Q4 2024 ATRenew Inc Earnings Call

Operator: Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to AT Renew. Fourth Quarter and Full Year 2024 Earnings Conference Call At this time, all participants are in a listen-only mode.

Good morning, and good evening, ladies and gentlemen.

Thank you for standing by and welcome to H hearing you Inc's fourth quarter and full year 'twenty 'twenty four earnings conference call.

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

Operator: We will be hosting the question and answer session after management's prepared remarks. Please note, today's event is being recorded.

We will be hosting a question and answer session. After management's prepared remarks.

Please note today's event is being recorded.

Jeremy Ji: I will now turn the call over to the first speaker today, Mr. Jeremy Ji, Director of Corporate Development and Investor Relations of the company. Please go ahead. Thank you.

Speaker Change: I'll now turn to call to the first speaker today, Mr. Jeremy Chi director of corporate development and Investor Relations of the company. Please go ahead Sir.

Speaker Change: Thank you Hello, everyone and welcome to each of our newest fourth quarter and full year 2024 earnings Press release Conference call speaking first today is carrier churn, our founder chairman and CEO and he'll be followed by Rex Chen our CFO after that we'll open the call to questions from analysts.

Jeremy Ji: Hello, everyone, and welcome to AT Renews' fourth quarter and full year 2024 earnings conference call.

Kerry Chen: Speaking first today is Kerry Chen, our founder, chairman and CEO, and he'll be followed by Rex Chen, our CFO. After that, we'll open the call to questions from...

Jeremy Ji: The first quarter and full year 2024 financial results were released earlier today. The earnings, price release, and IR deck accompanying this call are available at our IR website, ir.atrenew.com. There will also be a transcript following this call for you.

Speaker Change: The fourth quarter and full year 2024 financial results were released earlier today the earnings press release and IR deck accompanying this call are available at our IR website IR at <unk> Dot com it'll also be a transcript following this call for your convenience.

Jeremy Ji: For today's agenda, Kerry will share his thoughts of our quarterly performance and business strategy, followed by Rex, who will address the financial highlights. Both Kerry and Rex will join the Q&A session.

Speaker Change: Well today's agenda Cary will share his thoughts about the quarterly performance and business strategy, followed by Rex who will address the financial highlights most carry and Rex will join the Q&A session.

Jeremy Ji: Please pay attention to the safe harbor statements. Some of the information you hear during our discussion today will consist of forward-looking statements. And I refer you to our safe harbor statements in the earnings pricing. Any forward-looking statements that management makes on this call are based on assumptions as of today, and that AT Renew does not take any obligations to upgrade our assumptions.

Speaker Change: Please be please pay attention to the safe Harbor statements. Some of the information you'll hear during our discussion today will consist of forward looking statements and I refer you to our safe Harbor statement in the earnings press release any forward looking statements that management makes on this call are based on assumptions as of today.

Speaker Change: And that actually renewed does not take any obligation to upgrade our assumptions on these statements.

Jeremy Ji: Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings press release, which contains a reconciliation of non-GAAP measures to GAAP measures.

Also this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings press release, which contains a reconciliation of non-GAAP measures to GAAP measures. Finally, please note that unless otherwise stated all figures mentioned during this conference call are RMB and all comparisons are year over year.

Jeremy Ji: Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB, and all comparisons are on year-over-year.

Kerry Chen: I'd now like to turn the call over to Kerry for business and strategy. Hello, investors and analysts. Welcome to the 4th quarter of 2024, the performance call. We are very happy to share with you the performance of the 4th quarter and the whole year, update our strategic thinking on the second-hand industry, and communicate the development plans for 2025. Hello everyone and welcome to AT RENEWs fourth quarter and full year 2024 earnings conference call. We are excited to share our business updates, our strategic insights into the print-owned industry and our development roadmap for 2025. In the fourth quarter of 2024 and the whole year, we exceeded expectations in terms of income and profit.

Kerry: I'd now like to turn the call over to Kerry for business and strategy update.

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Speaker Change: You can see a woman <unk> also hired a tenuous the call being gel do on your own and.

Speaker Change: Father annuity.

Speaker Change: Hello, everyone and welcome to <unk> fourth quarter and full year 2019 full earnings conference call. We are excited to share our business update our strategic insights into the pre own industry and our development roadmap for 2025.

Speaker Change: Well I mean on the Austin, you and he said you do you teach Kenyan Hollywood she thought so little hoodies on mobile.

Kerry Chen: Q4's total revenue exceeds the previous high-end of the direction segment, and increases by 25.2% to 48.5 billion yuan. The total revenue of the year is 163.3 billion yuan, and increases by 25.9%. This result is much more than the increase in the second-hand mobile phone 3C industry and the increase in domestic consumer large-scale sales. In terms of profit, the net profit of the fourth quarter and the whole year of Nangab is 1.3 billion yuan and 4.1 billion yuan respectively, with a growth rate of 61% and 62.8%. In terms of profit margin, the non-GAF profit margin of the fourth quarter is 2.7%, and the non-GAF profit margin of the whole year has also reached an internal target of 2.5%.

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Speaker Change: Jimmy I'll also something Joe you don't shoot telcos until that sounds like it didn't Danielle yeah content.

Kerry Chen: There are more than 35.3 million second-hand goods transactions throughout the year, and the number of orders is growing healthily. We believe that in 2025, the country will strengthen its support for the two-star policy. With the support of super long-term national debt to save the world, AiHuiShou is on the golden opportunity of business development. First, I'm delighted to report that we realized total net revenues and profits ahead of target for the fourth quarter and full year 2024. Revenues for the fourth quarter exceeded the high end of our guidance, growing 25.2% year-over-year to 4.85 billion RMB. Full-year revenue reached 16.33 billion, representing a 25.9% year-over-year growth, significantly outpacing the growth rates of the pre-owned electronics industry, as well as the national retail sales of consumer goods.

Speaker Change: While Magellan.

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Speaker Change: First I'm delighted to report that we realized total net revenues and profits ahead of targets for the fourth quarter and full year 'twenty one for revenues for the fourth quarter exceeded the high end of our guidance growing 25, 2% year on year to $4 85 billion RMB full year revenue reached $6 33.

Speaker Change: But where exactly 25.

Speaker Change: 9% year over year growth significantly outpacing the growth rates of the pre owned electronics industry as far as the national retail sales of consumer goods.

Kerry Chen: On profitability, our NANDGAP income from operations was $130 million in the fourth quarter and $410 million in the full year 2024, growing 61% and 62.8% year-on-year, respectively. In terms of margins, NANDGAP operating margins, as we expected, were 2.7% in the fourth quarter and 2.5% in full year 2024. The total number of transactions grew healthily to over $35.3 million. With China's stronger support and subsidies backed by ultra-long special trade rebounds to large-scale renewal of equipment and trading of consumer goods in 2025, AHS Recycle stands at the forefront of a promising growth era.

Speaker Change: Profitability, our non-GAAP income from operations was $130 million in the fourth quarter and 410 million in full year, 'twenty 'twenty fault growing 61% and 62, 8% year on year, respectively. In terms of margin non-GAAP operating margin as we expected or two 7% in the fourth.

Speaker Change: Router and coupon.

Speaker Change: And 5% in full year 'twenty. Thank Paul the total number of transactions grew healthily to over $35 3 million with China strongly support and subsidy is backed by ultra long special Treasury bonds to large scale renewal of equipment I'm trading off how can I go in 'twenty five.

Speaker Change: Can you trust recycled stands at the forefront of our promising growth era.

Kerry Chen: 具体看,四季度的产品收入同比增长26.6%, 我们聚焦自营回收业务,做好用户体验,更多实现从C端用户回收向C端用户销售的产业链端到端的闭环。 In terms of low-end recycling, we see an emotional boost for consumers. AiHuiShou has captured the first-hand resources through the long-term operation of stores and high-quality scenarios. At the same time, we and our strategic partner JD have upgraded the delivery service based on the industry-leading supply chain capabilities. From the results, in the fourth quarter, in the recycling and innovation scenario of JD, the recycling revenue has exceeded half and is more popular with users. 我們從四年前就開始培育的宇宙幻星 Ye Wu Mo Shi, Yue Lai Yue Cheng Wei Chu Jing Xiao Fei De Zhong Yao Zhua Shou Zooming in, product revenues for the fourth quarter grew by 26.6% year-over-year.

Speaker Change: Judy.

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Speaker Change: And Tien Tsin, how are you that you don't want to see.

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Speaker Change: Towards the shelf puzzle.

Speaker Change: Product revenues for the fourth quarter grew by 26, 6% year over here.

Kerry Chen: We focused on growing our 1P business and further advancing our user experience. This allows us to enhance the end-to-end cycle of direct engagement with consumers at the front of recycling and retailing. On recycling from consumers, we sourced an increasing volume of first-hand supplies from individual users as their demand increased. AHS stores have been the quality scenario for fulfillment. In the meantime, we collaborated with JD.com as we mastered industry-leading know-how and supply chain capabilities. Together, we introduced our next level fulfillment services to users. In the fourth quarter, Trading contributed over 50% of the total refactoring value in our exclusive service for JD's refactoring program, becoming a mainstream consumption solution for users.

Speaker Change: We focused on growing our why keep it says and further advancing all of our user experience. This allows us to enhance the end to end cycle off direct engagement with consumers at the front of recycling and retaining.

Speaker Change: Or is that coming from consumer we sourced an increasing volume of first time buyers from individual users and they are demanding credit.

Speaker Change: <unk> has been the quality of scenarios for fulfillment.

Speaker Change: In the meantime, we collaborated with JD com as we marked our industrial leading knowhow and supply chain capabilities together, we entered with our next level of fulfillment services to our users.

Speaker Change: In the fourth quarter trading contributed over 50% of the total recycling value in all of our exclusive surveys or J D.

Speaker Change: We're suffering program they call me amazed when consumption solution for users.

Kerry Chen: We attribute the results to our investment into Trading offering four years ago, which has incrementally driven consumption growth. In terms of C-end sales, the B2C sales capabilities of Jingdong PaiPai, AiHuiShou, MenDian and GuanWang new media channels have all achieved breakthroughs. We have integrated a plate of goods with supply chain capabilities, improved the efficiency of B2C members' selection of goods, and launched a project to sell and retail, which has tripled the number of members who can buy and sell at C-end. Our return-to-sale refurbishment process is further improved, ensuring that low-priced goods will continue to supply, and after-sales will be at ease.

Speaker Change: We are treating it with or without our investment into trading offering four years ago, which has incrementally driven consumption growth.

Speaker Change: Yeah.

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Speaker Change: All right.

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Speaker Change: P. J O. So as you go country, so a whole function so a gigolo well.

Kerry Chen: As a result, our B2C selected sales business has achieved a total annual sales volume of 5.5 billion yuan. In the fourth quarter, the B2C sales ratio in the first batch of return-to-sale income increased to 29%, and the red ratio increased by 8%. On the direct sales to consumers, PaiPai selection on JD.com, physical stores and online portals of AHS Recycle, and new media distribution channels all had breakthroughs. We leveraged our supply chain capabilities and established an integrated inventory system, advancing our efficiency in screening and picking retail products. We launched a pilot program of the on-demand refurbishment.

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Peter C.: The Asa Joel Kobe T cell not Pago back Wendy.

Peter C.: Although direct sales to consumers perpetual extra on JD dotcom physical stores and online portals of AA transfer recycled and new media distribution channels all had breakthrough.

Peter C.: We leveraged our supply chain capabilities and established and into inventory.

Peter C.: Inventory system, and one thing our efficiency in screening and peaking retail products.

Peter C.: We launched a pilot program of the on demand refurbishment. It allows us to do say multiple product options and conduct all demand with furbished man only way all consumer has made an order. We'll also publish our refurbishment processes, ensuring ample supplies of value for money quality assured products to our consumers.

Kerry Chen: It allows us to display multiple product options and conduct on-demand refurbishment only when a consumer has made an order. We also polish our refurbishment processes, ensuring ample supplies of value-for-money, quality-assured products to our consumers. To name a few results we made, the total GNV of our 1P2C cells reached a new milestone at 5.5 billion RMB in 2024. Retail revenue as a percentage of net product revenues was 29% in the fourth quarter, up by 8 percentage points year-on-year. and Hau DeChuanBo. We focused on the new media team in 2024, left-hand-made, AiHuiShou intl. experts, and Ziyin. We increased exposure through new media platforms such as Douyin, Kuaishou and Xiaohongshu, and developed content marketing based on the unique geographical location of the stores.

Peter C.: To name a few without we made the total Jeremy of our water heaters himself reached a new milestone at $5 5 billion RMB in 'twenty, one you fall.

Peter C.: Retail revenue as a percentage of net product revenues was 29% in the fourth quarter up by eight percentage points year on year.

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Kerry Chen: New media marketing investment of more than 100 million yuan has increased the brand and service awareness of AiHuiShou. We believe that in the second-hand recycling field, excellent brands like AiHuiShou are still scarce, and there is still room for brand innovation. We clearly see that AiHuiShou is an increasing market, and there are many users in JD and offline buyers of new machines who have never experienced AiHuiShou. We coupled marketing strategy and prioritized the development of our new media department in 2024. This established a consumer mindshare that AHS Recycle is the expert in recycling numerous categories of products and offers value for money quality products.

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Speaker Change: Thank you you fool.

Speaker Change: We cover marketing strategy and prioritize the development of our new media Department in 2024.

Speaker Change: Established a consumer mindshare that AA trust recycle is the expert in recycling numerous categories of products and offer value for money quality product.

Kerry Chen: We spent 100 million yuan on new media marketing to increase our brand exposure across Douyin, Kuaishou and Xiaofengshu and promoted our location-based in-store services with content developed in-house. This was a valuable approach to raise our brand and service awareness as trading subsidies were deployed. Once again, we want to emphasize that AHS Recycle is a unique brand name with huge potential in the second-hand industry. Trading has a clear growth outlook as the massive consumer group is still new to this option. In terms of multi-product business, we quickly improved the service capability of our stores in 2024.

Speaker Change: 100 million run on new media marketing to increase our brand exposure across don't emit quite shall NGL punctual and promoting our location based in store services with content developed in house.

This was a valuable approach to raise our brand and awareness that's great in subsidies are working quite well once again, we want to emphasize that antitrust recycle is a unique brand name with the huge potential in the secondhand industry trading has a pure growth outlook at the massive consumer group is still new to this.

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Kerry Chen: As of the end of 2024, a total of 673 AiHuiShou stores have opened multi-product recycling stores. AiHuiShou is a multi-product recycling business. On the one hand, it has taken advantage of the basic capabilities of our store, and has increased the production of single electricity. On the other hand, it has contributed significantly to the operating model of our store. In 2024, in terms of multi-product capacity building, we will actively accelerate the price response, reduce the service time of our store users, and increase the acceptance rate of recycling prices. In the past year, the number of multi-product recycling transactions in the free scene of AiHuiShou has increased by nearly three times, contributing 8.6% of the service revenue in 2024, and 2.3% in the same period in 2023.

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Kerry Chen: AiHuiShou has established a standardized service capability for users of mobile phones, 3C, luxury goods, gold, rice wine, shoes, etc. The brand awareness of AiHuiShou is not limited to mobile phones, and it is beginning to be recognized by more consumers. In terms of category expansion, we rapidly expanded our multi-category recycling and services to 673 AHS stores in 2024. More consumers recognize that AHS Recycle serves diversified needs and categories. Multi-category recycling and services grew in our existing stores and basic fulfillment capabilities. This leveled up store performance and contributed incremental operating profits to store operations. As for the development of multi-category recycling services in 2024, we strengthened our pricing capabilities, reduced in-store service time, and improved price acceptance.

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Speaker Change: In terms of category expansion, we rapidly expanded our mantra category recycling services to 673 Asia stores in 'twenty, one for more consumers recognize that Asia is a recycled source diversified needs and category.

Speaker Change: How do you get to where they're suffering in this sorry.

Speaker Change: Well in our existing stores and basic fulfillment capabilities. This leveled off store performance and contributed incremental operating profit to store operation.

Speaker Change: I applaud the development of multi customer recycling services in 'twenty 'twenty four we strengthened our pricing capabilities reduce in store service time and improved product acceptance in 2094, but do you have to worry recycling services transaction volume increased nearly three fold year over year contributing eight 6% of total service revenue.

Kerry Chen: In 2024, multi-category recycling services transaction volume increased nearly threefold year-over-year, contributing 8.6% of total service revenue, up from 2.3% in 2023. We comprehensively enhanced AHS's standardized one-stop ability to serve users recycling various items, including consumer electronics, luxury goods, gold, premium liquor, shoes, and clothing. More consumers are now realizing that AHS Recycle offers more than just mobile phones and electronics recycling. In terms of trading platforms, TSMC's platform service revenue in 2024 has steadily increased. TSMC is the location of China's second-hand mobile phone 3G source center, and is a step closer to Hong Kong. The number of registered buyers on the platform has exceeded 850,000.

Speaker Change: Up from two 3% in 2023.

Speaker Change: What are your comprehensively enhance Asia standardized wiped off ability to serve users recycling various items, including consumer electronics luxury goods go printer maker shoes and clothing.

Speaker Change: Our customers are now realizing that age has recycle offers more than just mobile phone and electronics restocking.

Speaker Change: So you can die from it.

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Kerry Chen: Panxitang is also supporting the local new media traffic at the seller's end, innovating the distribution and live-streaming service at the buyer's end, comprehensively improving the vitality of the business-to-ecology ecosystem, and improving the amount of storage brought by the National Treasury in 2025. It has achieved good results. Taipai Pop業務向寄賣模式升級,打通商家貨源池,為商家提供統一的店舖運營,自檢驗證,售後客服。 Or to reduce the cost of retail revenue for junior and junior small businesses on JD.com According to QWAK, the sales growth is nearly 6 times greatly over the previous year In terms of the trading platform, On our marketplaces, the service revenue of Paijitang saw a steady increase in 2024.

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Speaker Change: Okay.

Speaker Change: Our marketplaces the service revenue off Peggy time saw a steady increase in 2020 six but Tony is 94, the positioning of I did hint at the center of dramatic secondhand smartphones and consumer electronics was further strengthened with the number of registered users on the platform exceeding 850000.

Kerry Chen: The positioning of Paijitang as the source center of domestic second-hand smartphones and consumer electronics was further strengthened, with the number of registered merchant users on the platform exceeding 850,000. Paijitang also made innovations in local new media traffic support for sellers, tiered services for buyers and live streaming supply, which generally enhanced the vitality of the merchant ecosystem and laid a solid foundation for the business expansion in 2025, supported by national subsidies. Taipei Public Business was upgraded to the consignment model, which aggregated fragmented sources of supply and provided them with unified store operation, quality inspection, and after-sales customer service.

Speaker Change: I did also made innovations and local new media traffic support for sellers cheered Thursdays for buyers and loves swimming supply, which generally in house the mentality of the merchant ecosystem and laid a solid foundation for the business expansion in 'twenty five supported by National subsidy.

Speaker Change: Our pulp business with upgrade it to the consignment model, which have abrogated fragment as far as the self supply and provided them with unified store operation quality inspection and asked ourselves customer started.

Kerry Chen: This comprehensively reduced the cost for small and medium-sized public owners who wish to expand their retail business on JD.com. The transaction value of Taipei Consignment Business increased nearly six times year-on-year.

Speaker Change: This comprehensively radios that called for small and medium sized owners, who wish to expand their retail business on JD com. The transaction that are off high pack off I'm in defense increased nearly six times year on year.

Kerry Chen: 回顾2024年,我们还有一些业务值得一提。 First of all, Apple's official renewable energy business has a yearly revenue of 10.5 billion yuan. While we are ensuring the user experience, by optimizing prices and operating strategies, we have achieved a better profit margin in the fourth quarter. Secondly, in terms of overseas business, in the second half of 2014, we adjusted some of the business lines that suffered losses. Income has shown a gradual decline. We believe that second-hand mobile phones are still the most valuable products in the world. The export and cross-regional circulation of second-hand mobile phones have a great opportunity. We will continue to innovate and explore, and update progress with investors and analysts at the right time in the future.

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Jonathan: Very cute Chenzhou, though Jonathan.

Jonathan: Also did a tool called hook, what she really ultra youre talking about you know what.

Jonathan: Oh, Magellan tissue, Tianjin, Chongqing pedestal without that solicitous of Jeep, whose hook holds the orphan diseases Ghansham ginger.

Kerry Chen: Reviewing 2024, certain business segments were in a transition phase as we refined our strategy. Firstly, in our Apple official trading business, we adjusted pricing and operational strategy without jeopardizing user experience, realizing an improved profit margin in the fourth quarter. Segment revenue was 1.05 billion RMB in 2024. Secondly, in terms of our overseas businesses, we closed certain lockmaking businesses, resulting in a downsize overseas product revenue. However, we believe that smartphones remain one of the most globally tradable and valuable categories in the pre-owned market. There is substantial opportunity in the export and cross-regional circulation of pre-owned smartphones, and we will approach this with innovative approaches.

Jonathan: Revealing in 'twenty or 'twenty for certain business segments, we're in a transition phase as we refined our strategy.

Jonathan: Firstly in our alcohol fish oil trading business, we adjusted pricing and operational strategy without jeopardizing music sharing realizing an improved profit margin in the fourth quarter segment revenue was 1.05 billion RMB in 'twenty 'twenty four.

Jonathan: Secondly in terms of our overseas businesses, we close certain work, making businesses, resulting in a downsize overseas product revenue. However, we believe that smartphones remain one of the most globally tradable and valuable category in the play on market. There is substantial opportunity in the export and <unk>.

Jonathan: Loss ratio loss circulation offering on smartphones and we will approach this with innovative approaches.

Kerry Chen: We will provide further updates at appropriate times.

Jonathan: We'll provide further updates at appropriate time.

Kerry Chen: In 2025, our strategy will focus on three things. 堅持體驗驅動大力投入C端業務 堅持投入愛惠州品牌的建設堅持投入交付能力的建設 Looking ahead to 2025, our strategy will focus on three commitments. Commitment to experience driven growth with further investment in retail business. Commitment to building the AHF Recycle Ramp. Commitment to strengthening our fulfillment capability. The first point is to focus on the strategy of C-search and C-sell. 公司升级了公司升级了 The company has upgraded The user experience driving mechanism is set up by the Group User Experience Commission, which specializes in the study and optimization of user experience. In the price recovery, the ratio of face-to-face transactions, the up-to-date rate, the discounted premium rate, and many other user experience indicators, it continues to improve and optimize.

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Speaker Change: Jim I was hoping pilot yeah. So.

Speaker Change: Jim Sokol, who Jo Malone meet again so.

Speaker Change: Looking ahead to 2025, our strategy will focus on three commitment commitment to experience driven growth with further investment in retail business.

Speaker Change: It meant to building the AI towards recycled rent commitment to strengthening our fulfillment capabilities.

Speaker Change: Did it.

Speaker Change: So you don't see and judge the total seaborne so see somebody that's on it.

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Speaker Change: You know, what he and treat them with G suite. So it's a lot cheaper one youll, who T. N. We don't quit trying Michele yeah, you're quite yokota, yet exactly so <unk> been doing Ms. Joey that's M. B summy somebody that used to meet since you're on hold the economy, the broker who T. Instead goes on so she she's going to go up.

Kerry Chen: First, we will concentrate resources on direct engagement with consumers at the front of resourcing and retailing. We have upgraded a user experience-driven mechanism and set up a group-level user experience committee dedicated to analyzing and optimizing user experience. Multiple user experience metrics including recycling prices, the proportion of face-to-face transactions, two-door service punctuality, and post-inspection negotiation rates are steadily optimizing. Since the 4th quarter, with the promotion of subsidies and platforms, we have seen a rapid growth in the need for old and new from the JD channels. This is due to our previous joint construction of services and second-hand supply chain capabilities with JD, and the cooperation between the two systems, operating efficiently, and receiving more first-hand resources from C-end users.

Speaker Change: First well concentrate resources on direct engagement with consumers at the Roth software sourcing and retailing.

Speaker Change: We have upgraded our user experience drilling kind of them and set up a group level user experience committee dedicated to analyzing and optimizing user experience.

Speaker Change: Multiple user sharon's matrix, including recycling prices the proportion of all face to face transactions two door service punctuality and post inspection negotiation rates are steadily optimizing.

Speaker Change: So if you go to a gene that boutique European car pick one that she'd only shop or what kind of lives of gene don't shoot other usual question as usual quite so we don't so don't you women shouldn't be uncle uncle sort of fall only awesome going Union. So on Vascepa potholes schedule you go shopping at both <unk> and Yahoo.

Speaker Change: Oh yeah.

Kerry Chen: On January 20, 2025, the National Institute of Technology, a upgraded third party EIC, continued to provide an online subsidy service thatyear. Subsidies will remain level at zK- chased and the sales price of 6,000 CNY will go through a 15% drop and it will go up 500 CNY of supply for the new generation. During the Spring and Summer releases, our cTB recovery maneuvered to have and achieved above 70% of the same growth and smoothly rescue the calculate changing needs for our customers. Since the fourth quarter of 2024, driven by subsidy rollout and the platform promotion, we have seen rapid growth in trading demand from users of JD.com.

Speaker Change: On their own yeah, you're awesome Quadcopter is so cheap, but it's a little dog up so one Sunday. So much has been that you're watching for kids.

Speaker Change: She has something changed out loyalty, so useful shall Johnstown, new chair shadow Shinji changing patterns of soup salad and sandwich, but what about the selfie booth here.

Speaker Change: 'twenty John teaches yet woman does seem to be quite so yeah. Gs is you end up having to choose sees on that Tony.

Speaker Change: Oh shelf Wala Cheng.

Speaker Change: So once you put just useful.

Speaker Change: Since the fourth call her off 2024, driven by subsidy rollout MJ platform promotion, we have seen rapid growth in trade and demand from users of JD to home. This is attributed to our joint effort with JD com in building, a robust secondhand and electronic trading service, Quebec capability and supply chain, enabling scene.

Kerry Chen: This is attributed to our joint efforts with JD.com in building a robust second-hand electronics trading service capability and supply chain, enabling seamless system integration and efficient operational collaboration. As a result, we have sourced more first-hand supplies directly from individual users. On January the 20th, 2025, the National Trading Subsidy for mobile phones, tablets, and smartwatches were officially launched both online and offline, offering a 15% subsidy capped at 500 RMB for new devices priced below 6,000 RMB. During the Chinese New Year holiday, our C2C recycling business grew by over 70% year-on-year, effectively meeting the trading needs of users nationwide.

Speaker Change: System integration and efficient operational collaboration.

Speaker Change: Without we have sourced more firsthand supplies directly from individual users.

Speaker Change: Generate the 20th 2025.

Speaker Change: The national trade and subsidy for mobile phones tablets, and smart watches were officially launched both online and offline.

Speaker Change: Offering a 15% subsidy be capped at 500 RMB four new devices priced below 6000, RMB during the Chinese new year holiday, our CTV, where satcom business grew by over 70% year on year effect effectively meeting the training needs of users nationwide.

Speaker Change: Yeah.

Kerry Chen: At the same time, we have the ability to take the lead in the supply chain industry and prepare for a return on investment. We have the authorization to invest in well-known leading brand manufacturers. We can use brand accessories to increase the value of the products and increase the number of retailers who are willing to buy our products. The proportion of retailers who are willing to buy our products has increased from 17% in the first quarter of 2023 to 29% in the fourth quarter of 2024. The long-term goal is to reach 50%. At the same time, we are also working to attract more buyers through our auctioning capability.

Speaker Change: Also although phosphate means you'll call me at a going in and meet changing hook, what he finds himself, but well my oil swimming co booking patterns on the soldier I'm thinking too too crazy on payment pilot pay debt G soldier towards it.

Speaker Change: Are you still not Gee, you're shipping soda cool Soho, yeah, well I'm Gonna see Asia being so yeah with that E. P. A with a P. D told all the all of a sudden they're easy to do that and this is a cheap when both T cells on the Ostomy as soon as you do that by having this also Joan Tong County, maybe I'll see I'll call about patent law suit pulse.

Speaker Change: Well my iPhone iPad two mile lateral going through the course of four years.

Kerry Chen: We expect to achieve a three-fold increase in the sales scale of auctioning in 2025. Leveraging our industry-leading supply chain capabilities, we conduct compliant refurbishment. With authorization from leading manufacturers, we use genuine parts for value-added processing, enhancing the availability for retail-ready products for our 1P business. 1P2C retail revenue as a percentage of total product revenues has steadily increased from 17% in the first quarter of 2023 to 29% in the fourth quarter of 2024. And our mid- to long-term goal of this proportion is 50%. Additionally, by leveraging PyPy's confinement capabilities, we expect to double our offerings and confinement sales in 2025.

Speaker Change: He's out on their own is it's yeah, how about you Matt She also claim or that somebody does.

Speaker Change: Leveraging our industry, leading supply chain capabilities, we conduct confined to refurbishment with authorization from leading manufacturers, we use genuine parts for value added processing in housing the availability for rack retail ready products for our one <unk> business.

Speaker Change: Pizza is the retail revenue as a percentage of total product routing has steadily increased from 17% in the first quarter of 23% to 29% in the fourth quarter of 2094, and our mid to long term goal of this proportion is 50%.

Speaker Change: Italy by leveraging pipe highest consignment capabilities, we expect to double our offerings and consignment itself in 2025.

Kerry Chen: Second, we will continue to invest in the development of the AiHuiShou app and the AiHuiShou brand. In the field of second-hand recycling, AiHuiShou is a rare high-quality brand. At present, there are still a large number of ordinary users who have not experienced recycling and renewable services. In the industry, there are a large number of third-party recycling and maintenance shops that are scattered, and they have not yet realized the brand operation. There is a huge room for improvement in both the recycling penetration rate and the brand link-up rate. With this opportunity, we will continue to build brand capabilities in 2024 and actively explore new media capabilities around the first recycling brand in the country, and do marketing in new media channels such as Tiktok and Xiaohongshu.

The audience Gen Chicago, ABB I was hoping Pat.

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Kerry Chen: This is also an addition to our existing precise e-commerce and brand scenes. By attracting more users to the AiHuiShou store with the theme of recycling services, we will try to experience recycling services and improve users' experience of the AiHuiShou app and small programs through multi-category recycling and anti-pandemic environmental activities. Second, we remain committed to building AHS Recycle apps and this brand. In the pre-owned recycling industry, AHS Recycle is a rare, high-quality brand. However, a significant portion of users have yet to experience recycling for trading services, and the industry remains fragmented, with many third-party recycling and repair shops lacking brand recognition.

Speaker Change: So, yes, I do with my yoga children against all hooking pet hunting the portal.

Speaker Change: Powell you hoist on food waste to Tito she makes your needle she couldn't do the Yahoo.

Speaker Change: Oh man that Tulsa T I'm always hopeful being punk all popular way, so hoofbound hung ching kwan, but to sort of hold on Keystone.

Speaker Change: So you don't have always all ABB push out so I'm sure that Q2, yeah. It was all the fall Amit.

Speaker Change: Second we remain committed to building a H S recycle app and this brand in the pre owned recycling industry H.

Recycle is a rare high quality brand.

Speaker Change: Over a significant portion of users have yet to experience recycling for trading services and the industry remains fragmented with many third party recycling and repair shops lacking brand recognition.

Kerry Chen: This presents huge opportunities to improve both recycling penetration and brand consolidation. Building on our 2024 brand building efforts, we will actively explore new media capabilities to position AHS Recycle as the top brand for recycling services in China. We will leverage platforms like Douyin and Xiaohongshu for marketing, complementing our existing precise e-commerce and brand partner scenarios. Through production of new media content focused on recycling services, we aim to attract more users to AHS stores to experience our services. Additionally, multi-category recycling and eco-friendly initiatives like the REVIVE campaign will encourage users to explore the AHS Recycle app and mini-programs, showcasing our service capabilities.

Speaker Change: This presents huge opportunities to improve ultra recycling penetration and brand consolidation.

Speaker Change: Building on our 2024 brand building efforts, we will actively explore new media capabilities to position any chance to recycle at the top brand for recycling services in China, well leverage platforms like though in Nanjing Hangzhou for marketing complementing our existing precise E Commerce and brand partners scenarios.

Speaker Change: Zero production off new media content focused on recycling services, we aim to attract more users to Asia stores to experience our services.

Speaker Change: <unk> multi category of recycling and eco friendly initiatives like the revive some pain well encourage users to explore the antitrust recycle app and many programs showcasing our service capability.

Kerry Chen: Thirdly, we will continue to invest in the construction of interoperability. Our continued investment in the AiHuiShou brand in the new media channels is expected to drive more online traffic to the store and support the expansion of more stores. In the first and second-tier cities, the multi-product recycling business of the new asset model has grown rapidly, optimizing the secret model of AiHuiShou stores, and also supporting us to launch more stores. In the mid- and low-tier cities, we support the construction of new media IP local traffic, improve local traffic, improve the ability of stores to operate, and support the launch of more Jiameng stores.

Speaker Change: Sunday Gen Superloo chockfull of meat agenda, so well.

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Kerry Chen: In areas where it is not convenient for consumers to go to the store, we will strengthen our ability to go to the store to increase the density of services and meet the needs of users' face-to-face transactions.

Speaker Change: Sophie the profoundly adult women judge how summer fall of neat E T cell for me to mentor Young men domain Joey that's useful.

Kerry Chen: In the next three years, our goal is to set up 5,000 stores nationwide and 5,000 go-to-the-store teams to provide a more complete inter-payment network to meet the needs of users' various recovery and recovery needs. Third, we remain committed to enhancing our fulfillment capabilities. Our continuous marketing efforts for the AHA Recycle brand are expected to drive more online traffic to our physical stores, which drive our store openings. In first- and second-tier cities, the rapid growth of our asset-light multi-category recycling business has optimized the profitability model of our stores, supporting the opening of new stores. In lower-tier cities, we support partners in building local traffic through new media IPs.

Speaker Change: Send me a when a movie out at China go up would you change I'm, India, who children summit.

Speaker Change: You can tell I'm, Phil Joseph Bank, Doyle, who joined us in the future.

Speaker Change: Third we remain committed to enhance our fulfillment capabilities, our continuous marketing effort for the Asia recycle brand are expected to drive more online traffic to our physical stores, which drive our store opening in first and second tier cities. The rapid growth of our asset light Martha casually.

Speaker Change: Second business has optimized the profitability model of all of our stores supporting the opening of new stores.

Speaker Change: Lower tier cities, we support partners in doing local traffic through new media I E.

Kerry Chen: With greater local traffic, the operational capabilities of our franchisee will be enhanced, thus further converting to an expanded franchisee network. In areas where in-store visits are less convenient, we are strengthening our two-door service capabilities to increase service density and meet users' demand for face-to-face transactions. Over the next three years, we aim to establish a nationwide network of 5,000 stores and a 5,000-member two-door service team, ensuring a robust fulfillment network to cater to diverse recycling and trading needs. Based on the above three strategic focuses, we are confident that we will seize the opportunity to grow together with the state-owned enterprises.

Speaker Change: Greater local traffic the operational capabilities of our franchisee were being held back for their on working through and extended franchisee network.

Speaker Change: The areas, where you saw our visits are less convenient we are strengthening our two doors. There is kind of entities to increase service density and meet users' demand for face to face transaction.

Speaker Change: Over the next three years, we aim to establish a nation wide network of 5000 stores and our 5000 member to the authority, ensuring a robust fulfillment network to cater to diverse diverse recycling and trading needs.

Speaker Change: G. So on Sunday and Saturday to gel will be you'll see she tried to global.

Speaker Change: Sometimes you can go out and find that chip and Jo Malone eat what you can do it easily so who are you didn't you talk ourselves going in elite sushi gunboat PD the proceedings.

Kerry Chen: With a wider front-end delivery capability, we will acquire more first-hand retail resources. And through efficient supply chain capabilities, we will achieve a greater proportion of QC retail. Based on the three strategic focuses, we are confident in capturing an increase in growth opportunities on the supply side driven by national subsidies. By expanding our fulfillment capabilities, we will secure more first-hand sources of supply, utilize our supply chain capabilities to drive more retail.

Speaker Change: Based on those rates based on the three strategic focus that we are confident in capturing an increase and growth opportunities on the supply side driven by national subsidy by expanding our fulfillment capabilities, we will secure more firsthand source they self supply utilize our supply chain capabilities to drive more reach.

Speaker Change: Dale.

Rex Chen: 我们相信,2025年对于二手行业和爱回收而言,将是充满机会的一年。 我们相信,2025年对于二手行业和爱回收而言,将是充满机会的一年。 下面请CFO Rex解读一下财务情况 Now I'd like to turn the call over to CFO Rex for financial updates. Hello, investors and analysts. In 2024, we achieved excellent performance. While developing core recovery and innovation business, we achieved a double growth in income and profitability. The total annual income grew by 25.9% to 16.3 billion yuan. The annual GAAP operating profit grew by 62.8% to 4.1 billion yuan. We also achieved the operating profit under the GAAP model for the first time. These achievements reflect our success in scale-effective construction and sustainable development.

Speaker Change: Well be challenging our their own yeah, and also Hong <unk>, who I hope he saw yeah, John Thomas do you weigh the Union, we believe for the first for the frame on industry and antitrust recycled 295 is a year full of opportunity.

Speaker Change: Xiaomi Nanjing CFO Rex territories, how would you quote now I'd like to turn the call over to CFO Iraq for financial update.

Speaker Change:

Speaker Change: Perfect Thats helpful.

Speaker Change: How do you often hear women should go to truly be a teacher, Zacatecas, which equals who you will talk to you but almost.

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Speaker Change: Some children can be tens off patent law suit you see baidu century, trinian cappuccino or it can be tough to jump back in July we started Bob So city, even when resources you an opinion chemicals you'd have to achieve either so she she's you know what I'm, saying, we will shrink just so people could see.

Speaker Change: It went from you she did assemble.

Rex Chen: Hello, everyone. I am pleased to announce that we achieved strong financial performance in 2094, driving revenue and profitability growth as we developed our poor recycling businesses and cultivated our innovative businesses. Total net revenues for the year increased by 25.9% to 16.3 billion RMB. Adjusted operating income grew significantly, rising 62.8% to 410 million. And we are proud to have achieved our first gap operating income for the year as well. These results demonstrate our success in building out our economies of scale and delivering on our mission of driving sustainable development.

Speaker Change: Hello, everyone I am pleased to announce that we achieved strong financial performance in 2009 for driving revenue and profitability growth as we developed our poorer recycling businesses and quality rated our innovative businesses.

Speaker Change: Total net revenues for the year increased by 25, 9% to $16 3 billion RMB adjusted operating income grew significantly rising 62, 8% to $410 million and we are proud to have achieved our first GAAP operating income for the year as well these results demonstrate.

Speaker Change: Our success in building out our economies of scale and delivering on our mission of driving sustainable development, sorry tier twos, how should you wish to change your suite Chipotle swimming swoop junior treat MEP, we're done with sue to smoking through Q2.

Rex Chen: Before I explain the financial data, please note that unless there is another explanation, all the amounts are in the RMB unit, and all the increase data is in the same unit. Before taking a detailed look at the financials of the fourth quarter of 2024, please note that all amounts are in RMB and all comparisons are on a year-over-year basis, unless otherwise. In the fourth quarter, the total gross income of the group increased from 25.2% to 48.49 billion yuan, mainly due to the continued steady growth in product revenue. Product revenue increased from 26.6% to 44.6 billion yuan, mainly due to the growth in the company's revenue scale and the growth of online channels' second-hand consumer electronics sales.

Speaker Change: Sure Tobey.

Speaker Change: Before taking a detailed look at the financial of the fourth quarter of 2024. Please note that all amounts are in RMB and all comparisons are on a year over year basis, unless otherwise stated.

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Speaker Change: Throughout the year.

Speaker Change: We spoke with them with a syndrome you shouldn't so I'll just I'll also shop with you at the time people shuffled things on.

Rex Chen: The annual product revenue is 148.4 billion yuan, which is 27.3% higher than the previous year. In the fourth quarter, total revenues increased by 25.2% to $4,849 million, primarily driven by ongoing growth in our net product revenues. Net product revenues increased by 26.6% to $4,461 million, primarily due to the growth in our reflecting scale and the sales offering on consumer electronics through our online channels. Net product revenues for the full year reached $14.84 billion, representing a year-on-year increase of 27.3%. In the fourth quarter, service revenue increased by $3.89 billion to $4.7 billion, primarily due to the increase in service revenue and the recovery of multi-products.

Speaker Change: Trillions, how many total E bikes to spud this year pulling me tunes I forgot what you didn't say.

Speaker Change: In the fourth quarter total revenue was increased by 25, 2% to 4840 $9 million, primarily driven by ongoing growth in our net product revenues net product revenues increased by 26, 6% to 4460 $1 million, primarily due to the growth in our refractory with sky.

Speaker Change: And the scope and the scale offering on consumer electronics through our online channels.

Speaker Change: Revenue for the full year raised $14 84 billion, representing a year on year increase of 27, 3%.

Speaker Change: So Louise Sandeep Bhatia.

And as our partners did she.

Speaker Change: The easy part you don't see probably try to fool sodium who populate resolved.

Rex Chen: Our platform service revenue, as a result of the increase in transaction volume, increased by 5.36% in the fourth quarter, while the recovery of multi-products amounted to more than $40 million in service revenue, which is more than 4% of the group's annual service revenue. 相比2023年第四季度的5.5%大幅度的增長 相比2023年第四季度的5.5%大幅度的增長 全年服务收入14.8亿元,同比增长13.5%, 综合服务收费率为5.35%, 全年多品类回收业务贡献1.3亿元服务收入, 同比增长3倍, 贡献服务收入的8.6%, 2023年这一比例为2.3% Net service revenues were $389 million in the fourth quarter, representing an increase of 10.7%. The increase was primarily due to an increase in the service revenue generated from PG&E marketplace and multi-category recycling business. The growth in service revenues went along with the upward trend in our marketplaces' overall growth transaction value, delivering an overall marketplace peak rate of 5.36% in the fourth quarter of 2024.

Speaker Change: What was the free trade agreement that's in job Templeton John since you do the pin pad Tucows hope anyway preference of William send you should you're dumping like which of your question is how close did you want to fool soda talk what you're trying to do so with our partners.

Speaker Change: Some of you already know Sunday diesel passenger would you pass a piece of it.

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Speaker Change: So what are your problems or would you say one trillion two P. Lakers who you consider you just send you an foods total pumping jobs.

Speaker Change: Sure first of all departments barbecue Sonya, so you'd be worried about the audience.

Speaker Change: Net service revenues were 389 million in the fourth quarter, representing an increase of 10.7%. The increase was primarily due to an increase in the service revenue generated from P. J T marketplace and market catch where recycling businesses.

Speaker Change: The growth in service revenues went along with the upward trend in our marketplaces overall gross transaction value delivering an overall marketplace take rate of five point, 36% in the fourth quarter of 'twenty 'twenty four.

Rex Chen: During the quarter, our multi-category second business contributed over $40 million to service revenues, representing over 10% of service revenues, a significant increase from 5.5% in the same period of 2023. Net service revenue for the full year reached $1.48 billion, representing a 13.5% year-on-year increase, with an overall tick rate of 5.35%, of which our multi-category recycling business contributed $130 million, representing a three-fold increase year-on-year. This accounted for 8.6% of total service revenues in 2024, compared to 2.3% in 2023.

Speaker Change: During the quarter, our multi catch wherever the second business contributed over 14 million to service revenues representing over 10% of service revenues a significant increase from five 5% in the same period of 2023.

Speaker Change: And that service revenue for the full year reached 148 billion, representing a 13, 5% year on year increase with an overall take rate of $5 35 per cent of which or my multi care for our recycling business contributed 130 million, representing a threefold increase year on year.

Speaker Change: This accounted for 86% of total service revenues in 'twenty 'twenty four compared to two 3% in 2023.

Speaker Change: Yeah, <unk> pardon me women through our power in the Gulf of coaching a fever pitch.

Speaker Change: So quarantine to the switch off the field.

Speaker Change: Glaring gaps in the Gulf could you do tells US she chunk hold much hope I'll call, you changeover, which to Joanna who do keep your cool now lets discuss our operating expenses to provide greater clarity on the trends in our actual operating base expenses, we will mainly discuss our non-GAAP operating expenses, which better reflect how management.

Rex Chen: Now let's discuss our operating expenses. To provide greater clarity on the trends in our actual operating-based expenses, we will mainly discuss our non-GAAP operating expenses, which better reflect how measurement views our results of our operations. The recalculations of GAAP and non-GAAP results are available in our earnings release and the corresponding Form 6K furnished with the U.S. S&P. In the fourth quarter, the cost of goods increased by 24%. We have a growth rate of 39.05 billion yuan, which is consistent with product sales. The gross profit margin of our EP business is 12.5%, which is a steady trend.

Speaker Change: Be it with our results.

Speaker Change: Our operation the reconciliations of GAAP and non-GAAP results are available in our earnings release, and the corresponding form 6K furnished with the U S. S E T.

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Each year with them or will you be worried about.

Speaker Change: Sure sure sure Sonya to ensure departments.

Rex Chen: It was 10.6% in the same period last year. The improvement of the EP gross profit margin is mainly due to our ability to play the industrial chain end-to-end, and the ability to prepare for a return on investment, and to realize more QC retail with higher gross profit margin. We optimized the business performance of Apple's official exchange system in the same period, and achieved a simultaneous increase in revenue scale and gross profit margin in the fourth quarter. 全年商品成本130.9億元,同比增長26.6%,全年EP毛利率為11.8%,上年為11.3% In the fourth quarter of 2024, merchandise costs increased by 24% to $3,905 million. In line with the growth in product sales, gross profit margin for our 1P business was 12.5%, showing a trend of stabilization and recovery, compared with 10.6% in the same period last year.

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Speaker Change: Refreshing its affinity so she can do mortgage I'll call. It two seating so when we look towards Europe pingo equivalent to a bunch in there you've got your city to zoom, a soda agreement with pneumonia.

Speaker Change: She said she knew something soon but your best sense did you either told me too.

Speaker Change: We can do <unk> department of C. Diff pop Sonya, we prefer to see this.

Speaker Change: In the fourth quarter of 2020 for merchandize cost increased by 24% to 3905 5 million in line with the growth in product sales gross profit margin for our one Peter said was 12, 5% showing a trend of stabilization recovery compared with.

Speaker Change: 10, 6% in the same period last year the improvement of gross profit margin in one P business was mainly driven by our end to end supply chain stress and refurbishment capabilities contributing to higher margin DTC sales.

Rex Chen: The improvement of gross profit margin in 1P business was mainly driven by our end-to-end supply chain strength and refurbishment capabilities, contributing to higher margin due to C sales. We also optimized the performance of Apple's official trading program, driving both revenue growth and margin expansion in the fourth quarter. Merchandise costs for the full year increased by 26.6% to $13.09 billion, with a 1P gross margin of 11.8%, compared to 11.3% in 2023. In the 4th quarter, the Lvye fee increased from 31.8% to 3.97 billion yuan. The NGAP Lvye fee increased from 32.7% to 3.92 billion yuan. The main reasons for the increase in NGAP Lvye fee are the following points.

Speaker Change: Also optimized the performance out of Apple's official trading program driving both revenue growth and margin expansion in the fourth quarter.

Speaker Change: Merchandize cost for the full year increased by 26.6% to 13.09 billion with a one P. Gross margin of 11, 8% compared to 11, 3% in 2023.

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Rex Chen: First, compared with the same period in 2023, the increase in revenue and transaction volume led to an increase in manpower and logistics costs. Second, due to the group's expansion in the 4th quarter of 2024, the offline inter-network and operating center capacity and operating cost increased accordingly. 全年冷盖尔旅游费用为13.6亿元,同比增长23.7%,全年冷盖尔旅游费用率为8.3%,上年为8.5% In the fourth quarter of 2024, fulfillment expenses increased by 31.8% to $397 million. Non-gap fulfillment expenses increased by 32.7% to $392 million. Under the non-gap measures, the increase was primarily due to an increase in personnel costs and logistics expenses as we conducted more recycling and transaction activities compared with the same period of 2023, and an increase in operation-related expenses as we expanded our recycling fulfillment network and operation center capacity in the fourth quarter of 2024.

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Speaker Change: Julian do you feel where you decided to do either told me to stop after I'll send it cheap treat isn't a carpenter youre familiar with it.

Sonya: Sonya we brought in the body.

Sonya: In the fourth quarter of 2020 full fulfillment expenses increased by 31, 8% to 397 million non-GAAP fulfillment expenses increased by 32, 7% to 392 million and non-GAAP measures. The increase was primarily due to an increase in personnel costs.

Sonya: Logistics.

Sonya: As we conducted more recycling and transaction activities compared with the same period of 2023, and then increase in operation related expenses as we expanded our recycling fulfillment network and operation Center capacity in the fourth quarter of 2024.

Rex Chen: Non-Gap Fulfillment Expenses as a percentage of total revenues increased to 8.1% from 7.6%. Non-Gap Fulfillment Expenses for the full year increased by 23.7% to 1.36 billion, while the Non-Gap Fulfillment Expenses as a percentage of total revenues decreased to 8.3% from 8.5%. In the fourth quarter, sales increased by 18.7% to 3.76 billion yuan Gap sales increased by 30% to 3.21 billion yuan The main reasons are the increase in advertising and promotion activities, as well as the increase in commission fees related to channel services. The NGAP sales fee rate rose from 6.4% to 6.6%. The annual NGAP sales fee is 10.9 billion yuan, which is an increase of 14.8%.

Sonya: non-GAAP fulfillment expenses as a percentage of total revenues increased to eight 1% from seven 6% non-GAAP fulfillment expenses for the full year increased by 23, 7% to 136 billion, whereas the knockout fulfillment expenses as a percentage of total revenues in take rate.

Sonya: 283% from eight 5%.

Sonya: You said your two shows will be able to draw from Mr. Buffett She's percentage do you then got a sharp.

Sonya: Chop on cents to send you our year jewelry, we went public to shop with a chunk of the films and Josh did you shoot off with Shanghai film syndrome men garbage trucks with fuel needs from partner to juice shops, you Thompsons just gave you.

Sonya: Trillion in Gulf shores fulfillment, so didn't your ear tungsten job department as Susan ball, Chilean Gorbachev's, where people would be worried about who can do Sonya we published yesterday.

Rex Chen: The annual NGAP sales fee rate is 6.6%, which was 7.3% last year. In the fourth quarter of 2024, selling and marketing expenses increased by 18.7% to $317.6 billion. Non-gap selling and marketing expenses increased by 30% to $321 million, primarily due to an increase in advertising expenses and promotional campaign-related expenses, and an increase in commission expenses in relation to channel services. Non-gap selling and marketing expenses as a percentage of total revenues increased slightly to 6.6% from 6.4%. Nangab Selling and Marketing Expenses for the full year increased by 14.8% to $1.09 billion, while Nangab Selling and Marketing Expenses as a percentage of total revenues decreased to 6.6% from 7.3%.

Sonya: In the fourth quarter of 2020 for selling and marketing expenses increased by 18, 7% to 317 6 million.

Sonya: non-GAAP selling and marketing expenses increased by 30% to 321 million, primarily due to an increase in AR.

Advertising fences and promotional campaign related expenses and an increase in commission expenses in relation to channels overseas.

Sonya: non-GAAP selling and marketing expenses as a percentage of total revenues increased slightly to six 6% from six 4%.

Sonya: And then got selling and marketing expenses for the full year increased by 14, 8% to one point, there reminding them, well non-GAAP selling and marketing expenses as a percentage of total revenues decreased to six 6% from seven 3%.

Rex Chen: In the fourth quarter, management costs increased from 46.5% to 9,100,000 yuan. EnGAP management costs increased from 71.1% to 7,700,000 yuan. Mainly due to the increase in energy costs, EnGAP management costs rose from 1.2% to 1.6%. The annual EnGAP management costs are 2.5 billion yuan. The growth is 28.2%. The annual EnGAP management costs are 1.5%. In the fourth quarter of 2024, general and administrative expenses increased by 46.5% to 91 million. Non-GAAP GNA expenses increased by 71.1% to 77 million, primarily due to an increase in personnel costs. Nangab GNA expenses as a percentage of total revenues increased to 1.6% from 1.2%.

Sonya: One of your films so probably.

Speaker Change: This is Luke so cheap I wonder.

Speaker Change: Since I'm, probably the T C D. So teacher and she bought one familiar with it.

Speaker Change: And John Mccracken assumed routes from Barclays ETR, sometimes about what he can do.

Speaker Change: Trinian, Kevin Crummy, feeling we are the leader to be tuned up.

Speaker Change: Turning to capital any film do you worry about redo Toby Chesapeake.

Speaker Change: In the first quarter of 'twenty 'twenty, four general and administrative expenses increased by 14, six 5% to $91 million non-GAAP G&A expenses increased by 71, 1% to 77 million, primarily due to an increase in personnel costs.

Speaker Change: non-GAAP G&A expenses as a percentage of total revenues increased to one 6% from one 2% non-GAAP G&A expenses increased by 28, 2% to 250 million, while non-GAAP G&A expenses as a percentage of total revenues remain flat year over year at one 5%.

Rex Chen: Nangab GNA expenses increased by 28.2% to $250 million, while Nangab GNA expenses as a percentage of total revenues remained flat year-over-year at 1.5%. In the fourth quarter, R&D costs decreased from 10.7% to 57 million yuan, and NGAP R&D costs decreased from 9.3% to 52.9 million yuan. Mainly due to the reduction in manpower costs, NGAP R&D costs decreased from 1.5% to 1.1%. 全年冷盖的研发费用为1.9亿元,同比增长10.7%,全年冷盖的研发费用率为1.2%,上年为1.3% In the fourth quarter of 2024, technology and content expenses decreased by 10.7% to $57 million. Nangap technology and content expenses decreased by 9.2% to $53 million. The decrease was primarily due to a decrease in personnel costs.

Speaker Change: You said you do you have a few of them choose our partners did she should she brought with it then.

Speaker Change: You have a chance of apartment, Judy Incent suture Arturo Soria.

Speaker Change: Jumpy Mcguffey, you buy filters from.

Speaker Change: But when you do shut down.

Speaker Change: <unk> trillion of debt that you're not feeling when you did your ear Puneet Genzyme partners, who can sheet.

Speaker Change: Julian the government you have a feeling.

Speaker Change: So and you're worried about Vegas.

Speaker Change: In the first quarter of 2020 for technology and content expenses decreased by 10, 7% to 57 million non-GAAP technology and content expenses decreased by nine 2% to 53 million. The decrease was primarily due to a decrease in personnel costs.

Rex Chen: Nangab technology and content expenses as a percentage of total revenues decrease to 1.1% from 1.5%. Nangab technology and content expenses for the full year increase by 10.7% to $190 million while Nangab technology and content expenses as a percentage of total revenues decrease to 1.2% from 1.3%.

Speaker Change: non-GAAP technology and content expenses as a percentage of total revenues decreased to one 1% from one 5% non-GAAP technology and content expenses for the full year increased by 10, 7% to 119 million, while non-GAAP technology and content.

Speaker Change: <unk> as a percentage of total revenues decreased to one 2% from one 3%.

Rex Chen: In the fourth quarter, NETGAP's operating profit was 1.31 billion yuan, a 61% growth. NETGAP's operating profit rate was 2.7%, the same as last year, 2.1%. The annual NETGAP operating profit was 4.1 billion yuan, a 62.8% growth. The annual NETGAP operating profit rate was 2.5%, the same as last year, 1.9%. As a result, our non-gap operating income was $131 million in Q4 of 2024, representing an increase of 61% year-over-year. Non-gap operating profit margin was 2.7%, compared to 2.1% in Q4 of 2023. Our non-gap operating profit for the full year reached $410 million, increasing meaningfully to by 62.8%.

Speaker Change: I mean, you said you do it in a garage junior neither were you just saying either torn between sometimes you do see then cappuccino do they leave without knocking she suddenly it I'm sure that's not the heat treating in the garbage Unilever and where should you even tweeted that he was talking about.

Speaker Change: Trillion, a cappuccino peering with Backstopping Hasan you're worried about you didn't you.

Speaker Change: As a result.

Speaker Change: Our non-GAAP operating income was 131 million in the fourth quarter of 2024, representing an increase of 61% year over year.

Speaker Change: GAAP operating profit margin was two 7% compared to walk to 1% in the fourth quarter of 2023.

Speaker Change: Our non-GAAP operating profit for the full year raised 410 $410 million in crazy meaningfully to buy 62, 8% non-GAAP operating profit margin in 2019 for what two 5% compared to one 9% in 2023.

Rex Chen: Non-gap operating profit margin in 2024 was 2.5%, compared to 1.9% in 2023.

Rex Chen: In terms of shareholder returns, we will continue to push for repurchase. The current repurchase plan allows us to use less than US$50 million to make repurchases before June 27, 2025. In the fourth quarter of 2020, we used US$5.8 million to repurchase nearly 2.1 million shares of ADS. 截至2020年12月31日,我們在此回購計劃下,已經將2590萬美元回饋給股東,共計回購約1030萬股ADF。 In terms of shareholder returns, we continue to push forward with repurchases, and our current repurchase program allows us to repurchase up to US$15 million of our ADSes through June 27, 2025. In the fourth quarter of 2024, we used US$5.8 million to repurchase approximately US$2.1 million ADSes. As of December 31, 2024, we have returned US$25.9 million to our shareholders for a total of 10.3 million ADSes.

Speaker Change: So look we bought from you shoot to do critical Shits, you could go cheap RV show them to audio.

Speaker Change: We also choose to choose Super Sogou, telling me Ching jaw Regal.

Speaker Change: He asked me. He said you do almost as soon as possible, we're going to do to offer you shrunk wages.

Speaker Change: She is already asking you started essentially halt when we started this we go to wash out the gijon gone to virtual swimming again.

Speaker Change: Clearly the comps you would go you you're changing sensor along with us.

Speaker Change: In terms of shareholder return, we continue to push forward with repurchases and our current repurchase program allows us to repurchase up to $50 million of our eight assets through June 27th 25 in the fourth quarter of 2019 for we used $5 8 million in U S dollars to repurchase approximately.

Speaker Change: $2 1 million 80 assets as of December 31st 2024, we have returned $25 9 million in U S dollars to our shareholders for a total of <unk>.

Speaker Change: $10 3 million.

Rex Chen: As of December 31, 2020, cash and cash-added goods, limited funds, short-term investment, and third-party payment platforms, the company has accumulated a total of 2.9 billion yuan in accounts. The company's funds are sufficient to support the development of business investment and shareholding returns. As of December 31st, 2024, cash-and-cash equivalents, restricted cash, short-term investments, and funds receivable from third-party payment service providers totaled 2.9 billion. The company's financial reserves are sufficient to support reinvestment in business development and shareholder return.

Speaker Change: Just starting off Snia Cyrus essentially you shouldn't you shouldn't you can show associated Jeep bunch. It holds it did your T cell phone supine parent you saw somewhat who achieve passage of either.

Speaker Change: Okay.

Speaker Change: Just to your father, Tony who could do repo.

Speaker Change: As of December 31st 2024, cash and cash equivalents restricted cash short term investments and funds receivable from third party payment service providers totaled.

Speaker Change: 2.9 billion, the company's financial reserves are sufficient to support reinvestment in business development and shareholder returns.

Rex Chen: 关于2025年第一季度的资讯,我们预计总收入将在45.5亿元至46.5亿元。 同比對應同比增長24.6%至27.6% In the second half of 2023, we launched the first official business of Apple, which is a global innovation business, and prioritizes the scale of business development. In the first quarter of 2020, this business generated high-tech product revenue, and in the first quarter of 2025, the company adjusted its operating strategy, and estimated that the scale of the business would decrease, but the operating profit rate would remain the same. In addition, in the past 2020, we have made a small number of adjustments to some of our overseas losses. These two factors have been considered in the first quarter of 2025's revenue guidance.

Speaker Change: D G to Etsy for me.

Speaker Change: John sorry.

Speaker Change: So it's really weird to me.

Speaker Change: During the 20th century.

Speaker Change: So the Hughes.

Speaker Change: Students.

Speaker Change: Just one for me.

Speaker Change: Suddenly shoveling these sorts of chicken when people went from Q U B you shouldn't bother you win more car you. So how do you see a D. G to try some culture Suda Sandvik. So are you how would you teach you kosta childhood with gene sort of it.

Speaker Change: Can you agree more startup, but you really what you saw in New York when we do find why did you see accretion to you shortly on how old it. So long the instrument you called as you all know when you teach them to a solvency Doom you don't see that you felt you don't you won't be suitable for you you can jump on triple Copa <unk>.

Rex Chen: The above guidance reflects our initial development of the current market and operating situation, and is expected to change.

Speaker Change: You can even go up.

Rex Chen: Now turning to business outlook. For the first quarter of 2025, we anticipate total revenues to be between 4,550 million RMB and 4,650 million RMB, representing a year-over-year increase of 24.6% to 27.4%. Notably, the first quarter of 2024 marked a high base of product is operational strategy and estimated that the scale of this business would decrease, but the operating profit margin could turn positive. In addition, we downsized some overseas businesses with negative margins. These two factors have been taken into account in the outlook for the first quarter of 2025. Please note that this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change.

Speaker Change: Now turning to the business outlook for the first quarter of 2025, we anticipate total revenue to be between 404000 550 million RMB and 4000 650 million RMB, representing a year over year increase of 24, 6% to 27, 4%.

Speaker Change: Notably the first quarter of 2024 marks a high base of product revenue for Apple trading business in the first quarter of this year. The company adjusted its operational strategy and estimated that the scale of this business will decrease but the operating profit margin could turn positive. In addition, we downsized.

Speaker Change: Almost as businesses with negative margins. These two factors have been taken into account in the absolute for the first quarter of 2025. Please note that this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change you saw so yeah two tumor Felicia.

Operator: 以上是我们业绩终点分享,欢迎各位提问交流。 This concludes our prepared remarks. Operator, we are now ready to take questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star and then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star and then 2. When asking a question, please set your question in Chinese first, then repeat your question in English for the convenience of everyone in the call.

Speaker Change: Sure Jojo.

Speaker Change: This concludes our prepared remarks, operator, we're now ready to take questions.

Speaker Change: Okay.

Speaker Change: Thank you we will now begin the question and answer session to ask a question you May Press Star and then one on your telephone keypad.

Speaker Change: If you are using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: If at any time Youre question is can the trees and you would like to withdraw your question. Please press Star then two.

Speaker Change: When asking a question. Please state your question in Chinese first then repeat your question in English for the convenience of everyone in the cool.

Operator: At this time, we will pause momentarily to assemble the roster.

Speaker Change: At this time, we will pause momentarily to assemble the roster.

Speaker Change: Okay.

Joyce Ju: The first question that we have is from Joyce Ju of Bank of America. Please go ahead. Good evening, Management. Thank you for accepting my question. I have a question here. This year, we also see that China's stock market has brought a strong trend to the market. I would like to know how the management plan will seize the opportunity to develop in 2025. How should we diversify the stimulus factors brought by China's stock market, mobile phones, and 3C? Can you provide us with some directional guidance for the overall growth in 2025?

Speaker Change: The first question. We have is from Joyce Ju of Bank of America. Please go ahead.

Speaker Change: [laughter], putting too much on how do you think you can share with it.

Speaker Change: Would you be able to convince you shooting there will be a kind of go up with that and you can count on.

Speaker Change: Sure.

Speaker Change: So when you talk to your clients will be on collateral.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: What bushel Geos and she and I did signal to Omega and shake out what no one else.

Speaker Change: George It's also came on because you're going against that without seeing a tricky, okay. How would I find yourself with the windshield Hi management. Thank you for taking my question could you kindly share your plans to capture the growth opportunities in 2025 on the back of nationwide consumer electronics trading subsidies.

Joyce Ju: Then I will translate my question. Hi, Management. Thank you for taking my question. Could you kindly share your plans to capture the growth opportunities in 2025 on the back of nationwide consumer electronics trading subsidies? May you help us quantify the add-ons from this year's subsidy? What's the outlook for growth of your top line for this year? Thank you.

Speaker Change: Curt May may you help us quantify the add ons from this year's subsidy, what's the outlook for growth.

Speaker Change: One of the top line like you know for this year. Thank you.

Kerry Chen: Let me answer the question.

Speaker Change: Okay.

Speaker Change: Nice job.

Kerry Chen: 我们认为,中国的二手手机电子产品的交易与服务市场仍然有巨大的开发空间 我们认为,中国的二手手机电子产品的交易与服务市场仍然有巨大的开发空间 From the industry-leading mobile phone market, the mobile phone sales market has warmed up in 2024. In the whole year, the number of new mobile phone deliveries in China has increased by nearly 6% to 2.9 billion units. This is mainly due to the gradual release of mobile phone demand and the promotion of consumer policy. The third-party institution IDC report also shows that the second-hand mobile phone recycling industry continues to maintain a double-digit growth every year.

Speaker Change: Well, there's no way to go to also so you tend to champion the Joey foolish youth voices out there that you have to cut back on again.

Speaker Change: Total salaries suddenly although it shouldn't uses on that kind of on the Australia Shinji social Sudan.

Speaker Change: Kenyan Tango, two nacho cheese, Shinji tore down until it turns on Tim patterns, a little odd into either so we are very important issues.

Speaker Change: Cause shelving some took so do the trade off there.

Speaker Change: San Francisco, our D C portfolio.

Speaker Change: Oh, so sooner so cheap why are you. So Joe you hung up mainly in tissue boxes, that's always what it's done.

Kerry Chen: Thank you for the question. We believe China's pre-owned electronics market has significant untapped potential. Looking upstream, new smartphone shipments in China rebounded in 2024 by nearly 6% year-over-year to 290 million units. This was driven by a steady increase in replacement demand and supported consumption policies. Meanwhile, according to IDC research, China's pre-owned smartphone recycling and transaction industry has sustained a double-digit growth. 我们认为国股对于手机回收业务的推动是确定的 AiHuiShou will use its unique position in the industry and its leading recovery ability to seize the opportunity to achieve the improvement of the recovery penetration rate in mainstream scenarios. In 2025, the country released a mobile phone tablet smart watch as a new consumer supplement.

Speaker Change: Thank you for the question, we believe China's pre owned electronics market has significant untapped potential looking upstream new smartphone shipments in China rebounded in 2020.

Speaker Change: 'twenty 'twenty four by nearly 6% year over year to 219 million units. This was driven by a steady increase in replacement demand and support its consumption policies.

Speaker Change: Meanwhile, According to IDC waste there China's pre owned smartphone recycling transaction industry has sustained double digit growth.

Speaker Change: Well minimum wage or both or you sold your place all year with the praetor so treating them.

Speaker Change: I was jumping Jill Shea.

Speaker Change: D wave could mean, Shandong Guizhou Donald Lu will eat out or would you wait so she had to limit hunting the resources to be simple to use them on their own yeah, Cordell Fabulous. So G. P. M. But you know shall go that you don't see them show people T D.

Kerry Chen: Thanks to our early recovery service capability, pricing capability, and system-level connection capability, we have achieved a significant amount of C2P recovery since early this year. The national trading subsidies are inevitably a growth engine for our recycling business. By leveraging our unique industry position and front-end capabilities, we will strive to seize opportunities and increase our penetration rates in core scenarios. As China deploys national subsidies to mobile smartphones, tablets, and smartwatches in 2025, we witnessed a significant increase in C2B recycling volume in January and February, thanks to our front-end fulfillment pricing and system capabilities. We will also use the ability to play the game of turning the tables, as well as the ability to turn the tables efficiently, to promote more efficient and profitable circulation of second-hand mobile 3C products.

Speaker Change: So your woman Gen bundle, where you so full of me telling me he teach them to do that she don't do the digital Amit well mentioned minions, who it is.

Speaker Change: Schindler pseudo before you saw the shift towards O'neil.

Speaker Change: The national trade and subsidies.

Speaker Change: But to be a growth engine for our recycling business.

Speaker Change: Leverage our unique industry position and front end capabilities, we will strive to seize opportunities and increase our penetration rates and of course scenarios.

Speaker Change: China deployed nationwide at national subsidies to mobile smartphones tablets smartwatch has in 'twenty five we witnessed a significant increase in sea there'll be recycling volume in January and February thanks to our from 10 fulfillment pricing and system capabilities.

Speaker Change: Well, Mike Hi, John Pongolle, Farquhar, Hooghly function to better meet E G passing along with collision the gaucho lunch children's.

Speaker Change: Children can do social was essentially something that you'll show shoulder. So you'll literally with home pingo <unk> Chairman Derek Cook well on the shoulder me fool chunk or Zalviso.

Kerry Chen: Through the retail ability of AiHuiShou's selected stores and official websites, we will serve the national consumer's purchase demand for selected second-hand mobile phones. AiHuiShou's ability to increase the number of users through multi-product recycling services On the other hand, it has the ability to open more stores and provide online team services At the same time, it has the ability to increase the currency rate by gradually increasing the number of products by strengthening the structural data and pricing ability of commercial products Overall, the target group income growth rate is expected to reach an increase of more than 2024 in 2025 We aim to further deploy our combined refurbishment capabilities and high turnover capabilities of PJT Marketplace.

Speaker Change: Awesome, So komatsu tool.

Speaker Change: So it was all on me two evenly at Pogo books, where you saw food doesn't go your own Keytruda leave me a case of it because it's bottoming yet.

Speaker Change: Tim Tebow summit on Big fall, Amit, sorry, about subways or T cell culture.

Speaker Change: Pogo at Georgetown, So many geographies Fox to apologize to booties uncles up you laid out for you what your body.

Speaker Change: Some of them will be out G fast solute them soon on their own.

Speaker Change: And yet you're just talk on your Australian Joshua Jones.

Speaker Change: We aim to further deploy all work.

Speaker Change: Fishman capabilities and high turn all of our capabilities how P. J T marketplace.

Kerry Chen: This is to drive more efficient and profitable circulation of pre-owned consumer electronic products. Through AHS stores and official website, we are meeting the growing consumer demand for high-quality pre-owned products nationwide. On our recycling service capabilities, we expand our user range by offering a broader area of product service capabilities. In addition to more stores and larger two-door service We deliver upward-reflecting results and take rates for product categories, while further establishing our product catalogue and pricing capability. As a result, we aim at an accelerated growth of the top line in 2025. Specifically, we plan to speed up the opening of our store and build a team of customers in 2025 to provide a wider range of services to save and rejuvenate our business.

Speaker Change: This is to drive more efficient and profitable circulation of pre owned consumer electronic product through IHS stores and official website. We are meeting the growing consumer demand for high quality pre owned products nationwide.

Speaker Change: Our recycling service capabilities, we expand our user reach by offering a broader area all product service capabilities. In addition to more stores in larger two doors the risking.

Speaker Change: We deliver off watch recycling results and take rates for product categories, while further establishing our product catalog and pricing capability. As a result, we aim at an accelerated growth of the top line in 2025.

Speaker Change: Judy Carlucci, what he turns you couldn't quantify weather you don't want.

Speaker Change: Or what's your thoughts on the Odeon Joshua K did Joshua with Genesis Osaman 20, mobile Yeah, Nate Xinjiang Barbour, Josh I always want me to do.

Kerry Chen: Our goal is to add 800 AiHuiShou stores and 1,000 customers within a year. Basically, we want to realize a nationwide network of face-to-face retail and pay-as-you-go appointments, further improving the user experience and increasing customer demand. At the same time, we plan to increase our investment in the AiHuiShou brand. We plan to release more lively AiHuiShou brand and service content on new media platforms such as Tiktok and Xiaogongshu. We want to consolidate the user experience of AiHuiShou, the number one retail brand in China, and attract more users to our store or online orders.

Speaker Change: Schindler E chimneys, some food angle cheapest as yet.

Speaker Change: Girlfriend, when he made the comment so I only have one kind of do you want more G booties on yogurt cheese.

Speaker Change: Huge ozawa Pulsar walnuts, you want Saddam job I'll tell you I was hoping Pat at Hulu.

Speaker Change: So you can push our wuxi, she made pindaric fabric cause Boston.

Speaker Change: What impact you always hope Vornado can go out what sort of Goldman deal was hoping patent youll push into Che couldn't boy, Oh, Oh, yeah, well the <expletive> in southern Sudan, well minimum weight on it also hung it on their own you choose to Shanghai.

Kerry Chen: We believe that the second-hand industry is doing well in 2025. We should prepare for long-term business development through reasonable brand and pay-as-you-go construction. In the long run, the group will be proud of its position and scale in the industry and gradually release operating profits. On tactics, we plan to speed up store openings and expand our $2.00 service team by net adding 800 stores and 1,000 $2.00 staff in 2025. This advances our national face-to-face fulfillment network that will provide instant recycling and cashback services. We convert more customers with such a unique user experience. We will also boost brand investment by amplifying AHS' presence on new media platforms like Douyin and Xiaogongshu, reinforcing AHS' recycled position as the top-of-mind brand name for recycling services, and attracting more users to our offline and online touchpoints.

Speaker Change: In Congo, Hoodie that pin party, but you also need agenda. So we come to that you know will further towards the.

Speaker Change: Its own country G. G I'm quite believe Hanmi alone pulled away the way you're getting most of our troops.

Speaker Change: Oh Gee literate.

Speaker Change: On tactics, we plan to stay that store openings and expanding our teas our service team.

Speaker Change: Net adding 800 stores and 1002 of our staff in 'twenty five this advances our national face to face fulfillment network that will provide instant recycling and cashback services, we convert more customers with factory and make user experience. We will also post brand in last time by Amplifying Asia presence on new media.

Speaker Change: Platforms like Dow and counsel reinforcing age for a trust recycled position at the top of mind brand name for recycling services and they are attracting more users to our offline and online touch points.

Kerry Chen: Given the bright growth outlook for the pre-owned market, we should value rational investment into brand awareness and fulfillment capabilities in preparation for long-term development. In the mid to long term, our industry leadership and economies of scale will gradually deliver sustained profitability.

Speaker Change: Given the bright growth outlook for the pre owned market, we used to value rational investment into brand awareness and fulfillment capabilities in preparation for a long time development.

Speaker Change: In the mid to long term, our industry leadership and economies of scale will gradually deliver sustained profitability.

Kerry Chen: 好,谢谢 Thank you for the question.

Akshay: Akshay. Thank you for the question.

Jiao Wan: The next question we have is from Jiao Wan of CICC, please go ahead. Hi, good evening. Thank you for taking my questions. I have some questions about the big model direction. As we know, in the past few years, the company has also achieved very good sales results I would like to ask if our company is concerned about the recent DeepSeek and AI models, and if there are any plans to optimize business through AI in the future.

Akshay: The next question we have is from gel one offs. The ICC. Please go ahead.

Akshay:

Akshay: Then just to show that Sheila.

Akshay: When you talk about imposing on lodging Olympia.

Akshay: Genomic musical you didn't know you don't want to we need to know what you're getting into nursing home before they tell me it sounds like a nice actually to have Jonathan I'm going to take advantage of the deep sea conscious yet Adam what's usually with you when do you when I met with Homeaway I think as you know we don't want that.

Jiao Wan: I will translate it myself. Hi, good evening. Thank you for taking my questions. We know you have made great progress in reducing costs through automatic quality inspection and operations in recent years. Do you pay attention to recent AI models like DeepSeek and have a plan to optimize your business with AI?

Speaker Change: Oh, Hi, good evening. Thank you for taking my questions, we need to have made great progress in reducing costs through automated quality inspection and operations in recent years and do you pay attention to recent models like deep sea and have lots of lines to optimize this next week.

Kerry Chen: Thank you. 好,谢谢提问 AiHuiShou is a scene-driven industrial Internet company. Through self-managed recycling and platform business, it has achieved a scale effect and improved the standardization of operation, accumulating a large amount of internal expertise. We have already developed AI applications in some business scenarios. For example, we have widely used AI image recognition capabilities in Dongguan and Changzhou Autonomous Self-Consolidation Operating Centers, achieving automatic judgment of product appearance and internal self-consolidation properties, improving the accuracy of self-consolidation, and reducing the error rate of self-consolidation operation costs and manpower. AT Renew is a scenario-driven industry internet company. It achieves scale effects and enhances the standardization of operations through its own recycling and platform businesses, accumulating enormous know-how.

Akshay: <unk>.

Akshay: Oh sure.

Akshay: I always oce job hunting shooting the tie up with I won't call soup Pogo to inquiry, so hoping that youll see we won't show you she's on the pill don't watch on Chile.

Akshay: Sheila.

Akshay: Daniel Jos.

Speaker Change: Well. It tells you it seems that you're always hunting Titan aig's, where the email.

Speaker Change: You talked about her tongue daughters took a while to get it means launching quantify yana hey, either push out so be it.

Speaker Change: So as you know something like when you shop for LIBOR suggests which he has done a superb panting.

Speaker Change: So not to get too John.

Speaker Change: John.

Speaker Change: Each of them, but whose uncle tactfully.

Speaker Change: If you renew is there a scenario driven industry Internet company, it's achieved scale effects and enhance standardization of operations through its own recycling and platform businesses accumulating enormous knowhow, we have AI applications and some business scenarios for example in our automated quality inspection.

Kerry Chen: We have AI applications in some business scenarios. For example, in our automated quality inspection centers in Dongguan and Changzhou, we have extensively deployed AI image recognition to automatically determine the appearance and inspect main boards and components, improving inspection accuracy, reducing costs of quality inspection, and reducing manual inspection errors. Currently, some of our business links still rely on artificial intelligence. The space for efficiency improvement through AI is very visible. Since last quarter, we have been actively embracing the trend of cutting-edge technology. Through the deployment of some open-source large-scale models, we have made some preliminary industrial application innovations.

Speaker Change: <unk> centers in Shanghai, and Hangzhou, we have extensively deployed and image recognition and to automatically determines appearance and in fact main bars and components, improving inspection accuracy, reducing cogs of quality inspection and reducing many ways spectrum era.

Speaker Change: Function well then that you said you won't get there.

Speaker Change: It doesn't go Pogo AI. So she had children. She has an accordion feature on Cooke, one woman tone genius digital cause D. G about changing the Chooser Pogo as you're kind of in motion. The bushel yield chubu suggest that you should do.

Kerry Chen: For example, AiHuiShou's nationwide door-to-door return and inspection efficiency improvement. AiHuiShou's operation center employees' digital human skills training. the code software development process, and more intelligent and useful internal knowledge baskets. The team's cooperation efficiency has also improved. This year, we will continue to deploy AI applications in more departments and more business sessions, focusing on smart customer service, smart self-management, and smart pricing to develop AI plus circular economy innovative applications to achieve more recovery scenarios and the reduction of costs under the business process and bring more value to customers. At present, some of our business procedures need human operation, and there is considerable room for efficiency improvement through AI.

Speaker Change: You have always Osha and Goldman did the hook, we shouldn't just showed you that he's done in Chongqing and I'm gonna suits us in patient transport panelist go deep.

Speaker Change: Hi, Martha the Colorado, Punjab, Haryana neighborhood, so it's a quarter pounder agendas. It will shelter your institution, such India or Magellan high well look I don't think with our current BOP women don't go your way.

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Speaker Change: So again, we'd all Chilean kofu shouldn't answered yet sort of mounting job my father AI.

Speaker Change: Got you want them to do that twice a year you see it going book, we saw challenging ULE Olson sharp jump in doing so we're cool telecom butcher.

Speaker Change: Our present some of our business procedures meet Humira operation and there is concern there are considerable room for efficiency improvement through AI.

Kerry Chen: Since the fourth quarter of last year, we have actively embraced a cutting-edge trend and achieved some initial industry application innovations through the deployment of some open-source large-language models. For example, the efficiency improvement of the compliance check of our store operations, digital operation trainings at operation centers, coding for back-office-related requirements, internal knowledge database, etc. This year, we will further deploy AI applications in more departments and business scenarios, focusing on the development of AI plus circular economy innovative applications in the fields of intelligent customer service, intelligent quality inspection, and intelligent pricing to achieve cost reduction and efficiency improvement in more recycling scenarios and business processes, and bring more value to customers.

Speaker Change: The fourth quarter of last year, we have actively embraced or putting a trend and achieve some initial industry application innovation through the deployment of some open source large number of models. For example, the efficiency improvement after compliance check off our store operations digital operation trainings at operation centers.

Speaker Change: Coating for back office related requirements internal knowledge database et cetera.

Speaker Change: This year, we will further deploy our applications and more departments in business in areas focusing on the development of AI plus the clarity circular economy innovative applications in the field of intelligent.

Speaker Change: Customer service intelligent quality inspection and intelligent pricing to achieve cost reduction and efficiency improvement and more recycling scenarios and business processes process processes and bring more value to customers.

Kerry Chen: In addition, we expect that AI models will be widely used in mobile phone end-to-end and new form end-to-end, and there will be more smart hardware updates and upgrades. In addition, we expect AI will be more widely deployed on mobiles and PC terminals, leading to the renewal of AI hardware. Given we have focused on personal and household electronic products, we believe this presents a significant long-term business opportunity for us.

Speaker Change: So why not well maybe cheap promotion junk long fund the boson, so which is all done E. G. She should have been.

Speaker Change: Pension solutions couldn't do their children in gender theater for synergy.

Speaker Change: Oh It was all generally good unquote charging shelving tens attempting or minimum weight tonnes, you kind of just to show you I was sort of talking about you know with Jupiter.

Speaker Change: In addition, we expect AI will be more widely deployed on mobiles M. P. C terminal leading to the renewal of a hot where Cuba, we have focus on personal and household electronic products. We believe this presents a significant long term business opportunity for us.

Kerry Chen: 好,谢谢 Thank you.

Speaker Change: Thank you.

Speaker Change: Thank you.

Michael Kim: The next question we have is from Michael Kim of Zach's Small Cap Research. Please go ahead. Great. Good morning or good evening, everyone. Just one follow-up question for me. Can you just flesh out your updated thinking on capital management priorities, particularly as it relates to reinvesting for growth versus returning capital to shareholders via buyback? Okay, let me answer this question. As I shared in the previous session, our second-hand recycling industry will continue to grow for the next 3 to 5 years. Therefore, we will return to the accelerated growth track and set internal performance goals for 2025.

Speaker Change: The next question, we have is from Michael Kim of Zacks small cap research. Please go ahead.

Speaker Change: Great Good morning, or good evening, everyone. Just one follow up question for me.

Speaker Change: Can you just flush out your updated thinking on on capital management priorities, particularly as it relates to.

Speaker Change: Reinvesting for growth versus returning capital to shareholders via via buybacks. Thanks.

Speaker Change: Although more work with us to go and.

Speaker Change: Lucid Sharon when Jennifer Zhang.

Speaker Change: Also we still hanging with us and talk about what.

Speaker Change: I'm Jong twinkly, Charles Woodson don't quit talks with them already only in April.

Kerry Chen: Therefore, we will strengthen the service ability of front-end users and build the user mentality of recycling brands on both sides. We will match the scale of business and carry out some OPEX re-investment. In the past 1 to 2 years, we have focused on developing new business, such as multi-product recycling, Apple's official recycling, etc. We have verified the growth and profitability of our business. Basically, we don't need any additional investment. I will address this question. As mentioned earlier, we remain optimistic about the growth of the secondhand recycling industry over the next three to five years. Therefore, we have set reacceleration as our internal target for 2025.

Speaker Change: T mobile Youtube, which I'll touch on children, you want CDR food B, you're always hoping pilot even pushing them to choose from you could pay you. We wont you see ship opex to start to when we start what she thought on you to be a father and she's new rebooting vehicles, so refreshing people coming from Washington D C and content cause you mean any cheaper.

Jonathan: Sure Jonathan.

Jonathan: I'll address this question as mentioned earlier, we remain optimistic about the growth of the secondhand recycling industry over the next three to five years. Therefore, we have sat reacceleration as our internal target for 2025. Consequently, we will make some extra investments in line with the business scale to enhance the service capabilities.

Kerry Chen: Consequently, we will make some OPEX reinvestments in line with the business scale to enhance the service capabilities on the front end for users and to build the user perception of AHS Recycle's brand name. The emerging businesses that we have focused on developing over the past one to two years, such as Nauticadware Recycling, Combined Refurbishment, and Apple's official trading program, have already demonstrated healthy growth and profitability, and thus basically require no additional investment. 我们的业务整体上是一个重运营,轻资产 In 2025, we will use the method of mass integration to invest in power generation, power supply, and interconnectivity. The adjustment and upgrade of our Huanan Transportation Center is also being completed in the near future.

Jonathan: On the front end for users and to be able to use a perception of a transfer recycles brand name the emerging businesses that we have focused on developing over the past one to two years, such as Arctic cat, where recycling combined refurbishment and Apple official training program have already demonstrated healthy growth and profitability and that basically required.

Jonathan: Additional investment.

Jonathan: Do you tend to stop so you got to read the motion.

Jonathan: Oh yeah.

Jonathan: Yeah, which ultimately totaling jumps around changes to the pumps women don't want any assumption that children since you're you're touching should keep on watching you starting.

Kerry Chen: Therefore, there will not be too many additional categories in 2025. We hope to maintain a healthy profit margin for non-gap operations and support business investment and shareholder return. Our business model is generally asset-light but operational-intensive. We will adopt a balanced approach when expanding our store network and fulfillment capabilities in 2025. The adjustment and upgrade of our South China Operation Center is complete, so there will not be too much additional capex in 2025. We aim to maintain a healthy non-gap operating profit margin to support business reinvestment and shareholder return. We are confident in our business outlook and will further execute on our current repurchase plan.

Speaker Change: Oh boy, what type of or the Capex total was Sean John that cover you can rip off say Ya Qin country P. C. You will start who don't recall our business model is generally asset light, but operationally intensive we will adopt a balanced approach one expanding our store network and fulfillment capabilities in 'twenty five.

Speaker Change: The adjustment and upgrade of our South China Operation Center is complete so there will be not be too much additional capex in 2025, we aim to maintain a healthy non-GAAP operating profit margin to support that says the reinvestment and shareholder return.

Speaker Change: Starting on your well jump shoot wiggle Chihuahua switch as you know the concealed sushi.

Speaker Change: So Jonathan So let me jump you can jump in towards the gene pool, Rio Tinto maturing swaps and teaches them quickly fall, but still below what you thought you were showing starting on your annuity. So I thought you said you know what we would say concludes communities. She took a good homes interested we.

Speaker Change: We are confident in our business outlook and will further execute on our current repurchase plan well also balanced use of cash and invest more when industrial opportunities grow. The ultimate goal is to increase long term shareholder return the repurchase program is valid until the end of June 2025, we will continue to actively engage.

Michael Kim: We will also balance the use of cash and invest more when industry opportunities grow. The ultimate goal is to increase long-term shareholder returns. The repurchase program is valid until the end of June 2025. We will continue to actively engage with our board of directors during the interim for extension. Got it. Thanks for taking my question.

Speaker Change: With our board of directors during the interim for your attention.

Speaker Change: Got it thanks for taking my question.

Speaker Change: Yeah.

Operator: As there are no further questions at this time, I'd like to hand the conference back to management for closing remarks. Thank you all again for joining us. A replay of today's call will be available on our IR website shortly, followed by a transcript already. If you have any additional questions, please feel free to email us at ir at heritagerenew.com. Have a good day. This conference is now concluded. Thank you for attending today's presentation. You may now disconnect. [music] © The Ultimate Parody Site!

Speaker Change: As there are no further questions at this time I'd like to hand, the conference back to management for closing remarks.

Speaker Change: Thank you.

Speaker Change: Thank you all again for joining US a replay of today's call will be available on our IR website. Shortly followed by a transcript already if you have any additional questions. Please feel free to email us at.

Speaker Change: Renewed our call have a good day.

Speaker Change: Okay.

Speaker Change: This conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].