Q2 2026 Chagee Holdings Ltd Earnings Call

August 28, 2026

Operator: Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to Chagee's Q2 2026 earnings conference call. We will be hosting a question and answer session after management's prepared remarks. Please note that today's event is being recorded. With that, I will now turn the call over to the first speaker today, Ms. Alicia Guo, Investor Relations Director of the company. Please go ahead, ma'am.

Speaker #1: Please note that today's event is being recorded. With that, I will now turn the call over to the first speaker today, Ms. Alicia Guo, Investor Relations Director of the company.

Speaker #1: Please go ahead, ma'am.

Speaker #2: Thank you. Hello, everyone, and welcome to Chagee's second quarter 2026 earnings call. With us today are Mr. Junjie Zhang, our CEO; Mr. Aiden Yin, our COO; and Mr. Aaron Huang, our CFO.

Alicia Guo: Thank you. Hello, everyone, and welcome to Chagee's Q2 2026 earnings call. With us today are Mr. Junjie Zhang, our CEO, Mr. Dengfeng Yin, our COO, and Mr. Hongfei Huang, our CFO. The company's financial and operating results were released by the newswire earlier today and are currently available online. Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call. Any forward-looking statements that we make on this call are based on assumptions as of today, and Chagee does not undertake any obligations to update these statements. Also, this call includes discussions of certain non-GAAP financial measure. Please refer to our earnings release, which contains a reconciliation of non-GAAP measure to GAAP measure. With that, I will turn the call to our CEO, Mr. Junjie Zhang. Please go ahead, sir.

Alicia Guo: Thank you. Hello, everyone, and welcome to Chagee's Q2 2026 earnings call. With us today are Mr. Junjie Zhang, our CEO, Mr. Dengfeng Yin, our COO, and Mr. Aaron Huang,our CFO. The company's financial and operating results were released by the newswire earlier today and are currently available online. Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call. Any forward-looking statements that we make on this call are based on assumptions as of today, and Chagee does not undertake any obligations to update these statements. Also, this call includes discussions of certain non-GAAP financial measure. Please refer to our earnings release, which contains a reconciliation of non-GAAP measure to GAAP measure. With that, I will turn the call to our CEO, Mr. Junjie Zhang. Please go ahead, sir.

Speaker #2: The company's financial and operating results were released by the newswire earlier today and are currently available online. Before we continue, I refer you to our Safe Harbor statement in the earnings release.

Speaker #2: Which applies to this call. Any forward-looking statements that we make on this call are based on assumptions as of today. And Chagee does not undertake any obligations to update these statements.

Speaker #2: Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to GAAP measures.

Speaker #2: With that, I will turn the call over to our CEO, Mr. Junjie Zhang. Please go ahead, sir.

Junjie Zhang: Hello，大家好。欢迎参加霸王茶姬2026年第二季度财报电话会。

Junjie Zhang: [Foreign language]

Speaker #3: 哈喽，大家好。欢迎参加霸王茶姬2026年第二季度财报电话会。

Alicia Guo: Hello everyone, welcome to Chagee's Q2 2026 earnings call.

[Translator]: Hello everyone, welcome to Chagee's Q2 2026 earnings call.

Speaker #2: Hello, everyone. Welcome to Chagee's second quarter 2026 earnings call.

Speaker #3: 进入2026年，我们战略聚焦经本质，专注做好用户关心的每一件事，一季度完成组织、产品与营销线路的梳理。为高质量增长筑基，二季度外部环境虽有些波动啊，但这恰恰验证了我们的判断。穿越周期的根本还是在于用户发自内心的认可。市场越复杂，越要回归本质。竞争越激烈，越要把用户的触点做到极致。二季度所有工作围绕这一逻辑展开，不是被动地去应对，而是在变化中更聚焦地坚持我们一贯的路径。

Junjie Zhang: 进入2026年，我们战略聚焦精本质，专注做好用户关心的每一件事儿。一季度完成组织、产品与营销线路的梳理，为高质量增长筑基。二季度外部环境虽有些波动，但这恰恰验证了我们的判断：创业周期的根本还是在于用户发自内心的认可。市场越复杂，越要回归本质；竞争越激烈，越要把用户的触点做到极致。二季度所有工作围绕这一逻辑展开，不是被动地去应对，而是在变化中更聚焦地坚持我们一贯的路径。

Speaker #2: As we entered 2026, our strategy has stayed focused on the fundamentals of the business, centered on doing well by the things our consumers truly care about.

Alicia Guo: As we entered 2026, our strategy has stayed focused on the fundamentals of the business, centered on doing well by the things our consumers truly care about. In Q1, we completed a systematic review of our organization, product, and marketing roadmap, laying the foundation for high-quality growth. While the external environment saw some volatility in Q2, these changes have only reinforced our conviction. The ability to navigate cycles ultimately comes down to genuine consumer recognition. The more complex the market, the more important it is to return to the fundamentals. The more intense the competition, the more important it is to perfect every consumer touch point. All of our work in Q2 was built around this logic, not as reactive response, but as a more focused commitment to our proven path.

[Translator]: As we entered 2026, our strategy has stayed focused on the fundamentals of the business, centered on doing well by the things our consumers truly care about. In Q1, we completed a systematic review of our organization, product, and marketing roadmap, laying the foundation for high-quality growth. While the external environment saw some volatility in Q2, these changes have only reinforced our conviction. The ability to navigate cycles ultimately comes down to genuine consumer recognition. The more complex the market, the more important it is to return to the fundamentals. The more intense the competition, the more important it is to perfect every consumer touch point. All of our work in Q2 was built around this logic, not as reactive response, but as a more focused commitment to our proven path.

Speaker #2: In the first quarter, we completed a systematic review of our organization, product, and marketing roadmap, laying the foundation for high-quality growth. While the external environment saw some volatility in the second quarter, these changes have only reinforced our conviction.

Speaker #2: The ability to navigate cycles ultimately comes down to genuine consumer recognition. The more complex the market, the more important it is to return to the fundamentals.

Speaker #2: The more intense the competition, the more important it is to perfect every consumer touchpoint. All of our work in the second quarter was built around this logic.

Speaker #2: Not as a reactive response, but as a more focused commitment to our proven path.

Speaker #3: 茶饮行业啊，正在经历结构性的演变。供给端呢，当前鲜奶茶赛道啊，可以说是群雄逐鹿。核心玩家悉数入局。行业竞争格局已经从增量的共荣，现在转向了存量的博弈。竞争烈度啊，极度上升。需求端呢，代际价值，整个价值观也被重构。呃，品牌叙事逻辑也要进行迭代。过去高格调的和大城市的这种核心的逻辑，现在已然失效了。当下用户所追求的呢，更多是自我的表达、个性的彰显和回归本质的心灵疗愈。所以品牌应该化作和个体共鸣的温柔触点，以真诚贴心的细致细腻的方式来回应用户，渠道端呢，外卖大战驱动下消费习惯发生了迁移。公寓市场大幅度的扩大，呃，现在已经成为各大品牌的主要战场之一了。在流量端呢，分发的路径逐渐现在多元化，碎片化，要求品牌在精确追随用户迁移和高效配置资源上有更大的要求。

Junjie Zhang: 茶饮行业正在经历结构性的演变。供给端，当前鲜奶茶赛道可以说是群雄逐鹿，核心玩家悉数入局。行业竞争格局已经从增量的共荣，转向了存量的博弈，竞争烈度极度上升。需求端，代际价值整个价值观也被重构，品牌叙事逻辑也要进行迭代。过去高格调和大程式的这种核心的逻辑现在已然失效了。当下用户所追求的更多是自我的表达，个性的彰显和回归本质的心灵疗愈。所以品牌应该化作和个体共鸣的温柔触点，以真诚贴心的细致细腻的方式来回应用户。渠道端，外卖大战驱动下，消费习惯发生了迁移，公域市场大幅度地扩大，现在已经成为各大品牌的主要战场之一了。在流量端，分发的路径逐渐多元化、碎片化，要求品牌在精确追随用户迁移和高效配置资源上有更大的要求。

Alicia Guo: The tea beverage industry is going through a structural change. On the supply side, the fresh milk tea category is now crowded with more players, and a competitive landscape has shaped from shared growth in an expanding market to competition over a same space, raising the intensity of competition. On the demand side, shifting generational value require brands to find new ways of telling their story. The old playbook, built on high profile positioning and loud marketing, has lost its effectiveness. What consumers are looking for today is individual self-expression and a genuine sense of comfort. Brands need to become a gentle touch point that resonates with the individual, connecting through sincerity and responding to consumers with care. On the channel side, intensified competition among delivery platforms is reshaping consumer behavior. The public domain has expanded meaningfully and become a key competitive arena for brands.

[Translator]: The tea beverage industry is going through a structural change. On the supply side, the fresh milk tea category is now crowded with more players, and a competitive landscape has shaped from shared growth in an expanding market to competition over a same space, raising the intensity of competition. On the demand side, shifting generational value require brands to find new ways of telling their story. The old playbook, built on high profile positioning and loud marketing, has lost its effectiveness. What consumers are looking for today is individual self-expression and a genuine sense of comfort. Brands need to become a gentle touch point that resonates with the individual, connecting through sincerity and responding to consumers with care. On the channel side, intensified competition among delivery platforms is reshaping consumer behavior. The public domain has expanded meaningfully and become a key competitive arena for brands.

Speaker #2: The tea beverage industry is going through a structural change. On the supply side, the fresh milk tea category is now crowded with more players, and the competitive landscape has shifted from shared growth in an expanding market to competition over a fixed base.

Speaker #2: Raising the intensity of competition. On the demand side, shifting generational values require brands to find new ways of telling their story. The old playbook, built on high-profile positioning and loud marketing, has lost its effectiveness.

Speaker #2: What consumers are looking for today is individual self-expression and a genuine sense of comfort. Brands need to become a gentle touchpoint that resonates with the individual.

Speaker #2: Connecting through sincerity and responding to consumers with care. On the channel side, intensified competition among delivery platforms is reshaping consumer behavior. The public domain has expanded meaningfully.

Speaker #2: And become a key competitive arena for brands. Meanwhile, traffic distribution has become increasingly diversified and fragmented. Brands must closely track where consumers are moving and allocate resources efficiently.

Alicia Guo: Meanwhile, traffic distribution has become increasingly diversified and fragmented. Brands must closely track where consumers are moving and allocate resources efficiently.

[Translator]: Meanwhile, traffic distribution has become increasingly diversified and fragmented. Brands must closely track where consumers are moving and allocate resources efficiently.

Speaker #3: 呃，面对这些变化呢，我们主要从四个维度在构建我们的能力。第一呢，提升核心的能力在前台。我们将强化创新能力，向优而行，也向新而行。充分示范品牌与产业的产研的创造力。那中台呢，我们也在夯实我们的支撑能力。仅靠创新肯定是不够的，还需要强大的组织能力、调动更多的资源来实现目标。所以我们持续提升运营体系的能力、渠道的能力、用户运营和IT基础设施的能力，以支撑日益扩大的规模体量。

Junjie Zhang: 那面对这些变化，我们主要从四个维度在构建我们的能力。第一，提升核心的能力。在前台，我们将强化创新能力，向优而行，也向新而行，充分释放品牌与产业的创造力。那中台，我们也在夯实我们的支撑能力。仅靠创新肯定是不够的，还需要强大的组织能力，调动更多的资源来实现目标。所以我们持续提升运营体系的能力、渠道的能力、用户运营和IT基础设施的能力，以支撑日益扩大的规模体量。

Alicia Guo: In response to these changes, we are building our capabilities across four dimensions. First, strengthening our core capabilities. At the front end, we are enhancing our innovation capabilities. Striving for excellence, embracing new directions, and fully unlocking the creativity of our branding and product teams. In the middle office, we are reinforcing our support infrastructure. Innovation alone is not enough. We also need strong capabilities to mobilize resources and deliver our goals. We are therefore continuing to upgrading our operating system, channel capabilities, consumer operations, and IT infrastructure to support our growing scale.

[Translator]: In response to these changes, we are building our capabilities across four dimensions. First, strengthening our core capabilities. At the front end, we are enhancing our innovation capabilities. Striving for excellence, embracing new directions, and fully unlocking the creativity of our branding and product teams. In the middle office, we are reinforcing our support infrastructure. Innovation alone is not enough. We also need strong capabilities to mobilize resources and deliver our goals. We are therefore continuing to upgrading our operating system, channel capabilities, consumer operations, and IT infrastructure to support our growing scale.

Speaker #2: In response to these changes, we're building our capabilities across four dimensions. First, we are strengthening our core capabilities at the front end by enhancing our innovation capabilities, striving for excellence, embracing new directions, and fully unlocking the creativity of our branding and product teams.

Speaker #2: In the middle office, we're reinforcing our support infrastructure. Innovation alone is not enough; we also need strong capabilities to mobilize resources and deliver our goals.

Speaker #2: We're therefore continuing to upgrade our operating system, channel capabilities, consumer operations, and IT infrastructure to support our growing scale.

Junjie Zhang: 第二，调整产品的结构。我们在原叶鲜奶茶之外，积极在探索更多的品类，比如二季度大家看到善兴的茶特调品类、Geelato品类。我们也希望可以通过更多尝试，更多产品的品类形态，以满足用户日益多元的需求。这要求我们持续改革，无论在供应链的能力还是运营体系的能力，都要为品类扩张提供更坚实的支撑。

Speaker #3: 第二，调整产品的结构。我们在原先奶茶之外啊，积极在探索更多的品类，比如二季度大家看到三星的茶特调品类、吉拉托品类等。那我们也希望可以通过更多尝试、更多产品的品类形态，以满足用户日益多元的需求。这要求我们持续改革，无论在供应链的能力还是运营体系的能力，都要为品类扩张提供更坚实的支撑。

Alicia Guo: Second, broadening our product mix. Beyond loose leaf fresh milk tea, we are actively exploring additional categories, including the special deals and Geelato recently launched in Q2. We want to test more product formats to meet our consumers' increasingly diverse needs. This requires us to continue reforming our supply chain capabilities and operating system to provide a solid foundation for category expansion.

[Translator]: Second, broadening our product mix. Beyond loose leaf fresh milk tea, we are actively exploring additional categories, including the special deals and Geelato recently launched in Q2. We want to test more product formats to meet our consumers' increasingly diverse needs. This requires us to continue reforming our supply chain capabilities and operating system to provide a solid foundation for category expansion.

Speaker #2: Second, broadening our product mix. Beyond Loosely Fresh Milk Tea, we're actively exploring additional categories, including the special deals and gelato recently launched in the second quarter.

Speaker #2: We want to test more product formats to meet our consumers' increasingly diverse needs. This requires us to continue reforming our supply chain capabilities and operating system to provide a solid foundation for category expansion.

Junjie Zhang: 第三，增强用户触达。一方面通过灵活多元的内容营销来打动用户，扩大我们的流量入口。另一方面，通过多场景的渗透来扩展、扩宽我们用户的触达面。

Speaker #3: 第三呢，增强用户触达。一方面通过灵活多元的内容营销来打动用户，扩大我们的流量入口。另一方面呢，通过多场景的渗透来扩展扩宽我们用户的触达面。

Alicia Guo: Third, enhancing consumer reach. On one hand, we are using flexible and diverse content marketing to connect with consumers and expand our traffic funnel. On the other hand, we are expanding our reach through penetration across more consumer scenarios.

[Translator]: Third, enhancing consumer reach. On one hand, we are using flexible and diverse content marketing to connect with consumers and expand our traffic funnel. On the other hand, we are expanding our reach through penetration across more consumer scenarios.

Speaker #2: Third, enhancing consumer reach. On one hand, we're using flexible and diverse content marketing to connect with consumers and expand our traffic funnel. On the other hand, we are expanding our reach through penetration across more consumer scenarios.

Speaker #3: 第四呢，是迭代价值主张啊。随着用户需求的变化，我们品牌的价值主张也需要顺应时代进行更迭升级。那么通过价值共鸣和体验的沉淀，将用户真正留下来，这是根本。

Junjie Zhang: 第四是迭代价值主张。随着用户需求的变化，我们品牌的价值主张也需要顺应时代进行更迭升级。通过价值共鸣和体验的沉淀，将用户真正留下来，这是根本。

Alicia Guo: Fourth, we are evolving our value proposition. As consumer needs evolve, our brand value proposition also needs to iterate with the times. Through emotional resonance and experience-driven retention, we aim to turn new consumers into loyal long-term Chagee friends.

[Translator]: Fourth, we are evolving our value proposition. As consumer needs evolve, our brand value proposition also needs to iterate with the times. Through emotional resonance and experience-driven retention, we aim to turn new consumers into loyal long-term Chagee friends.

Speaker #2: Fourth, we're evolving our value proposition. As consumer needs evolve, our brand value proposition also needs to iterate with the times. Through emotional resonance and experience-driven retention, we aim to turn new consumers into loyal, long-term Chagee friends.

Speaker #3: 以茶会友，是我们始终不变的价值观。把茶做到极致，把霸王茶姬推向全球，塑造高价值品牌与良好的用户体验，这是我们始终如一的方向和标准。为了这一标准呢，我们持续构建的能力，每一步都坚定且踏实。我们相信啊，越是在复杂的环境中，我们越要回归本质。做好产品，服务好用户，打磨好每一家门店。随着我们在产品创新、营销创新、组织效率、用户运营和海外拓展等多方面的持续深耕，我们有信心在任何市场的环境下，都实现高质量、可持续的增长。

Junjie Zhang: 以茶会友是我们始终不变的价值观。把茶做到极致，把霸王茶姬推向全球，塑造高价值品牌与良好的用户体验，这是我们始终如一的方向和标准。为了这一标准，我们持续构建的能力，每一步都坚定且踏实。我们相信越是在复杂的环境中，我们越要回归本质，做好产品，服务好用户，打磨好每一家门店。随着我们在产品创新、营销创新、组织效率、用户运营和海外拓展等多方面的持续深耕，我们有信心在任何市场的环境下都实现高质量可持续的增长。

Alicia Guo: Connecting through tea is our enduring value. Perfecting the art of tea, bringing Chagee to the world, and building a premium brand with exceptional user experiences. This is our unwavering direction and standard. We continue to build our capabilities towards this goal. With every step deliberate and grounded, we believe that the more complex the environment, the more important it is to return to the fundamentals: making great products, serving our consumers well, and refining every tea house. As we continue to deepen our capabilities across product innovation, marketing innovation, organizational efficiency, consumer operations, and overseas expansion, we are confident in achieving high quality, sustainable growth in any market environment.

[Translator]: Connecting through tea is our enduring value. Perfecting the art of tea, bringing Chagee to the world, and building a premium brand with exceptional user experiences. This is our unwavering direction and standard. We continue to build our capabilities towards this goal. With every step deliberate and grounded, we believe that the more complex the environment, the more important it is to return to the fundamentals: making great products, serving our consumers well, and refining every tea house. As we continue to deepen our capabilities across product innovation, marketing innovation, organizational efficiency, consumer operations, and overseas expansion, we are confident in achieving high quality, sustainable growth in any market environment.

Speaker #2: Connecting through tea is our enduring value. Perfecting the art of tea, bringing Chagee to the world, and building a premium brand with exceptional user experiences.

Speaker #2: This is our unwavering direction and standard. We continue to build our capabilities toward this goal. With every step deliberate and grounded, we believe that the more complex the environment, the more important it is to return to the fundamentals.

Speaker #2: Making great products, serving our consumers well, and refining every tea house. As we continue to deepen our capabilities across product innovation, marketing innovation, organizational efficiency, consumer operations, and overseas expansion, we're confident in achieving high-quality, sustainable growth in any market environment.

Speaker #3: 上个季度呢，我们宣布了一项不超过1.5亿美元的回购计划。那截至8月24日，我们已经执行了约0.3亿美元的回购。我们也希望可以通过持续的行动，传递公司对长期价值的坚定信心，也切实地回馈股东们的信任。

Junjie Zhang: 上个季度，我们宣布了一项不超过1.5亿美元的回购计划。截至8月24日，我们已经执行了约0.3亿美元的回购。我们也希望可以通过持续的行动，传递公司对长期价值的坚定信心，也切实地回馈股东们的信任。

Alicia Guo: Last quarter, we announced a share repurchase program of up to $150 million. As of 24 August, we have executed approximately $30 million in repurchases. Through continued action, we want to demonstrate the company's firm confidence in its long-term value and deliver a tangible return on our shareholders' trust.

[Translator]: Last quarter, we announced a share repurchase program of up to $150 million. As of 24 August, we have executed approximately $30 million in repurchases. Through continued action, we want to demonstrate the company's firm confidence in its long-term value and deliver a tangible return on our shareholders' trust.

Speaker #2: Last quarter, we announced a share repurchase program of up to $150 million. As of August 24, we have executed approximately $30 million in repurchases.

Speaker #2: Through continued action, we want to demonstrate the company's firm confidence in its long-term value and deliver a tangible return on our shareholders' trust.

Speaker #3: 接下来请COO Aiden为大家详细汇报本季度的执行进展。谢谢。

Junjie Zhang: 接下来请COO Aiden为大家详细汇报本季度的执行进展。谢谢。

Speaker #2: Next, I will hand the call over to our COO, Aiden, who will walk you through the execution during the quarter. Thank you.

Alicia Guo: Next, I will hand the call over to our COO, Aiden, who will walk you through the execution during the quarter. Thank you.

[Translator]: Next, I will hand the call over to our COO, Aiden, who will walk you through the execution during the quarter. Thank you.

Speaker #4: 谢谢静觉，也感谢大家参加我们的业绩发布会。

Dengfeng Yin: 谢谢俊杰，也感谢大家参加我们的业绩发布会。

Speaker #2: Thank you, Jingjue, and thank you all for joining our earnings call today.

Alicia Guo: Thank you, Junjie, and thank you all for joining our earnings call today.

[Translator]: Thank you, Junjie, and thank you all for joining our earnings call today.

Speaker #4: 首先我来分享一下二季度的整体表现。二季度总收入为人民币34.15亿元，同比增长2.5%，环比下降3.7%。Gap净利润达到了人民币4.65亿元，净利润率为13.6%，相比去年同期的2.3%实现了大幅提升。Non-Gap净利润为人民币4.89亿元，Non-Gap净利润率为14.3%，环比保持稳定。

Dengfeng Yin: 首先我来分享一下二季度的整体表现。二季度总收入为人民币34.15亿元，同比增长8.5%，环比下降3.7%。GAAP净利润达到了人民币4.65亿元，净利润率为13.6%，相比去年同期的2.3%实现了大幅提升。

Dengfeng Yin: Non-GAAP 净利润为人民币4.89亿元，Non-GAAP 净利润率为14.3%，环比保持稳定。

Speaker #2: Let me begin by sharing our overall performance for the second quarter. Total revenue reached RMB 3,415 million, representing a 2.5% increase year over year.

Alicia Guo: Let me begin by sharing our overall performance for Q2. Total revenue reached RMB 3,415 million, representing a 2.5% increase year-over-year, and a 3.7% decrease quarter-over-quarter. GAAP net income was RMB 465 million, representing a net income margin of 13.6%, a substantial improvement from 2.3% in the same period last year. Non-GAAP net income was RMB 489 million. Non-GAAP net margin was 14.3%, stable on a sequential basis.

[Translator]: Let me begin by sharing our overall performance for Q2. Total revenue reached RMB 3,415 million, representing a 2.5% increase year-over-year, and a 3.7% decrease quarter-over-quarter. GAAP net income was RMB 465 million, representing a net income margin of 13.6%, a substantial improvement from 2.3% in the same period last year. Non-GAAP net income was RMB 489 million. Non-GAAP net margin was 14.3%, stable on a sequential basis.

Speaker #2: And a 3.7% decrease quarter over quarter. GAAP net income was RMB 465 million, representing a net income margin of 13.6%. This is a substantial improvement from 2.3% in the same period last year.

Speaker #2: Non-GAAP net income was RMB 489 million. Non-GAAP net margin was 14.3%, stable on a sequential basis.

Speaker #4: 二季度总GMV为人民币76.6亿元，环比降低3.3%。中国区GMV为人民币71.56亿元，环比降低10.5%。海外市场表现突出，GMV达到人民币5.04亿元，环比增长18.2%，同比增长114.3%。继续成为我们重要的增长引擎。

Dengfeng Yin: 二季度总GMV为人民币76.6亿元，环比降低33%。中国区GMV为人民币71.56亿元，环比降低4.5%。海外市场表现突出，GMV达到人民币5.04亿元，环比增长18.2%，同比增长114.3%，继续成为我们重要的增长引擎。

Alicia Guo: Total GMV for the Q2 was RMB 7,660 million, down 3.3% sequentially. Greater China GMV was RMB 7,156 million, down 4.5% sequentially. Overseas markets stood out, with GMV reaching RMB 504 million, up 18.2% sequentially and 114.3% year-over-year, continuing to serve an important growth engine for us.

[Translator]: Total GMV for the Q2 was RMB 7,660 million, down 3.3% sequentially. Greater China GMV was RMB 7,156 million, down 4.5% sequentially. Overseas markets stood out, with GMV reaching RMB 504 million, up 18.2% sequentially and 114.3% year-over-year, continuing to serve an important growth engine for us.

Speaker #2: Total GMV for the second quarter was RMB 7,660 million, down 3.3% sequentially. Greater China GMV was RMB 7,156 million, down 4.5% sequentially. Overseas markets stood out.

Speaker #2: With GMV reaching RMB 504 million, up 18.2% sequentially and 114.3% year over year, it continues to serve as an important growth engine for us.

Speaker #4: 本季度我们继续围绕高质量增长战略，在四个维度持续深化布局。第一，新品投放加速。本季度共计投放17款新品，为历史以来单季上新数量最高，品类已从原液鲜奶茶拓宽至茶特调、柠檬奶、抹茶、吉拉特等系列。呃，其中呢，原液鲜奶茶方面两款经典产品成功回归。夏梦美浓上新首周店日均杯量达到了110杯，杯占比近20%。首次消费会员渗透率也为今年新品最高。另外一支醒思深山回归带动了清明节期间的整体GMV环比增长将近25%，表现也优于去年。

Dengfeng Yin: 本季度我们继续围绕高质量增长战略，在四个维度持续深化布局。第一，新品投放加速。本季度共计投放17款新品，为历史以来单季上新数量最高。品类已从原叶鲜奶茶拓宽至茶特调、柠檬奶、抹茶、Geelato等系列。而其中原叶鲜奶茶方面，两款经典产品成功回归。夏梦玫珑上线首周店日均杯量达到了一百一十杯，杯占比近20%，首次消费会员渗透率也为今年新品最高。另外一支醒狮升杉回归，带动了清明节期间的整体GMV环比增长将近25%，表现也优于去年。

Alicia Guo: This quarter, we continued to advance our high-quality growth strategy across 4 key dimensions. First, we accelerated new product launches. We launched a total of 17 new products this quarter, the highest number in a single quarter in our history. Our offerings have expanded from loose leaf fresh milk tea to include special deals, Lemon Tea Latte, Matcha Latte, Geelato, and other series. Within loose tea fresh milk tea, we successfully brought back 2 classic products. Melon Oolong Milk Tea reached an average of 110 cups per teahouse per day in its first week, with a cup share of nearly 20% and the highest first-time member penetration of any new product this year. The return of Longjing tea latte drove overall GMV up nearly 25% sequentially during the Tomb Sweeping Day period, outperforming last year.

[Translator]: This quarter, we continued to advance our high-quality growth strategy across 4 key dimensions. First, we accelerated new product launches. We launched a total of 17 new products this quarter, the highest number in a single quarter in our history. Our offerings have expanded from loose leaf fresh milk tea to include special deals, Lemon Tea Latte, Matcha Latte, Geelato, and other series. Within loose tea fresh milk tea, we successfully brought back 2 classic products. Melon Oolong Milk Tea reached an average of 110 cups per teahouse per day in its first week, with a cup share of nearly 20% and the highest first-time member penetration of any new product this year. The return of Longjing tea latte drove overall GMV up nearly 25% sequentially during the Tomb Sweeping Day period, outperforming last year.

Speaker #2: This quarter, we continued to advance our high-quality growth strategy across four key dimensions. First, we accelerated new product launches; we launched a total of 17 new products this quarter—the highest number in a single quarter in our history. Our offerings have expanded from loose leaf fresh milk tea to include special deals, lemon tea latte, matcha latte, gelato, and other series.

Speaker #2: Within our loose tea fresh milk tea lineup, we successfully brought back two classic products: melon oolong tea milk, which is rich and averaged 110 cups per teahouse per day in its first week.

Speaker #2: With the cup share of nearly 20% and the highest first-time member penetration of any new product this year, the return of the Longjing Tea Latte drove overall GMV up nearly 25% sequentially during the Tomb-Sweeping Day period, outperforming last year.

Speaker #4: 品类拓展方面，茶特调走走序列精准匹配了周末休闲场景。上新三日店日均杯量达到了124杯，带动了周末GMV涨幅达到双位数，柠檬奶上新期间带动首次消费会员增长了45%，验证了品类延伸对新客获取的拉动力。此外，我们在部分门店试点了gelato，将原液茶与义式冰淇淋供应项结合，截至8月累计落店了达到190家。gelato受到了广大茶友的欢迎，从近期的表现来看，试点门店业绩显著提升。平均线下渠道GMV提升了20%以上，且gelato呈现出更强的拉新能力和沉睡用户的唤醒能力，同时也有效地增加了线下客流。

Dengfeng Yin: 品类拓展方面，茶特调走走系列精准匹配了周末休闲场景。上新三日店日均杯量达到124杯，带动了周末GMV涨幅达到双位数。柠檬奶上新期间带动首次消费会员增长了45%，验证了品类延伸对新客获取的拉动力。此外，我们在部分门店试点了Geelato，将原叶茶与意式冰淇淋工艺相结合。截至8月，累计落店达到190家。Geelato受到了广大茶友的欢迎。从近期的表现来看，试点门店业绩显著提升。平均线下渠道GMV提升了20%以上。且Geelato呈现出更强的拉新能力和沉睡用户的唤醒能力，同时也有效地增加了线下客流。

Alicia Guo: On category expansion, the special deals designed for weekend leisure occasions averaged 124 cups per teahouse per day during its first 3 days and contributed to double-digit weekend GMV growth. The launch of the Lemon Tea Latte also increased the first-time member acquisition by 45% during the launch period, underscoring its effectiveness in attracting new customers. In addition, we piloted Geelato in selected teahouses, combining loose tea leaves with Italian gelato craftsmanship. As of August, Geelato has been introduced in more than 190 teahouses and has been well received by our Chagee friends. Recent pilot store performance indicates meaningful improvements, with average offline channel GMV increasing by more than 20%. Geelato has also demonstrated a strong ability to attract new customers, reactivate dormant members, and increase in-store traffic.

[Translator]: On category expansion, the special deals designed for weekend leisure occasions averaged 124 cups per teahouse per day during its first 3 days and contributed to double-digit weekend GMV growth. The launch of the Lemon Tea Latte also increased the first-time member acquisition by 45% during the launch period, underscoring its effectiveness in attracting new customers. In addition, we piloted Geelato in selected teahouses, combining loose tea leaves with Italian gelato craftsmanship. As of August, Geelato has been introduced in more than 190 teahouses and has been well received by our Chagee friends. Recent pilot store performance indicates meaningful improvements, with average offline channel GMV increasing by more than 20%. Geelato has also demonstrated a strong ability to attract new customers, reactivate dormant members, and increase in-store traffic.

Speaker #2: On category expansion, the special deals designed for weekend leisure occasions averaged 124 cups per teahouse per day during the first three days, and contributed to double-digit weekend GMV growth.

Speaker #2: The launch of the lemon tea latte also increased first-time member acquisition by 45% during the launch period, underscoring its effectiveness in attracting new customers.

Speaker #2: In addition, we piloted gelato in selected teahouses, combining loose tea leaves with Italian gelato craftsmanship. As of August, gelato has been introduced in more than 190 teahouses and has been well received by our Chagee friends.

Speaker #2: Recent pilots' performance indicates meaningful improvement. With average offline channel GMV increasing by more than 20%, Gelato has also demonstrated a strong ability to attract new customers, reactivate dormant members, and increase in-store traffic.

Dengfeng Yin: 第二，营销持续构建高价值品牌内核，深耕品牌质感与文化共鸣，推进了一系列高影响力的合作，探索文化与茶饮相结合的体验升级。例如六月份，我们与阿那亚戏剧节达成战略合作，并于七月开设了首个Chagee Imagine茶空间。我们也联手湖北省博物馆，开设全国首家博物馆主题店，聚焦传统文化与非遗传承，让茶饮成为文化载体。品牌价值与理念清晰传递，不仅构建了与用户的情感连接，更有效转化为会员吸引力与消费粘性。二季度末，我们的注册会员总数已经达到了2.57亿，活跃会员复购率始终保持在43%以上。购买两次以上的会员贡献超过78%的订单量。

Speaker #4: 第二，营销持续构建高价值品牌内核。深耕品牌质感与文化共鸣，推进了一系列高影响力合作，探索文化与茶影像结合的体验升级。例如，6月份我们与阿拉雅西语界达成战略合作，并于7月开设了首个XG Imaging茶空间。我们也联手湖北省博物馆，开设全国首家博物馆主题店，聚焦传统文化与非遗传承，让茶饮成为文化载体。品牌价值与理念清晰传递，不仅构建了与用户的情感连接，更有效转化为会员吸引力与消费粘性。二季度末，我们的注册会员总数已经达到了2.57亿，活跃会员复购率始终保持在13%以上。购买两次以上的会员贡献超过78%的订单量。

Alicia Guo: Second, our marketing continues to build a high value brand core, deepening brand character and cultural resonance through a series of high impact collaborations, exploring upgrades at the intersection of culture and tea. In June, we formed a strategic partnership with the Aranya Theater Festival and opened our first CHAGEE Modern Tea House Imagine tea space in July. We also partnered with the Hubei Provincial Museum to launch the country's first museum-themed tea house, drawing on traditional culture and intangible cultural heritage to position tea as a meaningful cultural medium. By clearly communicating with our brand values and philosophy, we have strengthened emotional connections with consumers and translated that engagement into consumer acquisition and loyalty. As of the end of June, our total registered members reached 257 million.

[Translator]: Second, our marketing continues to build a high value brand core, deepening brand character and cultural resonance through a series of high impact collaborations, exploring upgrades at the intersection of culture and tea. In June, we formed a strategic partnership with the Aranya Theater Festival and opened our first CHAGEE Modern Tea House Imagine tea space in July. We also partnered with the Hubei Provincial Museum to launch the country's first museum-themed tea house, drawing on traditional culture and intangible cultural heritage to position tea as a meaningful cultural medium. By clearly communicating with our brand values and philosophy, we have strengthened emotional connections with consumers and translated that engagement into consumer acquisition and loyalty. As of the end of June, our total registered members reached 257 million.

Speaker #2: Second, our marketing continues to build a high-value brand core, deepening brand character and cultural resonance through a series of high-impact collaborations, exploring upgrades at the intersection of culture and tea.

Speaker #2: In June, we formed a strategic partnership with the Dioraya Theater Festival and opened our first Chagee Imaging tea space in July. We also partnered with the Hubei Provincial Museum to launch the country's first museum-themed teahouse, drawing on traditional culture and intangible cultural heritage to position tea as a meaningful cultural medium.

Speaker #2: By clearly communicating our brand values and philosophy, we have strengthened emotional connections with consumers and translated that engagement into consumer acquisition and loyalty.

Speaker #2: As of the end of June, our total registered members reached 257 million. The repurchase rate among active members remained above 43%, while members who made two or more purchases accounted for more than 78% of total orders.

Alicia Guo: The repurchase rate among active members remained above 43%, while members who made two or more purchases accounted for more than 78% of total orders.

[Translator]: The repurchase rate among active members remained above 43%, while members who made two or more purchases accounted for more than 78% of total orders.

Dengfeng Yin: 第三，组织效能持续释放。本季度我们实现了非GAAP管理费用率为9.1%，较去年同期的13.2%下降了4.1个百分点，环比也下降了2.5个百分点。本季度非GAAP销售及营销费用率从去年同期的10.6%收窄至8.8%，稳定在个位数的健康区间，与一季度8.6%的水平保持基本一致。我们优化费用率并非简单压缩支出，而是提升资源投放效率。执行端，我们变得更快速、更精准、更协同，将有限资源集中投放到最能创造用户价值的方向。

Speaker #4: 第三，组织效能持续释放。本季度我们实现了Non-GAAP管理费用率为9.1%，较去年同期的13.2%下降了4.1个百分点，环比也下降了2.5个百分点。本季度Non-GAAP销售及营销费用率从去年同期的10.6%收窄至8.8%，稳定在个位数的健康区间，与一季度8.6%的水平保持基本一致。我们优化费用率并非简单压缩支出，而是提升资源投放效率。咨询端，我们变得更快速、更精准、更协同，将有限资源集中投放到最能创造用户价值的方向。

Alicia Guo: Third, we continue to benefit from our more streamlined and efficient organizational structure. In Q2, our non-GAAP G&A expense ratio declined to 9.1%, compared with 13.2% in the prior year, and down 2.5 percentage points sequentially. Our non-GAAP sales and marketing expense ratio narrowed down to 8.8% from 10.6% a year ago, remaining within a healthy single digit range and broadly in line with the 8.6% level reported in Q1. These improvements are not simply cutting spending. They reflect a more disciplined and efficient approach to resource allocation. We are executing faster with greater precision and stronger coordination, while focusing our resources on initiatives that create the most value for consumers.

[Translator]: Third, we continue to benefit from our more streamlined and efficient organizational structure. In Q2, our non-GAAP G&A expense ratio declined to 9.1%, compared with 13.2% in the prior year, and down 2.5 percentage points sequentially. Our non-GAAP sales and marketing expense ratio narrowed down to 8.8% from 10.6% a year ago, remaining within a healthy single digit range and broadly in line with the 8.6% level reported in Q1. These improvements are not simply cutting spending. They reflect a more disciplined and efficient approach to resource allocation. We are executing faster with greater precision and stronger coordination, while focusing our resources on initiatives that create the most value for consumers.

Speaker #2: Third, we continue to benefit from our more streamlined and efficient organizational structure. In the second quarter, our non-GAAP G&A expense ratio declined to 9.1%, compared with 13.2% in the prior year, and down 2.5 percentage points sequentially.

Speaker #2: Our non-GAAP sales and marketing expense ratio narrowed down to 8.8% from 10.6% a year ago, remaining within a healthy single-digit range and broadly in line with the 8.6% level reported in the first quarter.

Speaker #2: These improvements are not simply about cutting spending; they reflect a more disciplined and efficient approach to resource allocation. We're executing faster, with greater precision and stronger coordination, while focusing our resources on initiatives that create the most value for consumers.

Speaker #4: 第四，国内门店网络以质量为先，海外扩张保持稳健节奏。截止二季度末，全球门店总计7,639家，较上季度末竞争108家，其中中国区7,240家，海外399家。我们已经进入了8个海外市场，覆盖新加坡、马来西亚、泰国、印尼、菲律宾、越南、美国及韩国。

Dengfeng Yin: 第四，国内门店网络以质量为先，海外扩张保持稳健节奏。截止二季度末，全球门店总计7639家，较上季度末净增108家，其中中国区7240家，海外399家。我们已经进入了八个海外市场，覆盖新加坡、马来西亚、泰国、印尼、菲律宾、越南、美国及韩国。

Alicia Guo: Fourth, we continue to prioritize high quality growth across our tea house network while advancing our tea house expansion. As of the end of June, our global network totaled 7,639 tea houses, representing a net increase of 108 locations from the prior quarter. This includes 7,240 tea houses in Greater China and 399 overseas. We are now present in eight overseas markets, including Singapore, Malaysia, Thailand, Indonesia, the Philippines, Vietnam, the United States, and South Korea.

[Translator]: Fourth, we continue to prioritize high quality growth across our tea house network while advancing our tea house expansion. As of the end of June, our global network totaled 7,639 tea houses, representing a net increase of 108 locations from the prior quarter. This includes 7,240 tea houses in Greater China and 399 overseas. We are now present in eight overseas markets, including Singapore, Malaysia, Thailand, Indonesia, the Philippines, Vietnam, the United States, and South Korea.

Speaker #2: Fourth, we continue to prioritize high-quality growth across our teahouse network while advancing our teahouse expansion. As of the end of June, our global network totaled 7,639 teahouses, representing a net increase of 108 locations from the prior quarter.

Speaker #2: This includes 7,240 teahouses in Greater China and 399 overseas. We're now present in 8 overseas markets, including Singapore, Malaysia, Thailand, Indonesia, the Philippines, Vietnam, the United States, and South Korea.

Speaker #4: 本季度，我们首次进入韩国市场。首尔商店开业前3日总销售备量超过了16,000杯，开业前APP下载量超过了46,000次，5月单店日均备量达到了1,648杯。这一表现充分验证了霸王茶姬品牌的区域竞争力与吸引力。世界茶日期间，我们在亚太地区上线了博雅系列新品，带动前15天亚太区域整体店均备量增长52%，其中越南、泰国、印尼的博雅系列杯占比均超过了30%，展现了核心产品系列的跨区域渗透力。

Dengfeng Yin: 本季度我们首次进入韩国市场，首尔商店开业前三日总销售杯量超过了16000杯。开业前APP下载量超过了46000次，5月单店日均杯量达到了1648杯。这一表现充分验证了霸王茶姬品牌的区域竞争力与吸引力。世界茶日期间，我们在亚太地区上线了伯牙系列新品，带动前15天亚太区域整体店均杯量增长52%，其中越南、泰国、印尼的伯牙系列杯占比均超过了30%。展现了核心产品系列的跨区域竞争力。

Alicia Guo: This quarter marked our first entry into the South Korean market. Our three Seoul tea houses sold over 16,000 cups combined in their first three days, with pre-opening app downloads exceeding 46,000. Average daily cup volume per tea house reached 1,648 in May, demonstrating the strong regional appeal and competitiveness of the Chagee brand. During World Tea Day, we introduced new offerings under the BOYA Tea Latte series across the Asia Pacific region. The series increased average cups sold per tea house across the region by 52% during its first 15 days. In Vietnam, Thailand, and Indonesia, the BOYA Tea Latte series accounted for more than 30% of cup volume, underscoring the cross-market appeal of our core product offerings.

[Translator]: This quarter marked our first entry into the South Korean market. Our three Seoul tea houses sold over 16,000 cups combined in their first three days, with pre-opening app downloads exceeding 46,000. Average daily cup volume per tea house reached 1,648 in May, demonstrating the strong regional appeal and competitiveness of the Chagee brand. During World Tea Day, we introduced new offerings under the BOYA Tea Latte series across the Asia Pacific region. The series increased average cups sold per tea house across the region by 52% during its first 15 days. In Vietnam, Thailand, and Indonesia, the BOYA Tea Latte series accounted for more than 30% of cup volume, underscoring the cross-market appeal of our core product offerings.

Speaker #2: This quarter marked our first entry into the South Korea market. Our three Seoul teahouses sold over 16,000 cups combined in their first three days, with pre-opening app downloads exceeding 46,000.

Speaker #2: Average daily cup volume per teahouse reached 1,648 in May, demonstrating the strong regional appeal and competitiveness of the Chagee brand. During World Tea Day, we introduced new offerings under the Boya Tea Latte series across the Asia-Pacific region.

Speaker #2: The series increased average cups sold per teahouse across the region by 52% during its first 15 days. In Vietnam, Thailand, and Indonesia, the Boya Tea Latte series accounted for more than 30% of cup volume, underscoring the cross-market appeal of our core product offerings.

Speaker #4: 展望未来，我们的方向清晰且坚定。产品端，我们保持稳健的上线节奏，持续拓展新品类，并推进糖、基底乳等原料品质升级，引领健康产品方向。服务端，我们持续优化会员体系与用户体验，门店端，我们坚持中国区以质量优先，海外我们不扩张。同时，我们迭代我们的设备，保证产品质量，提升运营效率。空间环境端，我们持续升级门店差异化设计，让第三空间成为用户愿意停留的场所。品牌端，我们紧贴市场趋势，通过品牌升级、产品一致性、体验优化及培训体系迭代，实现回归茶本质的极致体验。

Dengfeng Yin: 展望未来，我们的方向清晰且坚定。产品端，我们保持稳健的刷新节奏，持续拓展新品类，并推进糖、基底乳等原料品质升级，引领健康产业方向。服务端，我们持续优化会员体系与用户体验。门店端，我们坚持中国区以质量优先，海外稳步扩张。同时，我们迭代我们的设备，保证产品质量，提升运营效率。空间环境端，我们持续升级门店差异化设计，让第三空间成为用户愿意停留的场所。品牌端，我们紧贴市场趋势，通过品牌升级、产品一致性、体验优化及培训体系迭代，实现回归茶本质的极致体验。

Alicia Guo: Looking ahead, we remain focused on a clear set of priorities. On products, we will maintain a consistent launch cadence, expand into new categories, and continue enhancing ingredients, including sugar and dairy bases, to lead the development of healthier tea beverages. On service, we will further optimize our membership program and overall consumer experience. Across our teahouse network, we will prioritize high quality growth in Greater China while expanding overseas in a disciplined manner. We will also upgrade equipment to help ensure product consistency and improve operating efficiency. On experience, we will continue to differentiate our teahouses through thoughtful design, creating a third space where consumers genuinely want to spend time. Finally, on brand, we will stay closely aligned with market trends and continue elevating the tea experience through brand enhancements, consistent product quality, improved consumer experience, and an evolving training system.

[Translator]: Looking ahead, we remain focused on a clear set of priorities. On products, we will maintain a consistent launch cadence, expand into new categories, and continue enhancing ingredients, including sugar and dairy bases, to lead the development of healthier tea beverages. On service, we will further optimize our membership program and overall consumer experience. Across our teahouse network, we will prioritize high quality growth in Greater China while expanding overseas in a disciplined manner. We will also upgrade equipment to help ensure product consistency and improve operating efficiency. On experience, we will continue to differentiate our teahouses through thoughtful design, creating a third space where consumers genuinely want to spend time. Finally, on brand, we will stay closely aligned with market trends and continue elevating the tea experience through brand enhancements, consistent product quality, improved consumer experience, and an evolving training system.

Speaker #2: Looking ahead, we remain focused on a clear set of priorities. On products, we will maintain a consistent launch cadence, expand into new categories, and continue enhancing ingredients.

Speaker #2: Including sugar and dairy bases, to lead the development of healthier tea beverages. On service, we will further optimize our membership program and overall consumer experience.

Speaker #2: Across our teahouse network, we will prioritize high-quality growth in Greater China, while expanding overseas in a disciplined manner. We will also upgrade equipment to help ensure product consistency and improve operating efficiency.

Speaker #2: On experience, we will continue to differentiate our teahouses through thoughtful design, creating a third space where consumers genuinely want to spend time. Finally, on brand, we will stay closely aligned with market trends and continue elevating the tea experience through brand enhancements, consistent product quality, and improved consumer experience.

Speaker #2: In an evolving training system.

Speaker #4: 我的发言就到这里。接下来有请我们CFO为大家详细解读本季度的财务细节。谢谢大家。

Dengfeng Yin: 我的发言就到这里。接下来有请我们的CFO为大家详细解读本季度的财务细节。谢谢大家。

Alicia Guo: That concludes my remarks. Now, let me turn the call over to our CFO, Aaron, who will walk you through the detailed financials. Thank you.

[Translator]: That concludes my remarks. Now, let me turn the call over to our CFO, Aaron, who will walk you through the detailed financials. Thank you.

Speaker #2: That concludes my remarks. Now, let me turn the call over to our CFO, Aaron, who will walk you through the detailed financials. Thank you.

Speaker #3: Thank you, Aiden, and hello everyone. Thank you for joining our earnings call. Before we begin, please note that all amounts are in RMB, and all comparisons are on a year-over-year basis unless otherwise stated.

Hongfei Huang: Thank you, Aiden, and hello everyone. Thank you for joining our earnings call. Before we begin, please note that all amounts are in RMB and all comparisons are on a year-over-year basis unless otherwise stated. As Junjie and Aiden outlined, the Q2 presented a softer macro backdrop and a more challenging competitive landscape across the industry. Our results reflect that environment. What I want to emphasize is that even as top-line growth moderated, we maintained the operating discipline we established earlier this year, and our profitability held largely intact. We view this as evidence that our cost structure and organization efficiency gains are durable, not a one-time, and that they give us a stable foundation to keep executing our strategic priority regardless of the external environment. With that context, let me walk through the quarter in detail.

Aaron Huang: Thank you, Aiden, and hello everyone. Thank you for joining our earnings call. Before we begin, please note that all amounts are in RMB and all comparisons are on a year-over-year basis unless otherwise stated. As Junjie and Aiden outlined, the Q2 presented a softer macro backdrop and a more challenging competitive landscape across the industry. Our results reflect that environment. What I want to emphasize is that even as top-line growth moderated, we maintained the operating discipline we established earlier this year, and our profitability held largely intact. We view this as evidence that our cost structure and organization efficiency gains are durable, not a one-time, and that they give us a stable foundation to keep executing our strategic priority regardless of the external environment. With that context, let me walk through the quarter in detail.

Speaker #3: As Junji and Aiden outlined, the second quarter presented a softer macro backdrop and a more challenging competitive landscape across the industry. Our results reflect that environment.

Speaker #3: What I want to emphasize is that, even as top-line growth moderated, we maintained the operating discipline we established earlier this year, and our profitability held largely intact.

Speaker #3: We view this as evidence that our cost structure and organizational efficiency gains are durable—not a one-time event—and that they give us a stable foundation to keep executing our strategic priorities regardless of the external environment.

Speaker #3: With that context, let me walk through the quarter in detail. Total GMV was $7,660.3 million in the second quarter, down 3.3% sequentially from $7,917.8 million in the first quarter.

Hongfei Huang: Total GMV was RMB 7,660.3 million in the Q2, down 3.3% sequentially from RMB 7,917.8 million in the Q1. As of 30 June 2026, our teahouse network totaled 7,639 locations across Greater China and overseas, up 8.5% from 7,038 a year ago. Of these, 6,756 were franchisee teahouses and 883 were company-owned teahouses. In Greater China, average monthly GMV per teahouse was RMB 338,259 in the Q2, compared to RMB 356,080 in the Q1. Meanwhile, overseas total GMV grew 114.3% year-over-year and 18.2% quarter-over-quarter, from RMB 426.4 million in the Q1 to RMB 504.0 million in this quarter. Overseas markets remains our clearest growth engine. Same-store GMV growth in Greater China improved by 7 percentage points year-over-year and was broadly flat sequentially. Overall, same-store GMV growth improved by 6.9 percentage points from a year ago and remained relatively stable compared with the prior quarter.

Aaron Huang: Total GMV was RMB 7,660.3 million in the Q2, down 3.3% sequentially from RMB 7,917.8 million in the Q1. As of 30 June 2026, our teahouse network totaled 7,639 locations across Greater China and overseas, up 8.5% from 7,038 a year ago. Of these, 6,756 were franchisee teahouses and 883 were company-owned teahouses. In Greater China, average monthly GMV per teahouse was RMB 338,259 in the Q2, compared to RMB 356,080 in the Q1. Meanwhile, overseas total GMV grew 114.3% year-over-year and 18.2% quarter-over-quarter, from RMB 426.4 million in the Q1 to RMB 504.0 million in this quarter. Overseas markets remains our clearest growth engine. Same-store GMV growth in Greater China improved by 7 percentage points year-over-year and was broadly flat sequentially. Overall, same-store GMV growth improved by 6.9 percentage points from a year ago and remained relatively stable compared with the prior quarter.

Speaker #3: As of June 30, 2026, our teahouse network totaled 7,639 locations across Greater China and overseas, up 8.5% from 7,038 a year ago. Of these, 6,756 were franchisee teahouses and 883 were company-owned teahouses.

Speaker #3: In Greater China, average monthly GMV per teahouse was 338,259 in the second quarter, compared to 356,080 in the first quarter. Meanwhile, overseas, total GMV grew 114.3% year over year, and 18.2% quarter over quarter.

Speaker #3: From 426.4 million in the first quarter to 504.0 million in this quarter. Overseas, markets remain our clearest growth engine. Same-store GMV growth in Greater China improved by 7 percentage points year over year, and was broadly flat sequentially.

Speaker #3: Overall, same-store GMV growth improved by 6.9 percentage points from a year ago and remained relatively stable compared with the prior quarter. On the revenue line, our net revenues increased by 2.5% year over year to RMB 3,414.6 million in the second quarter.

Hongfei Huang: On the revenue line, our net revenues increased by 2.5% year-over-year to CNY 3,414.6 million in the second quarter. Net revenue from franchisee tea houses were CNY 2,474 million, representing 72.5% of total net revenue, compared to CNY 3,020.7 million a year ago. Net revenue from company-owned tea houses were CNY 940.6 million, up 202.2% from CNY 311.2 million a year ago, mainly as a result of continued development of the company-owned tea houses network across Greater China and overseas markets. Turning to margin, our gross profit, calculated by excluding cost of material, storage, and logistics from net revenue, reached CNY 1,843.4 million this quarter, resulting in a gross margin of 54%, flat year-over-year. Our organizational enhancements drove a meaningful year-over-year decline in operating expenses. Share-based compensation expenses totaled CNY 23.9 million in the quarter and reflects our focus on retaining and motivating employees while aligning their interests with those of shareholders.

Aaron Huang: On the revenue line, our net revenues increased by 2.5% year-over-year to CNY 3,414.6 million in the second quarter. Net revenue from franchisee tea houses were CNY 2,474 million, representing 72.5% of total net revenue, compared to CNY 3,020.7 million a year ago. Net revenue from company-owned tea houses were CNY 940.6 million, up 202.2% from CNY 311.2 million a year ago, mainly as a result of continued development of the company-owned tea houses network across Greater China and overseas markets.

Speaker #3: Net revenue from franchised teahouses was RMB 2,474 million, representing 72.5% of total net revenue, compared to RMB 3,020.7 million a year ago. Net revenue from company-owned teahouses was RMB 940.6 million.

Speaker #3: Up 202.2% from 311.2 million a year ago, mainly as a result of continued development of the company-owned teahouses network across Greater China and overseas markets.

Aaron Huang: Turning to margin, our gross profit, calculated by excluding cost of material, storage, and logistics from net revenue, reached CNY 1,843.4 million this quarter, resulting in a gross margin of 54%, flat year-over-year. Our organizational enhancements drove a meaningful year-over-year decline in operating expenses. Share-based compensation expenses totaled CNY 23.9 million in the quarter and reflects our focus on retaining and motivating employees while aligning their interests with those of shareholders.

Speaker #3: Turning to margin, our gross profit, calculated by excluding the cost of material storage and logistics from net revenue, reached $1,843.4 million this quarter, resulting in a gross margin of 54%, which is flat year over year.

Speaker #3: Our organizational enhancements drove a meaningful year-over-year decline in operating expenses. Share-based compensation expenses totaled $23.9 million in the quarter and reflect our focus on retaining and motivating employees while aligning their interests with those of shareholders.

Speaker #3: To provide greater clarity on our underlying operational performance, we will continue to reference non-GAAP operating results, with full reconciliations available in our earnings release and Form 6-K.

Hongfei Huang: To provide greater clarity on underlying operational performance, we will continue to reference Non-GAAP operating results with full reconciliations available in our earnings release and Form 6-K. Operating income was CNY 524.7 million, representing an operating income margin of 15.4%, increased significantly from 3.2% in the same period of a year ago, benefiting from our strategic organizational adjustment and continued disciplined cost management. Excluding share-based compensation expenses, Non-GAAP operating income was CNY 548.6 million, representing a 16.1% margin compared to a 17.1% margin in the first quarter of 2026. Operating costs for company-owned tea houses were CNY 566.8 million, up 207.8% from CNY 184.1 million a year ago, consistent with the continued build-out of our company-owned network. Other operating costs decreased by 33.3% to CNY 115.8 million, largely due to a decrease of RMB 30.2 million in our payroll expenses, driven by organizational structure enhancement and headcount optimization.

Aaron Huang: To provide greater clarity on underlying operational performance, we will continue to reference Non-GAAP operating results with full reconciliations available in our earnings release and Form 6-K. Operating income was CNY 524.7 million, representing an operating income margin of 15.4%, increased significantly from 3.2% in the same period of a year ago, benefiting from our strategic organizational adjustment and continued disciplined cost management. Excluding share-based compensation expenses, Non-GAAP operating income was CNY 548.6 million, representing a 16.1% margin compared to a 17.1% margin in the first quarter of 2026. Operating costs for company-owned tea houses were CNY 566.8 million, up 207.8% from CNY 184.1 million a year ago, consistent with the continued build-out of our company-owned network. Other operating costs decreased by 33.3% to CNY 115.8 million, largely due to a decrease of RMB 30.2 million in our payroll expenses, driven by organizational structure enhancement and headcount optimization.

Speaker #3: Operating income was $524.7 million, representing an operating income margin of 15.4%, which increased significantly from 3.2% in the same period a year ago, benefiting from our strategic organizational adjustment and continued disciplined cost management.

Speaker #3: Excluding share-based compensation expenses, non-GAAP operating income was $548.6 million, representing a 16.1% margin, compared to a 17.1% margin in the first quarter of 2026.

Speaker #3: Operating costs for company-owned teahouses were $566.8 million, up 207.8% from $184.1 million a year ago. This is consistent with the continued build-out of our company-owned network.

Speaker #3: Other operating costs decreased by 33.3% to 115.8 million, largely due to a decrease of RMB 30.2 million in payroll expenses, driven by organizational structure enhancement and headcount optimization.

Hongfei Huang: On a Non-GAAP basis, other operating costs accounts for 3.4% of revenues compared to 4.7% a year ago and 4.3% in the first quarter. Sales and marketing expenses for the quarter were CNY 301.5 million, down 21.7% from CNY 385 million a year ago, mainly due to a more streamlined branding and marketing team together with improved efficiency in advertising placement and precision marketing. On a Non-GAAP basis, sales and marketing expenses represented 8.8% of revenue compared to 10.6% a year ago and 8.6% in the previous quarter. General and administrative expenses reached CNY 334.5 million, down 64.6% year-over-year from CNY 944.6 million. The decrease primarily reflected lower share-based compensation expenses, reduced payroll, facility, and professional service costs, and absence of IPO-related expenses incurred in the prior year period.

Aaron Huang: On a Non-GAAP basis, other operating costs accounts for 3.4% of revenues compared to 4.7% a year ago and 4.3% in the first quarter. Sales and marketing expenses for the quarter were CNY 301.5 million, down 21.7% from CNY 385 million a year ago, mainly due to a more streamlined branding and marketing team together with improved efficiency in advertising placement and precision marketing. On a Non-GAAP basis, sales and marketing expenses represented 8.8% of revenue compared to 10.6% a year ago and 8.6% in the previous quarter. General and administrative expenses reached CNY 334.5 million, down 64.6% year-over-year from CNY 944.6 million. The decrease primarily reflected lower share-based compensation expenses, reduced payroll, facility, and professional service costs, and absence of IPO-related expenses incurred in the prior year period.

Speaker #3: Our non-GAAP basis other operating costs accounted for 3.4% of revenues, compared to 4.7% a year ago, and 4.3% in the first quarter. Sales and marketing expenses for the quarter were $301.5 million, down 21.7% from $385 million a year ago.

Speaker #3: Mainly due to a more streamlined branding and marketing team, together with improved efficiency in advertising placement and precision marketing. Our non-GAAP basis sales and marketing expenses represented 8.8% of revenue, compared to 10.6% a year ago, and 8.6% in the previous quarter.

Speaker #3: General and administrative expenses reached $334.5 million, down 64.6% year over year. This decrease primarily reflected lower share-based compensation expenses, reduced payroll, facility and professional service costs, and the absence of IPO-related expenses incurred in the prior year period.

Hongfei Huang: On a Non-GAAP basis, G&A expenses represented 9.1% of revenues, compared to 13.2% in the same period a year ago and 11.6% in the first quarter. Income tax expenses represented 20% of income before income tax, compared to 62.1% a year ago and 21.2% in the first quarter. The year-over-year normalization primarily reflecting a reduced impact from share-based compensation expenses. Notably, we continued to deliver profitability on both GAAP and a Non-GAAP basis, extending our track record to 14 consecutive quarters of positive net income. GAAP net income was CNY 464.8 million. Non-GAAP net income, excluding CNY 23.9 million of share-based compensation expenses, was CNY 488.7 million, with a Non-GAAP net margin of 14.3% compared to 18.9% a year ago and flat sequentially. For the second quarter, basic and diluted net income per ordinary share was RMB 2.44 and RMB 2.42 respectively.

Aaron Huang: On a Non-GAAP basis, G&A expenses represented 9.1% of revenues, compared to 13.2% in the same period a year ago and 11.6% in the first quarter. Income tax expenses represented 20% of income before income tax, compared to 62.1% a year ago and 21.2% in the first quarter. The year-over-year normalization primarily reflecting a reduced impact from share-based compensation expenses. Notably, we continued to deliver profitability on both GAAP and a Non-GAAP basis, extending our track record to 14 consecutive quarters of positive net income. GAAP net income was CNY 464.8 million. Non-GAAP net income, excluding CNY 23.9 million of share-based compensation expenses, was CNY 488.7 million, with a Non-GAAP net margin of 14.3% compared to 18.9% a year ago and flat sequentially. For the second quarter, basic and diluted net income per ordinary share was RMB 2.44 and RMB 2.42 respectively.

Speaker #3: Our non-GAAP basis G&A expenses represented 9.1% of revenues, compared to 13.2% in the same period a year ago, and 11.6% in the first quarter.

Speaker #3: Income tax expenses represented 20% of income before income tax, compared to 62.1% a year ago and 21.2% in the first quarter. The year-over-year normalization primarily reflects a reduced impact from share-based compensation expenses.

Speaker #3: Notably, we continued to deliver profitability on both GAAP and non-GAAP bases, extending our track record to 14 consecutive quarters of positive net income. GAAP net income was $464.8 million; non-GAAP net income, excluding $23.9 million of share-based compensation expenses, was $488.7 million.

Speaker #3: With a non-GAAP net margin of 14.3%, compared to 18.9% a year ago and flat sequentially. For the second quarter, basic and diluted net income per ordinary share was RMB 2.44 and RMB 2.42, respectively.

Hongfei Huang: On a Non-GAAP basis, basic and diluted net income per ordinary share was RMB2.57 and RMB2.54, respectively. Turning to liquidity, we ended the quarter with RMB6,795.5 million in cash and cash equivalent restricted cash and time deposits. This reflects the impact of our share repurchase program commencing on 1 June 2026, alongside our continued investment in tea house network. We maintain a healthy balance sheet that gives us flexibility to keep executing our strategic priorities while returning capital to shareholders. As we move through the remainder of 2026, we will execute against our new product pipelines, enhancement memberships and service experience, and maintain a focus on quality as we expand our tea house network in Greater China and overseas. Our confidence in the company's long-term value remains firm, and we are committed to return value to our shareholders in a meaningful way. With that, we are ready to begin Q&A.

Aaron Huang: On a Non-GAAP basis, basic and diluted net income per ordinary share was RMB2.57 and RMB2.54, respectively. Turning to liquidity, we ended the quarter with RMB6,795.5 million in cash and cash equivalent restricted cash and time deposits. This reflects the impact of our share repurchase program commencing on 1 June 2026, alongside our continued investment in tea house network. We maintain a healthy balance sheet that gives us flexibility to keep executing our strategic priorities while returning capital to shareholders. As we move through the remainder of 2026, we will execute against our new product pipelines, enhancement memberships and service experience, and maintain a focus on quality as we expand our tea house network in Greater China and overseas. Our confidence in the company's long-term value remains firm, and we are committed to return value to our shareholders in a meaningful way. With that, we are ready to begin Q&A.

Speaker #3: Our non-GAAP basis basic and diluted net income per ordinary share was RMB 2.57 and RMB 2.54, respectively. Turning to liquidity, we ended the quarter with RMB 6,795.5 million in cash and cash equivalents, restricted cash, and time deposits.

Speaker #3: This reflects the impact of our share repurchase program commencing on June 1, 2026, alongside our continued investment in the teahouse network. We maintain a healthy balance sheet that gives us flexibility to keep executing our strategic priorities while returning capital to shareholders.

Speaker #3: As we move through the remainder of 2026, we will execute against our new product pipeline enhancements, memberships, and the service experience, and maintain a focus on quality as we expand our teahouse network in Greater China and overseas.

Speaker #3: Our confidence in the company's long-term value remains firm, and we are committed to returning value to our shareholders in a meaningful way. With that, we are ready to begin Q&A.

Speaker #1: Thank you, Aaron. We received a number of questions ahead of today's call. We will now address some of the key topics raised. Our first question relates to the outlook for the second half of the year.

Alicia Guo: Thank you, Aaron. We received a number of questions ahead of today's call. We will now address some of the key topics raised. Our first question relates to the outlook of the H2 of the year. How does management view the H2 of the year amid the current competitive market environment? Our CEO, Junjie, will address this question. Thank you for the question. As we just shared, the market environment has changed significantly, and competition in the industry has become more intense. We have always believed that the more complex the market becomes, the more important high-quality growth is. We see 2026 as a year of adjustment and stabilization. In Q1, we completed the organizational restructuring and conducted a systematic review of our growth strategy. In Q2, we have started to explore areas such as new product category expansion and user experience upgrades.

Speaker #1: How does management view the second half of the year amid the current competitive market environment? Our CEO, Junjie, will address this question.

Speaker #2: 好的。谢谢大家的提问。正如我们刚刚分享的，当前市场环境确实发生了深刻的变化。行业竞争也越发是更加激烈了，但我们始终还是认为市场越复杂，越凸显了高质量增长的战略价值。我们将2026年其实定位为我们调整和企业企稳之年。一季度我们完成了组织架构调整和增长战略的系统性梳理，二季度我们在新品的品类扩张和用户体验方面进行了全面升级和多维度的探索与验证。今年的核心任务并非追求规模上的高速扩展，而是为下一阶段的可持续增长筑牢根基。

Speaker #1: Thanks for the question. As we just shared, the market environment has changed significantly, and competition in the industry has become more intense. But we have always believed that the more complex the market becomes, the more important high-quality growth is.

Speaker #1: We see 2026 as a year of adjustment and stabilization. In Q1, we completed the organizational restructuring and conducted a systematic review of our growth strategy.

Speaker #1: In Q2, we have started to explore areas such as new product category expansion and user experience upgrades. Our core objective this year is not to pursue rapid expansion in scale, but to build a stronger foundation for sustainable growth in the next stage.

Alicia Guo: Our core objective this year is not to pursue rapid expansion in scale, but to build a stronger foundation for sustainable growth in the next stage. As we enter the H2 of the year, our work will become more focused and practical. Along the main line of adjustment and exploration, we will gradually implement the experience and results accumulated in the H1 of the year. We will do both the solid and the long-term. No matter how the external environment changes, we will still return to the essence, make good products, and focus on doing everything that users truly care about.

Speaker #2: 所以进入到下半年，我们的工作将更加聚焦和务实，沿着调整与探索的主线，我们将把上半年积累的经验和成果逐一落地，坐实也做细。无论外部环境如何变化，我们都还是会回归到本质，做好产品，专注做好用户真正关心的每件事情。我们对下半年的稳健发展充满信心，大家也拭目以待。谢谢。

Junjie Zhang: 我们对下半年的稳健发展充满信心，大家也拭目以待。谢谢。

Alicia Guo: In the H2, our work will become more focused and practical. Along the direction of adjustment and exploration, we will put into execution the results and learnings from the H1 one by one. No matter how external environment changes, we will stay focused on the fundamentals, making good products and doing the things that matter most to our members. We remain confident in steady development in the H2. Our next question relates to same-store trends. Could you share how same-store have trended so far in the Q3? Our COO, Aiden, will address this question.

[Translator]: In the H2, our work will become more focused and practical. Along the direction of adjustment and exploration, we will put into execution the results and learnings from the H1 one by one. No matter how external environment changes, we will stay focused on the fundamentals, making good products and doing the things that matter most to our members. We remain confident in steady development in the H2. Our next question relates to same-store trends. Could you share how same-store have trended so far in the Q3? Our COO, Aiden, will address this question.

Speaker #1: In the second half, our work will become more focused and practical. Along the direction of adjustment and exploration, we'll put into execution the results and learnings from the first half.

Speaker #1: One by one. No matter how the external environment changes, we'll stay focused on the fundamentals: making good products and doing the things that matter most to our members. We remain confident in steady development in the second half.

Speaker #1: Our next question relates to same-store trends. Could you share how same-store trends have been so far in the third quarter? Our COO, Aiden, will address this question.

Dengfeng Yin: 感谢提问。三季度以来，我们看到积极的回暖信号。七月份同店已呈现出低个位数的下滑，较上半年明显收窄了。截至目前的数据来看，八月份同店有望实现同比转正。这一趋势的改善充分说明我们此前战略调整的成效正在逐步凸显。

Aaron Huang: 感谢提问。三季度以来，我们看到积极的回暖信号。七月份同店已呈现出低个位数的下滑，较上半年明显收窄了。截至目前的数据来看，八月份同店有望实现同比转正。这一趋势的改善充分说明我们此前战略调整的成效正在逐步凸显。

Speaker #3: 感谢提问。三季度以来，我们看到积极的回弹信号。7月份同店已呈现出低个位数的下滑，较上半年明显收窄了。截止目前的数据来看，8月份同店有望实现同比转正。这一趋势的改善充分说明，我们此前战略调整的成效正在逐步兑现。

Speaker #1: Thanks for the question. Since the start of Q3, we have seen positive signs of recovery. Same-store sales in July showed a low single-digit decline, representing a meaningful improvement from the first half.

Alicia Guo: Thanks for the question. Since the start of Q3, we have seen positive signs of recovery. Same-store sales in July showed a low single-digit decline, representing a meaningful improvement from the H1. Based on trends so far, we expect same-store sales in August to turn positive year-over-year. We believe the improvement reflects that the benefit of our earlier strategic adjustments are gradually coming through.

[Translator]: Thanks for the question. Since the start of Q3, we have seen positive signs of recovery. Same-store sales in July showed a low single-digit decline, representing a meaningful improvement from the H1. Based on trends so far, we expect same-store sales in August to turn positive year-over-year. We believe the improvement reflects that the benefit of our earlier strategic adjustments are gradually coming through.

Speaker #1: Based on trends so far, we expect same-store sales in August to turn positive year-over-year. We believe this improvement reflects that the benefit of our earlier strategic adjustments is gradually coming through.

Speaker #3: 具体而言，首先是新品策略的持续贡献。三季度我们仍按延续的二季度的上行节奏，推出香槟芭乐桃、柠檬奶等多款新产品，并复推了一骑红尘、清末光阴等人气大单款。同时，由于三季度正值限制茶饮的消费旺季，我们近期推出的新品，如 gelato、茶茶条，也更适合夏季高温天气，有效地拉动了线下流量和整体业绩。

Dengfeng Yin: 具体而言，首先是新品策略的持续贡献。三季度我们仍延续了二季度的上线节奏，推出香槟芭乐桃、柠檬奶等多款新产品，并复推了一骑红尘、青沫观音等人气大单款。同时，由于三季度正值现制茶饮的消费旺季，我们近期推出的新品如Geelato、茶特调，也更适合夏季高温天气，有效地拉动了线下流量和整体业绩。

Aaron Huang: 具体而言，首先是新品策略的持续贡献。三季度我们仍延续了二季度的上线节奏，推出香槟芭乐桃、柠檬奶等多款新产品，并复推了一骑红尘、青沫观音等人气大单款。同时，由于三季度正值现制茶饮的消费旺季，我们近期推出的新品如Geelato、茶特调，也更适合夏季高温天气，有效地拉动了线下流量和整体业绩。

Alicia Guo: There are a few drivers behind this trend. First, our new product strategy continues to contribute. In Q3, we maintained the pace of new launches from Q2, introducing several new products including Champagne Guava Peach and Lemon Tea Latte, while also relaunching popular bestsellers such as Lychee Black Tea and Tie Guan Yin Milk Tea. At the same time, since Q3 falls in peak season for tea consumption, recently launched products such as Geelato and special deals are also better suited to the summer heat, effectively driving in-store traffic and overall performance.

[Translator]: There are a few drivers behind this trend. First, our new product strategy continues to contribute. In Q3, we maintained the pace of new launches from Q2, introducing several new products including Champagne Guava Peach and Lemon Tea Latte, while also relaunching popular bestsellers such as Lychee Black Tea and Tie Guan Yin Milk Tea. At the same time, since Q3 falls in peak season for tea consumption, recently launched products such as Geelato and special deals are also better suited to the summer heat, effectively driving in-store traffic and overall performance.

Speaker #1: There are a few drivers behind this trend. First, our new product strategy continues to contribute. In Q3, we maintained the pace of new launches from Q2, introducing several new products.

Speaker #1: Including Guava Peach Iced Tea and Lime Tea Latte, while also relaunching popular bestsellers such as Lychee Black Tea Milk Tea and 铁观音 Milk Tea.

Speaker #1: At the same time, since Q3 falls in the peak season for tea consumption, recently launched products such as gelato and special deals are also better suited to the summer heat.

Speaker #1: Effectively driving in-store traffic and overall performance.

Speaker #3: 其次是门店服务体现了持续新进。我们始终强调回归本质。今年以来，持续在门店端打磨服务细节，提升出品效率，强化用户体验。我们将这些看似微小的细节落到实处，转化为实实在在的用户复购与口碑。

Dengfeng Yin: 其次是门店服务体验的持续精进。我们始终强调回归本质，今年以来持续在门店端打磨服务细节，提升出品效率，强化用户体验。我们将这些看似微小的细节落到实处，转化为实实在在的用户复购与口碑。

Aaron Huang: 其次是门店服务体验的持续精进。我们始终强调回归本质，今年以来持续在门店端打磨服务细节，提升出品效率，强化用户体验。我们将这些看似微小的细节落到实处，转化为实实在在的用户复购与口碑。

Alicia Guo: Second, we continue to refine in-store service and customer experience. We have consistently emphasized a return to fundamentals, and throughout this year, we have continued to refine service details at the teahouse level, improving preparation efficiency and strengthening customer experience. We are translating these seemingly small details into real, tangible outcomes in the form of repeat purchases and word of mouth.

[Translator]: Second, we continue to refine in-store service and customer experience. We have consistently emphasized a return to fundamentals, and throughout this year, we have continued to refine service details at the teahouse level, improving preparation efficiency and strengthening customer experience. We are translating these seemingly small details into real, tangible outcomes in the form of repeat purchases and word of mouth.

Speaker #1: Second, we continue to refine in-store service and customer experience. We have consistently emphasized a return to fundamentals, and throughout this year we have continued to refine service details at the tea house level, improving preparation efficiency and strengthening the customer experience.

Speaker #1: We're translating these seemingly small details into real, tangible outcomes in the form of repeat purchases and word-of-mouth.

Speaker #3: 整体来看，7月和8月的经营改善趋势让我们对下半年的同店趋势更有信心。虽然外部市场环境仍存在不确定性，但我们的产品储备更加扎实，赚钱方向更加坚定。我们相信这一回暖趋势具备可持续性。

Dengfeng Yin: 整体来看，7月和8月的经营改善趋势，让我们对下半年的同店趋势更有信心。虽然外部市场环境仍存在不确定性，但我们的产品储备更加扎实，战略方向更加坚定。我们相信这一回暖趋势具备可持续性。

Aaron Huang: 整体来看，7月和8月的经营改善趋势，让我们对下半年的同店趋势更有信心。虽然外部市场环境仍存在不确定性，但我们的产品储备更加扎实，战略方向更加坚定。我们相信这一回暖趋势具备可持续性。

Speaker #1: Overall, the improving trends in July and August gave us greater confidence in same-store performance for the second half of the year, while uncertainty remains in the external environment.

Alicia Guo: Overall, the improving trends in July and August gave us greater confidence in same-store performance for the H2 of the year. While uncertainty remains in the external environment, our product pipeline is stronger and our strategic direction is clearer, and we believe this recovery is sustainable. The last question relates to payout. Does the company have any further payout plans? Our CFO, Aaron, will address this question.

Speaker #1: Our product pipeline is stronger, and our strategic direction is clearer. We believe this recovery is sustainable. The last question relates to payout. Does the company have any further payout plans?

Speaker #1: Our CFO, Erin, will address this question.

Speaker #3: 感谢大家的提问。我们实际上一直向股东回报作为资本配置战略的核心考量之一。在去年四季度的时候，我们实施了一次总额为1.77亿美元的特别分红，且充分体现了公司在回馈股东的诚意与决心。

Hongfei Huang: 感谢大家的提问。我们实际上一直将股东回报作为资本配置战略的核心考量之一。在去年四季度的时候，我们实施了一次总额为1.77亿美元的特别分红，也充分体现了公司在回馈股东的诚意与决心。

Aaron Huang: 感谢大家的提问。我们实际上一直将股东回报作为资本配置战略的核心考量之一。在去年四季度的时候，我们实施了一次总额为1.77亿美元的特别分红，也充分体现了公司在回馈股东的诚意与决心。

Speaker #1: Thanks for the question. Shareholder returns have always been one of the key considerations in our capital allocation strategy. In the fourth quarter of last year, we paid a special dividend of $177 million, which reflects our commitment to returning value to shareholders.

Alicia Guo: Thanks for the question. Shareholder returns have always been one of the key considerations in our capital allocation strategy. In Q4 of last year, we paid a special dividend of USD 177 million, which reflects our commitment to returning value to shareholders.

[Translator]: Thanks for the question. Shareholder returns have always been one of the key considerations in our capital allocation strategy. In Q4 of last year, we paid a special dividend of USD 177 million, which reflects our commitment to returning value to shareholders.

Speaker #3: 在进入2026年，随着组织架构优化和营运效能的持续提升，我们的自由现金流状况已保持健康。这为我们探索更为常态化、可持续的股东回报机制奠定了坚实的基础。目前董事会和管理层正结合公司中长期的战略规划，海内外业务发展的资金需求，以及市场环境变化，积极审慎地研究包括常规分红在内的多元化回报方案。我们充分认识到，在保持高质量增长的同时，让股东切实分享公司的经营成果至关重要。所以持续提升股东回报水平是我们坚定不移的方向。管理层目前正在讨论具体方案，我们会适时向董事会呈报具体情况，并在其审阅批准后向市场披露详情。

Hongfei Huang: 在进入2026年，随着组织架构优化和运营效能的持续提升，我们的自由现金流状况已保持健康，这为我们探索更为常态化、可持续的股东回报机制奠定了坚实的基础。目前，董事会和管理层正结合公司中长期的战略规划、海内外业务发展的资金需求，以及市场环境变化，积极审慎地研究包括常规分红在内的多元化回报方案。我们充分认识到，在保持高质量增长的同时，让股东切实分享公司的经营成果至关重要。所以持续提升股东回报水平是我们坚定不移的方向。管理层目前正在讨论具体方案，我们会适时向董事会呈报具体情况，并在其审阅批准后向市场披露详情。

Aaron Huang: 在进入2026年，随着组织架构优化和运营效能的持续提升，我们的自由现金流状况已保持健康，这为我们探索更为常态化、可持续的股东回报机制奠定了坚实的基础。目前，董事会和管理层正结合公司中长期的战略规划、海内外业务发展的资金需求，以及市场环境变化，积极审慎地研究包括常规分红在内的多元化回报方案。我们充分认识到，在保持高质量增长的同时，让股东切实分享公司的经营成果至关重要。所以持续提升股东回报水平是我们坚定不移的方向。管理层目前正在讨论具体方案，我们会适时向董事会呈报具体情况，并在其审阅批准后向市场披露详情。

Alicia Guo: Entering 2026, with the organizational optimization and continued improvement in operating efficiency, our free cash flow has remained healthy. This provides a solid foundation for us to explore a more regular and sustainable shareholder return mechanism. Currently, the board and management are actively and prudently reviewing different options, including regular dividends, while considering our medium to long-term strategy, funding needs for Tea House development, and changes in the market environment. We fully understand that it is important for shareholders to share in the results of the company while we maintain high quality growth. Therefore, continuously enhancing shareholder returns remains a firm direction for us. Management team is currently evaluating the specific details. We will bring a proposal to the board at the appropriate time, subject to the board review and approval, provide an update to the market. That concludes today's Q&A session.

[Translator]: Entering 2026, with the organizational optimization and continued improvement in operating efficiency, our free cash flow has remained healthy. This provides a solid foundation for us to explore a more regular and sustainable shareholder return mechanism. Currently, the board and management are actively and prudently reviewing different options, including regular dividends, while considering our medium to long-term strategy, funding needs for Tea House development, and changes in the market environment. We fully understand that it is important for shareholders to share in the results of the company while we maintain high quality growth. Therefore, continuously enhancing shareholder returns remains a firm direction for us. Management team is currently evaluating the specific details. We will bring a proposal to the board at the appropriate time, subject to the board review and approval, provide an update to the market.

Speaker #1: Entering 2026, with organizational optimization and continued improvement in operating efficiency, our free cash flow has remained healthy. This provides a solid foundation for us to explore a more regular and sustainable shareholder return mechanism.

Speaker #1: Currently, the Board and management are actively and prudently reviewing different options, including regular dividends, while considering our medium- to long-term strategy, funding needs for tea house development, and changes in the market environment.

Speaker #1: We fully understand that it is important for shareholders to share in the results of the company while we maintain high-quality growth. Therefore, continuously enhancing shareholder returns remains a firm direction for us.

Speaker #1: The management team is currently evaluating the specific details. We will bring a proposal to the board at the appropriate time, subject to the board's review and approval, and will provide an update to the market.

Alicia Guo: That concludes today's Q&A session.If you have any further questions, please feel free to contact us or request us through our IR website. Thank you all for your time today. We look forward to reconnecting on our next call. Have a wonderful day.

Speaker #1: That concludes today's Q&A session. If you have any further questions, please feel free to contact us or reach out through our IR website. Thank you all for your time today.

Alicia Guo: If you have any further questions, please feel free to contact us or request us through our IR website. Thank you all for your time today. We look forward to reconnecting on our next call. Have a wonderful day.

Speaker #1: We look forward to reconnecting on our next call. Have a wonderful day.

Operator: This concludes today's event. Thank you for participating. You may now disconnect.