拼多多 (PDD) 2022 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to Pinduoduo First Quarter 2022 Earnings Conference Call. (Operator Instructions) I must advise you that this conference is being recorded today. I would now like to hand the conference over to your host today, Mr. Chen Ping. Sir, please go ahead.

女士們，先生們，感謝大家的支持，歡迎來到拼多多2022年第一季度財報電話會議。 （操作員說明）我必須告訴您，今天正在錄製這次會議。我現在想把今天的會議交給你們的主持人陳平先生。先生，請繼續。

Thank you, operator. Hello, everyone, and thank you for joining us today. My name is Chen and I will help host the earnings call. Pinduoduo earnings release was distributed earlier and is available on our website at investor.pinduoduo.com as well as through global news by services.

謝謝你，接線員。大家好，感謝您今天加入我們。我的名字是陳，我將幫助主持財報電話會議。拼多多財報發布較早，可在我們的網站investor.pinduoduo.com 以及全球新聞服務中獲取。

Before we begin, I would like to refer you to our safe harbor statement in the earnings press release, which applies to this call as we will make certain forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP measures to GAAP measures.

在我們開始之前，我想向您推薦我們在收益新聞稿中的安全港聲明，該聲明適用於本次電話會議，因為我們將做出某些前瞻性聲明。此外，本次電話會議還包括對某些非公認會計原則財務措施的討論。請參閱我們的收益發布，其中包含非公認會計原則措施與公認會計原則措施的對賬。

Joining us today on the call are Chen Lei, our Chairman and Chief Executive Officer; Liu Jun, our VP of Finance. Lei will make some general remarks on our performance for the past quarter and our strategic focus going forward. Jun will then take us through our financial results for the first quarter ended March 31, 2022.

今天加入我們電話會議的是我們的董事長兼首席執行官陳磊；我們的財務副總裁劉軍。雷軍將對我們過去一個季度的表現和我們未來的戰略重點做一些概括性的評論。然後，Jun 將向我們介紹截至 2022 年 3 月 31 日的第一季度財務業績。

During the Q&A session, Lei will answer questions in Chinese and I will help translate. Please kindly note that all translations provided are for reference purposes only. In case of a discrepancy between the original remarks and the translated version, statements in the original language should prevail. Now it is my pleasure to introduce our Chairman and Chief Executive Officer, Chen Lei. Lei, please go ahead.

問答環節，雷老師會用中文回答問題，我會幫忙翻譯。請注意，所提供的所有翻譯僅供參考。如原文與翻譯版本有差異，以原文為準。現在很高興向大家介紹我們的董事長兼首席執行官陳磊。雷，請繼續。

Thank you, Chen. Hello, everyone. Thank you for joining our earnings call for the first quarter of 2022. Let me start by giving a brief overview of our first quarter results. Our total revenue for this quarter, excluding revenue from merchandise sales, was RMB 23.7 billion. This represents a year-on-year increase of 39%. Our active buyers reached 881.9 million for 12 months ending March 31, with 751.3 million average quarterly MAU.

謝謝你，陳。大家好。感謝您參加我們 2022 年第一季度的財報電話會議。讓我首先簡要概述一下我們的第一季度業績。我們本季度的總收入（不包括商品銷售收入）為人民幣 237 億元。這意味著同比增長 39%。在截至 3 月 31 日的 12 個月中，我們的活躍買家達到 8.819 億，平均季度 MAU 為 7.513 億。

Given our current scale, our user growth will inevitably slow down. That's why we have shifted our priority from winning new users to how to better serve our existing user base. We also strive to adapt to the constantly evolving patterns of consumer behavior. There is still plenty of room for us to improve and we will continue to work hard to refine and strengthen our core capabilities.

鑑於我們目前的規模，我們的用戶增長將不可避免地放緩。這就是為什麼我們將優先事項從贏得新用戶轉移到如何更好地服務於我們現有的用戶群。我們還努力適應不斷變化的消費者行為模式。我們還有很大的提升空間，我們將繼續努力完善和加強我們的核心能力。

In all of this, agriculture continues in the front and center of our strategy. We remain focused on making long-term investments in agriculture and promoting digital inclusion. A key plank of our strategy has been to develop a tech-driven agricultural infrastructure, less responsive, sustainable and like meeting the needs of different stakeholders.

在所有這一切中，農業仍然是我們戰略的前沿和中心。我們仍然專注於對農業進行長期投資並促進數字包容性。我們戰略的一個關鍵部分是開發一個技術驅動的農業基礎設施，響應速度較慢、可持續，並且可以滿足不同利益相關者的需求。

We constantly think about how we can use our platform to create more value for our consumers and benefit society. And here, I would like to take this opportunity to express my thanks to our consumers, producers, merchants and other partners for their continued support. We are grateful to rent for standing with us as Pinduoduo matures as a company and take through more social responsibility.

我們不斷思考如何利用我們的平台為消費者創造更多價值，造福社會。在此，我想藉此機會對我們的消費者、生產者、商家和其他合作夥伴一直以來的支持表示感謝。在拼多多作為一家公司成熟並承擔更多社會責任的過程中，我們感謝租與我們站在一起。

We are committed to service all of them better. We are also grateful that Pinduoduo is in a position to serve millions of farmers and connect them to a digital economy. We help farmers and more by promoting agricultural produce to more consumers across the country. This creates huge value for our consumers who can now enjoy high-quality fresh produce at low cost through our agriculture network.

我們致力於為所有人提供更好的服務。我們也很感激拼多多能夠為數百萬農民服務，並將他們與數字經濟聯繫起來。我們通過向全國更多消費者推廣農產品來幫助農民等等。這為我們的消費者創造了巨大的價值，他們現在可以通過我們的農業網絡以低成本享受高質量的新鮮農產品。

During the Chinese New Year period in the first quarter, we partnered with our merchants and logistics service providers to offer uninterrupted delivery services. Demand for high-quality agricultural produce, third, during the period. We attracted orders from consumers who could not fulfill their needs previously due to lengthy delivery time, high cost and wastage.

第一季度春節期間，我們與商家和物流服務提供商合作，提供不間斷的送貨服務。第三，期內對優質農產品的需求。我們吸引了以前由於交貨時間長、成本高和浪費而無法滿足他們需求的消費者的訂單。

Order volumes or different types of agriculture produce increased significantly during the Chinese New Year period. They include tariffs, oranges, seafood SOL, a relatively short shelf life and that supply has processed in confirmed to a local region, aided by our agricultural infrastructure. It now takes a few hours for the fresh produce to arrive at warehouses.

農曆新年期間，訂單量或不同類型的農產品顯著增加。它們包括關稅、橙子、海鮮 SOL、相對較短的保質期，以及在我們的農業基礎設施的幫助下，供應已在當地得到確認。新鮮農產品現在需要幾個小時才能到達倉庫。

This has greatly shortened the time consumer has to wait to receive their fresh produce. As work continues on agricultural infrastructure, we are also pushing ahead on a technology front. And now I'm happy to share with you some of the tangible results for a second smart agriculture competition, a long distance to make a growing challenge that concluded in April. Over the last 6 months, we work closely with China Agricultural University, Sichuan University, a new FAO and [Ratanga University] to encourage young scientists and technologies to develop practical and cost-effective agri-tech solutions that farmers can use to improve their livelihood. The participating teams have done very well in applying technology to solve real profit.

這大大縮短了消費者等待收到新鮮農產品的時間。隨著農業基礎設施工作的繼續，我們也在技術前沿推進。現在，我很高興與大家分享第二屆智能農業競賽的一些切實成果，這是一項在 4 月結束的長距離挑戰。在過去的 6 個月裡，我們與中國農業大學、四川大學、新成立的糧農組織和 [Ratanga 大學] 密切合作，鼓勵年輕科學家和技術開發實用且具有成本效益的農業技術解決方案，農民可以利用這些解決方案來改善他們的生計.參賽團隊在應用技術解決實際利潤方面做得非常好。

First, the developed precision greenhouse management solutions let substantially improved crop production. The team was able to deliver double yields of transitional growers by addressing variables such as community and lighting. The nutritional value of [little metals] also registers in the top range of the industry.

首先，開發的精準溫室管理解決方案顯著提高了作物產量。通過解決社區和照明等變量，該團隊能夠為過渡種植者提供雙倍的產量。 [小金屬] 的營養價值也在行業中名列前茅。

These solutions are commercially viable and can be applied by growers without special trends. Second, the R&D processes of participating teams [imbursed] all the practical technologies. For instance, one group of researchers developed a disease prediction model to give farmers 1-week window to intervene and prevent loss.

這些解決方案在商業上是可行的，並且可以由沒有特殊趨勢的種植者應用。其次，參賽團隊的研發過程【包銷】了所有實用技術。例如，一組研究人員開發了一種疾病預測模型，讓農民有 1 週的時間進行干預和預防損失。

Another group came up with low cost and environmentally friendly equipment to enhance plant growth. The team also reduced of visual recognition technologies to help growers make better decisions of irrigation and harvesting. The achievements demonstrate the benefits of technology when brought into agriculture. We are delighted that the competition is serving as (inaudible) between academia and industry and a channel for the implementation of effective technology.

另一組提出了低成本和環保的設備來促進植物生長。該團隊還減少了視覺識別技術，以幫助種植者做出更好的灌溉和收穫決策。這些成就證明了技術在農業中的好處。我們很高興這場競賽在學術界和工業界之間起到了（聽不清）的作用，並成為實施有效技術的渠道。

We will be supportive team as they rule out their solutions across China. We are also very encouraged that patient has helped inspire young people from different disciplines and background to improve their work to agriculture. The majority of the participants in the smart agriculture competition will long in [1990s] many has said they benefited greatly from interacting with world-class talent from different fields.

我們將成為支持團隊，因為他們排除了他們在中國的解決方案。我們也非常鼓舞的是，患者幫助激發了來自不同學科和背景的年輕人改善他們在農業方面的工作。智能農業競賽的大多數參與者將在 [1990 年代] 很長一段時間內，許多人表示他們從與來自不同領域的世界級人才的互動中受益匪淺。

They gain new perspectives and new knowledge to help advance their own work. Indeed, some participants in the competition come from a rural background. They bring with an asset belief that agri-tech will help secure our food suppliers and relieve the workload of farmers. We will share the deeply health sensor mission to make agriculture better through technology.

他們獲得了新的觀點和新的知識，以幫助推進自己的工作。事實上，比賽的一些參與者來自農村背景。他們帶來了一種資產信念，即農業技術將有助於保護我們的食品供應商並減輕農民的工作量。我們將分享深度健康傳感器的使命，通過技術讓農業變得更好。

The future of agriculture will depend on attracting more of this tax use and channel the passionate ideas into this sector. And on our part, Pinduoduo is best ready to help facilitate their (inaudible). We believe that the digitalization of agriculture will unlock opportunities and efficiencies that will benefit society at large and environment.

農業的未來將取決於吸引更多的這種稅收用途，並將充滿激情的想法引入這一領域。就我們而言，拼多多最願意幫助他們（聽不清）。我們相信，農業數字化將釋放機遇和效率，造福整個社會和環境。

We are committed to investing and working with limited partners on this important measures. We will play a long game and aim for a long-term success. This will mean being patient and evaluating initiatives according to the impact of agri-food ecosystem and future generation.

我們致力於在這一重要措施上進行投資並與有限合夥人合作。我們將打一場持久戰，並以長期成功為目標。這將意味著要有耐心並根據農業食品生態系統和後代的影響來評估舉措。

To conclude, we started last year to transition from a phase of hyper goals to one of the more measured development. Our transition from sales and marketing towards research and development continues space into 2022. We now have a technology team numbering over 5,600 which represent about 60% of our total workforce.

總而言之，我們從去年開始從一個超目標階段過渡到一個更加謹慎的發展階段。我們從銷售和營銷向研發的過渡將持續到 2022 年。我們現在擁有一支超過 5,600 人的技術團隊，約占我們員工總數的 60%。

There is not only -- they not only iterate and improve our technological capabilities but also help attract new talents. We will set our efforts to further build up our in-house research and development capabilities. We continue to believe that this is the right approach at this stage of our development.

不僅——它們不僅迭代和提高我們的技術能力，而且有助於吸引新的人才。我們將努力進一步增強我們的內部研發能力。我們仍然相信這是我們現階段發展的正確方法。

We will do more and do better to achieve our long-term corporate mission to put people first, to be open and to benefit all. Thank you. And now let me pass the time to Jun.

我們將做得更多、做得更好，以實現我們的長期企業使命：以人為本、開放、惠及所有人。謝謝你。現在讓我把時間交給君。

Thank you, Lei. Hello, everyone. Let me first walk you through our operating results for the first quarter ended March 31, 2022. Our annual active buyers for the 12 months ending March 31, 2022, was 881.9 million. This is an increase of 58.1 million or 7% from the same quarter of 2021. Average MOU in Q1 was 751.3 million. This is a 26.7 million increase or 4% from the same quarter of 2021.

謝謝你，雷。大家好。讓我首先向您介紹我們截至 2022 年 3 月 31 日的第一季度的經營業績。截至 2022 年 3 月 31 日的 12 個月，我們的年度活躍買家為 8.819 億。這比 2021 年同期增加了 5810 萬或 7%。第一季度的平均諒解備忘錄為 7.513 億。這比 2021 年同期增加了 2670 萬或 4%。

At this current scale, it is inevitable for us to set lower user growth. We will continue to focus on how to serve our users better to depend the trust users place in us and to improve user MyShare.

在目前的規模下，我們設置較低的用戶增長是不可避免的。我們將繼續專注於如何更好地為我們的用戶服務，以依賴用戶對我們的信任並改進用戶 MyShare。

Next, I will go through our financial performance and quarter ended March 31, 2022. In terms of P&L, our total revenue in the quarter was RMB 23.8 billion, up 7% from RMB 22.2 billion, in the same quarter of 2021. This was mainly driven by an increase in revenues from online marketing services and revenue from transaction services, offset by the decrease in revenue from 1P trials.

接下來，我將介紹我們的財務業績和截至 2022 年 3 月 31 日的季度。在損益方面，我們本季度的總收入為 238 億元人民幣，比 2021 年同期的 222 億元人民幣增長 7%。這是主要受在線營銷服務收入和交易服務收入增長的推動，但被 1P 試用收入的下降所抵消。

Excluding revenue from our 1P trials, our total revenue was RMB 23.7 billion in Q1 2022, up 39% from RMB 17 billion in the same quarter of 2021. Revenues from online marketing services and others were RMB 18.2 billion this quarter, up 29% compared with the same period of 2021. This was primarily due to an increase in merchant activities, a reflection of the value that our platform creates for them.

剔除我們的 1P 試驗收入，我們 2022 年第一季度的總收入為 237 億元人民幣，比 2021 年同期的 170 億元人民幣增長 39%。本季度在線營銷服務和其他收入為 182 億元人民幣，同比增長 29%與 2021 年同期。這主要是由於商家活動的增加，這反映了我們的平台為他們創造的價值。

Our transaction services revenue this quarter were RMB 5.6 billion, up 91% versus the same period of 2021. The increase in our transaction services revenue was due to: first, the increase in total transaction processing fee as a result of higher transaction volume; and second, more diversified services that we provide to merchants such as fulfillment services.

本季度交易服務收入為人民幣56億元，較2021年同期增長91%。交易服務收入增長的原因是：第一，交易量增加導致總交易手續費增加；其次，我們為商家提供的服務更加多樣化，例如履行服務。

Moving on to cost and expenses. Our total cost of revenue decreased from RMB 10.7 billion in Q1 2021 and to RMB 7.2 billion this quarter. The decrease came mainly from the reduction of merchandise sales, partially offset by increased fulfillment expenses. Total operating expenses this quarter were RMB 14.5 billion, the RMB 15.6 billion in the same quarter of 2021.

繼續討論成本和費用。我們的總收入成本從 2021 年第一季度的 107 億元人民幣下降到本季度的 72 億元人民幣。下降主要來自商品銷售的減少，部分被履行費用的增加所抵消。本季度總營業費用為人民幣 145 億元，為 2021 年同期的人民幣 156 億元。

On a non-GAAP basis, our total operating expenses as a percentage of revenue, excluding 1P, has been declined from 86% and to 55% for Q1 of 2021 and 2022, respectively. Looking to specific expense items. Our non-GAAP sales and marketing expenses this quarter RMB 10.7 billion, down 16% versus second quarter of 2021. As we continue to shift away from our previous forecast on sales and marketing, we remain disciplined on our sales marketing spending this quarter.

在非公認會計原則的基礎上，我們的總運營費用佔收入的百分比（不包括 1P）已分別從 2021 年第一季度和 2022 年第一季度的 86% 和 55% 下降。尋找特定的費用項目。本季度我們的非美國通用會計準則銷售和營銷費用為人民幣 107 億元，比 2021 年第二季度下降 16%。隨著我們繼續偏離之前對銷售和營銷的預測，我們在本季度的銷售營銷支出上保持自律。

As a result, on a non-GAAP basis, our sales and marketing expenses as a percentage of our revenue this quarter was 45%. And compared with 57% for the same quarter in 2021. Our non-GAAP general administrative expenses were RMB 228.8 million versus RMB 160.7 million in the same quarter of 2021.

因此，在非公認會計原則的基礎上，本季度我們的銷售和營銷費用占我們收入的百分比為 45%。與 2021 年同期的 57% 相比。我們的非公認會計原則一般管理費用為 2.288 億元人民幣，而 2021 年同期為 1.607 億元人民幣。

Our non-GAAP research and development expenses were RMB 2 billion, an increase of 30% from RMB 1.7 billion in the same quarter of 2021. The increase was primarily due to an increase in headcount and the recruitment of more experienced R&D personnel. To better make evolving consumer demand and foster sustainable growth of our platform, we are committed to further growing our R&D capabilities and stubbing net of R&D spending. Operating profit for the quarter was RMB 2.2 billion on a GAAP basis compared with operating loss of RMB 4.1 billion in the same quarter of 2021. Non-GAAP operating profit was RMB 3.7 billion versus the operating loss of RMB 3.2 billion in the same quarter of 2021.

我們的非美國通用會計準則研發費用為人民幣 20 億元，較 2021 年同期的人民幣 17 億元增加 30%。增加的主要原因是員工人數增加和招聘更有經驗的研發人員。為了更好地滿足不斷變化的消費者需求並促進我們平台的可持續增長，我們致力於進一步提高我們的研發能力並減少研發支出。按美國通用會計準則計算，本季度營業利潤為 22 億元人民幣，而 2021 年同期為 41 億元人民幣。非美國通用會計準則營業利潤為 37 億元人民幣，而 2021 年同期為 32 億元人民幣。 2021 年。

Net income attributable to ordinary shareholders was RMB 2.6 billion compared with a net loss of RMB 2.9 billion in the same quarter of 2021. Basic earnings per ADS was RMB 2.06 and diluted earnings per ADS was RMB 1.84 versus basic and diluted net loss per ADS of RMB 2.33 of the same quarter. Non-GAAP net income attributable to ordinary shareholders was RMB 4.2 billion, compared with a net loss of RMB 1.9 billion in the same quarter last year.

歸屬於普通股股東的淨利潤為人民幣 26 億元，而 2021 年同期淨虧損為人民幣 29 億元。每股 ADS 的基本收益為人民幣 2.06 元，每股 ADS 的攤薄收益為人民幣 1.84 元，而每股 ADS 的基本和攤薄淨虧損為同季度人民幣2.33元。 Non-GAAP 歸屬於普通股股東的淨利潤為人民幣 42 億元，而去年同期為人民幣 19 億元的淨虧損。

Non-GAAP diluted earnings per ADS was RMB 2.95 versus non-GAAP diluted net loss per ADS of RMB 1.52 in the same quarter of 2021. More disciplined spending and slowing growth are the main reasons behind the process in the past few quarters. The process us gave more confidence and resources to devote to key areas such as R&D and agriculture initiatives. That said, we expect profits to fluctuate as we spend to meet changing consumer needs.

2021 年同一季度，非 GAAP 攤薄後每股 ADS 收益為 2.95 元人民幣，而非 GAAP 攤薄後每股 ADS 淨虧損為 1.52 元人民幣。過去幾個季度，支出更加嚴格和增長放緩是主要原因。這個過程讓我們有更多的信心和資源投入到研發和農業計劃等關鍵領域。也就是說，我們預計利潤會隨著我們支出的變化而波動，以滿足不斷變化的消費者需求。

Notably, our profit this quarter narrowed significantly to the last quarter. Our net cash flow used in operating activities was RMB 9.1 billion compared with outflow of RMB 3.7 billion the same quarter of 2021, primarily due to changes in working capital as a result of seasonality offset by an increase in online marketing services revenues. As of March 31, 2022, the company had RMB 95.2 billion in cash, cash equivalents and short-term investments. This concludes my prepared remarks.

值得注意的是，我們本季度的利潤與上一季度相比顯著收窄。我們用於經營活動的淨現金流為人民幣 91 億元，而 2021 年同期為流出人民幣 37 億元，主要是由於季節性因素導致的營運資金變化被在線營銷服務收入的增加所抵消。截至2022年3月31日，公司擁有現金、現金等價物和短期投資人民幣952億元。我準備的發言到此結束。

Thank you, Jun. Next, we will move on to the Q&A session. For today's Q&A session, Lei and Jun will take questions from analysts on the line. We will take a maximum of 2 questions by analysts. Lei will answer questions in Chinese and I will help translate later remarks for ease of reference. Operator, we may now take questions on the line.

謝謝你，Jun。接下來，我們將進入問答環節。今天的問答環節，雷軍和君將在線回答分析師的提問。我們最多會回答分析師的 2 個問題。雷將用中文回答問題，我將幫助翻譯後面的評論以方便參考。接線員，我們現在可以提問就行了。

(Operator Instructions) Your first question comes from Thomas Chong with Jefferies.

（操作員說明）您的第一個問題來自 Jefferies 的 Thomas Chong。

(foreign language) My question is about our growth driver in Q1. And given the outbreak of pandemic in recent months, can management share about some of the bots about what we are seeing in terms of the recent monthly trend? On the other hand, can management also comment about the trend in terms of the take rate?

（外語）我的問題是關於我們第一季度的增長動力。鑑於最近幾個月大流行的爆發，管理層能否分享一些機器人關於我們在最近的月度趨勢方面所看到的情況？另一方面，管理層是否也可以就獲取率的趨勢發表評論？

[Interpreted] Thomas, so let me address your first question around growth rate. The past period of time, we have been going through adjustments and development strategies to focus more on technology and agriculture in order to pursue long-term high-quality growth. Well, it takes time for the final results to be fruit and in the process of our growth rate might be affected.

[解釋] 托馬斯，讓我來談談你關於增長率的第一個問題。過去一段時間，我們一直在調整和發展戰略，更多地關注科技和農業，以追求長期的高質量增長。嗯，最終結果需要時間，在這個過程中我們的增長速度可能會受到影響。

In addition, as we reach our current scale, investors should not expect us to continuously deliver high growth. Well, our development is inseparable from the support of our consumers. So as the user base reaches its current scale, our focus now is on how to serve our 880 million users and improve their trust and mind share to remain to be user-centric. So we will continue to pay more attention to technology and agri-investments and to promote our differentiation in agriculture to help create more value for our consumers.

此外，隨著我們達到目前的規模，投資者不應期望我們持續實現高增長。那麼，我們的發展離不開廣大消費者的支持。因此，隨著用戶群達到目前的規模，我們現在的重點是如何為我們的 8.8 億用戶提供服務，並提高他們的信任度和思想份額，以保持以用戶為中心。因此，我們將繼續更加關注技術和農業投資，推動我們在農業方面的差異化，為我們的消費者創造更多價值。

Well, as we have been communicating, we always remain committed to investing to create long-term value. If you look from the outside at times, we might appear to be overly aggressive or overly conservative sometimes. So we recommend you not to pay too much attention to the fluctuations between quarters. Instead, we hope investors would focus on whether what we are doing is generating value and whether it can bring about high-quality development. I hope what I've shared may address your question.

好吧，正如我們一直在交流的那樣，我們始終致力於投資以創造長期價值。如果您有時從外部看，我們有時可能會顯得過於激進或過於保守。所以我們建議您不要過多關注季度之間的波動。相反，我們希望投資者關注我們所做的是否在創造價值，是否能夠帶來高質量的發展。我希望我分享的內容可以解決您的問題。

Well, Thomas, this is Jun. Thank you for your question. I would like to further talk about the take rate which you mentioned. Well, our focus has always been to better serve our users, as just mentioned by Lei. With this being said, take rate or monetization rate is not a metric to forecast. Instead, I think it is a natural result. So we recommend you not look at quarter-to-quarter changes. And in the long run, our monetization rate depends on how much value we create. And for future outlook for monetization, as I said, it really depends on our value creation.

好吧，Thomas，我是 Jun。謝謝你的提問。我想進一步談談你提到的採取率。嗯，我們的重點一直是更好地為我們的用戶服務，正如雷剛提到的那樣。話雖如此，獲取率或貨幣化率並不是預測的指標。相反，我認為這是一個自然的結果。因此，我們建議您不要查看季度間的變化。從長遠來看，我們的貨幣化率取決於我們創造了多少價值。正如我所說，對於未來的貨幣化前景，這實際上取決於我們的價值創造。

One thing we would like to point out as we started Pinduoduo with a strong agriculture forecast from the beginning. And we stick to our zero commission policy for agriculture projects. And we definitely will continue to support agriculture merchants, for example, offering more traffic exposure. Also, we have communicated before, we will step up investment in agriculture for better consumer experience. Well, as the proportion of agricultural product increases, our monetization rates might be affected.

我們想指出的一件事是，我們從一開始就以強勁的農業預測創立了拼多多。我們堅持農業項目的零佣金政策。我們肯定會繼續支持農商，例如提供更多的流量曝光。另外，我們之前也有溝通過，為了更好的消費體驗，我們會加大對農業的投入。那麼隨著農產品比例的增加，我們的貨幣化率可能會受到影響。

Your next question comes from Eddy Wang with Morgan Stanley.

您的下一個問題來自摩根士丹利的 Eddy Wang。

(foreign language) I have 2 questions. First is about competition. Can you please share with us your view on China's e-commerce industry competitive landscape? We witness that on one hand, we do see other e-commerce platform adopting a structured cost control and less aggressive expansion. But on the other hand, we do see some live stream e-commerce platform seems to be very aggressive in the user acquisition and expansion. So just want to hear your view on the competitive landscape in the e-commerce sector and the impact on PDD.

（外語）我有兩個問題。首先是關於競爭。您能否與我們分享您對中國電子商務行業競爭格局的看法？我們看到，一方面，我們確實看到其他電子商務平台採用結構化的成本控制和不那麼激進的擴張。但另一方面，我們確實看到一些直播電商平台在用戶獲取和擴張方面似乎非常激進。因此，只想听聽您對電子商務領域的競爭格局以及對拼多多的影響的看法。

And the follow-up question is about the (inaudible) agriculture new initiatives. What's the proportion of the RMB 10 billion have been used so far? And what's the next kind of areas we want to investment in the next maybe 1 or 2 years?

後續問題是關於（聽不清）農業新舉措。目前這100億元的使用比例是多少？我們希望在未來 1 或 2 年內投資的下一類領域是什麼？

[Interpreted] Eddy, so for your question around competition landscape, I think the current landscape versus 2, 3 months ago, it has not changed much. So essentially, China's e-commerce industry is a huge market, and it is full potential. As industry infrastructure continues to develop and as our consumer needs continue to evolve, more and more companies will join e-commerce.

[解釋] Eddy，所以對於你關於競爭格局的問題，我認為目前的格局與2、3個月前相比，並沒有太大變化。所以本質上，中國的電子商務行業是一個巨大的市場，而且潛力無限。隨著行業基礎設施的不斷發展和消費者需求的不斷發展，越來越多的公司將加入電子商務。

We believe that in the long run, the emergence of new platforms as well as new formats will have a positive impact on consumers and on the industry itself. For us, if you look at the -- under the perspective of the recent pandemic and if you look at areas where other peers have done well, we think that for ourselves, there is still a lot of room to further improve from our current level of service offerings. This is what our team needs to learn from. And our team needs to work harder and also remain down to earth to serve consumers well and to create value for the society as a whole. This is the duty and the responsibility for us as a company.

我們認為，從長遠來看，新平台、新業態的出現將對消費者和行業本身產生積極影響。對我們來說，如果你看看——在最近的大流行的角度下，如果你看看其他同行做得好的地方，我們認為對我們自己來說，從我們目前的水平來看，還有很大的提升空間的服務產品。這是我們團隊需要學習的。我們的團隊需要更加努力，也需要腳踏實地，為消費者服務好，為整個社會創造價值。這是我們作為一家公司的責任和義務。

As for our differentiation while we started out Pinduoduo with agriculture products. As we developed, agriculture has always been our core. We also firmly believe in the future potential of the agriculture sector. Just as I introduced, we are now stepping up investments in core technology, especially in agriculture technology. We believe in the long run, these investments can create more value for consumers.

至於我們的差異化，我們以農產品起步拼多多。隨著我們的發展，農業一直是我們的核心。我們也堅信農業部門的未來潛力。正如我介紹的那樣，我們現在正在加大對核心技術的投資，特別是在農業技術方面。我們相信，從長遠來看，這些投資可以為消費者創造更多價值。

So here, let me also address your second question. We announced the RMB 10 billion agriculture initiative last year. When we announced it, we also mentioned that we hope this initiative can facilitate the advancements of agritech, promote digital inclusion and also to make a sense of fulfillment for agri-workers and agri-scientists. Over the past year, our team and myself have been devoting a lot of time and efforts to diligently evaluate and study of various proposals and projects in order to deploy resources to where they are needed the most.

所以在這裡，讓我也談談你的第二個問題。去年，我們宣布了 100 億元人民幣的農業計劃。當我們宣布它時，我們還提到我們希望這一舉措能夠促進農業科技的進步，促進數字包容性，並讓農業工人和農業科學家感到滿足。在過去的一年裡，我們團隊和我自己都投入了大量的時間和精力，對各種提案和項目進行了認真的評估和研究，以便將資源部署到最需要的地方。

In my previous remarks, I also have given you some examples of how a technology empowers agriculture, including our smart agriculture competition. In addition, we are also cooperating with top agronomic universities and research institutions to jointly will come some research projects. Admittedly, to empower agriculture through technology requires a lot of thinking, deep understanding and actual patients. So we need to compare various options side by side and evaluate each options carefully, and we have to leverage our past experiences in agriculture as well as our team's technical background to make the best options and choices.

在我之前的發言中，我也給你舉了一些技術如何賦能農業的例子，包括我們的智慧農業競賽。此外，我們還與頂尖的農學大學和研究機構合作，共同開展一些研究項目。誠然，通過技術賦能農業需要大量的思考、深刻的理解和實際的患者。所以我們需要並排比較各種選項，仔細評估每個選項，我們必須利用我們過去在農業方面的經驗以及我們團隊的技術背景來做出最好的選擇和選擇。

In this area, our strategy is long term, and our investment in agriculture are still in early stage. For such a sector of such big scale and impact of our investment horizon as well as investment scale would not change when there are short- to medium-term fluctuations. I hope what I share can give you more color around how we think about and what we are doing in terms of agriculture.

在這方面，我們的戰略是長期的，我們對農業的投資還處於早期階段。對於這樣一個規模如此之大的行業，我們的投資期限和投資規模在中短期波動時不會改變。我希望我分享的內容可以讓您更加了解我們在農業方面的想法和所做的事情。

Your next question comes from Kenneth Fong with Credit Suisse.

您的下一個問題來自瑞士信貸的 Kenneth Fong。

(foreign language) I have 2 questions, please. On user, we noticed that despite a high base, AAC and MAU both see accelerating sequential growth. Can you share with us the drivers behind? Understand that we shouldn't expect fast growth given our larger user base, how should we think about user upside and the ceiling?

（外語）請問我有兩個問題。在用戶方面，我們注意到儘管基數很高，但 AAC 和 MAU 都看到了加速的連續增長。你能和我們分享一下背後的驅動因素嗎？了解鑑於我們的用戶群較大，我們不應該期望快速增長，我們應該如何考慮用戶優勢和天花板？

And my second question is on the sales and marketing expense. Despite the fast revenue growth, our control over sales and marketing have been very effective with amount continue to come down on a year-on-year basis. Can you share with us the reason behind? For example, is there a change in our ROI special on this acquisition and any room for further improvement? Last year, Pinduoduo said that we are shifting from sales and marketing to R&D focus. Can you also update us on the progress? And then should we expect this to be largely finished?

我的第二個問題是關於銷售和營銷費用。儘管收入增長迅速，但我們對銷售和營銷的控制非常有效，金額同比繼續下降。你能和我們分享一下背後的原因嗎？例如，我們此次收購的 ROI 特別版是否有變化，還有進一步改進的空間嗎？去年，拼多多表示，我們正在從銷售和營銷轉向研發。你能告訴我們最新進展嗎？然後我們是否應該期望這將在很大程度上完成？

[Interpreted] Well, Kenneth, so let me address your question. User number. So let's look at the numbers first. By the first quarter last year, our annual active buyers and MAU was approximately 820 million and 720 million, respectively. This was already a relatively high base. And by the first quarter this year, our [ASC] and MAU further increased to about 880 million and 750 million. We achieved some growth. But I think the long-term trend should be very clear. Though there might be, call it fluctuations, I think it is inevitable that our user growth would be slower. Well, over the course from the past few quarters, we also have shared this view with you.

[解釋]好吧，肯尼斯，讓我來回答你的問題。用戶編號。所以讓我們先看看數字。到去年第一季度，我們的年度活躍買家和 MAU 分別約為 8.2 億和 7.2 億。這已經是一個比較高的基數了。到今年第一季度，我們的 [ASC] 和 MAU 進一步增加到大約 8.8 億和 7.5 億。我們取得了一些增長。但我認為長期趨勢應該很清楚。雖然可能會有波動，但我認為我們的用戶增長速度會放緩是不可避免的。好吧，在過去幾個季度的課程中，我們也與您分享了這一觀點。

So now the priority that we see and the duty we have to perform right now is to further improve the existing 880 million consumers user experience and as well as to improve their trust and solidify their mind share in us. As for the strategic shift, we are going through basically amid the changes in infrastructure upgrade and the evolving user needs what we are doing in terms of investing in technology is to find opportunities and improve ourselves to serve our users better.

所以現在我們看到的當務之急和我們現在必須履行的職責是進一步改善現有的 8.8 億消費者的用戶體驗，以及提高他們的信任度並鞏固他們對我們的看法。至於戰略轉變，我們基本上是在基礎設施升級的變化和不斷變化的用戶需求中經歷的，我們在技術投資方面所做的就是尋找機會，提高自己，更好地為用戶服務。

And I'm glad to see that through our efforts, we have indeed created value for consumers, especially in the area of agricultural produce.

我很高興看到，通過我們的努力，我們確實為消費者創造了價值，尤其是在農產品領域。

So another point is that the recent pandemic does show some of the areas that we need to improve. And in terms of understanding users' needs and keeping up with the changes in their behaviors and their demand, we need to do better. So we will continue to explore the evolving needs and preferences of our users and to continue enhance our capabilities. In addition, as we explore, when we see good opportunities, we will continue to invest. So if we look at the financials, it is possible that our efforts would show up and be reflected in the future financial results as well, especially around technology. And I hope of what I have just shared, I may provide you with more color and give you some insights on our user number and its growth going forward.

所以另一點是，最近的大流行確實表明了我們需要改進的一些領域。而在了解用戶的需求和跟上他們行為和需求的變化方面，我們需要做得更好。因此，我們將繼續探索用戶不斷變化的需求和偏好，並繼續增強我們的能力。此外，在我們探索的過程中，當我們看到好的機會時，我們會繼續投資。因此，如果我們看一下財務狀況，我們的努力可能會出現並反映在未來的財務業績中，尤其是在技術方面。我希望我剛剛分享的內容可以為您提供更多色彩，並讓您了解我們的用戶數量及其未來的增長情況。

Okay. Thank you, Kenneth. I will take your second question about SME expenses. Well, as you just said, we are going through a shift with low forecast towards R&D from marketing. And such shape has been in our financial results, as you may see. For example, sales and marketing expenses fell 14% year-over-year in Q1, which represents 47% of total revenue and down from 59% of Q1 last year. And at the same time, R&D expenses increased by 20% Y-o-Y. Well, for our reinvestments, we carefully evaluate the ROI and we allocate resources to generate long-term and high-quality development. As always, we will continue our investment discipline.

好的。謝謝你，肯尼斯。我會回答你關於中小企業費用的第二個問題。好吧，正如您剛才所說，我們正在經歷從營銷向研發的低預測轉變。如您所見，我們的財務業績中一直存在這種情況。例如，第一季度銷售和營銷費用同比下降 14%，佔總收入的 47%，低於去年第一季度的 59%。與此同時，研發費用同比增長 20%。那麼，對於我們的再投資，我們會仔細評估投資回報率，並分配資源以產生長期和高質量的發展。一如既往，我們將繼續我們的投資紀律。

And in addition, in terms of certain user needs, would not do very enough, and there's still plenty of room for us to further improve. So we need to further explore how to better serve our users. In fact, recent pandemic also shows certain areas for us to improve. So as we see good opportunities, we will continue our investments to create more value for our consumers. As a result, the future expenses trend is likely to change. And to us, we firmly believe that R&D investment can generate high-quality developments. So we will continue to step up the investment, which will be shown in our financial results. And we are still in the investment phase instead of the stable stage. For financial numbers, we suggest you look at the long-term trends and the value we create from this investment. Hope that can clarify your questions. Thank you.

另外，在某些用戶需求方面，做的還不夠，還有很大的提升空間。所以我們需要進一步探索如何更好地為我們的用戶服務。事實上，最近的大流行也表明我們有一些需要改進的地方。因此，當我們看到良好的機會時，我們將繼續投資，為我們的消費者創造更多價值。因此，未來的費用趨勢可能會發生變化。而對我們來說，我們堅信研發投入可以帶來高質量的發展。因此，我們將繼續加大投入，這將體現在我們的財務業績中。而且我們還處於投資階段而不是穩定階段。對於財務數據，我們建議您關注長期趨勢以及我們從這項投資中創造的價值。希望可以澄清你的問題。謝謝你。

I think we still have time to take questions from the next analyst, and that will be the last one.

我認為我們還有時間回答下一位分析師的問題，這將是最後一個。

Your last question comes from Natalie Wu with Haitong International.

您的最後一個問題來自海通國際的 Natalie Wu。

(foreign language) Let me quickly translate myself. So 2 questions from my side. First question is related with the COVID, just regarding the recent called breakout, can management share more details about how the pandemic has impacted industry and your operations at Pinduoduo? And how much impact has it had on your first quarter results? And also, what is your outlook towards the second quarter results during current and mix data?

（外語）讓我趕緊自己翻譯。所以我這邊有兩個問題。第一個問題與COVID有關，就最近所謂的爆發而言，管理層能否分享更多關於大流行如何影響行業以及您在拼多多的運營的細節？它對您的第一季度業績有多大影響？此外，您對當前和混合數據中的第二季度業績有何展望？

And my second question is regarding the profitability. You have the lever meaningful process on both GAAP and non-GAAP basis for 4 consecutive quarters. Just wondering at current stage, are you now prioritizing our probability of goals? Should investors expect our quarterly earnings to be the norm?

我的第二個問題是關於盈利能力的。您在 GAAP 和非 GAAP 基礎上連續 4 個季度都擁有有意義的槓桿流程。只是想知道在當前階段，您現在是否優先考慮我們的目標概率？投資者是否應該期望我們的季度收益成為常態？

[Interpreted] Well, Natalie. So let me take your question on how the pandemic has affected us and our operations. Well, I think 1 area that the pandemic has shown us is that for our business, we need to build it to be more resilient, and there are certain areas that we need to further improve, especially in terms of how we can effectively meet users' needs. And under the current situation -- and on the current situation, I think our peers have shown certain aspects that we may also learn from.

[解釋] 好吧，娜塔莉。因此，讓我來回答您關於大流行如何影響我們和我們的運營的問題。好吧，我認為大流行向我們展示的一個領域是，對於我們的業務而言，我們需要將其建設得更有彈性，並且我們需要進一步改進某些領域，特別是在我們如何有效地滿足用戶方面'需要。在目前的情況下 - 在目前的情況下，我認為我們的同行已經展示了我們也可以學習的某些方面。

And Pinduoduo is an e-commerce company that focuses on the essential needs of users. During the pandemic, we are also actively leveraging our differentiation to create value for consumers and to fulfill our social responsibilities. Here, let me give you some examples. First, in Shanghai, we launched a 48-hour supply packages for Shanghai residents through aggregating their ordering and the fulfillment staff we strive to meet the basic needs from as many households as possible.

而拼多多是一家專注於用戶基本需求的電子商務公司。疫情期間，我們也積極發揮差異化優勢，為消費者創造價值，履行社會責任。在這裡，讓我舉幾個例子。首先，在上海，我們為上海居民推出了 48 小時供應套餐，通過匯總他們的訂單和履行人員，我們努力滿足盡可能多的家庭的基本需求。

In addition, on the guidance of our relevant governmental departments, we have made efforts to provide supplies for medical personnel and people need. These are some areas which we have been working on by leveraging our differentiation and our value proposition. Another important point that I want to make during this pandemic time is that we also see many young talents writing up to challenges, and they are growing up rapidly in the face of these real-world challenges. They are proactively securing good supply. They provide technical support to assist fulfillment and they are also solving some of the operational difficulties. They are taking on more and more responsibilities and challenges. So from this, I'm confident in the potential of our team. So based on what I just said, what I see Pinduoduo has given me more conviction in how our team would perform in the young talent from our team.

此外，在政府有關部門的指導下，我們努力為醫務人員和群眾提供物資。這些是我們通過利用我們的差異化和價值主張一直在努力的一些領域。在這次大流行期間，我想提出的另一個重要觀點是，我們也看到許多年輕人才勇於面對挑戰，他們在面對這些現實世界的挑戰時正在迅速成長。他們正在積極確保良好的供應。他們提供技術支持以協助履行，他們還解決了一些運營困難。他們承擔著越來越多的責任和挑戰。因此，我對我們團隊的潛力充滿信心。所以基於我剛才所說的，我所看到的拼多多讓我更加確信我們的團隊會在我們團隊的年輕天才中表現如何。

And to add on one more point, during such special times, we also see that agriculture and the agriculture supply chain, it's so essential and the importance of having a very resilient agriculture supply chain. So our long-term investment in agriculture is particularly important. I hope what I've just shared around this point can give you some more color around our take on agriculture.

再補充一點，在這樣的特殊時期，我們還看到了農業和農業供應鏈，擁有一個非常有彈性的農業供應鏈非常重要和重要。所以我們對農業的長期投資就顯得尤為重要。我希望我剛才分享的關於這一點的內容可以讓你對我們對農業的看法有更多的了解。

Well, thanks for your second question about profitability. First, I would like to point out just not our current priority -- over the past few quarters, our profits remain due to our operating leverage, especially from sales and marketing. And as mentioned last quarter, we have also controlled our spending in the face of lower growth. And under current intensified competition, we also see we still have many room to improve in terms of [providing] users. The reasons pandemic also shows that. So we need to step up our investments and it may cause our quarterly profit to fluctuate in the future. As you may see, this quarter's profit has decreased sequentially versus last quarter. Meanwhile, the profitability over past few quarters also gives us greater confidence to continue our long-term investments. We hope that everyone will focus more on the value we generate. Thank you.

好吧，謝謝你關於盈利能力的第二個問題。首先，我想指出的不是我們當前的優先事項——在過去的幾個季度中，我們的利潤仍然是由於我們的運營槓桿，特別是來自銷售和營銷的槓桿。正如上個季度所提到的，面對增長放緩，我們也控制了支出。而在當前激烈的競爭下，我們也看到我們在[提供]用戶方面還有很大的提升空間。大流行的原因也表明了這一點。所以我們需要加大投資力度，這可能會導致我們未來的季度利潤出現波動。如您所見，本季度的利潤與上一季度相比環比下降。同時，過去幾個季度的盈利能力也讓我們更有信心繼續進行長期投資。我們希望大家更加關注我們創造的價值。謝謝你。

Okay. Thank you, everyone, for joining us on the conference call today. If you have further questions, please feel free to reach out to our IR team. Thank you. Have a great day.

好的。謝謝大家，今天加入我們的電話會議。如果您還有其他問題，請隨時聯繫我們的 IR 團隊。謝謝你。祝你有美好的一天。

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.

女士們先生們，今天的會議到此結束。感謝您的參與。你們都可以斷開連接。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[此成績單中標記為 [已翻譯] 的部分由現場通話中的口譯員朗讀。]