Half Year 2025 Yunji Inc Earnings Call

Good morning and good evening, ladies and gentlemen.

Thank you for standing by, and welcome to Yunji Inc.'s first half 2025 earnings conference call.

With us today are Mr. Shanglue Xiao, Chairman and Chief Executive Officer, and Mr. Nan Song, Senior Financial Director.

As a reminder, this conference call is being recorded.

Before we start, please know that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These are based on the company's current expectations and current marketing and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors affecting UNG and its industry.

These four looking statements can be identified by terminologies such as "will," "expect," "anticipate," "continued," or other similar expressions.

For a detailed discussion of these risks and uncertainties, please refer to the company's related documents filed with the U.S. SEC.

Operator: Any forward-looking statements that the company makes on this call are based on assumptions as of today and are expressly qualified in their entirety by cautionary statements, risk factors, and other details of its filing with the SEC. The company does not undertake any obligation to update these statements except as required under applicable law. With that, I will now turn it over to Mr. Shang Lujiao, Chairman and CEO of Yunji. Please go ahead, sir. Apologies, ladies and gentlemen. We seem to have disconnected with our speakers. Please hold while we reconnect. Ladies and gentlemen, we have reconnected with our speaker line. Please proceed with the presentation.

Any of the statements that the company makes on this call are based on assumptions as of today.

And are expressly qualified in their entirety by cautionary statements, risk factors, and other details of its filing with the FCC.

The company does not undertake any obligation to update these statements, except as required under applicable law.

With that, I will now turn it over to Mr. Changmin, CEO of Ye. Please go ahead, sir.

Apologies, ladies and gentlemen. We seem to have disconnected with our speakers. Please hold while we reconnect.

Ladies and gentlemen, we've reconnected with our speaker lines. Please proceed with the presentation.

Shang Lujiao: 大家好, 欢迎来到云集2025年上半年财报电话会。感谢大家的持续关注与支持。

Sally: Hello everyone, and welcome to Yunji's First Half 2025 Earnings Report. Thank you for your continued interest and support.

Shang Lujiao: for Yunji's future development.

Hello, everyone, and welcome to LG's first half of 2025 earnings call. Thank you for your continued interest and support.

Sally: Over the past six months, we have remained firmly anchored to our organic health strategy. While overall market conditions and a weakened consumer confidence have led to a slight decline in our total revenue, we believe that staying committed to organic health is the right strategy and represents an important opportunity for Yunji Inc.'s future development.

Shang Lujiao: Milk作为塑造有机健康品牌形象的开篇之作。该产品上市首发销售额即达到5 million RMB, 成功将Yunji有机健康的品牌心智初步植入消费者认知。以Yujiang Organic Milk为起点, 我们将逐步由点及面的铺展Yunji有机健康理念。

A slight decline in our total revenue. We believe that our commitment to organic growth is the right strategy and represents an important opportunity for Lynch's future development.

Sally: We have a center on our strategy on organic health, positioning Yujiang Organic Milk as our flagship product to shape our brand image in this space. The product achieved RMB 5 million in sales at launch, helping establish Yunji's health-focused brand awareness among consumers. Building on this success, we will gradually expand the concept from this foundation. Additionally, Yujiang Organic Milk will serve as an important tool for Yunji's expansion, helping us better penetrate the retail market developed through community group leader channels.

And we have a center on our strategy on organic house positioning our flagship product to shape our brand image in this space. The product achieved an R&B $5 million in sales at launch, helping establish house-focused brand awareness among consumers. Putting on this event will gradually expand the concept from this foundation. Additionally, it will serve as an important tool for Yunji expansion, helping us better penetrate the retail market through community leaders.

Shang Lujiao: influence, fully penetrate the concept of organic health, and continuously optimize our product portfolio.

For.

Sally: Over the past six months, our other major products have also performed exceptionally well. Slimming Coffee achieved sales of over 10 million RMB. Probiotics Bolus reached nearly 7 million RMB, while Freeze Dry Seed Box Thorn Powder and Herbal Sound Deer Paste each generated more than 5 million RMB in sales. These successes come from our organic health strategy and our scientific weight management product selection, both aligned closely with the national health agenda outlined in Healthy China 2030, a government initiative that sets long-term goals to improve public health and healthcare by 2030. This marks our approach sustainable in the long term and holds tremendous development potential. Moving forward, we will continue to expand our brand influence through an integrated organic health concept and continually optimize our product mix.

Already passed 6 months. Our other major products have also performed exceptionally. Well flying slimming coffee achieve the sales of over 10 million. R&B probiotics Bowlers, reached nearly 7 million R&B while freeze drying powder and her bow is sounds to your patient. Um, each generated more than 5 million R&B in sales. This is a sense comes from our organic health strategy and our scientific await management product selection. Both aligned closely with the National Health agenda, our line in healthy China, 2030 a government initiative that sets long-term goals to improve.

Shang Lujiao: expenses and continuously improve the efficiency of expense utilization.

Public house and healthcare by 2030. These masks are approached sustainably in the long term, and I hope it's a tremendous development potential moving forward. We will continue to expand our brand influence to the integrated organic house concept and continually optimize our product image.

Sally: Our beauty brand Suye offers high-value products that align closely with consumer preferences in today's market. Its approach of combining nature products with high-impact promotion has achieved positive market feedback. The Suye Pro-Zealing Firming Essence lotion generated over 4 million RMB in sales at launch, and more than 32% of the buyers being returning dormant users. The entire Suye Pro-Zealing Firming series, including creams, lotions, and essences, generated sales exceeding 10 million RMB. In terms of channels and brand development, we are actively expanding public domain channels, upgrading our demo infrastructure, establishing partnerships with top influencers for live streaming sales, and enhancing WeChat channel content. Currently, our WeChat channel transaction volume ranks higher than 92% of our peers. As we expand our public domain sales, we will continue monitoring market expenses and constantly improving cost efficiency.

offers high-value products that align closely with consumer preferences in today's market. Its approach combines major products with high-impact promotion.

Currently, our WeChat Channel transaction volume runs higher than 92% of our peers. As we expand our public domain sales, we will continue monitoring market expenses and constantly improving cost-effectiveness.

Shang Lujiao: phase, 凭借材料项目强劲的增长潜力与客户粘性, 上半年100人的材料师团队建设目标基本顺利达成, 高频参与材料项目的人员占比保持在60%的高位。更值得关注的是, 参与材料项目的人群已从现有会员逐步拓展至外部高净值人群, 目前通过材料项目开发的外部人员占比接近15%, 为业务进一步发展开辟了广阔的空间。同时, 材料项目将助力 Yunji Inc. 进一步塑造有机健康的形象, 为有机健康产品提供优质流量入口。2025年的上半年, 有超过90%的材料用户购买了我们的主营商品, 有效地反哺了其他健康商品的销售。

Sally: Our tea therapy business is currently in the incubation phase. Thanks to the strong growth potential and the customer loyalty of the tea therapy program, we successfully reached our goal of building a 100-person tea therapist team in the first half of the year, with frequent users maintaining a solid 60% participation rate. More notably, participants in the tea therapy program have gradually expanded from existing members to external network individuals. At present, external members brought in through the program account for nearly 15% of all participants, creating significant opportunities for further business growth. Meanwhile, the tea therapy program will help Yunji Inc. further establish our organic health image and provide quality traffic for our organic health products. In the first half of 2025, over 90% of tea therapy users purchased our main products, effectively supporting sales of our other health products.

The therapy business is currently in the incubation phase, given the strong growth potential and customer loyalty of the therapy program. We successfully reached our goal of building a 100% therapist team in the first half of the year, with frequent users maintaining a solid 30% participation.

Shang Lujiao: conveniently, ultimately achieving mutual benefit and win-win results.

Generate more notably participants in a t therapy for when have a gradually expanded from existing members to ask. No, find other ways individuals, at present, external members in through the program account, for nearly 15% of of an all participants creating significant opportunities for further business groups. Meanwhile, the T Therapy Program will help in further, establish our organic house, image, and provide a quality traffic for our organic house products in the first half of 2025 over 90% of the therapy uses purchased. Our main products is f****** sporting sales of our other house products.

Sally: The rapid growth of instant retail is posing new challenges for community group leaders. Under this trend, community group leaders are more inclined to increase private domain e-commerce and connect with the sole supplier. Therefore, in the future, we will focus on expanding our community group leader channels, placing organic foods in community group leaders' stores. This will not only empower community group leaders but also allow more people to conveniently enjoy our organic products, ultimately achieving mutual benefits and win-win results.

Contentious link. So for the shim in the way.

The reference groups open in retail, exposing new challenges for Community Reach Out group leaders. We need to train the community group leaders to be more inclined to embrace private domain e-commerce and connect with the social suppliers. Therefore, in the future, we will focus on expanding our community group leader channels.

Organic foods in community group leaders' source. This will not only empower community group leaders, but also allow more people to conveniently enjoy our organic products, ultimately achieving mutual benefits. And when we see results,

Shang Lujiao: 我的分享就到这里, 下面欢迎我们的财务总高级总监宋楠为大家分享财务的情况。

Sally: With that, I will hand over to Mr. Nan Song, our Senior Financial Director, to go through the financial results.

Nan Song: Thank you, Sally. Hello everyone. Before I go through our financial results, please note that all numbers detailed in the following remarks are in RMB terms and all comparisons and percentages changed on a year-over-year basis unless otherwise noted. During the first half of 2025, market uncertainties still posed challenges to our operations. Even so, our foundation position allowed us to continue advancing our strategic initiatives. We continuously assess the profitability of both new and innovative business lines and make timely adjustments to adapt to shifting market conditions, ensuring we're making a leader-like foundation while driving ongoing improvement. Now, let's take a close look at our foundation. Total revenue was 158.3 million compared to 233.8 million a year ago. Revenues from sales of merchandise were 131.7 million, and revenues from our marketplace business were 24.5 million.

With that, I will highly recommend our Senior Financial Director to go through the financial results.

Thank you. Hello everyone. Before I go through our financial results, please note that our number situated in the following remarks are in on the terms and all comparisons. And the percentage changes are online year-over-year basis on life. Otherwise noted, during the first half of 20125 Market, uncertainties still posted to the challenges to our operations, even so our fun matching position along the us to continue advising our strategic initiatives.

We continuously assess the profitability of both new and existing business lines and make timely adjustments to adapt to shifting market conditions when meeting a leader line to find national foundation while driving ongoing improvements.

Now, let's take a look. Look at our foundation.

Nan Song: The changes were primarily due to software consumer confidence and our ongoing strategy to refine product selection across all categories and optimization our supply and merchant bases, which affected sales. Despite these challenges, our gross margin remained relatively solid at 47.3%. This was due to sustained customer loyalty towards our product levels and our effective product curation strategy that expressed high margin. High rotation categories within our integrated portfolio. Now, let's take a look at our operating expenses. Fulfillment expenses increased to 20.6 million from 42.6 million a year ago. This was primarily driven by loyal warehousing and logistics costs from reduced merchandise sales. With lowering personal expenses for jumping structure, sales and marketing expenses were 50.1 million compared to 47.5 million a year ago.

Consume the confidence and our ongoing strategy to refine product selection.

Of color or categories and options, our supply, and the merchant bases, which affected our sales.

Despite the strongest growth margin, the men relatives started at 47.3%. This was due to sustained customer loyalty towards our product levels and our effective productive curation based on the data as high margin. High limitation categories within our integrator point of volume.

Now, let's take a look at our operating expenses fulfillment expenses request to 20 pound 6 million from 42.6 million. A year ago, this was from driving by loyal or housing and the suggestive cost from reduced. The merchandise sales with with as as law and personal expenses for in drafting structural def

Nan Song: This was primarily due to high member management space from growing the membership space and increased personal costs to support its expansion into markets, partially offset by loyal advertising expenses. Technology and content expenses were 15.3 million compared to 25.5 million a year ago. The decrease was mainly due to a reduction in personal costs resulting from staffing structure optimization. General and administrative expenses were 93.4 million compared to 33.5 million a year ago. The increase was mainly due to a high allowance for creative lobbyists, partially offset by loyal professional service expenses and personal costs. Including the one-time allowance, G&A expenses decreased by 35.6%, reflecting the loss of our expenses optimization effect. Total operating expenses in the first half of 2025 were $179.4 million compared to $149.1 million in the same period of 2024.

Sales and marketing expenses were £15 million compared to £47.5 million a year ago. This was primarily due to high management expenses faced from borrowing and the membership space.

And increased their personal cost to support. It is special.

Into markets.

Partially off, officers by lawyer advertising expenses, technology and content expenses were $15.

3 million compared to 25.5 million. A year ago, the decrease was mainly due to a reduced reduction in personal costs resulting from the tax structure optimization. General and administrative expenses were $933.4 million compared to $333.2 million, due to a significant loss from gradient losses.

currently officers, officers by lawyer Professional Service is bestes and their personal costs, the growing the 1 time, lost J and a excessive decreased by 135.6%, the flight in the lot of our expenses of optimization

Effect.

Nan Song: Loss from operating was $100.4 million compared to loss of operating of $32.4 million a year ago. Net loss was $100.7 million compared with net loss of $8 million a year ago, while adjusted net loss was $100.5 million compared with adjusted net loss of $6.7 million a year ago. Basic and diluted net loss per share attributable to ordinary shareholders were both $0.05 compared with basic and diluted net income per share of new in the same period of 2024. Turning to recorded as of January 30, 2025, we had a total of $217.1 million in cash and cash equivalent except cash and short-term investment on our balance sheet compared to $242.8 million as of December 31, 2024. Our liquid assets provided adequate coverage for our payable obligations.

Total operating expenses in the first half of 2025 were $1,379.4 million, compared to $1,491 million in the same period of 2024. The loss from operations was $144 million, compared to a loss from operations of $32.4 million a year ago. The net loss was $100.7 million.

Compared with a net loss of $8 million a year ago, we reported a net loss of $100.5 million compared with an adjusted net loss of $6.7 million. A year ago, basic and diluted net loss for sure. The top two were both $0.05 compared with basic and diluted net income for sure, for the new innocent period of 2024.

322 recorded as of January 2022, we had a total of 200 gender, $17.1 million in cash, and the cash equivalent of executed cash and the short-term development on our balance sheet.

Compared to 242.8 million, as of December 31, 2024.

Nan Song: In addition, we are desperate to market the most of our working capital and market managing our assets to best support our operations. To sum up, during the first half of 2025, we continued to optimize our cost structure while ensuring efficient capital allocation. We remain committed to maintaining financial discipline and driving improved profitability while supporting long-term sustainable growth. Our continued focus on loss integration, together with our commitment to efficient asset utilization, play a key role in achieving this improvement. Looking ahead, we will concentrate on continuously improving our gross margin, aiming to achieve break-even and strengthen our overall financial position with a strategic focus, where we are prepared to manage future hindrances and capture growth opportunities in our evolving market environment. This concludes our prepared remarks for today. Thank you. That brings us to an end of today's call. Thank you for attending. You may now disconnect.

Our liquid assets provided at quote coverage for our available application. In addition, we are decorated.

To mark the master of our working capital and the Ming our except to best support our operations.

Continue to optimize our customers' greater.

While enjoying efficient capital along Cushing, we remain committed to maintaining financial discipline and driving improved profitability while supporting long-term September growth.

Our continued focus on integration, together with our commitment to efficiency, plays a key role in achieving this improvement. Looking ahead, we will concentrate on continuously improving our growth margin.

I mean, to achieve break, even and strengthen our overall financial position with the Strategic Force where we will prepare to manage future hand work, and the cap Patrol growth opportunities in our environment involving Market environment. This concludes our prepared remarks for today. Thank you.

That brings us to the end of today's call. Thank you for attending. You may now disconnect.