Q1 2025 ATRenew Inc Earnings Call
Operator: Good morning and good evening, ladies and gentlemen.
Good morning, and good evening, ladies and gentlemen, thank you for standing by and welcome to a tee renew Inc's first quarter 2025 earnings conference call.
Operator: Thank you for standing by and welcome to AT Renew, Inc.'s first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. We will be hosting a question and answer session after management's prepared remarks. Please note, today's event is being recorded.
At this time all participants are in a listen only mode. We will be hosting a question and answer session. After management's prepared remarks. Please note today's event is being recorded.
Operator: 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. Let's go ahead, sir.
Speaker Change: I will now turn the call over to the first speaker today, Mr. Jeremy G director of corporate development and Investor Relations of the company. Please go ahead Sir.
Thank you.
Jeremy Ji: Hello, everyone. Welcome to AT Renews first quarter 2025 earnings conference call. Speaking first today is Kerry Chen, our Founder, Chairman and CEO, and he will be followed by Rex Chen, our CFO. After that, we will open the call to questions from The first quarter 2025 financial results were released early today. The earnings, price release, and investor slides accompanying this call are now available at our IR website, ir.80renew.com.
Speaker Change: Hello, everyone and welcome to 80 reduced first quarter 2025 earnings conference call.
Carrington: Speaking first today is Carrington co 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.
Rex Chen: Our first quarter 2025 financial results were released earlier today.
Rex Chen: The earnings press release, and you watch the slides accompanying this call are now available at our website <unk> dot.
Rex Chen: Got to get you to call it.
Jeremy Ji: There will also be a transcript following this call for you. For today's agenda, Cary 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 participate during the Q&A session.
Rex Chen: Will also be a transfer following this call for your convenience.
Kevin: Both today's agenda, Kevin will share his thoughts on our quarterly performance and business strategy, followed by Rex will address the financial highlights.
Kevin: Cary and Rex will participate during the Q&A session.
Operator: Please note that, please note our safe harbor statements. Some of the information you hear during our discussions today will consist of forward-looking. and I refer you to our safe harbor state. 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. Although this call includes discussions of certain non-GAP financial measures, Please refer to our earnings press release, which contains a reconciliation guide measures together. Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB, and all comparisons are on a year-over-year basis.
Kevin: Please note that our pace note our safe Harbor statement some of the information you'll hear during our discussion today will consist of forward looking statements I never refer you to our safe Harbor statement.
Kevin: The earnings press release.
Kevin: Any forward looking statements that management makes on this call are based on assumptions as of the state and that actually renewed does not take any obligation to upgrade our assumption on these statements.
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.
Kevin: Finally, please note that unless otherwise stated all figures machine. During this conference call, how you RMB and all comparisons.
Kevin: All year over year basis.
Kerry Chen: now like to turn the call over to Kerry for business and strategy. Hello, investors and translators. Welcome to WanWu News Group's 1st quarter sales call. We are happy to update you on the start of the year and business news for 2025. 并回应各位对于集团发展近况的关注 and respond to your concerns about the development of the group.
Kevin: I'd now like to turn the call over to Kerry for basically he said stretchy updates.
Speaker Change: Go a code you don't have any I guess.
Kevin: Oh.
Kevin: Well I was just going to go on their own that's easy, though you'll hopefully although <unk> still a couple of things on their own you end up hydrostatic.
Kevin: Uh huh.
Kevin: But you can go with that.
Kevin: I don't think on that one too.
Kerry Chen: Hello everyone and thank you for joining AT RENEWs first quarter 2025 earnings conference call. We are excited to share the updates of our performance and business development and to address your questions about the company's recent progress. 首先在 First of all, 均以业绩层面,一季度总收入再次超出 Chen Chen, Lixin Ju, Chen Chen, Jeremy Ji, AiHuiShou Intl. Firstly, in terms of operating results, total net revenues for the first quarter once again exceeded the high end of our guidance range, increasing 27.5% year-over-year to RMB 4,653.5 million. On the profitability side, our non-gap operating income increased by 39.5% year-over-year to over RMB 110 million.
Hello, everyone and thank you for joining <unk> first quarter of 2025 earnings Conference call. We are excited to share the updates of our performance and business development and to address your questions about the company's recent progress.
Kevin: So again.
Speaker Change: Gene, Yes, you tell me if you do it's also what's actually that's helpful.
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Speaker Change: Liberty almost a year now.
Speaker Change: And talking about me I've got the team here in Colombia.
Speaker Change: That's still down to E D E F <unk>.
Speaker Change: non-GAAP, a 13 millimeter wave pattern audience gel opinion.
Speaker Change: The countries that you cannot get in Congress keeps them.
Speaker Change: Firstly in terms of operating results total net revenues for the first quarter. Once again exceeded the high end of our guidance range, increasing 27, 5% year over year to RMB 4653, and five meaning a point 5 million on the profitability side, our non-GAAP operating income in <unk>.
Speaker Change: Waste by 39, 5% year over year, so over RMB $110 million non-GAAP operating margin range to 4%, indicating healthy progress compared to the first quarter of last year.
Kerry Chen: Non-gap operating margin reached 2.4%, indicating healthy progress compared to the first quarter of last year. The strong and stable growth of total revenue was primarily driven by the accelerated growth of our 1P business. We continue to invest in our 1P business and recycling fulfillment capabilities, enhance supply access and strengthen AHS recycle brand recognition among consumers to further improve the penetration of our 1P2C retail sales in our sales market. Let me provide more color for the three key drivers of the 1TBC. First of all, in the first quarter, EP's product revenue increased by 28.8% 如果扣除四季度電話會上提到的蘋果官方回收和海外業務去年一季度的高收入基數影響,產品收入同比增長超過50%,超出了我們對於大潭業務的業績預期。 Firstly, in the first quarter, 1P business revenue grew by 28.8% year-over-year, excluding the high base impact from Apple's official trading program and overseas business as mentioned during the fourth quarter earnings call.
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Speaker Change: But also with the strong and stable growth of total revenue was primarily driven by the accelerated growth of our <unk> business. We continue to invest in our <unk> business and we're tackling fulfillment capabilities in house supply excess and strength in Asia as recycled brand recognition among consumers to further inc.
Speaker Change: The penetration of our one P to see retail.
Speaker Change: Our sales mix.
Speaker Change: Let me provide more color for the three key drivers of the <unk> business.
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Speaker Change: Google Cultural since you bought them you don't always obviously you talked about Q1, frankly, so how are you watching it use it without golf, so little G suite happening in solar where companies on the on how about notes totaled a woman or your thoughts on you know what yeah do you.
Speaker Change: Yes.
Speaker Change: Firstly in the first quarter, what did he business revenue grew by 28, 8% year over year, excluding the high base impact from it I suppose I'll speak to our trade in program and of course, there's business as mentioned during the fourth quarter earnings call product revenue in the first quarter increased by over 50% year over year exceeding.
Kerry Chen: Product revenue in the first quarter increased by over 50% year-over-year, exceeding our expectations. In the market, it benefits from the release of national subsidies in mobile phone digital products and users' renewable demand for JD scenes. AiHuiShou's C2B mobile phone digital returns have increased by more than 50%. 我们继续践行从更多从C端消费者回收,更多向C端消费者销售的发展策略。 We will continue to build a development strategy of recycling from C-tier consumers to sell to C-tier consumers. In terms of capability, we will continue to build on our offline service capabilities and compete with last year's first quarter. There are 458 AiHuiShou branches The exchange range of ShangMeng team's payment is expanded Payment is also more timely The satisfaction of the users who jointly promote C2B recovery The relevant multiple indicators are improving 让借助国补体验以交换新的 用户同样拥有好的电脑 用户同样拥有好的电脑 In terms of trends, supported by the national subsidies for smartphones and digital products, as well as increased demand for user upgrades in the scenario of our strategic partner, JD.com's platform, our C2B consumer electronics recycling value grew by over 50% year over year.
Our expectations.
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Speaker Change: So those seem to be so useful marketplace ORKAMBI coming down yes, I'll follow up afterwards.
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Speaker Change: In terms of trend supported by the national subsidies for smartphones and data products as well as increased demand for use or upgrades in the scenario of our strategic partner J D. Dot com platform. Our soon to be consumer electronics recycling value grew by over 50% year over year, we are committed to a lot of things rather.
Kerry Chen: We are committed to advancing strategies on direct engagement with consumers at the front of recycling and retailing. On the capability side, we continue to enhance offline fulfillment capabilities, achieving a net addition of 458 AHS stores year-on-year by the end of March 2025, and broadening our door-to-door fulfillment coverage with more prompt service. The effort improves multiple metrics indicating C2B recycling customer satisfaction and ensures a high-quality experience for trading users via national subsidies. In terms of strategic cooperation with JD, we continue to play a unique supply chain advantage that has been jointly built with JD for a long time, maintaining the user experience and delivery ability of the industry, and further strengthening the delivery response of E-Jiong Huanxin, reducing the threshold for users to participate in national subsidies.
Speaker Change: Jeez on direct engagement with consumers at the front of recycling and retaining on the capability side, we continue to enhance offline fulfillment capabilities achieving a net addition of 458 H S stores year on year by the end of March 'twenty, one five and broadening our door to door fulfillment called.
Speaker Change: What's more prompt service.
Speaker Change: The effort improve multiple metrics, indicating so it would be recycling customer satisfaction and ensures a high quality experience flow trading users lie on national subsidies.
Speaker Change: Second don't tend to hold off on me or my T shoot properly and don't hung Chico agenda, we cook when you Yosef.
Amy Yong: Hi, Amy Yong quirky, yeah, that's helpful Amit.
Amy Yong: Jeep without telling you don't mention the shelf with Xiaomi, John Gila Billboards, how you grew up with them in China.
Kerry Chen: 通过协作已旧换新,我们和京东帮助用户以又好又便宜的方式抵扣新品购买成本,有效激发用户的消费需求,并抓住更多优质的二手手机3C产品货源,实现二手回收渗透率的提升。 作为结果,一季度已旧换新的业绩增长继续临跑京东大盘。 我们将继续努力提升已就换新供应链能力和服务能力的建设,以进一步扩大在二手手机3C货源端的获取能力和份额。 In terms of our strategic partnership with JD.com, we've strengthened the long-term co-development supply chain, delivering best-in-class user experience and efficient fulfillment. By optimizing the trading process, we've reduced barriers to national subsidies, enabling customers to trade in used devices for new ones in a better and cheaper way. This not only stimulates demand, but also improves supplies of high-quality pre-owned consumer electronics to boost recycling penetration. As a result, the growth of the trade-in segment continues to outpace. Looking ahead, we will continue to enhance our trade-in supply chain and services to expand our market share in the pre-owned consumer electronics industry.
Amy Yong: So we'll schedule are you still watching what Michael Tyndall bundled Yahoo E Yo Yo.
Amy Yong: Also the call. She can go back to them, but you won't forget shellfish, which I'll be glad to welcome you all to the all social G. So also saw <unk> Oh, yeah. So it's yeah I was always all of a sudden told you our T cell to a vehicle digital you don't mind.
Paul: Yeah. He turned out GCU named Paul do you know about how well the John tissue Lalit He's only going.
Paul: Yeah, no knee Oh food no need again, so E G equal caught out that also sold essentially hoya and Thunder Porcello neat Buffalo.
Paul: In terms of our strategic partnership with JD Com, we have strengthened the longtime calls a month's supply chain delivering best in class user experience and the efficient fulfillment.
Paul: Optimizing their trading process, we've reduced the barriers to a national subsidies, enabling customers to trade in you see like there's four new ones, you know them better and cheaper way.
Paul: Not only stimulate demand, but also improved supply of high quality pre owned consumer electronics to both recycling penetration.
Paul: As a result, the growth of their trade in segment continues to outpace looking ahead, we will continue to enhance our trade in supply chain and services to expand our market share in the pre owned consumer electronics industry.
Paul: Tulsa, zama or soaps and parallel need that yeah. So.
Kerry Chen: 同时我们加码AiHuiShou品牌能力的建设 Through innovative new media content marketing and environmental experts' interaction, we encourage users to experience AiHuiShou's more abundant service options, and support AiHuiShou's existing channels to achieve faster revenue growth. Through the AiHuiShou brand, we have proposed a new environmental initiative. 并实现了两者的全面连接打通,鼓励更多消费品牌参与互动,促进更多用户对AiHuiShou品牌价值的认可,提升用户对AiHuiShou品牌的感知和使用AiHuiShou服务的品质。 在今年4月的世界第九日期间,AiHuiShou与返航新生携手12个国内一线的消费品牌推出以二手手机和循环经济为主题的营销活动, 与线上和线下渠道促进用户参与二手回收。 At the same time, we have strengthened AHS Recycle's brand presence through new media channels with creative marketing and influencer partnerships, encouraging users to experience AHS Recycle's wide range of recycling services and accelerating the growth of our recycling channels. We have launched the Revive Environmental Protection Initiative under the AHS Recycle brand and fully integrated it with our existing initiatives.
Paul: Cobalt as long as you know Tim Mattke, there's only Ito Colombo.
Speaker Change: Oh yeah.
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Speaker Change: So yeah, just going back.
Speaker Change: Well I was hoping by woman teeth without having seen some of the barzani being so you cannot do that for a minute and then vehicle what he can do a celebration by the time you would go towards your goal for the athletes, hoping by Johnson doesn't Cook.
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Speaker Change: Awesome.
Speaker Change: At the same time, we have strengthened the HRS recycled brand presence through new media channels with creative marketing and Influencer partnerships encouraging users to experience as she has to recycle its wide range of recycling services and accelerating the growth of our recycling channels.
Speaker Change: We have launched a revised environmental protection initiatives and there they are trying to recycle brand and fully integrated it with all of our existing initiatives. This encourages more consumer brands to collaborate with us in helping you with the recommendation of antitrust recycled value proposition and increasing engagement with all of our services.
Kerry Chen: This encourages more consumer brands to collaborate with us, enhancing user recognition of AHS Recycle's value proposition and increasing engagement with our services. In April, while celebrating the Earth Day, we collaborated with 12 leading domestic consumer brands to promote initiatives focused on recycling and the circular economy through joint campaigns across online and offline channels. In the first quarter, we continued to use our mature end-to-end supply chain capabilities to strengthen the 2C retail of self-sustaining products. In the first quarter, the income of EP2C increased by 73.5% and the 2C ratio of EP revenue further increased to 33%.
Speaker Change: In April while celebrating the Earth day, we collaborated with 12, leading domestic consumer brands to promote initiatives focused on recycling and the circular economy through joint campaigns across online and offline channels.
Speaker Change: Well, it's always homes without Dunbar Queen in Georgetown. So you saw them in the two receiving so.
Speaker Change: Do you see it you'll see the solo told me don't go off patent, which is sun deal you'd be sold or about to see Tommy G boutique patterns it sounds as though.
Kerry Chen: Among them, we see that the retail repair project is based on a free and return-to-recycling preparation ability and amplifies the performance of 2C retail. For the users of PaiPai, AiHuiShou Intl, and retail cooperation channels, we provide products with better prices and after-sales relief.
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Speaker Change: So it's all about who do you go charter hall, so whole function the chumby.
Speaker Change: Jim Murray, one be junk on T cells.
Kerry Chen: We hope you enjoy! At the same time, the retail ability of the official website of AiHuiShou has continued to develop, and the income has increased by more than 160%, allowing more good products to be selected. 拓草苟德 By continuously leveraging our mature end-to-end supply chain, we enhanced our direct-to-consumer retail operations under the 1P business. In the first quarter, 1P2C revenue grew by 73.5% year-over-year. Retail revenue accounted for 33% of 1P revenue, representing an upward trend. Backed by our refurbishment capabilities, we've seen the pilot program of on-demand refurbishment effectively leverage retail capabilities. creating strong synergies with our in-house compliant refurbishment operations.
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Speaker Change: Duncan Yeah, Yeah, Yeah, Yeah, I'll call a halt.
Speaker Change: Total cooker.
Speaker Change: By continuously leveraging our mature end to end supply chain, we have our direct to consumer retail operations and then the one key business in the first quarter. One Peter C. Revenue grew by 73, 5% year over year retail revenue accounted for 33% of one P revenue representing an awful lot.
Speaker Change: Trent.
Backed by our refurbishment capabilities, we've seen the pilot program off aren't the mountain refurbishment effectively languish retail capabilities.
Speaker Change: Creating strong synergies with our in house combined with Furbished meant operation. This approach allows us to offer competitively priced quality or a short one P refurbished products to users across the pie Pie Asia.
Kerry Chen: This approach allows us to offer competitively priced, quality assured 1P refurbished products to users across PiPi, AHS Election, and other retail partner channels. As a result, GMV has shown a healthy upward trend quarter over quarter. Additionally, the retail capability of AHS Recycle's official store network continues to expand, with revenue growing by over 160% year over year. This amplified our product accessibility to consumers. We can see that Apple has officially changed its business. As previously communicated at the performance conference, due to the high-tech impact of the historical price strategy, the revenue of the first quarter of the business block has fallen.
Speaker Change: H S election, and other retail partner channels as a result, <unk> has shown a healthy upward trend quarter over quarter. Additionally, the retail capability of HRS Recycles official store network continues to expand with revenue growing by over 160% year over year.
Speaker Change: That's absolutely fine our product accessibility to consumers.
Speaker Change: And what kind of a single one.
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Kerry Chen: However, thanks to our ability to operate and efficiency improvement, the profitability level of Apple's business has significantly improved. In terms of overseas revenue, we have taken the initiative to adjust the scale of business. The profitability level has also significantly improved in the first quarter. Looking specifically at the Apple official trading business, as mentioned in previous earnings calls, revenue declined year-over-year in the first quarter due to the high base driven by early-stage pricing strategies. However, benefiting from our management capability and operational efficiencies, the margin in this segment improved significantly. For overseas revenues, as we adjusted our business scale, there was a notable improvement in margin as well.
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Speaker Change: Looking specifically at the Apple fee for our trading business as mentioned in previous earnings calls revenue declined year over year in the first quarter due to the high base driven by early stage pricing strategies.
Speaker Change: We're benefiting from our management capability and operational efficiencies the margin in this segment improved significantly for overseas revenues as we adjusted our business at scale. There was a notable improvement in margin as well.
Kerry Chen: In terms of platform business, this year, in addition to seeing a significant increase in the accessibility of online and offline users to the old and new, the needs of industry and commercial businesses are also changing actively. For this reason, our B2B, B2C, multi-platform recycling business has upgraded its service capability and improved user connectivity through a leading experience. Regarding our marketplace businesses, we've seen a marked rise in trade-in service acceptance among both online and offline users, alongside positive shifts in merchant demand. In response, we have enhanced our B2B, B2C, and multi-category restructuring services to deliver best-in-class user experience, thereby boosting user loyalty.
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Speaker Change: Junior Eli solar.
Speaker Change: So a lot can change I don't want to use your question that's usual to see them do it yourself.
Speaker Change: Yeah, It sounds out officially at that fossil and you said it well.
Speaker Change: Well, it's a it'll be beauty booking anyway. So yeah, we're changing our food on essentially warnings in the TNT you sound like you don't put that in there.
Speaker Change: Regarding our marketplace businesses.
Speaker Change: <unk> seen a marked rise in trading service acceptance among both online and offline users alongside positive shifts in merchant demand.
Speaker Change: In response, we have evolved our b to B b to C and Marty catch where recycling services to deliver best in class user experience, thereby boosting user loyalty.
Kerry Chen: We continue to strengthen Pajitang's industry-based facilities and improve services for merchants. As of the end of the first quarter, Pajitang's accumulated registered merchant numbers have exceeded 1 million. The number of trading merchants has shown a significant double-digit growth. The higher income-to-expenditure ratio has been improved, which has driven the Pajitang platform to set up and increase the cost ratio by 24 points. This also confirms Pajitang's position as an industry-based facility, as the second-hand mobile phone trading company in Shanxi, and is widely recognized by merchants around the country. We've strengthened our industry capabilities as fundamental infrastructure and enhanced services for merchants.
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We have strengthened our industrial capabilities as fundamental infrastructure and enhance services for merchants as.
Kerry Chen: As of the end of the first quarter, the number of registered merchants in PJT exceeded 1 million, with a double-digit year-over-year increase in active trading merchants. The proportion of higher-fee OPT services, i.e. shipping quality inspection services, grew, raising PJT Marketplace's take-rate for second-hand consumer electronic transactions by 24 basis points. This reflects PJT's growing nationwide prominence as an essential infrastructure within the industry and as a leading exchange for second-hand electronic products.
Speaker Change: At the end of the first quarter the number of registered Marcia M. P. J T exceeded 1 million with a double digit year over year increase in active trading merchants the proportion of higher V. O P. T services I shipping quality inspection services grew raising P. J D marketplaces take rate for the second half in consumer electronics.
Speaker Change: Chronic transactions by 24 basis points. This reflects P. J T is growing nationwide communists as an essential infrastructure within the industry and that's a leading exchanged for secondhand electronic products.
Speaker Change: How do you do you mean also shows Alfonso that function change outcome Bouillon, Samsung change outs will both answer.
Kerry Chen: In March of this year, we opened the first offline flagship store in Shenzhen, Huajiangbei, leading the second-hand 3C industry. The store occupies an area of 1,200 square meters, and has set up nearly 10,000 second-hand phones for professional testing. Pajitang's flagship store adopts the super-selling integrated model of super-storage pre-ordered mode By building a scene that looks, checks, collects, and is integrated The delivery cycle is shortened by 3-5 days compared to the traditional sales channels Helping low-end businesses to reduce the cost of loading and waiting for the logistics cycle Through on-site delivery, it is also conducive to reducing after-sales disputes We will continue to explore the potential of more industry merchants would expand the number of people to participate in LiDAR.
Speaker Change: Sounds good.
Speaker Change: Senator Kamala Padgett also triangle, so Josh Shanker oxygen, India Union also send a seat.
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How did you launch in India, and Toyota Townsville, She had chance to most of the Tomo U P. Emotional tomoko Qian Kai yeah check if your father tongue J B hunt on the shelves or whats your thought slowdown sendawal tender.
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Speaker Change: Oh, Yeah, I'm Kaifeng, Chivu wholesale change out of Shanghai.
Kerry Chen: PGT is pioneering the innovation of second-hand sales models by expanding diverse online and offline sales channels for merchants. In March, we launched our first offline flagship store in Shenzhen's Huaqiangbei, driving transparency in the pre-owned consumer electronics industry. The 1,200-square-meter store displays nearly 10,000 secondhand phones that have undergone professional inspection. The flagship store operates under a warehouse to retail model, seamlessly integrating storage and sales functions. By offering all-in-one browse, inspect, purchase experience, it significantly reduces the traditional three to five days of restocking cycle, helping merchants reduce inventory costs and minimize logistics delays. On-site procurement also reduces after-sales disputes.
Speaker Change: P. J T is pioneering the innovation of secondhand sales model by expanding diverse online and offline sales channels for merchants in March we launched our first offline flagship store store in Shenzhen quach on by driving transparency in the print at home consumer electronics industry.
Speaker Change: 1200 square meter store.
Speaker Change: That's why it's nearly 10000 secondhand songs that have undergone professional inspection.
Speaker Change: Flagship store operators, and our own warehouse and retail model seamlessly integrating storage and sales functions by offering all in one browser in fact purchase experience it significantly reduces the traditional three to five days of restocking cycle, helping merchants, where do you see inventory cost and minimize the logistics delays.
Speaker Change: Outside procurement also reduces after ourselves disputes.
Kerry Chen: We will continue to empower more industry merchants, open up our local and national merchant resources to enrich the offline product selection.
Speaker Change: We'll continue to empower more industry merchants open up our local and national merchants, where as far as it is to enrich the offline product selection.
Kerry Chen: 此外,我们近期在自营城市测试开设取证仓简化商家的入仓质检流程,以更低的成本经营位于城市交易中心的小仓,距离商家更近。 商家服务也更加便捷 同时我们探索直播平台的主播达人合作 开放拍击党EP和3P货盘和供应链 由二手手机3C行业的主播达人 帮助C端用户在拍击党上淘到高性价比的机器 打造代淘的模式 补充从拍击党到C端消费者的服务闭环 未来我们将进一步探索 开放更多平台能力给到行业商家 增加优质商品的销售机会 助力区域中心城市的 二手手机3C的商品集散和合规发展 In addition, we recently began piloting compact authentication warehouses within our self-operated city to streamline the quality inspection process for merchants. These compact warehouses, located closer to major trading hubs, allow us to operate at lower costs while offering more convenient and accessible services to merchants. At the same time, we are exploring collaborations with influencers on live streaming platforms. We opened our 1P and 3P inventory and supply chain on the PJT marketplace to those influencers, which enables them to help users find high-quality and cost-effective devices, creating the specialty buyer model and enhancing the service loop between PJT and consumers.
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Speaker Change: In addition, we recently began piloting compact authentication warehouses within our self operated C. D to streamline the quality inspection process for merchants. This compact warehouses located closer to major trading hubs allow us to operate at a lower cost while offering more convenient and accessible services too.
Speaker Change: Marcia.
Speaker Change: At the same time, we are exploring collaborations with Influencers on live streaming platform. We opened our one P M <unk> inventory and supply chain on the P. J D marketplace. So those influencers, which enables them to help users find high quality and quality faster effective devices, creating the specialty buyer model any housing.
Speaker Change: Service loop between P J T and consumers.
Kerry Chen: Moving forward, we will open up more platform capabilities to merchants to boost quality product sales and promote distribution capabilities and compliant growth of pre-owned consumer electronics across regional centers. PaiPai is transforming the small and medium-sized businesses in the second-hand industry by expanding recruitment, increasing the re-sale scale of platform goods, strengthening business back-end construction, optimizing business experience and pricing level, and comprehensively improving the efficiency of goods. At the same time, we are strengthening and improving the after-sales inspection and service strategy to improve traffic and customer purchase experience. PaiPai's sales volume has increased by 2.2 times in the first quarter.
Speaker Change: Moving forward, we will open up more platform capabilities to merchants to boost quality product sells and promote distribution capabilities and compliance growth of prey on consumer electronics across regional centers.
Speaker Change: How about where you're comfortable also how he had a phone call. So I'm glad to see my trenching Pongolle caught us all saw some gaps and start.
Speaker Change: Talking about size of windmill Chunghwa sounds Yahoo.
Speaker Change: Your son got you yeah. Thank God for Aegean don't quote to you got caught in that almost all of it.
Speaker Change: You can also check out why was that in Soho to Genco, who will tell you. It is on your own.
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Speaker Change: How about too much I mean, they're easy to the shelter at home you got all their opex or Magellan kind of tool box in my assumption thoughtful about going toward a three inch also Tom you don't wait til themselves on yachts Eagle fone without being sold to them.
Kerry Chen: We will explore how to open up PaiPai's business to more self-sustaining sales scenarios and provide a richer retail route for small and medium-sized businesses. As part of the ongoing transformation of the PaiPai consignment business, we are focused on better serving small merchants in the second-hand industry. This includes expanding merchants to increase the variety and volume of available products, strengthening back-end systems to improve greater accuracy in pricing and the overall merchant experience, while driving higher product turnover. In terms of scale, sales across all categories in the PaiPai consignment business grew by 2.2 times year-over-year in the first quarter.
Speaker Change: As part of the ongoing transformation of the pipe high consignment business. We are focused on by better serving small merchants in the secondhand industry. This includes expanding merchant is to increase the variety and volume of available product.
Speaker Change: Turning back end systems to improve greater accuracy in pricing in the overall merchant experience, while driving higher product turnover in terms of scale sales across all categories in the pie by consignment business grew by 2.2 times year over year in the first quarter looking ahead, we plan to further integrate <unk>.
Kerry Chen: Looking ahead, we plan to further integrate consignment products into more of our self-operated distribution channels, In terms of the development of multi-product recycling services, in the first quarter, the revenue of multi-product recycling transactions, GMV, achieved a growth rate of nearly 200%. The growth trend is still strong. Among them, the yield of gold recycling with a lower cost rate is faster. In terms of luxury goods recycling, the cost rate has achieved a small increase. In terms of user experience, we have continued to optimize SOP and internal capabilities in many aspects, such as consultation experience, price experience, and delivery experience before multi-screen recovery.
Speaker Change: And products into more of our self operated distribution channels, providing small and medium sized merchants with broader access to retail opportunities.
Speaker Change: That book in there for the Sofa, who fought out from your easy to book and they don't tell you Jim we put so little drinks as you know Jason.
Speaker Change: That won't be dumbed up tons also tell you that in challenging she don't selfishly, we charted a foundry in place over the years Joe.
Speaker Change: So it took me in Brazil for a minute so believes since you're on the shelf that T cell.
Speaker Change: So you can start booking there, but are you sort of talk about really don't close hopefully it won't be it won't be so you'll vote. He informed me woman's home Brooklyn Naval research and the decision to your childhood. He joked with you yet on both of them yet so you'll fly is O P. Maple Amit you'll want to yeah, you might you do with the dollar.
Kerry Chen: User experience and satisfaction have been effectively improved. Throughout the development of multi-category recycling services, both gross transaction value and revenue nearly tripled year-over-year in the first quarter. Gold recycling saw faster growth, while the recycling service fee for luxury goods increased slightly. As a result of these combined factors, the overall multi-category recycling take rate remained stable year-over-year. In terms of user experience, we have continued to optimize our SOPs and internal capabilities across multiple areas. Including pre-recycling consultation, pricing, and delivery. As a result, overall customer satisfaction and user experience have improved meaningfully.
Speaker Change: So like I said three.
Speaker Change: Throughout the development of Martha catch where recycling services, both gross transaction value and revenue nearly tripled year over year in the first quarter gold recycling saw faster growth, while the recycling service fee for luxury goods increased slightly as a result of these combined factors overall magic Marty kept were restocking take rate.
Speaker Change: Remained stable year over year in terms of user experience, we have continued to optimize our applebee's and internal capabilities across multiple areas.
Speaker Change: <unk> pre recycling consultation pricing and delivery as a result, overall customer satisfaction and user experience have improved meaningfully.
Kerry Chen: To sum up, our main business has achieved a fast growth in the first quarter of this year. With the industry's best experience of global exchange, we have seized the opportunity of development from China. Entering the second quarter, we are confident to continue to strengthen the construction of delivery power and brand power, to form a stronger consumption and recycling mentality for users, and to further seize the driving force for industry development. In the long run, as users' recognition of recycling and second-hand products increases, the second-hand industry will continue to rise.
Speaker Change: So in jail, yeah, well into a year with that Union, it's easy to sustain a total what you shoot a question was owned by others.
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Kerry Chen: 向好发展,我们以长期坚定的场景加供应链的战略,加强AiHuiShou品牌新制建设,持续优化用户体验,做好二手商品的高效流转,实现更多价值创造方案。 In summary, our core businesses achieved faster-than-expected growth in the first quarter of this year. We seized growth opportunities arising from national subsidies by providing best-in-class trade-in experience. As we enter the second quarter, we are confident in further strengthening our fulfillment capabilities and brand influence. This will enhance users' awareness of trade-in and recycling, enabling us to seize the industry growth opportunities.
Speaker Change: In summary, our core businesses achieved faster than expected than expected growth in the first quarter and updates here, we see the growth opportunities are arising from national subsidies by providing best in class trading experience.
Speaker Change: We entered the second quarter, we are confident in further strengthening our fulfillment capabilities and brand influence therefore enhance users awareness of trade in and recycling.
Speaker Change: Let me ask to see if the industry growth opportunities.
Kerry Chen: . In the long run, as user recognition of recycling and second-hand products continues to rise, the industry is on a positive growth trajectory. With our long-term and steadfast scenarios plus supply chain strategy, we are committed to obtain more user mindshare. Enhancing user experience, ensuring the efficient circulation of second-hand products, and creating greater value.
Speaker Change: In the long run as he was a recommendation of recycling in secondhand products continues to rise the industry is on a positive growth trajectory with all long term and steadfast scenarios caused supply chain strategy. We are committed to obtain more user mindshare.
Speaker Change: Housing user sharon's, ensuring the efficient circulation of secondhand products and creating greater value.
Rex Chen: 下面请CFO Rex对于财务数据进行解读 Hello, investors and journalists. We are very happy to share with you the financial statements of the first quarter of the company in 2025. With the landing of the State Welfare Policy, the group's ability to communicate with people in New York has been strengthened, and the ability to sell goods has been expanded. We have once again made a breakthrough and have reached a new high. In the first quarter of 2025, sales exceeded 1.6 billion yuan. 同比增长27.5%,能GAP经营利润同比增长39.5%,超过1.1% Hello everyone, we are pleased to report strong financial performance in the first quarter of 2025. Driven by the national subsidy policies, our enhanced fulfillment capabilities and expanded retail network, total revenue in the first quarter once again exceeded the high end of our guidance, increasing by 27.5% to over $4,650 million, and adjusted operating income increased by 39.5% to over $110 million.
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Staff Iraq: Now I'd like to turn the call over to staff Iraq for financial updates.
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Speaker Change: Hello, everyone. We are pleased to report strong financial performance in the first quarter of 2025, driven by the National subsidy policies are in house fulfillment capabilities and expanded retail network total revenue in the first quarter and once again exceeded the high end of our guidance increasing by 27, 5% to over.
Speaker Change: <unk> 4000, 650 million and the adjusted operating income increased by 39, 5% or $110 million.
Rex Chen: 在解读财务数据之前,请注意,除非一定有说明,所有金额均以人民币为单位,所有增速数据均为同比。 Before taking a detailed look at the financials, please note that all amounts are in RMB and all comparisons are on a year-over-year basis, unless otherwise stated. 第一季度,集团总收入的增长动力主要来自产品收入的持续稳健增长。 Product revenue growth, 28.8% to 4.6 billion yuan Mainly due to the online channel of the company Passive consumption of electronic products In the first quarter, the growth of total revenues was primarily driven by sustained growth in our net product revenues. Net product revenues increased by 28.8% to RMB 4,260 million, primarily due to an increase in the sales of free-on consumer electronics through our online channels. The service revenue is 3.9 billion yuan, which is a 14.2% increase in the same year, mainly due to the service revenue growth contributed by multi-category recycling business and Pajitang platform business.
Speaker Change: So actually it was helpful to cheer Q3 true preview Fu Fu Sheng, if need be with him we swoops institution Dreamworld.
Speaker Change: Before taking a detailed look at the financials. 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: In the first quarter the growth of total revenues was primarily driven by sustained growth in all of our net product revenues net product revenues increased by 28, 8% to RMB 4000 260 million.
Speaker Change: Due to an increase in the south are free on consumer electronics through our online channels.
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Speaker Change: Pinto Paiva for solvency, Joe you can be more Twingo syndrome, you do the <unk>.
Rex Chen: As the service revenue of the platform increases with the size of the transaction, the platform's total revenue per quarter is 5.25%. During this period, multi-category recycling business contributed more than 50 million yuan in service revenue. accounted for 13.3% of this quarter's revenue, which is 5.6% higher than the 5.6% in the same period in 2024. Net service revenues were 390 million, representing an increase of 14.2%. The increase was primarily due to an increase in the service revenue generated from multi-category recycling business and PGT marketplace. The growth in service revenue went along with the upward trend in our marketplace's overall growth transaction value, delivering an overall marketplace take rate of 5.25% in the first quarter of 2025.
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Speaker Change: That service revenues were 319 million, representing an increase of 14, 2%. The increase was primarily due to an increase in the service revenue generated from Arctic cat to our recycling business and P. J T marketplace. The growth in service revenue went along with the upward trend in our market place as well.
Speaker Change: Gross transaction value delivering an overall marketplace take rate of five point, 25% in the first quarter of 2025 during the quarter, our multi category recycling business contributed over 50 million of revenue accounting for 13, 3% of service revenues the percentage significant.
Rex Chen: During the quarter, our multi-category recycling business contributed over $50 million of revenue, accounting for 13.3% of service revenues. The percentage significantly increased from 5.6% in the same period of 2024.
Speaker Change: The increase from five 6% in the same period of 2024.
Rex Chen: In terms of operating cost, we mainly discuss the cost analysis of NGAP, to demonstrate the trend of cost in the management team's perspective. Regarding the adjustment between NGAP and GAP, please refer to our financial report and the 6K report submitted to the U.S. Securities and Exchange Commission. 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 management views our results of operations. The reconciliations of GAAP and non-GAAP results are available in our earnest release and the corresponding Form 6K furnished with the U.S.
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Speaker Change: Now lets discuss our operating expenses to provide greater clarity on the trends in our actual operating expenses well, mainly discuss our non-GAAP operating expenses, which better reflect how management views our results of operations. The reconciliations of GAAP and non-GAAP results are available in our earnings.
Speaker Change: Release, and corresponding form 6K furnished with the U S. S E C.
Rex Chen: S&P. The commodity cost has increased by 22.7% to 36.2 billion yuan, which is consistent with the growth of product sales. The gross profit margin of our EP business is 15.2%, and it was 10.9% in the same period last year. The improvement of the gross profit margin of EP is mainly due to our performance in CQB, recycling supply chain, and the ability to prepare for the return on investment, as well as the advantages of multiple retail channels to achieve more high-profit QC retail. We are optimizing the business strategy of Apple and the business scale is down by a high level in the first quarter of 2024.
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Rex Chen: The gross profit margin is down by a high level in the same period last year. Merchandise costs increased by 22.7% to $3,620 million. In line with the growth of product sales, growth profit margin for our 1P business was 15.2% compared with 10.9% in the same period last year. The improvement of growth margin in our 1P business was primarily due to our C2B recycling supply chain capabilities, compliant refurbishment capabilities, In addition, we optimized the business strategy of Apple's official trade-in program. Despite a decrease in business scale from the high base in the first quarter of 2024, the growth margin in the first quarter of 2025 achieved a significant turnaround from losses compared to the same period last year.
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Speaker Change: Merchandize cost increased by 22, 7% to 3000 620 million in line with the growth of product revenue product sales gross profit margin for our <unk> business was 15, 2% compared with 10, 9% in the same period last year the improvement of gross margin.
Speaker Change: In our one P business was primarily due to our C to be recycled and supply chain capabilities compliant with furbished brand capabilities and diversified retail channels.
Speaker Change: In addition, we optimized our business strategy of Apple's official trade in program. Despite a decrease in business scale from the high base in the first quarter of 'twenty 'twenty four the gross margin in the first quarter of 'twenty 75 achieved a significant turnaround from losses compared to the same period last year.
Rex Chen: 38.1% increase in taxes in New York to 4.3 billion yuan 40.2% increase in taxes in New York to 4.3 billion yuan The main reason for the increase in taxes in New York is In comparison with the same period in 2020, the increase in revenue and transaction volume has led to an increase in manpower and logistics costs. Second, in the first quarter of 2025, the growth of offline payment networks and the corresponding growth in operating capital and operating costs has increased from 8.3% to 9.1%. Fulfillment expenses increased by 38.1% to $430 million. Non-gap fulfillment expenses increased by 40.2% to $430 million.
Speaker Change: Do you feel them since offer and satisfy their needs to be a stranger.
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Speaker Change: Fulfillment expenses increased by 38, 1% to $430 million non-GAAP fulfillment expenses increased by 42% to 430 million and there are the non-GAAP measures. The increase was primarily due to an increase in personnel cost and logistics expenses as we conduct it more.
Rex Chen: 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 2024, and an increase in operation-related expenses as we expanded our store networks and operations center capacity in the first quarter of 2025. Non-gap fulfillment expenses as a percentage of total revenues increased to 9.1% from 8.3%. Sales increased by 30.4% to 4.2 yuan Cold cap sales increased by 72.8% to 3.9% 主要原因为广告和推广活动相关的费用增加,以及渠道服务相关的佣金费用增加,Nangab销售费用率从6.1%上升至8.3% Selling and marketing expenses increased by 30.4% to 420 million, Nangab selling and marketing expenses increased by 72.8% to 390 million The increase was primarily due to an increase in advertising expenses and promotional campaign-related expenses, and an increase in commission expenses in relation to channel services.
Speaker Change: Our recycling and transaction activity as compared with the same period after 124 and the increase in operation related expenses as we expanded our store networks and operations center capacity in the first quarter of 2025, non-GAAP fulfillment expenses as a percentage of total revenues increased to nine one per.
Speaker Change: From eight 3%.
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Speaker Change: non-GAAP chosen fields in chocolate and she's talking box to send into here.
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Speaker Change: Selling and marketing expenses increased by 34% to $420 million non-GAAP, selling and marketing expenses increased by 72, 8% to $319 million the.
Speaker Change: The increase was primarily due to an increase in advertising expenses and promotional campaign related expenses.
Speaker Change: And then increase in commission expenses in relation to a channel service fees.
Rex Chen: Nangab selling and marketing expenses as a percentage of total revenues increased to 8.3% from 6.1%. 管理费用降低40.1%至6300万元,能概拔管理费用提升2.2%至5900万元,主要由于人员成本增加,能概拔管理费用率从1.6%下降至1.3% General and administrative expenses decreased by 14.1% to $63 million. Non-GAAP G&A expenses increased by 2.2% to $59 million, primarily due to an increase in personnel costs. Non-GAAP G&A expenses as a percentage of total revenues decreased to 1.3% from 1.6%. The cost of R&D increased from 9.6% to 5.5 million yuan The cost of R&D for NGAP increased from 16.5% to 5.3 million yuan Mainly due to the increase in energy costs, the energy efficiency development cost rate has dropped from 1.2% to 1.1%.
Speaker Change: non-GAAP selling and marketing expenses as a percentage of total revenues increased to eight 3% from six 1%.
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Speaker Change: General and administrative expenses decreased by 14.1% to 63 million non-GAAP G&A expenses increased by 2.2% to 59 million, primarily due to an increase in personnel costs non-GAAP G&A expenses as a percentage of total revenues decreased to one 3% from $1 six.
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Rex Chen: Technology and content expenses increased by 9.6% to 55 million. Non-GAP technology and content expenses increased by 16.5% to 53 million. The increase was primarily due to an increase in personnel costs. Non-GAP technology and content expenses as a percentage of total revenues decreased to 1.1% from 1.2%. Non-GAP technology and content expenses increased by 1.1% to 39.5%. Non-GAP technology and content expenses increased by 2.4%. Non-GAP technology and content expenses increased by 2.2%. As a result, our non-gap operating income was $110 million in the first quarter of 2025, representing an increase of 39.5% year-over-year. Non-gap operating profit margin was 2.4%, compared to 2.2% in the first quarter of 2024.
Speaker Change: Yeah.
Speaker Change: Technology and content expenses increased by nine 6% to 55 million non-GAAP technology and content expenses increased by 16, 5% to 53 million. The increase was primarily due to an increase in personnel costs.
Speaker Change: non-GAAP technology and content expenses as a percentage of total revenue decreased to one 1% from a one 2%.
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Speaker Change: As a result, our non-GAAP operating income was $110 million in the first quarter of 'twenty or 'twenty five representing an increase of 39, 5% year over year non-GAAP operating profit margin was two 4% compared to two 2% in the first quarter after 124.
Rex Chen: In the first quarter of 2025, we used about US$1.2 million to buy back nearly 400,000 ADS stocks. The current buyback plan allows us to use less than US$50 million before June 27, 2025. As of March 31, 2025, under this buyback plan, we have used US$27.1 million to buy back about 10.7 million ADS stocks. During the first quarter of 2025, we repurchased a total of approximately 0.4 million ADSes for approximately 1.2 million U.S. dollars under our current share repurchase program, which authorizes us to repurchase up to 50 million U.S. dollars worth of our shares, including ADSes, through June 27, 2025.
Speaker Change: So all in all with you.
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Speaker Change: During the first quarter of 295, we repurchased a total of approximately 0.4 million 80 assets for approximately $1 2 million U S dollars under our current share repurchase program, which authorized us to repurchase up to $50 million worth of our shares including India.
Speaker Change: Through June the 27th 2075 as of March 31, 2025, we had repurchased a total of approximately $10 7 million a D. S is for approximately $27 1 million U S dollars and they're just share repurchase program.
Rex Chen: As of March 31, 2025, we had repurchased a total of approximately 10.7 million ADSes for approximately 27.1 million U.S. dollars under this share repurchase program.
Speaker Change: She is already known yet so you essentially you shouldn't you shouldn't you shouldn't Joe Sushi, that's G. But she told you send false pinterest.
Rex Chen: 截至2025年3月31日, 现金及现金等家务受限资金、短期投资以及第三方支付平台 应收款项合计27.8亿元, 公司的资金储备充足。 Lixin Ju, Chen Chen, Jeremy Ji, AiHuiShou Intl. As of March 31st, 2025, cash and cash equivalents, restricted cash, short-term investment and funds receivable from third-party payment service providers totaled 2.78 billion RMB. Our financial reserves are sufficient to support reinvestment in business development and shareholder returns.
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Speaker Change: As of March 31, 2025, cash and cash equivalents restricted cash and short term your markman and funds receivable from third party payment service providers totaling $2 78 billion RMB, our financial reserves are sufficient to support reinvestment in business development and shareholder returns.
Rex Chen: As of February 2nd, 2025, our expected total revenue will be between 4.7 billion and 4.8 billion yuan, corresponding to a 24.7% to 27.7% growth rate. 以上指引僅反映當前我們對市場和運營狀況的初步看法,預期有可能有變化。 Now turning to business outlook, for the second quarter of 2025, we anticipate total revenues to be between RMB 4,710 million and RMB 4,801 million. Representing a year-over-year increase of 24.7% to 27.4%. Please note that this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change.
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Speaker Change: Now turning to the business outlook for the second quarter of 2025, we anticipate total revenue to be between RMB, 4000, 710 million and RMB 4000 $801 million.
Speaker Change: Representing a year over year increase of 24, 7% to 27.4%. 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: Your songs assortment fisheye or you're going to enjoy this concludes our prepared remarks, operator, we are now ready to take questions.
Operator: 以上是我们的业绩终点分享 欢迎各位寻找我们 This concludes our prepared remarks.
Operator: Operator, we are now ready to take questions. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone. Check up your handset before pressing the button. If at any time your question has been addressed, and you would like to withdraw your question, please press star then.
Speaker Change: Yeah.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys if at anytime. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Operator: When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call.
Speaker Change: When asking a question. Please state your question in Chinese first then repeat your question in English for the convenience of everyone on the call, we will pause momentarily to assemble our roster.
Operator: We will pause momentarily to assemble our roster.
Speaker Change: Uh huh.
Joyce Ju: Your first question comes from Joyce Ju with Bank of America. Please go ahead. Thank you Guan Liancheng for accepting my question. First of all, congratulations on the achievement of this record. I have two questions. The first question is to ask about the return on investment we have seen on the national stocks. Can we see a continuity in the second-hand return and the growth of sales business? The second question is about the increase in the interest rate and sales cost. Our first record of income and non-GAAP operating profit have achieved excellent results. I would like to ask how to understand the increase in the interest rate and sales cost of non-GAAP interest rate.
Speaker Change: And your first question comes from Joyce Ju with Bank of America. Please go ahead.
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Joyce Ju: In addition, is there any adjustment in our income and profit this year? Let me translate. Thanks management for taking my question and congrats for achieving a strong quarter. My first question is on the national subsidy. How effective has the national subsidy been in promoting recycling and trading programs? Do you see sustained growth moment in your second-hand recycling and resale business as a result? Secondly, in the first quarter, we see that both revenue and non-GAAP operating margin showed strong performance. Could you please help to explain the increase in the non-GAAP fulfillment margin and self-marketing margin? Is there any adjustment to this year's total revenue and margins target?
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Speaker Change: Thanks management for taking my questions and congrats for achieving a strong quarter. My first question is on the national subsidy, how effective person national subsidies in promoting exactly and training programs.
Speaker Change: Do you see sustained growth momentum.
Speaker Change: Recycling and resell business as a result.
Speaker Change: Secondly in the first quarter, we see that both revenue and non-GAAP operating margins showed strong performance could you. Please help me explain the increase in them and got their margin and self marketing margin is there any adjustment to this years total revenue and margin targets. Thank you.
Operator: Thank you.
Speaker Change: Yeah.
Kerry Chen: 谢谢提问,我先回答第一个问题,第二个问题Rex来回答。 The first question is, according to statistics, in the first quarter, the total number of new smartphones in China grew by 9%. In the five consecutive quarters, the growth rate was positive. The 3C phone of JD platform we serve is very powerful in terms of power consumption. This innovation has increased the power of more users to change their devices. Based on such an advantage locked in advance in the mainstream recycling scene, we have achieved an accelerated growth of a batch of self-sustaining performance. Thank you for the questions. I will take the first and Rex will take the second.
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Rex Chen: Thank you for the questions I'll take the first and Rex will take the second regarding your first question. According to industry research the shipment of new smartphones in the domestic market increased by 9% year over year in the first quarter, marking positive growth for the fifth.
Kerry Chen: Regarding your first question, according to industry research, the shipment of new smartphones in the domestic market increased by 9% year-over-year in the first quarter, marking positive growth for the fifth consecutive quarter. Meanwhile, new consumer electronic sales on our partner platform, JD.com, has strong growth momentum. The subsidies for trade-in programs, combined with our strong positioning in key recycling channels, have jointly driven the accelerated growth of our 1P business. We'd like to share our view on how Alipay's promotion of mobile phone recycling is clear. Alipay has a brand advantage in the recycling sector, a unique scene advantage in the delivery capability, and a chance to catch up with the mainstream scene by exchanging new services.
Speaker Change: Consecutive quarter. Meanwhile, new consumer electronic sales all caught in our platform J D. Dotcom has strong growth momentum the subsidies for trade in programs combined with our strong positioning in keys recycling channels have twice the driven the accelerated growth of our <unk> business.
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Kerry Chen: Alipay's current seal price is RMB500, but the recycling price of Alipay's first batch of services 相互拜緣左右 Youku has a stronger motivation, not only to win the national treasure, but also to actually add AiHuiShou's old and new services. In the medium-to-long term, we believe that the country's determination to promote consumption is certain. In all transactions of our 3G mobile phone, the mobile phone is the main commodity, accounting for about 70%. 手机的更换周期约为两年,中国每年有约三亿部的手机新机的出货量,以及数千万部的笔记本和数码新品的出货。目前的回收和已就换新的服务渗透率仍然是个位数水平。 From a long-term perspective, China's penetration rate has increased to more than 20%. We have previously shared the view that the national subsidies will definitely boost the mobile phone recycling business.
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Speaker Change: We have previously shared the view that the national subsidies, well definitely boost mobile phone recycling business, that's why industry, leading brand awareness fulfillment capabilities and unique advantages any central application scenarios seem recycling recycling is well positioned to benefit from the increasing adoption of recycling and.
Kerry Chen: Backed by industry-leading brand awareness, fulfillment capabilities, and unique advantages in essential application scenarios in recycling, AHS Recycle is well positioned to benefit from the increasing adoption of recycling in mainstream channels. Currently, the national subsidy cap for mobile phone trade-ins is 500 RMB. However, our average recycling price in 1P business is approximately 1,500 RMB. This creates a stronger incentive for users to not only take up the national subsidy, but also leverage the trade-in service of AHS Recycle. Looking ahead to the medium to long-term, we remain confident in China's strong and consistent commitment to stimulating consumption. In our total transaction volume for pre-owned consumer electronics, mobile phones are the largest category, accounting for approximately 70%.
Speaker Change: In mainstream channels.
Speaker Change: Currently national subsidy capsule mobile phone trade in is 500, RMB. However, our average recycling pricing lumpy business. It's approximately 1500 army that's grades of stronger incentives for users to not only take up the national subsidy, but also leverage that trade in service.
Speaker Change: As of right now your trust recycled.
Speaker Change: Looking ahead to the medium to long term, we remain confident in China's strong and consistent commitment to seamless stimulating consumption in our total transaction volume for pre owned consumer electronics mobile phone or the largest category accounting for approximately 70% the average we paid.
Kerry Chen: The average replacement cycle for phones is about two years, and there are approximately 300 million new phones and tens of millions of new laptops and digital devices being shipped annually in China. Currently, the penetration rate for recycling and trade-in programs remains in single digits. But in the long run, we believe there is potential for domestic penetration to raise to over 20%. The major brands and e-commerce platforms we serve are taking a more flexible price strategy to participate more closely in state-owned enterprises.
Speaker Change: Raceman FICO for phone is about two years and there are approximately 300, meaning new phones and tens of millions of new laptops and digital device is being shaped annually in China currently the penetration rate for recycling and trade in program remains in single digits, but in the long run we believe there is.
Speaker Change: Potential for domestic penetration into rates to over 20%.
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Kerry Chen: 在今年已经开启的618电商大促期间,在今年已经开启的618电商大促期间, 我们期待已修换新,能进一步提升业务的增长动能。我们期待已修换新,能进一步提升业务的增长动能。 AiHuiShou也将以更优质的交付能力承接用户的回收和换新服务。 The main brands and e-commerce platforms we collaborated with are participating in national subsidy programs with more flexible pricing strategies. Therefore, during the June 18th Shopping Festival this year, we expect to maintain business growth through trade-in services and are committed to strengthening our delivery capabilities to better serve users in recycling and trade-in.
Speaker Change: The main brands and E Commerce platforms, we collaborated with our participating in national subsidy programs with more flexible pricing strategies. Therefore during the June 18th shopping festival. This year, we we expect to maintain business growth through trading services and are committed to strengthening our delivery.
Speaker Change: Relative to better serve users in recycling and trading.
Rex Chen: Let me answer the second question from Joyce. In the first quarter, our GAAP profit margin has increased by the same rate, mainly due to our balance control of business price strategy and overall cost-benefit ratio. As Kerry has shared before, Apple's official interest in business and overseas business has had high technical and significant losses in the first quarter of 2024. But in the first quarter of this year, with the optimization of our business strategy and price strategy, the profit margin of the two listed businesses has significantly improved. EP2C retail revenue accounted for 8% increase. Regarding the second question, the year-on-year improvement of non-GAAP operating profit margin in the first quarter was mainly due to our pricing strategy and balanced control of the overall expense ratio.
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Speaker Change: Regarding the second question the year on year improvement of non-GAAP operating profit margin in the first quarter was mainly due to our pricing strategy and balanced control off the overall expense ratio as Kerry noted in the first quarter of 'twenty 'twenty four Apple So official training program and our overseas business reported high.
Rex Chen: As Kerry noted, in the first quarter of 2024, Apple's official trading program and our overseas business reported high revenue and loss. However, in the first quarter of 2025, as we optimized business and pricing strategies, the profit margin of the two businesses has significantly improved. Meanwhile, by leveraging our supply chain strengths, the proportion of 1P2C retail revenue increased by 8% year over year. At the same time, with the rapid growth of self-employed business scale, we have step-by-step withdrawn the development of self-employed stores and increased the number of people in the rental and disposal sections. Therefore, the rental and disposal fees can be increased by 0.9%.
Speaker Change: Revenue and losses.
Speaker Change: However, in the first quarter of 2025, as we optimize visits and pricing strategies the profit margin off the two businesses.
Speaker Change: <unk> has significantly improved Meanwhile, celebration of all of our supply chain strengths. The proportion of one P to see retail revenue increased by 8% year over year.
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Rex Chen: During the same period, as our 1P business expanded rapidly, we strategically focused on self-operated stores and increased staff fulfillment and operation functions. Thus, the non-gap fulfillment expense ratio rose by 0.9% year-over-year. NGAP sales revenue increased by 2.2% The main factors are promotion and advertising revenue This quarter, with the increase in business demand we increased promotion revenue such as discount coupons to meet the needs of brand awareness We have made investment plans that meet the business growth expectations For example, we shared the new media of AiHuiShou brand 另外在与京东加强回收和已旧换新协同的过程中,渠道佣金出现了在预期内的一些变化。 The non-gap selling expenses ratio has increased by 2.2%, mainly due to higher promotion and advertising expenses.
Jonathan: During the same period of our one P business expanded rapidly we're strategically focused on self operated stores and increased staff in fulfillment and operations functions that the non-GAAP fulfillment expense ratio rose by 0.9% year over year.
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Speaker Change: The non-GAAP selling expenses ratio has.
Speaker Change: Despite 2.2%, mainly due to higher promotion and advertising expenses, which rising business demand, we increased coupon related promotional expenses. This quarter. Meanwhile to raise brand awareness, we made investments align with visits growth such as in new media platform of antitrust recycled.
Rex Chen: With rising business demand, we increased coupon-related promotion expenses this quarter. Meanwhile, to raise brand awareness, we made investments aligned with business growth, such as a new media platform of AHS Recycle brand. Additionally, in strengthening recycling and trade-in collaboration with JD.com, channel commissions rose as expected. 由于集团精细化的管理由于集团精细化的管理 and AiHuiShou. As a result, the non-gap operating profit margin for the first quarter increased by 0.2% year Benefiting from our refined management of general and administrative expenses as well as technology and content expenses, both non-gap expenses ratios decreased in the first quarter. As a result, the non-gap operating profit margin for the first quarter increased by 0.2% year over year.
Speaker Change: Brent.
Speaker Change: Additionally, in strengthening recycling and trade in collaboration with JD Dot Com channel commissions rose as it's expected.
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Speaker Change: Thanks, you for the question.
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Speaker Change: Everything from our refined management of general and administrative expenses as well as technology and content expenses, both non-GAAP expense ratios decreased in the first quarter as a result, non-GAAP operating profit margin for the first quarter increased by zero to 2% year over year somewhat neutral in year, one boxes from Sweden.
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Rex Chen: Consüsterei努力實現加速增長目標不變,並保持建設支持國土帶來 一球換新,增量的交付力和愛回收品牌力的戰略發展目標, 保持用戶端價格有吸引力,在未來逐步提升non-gap 經營利潤率, 以體現更有效的經營槓桿。 Looking at the full year of 2025, we remain committed to our goal of accelerating total revenue growth. We will continue to strengthen our fulfillment capacity and brand influence to support growth in trade-in volumes driven by national subsidy programs and maintain competitive pricing strategies. In the future, we aim to gradually improve our non-gap operating profit margin, reflecting our effective operating leverage.
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Speaker Change: Looking at the full year of 2025, we remain committed to our goal of accelerating total revenue growth.
Speaker Change: We will continue to strengthen our fulfillment capacity and brand influence to support growth in trading volumes driven by national subsidy programs and maintain competitive pricing strategy in the future. We aim to gradually improve our non-GAAP operating profit margin, reflecting our effective operating leverage.
Speaker Change: Okay.
Xiao Wan: Next question comes from Xiao Wan with CID.
Speaker Change: And your next question comes from gel one with C. I C. C. Please go ahead.
Xiao Wan: Good evening, Guanling Village. Thank you for accepting my question. I have a question. Our previous Guanling Village also said that the plan will be accelerated this year. Thank you for taking my question, as you mentioned earlier, your goal is to accelerate store openings this year with target of a net add of 800 HS recycle stores. Can you share details on the progress of store opening in the first quarter? Thank you. As of March 31, 2025, AiHuiShou has a total of 1,886 branch offices across the country, of which JiYin has 917 branches, and JiaMeng has 969 branches.
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Speaker Change: Thank you for taking my question I think I mentioned that earlier, you'll go X to X out of reach.
Speaker Change: Yeah, he's talking to all of them that Oh.
Speaker Change: H as recycled source can you share details on the program itself.
Speaker Change: Thank you.
Speaker Change: Okay Gotcha.
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Kerry Chen: The total number of branches is 458, compared with last year's Q1 competition. In contrast, at the end of 2024, we will be in three high-end cities. For the effective implementation of state-owned enterprises' competitive business, to improve user satisfaction, some stores will be transformed into a self-managed model with more efficient self-managed management and operation capabilities to improve the retail performance of these stores. As of March 31, 2025, there were a total of 1,886 AHS recycle stores nationwide, including 917 self-operated stores and 969 joint-operated stores. The total number of stores has increased by a net of 458 compared to the same period last year.
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Speaker Change: As of March 31, 2025, there were a total of 1886 H rest recycle stores nationwide, including 917 self operated stores and 969 trying to operate eight stores.
Speaker Change: Total number of stores has increased I on that of 458 compared to the same period last year.
Kerry Chen: Compared to the end of 2024, in certain areas of three high-tier cities, we transitioned some of our joint-operated stores to a self-operated model to effectively handle the incremental trading volumes from national subsidies and improve user satisfaction. This change allows us to leverage the more efficient self-managed operational capabilities to quickly boost the recycling performance of these stores.
Speaker Change: Parents through the end of 'twenty 'twenty four in certain areas of three high tier cities, we transitioned some of our joint operated stores to our self operated model to effectively handle the incremental trading volumes from national subsidies and improve user satisfaction. This change allows us to leverage a more efficient self management.
Speaker Change: Ah self managed operational capabilities to quickly boost the recycling performance of these stores.
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Kerry Chen: 同期我们快速建设上门交付能力建设 上门团队的人员规模突破了1000人,同比竞争约360人。 and to build more widely the vandalized cyber blockade in the marketplace. Over the same period, our two-door fulfillment team expanded by 360 people year-over-year to 1,000 people, strengthening our fulfillment capabilities in more markets. DaoDianHuiShou and DaoJiaHuiShou have come together to further enhance the ratio of AiHuiShou's face-to-face service. In the process of user-recommended NPS research, DaoDianHuiShou and ShangMengHuiShou have confirmed the user satisfaction of the two offline delivery methods and continue to lead significantly in the recovery of material components. We will stick to the offline delivery of HangShi, to provide users with the best service in the industry.
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Speaker Change: Over the same period, our two door fulfillment team expanded by 360 people year over year to 1000 people strengthening our fulfillment capabilities in more markets.
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Kerry Chen: We are increasing the proportion of face-to-face services by extending both in-store and two-door services. In our NPS service, users are much more satisfied with these two face-to-face offline services featuring instant confirmation than with logistics-based pick-up. We will continue to enhance our offline fulfillment capabilities to provide the best-in-class trading experience. Thank you for the question.
Speaker Change: We are increasing the proportion of all face to face services by expanding both in store and two door services.
Speaker Change: Our ne N P. S tourists users our march much more satisfied with those with face to face to face offline service featuring instant confirmation bandwidth logistics space to pick up where you were.
Speaker Change: We'll continue to enhance our offline fulfillment capabilities to provide a best in class trading experience.
Speaker Change: Yeah.
Speaker Change: Oh thank.
Speaker Change: Thank you for the question.
Mike: And your next question comes from Mike. Zach's Small-Cap Research, please go ahead.
Speaker Change: And your next question comes from Michael Kim with Zacks small cap research. Please go ahead.
Mike: Great, good morning and good evening everyone. Just one question from me just in terms of your initiatives to enhance the AHS Recycle brand. Can you discuss how much traction you've seen as a result of your increased focus on marketing and advertising? And then just related to that, how should we be thinking about incremental expenses or customer acquisition costs as you continue to prioritize improving brand awareness and loyalty? Okay, thank you for your question. AiHuiShou's first brand, XinZhi, was built mainly through... 上个问题所提到的更好的履业交付服务进行 We believe that high-quality feedback service and active response to user feedback are the foundation of brand reputation.
Michael Kim: Great. Good morning, and good evening, everyone. Just one question from me just in terms of your initiatives to enhance the a a H S. Recycle brand can you discuss how much traction you've seen as a result of your increased focus on <unk>.
Michael Kim: Marketing and advertising and then just related to that how should we be thinking about incremental expenses or customer acquisition costs as we continue to prioritize improving our brand awareness and loyalty.
Michael Kim: Okay. Thank you for your question.
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Kerry Chen: What else? We consider that the current recovery service penetration rate is still very low. We will promote through some savvy new media promotion activities.
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Kerry Chen: AHS Recycle has solidified its position as the leading brand in recycling by providing best-in-class fulfillment services. We believe that high-quality services and proactive response to user feedback are the cornerstones of brand reputation. Given the current low penetration rate of recycling services, we have strategically employed well-planned new media campaigns to promote our services and enhance brand awareness. On the one hand, we record and produce truly interesting recycling service work to introduce to more widespread users AiHuiShou's high-priced, safe and easy-to-use recycling service. On the other hand, based on the location of the site, we promote AiHuiShou stores nearby to users and transfer users' orders from the AiHuiShou app to our stores.
Speaker Change: Yeah, sure Hey interest rate cycle has solidified its position as the leading brand in recycling by providing best in class fulfillment services, we believe that high quality services and proactive response to user feedback other cornerstones of brand reputation.
Speaker Change: Given the current low penetration rate of recycling services, we have strategically employed.
Speaker Change: Planned new media campaigns to promote our services and enhance brand awareness.
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Kerry Chen: In addition, we support store partners to jointly produce more resonant content for local users. We also support store partners to upgrade their new media accounts and bring local users to our stores to experience our recycling service. As a result, in the first quarter of this year, the revenue growth of the products from the official website of AiHuiShou is significantly faster than the overall revenue of EP. On the one hand, we introduce engaging content showcasing our recycling services, emphasizing AHS Recycle's competitive pricing, security, and convenience. On the other hand, by leveraging geo-targeting, we guide users to nearby AHS Recycle stores, driving orders through our mini-program, official website, and AHS stores.
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Speaker Change: On the one hand, we introduced engaging content showcasing our recycling services emphasizing a transfer recycled competitive pricing security inconvenience on the other hand by leveraging Geo targeting we guide users to nearby Asia is recycled doors driving orders through our mini programs official.
Speaker Change: What site N H S rates start. Furthermore, we have the new media presence of our joint operated stores I call, creating content that resonates with local users, thereby attracting more customers to the stores as a result in the first quarter the product revenue from AA Trust, meaning Ram and office.
Kerry Chen: Furthermore, we enhance the new media presence of our joint operative stores by co-creating content that resonates with local users, thereby attracting more customers to the stores. As a result, in the first quarter, the product revenue from AHS mini-program and official websites grew faster than our overall 1PBC. 值得强调的是,在国补的促进作用下,更多用户接触到或使用了二手回收服务。 我们相信,随着我们有节奏地建设爱回收品牌力, AiHuiShou will further increase the market share and user awareness. The national subsidy has also played a role in increasing user awareness and adoption of our services.
Speaker Change: Websites for Fox earned out over a long one of your business.
Speaker Change: So the $10 a ton.
Speaker Change: What would a trojan toward your own shop.
Speaker Change: Which is let's see on the ASO.
Speaker Change: Awesome, so food well michelle's team so you've got a woman EOG is OTA, Joe So I was hoping patty.
Speaker Change: So you can call any gender leasehold 40, yet Oh, John T bolt two southern Sudan.
Speaker Change: Oh of course your question Susan.
Speaker Change: The National subsidy has also played a role in increasing user awareness and adoption of our services. Looking ahead, we will continue to strengthen the air transport recycled brand and refine our industry, leading recycling service offerings to capture greater market share and reinforce user perception.
Operator: Looking ahead, we will continue to strengthen the AHS Recycle brand and refine our industry-leading recycling service offerings to capture greater market share and reinforce user perception. Okay, thank you. As there are no further questions at this time, I'd like to thank you for your patience. Thank you. Thank you all again for joining us. A replay of today's call will be available on our website shortly, followed by a transcript already. If you have any additional questions, please feel free to email us at ir.ijinrenu.com. Have a good day. The conference has now concluded. Thank you for attending today's presentation.
Speaker Change: Okay. Thank you.
Speaker Change: Yeah.
Speaker Change: As there are no further questions at this time I'd like to turn the conference back to management for closing remarks.
Speaker Change: Thank you. 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 are ready.
Speaker Change: Do you have any additional questions. Please feel free to email us.
Speaker Change: 18 radio talk all have a good day.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: You may now disconnect. Lixin Ju, Chen Chen, Jeremy Ji, AiHuiShou
Speaker Change: [music].