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，歡迎參加拼多多2022年第一季業績電話會議。 （操作員指示）我必須通知您，今天我們正在錄製這次會議。現在我想把今天的會議交給主持人陳平先生。先生，請說。

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.

謝謝您，接線生。大家好，感謝大家今天加入我們。我叫陳，我將協助主持財報電話會議。拼多多收益報告已於早些時候發布，您可以在我們的網站 investor.pinduoduo.com 上以及透過服務的全球新聞中查閱。

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，我想請您參閱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陳述。此外，本次電話會議也包括某些非公認會計準則財務指標的討論。請參閱我們的收益報告，其中包含非 GAAP 指標與 GAAP 指標的對帳。

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.

今天參加電話會議的還有我們的董事長兼執行長陳雷；劉軍，我們的財務副總裁。雷軍將對我們過去一個季度的表現以及未來的戰略重點做一些總體評價。然後，Jun 將向我們介紹截至 2022 年 3 月 31 日第一季的財務表現。

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.

在問答環節，雷會用中文回答問題，我會幫忙翻譯。請注意，提供的所有翻譯僅供參考。若原文與譯文有出入，以原文為準。現在我很高興介紹我們的董事長兼執行長陳雷。雷，請說。

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。感謝您參加我們的 2022 年第一季財報電話會議。本季度，我們不包括商品銷售收入的總收入為 237 億元。這比去年同期增長了 39%。截至 3 月 31 日的 12 個月內，我們的活躍買家數量達到 8.819 億，平均季度月活躍買家數量為 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.

以我們目前的規模，我們的用戶成長不可避免地會放緩。這就是為什麼我們的重點從贏得新用戶轉變為如何更好地服務現有用戶群。我們也努力適應不斷變化的消費者行為模式。我們還有很大的進步空間，我們會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.

在這一切中，農業仍然處於我們策略的核心位置。我們仍然致力於對農業進行長期投資並促進數位包容。我們策略的關鍵部分是發展技術驅動的農業基礎設施，使其反應更快、更永續並能滿足不同利害關係人的需求。

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並造福社會。在此，我想藉此機會對我們的消費者、生產商、商家和其他合作夥伴的持續支持表示感謝。我們感謝租賃公司在拼多多公司逐漸成熟和承擔更多社會責任的過程中與我們站在一起。

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.

我們致力於為他們所有人提供更好的服務。我們也感恩拼多多能夠服務千萬農民，把他們連接到數位經濟。我們透過向全國更多消費者推廣農產品來幫助農民等。這為我們的消費者創造了巨大的價值，他們現在可以透過我們的農業網絡以低成本享受高品質的新鮮農產品。

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.

第一季農曆新年期間，我們與商家和物流服務供應商合作，提供不間斷的配送服務。第三，對優質農產品的需求。我們吸引了那些先前因配送時間長、成本高、浪費等原因而無法滿足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.

春節期間，各類農產品的訂單量大幅增加。其中包括關稅、橙子、海鮮 SOL、相對較短的保質期，並且該供應已在當地地區加工確認，並得到了我們農業基礎設施的協助。現在新鮮農產品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新鮮農產品的時間。在農業基礎建設不斷推進的同時，我們也在技術方面不斷取得進展。現在，我很高興與大家分享第二屆智慧農業比賽的一些實際成果，這是一項長足進步的挑戰，於四月結束。在過去的六個月裡，我們與中國農業大學、四川大學、新糧農組織和拉坦加大學密切合作，鼓勵年輕科學家和技術人員開發實用且經濟高效的農業技術解決方案，讓農民可以用來改善生計。參賽隊伍在運用科技解決現實利潤方面表現十分出色。

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使農作物產量大幅提高。該團隊透過解決社區和照明等變量，使過渡種植者的產量增加了一倍。 [小金屬]的營養價值也位居業界頂級範圍。

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.

這些解決方案具有商業可行性，可供沒有特殊趨勢的種植者採用。第二，參賽隊伍的研發過程全部是實用技術。例如，一組研究人員開發了疾病預測模型，為農民提供一周的時間來幹預和防止損失。

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.

另一個研究小組發明了低成本、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，以幫助種植者更好地做出灌溉和收穫的決策。這些成果充分體現了科技應用於農業帶來的好處。我們很高興看到競賽成為學術界和工業界之間的溝通橋樑，成為有效技術落地的管道。

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.

當他們在中國排除解決方案時，我們將為團隊提供支援。我們也非常鼓舞，患者幫助激勵來自不同學科和背景的年輕人改進農業工作。智慧農業比賽參賽者大多將長於[1990年代]，許多人表示，與不同領域的世界級人才互動受益匪淺。

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.

他們獲得了新的視野和新知識來幫助推進自己的工作。確實，有些參賽者來自農村。他們堅信農業科技將有助於保障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感測器的使命，透過科技讓農業變得更好。

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稅收並將熱情的想法引入該領域。而就我們而言，拼多多已做好充分準備來幫助他們（聽不清楚）。我們相信，農業數位化將釋放機會和提高效率，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.

我們致力於對這項重要舉措進行投資並與有限合夥人合作。我們將打持久戰並爭取長期成功。這意味著要保持耐心，並根據農業食品生態系統和子孫後代的影響來評估措施。

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，去年我們從超目標階段過渡到更謹慎的發展階段。我們從銷售和行銷轉變為研發的轉變將持續到 2022 年。

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.

不僅如此——他們不僅迭代和改進了我們的技術能力，而且還幫助吸引新的人才。我們將努力進一步增強我們的內部研發能力。我們始終相信，這是我們發展現階段的正確方法。

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、更好，以實現以人為本、開放、惠及全體人民的長期企業使命。謝謝。現在讓我把時間交給Jun。

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。首先，我先向您介紹我們截至 2022 年 3 月 31 日第一季的經營業績。這比 2021 年同期增加了 5,810 萬，即 7%。這比 2021 年同期增加了 2,670 萬，即 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.

在目前的這個規模下，我們設定較低的用戶成長率是不可避免的。我們將繼續致力於如何更好地服務我們的用戶，以不辜負用戶對我們的信任並改善用戶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。

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.

不計入我們的1P試用收入，我們2022年第一季的總收入為人民幣237億元，較2021年同期的人民幣170億元增長39%。

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，我們的交易服務收入為人民幣 56 億元，較 2021 年同期增長 91%。第二，我們為商家提供更多樣化的服務，例如物流服務。

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 年第一季的 107 億元人民幣下降至本季的 72 億元。下降主要由於商品銷售額的減少，但被履行費用的增加部分抵消。本季總營運費用為人民幣145億元，2021年同期為人民幣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.

根據非公認會計準則，我們的總營運費用佔收入（不包括 1P）的百分比分別從 2021 年第一季的 86% 和 2022 年第一季的 55% 下降。查看具體的開支項目。本季度，我們的非公認會計準則銷售和行銷費用為人民幣 107 億元，較 2021 年第二季度下降 16%。

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，以非 GAAP 計算，本季我們的銷售和行銷費用佔收入的百分比為 45%。而 2021 年同期則為 57%。

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.

我們的非公認會計準則研發費用為人民幣 20 億元，較 2021 年同期的 17 億元人民幣增長 30%。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永續發展，我們致力於進一步提高我們的研發能力並削減研發支出。以美國通用會計準則計算，本季營業利潤為人民幣 22 億元，而 2021 年同期營業虧損為人民幣 41 億元。

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為人民幣26億元，2021年同期淨虧損為人民幣29億元。非美國通用會計準則下歸屬於普通股股東的淨利為42億元人民幣，去年同期淨虧損為19億元。

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.

非公認會計準則下每股美國存託憑證攤薄收益為人民幣 2.95 元，而 2021 年同期非公認會計準則下每股美國存託憑證攤薄淨虧損為人民幣 1.52 元。這個過程讓我們更有信心，更有資源投入研發和農業項目等關鍵領域。儘管如此，我們預計利潤也會隨著我們為滿足不斷變化的消費者需求而增加支出而波動。

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，本季我們的利潤較上一季大幅收窄。我們經營活動所用的淨現金流為人民幣 91 億元，而 2021 年同期的淨現金流出為人民幣 37 億元，這主要是由於季節性導致的營運資本變化，但被線上行銷服務收入的增加所抵銷。截至2022年3月31日，本公司擁有現金、現金等價物及短期投資人民幣952億元。我的準備好的發言到此結束。

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Jun。在今天的問答環節，雷軍將在線上回答分析師的提問。我們將最多回答分析師提出的 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，我們現在可以透過電話回答問題。

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

（操作員指示）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的成長動力。鑑於近幾個月疫情的爆發，管理層能否分享一些我們看到的機器人的近期月度趨勢？另一方面，管理階層能否對接受率的趨勢進行評論？

[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.

[口譯] 湯瑪斯，讓我來回答你關於成長率的第一個問題。過去一段時間，我們一直在調整發展策略，更加重視科技和農業，以追求長期高品質的成長。嗯，最終的結果需要時間才能實現，而且在過程中我們的成長率可能會受到影響。

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，由於我們達到了目前的規模，投資者不應期望我們能夠持續實現高成長。我們的發展離不開消費者的支持。因此，當用戶群達到目前的規模時，我們現在的重點是如何服務我們的 8.8 億用戶並提高他們的信任和心智份額，以繼續以用戶為中心。因此，我們將繼續更加重視技術和農業投資，並促進我們在農業方面的差異化，以幫助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.

正如我們一直在傳達的那樣，我們始終致力於投資以創造長期價值。如果從外部來看，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度關注季度之間的波動。我們希望投資者關注的是我們所做的事情是否產生價值，是否能夠帶來高品質的發展。我希望我分享的內容能夠解答您的問題。

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.

嗯，托馬斯，我是 Jun。我想進一步談談您提到的接受率。是的，正如雷剛才所提到的，我們的重點一直是更好地服務我們的用戶。話雖如此，接受率或貨幣化率並不是一個可以預測的指標。相反，我認為這是自然的結果。因此，我們建議您不要關注季度間的變化。從長遠來看，我們的貨幣化率取決於我們創造的價值。至於未來貨幣化的前景，正如我所說，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.

我們想指出的一點是，我們從一開始就對拼多多有著強烈的農業預測。我們對農業項目堅持零佣金政策。我們肯定會繼續支持農業商家，例如提供更多的流量曝光。另外我們之前也溝通過，我們會加大對農業的投入，以提供更好的消費者體驗。那麼隨著農產品比重的增加，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 2 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產業競爭格局的看法？一方面，我們看到其他電子商務平台採用了結構化的成本控制和較不激進的擴張。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積極。所以只是想聽聽您對電子商務領域競爭格局以及對 PDD 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（聽不清楚）農業新措施。這100億元目前已經使用了多少比例？未來 1 到 2 年我們想投資的領域是什麼？

[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.

[口譯] 艾迪，關於你提到的競爭格局，我認為目前的格局與 2、3 個月前相比，並沒有發生太大變化。所以本質上，中國的電子商務產業是一個巨大的市場，而且潛力巨大。隨著行業基礎設施的不斷發展以及消費者需求的不斷變化，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.

我們相信，從長遠來看，新平台、新業態的出現，將對消費者和產業本身產生正面的影響。對我們來說，如果從最近的疫情角度來看，如果再看看其他同行做得好的領域，我們認為就我們自己而言，在目前的服務水準上還有很大的提升空間。這是我們團隊需要學習的。而我們的團隊需要更加努力，腳踏實地，服務好消費者，為整個社會創造價值。這是我們身為一家公司應盡的義務和責任。

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，當我們從農產品開始做拼多多的時候。在我們發展的過程中，農業一直是我們的核心。我們也堅信農業領域未來的潛力。正如我所介紹的那樣，我們現在正在加大對核心技術的投入，特別是在農業技術方面的投入。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.

在這裡，我也來回答你的第二個問題。我們去年宣布了100億元人民幣的農業計畫。我們在宣布這項措施的時候也提到，希望這項措施能促進農業科技的進步，促進數位包容，同時也讓農業工人和農業科學家有成就感。在過去的一年裡，我和我們的團隊投入了大量的時間和精力，認真評估和研究各種提案和項目，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.

我在前面的演講中也給大家舉了一些技術賦能農業的例子，包括我們的智慧農業大賽。此外，我們也與頂尖的農學院校和科研機構合作，共同進行一些科學研究計畫。誠然，用科技賦能農業需要很多的思考、深刻的理解和實際的耐心。因此，我們需要對各種選擇進行比較，仔細評估每種選擇，並且必須利用我們在農業方面的經驗以及我們團隊的技術背景來做出最佳的選擇。

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.

在這個領域，我們的策略是長期的，對農業的投資還處於早期階段。對於這麼大的產業，我們的投資期間和投資規模不會因為中短期的波動而改變。我希望我所分享的內容可以讓您更了解我們對農業的看法以及我們在農業方面所做的事情。

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）我有兩個問題。在使用者方面，我們注意到，儘管基數較高，但 AAC 和 MAU 均呈現連續加速成長。能和我們分享一下背後的驅動因素嗎？考慮到我們的用戶群較大，我們不應該期望快速成長，我們應該如何考慮用戶的成長空間和上限？

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行銷費用。儘管收入成長迅速，但我們對銷售和行銷的控制非常有效，金額逐年下降。您能與我們分享背後的原因嗎？例如，我們這次收購的投資報酬率有改變嗎？去年拼多多表示，我們正在從銷售和行銷轉向研發重點。可以向我們介紹一下進展嗎？那麼我們是否應該期待這項工作基本完成？

[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.

[翻譯] 好吧，肯尼斯，讓我來回答你的問題。用戶號碼。我們先來看一下這些數字。截至去年第一季度，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進一步增加至約8.8億和7.5億。我們取得了一些成長。但我認為長期趨勢應該非常明確。儘管可能會有波動，但我認為我們的用戶成長放緩是不可避免的。嗯，在過去幾個季度中，我們也與您分享了這個觀點。

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首要任務和必須履行的任務是進一步改善現有的8.8億消費者的使用者體驗，並提高他們對我們的信任度和鞏固他們的心智份額。至於策略轉變，我們基本上是在基礎設施升級和用戶需求不斷變化的情況下進行的，我們在技術投資方面所做的就是尋找機會，提升自己，並更好地服務使用者。

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

而且我很高興地看到，透過我們的努力，我們確實為消費者創造了價值，特別是在農產品領域。

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.

因此另一點是，最近的疫情確實暴露了我們需要改進的一些領域。在理解用戶需求、跟上用戶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。另外，我們在探索的過程中，看到好的機會，我們就會繼續投資。因此，如果我們看一下財務狀況，我們的努力可能會顯現出來並反映在未來的財務結果中，特別是在技術方面。我希望我剛剛分享的內容能為大家提供更多有關我們的用戶數量及其未來成長的見解。

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。我來回答您關於中小企業費用的第二個問題。嗯，正如您剛才所說，我們正在經歷從行銷轉向研發的低預測。正如您所看到的，我們的財務表現已經呈現出這樣的狀況。例如，第一季銷售和行銷費用年減 14%，佔總營收的 47%，低於去年第一季的 59%。同時，研發費用較去年同期成長20%。對於我們的再投資，我們會仔細評估投資報酬率，並分配資源以實現長期高品質的發展。像往常一樣，我們將繼續堅持我們的投資紀律。

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，在某些使用者需求方面，我們做的還不夠，還有很大的進步空間。所以我們需要進一步探索如何更好地服務我們的用戶。事實上，最近的疫情也顯示出我們有待改進的某些面向。因此，當我們看到良好的機會時，我們將繼續投資，為消費者創造更多價值。因此，未來的支出趨勢可能會改變。我們堅信研發投入可以帶來高品質的發展。因此我們將繼續加大投資，這將在我們的財務表現中反映出來。而我們還處於投資階段，而不是穩定階段。對於財務數據，我們建議您查看長期趨勢以及我們從這項投資中創造的價值。希望這可以澄清您的疑問。謝謝。

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

我想我們還有時間回答下一位分析師的問題，這也是最後一個問題。

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）讓我快速翻譯一下。我有兩個問題。第一個問題與 COVID 有關，就最近所謂的疫情而言，管理層能否分享更多有關疫情如何影響行業以及拼多多運營的細節？這對您的第一季業績有多大影響？另外，您對目前和混合資料下第二季的業績有何展望？

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獲利能力。您已連續 4 個季度在 GAAP 和非 GAAP 基礎上實現了有意義的流程。只是想知道在現階段，您現在是否優先考慮我們實現目標的可能性？投資者是否應該預期我們的季度收益將成為常態？

[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.

[翻譯] 好吧，娜塔莉。那麼，讓我來回答一下你的問題：這場疫情對我們和我們的營運有何影響。嗯，我認為這場疫情向我們展示的一個方面是，對於我們的業務來說，我們需要使其更具彈性，並且有些領域我們需要進一步改進，特別是在如何有效滿足用戶需求方面。在當前情況下——在當前情況下，我認為我們的同行已經表現出一些值得我們學習的方面。

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使用者本質需求的電商公司。疫情期間，我們也積極發揮差異化優勢，為消費者創造價值，並履行社會責任。這裡我給大家舉幾個例子。首先在上海，我們針對上海市民推出了48小時配送包，透過聚合上海市民的訂貨和配送人員，力求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，我們在政府相關部門的指導下，努力為醫護人員和群眾提供急需的物資。這些是我們一直致力於利用我們的差異化和價值主張所進行的一些領域。在這次疫情期間，我想說的另一個重要觀點是，我們也看到許多年輕人才迎接挑戰，他們在這些現實世界的挑戰面前迅速成長。他們正在積極確保良好的供應。他們提供技術支援以協助實現目標，同時也解決一些操作困難。他們承擔著越來越多的責任和挑戰。所以從這一點來看，我對我們團隊的潛力充滿信心。所以基於我剛才所說的，我看到拼多多的情況讓我更相信我們團隊在年輕人才方面的表現。

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.

另外一點，在這樣的特殊時期，我們也看到農業和農業供應鏈是如此重要，擁有一個非常有彈性的農業供應鏈非常重要。所以我們對農業的長期投資尤其重要。我希望我剛才分享的內容可以讓您更了解我們對農業的看法。

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，感謝您關於盈利能力的第二個問題。首先，我想指出這不是我們目前的首要任務——在過去幾季中，我們的利潤仍然來自於我們的經營槓桿，尤其是來自銷售和行銷的槓桿。正如上個季度所提到的，面對較低的成長，我們也控制了支出。而在當前日益激烈的競爭下，我們也看到我們在為用戶提供方面仍有很大提升空間。疫情大流行的原因也顯示了這一點。所以我們需要加大投入，這可能會導致我們未來的季度獲利出現波動。如你所見，本季的利潤與上一季相比較上季下降。同時，過去幾季的獲利也給了我們更大的信心繼續進行長期投資。我們希望大家更重視我們創造的價值。謝謝。

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。感謝大家參加我們今天的電話會議。如果您還有其他問題，請隨時聯絡我們的 IR 團隊。謝謝。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。你們都可以斷開連線。

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

[本記錄中標記為[已翻譯]的部分由現場翻譯人員朗讀。