth.

Mars Cai: There isn't too much visibility, actually, for the second half of 2024, in terms of our core business, the current numbers in July doesn't show much science over rebound in the peak third quarter season, but at the same time, our other initiative is training up pretty quickly, and there is definitely potential, it's being a driver of growth in the longer term. Now again, at the end of the day, I think we need to focus back into things that are in our own hand, specifically our focus on strengthening our operational scale and efficiency, especially in expanding natural partner coverage and providing more comprehensive support, key account acquisition under the direct model, and optimizing POI quality to enhance our margins. At the same time, diversifying ourselves with initiatives in renewable energy and plans for the international market will serve as drivers for tomorrow. Overall, I'm confident that these strategies collectively positions energy monster for long-term success.

Maria Xin: Yeah, I will now let Maria take the second part of the question.

Speaker Change: [music].

Maria Xin: Hi, VK. Our revenue mainly from our initiatives in renewable energy has been growing quickly in this quarter. It's a sector with a large market opportunities as well as clear business model.

Mars Cai: During the second quarter, other revenue outside of our core business grew by over 400% year-over-year as new business segments began to make more meaningful contribution to our financials.

Mars Cai: These assets are essential as we aim to realize our full growth potential and, consistently, deliver sustain the value to our shareholders.

Mars Cai: Now, let me walk you through our key initiatives in coverage and efficiency.

Maria Xin: As of July, this new initiative is already at a brief even point with a small amount of profits. The margin going forward will really depend on the scale, but the industry standard for this model is around 8 to 10% growth margin and 3 to 5% net margin. It will take a bit of time to reach that margin level, but we are definitely excited about it.

Maria Xin: Thank you.

Operator: Once again, if you wish to ask a question, please press star one on your telephone.

Charlie Chen: Your next question comes from Charlie Chen from China Renaissance. Please go ahead. Hi, Mars. Hi, Maria. Thanks for taking my question.

Mars Cai: It seems like we are executing the transition pretty quickly, so I just want you to understand what would be the equilibrium for the direct and the partner model in the near future. And also just a quick slide question, how exactly do you work with KAs in the future if most of your regions are on the network partner model? Thank you. Thanks, Charlie. Great questions. The vast majority of our POIs and GND will be from the network partner model.

Mars Cai: First is our strategies in coverage expansion, in light of the ongoing transition in our operational model. Our commitment to expanding our POI network is driven by the immense potential we see in entire regions and categories throughout China.

Mars Cai: This expansion is not just about increasing numbers, it's about strategic growth that aligns with our long-term vision of building a mobile device charging infrastructure network capable of fulfilling users' needs anywhere and anytime.

Mars Cai: That trend is undeniable. I think the balance will be around 5 to 10% of GND by the end of this year if I have to give a rough estimate, but this number really depends on a number of facts. Things like the efficiency of our direct model portfolio and the team all contribute to the end without. What is clear is currently that the economics of the network partner model is still superior to that of the direct one. And thus, we will continue forward with the rebalancing going into the second half of this year.

Mars Cai: The direct model remains particularly effective in high-year locations within higher tiers and key accounts.

Mars Cai: As for your question on KA, that's something we definitely thought through before we start this transition. The KA team currently closely work with the network partner team to continue expanding our penetration of key accounts. For certain new KAs, our KA team first secures the collaboration with a major brand. And then our network partner team finds a suitable network partner with extensive experience and proven track record of maintenance capability to jointly work with the KA.

Mars Cai: This allows us to continue expanding our KA footprint either in lower tier cities or other regions where our direct model doesn't appear that. In terms of our service and the maintenance commitment to the KAs, the marketing campaigns between their brand and ours and the tailored cabinets and power banks, nothing has changed. All of the bells and whistles that comes with working with EnergyMonster will remain the same for our current and future K partners. Given that, we remain very confident in our very proposition to our partners and ability to continue onboarding leading KAs to our mobile device network.

Speaker Change: [music].

Operator: Wearing Tang, Smart Share Glo. Wearing Tang, Smart Share Glo. Hello, and thank you for standing by for Energy Monsters' second quarter of 2024 earnings conference call. At this time, all participants are in listen-only mode. Today's conference is being recorded. If you have any objections, you may disconnect at this time.

Mars Cai: The positive reception of the comprehensive support system to our partners is a strong validation of our approach and we will continue to refine and enhance these support mechanisms to further strengthen our network partner model. By being able to support our network partner to more quickly launch a profitable operation, we are enhancing EnergyMonster's own competitive advantages.

Speaker Change: Hello, and thank you for standing by for Energy Monster second quarter, 'twenty 'twenty four earnings conference call.

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

Speaker Change: Today's conference is being recorded if you have any objections you may disconnect at this time.

Mars Cai: In addition to expanding our network, we continue to optimize low efficiency and underperforming POIs under direct model. This process involves a rigorous review of each POI's performance based on current user traffic and other key metrics. By transitioning underperforming POIs to our network partner model, we can optimize our portfolio for maximum effectiveness and long-term profitability.

Mars Cai: In terms of performance across different city tiers, we continue to observe trends that highlight the diversification of our mobile device charging network.

Handsome Chi: I would now like to turn the meeting over to your host for today's conference call Director of Investor Relations Handsome Chi.

Mars Cai: During the second quarter, our direct model sales team continues to secure and extend partnerships with leading KA chains in hospitality, convenience stores and restaurant industries. These high-profile partnerships are instrumental in boosting our brand visibility and driving our engagement particularly in high-tier cities where brand influence is critical.

Mars Cai: Contribution from lower-tier cities continue to drive our network expansion, as our expansion into third- and lower-tier cities continues to bear fruit. POI count in third- and lower-tier cities increased by more than 20% year-over-year as of the end of the second quarter, as our network partner model continued to allow us to effectively branch into lower-tier cities.

Handsome Chi: Thank you.

Speaker Change: Welcome to our 2024 second quarter earnings Conference call. Joining me on the call today are Marc Hi, Energy Monsters, Chairman and Chief Executive Officer, and Maria Sheehan, Chief Financial Officer for today's agenda management will discuss business updates operation highlights and financial performance for the second quarter of 2000.

Hansen Shi: Joining me on the call today are Mars Cai, Energy Monsters Chairman and Chief Executive Officer, and Maria Xin, Chief Financial Officer. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2024.

Hansen Shi: Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call. As we will make forward-looking statements, also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures through the most directly comparable GAAP measures. Finally, please note that, unless otherwise stated, all figures mentioned during this call are in R&B.

Speaker Change: Parable GAAP measures.

Speaker Change: Please note that unless otherwise stated all theatres mentioned during this call are in RMB.

Mars Cai: I would now like to turn the call over to our Chairman and Chief Executive Officer, Mars Cai, for the business and operation highlights. Thank you very much, Hansen. Good day, everyone.

I would now like to turn the call over to our chairman and Chief Executive Officer, Mark for the business and operational highlights.

Mars Cai: First-tier city POIs count maintained a slight increase year-over-year, despite the reduction in our direct model. Our diverse POI categories also showcased varying levels of performances. The restaurant, shopping, beauty, and transportation segments displayed resilience with quarter-over-quarter increases in terms of mobile device charging service GMV.

Mark: Thank you very much good day, everyone welcome to our 2024 second quarter earnings call.

Mars Cai: We believe our on-the-ground experience and hardware and software capabilities in China will extend into the international market.

Mars Cai: Conversely, entertainment and hotel experience quarter-over-quarter declines.

Mars Cai: Welcome to our 2024 second quarter earnings call. I'm pleased to report that Energy Monsters has demonstrated solid resilience in the second quarter, despite a softer, the expected consumption environment here in China. We managed to return to gap profitability with net income region 9 million R&B in the quarter. The return to gap profitability marks the strength and adaptability of our business model, especially given our overall transition towards the network partner model. This also marks the six consecutive quarters of non-GAAP profitability, since the reopening from the pandemic in early 2023. This achievement reflects the effectiveness of our strategic initiatives and our ability to stay resilient even amid challenging consumption conditions.

Mark: I'm pleased to report that energy Monster has demonstrated solid resilience in the second quarter, despite a softer than expected consumption environment in China with.

Mars Cai: In the future, it will serve as one of our new drivers of growth and, in the long run, serve as a way to diversify our operation geographically.

Mars Cai: While these sectors remain important to our portfolio, the fluctuations reflect the broader economic conditions and consumer behavior patterns in the current consumer climate.

Mars Cai: In terms of operational efficiency, we have made significant strides in optimizing our contract structures under the direct model.

Mars Cai: Our expansion strategies have allowed us to continue to improve the network effect of our portion, which drives a self-reinforcing cycle between the growth of our POI count and user count, while the market conditions have slowed our pace of expansion.

We managed to return to GAAP profitability with net income, reaching 9 million RMB in the quarter.

Mars Cai: I'm proud to see that we continue to reach new operational milestones.

Mark: Return to GAAP profitability marks the strength and adaptability of our business model, especially given our overall transition towards the network partner model.

Mars Cai: During the second quarter, we continue to transition thousands of POIs from direct model to network partner model. This transition, while incurring some one-time cost, is a strategic move that will enhance the financial health for our company in the long run.

Mars Cai: Our POI coverage now encompasses a record-high 1.27 million POIs, highlighting our relentless strive to enhance service availability and user convenience across a wider geographic region.

Mark: This also marks the sixth.

Mark: Consecutive quarters of non-GAAP profitability things well be opening from the pandemic in early 2023.

Mark: This achievement reflects the effectiveness of our strategic initiatives and our ability to stay resilient, even amidst challenging consumption condition.

Mars Cai: Now, in terms of the impact of the consumption power on our operation, our mobile device charging service G&E experienced a year-over-year decrease due to the softness of the consumption. Breaking down the quarter sequentially, the G&E decreased in April, increased in May, decreased in June, and then increased again in July on a month basis. While the impact of holidays and hotter than usual weather also served as factors in oscillating the results. The primary season for the lower than usual demand is due to the weaker consumption power going into the summer holidays, which historically has been our peak season.

Speaker Change: Now in terms of the impact of the consumption power on our accretion on mobile device charging service <unk> experienced a year over year decrease due to the softness of the consumption.

Speaker Change: Breaking down the quarter sequentially. The <unk> decrease in April increased in May decrease in June and then increase again in July on a month on month basis.

Speaker Change: While the impact of holidays and hotter than usual weather.

Speaker Change: Also said effective and Sydney isolating the results.

Speaker Change: The primary season for the lower than usual demand is due to the weaker consumption power going into the summer holidays, which historically has been our peak season.

Mars Cai: This decline in consumer activity and consumer confidence going into the summer can be seen across the consumer sectors and especially in offline locations. In terms of performance across different city tiers, we continue to observe trends that highlight the diversification of our mobile device charging network. Contributions from lower tier cities continue to drive our network expansion, as our expansion into third and lower tier cities continues to bear fruit. POI count in third and lower tier cities increased by more than 20% year-over-year as of the end of the second quarter. As our network partner model continued to allow us to effectively branch into lower tier cities, first tier city POI count maintained a slight increase year-over-year despite the reduction in our direct model.

Speaker Change: This decline in consumer activity and consumer confidence going into the summer can be seen across the consumer sectors and especially in offline location.

Speaker Change: In terms of performance across different for TTS, we continue to observe trends that highlight the diversification of our mobile device charging network.

Contribution from lower tier cities continue to drive our network expansion is our expansion into third and lower tier cities continues to bear fruit.

Speaker Change: I count in third and lower tier cities increased by more than 20% year over year as of the end of the second quarter as.

Speaker Change: As our network partner model continued to allow us to effectively branch into lower tier cities.

First <unk> count maintained a slight increase year over year. Despite the reduction in I would go back to model.

Mars Cai: Our diverse POI categories also showcased varying levels of performances. The restaurant, shopping, beauty, and transportation segments displayed resilience with quarter-over-quarter increases in terms of mobile device charging service GME. Conversely, entertainment and hotel experience quarter-over-quarter declines. While these sectors remain important to our portfolio, the fluctuations deflect the broader economic conditions and consumer behavior patterns in the current consumer climate. Our expansion strategies have allowed us to continue to improve the network effect of our position, which drives the self-reinforcing cycle between the growth of our POI count and the market conditions. Have slowed our pace of expansion. I'm proud to see that we continue to reach new operational milestones.

Speaker Change: Congress Lee Entertainment and hotel experienced quarter over quarter declines while these sectors remain important to our portfolio the fluctuations reflect the broader economic conditions and consumer behavior patterns in the current consumer climate.

Mars Cai: A significant component of our expansion strategy is the ongoing transition to network partner model. This transition is being executed with precision, balancing the rate of transition with quality and operational efficiency. By the end of the second quarter, 89.2% of our POI were operated under network partner model. A substantial increase from 79.7% at the end of the first quarter and 62% at the end of the same time last year.

Mars Cai: Thank you very much. Hope that answers your questions.

Speaker Change: Our expansion strategy has allow us to continue to improve the network effect of our portion which drives a self reinforcing cycle between the growth of opioid count in the user count.

Speaker Change: While the market conditions have slowed our pace of expansion.

Speaker Change: I am proud to see that we continue to reach new operational milestones.

Mars Cai: Our POI coverage now encompasses a record high 1.27 million POIs, highlighting our relentless drive to enhance service availability and user convenience across a wider geographic region. In parallel, our user base has grown alongside the growth encouraged as we landed at over 417.1 million cumulative reduced users as of the end of the second quarter, an increase of 12.8 million users. Additionally, I would like to note that these operational milestones were achieved even during our strategic rebalancing between our operation models. We were able to expand the contribution of our network partner model while maintaining our core direct model portfolios.

Speaker Change: Our <unk> coverage now encompass a record high $1 seven.

Speaker Change: 1.27 million.

Speaker Change: Highlighting our relentless drive to enhance service availability and user convenience across a wider geographic region.

Mars Cai: In parallel, our user base has grown alongside the growth in coverage as we landed at over 417.1 million cumulative registered users as of the end of the second quarter, an increase of 12.8 million users.

Speaker Change: In parallel our user base has grown alongside the growth in coverage and we landed at over $417 1 million cumulative registered users.

Speaker Change: At the end of the second quarter, an increase of $12 8 million users.

Speaker Change: Additionally, I would like to note that these operational milestones achieved even during our strategic rebalancing between our operation model.

Speaker Change: We were able to expand the contribution of our network partner model, while maintaining our core direct model portfolios.

Mars Cai: Although the shift in contribution between our business models have imposed short-term impact on our new POI expansion rate, we remain confident in our long-term prospect. We are already seeing the reduction in our direct model operations not only lower our operational expenses but also enhance the contribution from the higher margin network partner model. Financially, our cash and cash equivalents remain robust, providing us with the financial stability necessary to continue pursuing strategic initiatives and investing in future growth opportunities.

Mars Cai: Although the shift in contribution between our business models have imposed short-term impact on our new PUI expansion rate, we remain confident in our long-term prospect. We are already seeing the reduction in our direct model operations, not only lower our operational expenses, but also enhance the contribution from the higher-module network partner model. Financially, our cash and cash equivalents remain robust, providing us with financial stability necessary to continue pursuing strategic initiatives and investing in future growth opportunities. Our new initiatives that leverages energy monsters existing capabilities will unlock new avenues for growth. During the second quarter, other revenue outside of our core business grew by over 400% year-over-year, as new business segments began to make more meaningful contributions to our financials.

Speaker Change: Although the shift in contribution between our business models.

Speaker Change: Imposed short term impact on our new <unk> expansion rate, we remain confident in our long term prospect.

Speaker Change: Financially, our cash and cash equivalents remained robust providing us with the financial stability necessary to continue pursuing strategic initiatives and investing in future growth opportunities.

Mars Cai: Our new initiatives that leverage Energy Monster's existing capabilities will unlock new avenues for growth.

Speaker Change: Our new initiatives that leverages energy amongst its existing capabilities.

Speaker Change: <unk> new avenues for growth.

Speaker Change: During the second quarter.

Speaker Change: Revenue outside of our core business grew by over 400% year over year as new business segments begins to make more meaningful contribution to our financials.

Mars Cai: These efforts are essential as we aim to realize our full growth potential and consistently deliver sustained value to our shareholders.

Mars Cai: These assets are essential as we aim to realize our full growth potential and, consistently, deliver sustained value to our shareholders.

Speaker Change: These assets are essential as we aim to realize our full growth potential and consistently deliver sustained value to our shareholders.

Mars Cai: Now, let me walk you through our key initiatives: encourage and efficiency. First is our strategy's encouraged expansion in light of the ongoing transition in our operational model. Our commitment to expanding our PUI network is driven by immense potential we see in entire regions and categories throughout China. This expansion is not just about increasing numbers; it's about strategic growth that aligns with our long-term vision of building a mobile device charging infrastructure network capable of fulfilling users' needs anywhere and anytime. We continue to take a balanced approach in our expansion efforts, leveraging both our network partner model and the direct model.

Mars Cai: Now let me walk you through our key initiatives in coverage and efficiency.

Speaker Change: Now, let me walk you through our key initiatives.

Speaker Change: Coverage and efficiency.

Speaker Change: First is our strategies in coverage expansion in light of the ongoing transition in our operational model.

Speaker Change: Our commitment to expanding our network is driven by the immense potential we see untapped regions and categories throughout China.

Mars Cai: We continue to take a balanced approach in our expansion efforts, leveraging both our network partner model and the direct model. The network partner model offers distinct advantages in providing comprehensive coverage across all regions, seamlessly complementing our direct model strength. The direct model remains particularly effective in high-yield locations within higher tier cities and key accounts. A significant component of our expansion strategy is the ongoing transition to the network partner model. This transition is being executed with precision, balancing the rate of transition with quality and operational efficiency.

Speaker Change: We continue to take a balanced approach in our expansion efforts leveraging both our network partner model and the direct model.

Mars Cai: The network partner model offers distinct advantages in providing comprehensive coverage across all regions, seamlessly complementing our direct model strength. The direct model remains particularly effective in high-year locations within higher tiers and key accounts. A significant component of our expansion strategy is the ongoing transition to network partner model. This transition is being executed with precision, balancing the rate of transition with quality and operational efficiency. By the end of the second quarter, 89.2% of our PUI were operated under the network partner model. A substantial increase from 79.7% at the end of the first quarter and 62% at the end of the same time last year.

Speaker Change: A significant component of our expansion strategy is the ongoing transition to network partner modal. This transmission is being executed we've proficient balancing the rates of transition with quality and operational efficiency.

Mars Cai: By the end of the second quarter, 89.2% of our POI were operated under network partner model, a substantial increase from 79.7% at the end of the first quarter and 62% at the end of the same time last year. The pace at which we have rebalanced our operations between the direct model and network partner model has exceeded our initial expectations and will continue to take place going into the second half of 2024.

Speaker Change: By the end of the second quarter 89, 2% of all <unk> were operated under network partner model a substantial increase from 79, 7% at the end of the first quarter and 62% at the end of the same time last year.

Mars Cai: The pace at which we have rebalanced our operations between the direct model and network partner model has exceeded our initial expectations and will continue to take place going into the second half of 2024. We also now have over 12,000 network partners, an increase of more than a thousand things the end of first quarter, and an increase of around 3,700 year over year. This growth in network partners allows Energy Monster to develop a robust and dynamic distribution capability that drives our market participation and service reach. The increase in network partner account has allowed us to broaden the reach of our operation as we expanded into more than 50 new county-level areas this quarter for total coverage of more than 2,100 county-level cities.

Speaker Change: The pace at which we have rebalanced our operations between the direct model and network partner model has exceeded our initial expectations and we'll continue to take place going into the second half of 2024.

Mars Cai: We also now have over 12,000 network partners, an increase of more than 1,000 since the end, of first quarter, and an increase of around 3,700 year-over-year. This growth in network partners allow Energy Monster to develop a robust and dynamic distribution, capability that drives our market participation and service reach. The increase in network partner count has allowed us to broaden the reach of our corporation, as we expanded into more than 50 new county-level areas this quarter, for a total coverage of more than 2,100 county-level cities.

Speaker Change: We also now have over 12000 network partners, an increase of more than a thousand since the end of first quarter and an increase of around 3700 year over year.

Speaker Change: This growth in network partners allow energy amongst or to develop a robust and dynamic distribution capability that drives our market penetration and service to reach the.

Operator: We are now approaching the end of the conference hall.

Speaker Change: The increase in network partner Count has allowed us to broaden the reach of our corporation as we expanded into more than 50, New county level areas. This quarter for a total coverage of more than 2000, and 100 county level cities.

Mars Cai: The improved reach of our service has also translated into access to new users, as we are able to attract 12.8 million new registered users during the second quarter of 2024. Our network partner support team continue to play a crucial role providing hands-on guidance and direct support for everyday needs. Our network partner team continue to improve the standardization of our hardware, software, and operational support for our partners. This is crucial as the number of network partners continues to grow. We have to provide more comprehensive support for all case scenarios for network partners with all levels of experience.

Mars Cai: The improved reach of our service has also translated into access to new users, as we, are able to attract 12.8 million new registered users during the second quarter of 2024.

Speaker Change: The improved the reach of our service has also translated into access to new users as we are able to attract $12 8 million new registered users during the second quarter of 2024.

Mars Cai: Our network partner support team continues to play a crucial role, providing hand-on, guidance and direct support for everyday needs.

Our network partner support team continued to play a crucial role providing hand on guidance and direct support for everyday needs.

Mars Cai: Our network partner team continues to improve the standardization of our hardware, software, and operational support for our partners. This is crucial as the number of network partners continues to grow. We have to provide more comprehensive support for all case scenarios for network partners, with all levels of experience.

Speaker Change: Our network product team continue to improve the standardization of our hardware software and operational support for our partners. This is crucial as the number of network partners continue to grow.

Speaker Change: We have to provide more comprehensive support for all case scenarios for network partners with all levels of experience.

Mars Cai: The pace at which we have rebalanced our operations between the direct model and network partner model has exceeded our initial expectations and will continue to take place going into the second half of 2024. We also now have over 12,000 network partners and increase of more than 1,000 things at the end of the first quarter and an increase of around 3,700 year-over-year. This growth in network partners allow energy monster to develop a robust and dynamic distribution capability that drives our market participation and service reach. The increase in network partner count has allowed us to broaden the reach of our cooperation as we expanded into more than 50 new county-level areas this quarter.

Maria Xin: I will now attend the call over to Energy Month's CSR at Maria's in the closing remarks. Once again, thank you for joining us today. Please do not hesitate to contact us if you have any further questions. Thank you for your continuous support and we look forward to speaking with you in the coming months. Thank you. Thank you for your participation in today's conference.

Mars Cai: These initiatives are designed to ensure that our partners not only feel supported but also, empowered to achieve their full potential, as we want every single one of them to be successful.

Speaker Change: These initiatives are designed to ensure that our partners not only feel supported but also empowered to achieve their full potential and we want every single one of them.

Mars Cai: For total coverage of more than 2,100 county-level cities.

Operator: This concludes the presentation. You may now disconnect. Good day.

Operator: Wearing Tang, Smart Share Glover, Mars Cai, Yi Xin, Weiting Tang Wearing Tang, Smart Share Glover, Mars Cai, Yi Xin, Wearing Tang, Smart Share Glover, Mars Cai, Yi Xin, Wearing Tang, Smart Share Glover, Mars Cai, Yi Xin, Wearing Tang, Smart Share Wearing Tang, Smart Share Wearing Tang, Smart Share Wearing Tang, Smart Share Wearing Tang, Smart Share Glo Wearing Tang, Smart Share Glo Hello, and thank you for standing by for Energy Monsters' second quarter of 2024 earnings conference call. At this time, all participants are in listen only mode. Today's conference is being recorded.

Speaker Change: To be successful.

Mars Cai: The positive reception of the comprehensive support system to our partners is a strong, validation of our approach, and we will continue to refine and enhance these support mechanisms to further strengthen our network partner model. By being able to support our network partner to more quickly launch a profitable operation, we are enhancing Energy Monster's own competitive advantages.

The positive reception of the comprehensive support system to our partners is a strong validation of our approach and we will continue to refine and enhance the support in the Canada.

Hansen Shi: If you have any objections, you may disconnect at this time. I would like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Hansen Shi. Thank you. Welcome to our 2024 second quarter earnings conference call. Joining me on the call today are Mars Cai, Energy Monsters Chairman and Chief Executive Officer and Maria Xin, Chief Financial Officer. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2024.

Speaker Change: To further strengthen our network partner model.

Speaker Change: By being able to support our network pollo to more quickly launch a profitable operation, we are enhancing energy amongst us own competitive advantages.

Hansen Shi: Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call. As we will make forward-looking statements, also, this call includes discussion of certain non-gap financial measures. Please refer to our earnings release, which contains a reconciliation of non-gap measures through the most directly comparable gap measures. Finally, please note that, unless otherwise stated, all figures mentioned during this call are in R&B.

Mars Cai: In addition to expanding our network, we continue to optimize low efficiency and underperforming, POIs under the direct model. This process involves a rigorous review of each POI's performance based on current user, traffic and other key metrics.

Speaker Change: In addition to expanding our network, we continue to optimize low efficiency and underperforming <unk> under direct model.

Mars Cai: I would now like to turn the call over to our Chairman and Chief Executive Officer, Mars Cai, for the business and operation highlights. Thank you very much, Hansen. Good day, everyone. Welcome to our 2024 second quarter earnings call. I'm pleased to report that Energy Monsters has demonstrated solid resilience in the second quarter, despite a softer, the expected consumption environment here in China. We managed to return to gap profitability with net income region 9 million R&B in the quarter.

Mars Cai: This process involves a rigorous review of each POI's performance based on current user traffic and other key metrics. By transitioning underperforming POIs to our network partner model, we can optimize our portfolio for maximum effectiveness and long-term profitability. During the second quarter, our network direct model sales team continue to secure and expand partnerships with leading KHA chains and in hospitality, convenience stores, and restaurant industries. These high-profile partnerships are instrumental in boosting our brand of visibility and driving our engagement, particularly in high facilities, where brand influence is critical.

Speaker Change: This process involves a rigorous review of each pof's performance based on currently user traffic and other key metrics.

Mars Cai: The return to gap profitability marks the strength and adaptability of our business model, especially given our overall transition towards the network partner model. This also marks the six consecutive quarters of non-gap profitability, since the reopening from the pandemic in early 2023. This achievement reflects the effectiveness of our strategic initiatives and our ability to stay resilient even amid challenging consumption conditions. Now, in terms of the impact of the consumption power on our operation, our mobile device charging service G&E experienced a year-over-year decrease due to the softness of the consumption.

Mars Cai: By transitioning underperforming POIs to our network partner model, we can optimize our, portfolio for maximum effectiveness and long-term profitability.

By transitioning underperforming <unk> to our network partner model, we can optimize our portfolio for maximum effectiveness and long term profitability.

Mars Cai: Breaking down the quarter sequentially, the G&E decreased in April, increased in May, decreased in June, and then increased again in July, on a month basis. While the impact of holidays and hotter than usual weather also served as factors in the oscillating the results. The primary season for the lower than usual demand is due to the weaker consumption power going into the summer holidays, which historically has been our peak season. This decline in consumer activity and consumer confidence going into the summer can be seen across the consumer sectors and especially in offline locations.

Mars Cai: During the second quarter, our direct model sales team continues to secure and extend, partnerships with leading KA chains and in hospitality, convenience stores, and restaurant industries. These high-profile partnerships are instrumental in boosting our brand visibility and driving, our engagement, particularly in high-tier cities where brand influence is critical.

Speaker Change: During the second quarter, our net our direct model sales team continue to secure and extend partnerships with leading <unk> and <unk> in hospitality convenience stores and restaurant industries.

Speaker Change: These high profile partnerships are instrumental in boosting our brand visibility and driving our engagement, particularly in high tier cities, where brand influence is critical.

Mars Cai: For the remainder of 2024, in terms of our expansionary strategies, we will continue to emphasize the natural partner model as the core driver for growth here in China, while the direct model will focus on high-tier cities and major key. We have proactively begun exploring opportunities beyond China as a way to diversify our operations. We are seeing more and more countries outside of China having the demand for our service and have the suitable infrastructure in place for mobile device charging service to take off. We believe our underground experience and hardware and software capabilities in China will extend into the international market.

Mars Cai: For the remainder of 2024, in terms of our expansionary strategies, we will continue, to emphasize the network partner model as the core driver for growth here in China, while the direct model will focus on high-tier cities and major key accounts.

Speaker Change: For the remainder of 2024 in terms of <unk>.

Speaker Change: Ex pension and <unk> strategies, we will continue to emphasize the network partner model as the core drivers of growth here in China, while the direct model, we focus on the high tier cities and major key accounts.

Mars Cai: Additionally, this quarter, we have proactively begun exploring opportunities beyond China as a way to diversify our operation. We are seeing more and more countries outside of China having the demand for our service, and have the suitable infrastructure in place for mobile device charging service to take off. We believe our on-the-ground experience and hardware and software capabilities in China will extend into the international market. In the future, it will serve as one of our new drivers of growth and, in the long run, serve as a way to diversify our operation geographically.

Mars Cai: In terms of performance across different city tiers, we continue to observe trends that highlight the diversification of our mobile device charging network. Contributions from lower tier cities continue to drive our network expansion, as our expansion into third and lower tier cities continues to bear fruit. POI count in third and lower tier cities increased by more than 20% year-over-year as of the end of the second quarter. As our network partner model continued to allow us to effectively branch into lower tier cities, first tier city POI count maintained a slight increase year-over-year despite the reduction in our direct model.

Speaker Change: Additionally, this quarter, we have proactively begun exploring opportunities beyond China as a wage.

Speaker Change: To diversify our operations, we are seeing more and more countries outside of China, having a demand for our service and have the suitable infrastructure in place for mobile device charging service to take off.

Speaker Change: We believe our on the ground experience in hardware and software capabilities in China will extend into the international market.

Mars Cai: In the future, it will serve as one of our new drivers of growth and, in the long run, serve as a way to diversify our operations geographically.

Speaker Change: In the future it will serve as one of our new drivers of growth and in the long run and serve as a way to diversify our operation geographically.

Mars Cai: In terms of operational efficiency, we have made significant strides in optimizing our contract structures under the direct model.

Mars Cai: In terms of operational efficiency, we have made significant strides in optimizing our contract structures under the direct model. During the second quarter, we continue to transition thousands of POIs from direct model to network partner model. This transition, while incurring from one time call, is a strategic move that will enhance the financial health for our company in the long run. By optimizing the structure of our own direct model POIs, we are ensuring that the direct model portfolio is aligned with our broader growth of efficiency and profitability. Also, notably, the reduction in direct model contribution is also directly translating into a smaller workforce of direct model BD personnel, driving the reduction of our operational expenses.

Speaker Change: In terms of operational efficiency, we have made significant strides in optimizing our contract structures under the direct model during the second quarter. We continued to transition thousands of <unk> from direct model to network partner model. This transition while incurring some onetime cost is a strategic.

Speaker Change: Move that will enhance the financial health of our company in long run by optimizing the structure of our own direct model.

Mars Cai: By optimizing the structure of our own direct model POIs, we are ensuring that the direct model portfolio is aligned with our broader goals of efficiency and profitability. Also, notably, the reduction in direct model contribution is also directly translated into, a smaller workforce of direct model BD personnel, driving the reduction of our operational expenses.

Mars Cai: By optimizing the structure of our own direct model POIs, we are ensuring that the direct model portfolio is aligned with our broader goals of efficiency and profitability.

Speaker Change: We are ensuring that the direct model portfolio is aligned with our broader growth of efficiency and profitability.

Mars Cai: Also, notably, the reduction in direct model contribution is also directly translating into a smaller workforce of direct model BD personnel, driving the reduction of our operational expenses.

Speaker Change: Also notably the reduction indirect model contribution is also directly translate to into a smaller workforce of direct model BD personnel driving the reduction of our operational expenses.

Mars Cai: On the other side of the equation, the efficiency of our network partner operations remains, stellar, with the network partner count growing by 41 percent year over year, while the size of our team has grown only at a fraction of that rate. The operational leverage highlights the scalability of our network partner model and our ability, to drive growth without preparation increase in operational overheads.

Mars Cai: On the other side of the equation, the efficiency of our network partner operations remains stellar, with the network partner count growing by 41% year over year, while the size of our team has grown only at a fraction of that rate. The operational leverage highlights the scalability of our network partner model and our ability to drive growth without preparational increase in operational overheads.

Mars Cai: On the other side of the press for equal equation, the efficiency of our network partner operations remains stellar. With the network partner count growing by 41% over year, while the size of our team has grown only at a fraction of that rate. The operational leverage highlights the scalability of our network partner model and our ability to drive growth without an increase in operational overheads.

Speaker Change: On the other side of the equation the efficiency of our network partner operations remains stellar with a network partner count growing by 41% year over year, while the size of our team has grown only at a fraction of that rate.

Mars Cai: I'm proud to see that we continue to reach new operational milestones. Our POI coverage now encompass a record high 1.27 million POIs highlighting our relentless drives to enhance service availability and user convenience across a wider geographic region. In parallel, our user base has grown alongside the growth encouraged as we landed at over 417.1 million cumulative reduced users as of the end of the second quarter and increase of 12.8 million users. Additionally, I would like to note that these operational milestone were achieved even during our strategic rebalancing between our operation models.

Speaker Change: Operational leverage highlights the scalability of our network partner model and our ability to drive both without preparation an increase in operational overhead.

Mars Cai: In addition to optimizing our existing operations, we are also committed to innovation.

Mars Cai: The improved reach of our service has also translated into access to new users as we are able to attract 12.8 million new registered users during the second quarter of 2024.

Speaker Change: In addition to optimizing our existing operation. We are also committed to innovation, we continue to dedicate ourselves to the development of new series of cabinets and power banks with improved durability and end user experience.

Mars Cai: We continue to dedicate ourselves to the development of new series of cabinets and power banks with improved durability and end-user experience. This sustained and meticulous attention to every detail has led improvement to our hardware before and will continue to do so going into the future.

Mars Cai: This sustained and meticulous attention to every detail has led improvement to our hardware, before and will continue to do so going into the future. This progress is crucial as our cabinets are placed across China in all types of locations, and in all types of environmental conditions.

Speaker Change: This sustained and meticulous attention to every detail has led important improvement to our hardware before and it will continue to do so going into the future.

Mars Cai: We were able to expand the contribution of our network partner model while maintaining our core direct model portfolios. Although the shift in contribution between our business models have imposed short-term impact on our new PUI expansion rate, we remain confident in our long-term prospect. We are already seeing the reduction in our direct model operations, not only lower our operational expenses, but also enhance the contribution from the higher-module network partner model. Financially, our cash and cash equivalents remain robust, providing us with financial stability, necessary to continue pursuing strategic initiatives and investing in future growth opportunities.

Mars Cai: This progress is crucial as our cabinets are placed across China in all types of locations and in all types of environmental conditions. Improved durability will help reduce the maintenance requirement for both the company and all of our partners, increasing efficiency across all segments.

Speaker Change: This progress is crucial as our companies placed across China.

Speaker Change: In all types of locations and all types of environmental conditions improved durability will help reduce that maintains requirement for both the company and all of our partners increasing efficiency across all segments.

Mars Cai: Improved durability will help reduce the maintenance requirement for both the company, and all of our partners, increasing the efficiency across all segments.

Mars Cai: We are confident that our initiatives in operational efficiency and innovation will unlock our, growth and value potential in the foreseeable future.

Mars Cai: We are confident that our initiatives in operational efficiency and innovation will unlock our growth and value potential in the foreseeable future.

Speaker Change: We are confident that our initiatives in operational efficiency and innovation will unlock our growth and a value potential in the foreseeable future.

Mars Cai: In conclusion, the sustained profitability is a clear indicator of the robustness of, our business model and the effectiveness of our strategic vision. The ongoing optimization of our direct model coupled with expansion of network partner, model positions EnergyMonster for continued growth and success.

Mars Cai: In conclusion, the sustained profitability is a clear indicator of the robustness of our business model and the effectiveness of our strategic vision. The ongoing optimization of our direct model, coupled with expansion of network partner model, positions and a monster for continued growth and success. Although the second quarter and current trajectory of the third quarter showed signs of weaker than expected consumption, we remain confident in the long-term recovery of the consumer spending here in China. As we enter the second half of the year, we will continue to focus on strengthening our operational scale and efficiency, with a particular emphasis on expanding network power and coverage in support.

Speaker Change: In conclusion.

Speaker Change: The sustained profitability is a clear indicator of the robustness of <unk>.

Speaker Change: Our business model and the effectiveness of our strategic vision.

Speaker Change: <unk> optimization without direct model, coupled with expansion of network partner model positions energy amongst us for continued growth and success, although the second quarter and current trajectory of the third quarter showed signs of weaker than expected consumption. We remain confident in the long term.

Mars Cai: Our new initiatives that leverages energy monsters existing capabilities will unlock new avenues for growth. During the second quarter, other revenue outside of our core business grew by over 400% year-over-year, as new business segments began to make more meaningful contributions to our financials. These assets are essential as we aim to realize our full growth potential and, consistently, deliver sustained value to our shareholders. Now, let me walk you through our key initiatives, encourage and efficiency.

Mars Cai: Although the second quarter and current trajectory of the third quarter show signs of weaker, than expected consumption, we remain confident in the long-term recovery of the consumer spending here in China.

Speaker Change: Every of the consumer spending here in China as.

Mars Cai: As we enter the second half of the year, we will continue to focus on strengthening, our operational scale and efficiency, with a particular emphasis on expanding network partner coverage and support, key account acquisition and our direct operations, and optimizing POI quality to enhance our margins. We need to continue sharpening our competitive edge with the network partner model, which, already delivers healthy unit economics, but has the potential to achieve even greater efficiencies and returns. To that end, we will continue to improve the standardization of our product and service, for our network partners and provide enhanced support and experience to ensure their continued success.

Mars Cai: As we enter the second half of the year, we will continue to focus on strengthening our, operational scale and efficiency, with a particular emphasis on expanding network partner coverage and support, key account acquisition and our direct operations, and optimizing POI quality to enhance our margins.

As we enter the second half of the year, we will continue to focus on strengthening our operational scale and efficiency with a particular emphasis on expanding network partner coverage and support key account acquisition and our direct operations and optimizing toi quality to enhance our margins.

Mars Cai: He account acquisition and our direct operations and optimizing POI quality to enhance our margins. We need to continue sharpening our competitive edge with the network partner model, which already delivers healthy unit economics but has the potential to achieve even greater efficiencies and returns. To that end, we will continue to improve the stabilization of our product and service for our network partners and providing enhanced support and experiences to ensure their continued success. We will continue developing new hardware, including next-generation power banks and cabinets, designed to be more durable while the same time of future reduced costs.

Mars Cai: First is our strategy's encouraged expansion in light of the ongoing transition in our operational model. Our commitment to expanding our PUI network is driven by immense potential we see in entire regions and categories throughout China. This expansion is not just about increasing numbers, it's about strategic growth that aligns with our long-term vision of building a mobile device charging infrastructure network capable of fulfilling users' needs anywhere and anytime. We continue to take a balanced approach in our expansion efforts, leveraging both our network partner model and the direct model.

Mars Cai: We need to continue sharpening our competitive edge with the network partner model, which, already delivers healthy unit economics, but has the potential to achieve even greater efficiencies and returns. To that end, we will continue to improve the standardization of our product and service, for our network partners, and provide enhanced support and experience to ensure their continued success.

Speaker Change: And we will continue to improve the standardization of our product and service for our network partners and providing enhanced support and experiences to ensure their continued success we.

Mars Cai: We will continue developing new hardware, including next-generation power banks and, cabinets designed to be more durable while at the same time of future reduced cost.

Mars Cai: We will continue developing new hardware, including next-generation power banks and, cabinets designed to be more durable while at the same time featuring reduced costs. These initiatives are designed to ensure that we remain at the forefront of innovation, and further strengthen our competitive advantages under the network partner model.

Speaker Change: We will continue developing new hardware, including next generation power banks in cabinets designed to be more durable while at the same time of featuring reduced costs.

Mars Cai: These initiatives are designed to ensure that we remain at the forefront of innovation and further strengthen our competitive advantages under the network partner model.

Mars Cai: These initiatives are designed to ensure that we remain at the forefront of innovation and, further strengthen our competitive advantages under the network partner model.

Speaker Change: These initiatives are designed to ensure that we remain at the forefront of innovation and further strengthen our competitive advantages under the network partner model.

Mars Cai: In summary, we are optimistic about the future of the market in China and beyond. And demonstra is where position the fall sustained development. As the transition between direct and network partner models will help refine the quality of our direct model portfolio, while network partner model continues to feel growth. Once the transition is complete, our business model and the financials will be even healthier. Our robust cash reserves and cash flow provide a solid foundation for driving continued growth and value creation for shareholders.

Mars Cai: In summary, we are optimistic about the future of the market in China and beyond.

Mars Cai: In summary, we are optimistic about the future of the market in China and beyond. Energy Monster is well-positioned for sustained development, as the transition between direct, and network partner models will help refine the quality of our direct model portfolio while the network partner model continues to fuel growth. Once the transition is complete, our business model and financials will be even healthier.

Speaker Change: In summary, we are optimistic about the future of the market in China and beyond energy Monster is we're positioned for sustained development.

Mars Cai: Energy Monster is well positioned for sustained development as the transition between direct, and network partner models will help refine the quality of our direct model portfolio while the network partner model continues to fuel growth.

Speaker Change: The transition between direct and network partner model will help refine the quality of our director motor portfolio, while the network partner model continues to fuel growth.

Mars Cai: Once the transition is complete, our business model and financials will be even healthier.

Mars Cai: Our robust cash reserves and cash flow provide a solid foundation for driving continued growth, and value creation for shareholders.

Mars Cai: A substantial increase from 79.7% at the end of the first quarter and 62% at the end of the same time last year. The pace at which we have rebalanced our operations between the direct model and network partner model has exceeded our initial expectations and will continue to take place going into the second half of 2024. We also now have over 12,000 network partners, an increase of more than a thousand things the end of first quarter, and an increase of around 3,700 year over year.

Mars Cai: We are also pleased to see that the seeds of new initiatives in renewable energy are starting to take form, while the expansion towards international market will be a new capitalist in the future. We believe all of these strategies and positioning will allow us to deliver improved value to energy monsters, shareholders in the future.

Mars Cai: We are also pleased to see that the seeds of new initiatives in renewable energy is, starting to take form while the expansion towards international market will be a new catalyst in the future.

Mars Cai: We are also pleased to see that the seed of new initiatives in renewable energy is starting, to take form, while the expansion towards the international market will be a new catalyst in the future.

Mars Cai: We believe all of these strategies and positioning will allow us to deliver improved value to, Energy Monster's shareholders in the future.

Speaker Change: We believe all of these strategies and positioning will allow us to deliver improved value.

Speaker Change: Energy amongst its shareholders in the future.

Mars Cai: Thank you very much.

Maria Xin: I will now turn the call to Maria, our Chief Financial Officer, for the financial details. Thank you, Mars. Now, let me work you through the second quarter 2024 financial results in greater detail. For the second quarter of 2024, RAM news were 432.9 million, representing a 55.3% year-old year decrease. Mobile device charging RAM news, which consists of RAM news generating from both direct and network partner models for 410.6 million and accounted for 88.7% of our total RAM news for the quarter. RAM news generated from direct model, which comprise a mobile device charging service fee of 115.9 million and part bank sales of 2.2 million were 118.1 million for the second quarter of 2024, down 60.7% year-old year.

Maria Xun: I will now turn the call to Maria, our Chief Financial Officer, for the financial details.

Speaker Change: <unk> you very much I'll now turn the call to Maria our Chief Financial Officer for the financial details.

Maria Xun: Thank you, Mark.

Maria: Thank you Mark.

Mars Cai: This growth in network partners allow energy monster to develop a robust and dynamic distribution capability that drives our market participation and service reach. The increase in network partner account has allowed us to broaden the reach of our operation as we expanded into more than 50 new county-level areas this quarter for total coverage of more than 2,100 county-level cities. The improved reach of our service has also translated into access to new users as we are able to attract 12.8 million new registered users during the second quarter of 2024.

Maria Xun: Now, let me walk you through the second quarter 2024 financial results in greater detail.

Maria: Now, let me walk you through the second quarter 2020 for financial results in greater detail.

Maria Xun: For the second quarter of 2024, revenues were $452.9 million, representing a 55.3% year-on-year, decrease. Mobile device charging revenues, which consists of revenues generated from both direct and, network partner models, were $410.6 million and accounted for 88.7% of our total revenues for the quarter.

Maria Xun: For the second quarter of 2024, revenues were $462.9 million, representing a 55.3% year-over-year, decrease. Mobile device charging revenues, which consists of revenues generated from both direct and, network partner models, were $410.6 million and accounted for 88.7% of our total revenues for the quarter. Revenues generated from direct models, which comprise mobile device charging services of, $115.9 million and power bank sales of $2.2 million, were $118.1 million for the second quarter of 2024, down 60.7% year-over-year.

Maria: Second quarter of 2024 revenues were $492 9 million, representing a 55 points representing year over year decrease.

Speaker Change: Mobile device charging revenue Leach consists of revenue generating from both Iraq, and therefore, having a model for 410 points since many and accounted for 88, 7% of our total revenue for the quarter.

Maria Xun: Revenues generated from direct model, which comprised of mobile device charging services, of $115.9 million and power bank sales of $2.2 million, were $118.1 million for the second quarter of 2024, down 60.7% year-on-year. The decrease was primarily due to the decrease in number of POIs operated under the direct, model.

Speaker Change: Revenue generated from direct model niche comprised of mobile device charging service fee of $115 9 million and pop back up to a point too many $118 one <unk> for the second quarter of $2024 60.

Mars Cai: Our network partner support team continue to play a crucial role, providing hand-on guidance and direct support for everyday needs.

Mars Cai: Our network partner support team continue to play a crucial role providing hand-on guidance and direct support for everyday needs. Our network partner team continue to improve the standardization of our hardware, software, and operational support for our partners. This is crucial as the number of network partners continue to grow. We have to provide more comprehensive support for all case scenarios for network partners with all levels of experience. These initiatives are designed to ensure that our partners not only feel supported but also empowered to achieve their full potential as we want every single one of them to be successful.

Mars Cai: Our network partner team continue to improve the standardization of our hardware, software and operational support for our partners. This is crucial as the number of network partners continue to grow.

Speaker Change: 7% all year. The decrease was primarily due to the decrease in number of appeal is operating and is a direct model.

Maria Xin: The decrease was primarily due to the decrease in number of POI of Reted and the direct model. Renews generating from network partner model, which comprises of mobile dual charging solution C, which increased 14.3% year-to-61.4 million, and part-back cabinet and other related cells, which decreased 65.6% year-to-100.31 million, decreased by 59.7% to 292.5 million for the second quarter of 2024. The decrease was primarily due to the certain one-time adjustments in mobile dual charging revenues for the second quarter of 2023 as a result of the change in the contractual arrangement with network partners. Other roundmills, which account for 11.3% of our total roundmills, which are 52.3 million for the second quarter of 2024, are 433.7% year-to-year.

Maria Xun: The decrease was primarily due to the decrease in number of POIs operated under the direct, model.

Maria Xun: Revenues generated from network partner model, which comprised of mobile device charging, solution Z, which increased 14.3% year-on-year to $61.5 million, and power bank type cabinet and other related sales, which decreased 65.6% year-on-year to $131 million, decreased by, 59.7% to $292.5 million for the second quarter of 2024. The decrease was primarily due to the certain one-time adjustment in mobile device charging, revenues for the second quarter of 2023 as a result of the change in the contractual arrangement with network partners.

Maria Xun: Revenues generated from network partner model, which comprise of mobile device charging solution Z, which increased 14.3% year-over-year to $61.5 million, and power bank type cabinet and other related cells, which decreased 65.6% year-over-year to $131 million, decreased by 59.7% to $292.5 million for the second quarter of 2024. The decrease was primarily due to the certain one-time adjustment in mobile device charging revenues, for the second quarter of 2023 as a result of the change in the contractual arrangement with network partners.

Speaker Change: Revenue generated from Napa partnering model, which comprised of mobile device charging solution Z.

Speaker Change: <unk> increased 14, 3% year over year to $61, five, meaning and par bank type cabinet and other related Sal.

Speaker Change: <unk> decreased <unk>, 6%.

Mars Cai: The positive reception of the comprehensive support system to our partners is a strong validation of our approach, and we will continue to refine and enhance these support mechanism to further strengthen our network partner model. By being able to support our network partner to more quickly launch a profitable operation, we are enhancing energy mongers' own competitive advantages. In addition to expanding our network, we continue to optimize low efficiency and underperforming POIs under direct model.

Speaker Change: Two $131 million.

Speaker Change: Decreased by 59, 7% to 292 5 million for the second quarter of 2024.

Mars Cai: In addition to expanding our network, we continue to optimize low efficiency and under-performing POIs, under direct model. This process involves a rigorous review of each POIs performance based on current user traffic and other key metrics. By transitioning under-performing POIs to our network partner model, we can optimize our portfolio for maximum effectiveness and long-term profitability.

Maria Xun: Other revenues, which account for 11.3% of our total revenues, which are $52.3 million, for the second quarter of 2024, are 453.7% year-on-year. The increase was primarily attributable to the new business initiative.

Speaker Change: Other revenues, which account for 11 points or 8% of our total revenues.

Mars Cai: This process involves a rigorous review of each POIs performance based on current user traffic and other key metrics. By transitioning underperforming POIs to our network partner model, we can optimize our portfolio for maximum effectiveness and long-term profitability. During the second quarter, our network direct model sales team continue to secure and expand partnerships with leading KHA chains and in hospitality, convenience stores and restaurant industries. These high-profile partnerships are instrumental in boosting our brand of visibility and driving our engagement, particularly in high facilities, where brand influence is critical.

Maria Xun: Other revenues, which account for 11.3% of our total revenues, which are 52.3 million for the second quarter of 2024, are 453.7% year-over-year. The increase was primarily attributable to the new business initiatives.

Speaker Change: <unk> 52 points remaining for the second quarter of 2024, a 453, 7% year.

Maria Xin: The increase was primarily attributable to the new business initiatives. Costs of roundmills were down 67.2% year-year-to-2 hundred and 19.6 million for the second quarter of 2024. The decrease was primarily due to the one-time adjustments in mobile dual charging costs of roundmills for the second quarter of 2023 as a result of the change in contractual arrangement with network partners and the decrease in depreciation as a result of the decrease in number of POIs of rated and their direct model. Gold profit was down 33.7% year-to-2 hundred and 43.3 million for the second quarter of 2024. Operating expenses for the second quarter of 2024 were 249.3 million, down 29.5% year-to-year. Excluding share-based accommodation, non-gap operating expenses were 243.3 million, representing a year-to-year decrease of 30.1%.

Speaker Change: Increase was primarily attributable to the new business initiatives.

Maria Xun: Cost of revenues was down 67.2% year-to-year to $219.6 million for the second quarter of 2024. The decrease was primarily due to the one-time adjustment in mobile device charging cost of, revenue for the second quarter of 2023 as a result of the change in contractual arrangement with network partners, and the decrease in depreciation as a result of the decrease in number of POIs operated under the direct model.

Maria Xun: Cost of revenues were down 67.2% year-over-year to $219.6 million for the second quarter of 2024. The decrease was primarily due to the one-time adjustment in mobile device charging cost of revenue, for the second quarter of 2023 as a result of the change in contractual arrangement with network partners and the decrease in depreciation as a result of the decrease in number of POIs operated under the direct model.

Cost of revenues was down 57, 2% year over year to $219 six meaning for the second quarter of 2024.

Speaker Change: The decrease was primarily due to the one time.

Speaker Change: Adjustments in mobile device charging cost of revenue for the second quarter of 2023 as a result of the change in contractual arrangement with our partner.

Speaker Change: The decrease in depreciation as a result of the decrease in number appeal is.

Mars Cai: For the remainder of 2024 in terms of our expansionary strategies, we will continue to emphasize the network partner model as the core driver for growth here in China, while the direct model will focus on high-tier cities and major key accounts.

Mars Cai: For the remainder of 2024, in terms of our expansionary strategies, we will continue to emphasize the natural partner model as the core driver for growth here in China, while the direct model will focus on high-tier cities and major key We have proactively begun exploring opportunities beyond China as a way to diversify our operations. We are seeing more and more countries outside of China having the demand for our service and have the suitable infrastructure in place for mobile device charging service to take off.

Speaker Change: Operating and there's a direct model.

Maria Xun: Gross profit was down 33.7% year-to-year to $243.3 million for the second quarter of 2024. Operating expenses for the second quarter of 2024 were $249.3 million, down 29.5% year-to-year. Excluding share-based compensation, non-GAAP operating expenses were $243.3 million, representing a year-over-year decrease of 30.1%.

Maria Xun: Gross profit was down 33.7% year-over-year to $243.3 million for the second quarter of 2024. Operating expenses for the second quarter of 2024 were $249.3 million, down 29.5% year-over-year. Excluding share-based compensation, non-GAAP operating expenses were $243.3 million, representing a year-over-year decrease of 30.1%.

Speaker Change: Gross profit was down 33, 7% year over year to 243 plants remaining for the second quarter of 2020 for operating expenses for the second quarter of 2024 or 249 clients remaining down 29 five.

Speaker Change: But then your year, excluding share based compensation non-GAAP operating expenses of 243 clients remaining.

Mars Cai: Additionally, this quarter, we have proactively begun exploring opportunities in beyond China as a way to diversify our operations. We are seeing more and more countries outside of China having the demand for our service and have the suitable infrastructure in place for mobile device charging service to take off. We believe our on-the-ground experience and hardware and software capabilities in China will expand into the international market. In the future, it will serve as one of our new drivers of growth and in the long run serve as a way to diversify our operations geographically.

Speaker Change: Resenting, our year over year decrease of 31%.

Mars Cai: We believe our underground experience and hardware and software capabilities in China will extend into the international market. In the future, it will serve as one of our new drivers of growth and in the long run serve as a way to diversify our operations geographically. In terms of operational efficiency, we have made significant strides in optimizing our contract structures under the direct model. During the second quarter, we continue to transition thousands of POIs from direct model to network partner model.

Maria Xin: Research and the development expenses for the second quarter of 2024 were 20.8 million, up 11.6% year-to-year. The decrease was primarily due to the decrease in personnel-related expenses. Sales and marketing expenses for the second quarter of 2024 were 118.9 million, down 38.7% year-to-year. The decrease was primarily due to the decrease in incentive fees, paid to location partners and their direct model, and personnel-related expenses. Journal and administrative expenses for the second quarter of 2024 were 39.5 million, up 26.8% year-to-year. The increase was primarily due to the increase in reserve for the duck in relation to the increase in contribution of network partner model.

Maria Xun: Research and development expenses for the second quarter of 2024 were $20.8 million, up 11.6% year-over-year.

Speaker Change: Research and development expenses for the second quarter of 2024 or 28, meaning.

Speaker Change: One 6% year over year.

Maria Xun: The decrease was primarily due to the increase in personnel-related expenses.

Speaker Change: The decrease was primarily due to the increase in personnel related expenses.

Maria Xun: Sales and marketing expenses for the second quarter of 2024 were $180.9 million, down 38.7% year-over-year. The decrease was primarily due to the decrease in incentive fees paid to location partners under the direct model and the personnel-related expenses.

Maria Xun: Sales and marketing expenses for the second quarter of 2024 were $180.9 million, down 38.7% year-over-year. The decrease was primarily due to the decrease in incentive fees paid to location partners, under the direct model and the personnel-related expenses.

Sales and marketing expenses for the second quarter of 2024 or $118 9 million down.

Speaker Change: 38, 7% year over year. The decrease was primarily due to the decrease in incentive fees paid to location patent nurse and there's a direct model and personnel related expenses.

Mars Cai: This transition, while incurring from one time call, is a strategic move that will enhance the financial health for our company in long run. By optimizing the structure of our own direct model POIs, we are ensuring that the direct model portfolio is aligned with our broader growth of efficiency and profitability. Also, notably, the reduction in direct model contribution is also directly translating into a smaller workforce of direct model BD personnel, driving the reduction of our operational expenses.

Maria Xun: Journal and administrative expenses for the second quarter of 2024 were $39.5 million, up 26.8% year-over-year. The increase was primarily due to the increase in reserve for the accounts in relation to the increasing contribution of NAVA partner models.

Maria Xun: Journal and administrative expenses for the second quarter of 2024 were $39.5 million, up 26.8% year-over-year. The increase was primarily due to the increase in reserve for the DAFWA accounts, in relation to the increasing contribution of NAVA partner models.

Speaker Change: General and administrative expenses for the second quarter of 2024 was $39 5 million up 26, 8% year over year. The increase was primarily due to the increase in reserve for the Dove Qualcomm in relation to the increase in <unk>.

Mars Cai: By optimizing the structure of our own direct model PUIs, we are ensuring that the direct model portfolio is aligned with our broader growth of efficiency and profitable, also, notably, the reduction in direct model contribution is also directly translating into a smaller workforce of direct model BD personnel, driving the reduction of our operational expenses.

Speaker Change: Contribution of network partner model.

Maria Xun: Loss from operations was $6 million, and operating margin for the second quarter of 2024, was negative 1.3%.

Maria Xun: Lost from operations was $6 million and operating margin for the second quarter of 2024 was, negative 1.3%.

Maria Xin: Glo from operations was this meeting, and operating margin for the second quarter of 2024 was negative 1.3%. Net income was 9.2 million in the second quarter of 2024 compared to a net income of 24.5 million in the same period this last year. Net margin for the second quarter of 2024 was 2% compared to a net margin of 2.4% in the same period last year. Non-GAAP net income, which is flu share-based accommodation expenses, was 15.2 million in the second quarter of 2024 compared to a non-GAAP net income of 13.1 million in the same period last year.

Speaker Change: Loss from operations was this meeting and operating margins for the second quarter of 2024 was negative one 3%.

Maria Xun: Net income was $9.2 million in the second quarter of 2024, compared to a net income of $24.5 million in the same period last year.

Speaker Change: Net income was $9 two meeting in the second quarter of 2024 compared to a net income of 24 ARP, one 1 million in the same period last year.

Maria Xun: Net margin for the second quarter of 2024 was 2%, compared to a net margin of 2.4% in the same period last year. Non-GAP net income, which excludes share-based compensation expenses, was $15.2 million in the second quarter of 2024, compared to a non-GAP net income of $13.1 million in the same period last year.

Maria Xun: Net margin for the second quarter of 2024 was 2%, compared to a net margin of 2.4% in the same period last year. Non-GAAP net income, which excludes share-based compensation expenses, was $15.2 million in, the second quarter of 2024, compared to a non-GAAP net income of $13.1 million in the same period last year.

Martin: Martin for the second quarter of 2024 hour, 2% compared to a net margin of two 4% in the same period last year.

Martin: non-GAAP net income, which excludes share based compensation expenses was 15 point to me in the second quarter of 2024 compared to a non-GAAP net income of 13 when many in the same period last year.

Mars Cai: In addition to optimizing our existing operation, we are also committed to innovation.

Maria Xun: As of June 30, 2024, the company had cash and cash equivalents, restricted cash, and short-term investment of $3.2 billion.

Maria Xun: As of June 30, 2024, the company had a cash and cash equivalents restrictive cash and short-term investment of $3.2 billion.

Maria Xin: As of June 30, 2024, the company had cash and cash equivalents, restrictive cash, and sold to an investment of 3.2 billion. Cash flow from youth in operations for the second quarter of 2024 was 6.7 million. Capital expenditure for the second quarter of 2024.

Martin: As of June 32024, the company had a cash and cash equivalents.

Martin: <unk> cash and short term investments.

<unk> 3.2 bidding.

Martin: Cash flow from them.

Martin: Used in operations for the second quarter of 2024 was $6 seven meeting capital expenditure for the second quarter of 2024, or one 4 million.

Maria Xun: Cash flow from use in operations for the second quarter of 2024 was $6.7 million. Capital expenditures for the second quarter of 2024 were $1.4 million.

Maria Xun: Thank you for listening.

Maria Xin: Well, 1.4 million.

Maria Xin: Thank you for letting me. We are now ready for your questions. Operator. Thank you.

Speaker Change: Thank you for lessons, we are now ready for your questions operator.

Mars Cai: We are confident that our initiatives in operational efficiency and innovation will unlock our growth and value potential in the foreseeable future.

Mars Cai: We are confident that our initiatives in operational efficiency and innovation will unlock our growth and value potential in foreseeable future. In conclusion, the sustained profitability is a clear indicator of the robustness of our business model and the effectiveness of our strategic vision. The ongoing optimization of our direct model, coupled with expansion of network partner model, positions and a monster for continued growth and success. Although the second quarter and current trajectory of the third quarter showed signs of weaker than expected consumption, we remain confident in the long-term recovery of the consumer spending here in China.

Operator: We are now ready for your questions.

Speaker Change: Thank you.

Operator: The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the queue again after your first question has been addressed. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speaker phone, please pick up your handset to ask your question.

Speaker Change: <unk> and answer session of this conference call will start in a moment.

Operator: Operator.

Operator: Operator?

Speaker Change: In order to be fair to all callers, who wish to ask questions. We will take one question at a time from each caller.

Speaker Change: If you have more than one question. Please request to join the queue again. After your first question has been addressed.

Speaker Change: If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced.

Operator: Thank you.

Speaker Change: If you wish to cancel your request please press star two.

Mars Cai: Although the second quarter and current trajectory of the third quarter showed signs of weaker than expected consumption, we remain confident in the long-term recovery of the consumer spending here in China.

Speaker Change: You're on a speakerphone please pick up your handset to ask your question.

Operator: The question and answer session of this conference call will start in a moment.

Dickie Wei: Your first question comes from Dickie Way from City. Please go ahead. Hi, Management. Thanks for taking my question. Would you please share a bit more color about the progress of the second half of this year, both in terms of the power band business and other initiatives? It seems like other revenue is growing quickly, but from a financial perspective, how should we think of margin outlook this year? Thank you. Thanks, Dickie.

Speaker Change: Your first question comes from Vicky Wei from Citi. Please go ahead.

Operator: In order to be fair to all callers who wish to ask questions, we will take one question, at a time from each caller. If you have more than one question, please request to join the queue again after your first question has been addressed.

Vicky Wei: Hi management. Thanks for taking my question would you please shed a bit more color about the progress of the second half this year. Both in terms of the Paul been business and other initiatives. It seems like other revenue is growing.

Mars Cai: As we enter the second half of the year, we will continue to focus on strengthening our operational scale and efficiency, with a particular emphasis on expanding network power and coverage in support. He account acquisition and our direct operations and optimizing POI quality to enhance our margins. We need to continue sharpening our competitive edge with the network partner model, which already delivers healthy unit economics, but has the potential to achieve even greater efficiencies and returns.

Speaker Change: From a financial perspective, how should we think of margin outlook. This year. Thank you.

Mars Cai: We need to continue sharpening our competitive edge with the network partner model, which already delivers healthy unit economics, but has the potential to achieve even greater efficiencies and returns. To that end, we will continue to improve the stimulation of our product and service for our natural partners and providing enhanced support and experience to ensure their continued success.

Vicki: Thanks Vicki.

Mars Cai: Yes, I will take the first part of the question. I think the market in the second quarter was pretty challenging. Like I mentioned earlier, results are oscillating with no definitive trend of rebound as of the end of the second quarter. This again, I think, is due to a number of factors that include the consumer confidence and somewhat extreme weather conditions, and their impact has brought cold down to the overall consumer sector. There isn't too much visibility, actually, for the second half of 2024 in terms of our core business. The current numbers in July doesn't show much science over rebound in the peak third quarter season.

Speaker Change: Yes, I will take the first part of your question I think the market in the second quarter was pretty challenging.

Speaker Change: Like I mentioned earlier result, automating with no definitive trend of a rebound.

Mars Cai: To that end, we will continue to improve the stabilization of our product and service for our network partners and providing enhanced support and experiences to ensure their continued success. We will continue developing new hardware, including next-generation power banks and cabinets, designed to be more durable while the same time of future reduced costs. These initiatives are designed to ensure that we remain at the forefront of innovation, and further strengthen our competitive advantages under the network partner model.

Speaker Change: At the end of the second quarter.

Again, I think is due to a number of factors that include the consumer confidence and somewhat extreme weather conditions and their impact has bring codes down to the overall consumer sector.

Mars Cai: We will continue to develop a new hardware including next-generation power banks and cabinets, designed to be more durable while the same time of featuring reduced costs.

Speaker Change: There isn't too much visibility actually for the second half of 2024 in terms of our core business.

Mars Cai: These initiatives are designed to ensure that we remain at the forefront of innovation and further strengthen our competitive advantages under the network partner model.

Speaker Change: Current numbers in July it doesn't show much signs of a rebound.

Speaker Change: The peak third quarter season.

Mars Cai: In summary, we are optimistic about the future of the market in China and beyond.

Mars Cai: But at the same time, our other initiative is training up pretty quickly, and there is definitely potential at being a driver of growth in the longer term. Now again, at the end of the day, I think we need to focus back into things that are in our own hand, specifically our focus on strengthening our operational scale and efficiency, especially in expanding network partner coverage and providing more comprehensive support, key account acquisition under the direct model, and optimizing POI quality to enhance our margins. At the same time, diversifying ourselves with initiatives in renewable energy and plans for the international market will serve as drivers for tomorrow.

Speaker Change: But after the tie at same time, our other initiatives is training up pretty quickly and there is definitely potential.

Mars Cai: And the monster is where position the fall sustained development.

Mars Cai: As the transition between direct and network partner models will help refine the quality of our direct model portfolio, while network partner model continues to feel growth.

Speaker Change: It's being a driver of growth in the longer term.

Speaker Change: Now again at the end of the day, I think we need to folks back into things that.

Speaker Change: One hand.

Mars Cai: Once the transition is complete, our business model and financials will be even healthier.

Speaker Change: Specifically, our focus on strengthening our operational scale and efficiency.

Speaker Change: Especially in expanding network partner coverage and providing more comprehensive support key account acquisition under the direct model and optimizing <unk> quality to enhance our margins at the same time diversifying ourselves with initiatives in renewable energy and plans for the international market.

Mars Cai: Our robust cash reserves and cash flow provide a solid foundation for driving continued growth and a value creation for shareholders.

Speaker Change: <unk> will serve as drivers for tomorrow.

Mars Cai: So overall, I'm confident that these strategies collectively positions Energy Monster for long-term success.

Mars Cai: We believe all of these strategies and positioning will allow us to deliver improved value to energy monsters shareholders in the future.

Speaker Change: Overall I am confident that these strategies are collectively positions energy monster for long term success.

Maria Xin: Yeah, I will now let Maria take the second part of the question. Hi, we came. Our revenue mainly from our initiatives in renewable energy has been growing quickly in this quarter. It is a sector with a large market opportunities as well as clear business models. As of July, this new initiative is already at a big even point with a small amount of profits. The margin going forward will really depend on the scale, but the industry standard for this model is around 8 to 10% growth margin and 3 to 5% net margin. It will take a bit of time to reach that market level, but we are definitely excited about it.

Mars Cai: Thank you very much.

Speaker Change: Yeah, I'll, let Maria to take the second part of the question.

Maria Xin: I will now turn the call to Maria, our chief financial officer for the financial details.

Maria Xin: I will now turn the call to Maria, our chief financial officer, for the financial details. Thank you, Mars. Now, let me work you through the second quarter 2024 financial results in greater details. For the second quarter of 2024, RAM news were 432.9 million, representing a 55.3% year-old year decrease. Mobile device charging RAM news, which consists of RAM news generating from both direct and network partner models for 410.6 million and accounted for 88.7% of our total RAM news for the quarter.

Maria: Hi, Ricky other revenue mainly from our initiatives in renewable energy has.

Maria Xin: Thank you, Mars.

Maria Xin: Now let me work you through the second quarter, 2024 financial results in greater details.

<unk> been growing quickly in this quarter is it a sector with a large market opportunities as well as clear business model.

Maria Xin: For the second quarter of 2024, revenues were 432.9 million, representing a 35.3 percent year-old year decrease. Mobile device charging revenues, which consists of revenues generating from both direct and network partner models for 410.6 million and accounted for 88.7 percent of our total revenues for the quarter.

Maria: As of July This new initiative is already at a break even point with us more amongst our profit.

Speaker Change: The margins going forward really depends on the scale by the industry standard for this model is around 8% to 10% gross margin and 3% to 5% net margin.

Speaker Change: It will take a bit of time to reach the apps market level, but we are definitely excited about that.

Maria Xin: RAM news generated from direct model, which comprise a mobile device charging service fee of 115.9 million and part bank sales of 2.2 million were 118.1 million for the second quarter of 2024, down 60.7% year-old year. The decrease was primarily due to the decrease in number of POI of Reted and the direct model. Renews generating from network partner model, which comprises of mobile dual charging solution C, which increased 14.3% year-to-61.4 million, and part-back cabinet and other related cells, which decreased 65.6% year-to-100.31 million, decreased by 59.7% to 292.5 million for the second quarter of 2024.

Maria Xin: Thank you.

Speaker Change: Thank you. Thank you.

Operator: If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced.

Operator: If you wish to cancel your request, please press star 2.

Speaker Change: Thank you once again, if you wish to ask a question. Please press star one on your telephone.

Operator: Once again, if you wish to ask a question, please press star one on your telephone.

Charlie Chen: Your next question comes from Charlie Chen from China Renaissance.

Operator: If you're on a speakerphone, please pick up your handset to ask your question.

Speaker Change: Your next question comes from Charlie Chen from China Renaissance. Please go ahead.

Mars Cai: Please go ahead. Hi, Mars. Hi, Maria. Thanks for taking my question. It seems like we are executing the transition pretty quickly. So I just want to understand what would be the equilibrium for the direct and the partner model in the near future. And also just a quick five questions. How exactly do you work with KAs in the future if most of your regions are on the network partner model? Thank you. Thanks, Charlie. Great questions. The vast majority of our POIs and GND will be from the network partner model. That trend is undeniable. I think the balance will be around 5 to 10% of GND by the end of this year if I have to give a rough estimate.

Operator: Your first question comes from Dickie Wei from Citi.

Vicky Way: Your first question comes from Vicky Way from

Dickie Wei: Please go ahead.

Vicky Way: City.

Dickie Wei: Hi, management.

Vicky Way: Please go ahead.

Charlie Chen: Hi, Mark Hi, Maria Thanks.

Charlie Chen: Thanks for taking my question it.

Maria Xin: Revenue generated from network partner model, which comprise a mobile device charging solution which increased 14.3 percent year-old year to 61.5 million and part bank cabinet and other related sales, which decreased 65.6 percent year-old year to 131 million decreased by 59.7 percent to 292.5 million for the second quarter of 2024. The decrease was primarily due to the certain one-time adjustments in mobile device charging revenues for the second quarter of 2023 as a result of the change in the contractual arrangement with network partners.

Dickie Wei: Thanks for taking my question.

Speaker Change: It seems like we are executing the transition I'm pretty quickly. So I just want to understand what would be the equilibrium for the direct and the partner model in the near future.

Speaker Change: And also just a quick final question, how exactly do you work with <unk> in the future. If most of your regions are under the partner model. Thank you.

Vicky Way: Hi, management.

Vicky Way: Thanks for taking my question.

Charlie Chen: Thanks, Charlie Great questions.

Speaker Change: The majority of our <unk> and <unk> will be from the network partner model.

Charlie Chen: That trend is undeniable.

Speaker Change: I think the balance would be around 5% to 10% of <unk> by the end of this year, if I had to give a rough estimate but this number really depends on a number of effects.

Maria Xin: The decrease was primarily due to the certain one-time adjustments in mobile dual charging revenues for the second quarter of 2023 as a result of the change in the contractual arrangement with network partners. Other roundmills, which account for 11.3% of our total roundmills, which are 52.3 million for the second quarter of 2024, are 433.7% year-to-year. The increase was primarily attributable to the new business initiatives. Costs of roundmills were down 67.2% year-year-to-2 hundred and 19.6 million for the second quarter of 2024.

Mars Cai: But this number really depends on a number of effects. Things like the efficiency of our direct model portfolio and the team all contribute to the end result. What is clear is currently that the economics of the network partner model is still superior to that of the direct one. And thus we will continue forward with the rebalancing going into the second half of this year.

Speaker Change: Things like the efficiency of our direct model portfolio and the team all contribute to the end result.

Maria Xin: Other revenues which account for 11.3 percent of our total revenues which are 52.3 million for the second quarter of 2024 are 433.7 percent year-old year.

Speaker Change: What is clear is currently.

Speaker Change: That's the economics of natural part of the model is still superior to that of the direct when.

Speaker Change: And thus we will continue forward with the rebalancing going into the second half of this year.

Dickie Wei: Would you please share a bit more color about the progress of the second half this year, both in terms of the power bank business and other initiatives?

Maria Xin: The increase was primarily attributable to the new business initiative, of Ram News was done 67.2% year-year to 219.6 million for the second quarter of 2024.

Dickie Wei: It seems like other revenue is growing quickly, but from a financial perspective, how should we think of margin outlook this year?

Vicky Way: Would you please share a bit more color about the progress of the second half this year, both in terms of the power bank business and other initiatives?

Mars Cai: As for your question on K.A., that's something we definitely thought through before we start this transition. The K.A. team currently closely work with the network partner team to continue expanding our penetration of K.A. accounts. For certain new K.A.s, our K.A. team first secures the collaboration with a major brand. And then our network partner team finds a suitable network partner with extensive experience and a proven track record of maintenance capability to jointly work with the K.A. This allows us to continue expanding our K.A. footprint, either in lower tier cities or other regions where our direct model doesn't appear that.

Speaker Change: As for your question on K, a that's something we definitely through thought through before we start this transition. The K team currently closely work with the network partner team to continue expanding our penetration with key accounts.

Dickie Wei: Thank you.

Mars Cai: Thanks, Dickie.

Mars Cai: Yes, I will take the first part of the question.

Mars Cai: I think the market in the second quarter was pretty challenging.

Maria Xin: The decrease was primarily due to the one-time adjustments in mobile dual charging costs of roundmills for the second quarter of 2023 as a result of the change in contractual arrangement with network partners and the decrease in depreciation as a result of the decrease in number of POIs of rated and their direct model. Gold profit was down 33.7% year-to-2 hundred and 43.3 million for the second quarter of 2024, operating expenses for the second quarter of 2024 were 249.3 million down 29.5% year-to-year, excluding share-based accommodation, non-gap operating expenses were 243.3 million representing a year-to-year decrease of 30.1%.

Mars Cai: Like I mentioned earlier, results are oscillating with no definitive trend of a rebound as of the end of the second quarter.

Mars Cai: Yeah, I will now let Maria take the second part of the question.

Mars Cai: This, again, I think is due to a number of factors that include the consumer confidence and somewhat extreme weather conditions, and their impact has wrinkled down to the overall consumer sector.

Speaker Change: For certain U K ace Okay team first secures the collaboration with a major brand and then I'll, let it work partner team to find a suitable network partner with extensive experience and proven track record of maintaining its capability to jointly work with.

Maria Xun: Hi, Vicky.

Mars Cai: There isn't too much visibility, actually, for the second half of 2024 in terms of our core business.

Maria Xun: Other revenue mainly from our initiatives in renewable energy has been growing quickly in this quarter.

Mars Cai: The current numbers in July doesn't show much signs of a rebound in the peak third quarter season.

Maria Xun: It's a sector with large market opportunities as well as clear business model.

Mars Cai: But at the same time, our other initiative is trending up pretty quickly, and there is definitely potential of it being a driver of growth in the longer term.

Maria Xun: As of July, this new initiative is already at a break-even point with a small amount, of profit. The margin going forward will really depend on the scale, but the industry standard for, this model is around 8-10% gross margin and 3-5% net margin.

Mars Cai: Now, again, at the end of the day, I think we need to focus back into things that are in our own hand, specifically our focus on strengthening our operational scale and efficiency, especially in expanding network partner coverage and providing more comprehensive support, key account acquisition under the direct model, and optimizing POI quality to enhance our margins.

Maria Xun: It will take a bit of time to reach that margin level, but we are definitely excited about, that.

Mars Cai: At the same time, diversifying ourselves with initiatives in renewable energy and plans for the international market will serve as drivers for tomorrow.

Maria Xun: Thank you.

Mars Cai: Overall, I'm confident that these strategies collectively positions Energy Monster for long-term success.

Operator: Once again, if you wish to ask a question, please press star 1 on your telephone.

Operator: Your next question comes from Charlie Chen from China Renaissance.

Charlie Chen: Please go ahead.

Charlie Chen: Hi, Mars.

Speaker Change: This allows us to continue expanding our K footprint, either in lower tier cities or other regions, where our direct model doesn't.

Maria Xin: Ghost profit was down 33.7% year-year to 214.3 million for the second quarter of 2024. Operating expenses for the second quarter of 2024 were 249.3 million down 29.5% year-to-year, excluding share-based accommodations, non-cap operating expenses were 243.3 million, representing a year-to-year decrease of 30.1%.

Speaker Change: A peer that.

Mars Cai: In terms of our service and the maintenance commitment to the K.A.s, the marketing campaigns between their brand and ours, and the tailored cabinets and power banks, nothing has changed. All of the bells and whistles that comes with working with EnergyMonster will remain the same for our current and future K partners. Given that, we remain very confident in our value proposition to our partners and ability to continue onboarding leading K.A.s to our mobile device network. Thank you very much. Hope that answers your question.

Speaker Change: In terms of our service and maintenance commitments to the case the marketing campaigns between.

Speaker Change: Their brand and hours and the tailored cabinets and power banks nothing has changed all of the bells and whistles that comes with working with energy Monster will remain the same for our current and future K partners given that we remain very confident in our value.

Maria Xin: Research and development expenses for the second quarter of 2024 were 20.8 million up 11.6% year-to-year.

Maria Xin: Research and the development expenses for the second quarter of 2024 were 20.8 million up 11.6% year-to-year. The decrease was primarily due to the decrease in personnel-related expenses. Sales and marketing expenses for the second quarter of 2024 were 118.9 million down 38.7% year-to-year. The decrease was primarily due to the decrease in incentive fees, paid to location partners and their direct model and personnel-related expenses. Journal and administrative expenses for the second quarter of 2024 were 39.5 million up 26.8% year-to-year.

Speaker Change: Proposition to our partners and the ability to continue on boarding leading case to extend our mobile device network.

Speaker Change: Thank you very much hope that answers your question.

Charlie Chen: Great. Thank you.

Maria Xin: The decrease was primarily due to the decrease in personnel related expenses.

Speaker Change: Great. Thank you.

Operator: We are now approaching the end of the conference hall.

tonnage amongst: We are now approaching the end of the conference call I will now turn the call over tonnage amongst with CSI <unk> for closing remarks.

Maria Xin: Self and marketing expenses for the second quarter of 2024 were 118.9 million down 38.7% year-to-year. The decrease was primarily due to the decrease in incentive fees paid to location partners and their direct model and personnel related expenses.

Charlie Chen: Hi, Maria.

Vicky Way: It seems like other revenue is growing quickly, but from a financial perspective, how should we think of margin outlook this year?

Maria Xin: I will now turn the call over to EnergyMonster PSO at Maria's in the closing remarks. Once again, thank you for joining us today. Please don't hesitate to contact us. If you have any further questions, thank you for your continued support, and we look forward to speaking with you in the coming months. Thank you.

Charlie Chen: Thanks for taking my question.

Speaker Change: Once again, thank you for joining US today, please don't hesitate to contact us if you have any further questions.

Charlie Chen: It seems like we are executing the transition pretty quickly, so I just want to understand, what would be the equilibrium for the direct and the partner model in the near future?

Charlie Chen: And also just a quick side question, how exactly do you work with KAs in the future if most, of your regions are on the network partner model?

Speaker Change: <unk> for your continued support and we look forward to speaking with you in the coming months. Thank you.

Charlie Chen: Thank you.

Vicky Way: Thank you.

Maria Xin: Journal and administrative expenses for the second quarter of 2024 were 39.5 million up 26.8% year-to-year.

Operator: Thank you for your participation in today's conference.

Mars Cai: Thanks, Charlie.

Mars Cai: Thanks, Vicky.

Speaker Change: Thank you for your participation in today's conference. This concludes the presentation you may now disconnect good day.

Mars Cai: Great questions.

Mars Cai: Yes, I will take the first part of the question.

Mars Cai: Thanks, Charlie.

Mars Cai: I think the market in the second quarter was pretty challenging.

Mars Cai: Great questions.

Mars Cai: Like I mentioned earlier, results are oscillating with no definitive trend of rebound as of the end, of the second quarter. This, again, I think is due to a number of factors that include the consumer confidence and somewhat extreme weather conditions, and their impact has wrinkled down to the overall consumer sector.

Operator: This concludes the presentation. You may now disconnect. Good day.

Mars Cai: The vast majority of our POIs and GND will be from the network partner model. That trend is undeniable.

Mars Cai: There isn't too much visibility, actually, for the second half of 2024 in terms of our core business.

Mars Cai: I think the balance will be around 5-10% of GND by the end of this year if I have to give, a rough estimate, but this number really depends on a number of facts, things like the efficiency of our direct model portfolio and the team all contribute to the end result.

Operator: We are now approaching the end of the conference call.

Mars Cai: The current numbers in July doesn't show much signs of a rebound in the peak third quarter season.

Operator: We are now approaching the end of the conference call.

Mars Cai: What is clear is currently that the economics of network partner model is still superior, to that of the direct one, and thus we will continue forward with the rebalancing going into the second half of this year.

Maria Xun: I will now turn the call over to Energy Monster's CFO, Maria Xin, for closing remarks.

Mars Cai: Yi Wei, Yi Xin, Weiting Tang, Smart Share Globally, and providing more comprehensive support, key account acquisition under the direct model and optimizing POI quality to enhance our margins.

Maria Zinn: I will now turn the call over to Energy Monster's CFO, Maria Zinn, for closing remarks.

Maria Zinn: Thank you.

Mars Cai: As for your question on KAs, that's something we definitely thought through before we start, this transition. The KAs team currently closely work with the network partner team to continue expanding, our penetration of KAs accounts.

Mars Cai: At the same time, diversifying ourselves with initiatives in renewable energy and plans, for the international market will serve as drivers for tomorrow.

Maria Zinn: Once again, thank you for joining us today.

Mars Cai: For certain new KAs, our KAs team first secures the collaboration with a major brand, and, then our network partner team finds a suitable network partner with extensive experience and proven track record of maintenance capability to jointly work with the KA. This allows us to continue expanding our KA footprint, either in lower tier cities or, other regions where our direct model doesn't appear that.

Mars Cai: Overall, I'm confident that these strategies collectively positions Energy Monster for, long-term success.

Maria Zinn: Please don't hesitate to contact us if you have any further questions.

Mars Cai: In terms of our service and the maintenance commitment to the KAs, the marketing campaigns, between their brand and ours and the tailored cabinets and power banks, nothing has changed. All of the bells and the whistles that comes with working with EnergyMonster will remain, the same for our current and future KA partners.

Mars Cai: Yeah, I will now let Maria take the second part of the question.

Maria Zinn: Thank you for your continued support and we look forward to speaking with you in the coming months.

Mars Cai: Given that, we remain very confident in our value proposition to our partners and ability, to continue onboarding leading KAs in our mobile device network.

Maria Xun: Hi, Vicky.

Maria Xin: The increase was primarily due to the increase in reserve for the duck-for-cum in relation to the increase in contribution of network partner models.

Maria Xin: The increase was primarily due to the increase in reserve for the duck in relation to the increase in contribution of network partner model. Glo from operations was this meeting and operating margin for the second quarter of 2024 was negative 1.3%. Net income was 9.2 million in the second quarter of 2024 compared to a net income of 24.5 million in the same period this last year. Net margin for the second quarter of 2024 was 2% compared to a net margin of 2.4% in the same period last year.

Mars Cai: Thank you very much.

Maria Xun: Our revenue mainly from our initiatives in renewable energy has been growing quickly, in this quarter.

Charlie Chen: Hope that answers your question.

Maria Xun: It's a sector with a large market opportunities as well as clear business model.

Charlie Chen: Great.

Operator: Thank you.

Maria Xun: Thank you.

Operator: Thank you.

Operator: Once again, if you wish to ask a question, please press star 1 on your telephone.

Operator: Your next question comes from Charlie Chen from China Renaissance.

Charlie Chen: Please go ahead.

Charlie Chen: Hi, Mark.

Charlie Chen: Hi, Maria.

Charlie Chen: Thanks for taking my question.

Maria Xin: Gloves from operations were safe milling and operating margins for the second quarter of 2024 was negative 1.3%.

Charlie Chen: It seems like we are executing the transition pretty quickly, so I just want you to understand, what would be the equilibrium for the direct and the partner model in the near future, and also just a quick side question.

Charlie Chen: How exactly do you work with KAs in the future if most of your regions are under the network, partner model?

Charlie Chen: Thank you.

Mars Cai: Thanks, Charlie.

Mars Cai: Great questions.

Mars Cai: The vast majority of our POIs and GND will be from the network partner model. That trend is undeniable.

Mars Cai: I think the balance will be around 5% to 10% of GND by the end of this year if I have, to give a rough estimate, but this number really depends on a number of facts, things like the efficiency of our direct model portfolio and the team all contribute to the end result.

Mars Cai: As for your question on KA, that's something we definitely thought through before we start, this transition.

Mars Cai: The KA team currently closely works with the network partner team to continue expanding, our penetration of key accounts. For certain new KAs, our KA team first secures the collaboration with a major brand, and, then our network partner team finds a suitable network partner with extensive experience and proven track record of maintenance capability to jointly work with the KA.

Mars Cai: This allows us to continue expanding our KA footprint, either in lower tier cities or, other regions where our direct model doesn't appear that.

Mars Cai: In terms of our service and the maintenance commitment to the KAs, the marketing campaigns, between their brand and ours, and the tailored cabinets and power banks, nothing has changed. All of the bells and the whistles that comes with working with Energy Monster will remain, the same for our current and future KA partners.

Maria Xin: Net income was 9.2 million in the second quarter of 2024 compared to a net income of 24.1 million in the same period this last year.

Mars Cai: Given that, we remain very confident in our value proposition to our partners and ability, to continue onboarding leading KAs in our mobile device network.

Mars Cai: Thank you very much.

Charlie Chen: Hope that answers your question.

Charlie Chen: Great.

Charlie Chen: Thank you.

Maria Xin: Net margin for the second quarter of 2024 was 2% compared to a net margin of 2.4% in the same period last year.

Maria Xin: Non-gab net income, which is flu share-based accommodation expenses, was 15.2 million in the second quarter of 2024 compared to a non-gab net income of 13.1 million in the same period last year. As of June 30, 2024, the company had a cash and the cash equivalence, restrictive cash, and sold to an investment of 3.2 billion. Cash flow from youth in operations for the second quarter of 2024 was 6.7 million capital expenditure for the second quarter of 2024. Well, 1.4 million.

Maria Xin: As of June 30, 2024, the company had cash and cash equivalence, restrictive cash and a short-term investment of 3.2 million in the same period.

Maria Xin: Cash flow from use in operations for the second quarter of 2024 was 6.7 million capital expenditures for the second quarter of 2024 were 1.4 million.

Maria Xin: Thank you for letting me, we are now ready for your questions.

Operator: Thank you for letting me, we are now ready for your questions. Operator. Thank you.

Operator: Operator.

Operator: Thank you.

Operator: The question and answer session of this conference call will start in a moment.

Operator: The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the queue, again after your first question has been addressed. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speaker phone, please pick up your handset to ask your question.

Operator: In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the queue, again after your first question has been addressed. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced.

Operator: If you wish to cancel your request, please press star two.

Operator: If you are on a speaker phone, please pick up your handset to ask your question.

Dickie Wei: Your first question comes from Dickie Wei from City, please go ahead.

Dickie Wei: Your first question comes from Dickie Way from City. Please go ahead. Hi, management. Thanks for taking my question. Would you please share a bit more color about the progress of the second half of this year, both in terms of the power band business and other initiatives? It seems like other revenue is growing quickly, but from a financial perspective, how should we think of margin outlook this year? Thank you. Thanks, Dickie. Yes, I will take the first part of the question.

Dickie Wei: Hi management, thanks for taking my question.

Dickie Wei: Would you please share a bit more color about the progress of the second half this year, both in terms of the power band business and other initiatives?

Dickie Wei: It seems like other revenue is growing quickly, but from a financial perspective, how should we think of modern outlook this year?

Dickie Wei: Thank you.

Mars Cai: Thanks, Dickie.

Mars Cai: Yes, I will take the first part of the question.

Mars Cai: I think the market in the second quarter was pretty challenging.

Dickie Wei: I think the market in the second quarter was pretty challenging. Like I mentioned earlier, results are oscillating with no definitive trend of rebound as of the end of the second quarter. This again, I think, is due to a number of factors that include the consumer confidence and somewhat extreme weather conditions, and their impact has bring cold down to the overall consumer sector. There isn't too much visibility actually for the second half of 2024 in terms of our core business.

Mars Cai: Like I mentioned earlier, results are oscillating with no definitive trend of rebound as of the end of the second quarter.

Mars Cai: This again, I think, is due to a number of factors that include the consumer confidence and somewhat extreme weather conditions, and their impact has bring cold down to the overall consumer sector.

Dickie Wei: The current numbers in July doesn't show much science over rebound in the peak third quarter season. But at the same time, our other initiative is training up pretty quickly and there is definitely potential at being a driver of growth in the longer term. Now again, at the end of the day, I think we need to focus back into things that are in our own hand, specifically our focus on strengthening our operational scale and efficiency, especially in expanding network partner coverage and providing more comprehensive support, key account acquisition under the direct model and optimizing POI quality to enhance our margins.

Mars Cai: At the same time, diversifying ourselves with initiatives in renewable energy and plans for the international market will serve as drivers for tomorrow.

Dickie Wei: At the same time, diversifying ourselves with initiatives in renewable energy and plans for the international market will serve as drivers for tomorrow. So overall, I'm confident that these strategies collectively positions energy monster for long-term success. Yeah, I will now let Maria take the second part of the question. Hi, we came. Our revenue mainly from our initiatives in renewable energy has been growing quickly in this quarter. It is a sector with a large market opportunities as well as clear business models.

Mars Cai: Overall, I'm confident that these strategies collectively positions energy monster for long-term success.

Maria Xin: Yeah, I will now let Maria take the second part of the question.

Maria Xin: Hi, VK.

Maria Xin: Our revenue mainly from our initiatives in renewable energy has been growing quickly in this quarter.

Maria Xin: It's a sector with a large market opportunities as well as clear business model.

Dickie Wei: As of July, this new initiative is already at a big even point with a small amount of profits. The margin going forward will really depend on the scale, but the industry standard for this model is around 8 to 10% growth margin and 3 to 5% net margin. It will take a bit of time to reach that market level, but we are definitely excited about it. Thank you.

Maria Xin: Thank you.

Operator: Once again, if you wish to ask a question, please press star one on your telephone.

Charlie Chen: Your next question comes from Charlie Chen from China Renaissance.

Charlie Chen: Your next question comes from Charlie Chen from China Renaissance. Please go ahead. Hi, Mars. Hi, Maria. Thanks for taking my question. It seems like we are executing the transition pretty quickly. So I just want to understand what would be the equilibrium for the direct and the partner model in the near future. And also just a quick five question. How exactly do you work with KAs in the future if most of your regions are on the network partner model?

Charlie Chen: Please go ahead.

Charlie Chen: Hi, Mars.

Charlie Chen: Hi, Maria.

Charlie Chen: Thanks for taking my question.

Charlie Chen: It seems like we are executing the transition pretty quickly, so I just want you to understand what would be the equilibrium for the direct and the partner model in the near future.

Charlie Chen: And also just a quick slide question, how exactly do you work with KAs in the future if most of your regions are on the network partner model?

Charlie Chen: Thank you.

Mars Cai: Thanks, Charlie.

Charlie Chen: Thank you. Thanks, Charlie. Great questions. The vast majority of our POIs and GND will be from the network partner model. That trend is undeniable. I think the balance will be around 5 to 10% of GND by the end of this year if I have to give a rough estimate. But this number really depends on a number of effects. Things like the efficiency of our direct model portfolio and the team all contribute to the end result.

Mars Cai: Great questions.

Mars Cai: The vast majority of our POIs and GND will be from the network partner model. That trend is undeniable.

Mars Cai: I think the balance will be around 5 to 10% of GND by the end of this year if I have to give a rough estimate, but this number really depends on a number of facts.

Mars Cai: Things like the efficiency of our direct model portfolio and the team all contribute to the end without.

Mars Cai: What is clear is currently that the economics of the network partner model is still superior to that of the direct one.

Charlie Chen: What is clear is currently that the economics of the network partner model is still superior to that of the direct one. And thus we will continue forward with the rebalancing going into the second half of this year. As for your question on K.A., that's something we definitely thought through before we start this transition. The K.A, team currently closely work with the network partner team to continue expanding our penetration of K.A, accounts.

Mars Cai: And thus, we will continue forward with the rebalancing going into the second half of this year.

Mars Cai: As for your question on KA, that's something we definitely thought through before we start this transition.

Mars Cai: The KA team currently closely work with the network partner team to continue expanding our penetration of key accounts.

Mars Cai: For certain new KAs, our KA team first secures the collaboration with a major brand. And then our network partner team finds a suitable network partner with extensive experience and proven track record of maintenance capability to jointly work with the KA. This allows us to continue expanding our KA footprint either in lower tier cities or other regions where our direct model doesn't appear that.

Charlie Chen: For certain new K.A.s, our K.A, team first secures the collaboration with a major brand. And then our network partner team finds a suitable network partner with extensive experience and proven track record of maintenance capability to jointly work with the K.A. This allows us to continue expanding our K.A, footprint, either in lower tier cities or other regions where our direct model doesn't appear that. In terms of our service and the maintenance commitment to the K.A.s, the marketing campaigns between their brand and ours and the tailored cabinets and power banks, nothing has changed.

Mars Cai: In terms of our service and the maintenance commitment to the KAs, the marketing campaigns between their brand and ours and the tailored cabinets and power banks, nothing has changed. All of the bells and whistles that comes with working with EnergyMonster will remain the same for our current and future K partners. Given that, we remain very confident in our very proposition to our partners and ability to continue onboarding leading KAs to our mobile device network.

Mars Cai: Thank you very much.

Charlie Chen: All of the bells and whistles that comes with working with EnergyMonster will remain the same for our current and future K partners. Given that, we remain very confident in our value proposition to our partners and ability to continue onboarding leading K.A.s to our mobile device network. Thank you very much. Hope that answers your question. Great. Thank you.

Mars Cai: Hope that answers your questions.

Operator: We are now approaching the end of the conference hall.

Maria Xin: We are now approaching the end of the conference hall. I will now turn the call over to EnergyMonster PSO at Maria's in the closing remarks. Once again, thank you for joining us today. Please don't hesitate to contact us. If you have any further questions, thank you for your continued support and we look forward to speaking with you in the coming months. Thank you.

Maria Xin: I will now attend the call over to Energy Month's CSR at Maria's in the closing remarks.

Maria Xin: Once again, thank you for joining us today.

Maria Xin: Please do not hesitate to contact us if you have any further questions.

Maria Xin: Thank you for your continuous support and we look forward to speaking with you in the coming months.

Operator: Thank you.

Operator: Thank you for your participation in today's conference. This concludes the presentation.

Operator: You may now disconnect. Good day.

Operator: Thank you for your participation in today's conference.

Operator: This concludes the presentation.

Operator: You may now disconnect.

Operator: Good day.

Operator: At this time, all participants are in listen only mode. Today's conference is being recorded.

Operator: If you have any objections, you may disconnect at this time.

Hansen Shi: I would like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Hansen Shi.

Hansen Shi: Thank you.

Hansen Shi: Welcome to our 2024 second quarter earnings conference call.

Hansen Shi: Joining me on the call today are Mars Cai, Energy Monsters Chairman and Chief Executive Officer and Maria Xin, Chief Financial Officer.

Hansen Shi: For today's agenda, management will discuss business updates, operation highlights, and financial performance for the second quarter of 2024.

Hansen Shi: Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call.

Hansen Shi: As we will make forward-looking statements, also, this call includes discussion of certain non-gap financial measures. Please refer to our earnings release, which contains a reconciliation of non-gap measures through the most directly comparable gap measures.

Hansen Shi: Finally, please note that, unless otherwise stated, all figures mentioned during this call are in R&B.

Mars Cai: I would now like to turn the call over to our Chairman and Chief Executive Officer, Mars Cai, for the business and operation highlights.

Mars Cai: Thank you very much, Hansen.

Mars Cai: Good day, everyone.

Mars Cai: Welcome to our 2024 second quarter earnings call.

Mars Cai: I'm pleased to report that Energy Monsters has demonstrated solid resilience in the second quarter, despite a softer, the expected consumption environment here in China.

Mars Cai: We managed to return to gap profitability with net income region 9 million R&B in the quarter. The return to gap profitability marks the strength and adaptability of our business model, especially given our overall transition towards the network partner model.

Mars Cai: This also marks the six consecutive quarters of non-gap profitability, since the reopening from the pandemic in early 2023.

Mars Cai: This achievement reflects the effectiveness of our strategic initiatives and our ability to stay resilient even amid challenging consumption conditions.

Mars Cai: Now, in terms of the impact of the consumption power on our operation, our mobile device charging service G&E experienced a year-over-year decrease due to the softness of the consumption. Breaking down the quarter sequentially, the G&E decreased in April, increased in May, decreased in June, and then increased again in July, on a month basis. While the impact of holidays and hotter than usual weather also served as factors in the oscillating the results.

Mars Cai: Conversely, entertainment and hotel experience quarter-over-quarter declines.

Mars Cai: While these sectors remain important to our portfolio, the fluctuations deflect the broader economic conditions and consumer behavior patterns in the current consumer climate.

Mars Cai: Our expansion strategies have allowed us to continue to improve the network effect of our position, which drives the self-reinforcing cycle between the growth of our POI count and the market conditions have slowed our pace of expansion.

Mars Cai: In parallel, our user base has grown alongside the growth encouraged as we landed at over 417.1 million cumulative reduced users as of the end of the second quarter and increase of 12.8 million users.

Mars Cai: Additionally, I would like to note that these operational milestone were achieved even during our strategic rebalancing between our operation models. We were able to expand the contribution of our network partner model while maintaining our core direct model portfolios.

Mars Cai: Financially, our cash and cash equivalents remain robust, providing us with financial stability, necessary to continue pursuing strategic initiatives and investing in future growth opportunities.

Mars Cai: Our new initiatives that leverages energy monsters existing capabilities will unlock new avenues for growth.

Mars Cai: These assets are essential as we aim to realize our full growth potential and, consistently, deliver sustained value to our shareholders.

Mars Cai: Now, let me walk you through our key initiatives, encourage and efficiency.

Mars Cai: The direct model remains particularly effective in high-year locations within higher tiers and key accounts.

Mars Cai: A significant component of our expansion strategy is the ongoing transition to network partner model. This transition is being executed with precision, balancing the rate of transition with quality and operational efficiency. By the end of the second quarter, 89.2% of our PUI were operated under network partner model. A substantial increase from 79.7% at the end of the first quarter and 62% at the end of the same time last year.

Mars Cai: The pace at which we have rebalanced our operations between the direct model and network partner model has exceeded our initial expectations and will continue to take place going into the second half of 2024. We also now have over 12,000 network partners, an increase of more than a thousand things the end of first quarter, and an increase of around 3,700 year over year. This growth in network partners allow energy monster to develop a robust and dynamic distribution capability that drives our market participation and service reach.

Mars Cai: The increase in network partner account has allowed us to broaden the reach of our operation as we expanded into more than 50 new county-level areas this quarter for total coverage of more than 2,100 county-level cities. The improved reach of our service has also translated into access to new users as we are able to attract 12.8 million new registered users during the second quarter of 2024.

Mars Cai: Our network partner support team continue to play a crucial role providing hand-on guidance and direct support for everyday needs.

Mars Cai: Our network partner team continue to improve the standardization of our hardware, software, and operational support for our partners. This is crucial as the number of network partners continue to grow. We have to provide more comprehensive support for all case scenarios for network partners with all levels of experience.

Mars Cai: These initiatives are designed to ensure that our partners not only feel supported but also empowered to achieve their full potential as we want every single one of them to be successful. The positive reception of the comprehensive support system to our partners is a strong validation of our approach, and we will continue to refine and enhance these support mechanism to further strengthen our network partner model.

Mars Cai: By being able to support our network partner to more quickly launch a profitable operation, we are enhancing energy mongers' own competitive advantages.

Mars Cai: In addition to expanding our network, we continue to optimize low efficiency and underperforming POIs under direct model. This process involves a rigorous review of each POIs performance based on current user traffic and other key metrics. By transitioning underperforming POIs to our network partner model, we can optimize our portfolio for maximum effectiveness and long-term profitability.

Mars Cai: During the second quarter, our network direct model sales team continue to secure and expand partnerships with leading KHA chains and in hospitality, convenience stores and restaurant industries. These high-profile partnerships are instrumental in boosting our brand of visibility and driving our engagement, particularly in high facilities, where brand influence is critical.

Mars Cai: We are seeing more and more countries outside of China having the demand for our service and have the suitable infrastructure in place for mobile device charging service to take off. We believe our underground experience and hardware and software capabilities in China will extend into the international market.

Mars Cai: In the future, it will serve as one of our new drivers of growth and in the long run serve as a way to diversify our operations geographically.

Mars Cai: In terms of operational efficiency, we have made significant strides in optimizing our contract structures under the direct model.

Mars Cai: During the second quarter, we continue to transition thousands of POIs from direct model to network partner model. This transition, while incurring from one time call, is a strategic move that will enhance the financial health for our company in long run.

Mars Cai: By optimizing the structure of our own direct model POIs, we are ensuring that the direct model portfolio is aligned with our broader growth of efficiency and profitability. Also, notably, the reduction in direct model contribution is also directly translating into a smaller workforce of direct model BD personnel, driving the reduction of our operational expenses.

Mars Cai: In addition to optimizing our existing operation, we are also committed to innovation.

Mars Cai: We are confident that our initiatives in operational efficiency and innovation will unlock our growth and value potential in foreseeable future.

Mars Cai: In conclusion, the sustained profitability is a clear indicator of the robustness of our business model and the effectiveness of our strategic vision.

Mars Cai: The ongoing optimization of our direct model, coupled with expansion of network partner model, positions and a monster for continued growth and success.

Mars Cai: He account acquisition and our direct operations and optimizing POI quality to enhance our margins.

Mars Cai: We need to continue sharpening our competitive edge with the network partner model, which already delivers healthy unit economics, but has the potential to achieve even greater efficiencies and returns. To that end, we will continue to improve the stabilization of our product and service for our network partners and providing enhanced support and experiences to ensure their continued success.

Mars Cai: We will continue developing new hardware, including next-generation power banks and cabinets, designed to be more durable while the same time of future reduced costs.

Mars Cai: These initiatives are designed to ensure that we remain at the forefront of innovation, and further strengthen our competitive advantages under the network partner model.

Mars Cai: In summary, we are optimistic about the future of the market in China and beyond.

Mars Cai: And demonstra is where position the fall sustained development.

Mars Cai: As the transition between direct and network partner models will help refine the quality of our direct model portfolio, while network partner model continues to feel growth.

Mars Cai: Once the transition is complete, our business model and the financials will be even healthier.

Mars Cai: Our robust cash reserves and cash flow provide a solid foundation for driving continued growth and a value creation for shareholders.

Mars Cai: We believe all of these strategies and positioning will allow us to deliver improved value to energy monsters, shareholders in the future.

Mars Cai: Thank you very much.

Maria Xin: I will now turn the call to Maria, our chief financial officer, for the financial details.

Maria Xin: Thank you, Mars.

Maria Xin: Now, let me work you through the second quarter 2024 financial results in greater details.

Maria Xin: For the second quarter of 2024, RAM news were 432.9 million, representing a 55.3% year-old year decrease.

Maria Xin: Mobile device charging RAM news, which consists of RAM news generating from both direct and network partner models for 410.6 million and accounted for 88.7% of our total RAM news for the quarter.

Maria Xin: Renews generating from network partner model, which comprises of mobile dual charging solution C, which increased 14.3% year-to-61.4 million, and part-back cabinet and other related cells, which decreased 65.6% year-to-100.31 million, decreased by 59.7% to 292.5 million for the second quarter of 2024.

Maria Xin: Other roundmills, which account for 11.3% of our total roundmills, which are 52.3 million for the second quarter of 2024, are 433.7% year-to-year. The increase was primarily attributable to the new business initiatives.

Maria Xin: Costs of roundmills were down 67.2% year-year-to-2 hundred and 19.6 million for the second quarter of 2024. The decrease was primarily due to the one-time adjustments in mobile dual charging costs of roundmills for the second quarter of 2023 as a result of the change in contractual arrangement with network partners and the decrease in depreciation as a result of the decrease in number of POIs of rated and their direct model.

Maria Xin: Gold profit was down 33.7% year-to-2 hundred and 43.3 million for the second quarter of 2024, operating expenses for the second quarter of 2024 were 249.3 million down 29.5% year-to-year, excluding share-based accommodation, non-gap operating expenses were 243.3 million representing a year-to-year decrease of 30.1%.

Maria Xin: Research and the development expenses for the second quarter of 2024 were 20.8 million up 11.6% year-to-year.

Maria Xin: The decrease was primarily due to the decrease in personnel-related expenses.

Maria Xin: Sales and marketing expenses for the second quarter of 2024 were 118.9 million down 38.7% year-to-year. The decrease was primarily due to the decrease in incentive fees, paid to location partners and their direct model and personnel-related expenses.

Maria Xin: Journal and administrative expenses for the second quarter of 2024 were 39.5 million up 26.8% year-to-year. The increase was primarily due to the increase in reserve for the duck in relation to the increase in contribution of network partner model.

Maria Xin: Glo from operations was this meeting and operating margin for the second quarter of 2024 was negative 1.3%.

Maria Xin: Net income was 9.2 million in the second quarter of 2024 compared to a net income of 24.5 million in the same period this last year.

Maria Xin: Net margin for the second quarter of 2024 was 2% compared to a net margin of 2.4% in the same period last year. Non-gab net income, which is flu share-based accommodation expenses, was 15.2 million in the second quarter of 2024 compared to a non-gab net income of 13.1 million in the same period last year.

Maria Xin: As of June 30, 2024, the company had a cash and the cash equivalence, restrictive cash, and sold to an investment of 3.2 billion.

Maria Xin: Cash flow from youth in operations for the second quarter of 2024 was 6.7 million capital expenditure for the second quarter of 2024.

Maria Xin: Well, 1.4 million.

Maria Xin: Thank you for letting me, we are now ready for your questions.

Operator: Operator.

Operator: Thank you.

Operator: The question and answer session of this conference call will start in a moment.

Operator: In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the queue, again after your first question has been addressed. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced.

Operator: If you wish to cancel your request, please press star two.

Operator: If you're on a speaker phone, please pick up your handset to ask your question.

Dickie Wei: Your first question comes from Dickie Way from City.

Dickie Wei: Please go ahead.

Dickie Wei: Hi, management.

Dickie Wei: Thanks for taking my question.

Dickie Wei: Would you please share a bit more color about the progress of the second half of this year, both in terms of the power band business and other initiatives?

Dickie Wei: It seems like other revenue is growing quickly, but from a financial perspective, how should we think of margin outlook this year?

Dickie Wei: Thank you.

Mars Cai: Thanks, Dickie.

Mars Cai: Yes, I will take the first part of the question.

Mars Cai: I think the market in the second quarter was pretty challenging.

Mars Cai: Like I mentioned earlier, results are oscillating with no definitive trend of rebound as of the end of the second quarter.

Mars Cai: There isn't too much visibility actually for the second half of 2024 in terms of our core business.

Mars Cai: The current numbers in July doesn't show much science over rebound in the peak third quarter season.

Mars Cai: But at the same time, our other initiative is training up pretty quickly and there is definitely potential at being a driver of growth in the longer term.

Mars Cai: Now again, at the end of the day, I think we need to focus back into things that are in our own hand, specifically our focus on strengthening our operational scale and efficiency, especially in expanding network partner coverage and providing more comprehensive support, key account acquisition under the direct model and optimizing POI quality to enhance our margins.

Mars Cai: At the same time, diversifying ourselves with initiatives in renewable energy and plans for the international market will serve as drivers for tomorrow.

Mars Cai: So overall, I'm confident that these strategies collectively positions energy monster for long-term success.

Maria Xin: Yeah, I will now let Maria take the second part of the question.

Maria Xin: Hi, we came.

Maria Xin: Our revenue mainly from our initiatives in renewable energy has been growing quickly in this quarter.

Maria Xin: It is a sector with a large market opportunities as well as clear business models.

Maria Xin: As of July, this new initiative is already at a big even point with a small amount of profits. The margin going forward will really depend on the scale, but the industry standard for this model is around 8 to 10% growth margin and 3 to 5% net margin. It will take a bit of time to reach that market level, but we are definitely excited about it.

Maria Xin: Thank you.

Operator: Once again, if you wish to ask a question, please press star one on your telephone.

Charlie Chen: Your next question comes from Charlie Chen from China Renaissance.

Charlie Chen: Please go ahead.

Charlie Chen: Hi, Mars.

Charlie Chen: Hi, Maria.

Charlie Chen: Thanks for taking my question.

Charlie Chen: It seems like we are executing the transition pretty quickly.

Charlie Chen: So I just want to understand what would be the equilibrium for the direct and the partner model in the near future.

Charlie Chen: And also just a quick five question.

Charlie Chen: How exactly do you work with KAs in the future if most of your regions are on the network partner model?

Charlie Chen: Thank you.

Mars Cai: Thanks, Charlie.

Mars Cai: Great questions.

Mars Cai: The vast majority of our POIs and GND will be from the network partner model. That trend is undeniable.

Mars Cai: I think the balance will be around 5 to 10% of GND by the end of this year if I have to give a rough estimate.

Mars Cai: But this number really depends on a number of effects.

Mars Cai: Things like the efficiency of our direct model portfolio and the team all contribute to the end result.

Mars Cai: What is clear is currently that the economics of the network partner model is still superior to that of the direct one.

Mars Cai: And thus we will continue forward with the rebalancing going into the second half of this year.

Mars Cai: As for your question on K.A., that's something we definitely thought through before we start this transition.

Mars Cai: The K.A, team currently closely work with the network partner team to continue expanding our penetration of K.A, accounts.

Mars Cai: For certain new K.A.s, our K.A, team first secures the collaboration with a major brand. And then our network partner team finds a suitable network partner with extensive experience and proven track record of maintenance capability to jointly work with the K.A.

Mars Cai: This allows us to continue expanding our K.A, footprint, either in lower tier cities or other regions where our direct model doesn't appear that.

Mars Cai: In terms of our service and the maintenance commitment to the K.A.s, the marketing campaigns between their brand and ours and the tailored cabinets and power banks, nothing has changed. All of the bells and whistles that comes with working with EnergyMonster will remain the same for our current and future K partners.

Mars Cai: Given that, we remain very confident in our value proposition to our partners and ability to continue onboarding leading K.A.s to our mobile device network.

Mars Cai: Thank you very much.

Mars Cai: Hope that answers your question.

Operator: Great.

Maria Xin: Thank you.

Maria Xin: We are now approaching the end of the conference hall.

Maria Xin: I will now turn the call over to EnergyMonster PSO at Maria's in the closing remarks.

Maria Xin: Once again, thank you for joining us today.

Maria Xin: Please don't hesitate to contact us.

Maria Xin: If you have any further questions, thank you for your continued support and we look forward to speaking with you in the coming months.

Operator: Thank you.

Operator: Thank you for your participation in today's conference.

Operator: This concludes the presentation.

Operator: You may now disconnect.

Operator: Good day.

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