ATRenew Inc (RERE) 2021 Q4 法說會逐字稿

Good morning and good evening, ladies and gentlemen, thank you for standing by and welcome to ATRenew Inc. Fourth Quarter and Full Year 2021 Earnings Conference Call. (Operator Instructions)

女士們、先生們，早安、晚上好，感謝大家的支持，歡迎參加 ATRenew Inc. 2021 年第四季和全年財報電話會議。 （操作員指令）

I will now turn the call over to the first speaker today. Mr. Jeremy Ji, Director of Corporate Development and Investor Relations for the company. Please go ahead, sir.

現在我將把電話轉給今天的第一位發言者。該公司企業發展和投資者關係總監 Jeremy Ji 先生。先生，請繼續。

Thank you. Hello, everyone, and welcome to ATRenew's Fourth Quarter and Full Year 2021 Earnings Conference Call. Speaking first today is Kerry Chen, our Founder, Chairman and CEO; and he will be followed by CFO, Rex Chen. After that, we'll open the call to questions from analysts.

謝謝。大家好，歡迎參加 ATRenew 2021 年第四季和全年財報電話會議。今天首先發言的是我們的創辦人、董事長兼執行長陳凱瑞；他的繼任者為財務長 Rex Chen。之後，我們將開始回答分析師的提問。

Our fourth quarter and full year 2021 financial results were released earlier today. The earnings release, investor slides accompanying this call and filings with the U.S. SEC are available on our company's website at ir.atrenew.com. There will also be a transcript following this call.

我們的 2021 年第四季和全年財務業績已於今天稍早發布。本次電話會議的收益報告、投資者幻燈片以及提交給美國證券交易委員會的文件均可在我們公司的網站 ir.atrenew.com 上查閱。此次通話結束後還將提供一份記錄。

For today's agenda, Kerry will share his thoughts on our fourth quarter and full year performance as well as a review on our business strategy, followed by Rex, who will address the financial highlights. Both Kerry and Rex will join the Q&A session.

今天的議程是，Kerry 將分享他對我們的第四季度和全年業績的看法以及對我們業務策略的回顧，隨後 Rex 將介紹財務亮點。 Kerry 和 Rex 都將參加問答環節。

Please note that some of the information you will hear during our discussion today will consist of forward-looking statements, and I refer you to our safe harbor statements in the earnings press release.

請注意，您在我們今天的討論中聽到的一些資訊將包含前瞻性陳述，我請您參閱收益新聞稿中的安全港聲明。

Any forward-looking statements at ATRenew make on this call are based on assumptions as of today, and ATRenew does not take any obligation to update on assumptions on these statements. 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.

ATRenew 在本次電話會議上做出的任何前瞻性陳述均基於截至今天的假設，ATRenew 不承擔更新這些陳述中的假設的任何義務。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。

Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB, and all comparisons are on a year-over-year basis.

最後，請注意，除非另有說明，本次電話會議中提到的所有數字均為人民幣，所有比較均為同比。

I'd now like to turn the call over to Kerry for business and strategy updates.

現在我想將電話轉給克里，詢問業務和策略最新情況。

[Interpreted] Hello, everyone, and thank you for joining us on our fourth quarter and full year 2021 earnings conference call.

[口譯] 大家好，感謝您參加我們的 2021 年第四季和全年財報電話會議。

Before we begin, I would like to extend my gratitude to all our employees, merchant partners and industry partners. I could not be prouder of how well our teams have worked together across the country to overcome the challenges of the COVID-19 resurgence.

首先，我想向我們所有的員工、商家合作夥伴和產業夥伴表示感謝。我為我們全國各地的團隊齊心協力克服新冠肺炎疫情復發的挑戰感到無比自豪。

Our combined efforts enabled us to find creative solutions to navigate through such a challenging environment, offering consumers safe and convenient recycling, trading and shopping services. I also want to thank our merchants and [circular] ecosystem partners for their continued trust and collaboration. Together, we are promoting our low-carbon lifestyles where recycling and reuse of pre-owned consumer electronics has become mainstream.

我們的共同努力使我們能夠找到創造性的解決方案來應對如此充滿挑戰的環境，為消費者提供安全、便利的回收、交易和購物服務。我還要感謝我們的商家和[循環]生態系統合作夥伴的持續信任和合作。我們共同倡導低碳生活方式，回收再利用二手消費性電子產品已成為主流。

We are delighted to share with you our continued growth momentum at group level. In 2021, our GMV and total revenues reached RMB 32.5 billion and RMB 7.8 billion, representing year-over-year increase of 65.8% and 60.1%, respectively. These growth rates were significantly higher than those in 2020 and 2019. What contributed to this rapid growth was not only the increase in consumer demand for trading, but also our strong strategy execution of penetrating in lower-tier cities and enhancing our confidence of forcing supply locally.

我們很高興與您分享我們集團層面持續的成長動能。 2021年，我們的GMV和總收入分別達到人民幣325億元和人民幣78億元，較去年同期成長65.8%和60.1%。這些成長率明顯高於2020年和2019年的成長率，推動這一快速成長的不僅是消費者對交易的需求增加，還有我們強大的滲透低線城市的策略執行力，增強了我們在本地強制供應的信心。

On profitability, we have achieved significant efficiency optimization. In 2021, non-GAAP operating loss was RMB 100 million, and the non-GAAP operating margin narrowed to negative 1.3% from negative 3% in 2020. Notably, revenues in the fourth quarter beat guidance, and we have successfully achieved non-GAAP operating profitability. We are confident in maintaining this going forward with sufficient capital and a clear strategy, we are on the fast track of healthy and sustainable growth trajectory.

在獲利能力上，我們實現了顯著的效率優化。 2021年非GAAP經營虧損為人民幣1億元，非GAAP經營利潤率由2020年的負3%收窄至負1.3%。我們有信心，憑藉充足的資本和明確的策略，我們將繼續保持這一勢頭，並快速走上健康、可持續的成長軌道。

Next, let's take a more detailed look at our operations in 4 aspects: one, how we deploy and manage the nationwide edge as store network; 2, some newly updates on the city level service integration model; 3, how we balance the scale expansion and raising take rate of marketplaces; and 4 Paipai's sales performance during the spring festival.

接下來我們透過四個面向來更詳細地看一下我們的營運情況：第一，我們如何部署和管理全國範圍的邊緣門市網路； 2、對城市級服務整合模式進行了新的更新； 3.如何平衡規模擴張與提升市場的接受度； 4.拍拍春節期間的銷售業績。

First, on store operations. In 2021, we added 576 new stores, growing the total number of offline stores to 1,308. This greatly exceeds our previous guidance of 200 new openings at the beginning of 2021. The store network covers 214 cities, an increase of 43 cities compared to the end of 2020, [shouldering] in-person delivery and fulfillment.

第一，關於門市營運。 2021年，我們新增門市576家，線下門市總數增加至1,308家。這大大超出了我們先前對 2021 年初新開 200 家門市的預期，門市網路覆蓋 214 個城市，比 2020 年底增加了 43 個城市，承擔了現場配送和訂單履行的任務。

Riding on geographic expansion, we also deepened penetration in lower-tier cities and increased density of stores in existing markets in order to further enhance sourcing capabilities and expand service coverage to individual consumers.

透過地理擴張，我們亦加深了對低線城市的滲透，並增加了現有市場的門市密度，以進一步增強採購能力及擴大對個人消費者的服務覆蓋範圍。

Among other stores, 595 were self-operated AHS stores, where we meet our consumers' recycling demand directly as well as provide trading services for JD's new device sales. Notably, store economics set a new record high in the fourth quarter as monthly average revenues per self-operated store exceeded RMB 690,000 while achieving a net margin of 3.7%. Leveraging our strengths in such industry-leading UE, self-operated AHS stores continue to enhance our competitive mode on the supply side across different use cases and contribute to both the top line and bottom line growth of the 1P business.

其他門市中，595家為自營AHS門市，我們直接滿足消費者的回收需求，並為京東的新設備銷售提供交易服務。值得注意的是，門市經濟在第四季創下新高，每家自營店月均收入超過人民幣69萬元，同時實現淨利率3.7%。憑藉我們在業界領先的UE方面的優勢，自營AHS門市繼續在不同用例中增強我們在供應側的競爭模式，並為1P業務的營收和利潤成長做出貢獻。

Meanwhile, the number of [20]-operated AHS stores reached 692, including standard franchise stores with the same format of self-operated ones. Partner stores, we started and accelerated to open since 2021, and were incorporated in local retailer stores. Together, these 20 -operated stores have contributed to our channel penetration and brand recognition, especially in lower tier markets.

同時，AHS直營店數量達到[20]家，其中包括與自營店業態相同的標準加盟店。合作店，我們自2021年起開始加速開業，並進駐當地零售店。總而言之，這 20 家自營店提高了我們的通路滲透率和品牌知名度，尤其是在低線市場。

In addition, we have 21 Paipai selection retail stores that provide a premium guaranteed and integrated online/offline shopping experience to customers.

此外，我們擁有 21 家拍拍精選零售店，為顧客提供優質有保障的一體化線上/線下購物體驗。

The second aspect I would like to address is the city level service integration model. As introduced and emphasized in the third quarter earnings call, we reallocated resources in each city and integrated our core capabilities of 3 major business lines locally to establish our cohesive operating unit to penetrate deeper across local markets and to enhance local sourcing capability as well as transaction efficiency. We then review the financial performance of each city and provide incentives accordingly.

第二個面向我想講的是城市級服務整合模式。正如在第三季財報電話會議上介紹和強調的那樣，我們重新分配了每個城市的資源，並在當地整合了我們三大業務線的核心能力，建立了我們有凝聚力的營運單位，從而更深入地滲透到當地市場，並提高了本地採購能力和交易效率。然後，我們會審查每個城市的財務表現並提供相應的激勵措施。

The city level service integration model has proven to be the right path for growth, judging by our progress in the fourth quarter. Local penetration rate equivalent to the trading volume of pre-owned devices divided by the sales volume of new devices recorded significantly sequential increases of 46% in Langfang, Hebei Province and 53% new and Huzhou, Zhejiang province.

從我們第四季的進展來看，城市級服務整合模式已被證明是正確的成長道路。當地滲透率等於二手設備交易量除以新設備銷售量，其中河北廊坊較上季成長 46%，浙江湖州季增 53%。

In the first quarter 2020, we have launched 22 pilot cities. It turns out that 18 out of them achieved faster growth compared with the baseline. B2B GMV increased by over 100% in 12 cities, including Shenyang, Nanchang and Hefei. We remain steadfast in the city level service integration strategy and will leverage it for refined analysis on local operations. It enables us to improve our sourcing process, promote recycling at city level, serve our customers better and in turn, generate additional service revenue. Compared with the baseline, we expect to generate an extra GMV growth of 40% in the pilot cities.

2020年第一季度，我們已經啟動22個試點城市。結果表明，其中 18 家企業的成長速度比基線更快。瀋陽、南昌、合肥等12個城市B2B交易額增加超過100%。我們堅持城市級服務一體化策略，對本地營運進行精細化分析。它使我們能夠改善採購流程，在城市層級促進回收利用，更好地服務我們的客戶，進而產生額外的服務收入。與基準相比，我們預計試點城市的 GMV 將額外成長 40%。

Third, we have a comprehensive take rate of 4.8% for our marketplaces in the fourth quarter, and we will balance the rising take rate and healthy growth of the platform in the long run. For B2B business, we are devoted to offering a high-quality transaction platform to mid and small merchants, empowering them with digital tools of efficient sourcing, inventory management, sales, logistics and balance management. We take a small fraction of service fees out of the value we create.

第三，我們第四季市場綜合佣金率為4.8%，我們將在不斷上升的佣金率和平台長期健康成長之間取得平衡。對於B2B業務，我們致力於為中小型商家提供優質的交易平台，為他們提供高效的採購、庫存管理、銷售、物流和餘額管理的數位化工具。我們從所創造的價值中抽取一小部分服務費。

In 2021, our high-quality services earned endorsement from merchants, leading to a 33% year-over-year increase in registered merchant accounts. The trust and the confidence we obtained from merchants also evidence why we can successfully adjust the fee structure for certain service items.

2021年，我們優質的服務贏得了商家的認可，註冊商戶帳戶數年增33%。商家給予我們的信任和信心也是我們能夠成功調整某些服務項目收費結構的證據。

Looking ahead, we will continue to balance our need to increase the take rate and our desire to expand the scale of B2B marketplace. We hope to achieve sustainable and high-quality growth in the coming quarters as we unfold the city level service integration strategy.

展望未來，我們將繼續在提高接受率的需求和擴大 B2B 市場規模的願望之間取得平衡。我們希望隨著城市級服務一體化策略的實施，在未來幾季實現可持續的高品質成長。

Our positioning for PJT Marketplace is to build a basic service for the industry rather than to harvest the fruit aggressively. We are ready to fulfill third-party retailers growing demand to trading better to attract more merchants and their supply to the online marketplace as we continue to increase customer engagement and improve the service experience.

我們對PJT Marketplace的定位是打造產業基礎服務，而不是大舉收割果實。我們準備滿足第三方零售商日益增長的需求，以便更好地進行交易，吸引更多的商家並將他們的供應帶入線上市場，同時我們將繼續提高客戶參與度並改善服務體驗。

Fourth, let me quickly cover Paipai's development. We achieved stable growth in B2C platform GMV and reached new high in service take rate, thanks to an improved brand recognition, tighter control over self-operated supply chain and improvement in aftersales services.

第四，我來簡單介紹拍拍的發展。得益於品牌知名度的提升、自營供應鏈管控的加強以及售後服務的改善，B2C平台GMV實現穩定成長，服務接受率再創新高。

In the fourth quarter, take rates for mobile category and the Paipai consignment model exceeded 10% for the first time ever. We also collaborated with JD Group's marketing campaign related to the naming rights of CCTV New Year's Gala and provided full-scale services.

第四季度，行動端和拍拍代銷模式的佣金率首次突破10%。並配合京東集團中央電視台春節聯歡晚會冠名權行銷活動，提供全方位服務。

During the holiday, GMV for Paipai marketplace grew by 71% year-over-year. Furthermore, we achieved year-over-year sales growth of over 300% on both [OEM ratio].

節慶期間，拍拍網交易總額較去年同期成長71%。此外，我們的[OEM比例]銷售額年增都超過300%。

In terms of profitability, we further refined our management and achieved a non-GAAP fulfilled gross margin of 14.6% with longer operating profit reaching RMB 9.7 million in the fourth quarter. We also saw meaningful improvements in fulfillment and G&A efficiency. As the non-GAAP fulfillment expenses and non-GAAP G&A expenses declined remarkably as a percentage of total revenues. We believe such efficiency can be further improved as a result of our persistent execution of city level service integration strategy and wider implementation of automated inspection systems.

獲利能力方面，我們進一步精進管理，第四季非美國通用會計準則下毛利率達14.6%，營業利潤達970萬元。我們也看到履行和 G&A 效率方面有顯著的提高。由於非公認會計準則履行費用和非公認會計準則一般及行政費用佔總收入的百分比大幅下降。我們相信，隨著我們堅持實施城市級服務一體化策略和廣泛實施自動化檢查系統，這種效率可以進一步提高。

Operating an internet plus recycle business, ATRenew is evolving with the circular economy advocated by Chinese government. In 2022, we aim to serve our customers well while upholding our position as an important partner in JD's ecosystem. We routine this in supply chain capabilities, continue upgrading automation technologies and optimize cost structure and margins. With no doubt, city level service integration strategy stays core to our business and drives organic growth across local markets in China. We are confident in our sustained growth without compromising profitability.

ATRenew 經營網路+回收業務，隨著中國政府倡議的循環經濟不斷發展。 2022年，我們致力於服務好客戶，同時保持我們作為京東生態系統重要合作夥伴的地位。我們在供應鏈能力中常規化這一點，不斷升級自動化技術並優化成本結構和利潤率。毫無疑問，城市級服務整合策略始終是我們業務的核心，並推動中國本地市場的有機成長。我們有信心在不損害獲利能力的情況下實現持續成長。

With that, I will hand the call over to our CFO, Rex to go over the financials.

說完這些，我將把電話交給我們的財務長雷克斯 (Rex)，讓他討論財務狀況。

Thanks, Kerry, and hello, everyone. We are very pleased to report that we have achieved the profitability milestone while delivering fourth quarter revenues that exceeded our previous guidance. I will start by sharing some of our financial highlights before we go into a more detailed look at the numbers.

謝謝，Kerry，大家好。我們非常高興地報告，我們實現了盈利里程碑，同時第四季度的收入超過了我們先前的預期。在我們更詳細地了解數字之前，我將首先分享一些財務亮點。

Please note that all amounts are in RMB and our comparisons are on a year-over-year basis, unless otherwise stated. In the fourth quarter 2021, we delivered 48.2% revenue growth to achieve total revenues of over RMB 2.4 billion, exceeding the high end of our previous guidance range provided in the third quarter earnings conference call. Total GMV grew by over 50.7%, driven by strong growth in both product sales GMV and online marketplace GMV.

請注意，除非另有說明，所有金額均以人民幣計算，且我們的比較是按同比計算的。 2021年第四季度，我們實現了48.2%的營收成長，總收入超過人民幣24億元，超過了我們在第三季財報電話會議上給出的預期範圍的高端。總 GMV 成長超過 50.7%，這得益於產品銷售 GMV 和線上市場 GMV 的強勁成長。

In this quarter, the commission rate of our third-party marketplaces rose to 4.8% at the group level, marking a historical high. This is a testament that our merchants, users, technology PJT and the Paipai marketplace for digitalized safe and convenient transactions.

本季，我們第三方市場佣金率在集團層級上升至4.8%，創歷史新高。這證明了我們的商家、用戶、科技PJT和拍拍市場對數位安全、便利交易的支援。

Bidding center transactions continue to show very strong growth. Gross margin at the group level was 26.1% in the fourth quarter. Gross margin for our 1P business stabilized at 13.3% sequentially as we rolled out a nationwide strategy to secure sources of supply at our best efforts. This further meets consumers' demand for easy recycling and treating while obtaining greater consumer market share.

競價中心交易持續呈現非常強勁的成長。第四季集團毛利率為26.1%。由於我們推行全國策略，盡最大努力確保供應來源，我們的 1P 業務的毛利率環比穩定在 13.3%。這進一步滿足了消費者對於易於回收和處理的需求，同時獲得了更大的消費市場份額。

In the fourth quarter, we meaningfully optimize the cost structure through reducing fulfillment costs, both at the storefronts and at operation centers. The progress is evidenced by a strong expansion in the non-GAAP fulfilled gross margin, reaching 14.6% and representing an increase of 140 basis points over a year ago.

第四季度，我們透過降低店面和營運中心的履行成本，大幅優化了成本結構。這項進步體現在非公認會計準則毛利率的強勁擴張，達到 14.6%，較去年同期增加了 140 個基點。

Notably, as previously mentioned, we delivered a non-GAAP operating income of RMB 9.7 million in this quarter. We expect to continuously optimize operational efficiency and improve our non-GAAP operating margin. We aim at achieving operating profit throughout 2022 in the non-GAAP measures.

值得注意的是，如前所述，本季我們實現非公認會計準則營業收入為 970 萬元。我們希望不斷優化營運效率並提高非公認會計準則營業利潤率。我們的目標是在非公認會計準則下實現 2022 年全年營業利潤。

Now let's take a detailed look at the financials. So overall increase in GMV was driven by a strong growth in both product sales GMV and the online marketplace GMV, which increased by 52.9% and 50%, respectively.

現在讓我們詳細看看財務狀況。因此，GMV 的整體成長是由產品銷售 GMV 和線上市場 GMV 的強勁成長所推動的，分別成長了 52.9% 和 50%。

Product sales GMV growth was mainly driven by improved efficiency in sourcing through the growing density and the penetration rate of AHS stores in China. Another driver is a [singles day campaign] of e-commerce and the live streaming platforms, which we have shared currently in the third quarter conference call.

產品銷售GMV的成長主要得益於中國AHS門市密度和滲透率的提高所帶來的採購效率的提升。另一個驅動因素是電子商務和直播平台的「雙十一」活動，我們已經在第三季電話會議上分享了這一點。

GMV for online marketplaces, including PJT and the Paipai increased by 50% mainly driven by; first, stronger merchants demand and higher transaction frequency; and the second is the growth of B2C consignment model, as the 1P business contributes to profit and the 3P business is still loss-making at this stage. We strive to achieve more balanced growth rates of 1P GMV and 3P GMV from non-setting profitabilities, higher priority during business expansion.

包括PJT和拍拍在內的線上交易市場的GMV成長了50%，主要得益於：一是商戶需求增強，交易頻率提高；二是B2C代銷模式成長，現階段1P業務已實現獲利，3P業務仍處於虧損狀態。我們力求在非設定獲利能力的基礎上，達到1P GMV和3P GMV更均衡的成長率，在業務拓展過程中具有更高的優先順序。

In the fourth quarter, total revenues increased by 48.2% to RMB 2,435.8 million. Net product revenues increased by 43.9% to RMB 2,076 million. While net sales revenues increased by 78.3% to RMB 359.9 million.

第四季，總營收年增48.2%至人民幣24.358億元。淨產品收入成長43.9%至人民幣20.76億元。淨銷售收入較去年同期成長78.3%至人民幣3.599億元。

Growth in net product sales revenues were driven by continued increases in the density of our AHS stores and our reinforced trading collaboration with JD.com. Growth in service revenues was driven by growing transaction volumes and an increase in the monetization capabilities of our marketplaces, reflecting a growing demand for our digital solutions and the technology impairment by merchant users.

淨產品銷售收入的成長得益於我們 AHS 商店密度的持續增加以及與京東的加強貿易合作。服務收入的成長得益於交易量的不斷增長和我們市場貨幣化能力的提升，反映了對我們的數位解決方案日益增長的需求和商家用戶的技術損害。

We believe the expansion of commission rates should be organic as we see the balance between the growing take rate and the growth in scale as we prioritize the betterment of our ecosystem participants in the long run through more added services, including repair program, we aim to serve our customers well with ample service options instead of imposing comparing fees.

我們認為佣金率的擴大應該是有機的，因為我們看到了不斷增長的收費率和規模增長之間的平衡，因為我們優先透過更多附加服務（包括維修計劃）長期改善我們的生態系統參與者，我們的目標是透過充足的服務選項為客戶提供良好的服務，而不是施加比較費用。

Next, turning to our operating expenses to provide greater clarity on the change in our actual operating base expenses. We will discuss our non-GAAP operating expenses, which better reflect the views of management. The reconciliations of GAAP and non-GAAP results are available in our [6] filings with the SEC.

接下來，談談我們的營運費用，以更清楚地說明我們實際營運基礎費用的變化。我們將討論非公認會計準則下的營業費用，這能更能反映管理階層的觀點。我們向美國證券交易委員會 (SEC) 提交的 [6] 份文件可提供 GAAP 和非 GAAP 結果的對帳表。

Operating costs and expenses increased by 50.1% to RMB 2,573.2 million. Non-GAAP operating expenses, which exclude share-based compensation expenses and amortization of intangible assets resulting from business acquisitions increased by 48.9% to RMB 2,437.7 million. Merchandize costs increased by 45.6% to RMB 1,800.5 million. This is in line with the growth of the 1P product sales revenues.

經營成本及費用增加50.1%至25.732億元。非美國通用會計準則下營業費用（不含股權激勵費用及業務收購產生的無形資產攤銷）成長48.9%至人民幣24.377億元。商品成本增加45.6%至人民幣18.005億元。這與1P產品銷售收入的成長一致。

Fulfillment expenses increased by 52.8% to RMB 290.1 million, excluding RMB 10.3 million in share-based compensation expenses, which we will refer to as SPC from here on. Non-GAAP fulfillment expenses increased by 47.3% to RMB 279.8 million. The increase was primarily due to the growing costs related to fulfillment personnel, logistics and operating centers costs as the company's business continues to scale.

履行費用增加52.8%至人民幣2.901億元，其中不包括股權激勵費用人民幣1,030萬元（下文我們稱為SPC）。非美國通用會計準則履行費用增加47.3%至人民幣2.798億元。成長的主要原因是隨著公司業務規模不斷擴大，與履行人員、物流和營運中心相關的成本不斷增加。

Notably, we have relocated our Shenzhen operating center to Dongguan a city nearby at lower cost. Meanwhile, advancing automation capabilities there, we target to complete the full scale automation of Dongguan [operating] center in the first half of 2022, further reducing inspection costs per device by 20% in South China. At the same time, for products with low selling prices and relaxed delivery requirements, we brought in economical logistic provider to optimize fulfillment costs.

值得注意的是，我們已將深圳營運中心遷至成本較低的附近城市東莞。同時，我們不斷提升自動化水平，目標在2022年上半年完成東莞中心的全面自動化，將華南地區每台設備的檢測成本進一步降低20%。同時，對於銷售價格低、交貨要求寬鬆的產品，我們引進了經濟體的物流供應商，以優化履行成本。

Selling and marketing expenses increased by 74% to RMB 368.8 million. The increase was primarily due to an increase in costs related to business development, sales promotion and increasing personnel to match the growing scale of our business, excluding SBC expenses and the amortization of intangible assets from business acquisitions, non-GAAP selling and marketing expenses increased by 100.2% to RMB 271.7 million.

銷售及行銷費用增加74%至人民幣3.688億元。成長的主因是隨著業務規模的擴大，與業務拓展、促銷及增加人員相關的成本增加，不包括SBC費用及業務收購產生的無形資產攤銷，非公認會計準則銷售及行銷費用增加100.2%至人民幣2.717億元。

Non-GAAP measures, selling and marketing expenses as a percentage of total revenues was 11.2% in the fourth quarter, slightly increased by 0.7 percentage points sequentially. To provide more color on selling expenses through investments in advertisements, promotions and campaigns reached RMB 92 million. Coupons on Paipai was RMB 63 million, representing an increase of RMB 23 million compared with the fourth quarter of 2020. Commission expenses were RMB 56 million and increased in line with the growth in scale and the new large streaming sales model.

以非美國通用會計準則計算，第四季銷售及行銷費用佔總收入的比例為 11.2%，較上一季小幅上升 0.7 個百分點。為增加銷售業績，公司在廣告、促銷及活動的投資達到 9,200 萬元。拍拍優惠券支出為0.63億元，較2020年第四季增加0.23億元。

For context, Paipai consignment model launched in 2021 and thus related sales promotion expenses were new to this category. We expect those coupons on Paipai to decelerate as B2C and the consignment sales getting on track. Overall sales and marketing expenses as of total revenue remained relatively stable throughout 2021.

具體來說，拍拍寄售模式於 2021 年推出，因此相關的促銷費用對於這一類別來說是新費用。我們預計，隨著 B2C 和寄售業務步入正軌，拍拍上的優惠券成長將會放緩。 2021 年全年，總收入中的整體銷售和行銷費用保持相對穩定。

G&A expenses increased by 41% to RMB 51.9 million. Excluding SBC expenses, non-GAAP G&A expenses decreased by 10.6% to RMB 32.9 million. Similar to the third quarter, the decrease in G&A expenses showed an improved cost efficiency in our middle and back offices.

一般及行政開支增加41%至人民幣5,190萬元。除去SBC費用，非GAAP一般及行政費用下降10.6%至3,290萬元。與第三季類似，一般及行政開支的減少表明我們中後台部門的成本效率有所提高。

Technology and content expenses increased by 35.8% to RMB 62 million, the increase was primarily due to increases in personnel costs related to the expansion of our research and development activities. Excluding SBC expenses and amortization of intangible assets resulting from business acquisitions, non-GAAP technology and content expenses increased by 38% to RMB 52.7 million. As a result, our non-GAAP operating income was RMB 9.7 million in the fourth quarter of 2021. Non-GAAP operating margin was 7.4% compared with negative 1.5% in the previous quarter.

技術和內容費用增加35.8%至人民幣6,200萬元，增幅主要因擴大研發活動導致的人員成本增加。剔除SBC費用以及業務收購產生的無形資產攤銷，非GAAP技術及內容費用成長38%至人民幣5,270萬元。因此，2021年第四季我們的非GAAP營業收入為人民幣970萬元。

As of December 31, 2021, cash and cash equivalents, restricted cash, short-term investments, funds receivable from third-party payment service providers and JD on the balance sheet totaled RMB 2.6 billion. Of note, funds receivable from third-party payment service providers and funds in JD account recorded as amount due from related parties totaled RMB 583.1 million. These cash topped up in company's JD Pay account, [WeChat] Pay account and [Alipay] accounts to support efficient recycling and transaction services.

截至2021年12月31日，資產負債表上的現金及現金等價物、受限現金、短期投資、應收第三方支付服務提供者及京東的款項總計 26億元人民幣。值得注意的是，應收第三方支付服務提供者的款項及記為關聯方應收款項的京東帳戶資金合計為人民幣5.831億元。這些現金充值至公司的京東支付帳戶、微信支付帳戶和支付寶帳戶，以支援高效率的回收和交易服務。

As I recall, we announced a USD 100 million share repurchase program on 28 December 2021 out of the management's strong confidence in the company's solid fundamentals and growth momentum.

我記得，我們​​在 2021 年 12 月 28 日宣布了一項 1 億美元的股票回購計劃，因為管理層對公司穩健的基本面和成長勢頭充滿信心。

Now turning to Outlook. For the first quarter of 2022, the company currently expects its total revenues to be between RMB 2,150 million and RMB 2,200 million. We expect to achieve stable and healthy growth in 2022. The recurrence of COVID-19 variants might impose an adverse impact on our store operations, warehouses and merchant transactions in 2022. This forecast already reflects the company's current and preliminary views on the market and the operational conditions, which are subject to change. This concludes our prepared remarks for today.

現在轉向 Outlook。對於2022年第一季，該公司目前預計總收入將在人民幣21.5億元至人民幣22億元之間。我們預計 2022 年將實現穩定健康的成長。今天的準備發言到此結束。

Operator, we are now ready to take your questions.

接線員，我們現在可以回答您的問題了。

(Operator Instructions) Our first question today comes from Lucy Li with Goldman Sachs.

（操作員指示）我們今天的第一個問題來自高盛的 Lucy Li。

(foreign language) The question is on our next stage of growth and 10 in general. So in 2021, the company -- the proposed transaction volume exceeded 30 million pieces. So how do we assess the future growth potential going forward?

（外語）問題是關於我們的下一階段的成長以及整體的 10 個面向。所以2021年，該公司—擬定交易量超過3,000萬件。那我們如何評估未來的成長潛力？

And the second question is regarding our own business, 1P versus 3P. We observed that the 1P business delivered fast growth in both 4Q and this year. So I wonder if we are going to put more emphasis on the 1P business compared to 3P for example.

第二個問題是關於我們自己的業務，1P 與 3P。我們觀察到1P業務在第四季和今年都實現了快速成長。所以我想知道我們是否會更重視 1P 業務而不是 3P 業務。

[Interpreted] To address the first one, we believe there is a great credential for growth. Firstly, on the addressable market, the number of devices transacted on our platform this year reached a record high of over RMB 30 million. However, this is still a small portion compared with 590 million new electronic devices sold in China annually according to CIC. In addition, other devices, including phones, tablets and laptops, et cetera, totaled RMB 2.7 billion, indicating a low rate of recycling.

[解釋] 對於第一個問題，我們認為有很大的成長潛力。首先，在目標市場方面，今年我們平台交易的設備數量創下了3,000多萬人民幣的歷史新高。然而，根據 CIC 的數據，與中國每年銷售的 5.9 億台新電子設備相比，這仍然是一個小部分。此外，手機、平板電腦、筆記型電腦等其他設備總額為27億元，回收率較低。

Secondly, on our penetration rate at city level, our services have relatively little presence locally. It was low single-digits in 70% of the cities in China, as we mentioned on the last earnings call. We are poised to increase that through steadfast implementation of our city level service integration strategy.

其次，就城市層面的滲透率而言，我們的服務在當地相對較少。正如我們在上次財報電話會議上提到的，中國 70% 的城市的失業率都處於個位數以下。我們準備好透過堅定實施城市級服務整合策略來提高這一水準。

To answer your question to business priority, we plan to seek an accelerated growth of 1P business with steady profit and a healthy growth of 3P GMV with more attention to the efficiency and profitability of the marketplaces. Looking back at 2021, GMV of 1P business increased by 69.6% year-over-year, outlining the growth rates over the past years. We attribute this to the solid progresses in new store openings, a stronger trading partnership with JD and expanding 1P direct to retail business on Paipai.

回答你關於業務優先順序的問題，我們計劃尋求 1P 業務的加速成長和穩定的利潤，以及 3P GMV 的健康成長，同時更專注於市場的效率和獲利能力。回顧2021年，1P業務GMV年成長69.6%，概括了過去幾年的成長率。我們將此歸功於新店開設的穩步進展、與京東更強大的貿易夥伴關係以及拍拍上 1P 直銷業務的擴大。

The stores continue generating profit, in the fourth quarter 2021, net margin of mature stores reached 4.0%, improving our confidence in serving more customers and top up our efforts in these stores. We expect to open 200 new standard AHS stores in 2022. Furthermore, we aim to add 500 partner stores, i.e., store-in-store, a new format in collaboration with local partners as a part of the city level service integration strategy. This is to facilitate trading and to expand consumer reach through the synergy with JD and mobile brands, and it helps to grow our footprint in local retail scenarios.

門市持續獲利，2021年第四季成熟門市淨利率達4.0%，增強了我們服務更多客戶的信心，加大了我們在這些門市的投入。我們預計在 2022 年開設 200 家新的標準 AHS 門市。這是為了透過與京東和行動品牌的協同作用來促進交易並擴大消費者覆蓋範圍，並有助於擴大我們在本地零售場景的影響力。

We take city level service integration model, the key to the next stage of growth for PJT and Paipai marketplace. This will be achieved through sourcing premium goods more efficiently. In the first quarter of 2022, we have launched a service integration model in 22 pilot cities to highlight the growth rate of B2B business in 12 pilot cities exceeded 100%, including Shenyang, Nanchang and [Hefei] provincial capital. By leveraging the city level service integration model, we dive deep into this B2B business. We digitalized the transactions and encourage online transactions. Not only do we serve dealers but also new device retailers, thus forming a closed loop from recycling from users when buying a new device through inspection at our facilities and directly to the retail end.

我們採取城市級服務整合模式，這是PJT和拍拍市場下一階段成長的關鍵。這將透過更有效地採購優質商品來實現。 2022年第一季度，我們在22個試點城市啟動服務一體化模式，其中瀋陽、南昌、省會城市合肥等12個試點城市B2B業務增速超過100%。透過利用城市級服務整合模型，我們深入B2B業務。我們將交易數位化，並鼓勵網路交易。我們不僅服務經銷商，也服務新機零售商，形成從用戶購買新機回收，到我們工廠檢測，直達零售端的閉環。

The next question comes from Joyce Ju with Bank of America.

下一個問題來自美國銀行的 Joyce Ju。

(foreign language) We have seen the take rate reached 4.8% this quarter. Could management help us elaborate a little bit in terms of how do you take rates improve and the future trends in terms of how it could further improve?

（外語）我們看到本季的接受率達到了 4.8%。管理階層能否幫助我們詳細說明您如何看待利率提高以及未來利率如何進一步提高？

Let me take your question. As you can see, service revenue increased by 78.3% year-over-year in this quarter, surpassing the growth rate of platform GMV. This was due to the increase in take rate for both PJT and Paipai marketplaces. So in the fourth quarter, the overall take rate, as you mentioned, was 4.8%, a 0.2% increase sequentially. Amongst the take rate of PJT marketplace was, in average, it was 4.5%, while the take rate of Paipai in average was 5.4%, which was 0.6% and 1.2% higher than the same period last year, respectively.

請容許我回答你的問題。可以看到，本季服務營收年增78.3%，超過平台GMV的成長速度。這是由於 PJT 和拍拍市場收取率的提高。因此，正如您所說，第四季度的整體接受率為 4.8%，比上一季增長 0.2%。其中PJT市場平均成交率為4.5%，拍拍市場平均成交率為5.4%，分別比去年同期上升0.6個百分點和1.2個百分點。

For PJT marketplace, we started to charge an inspection service fee and consignment service fee from sellers in Q3, which led to an increased integrate for PJT marketplace by 0.6% compared with the same period last year. In the future, we will continue to expand and diversify our value-added services, such as maintenance services and supply chain financing services to increase the corresponding take rate. The take rate of the Paipai model on Paipai marketplace remained stable compared to the same period last year. The increase of take rate on Paipai was mainly due to the increase in the take rate of its consignment business.

對於PJT市場，我們從第三季開始向賣家收取檢測服務費和代銷服務費，帶動PJT市場積分比去年同期增加了0.6%。未來我們將繼續擴大和多樣化我們的增值服務，例如維護服務和供應鏈融資服務，以提高相應的接受率。拍拍模式在拍拍市場的推廣率與去年同期相比保持穩定。拍拍佣金率的提升，主要由於其代銷業務佣金率的提升。

Take rate of consignment model was 10.7%, a significant increase of 4% sequentially. GMV of consignment model accounted for 18% of Paipai platform GMV in recent quarters. The consignment model is being quickly adopted by merchants due to the complexity and fragmentation of the preowned electronic transaction industry chain. The cycle has faced numerous challenges when distributing to consumers. So the consignment model of Paipai is burden of retail and [offer] small merchants.

代銷模式承接率為10.7%，較上一季大幅增加4個百分點。寄售模式GMV佔最近幾季拍拍平台GMV的18%。由於二手電子交易產業鏈的複雜與零碎化，寄售模式正迅速被商家採用。在分銷給消費者時，該週期面臨許多挑戰。所以拍拍的代銷模式是零售負擔，小商家承擔。

In the future, we strive to reach our balance between scale expansion and leasing platform take rate. We will provide more service options and take tighter control over the operations and merchant ratings, which we believe will be conducive to the long-term development of the platform business.

未來，我們努力實現規模擴張和租賃平台承接率的平衡。我們將提供更多的服務選項，並加強對營運和商家評級的控制，我們相信這將有利於平台業務的長期發展。

The next question comes from Ella Ji with China Renaissance.

下一個問題來自華興資本的 Ella Ji。

(foreign language) Congratulations on a strong quarter. My question is regarding your margin outperformance. We wanted to, if management can provide more color regarding the main driver behind your margin outperformance? And how is the outlook for 2022 and onwards. And then within the expenses, we do see that sales and marketing has gone up in the quarter. Could you also provide more color regarding the sales and marketing expenses, the investment level also in 2022 and onwards.

（外語）恭喜您本季業績強勁。我的問題是關於你們的保證金超額表現。我們想知道管理階層是否可以提供更多有關利潤率優異表現的主要驅動因素的資訊嗎？ 2022 年及以後的前景如何？在費用方面，我們確實看到本季的銷售和行銷有所增加。您能否提供有關銷售和行銷費用以及 2022 年及以後的投資水準的更多詳細資訊。

For the first question regarding profitability, yes, we are confident to continue enhancing our operational efficiency and reach full year non-GAAP profitability target in 2022 and going forward. Our path to profitability can be divided into 3 aspects. First, as the gross margin improves due to the stable 1P pricing strategy and the increasing proportion of the service revenue, which can contribute the higher gross margin. Secondly, the fulfillment efficiency improved significantly due to more orders at store level in Q4 and better processing usage of our fixed facility. So our middle and back offices took tighter control of headcount and benefited from the economy of scale. As you can see in the decrease of the non-GAAP G&A expenses and this percentage as of total revenues.

對於第一個關於獲利能力的問題，是的，我們有信心繼續提高我們的營運效率，並在 2022 年及以後實現全年非 GAAP 獲利目標。我們的獲利之路可以分為三個面向。首先，由於1P定價策略穩定，服務收入佔比增加，毛利率提高，可以貢獻更高的毛利率。其次，由於第四季門市訂單增加以及固定設施的處理利用率提高，履行效率顯著提高。因此，我們的中後台部門對員工人數進行了更嚴格的控制，並從規模經濟中受益。正如您所看到的，非 GAAP G&A 費用佔總收入的百分比有所下降。

So for second question regarding selling expenses, non-GAAP selling and marketing expenses accounted for 11.2% of total revenue, increasing by 7.7% sequentially. Selling and marketing expenses mainly included personnel cost expenses for our B2B sales team. Channel fees and commission fees paid to JD as well as promotion and marketing fees for each different business lines. For this quarter, the year-over-year growth was mainly due to the expansion of our Paipai consignment businesses, new channel sales and the 1P direct 2C sales. We invested RMB 63 million in coupons and RMB 33 million in advertisements for brandings and the promotion of new channels, including live streaming, the JD Paipai flagship stores and the Paipai offline stores.

因此，對於第二個問題有關銷售費用，非 GAAP 銷售和行銷費用佔總收入的 11.2％，環比增長 7.7％。銷售和行銷費用主要包括我們B2B銷售團隊的人員成本費用。向京東支付的通路費、佣金以及各業務線的推廣行銷費用。本季同比成長主要得益於我們拍拍代銷業務的擴張、新通路銷售以及1P直銷2C的銷售。我們在優惠券方面投入了6,300萬元，在品牌廣告和新管道推廣方面投入了3,300萬元，包括直播、京東拍拍旗艦店、拍拍線下店等。

Furthermore, variable costs increased in line with our business expansion. The sequential increase compared with Q3 was due to the distribution of some coupons and marketing promotion activities for Paipai 2C sales related to the Singles Day shopping festival, above 12 and the Paipai anniversary campaigns. As we leverage multiple marketing approaches, we believe non-GAAP operating profit closely reflects our views on the performance of the business. Non-GAAP operating profit was RMB 9.7 million in this quarter, and the margin was 0.4%. We anticipate a positive non-GAAP operating margin in content to and expected to continue expanding.

此外，隨著業務的擴展，變動成本也隨之增加。環比成長主要由於拍拍2C銷售部分優惠券的發放以及與雙十一、十二折及拍拍週年慶活動相關的營銷推廣活動。由於我們利用多種行銷方法，我們相信非公認會計準則營業利潤密切反映了我們對業務表現的看法。本季非美國通用會計準則營業利潤為970萬元人民幣，利潤率為0.4%。我們預計非公認會計準則下的營業利潤率將為正，並且預計將繼續擴大。

The next question comes from [Jing Yu with GJTA].

下一個問題來自[GJTA的Jing Yu]。

(foreign language) As the pandemic situation in many areas has been quite serious recently. I would like to ask you a question about the impact on the company. What's the impact of your performance in last year? Your offline store has increased significantly, while the pandemic affect offline business was measured that the company take to deal with it?

（外語）由於近期許多地區疫情情勢比較嚴重。我想問您一個問題，關於對公司的影響。去年的表現有什麼影響？你們的線下門市成長明顯，疫情對線下業務的影響如何，公司採取了哪些因應措施？

[Interpreted] The core recurrence in 2021 had challenged our operations multiple times, but the overall adverse impacts were limited and controllable. This was primarily due to the scattered storefronts and operation facilities, AHS stores spread across 214 cities. Temporary closure of stores in some cities has limited impact on the overall performance. There were 7 regional operation centers and 95 city level operation stations nationwide. When there's a regional shutdown, the nearby facilities are able to step up. For example, our operation stations in the neighboring cities handle the orders for Shenzhen and Dongguan during their recent incidents. Although our business showed resilience, we can't predict the material negative impact on our business caused by the recurrences of COVID-19 variants. We will continue to prioritize safety, keep ourselves prepared and our workplaces clean and stay flexible.

【解讀】2021年的核心復發，對我們的經營造成了許多挑戰，但整體來說負面影響有限、可控制。這主要是由於店面和營運設施分散，AHS 門市遍布 214 個城市。部分城市門市暫時關閉，對整體業績影響有限。全國設有7個區域營運中心、95個地市級營運站。當發生區域性停工時，附近的設施能夠加強運作。例如，在深圳和東莞發生疫情期間，我們週邊城市的營運站就負責處理這兩個城市的訂單。儘管我們的業務表現出韌性，但我們無法預測 COVID-19 變種的復發會對我們的業務造成重大負面影響。我們將繼續把安全放在第一位，做好準備，保持工作場所的清潔和靈活性。

As there are no further questions at this time, I'd like to hand the conference back to our management for closing remarks.

由於目前沒有其他問題，我想將會議交還給我們的管理層，以便他們作結束語。

Thank you. A replay of today's call will be available on our IR website shortly followed by a transcript when ready. If you have any additional questions, please feel free to e-mail us at ir@atrenew.com. Have a good day.

謝謝。今天的電話會議重播將在我們的 IR 網站上提供，並在準備好後提供文字記錄。如果您有任何其他問題，請隨時發送電子郵件至ir@atrenew.com。祝你有美好的一天。

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

此次會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。

[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。