Viomi Technology Co Ltd (VIOT) 2023 Q2 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for Viomi Technology Co., Ltd Earnings Conference Call for the first half of 2023. Today's conference is being recorded.

女士們、先生們，大家好。感謝您出席雲米科技股份有限公司2023年上半年度業績電話會議，今天的會議正在錄製中。

I will now turn the call over to your host, Ms. Claire Ji, the IR Director of the company. Please go ahead, Claire.

現在我將電話轉接給你們的主持人，公司IR總監季克萊爾女士。請繼續，克萊爾。

Thank you, Allison, and hello, everyone, and welcome to Viomi Technology Company Limited Earnings Conference Call for the first half of 2023. As a reminder, this conference is being recorded. The company's financial and operating results were issued in the press release earlier today and are posted online. You can download the earnings press release and sign up for the company's e-mail distribution list by visiting the IR section of the company's website at ir.viomi.com.

謝謝艾莉森，大家好，歡迎參加雲米科技有限公司2023年上半年收益電話會議。溫馨提示，本次會議正在進行錄音。該公司的財務和經營業績已在今天早些時候的新聞稿中發布，並發佈在網上。您可以造訪公司網站 ir.viomi.com 的 IR 部分，下載收益新聞稿並註冊公司的電子郵件分發清單。

Participating in today's call are Mr. Xiaoping Chen, the Founder, Chairman of the Board of Directors and the Chief Executive Officer; and Mr. [Zhu Wen Zhang], the Head of our Capital Market Department. The company's management will begin with prepared remarks, and the call will conclude with a Q&A session.

參加今天電話會議的有創辦人、董事會主席兼執行長陳小平先生；以及我們資本市場部的負責人[朱文章]先生。公司管理階層將以準備好的發言開始，電話會議將以問答環節結束。

Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's annual report on Form 20-F and other filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required by law.

在我們繼續之前，請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。前瞻性陳述涉及固有風險和不確定性。因此，公司的實際結果可能與今天表達的觀點有重大差異。有關此風險和其他風險和不確定性的更多資訊包含在公司向美國證券交易委員會提交的 20-F 表格年度報告和其他文件中。除法律要求外，本公司不承擔更新任何前瞻性聲明的義務。

Please also note that Viomi's earnings press release and this conference call includes discussion of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. In addition, Viomi's press release contains a reconciliation of unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.

另請注意，雲米的獲利新聞稿和本次電話會議包括對未經審計的 GAAP 財務資訊以及未經審計的非 GAAP 財務指標的討論。此外，雲米的新聞稿還包含未經審計的非公認會計原則措施與未經審計的最直接可比較的公認會計原則措施的調節表。

I will now turn the call over to our founder and CEO, Mr. Xiaoping Chen. Mr. Chen will deliver his remarks in Chinese, followed immediately by an English translation. Mr. Chen, please go ahead.

現在我將把電話轉給我們的創辦人兼執行長陳小平先生。陳先生將以中文發表講話，隨後將提供英文翻譯。陳先生，請講。

(foreign language)

（外語）

[Interpreted] Thank you, Mr. Chen. I'll quickly translate our founder's remarks before discussing our financial performance for the first half of 2023.

[翻譯]謝謝陳先生。在討論我們 2023 年上半年的財務表現之前，我將快速翻譯我們創辦人的演講。

Hello, everyone. Thank you for joining us today on our Earnings Conference Call for the first half of 2023. Constrained by lukewarm consumer sentiment and the company's strategic adjustments during the first half of 2023, our total revenue recorded RMB 1.3 billion representing a decrease of 20% year-over-year, while gross margin declined by 1.9 percentage points year-over-year. However, as we continue to streamline our organizational structure and enhance operational efficiency, our operating results is on a way of recovery.

大家好。感謝您今天參加我們的 2023 年上半年業績電話會議。2023 年上半年，受消費者情緒冷淡以及公司戰略調整的製約，我們的總收入為人民幣 13 億元，同比下降 20%-毛利率同比下降1.9個百分點。不過，隨著我們不斷精簡組織架構、提升營運效率，我們的經營績效也逐漸恢復。

We see a year-over-year decline of 30.3% in operating expenses and a 1.4 percentage point decrease in net loss margin. Over the past 6 months, we enhanced our product mix by focusing on core product categories, driving an increase in the revenue contribution of our water purification products to 22% from 14% a year ago. We believe that optimizing our product category structure will benefit the sustainability of our long-term development.

我們預計營運費用將年減 30.3%，淨虧損率下降 1.4 個百分點。過去6個月，我們透過聚焦核心產品類別強化產品結構，帶動淨水產品的營收貢獻從一年前的14%提升至22%。我們相信，優化產品品類結構將有利於我們長期發展的可持續性。

Additionally, we have achieved market-leading industrial chain capabilities in the water purification products. We have independently mastered advanced filtration technology and material manufacturing processes, empowering us to research, develop and produce core components. Moreover, we have developed a comprehensive set of proprietary solutions, including the capability of complete machine assembly, customized automated production lines and end-to-end data collection and analysis.

此外，我們在淨水產品方面也取得了市場領先的產業鏈能力。我們自主掌握先進的過濾技術和材料製造工藝，具備核心零件的研發和生產能力。此外，我們還開發了一套全面的專有解決方案，包括整機組裝能力、客製化自動化生產線以及端到端資料收集和分析能力。

In July, Guangdong Lizi Technology Company Limited, one of our subsidiaries was designated as a national-level specialized and innovative 'little giant' enterprise, owing to its remarkable R&D and innovation capabilities in the water purification industry. As one of the highest level and most authoritative nationwide enterprise evaluation rating, this honor recognizes and affirms our comprehensive strength in the industrial chain of water purification.

7月，旗下廣東麗子科技有限公司憑藉在淨水產業卓越的研發創新能力，獲選為國家級專業創新「小巨人」企業。作為全國最高級別、最權威的企業評估評級之一，這項榮譽是對我們在淨水產業鏈綜合實力的認可和肯定。

In regards to our other product categories, we utilize a flexible combination of OEM and independent R&D to lay out our product mix. And in the meantime, we constantly deepen our investment in and control over core technologies to develop differentiated intelligent and whole house products.

對於其他產品類別，我們採用OEM和自主研發的靈活組合來佈置我們的產品組合。同時，我們不斷深化對核心技術的投入與掌控，開發差異化的智慧全屋產品。

On April 28, 2023, we introduced a series of high-tech products at our Spring New Product Launching Event, featuring enhanced integration of our one-stop IoT @ Home solutions, such as our Master 3 Pro, formaldehyde-removing AI vertical air conditioners and Super 2 Pro, AI vertical air conditioner equipped with fresh air systems, which improves the indoor air quality to protect users' health.

2023年4月28日，我們在春季新品發布會上推出了一系列高科技產品，其中加強了一站式IoT @ Home解決方案的集成，例如Master 3 Pro、除甲醛AI立式空調Super 2 Pro人工智慧直立式空調配備新風系統，改善室內空氣品質，並保障用戶健康。

We also debuted our Master 3 ultra-thin built-in refrigerator and washing machine set, which is currently setting a new trend in the home decoration industry as well as Master 3 Pro gas-electric hybrid water heater. Our brand-new intelligent lighting system within our smart home device category also made a debut.

我們也推出了引領家居裝潢產業新潮流的Master 3超薄嵌入式冰箱洗衣機以及Master 3 Pro燃氣電混合熱水器。我們的智慧家居設備類別中的全新智慧照明系統也首次亮相。

Turning to our brand. We were proud to be included on the list of 2023 China's Top 500 Brands, ranked at 443 with a brand valuation of RMB 13.385 billion. There are only two brands in the smart home sector that made their way on this ranking. We are honored to be one of them. This is a powerful recognition of our brand-leading position in the industry.

轉向我們的品牌。我們很榮幸入選2023年中國品牌500強，排名第443位，品牌價值133.85億元。智慧家居領域只有兩個品牌上榜。我們很榮幸能成為其中之一。這是對我們品牌產業領先地位的有力認可。

As to our off-line channels, with off-line consumer market recovering gradually, we participated in several large-scale acquisitions, including the China appliance and electronics were up for AWE held in Shanghai in April, and Shenzhen Creative Week held in May and the China International Building Decoration Fair held in Guangzhou in July.

線下通路方面，隨著線下消費市場逐步復甦，我們參與了多起大型收購，包括4月上海AWE上的中國家電電子、5月和2月深圳創意周等。7月，中國國際建築裝飾博覽會在廣州舉行。

During these events, we showcased our comprehensive whole health solution to our off-line distributors and attracted consumers to visit and experience an immersive future life, supporting the recovery of our off-line sales. Furthermore, we enrich our product offerings for our overseas markets with new categories accounting for over 60% of our revenues, overseas, which effectively made up for the decline in sales of smart cleaning products in overseas markets.

在這些活動中，我們向線下經銷商展示了全面的全健康解決方案，吸引了消費者參觀並體驗沉浸式未來生活，支持了線下銷售的復甦。此外，我們也豐富了海外市場的產品結構，新品類海外收入佔比超過60%，有效彌補了智慧清潔產品海外市場銷售的下滑。

With the widespread adoption of new energy vehicles and smart terminal devices, as well as the breakthrough in generative AI technology, we believe the era of intelligence has arrived, integrating AI's super power into whole-house intelligence, will not only enable a revolutionary user experience, but also inspire unprecedented creativity across the whole-house intelligent industry.

隨著新能源汽車和智慧終端設備的廣泛應用，以及生成式AI技術的突破，我們相信智能時代已經到來，將AI的超能力融入全屋智能，不僅會帶來革命性的用戶體驗，也激發了整個全屋智慧產業前所未有的創造力。

With our high-tech and fashionable brand positioning, we see Viomi is at the forefront of this revolution. By steadily improving our products' perception of space and environment and upgrading our AI voice interaction technology, we have successfully transitioned our whole-house intelligence from the era of control, which emphasizes connectivity, to the era of perception, characterized with active intelligence and proactive service.

憑藉高科技和時尚的品牌定位，我們看到雲米處於這場革命的最前沿。透過穩步提升產品對空間和環境的感知能力，升級AI語音交互技術，我們的全屋智能成功從強調連接的控制時代轉向主動智能、主動主動的感知時代。服務。

Moving forward, we will continue to explore and capitalize on our strengths to optimize our operations, concentrating on the following three areas. First, we will further deepen our roots in the water purification industry and roll out more industry-leading products, creating value for consumers with higher quality, more advanced technology, and more comprehensive services.

下一步，我們將繼續探索、發揮優勢，優化運營，並專注於以下三個方面的工作。一是進一步深耕淨水產業，推出更多業界領先的產品，以更高的品質、更先進的技術、更全面的服務為消費者創造價值。

Second, we will keep focusing on fine-tuning our product mix and improving and iterating our whole-house intelligent product matrix to elevate our products’ intelligent experience and deliver more helpful and user-friendly one-stop IoT home solutions.

其次，我們將持續聚焦產品結構的微調，完善和迭代全屋智慧產品矩陣，提升產品的智慧體驗，提供更實用、更人性化的一站式物聯網居家解決方案。

Last but not least, we will deepen our industrial layout, heighten our cost controls, increase our operational efficiency, and strengthen our product competitiveness to further improve operational performance. At the same time, we will maintain sufficient capital reserves to support these goals and consolidate our brand to drive robust and sustainable growth, sparing no effort to create long-term value for all of our users and shareholders.

最後，我們將深化產業佈局，加強成本控制，提高營運效率，增強產品競爭力，進一步提升營運績效。同時，我們將保持充足的資本儲備來支持這些目標，並鞏固我們的品牌，推動強勁、可持續的成長，不遺餘力地為所有用戶和股東創造長期價值。

Thank you. That concludes our founder's remarks. I will now turn the call over to our Head of Capital Markets, Mr. Zhu Wen Zhang to discuss our financial performance. Thank you.

謝謝。我們創始人的演講到此結束。我現在將電話轉給我們的資本市場主管朱文章先生，討論我們的財務表現。謝謝。

Thank you, Mr. Chen and Claire. And thanks to everyone for joining us today. I will go over our unaudited financial results for the first half of 2023. Our net revenues were RMB 1,304.4 million compared to RMB 1,665.4 million for the same period of last year. The decline was mainly due to a decrease in revenues from the IoT @ Home portfolio as well as small appliances and others.

謝謝陳先生和克萊爾。感謝大家今天加入我們。我將回顧我們 2023 年上半年未經審計的財務表現。我們的淨收入為人民幣 13.044 億元，而去年同期為人民幣 16.654 億元。下降的主要原因是 IoT @ Home 產品組合以及小家電和其他產品的收入下降。

Revenues from the IoT @ Home portfolio decreased by 21.8% to RMB 691.7 million from RMB 884.7 million for the same period of 2022. The decline was primarily due to the streamlining of SKUs in smart refrigerators and smart sweeper robots. Revenues from home water solutions increased by 1.7% or RMB 286.6 million from RMB 281.9 million for the same period last year. The increase was primarily driven by our efforts to focus on water purification products.

IoT@Home產品組合的收入從2022年同期的人民幣8.847億元下降21.8%至人民幣6.917億元。下降的主要原因是智慧冰箱和智慧掃地機器人的SKU精簡。家庭用水解決方案收入由去年同期的2.819億元成長1.7%，即人民幣2.866億元。這一增長主要是由於我們專注於淨水產品的努力所推動的。

Revenues from consumables decreased by 21% to RMB 135.9 million from RMB 172.1 million for the same period last year. The decrease was primarily due to the decrease in the sales volume of water purifier filters sold to Xiaomi. Revenues from small appliances and others decreased by 36.1% to RMB 190.2 million from RMB 297.6 million for the same period of 2022, primarily due to the ongoing product portfolio adjustments within this category.

消耗品收入由去年同期的人民幣1.721億元下降21%至1.359億元。減少的主要原因是銷售給小米的淨水器過濾器銷售減少。小家電及其他業務的收入由2022年同期的人民幣2.976億元下降36.1%至人民幣1.902億元，主要是由於該品類持續進行產品組合調整。

Gross profit was RMB 286.8 million compared to RMB 391.5 million for the same period last year. Gross margin was 22% compared to 23.9% for the same period of 2022. The decline was primarily due to a lower selling price of certain cleanup products and was partially offset by increasing sales of higher gross margin products as a result of product portfolio adjustments.

毛利為人民幣2.868億元，去年同期為人民幣3.915億元。毛利率為 22%，而 2022 年同期為 23.9%。下降主要是由於某些清理產品的售價較低，但部分被產品組合調整導致毛利率較高的產品銷售增加所抵銷。

Total operating expenses decreased by 30.3% to RMB 361.8 million from RMB 519.4 million for the same period of 2022, mainly attributable to the streamlined organizational structure and overall improved operational efficiency. In greater detail, research and development expenses decreased by 31% to RMB 109.5 million from RMB 158.7 million for the same period of 2022, mainly driven by a decrease in personnel costs and an optimization of our ongoing R&D projects.

總營業費用由2022年同期的人民幣519.4百萬元下降30.3%至人民幣361.8百萬元，主要由於精簡的組織結構和整體營運效率的提高。具體而言，研發費用從2022年同期的人民幣1.587億元下降31%至人民幣1.095億元，主要是由於人員成本的下降以及我們正在進行的研發項目的優化。

Selling and marketing expenses decreased by 33.4% to RMB 213.5 million from RMB 320.7 million for the same period last year, mainly due to a decrease in marketing expenses, logistic expenses and sale-related personnel costs. General and administrative expense decreased by 2.8% to RMB 38.8 million, compared to RMB 39.9 million for the same period of 2022, primarily due to a decrease in personnel costs, partially offset by an increase in the estimated allowances -- allowance for accounts and notes receivables.

銷售及行銷費用由去年同期的人民幣3.207億元下降33.4%至人民幣2.135億元，主要是行銷費用、物流費用以及銷售相關人員費用減少所致。一般及行政費用下降 2.8%，至人民幣 3,880 萬元，而 2022 年同期為人民幣 3,990 萬元，主要是由於人事費用減少，但被估計津貼（帳戶和票據備抵）的增加部分抵銷應收帳款。

Net loss attributable to ordinary shares -- ordinary shareholders of the company was RMB 54.9 million and non-GAAP net loss attributable to ordinary shareholders of the company was RMB 53.7 million. Despite the decrease in revenue scale, our loss from operations narrowed by 43.6%, indicating an improvement in our operational efficiency. Additionally, our balance sheet remained healthy. As of June 30, 2023, the company had cash and cash equivalents of RMB 691.5 million, restricted cash of RMB 128.1 million, short-term deposits of RMB 260.2 million and short-term investments of RMB 64.3 million.

歸屬於普通股的淨虧損－公司普通股股東為人民幣5,490萬元，非公認會計原則歸屬於公司普通股股東的淨虧損為人民幣5,370萬元。儘管收入規模下降，但經營虧損收窄43.6%，營運效率有所改善。此外，我們的資產負債表保持健康。截至2023年6月30日，公司擁有現金及現金等價物人民幣6.915億元，限制性現金人民幣1.281億元，短期存款人民幣2.602億元，短期投資人民幣6,430萬元。

Okay. This concludes our prepared remarks. We will now open the call for Q&A, Mr. Chen, our Founder; and Mr. Zhang will join this session and answer questions. Operator, please go ahead.

好的。我們準備好的演講到此結束。我們的創辦人陳先生，我們現在開始問答環節；張先生將參加本次會議並回答問題。接線員，請繼續。

(Operator Instructions) And our first question today will come from [Jingsheng Liu] of CICC. Pardon me, please standby for questions. One moment while we connect Jingsheng. Please standby. (Operator Instructions) And once again, we have question from Jingsheng Liu from CICC.

（操作員指示）今天我們的第一個問題將來自中金公司的[劉京生]。抱歉，請等待提問。一會兒我們聯絡景盛。請等待。 （操作員指示） 我們再次收到中金公司劉景生的提問。

Okay. Sorry. Thanks for the management. I'm Liu Jingsheng from CICC. And I have three questions about the result, and I will ask them one by one. So the first question is, how did the quarterly revenue perform in Q1 and Q2? And have we seen any improvement from the consumer demand? And what -- which categories shows good sales in the first half of 2023? That's my first question.

好的。對不起。感謝您的管理。我是中金公司的劉京生。而我對這個結果有三個疑問，我會一一問。那麼第一個問題是，Q1、Q2季營收表現如何？我們看到消費者需求有任何改善嗎？ 2023 年上半年哪些品類銷售良好？這是我的第一個問題。

Thank you, Miss. Lee, for your question. As the first quarter always comes at a flat season with lower revenue scale, it takes around 40% of the revenue in the first half of 2023. In the first quarter, we pushed hard on SKU streamlining and down market product clearance, which resulted in a lower profit margin than the same period last year. But on the bright side, the total SKU number decreased by 30%, and thus, the overall age of the inventory also decreased accordingly, which helped us get better prepared for the big promotion season.

謝謝李小姐的提問。由於第一季總是淡季，營收規模較小，佔2023年上半年營收的40%左右。第一季度，我們大力推動SKU精簡和下游產品清倉，導致利潤率低於去年同期。但好的一面是，SKU 總數減少了 30%，庫存的整體壽命也相應降低，這有助於我們為大促銷季做好更好的準備。

About the market demand during the 618 promotion season, we did observe a recovery of the consumption market, but such a recovery is still subdued and the overall sales did not meet our expectation. With the competition and the e-commerce platforms getting fiercer, companies are driven to compete with one another with lower price in order to maintain their sales volume. At the end of the day, this competition further reduced the profit margin.

從618促銷季的市場需求來看，我們確實看到了消費市場的復甦，但復甦依然疲軟，整體銷售沒有達到我們的預期。隨著競爭的加劇和電商平台的日益激烈，企業為了維持銷量，不得不以更低的價格相互競爭。歸根結底，這種競爭進一步壓縮了利潤率。

Another observation is that the demand of -- for good quality, durable and differentiated products is increasing in the consumption market. Products with concepts such as ultra-thin, customized, built-in, health care, energy conservation are becoming more popular among the young generation consumers. Therefore, in the future, we will keep focusing on optimizing our product mix, mainly by expanding the percentage of those products with better profit margins such as our water purifiers and smart kitchen products and lay out more products with trending and market-acknowledged features to meet the gradually recovering market demands.

另一個觀察結果是，消費市場對優質、耐用和差異化產品的需求正在增加。超薄、客製化、內建、保健、節能等概念的產品越來越受到年輕一代消費者的青睞。因此，未來我們將持續專注於優化產品結構，主要是擴大淨水器、智慧廚房等利潤率較好的產品佔比，佈局更多具有潮流性和市場認可度的產品，滿足逐步恢復的市場需求。

And back to your question on sales. Our air conditioners and water purifiers achieved quite good sales performance during the 618 season. As the peak season of air conditioners came in earlier than past years, we observed an increase in sales of air conditioners starting from March this year. And the revenue contribution of such products to the total revenue increased from 15% same period last year to 18% this year.

回到你關於銷售的問題。我們的空調、淨水器在618期間取得了相當不錯的銷售業績。由於空調旺季比往年提前，今年3月開始空調銷售成長。而該類產品的營收佔總營收的比重從去年同期的15%上升到今年的18%。

In the meantime, as we put more efforts on promoting water purifier products, revenue contribution of large-flux water purifiers increased to 22% compared to 17% in the same period last year. Thank you.

同時，隨著我們加大淨水器產品推廣力度，大流量淨水器收入貢獻由去年同期的17%提升至22%。謝謝。

Okay. And my second question is, what is the pipeline for the new products launched this year? And will the company launch any new category products? And what will be the business focus on the second half of this year?

好的。我的第二個問題是，今年推出的新產品有哪些管道？公司是否會推出新的品類產品？今年下半年的業務重點是什麼？

In the first half of 2023, we introduced a series of new products at the Spring New Product Launching Event, featuring enhanced iterations of our one-stop IoT @ Home Solutions, such as our Master 3 Pro formaldehyde-removing AI vertical air conditioners and Super 2 Pro AI vertical air conditioners equipped with fresh air system, both of which improved the indoor air quality and benefit the health of our users' family members. We also debuted our Master 3 ultra-thin built-in refrigerator and washing machine set, which is currently setting new trends in the home decoration industry.

2023年上半年，我們在春季新品發布會上推出了一系列新產品，包括Master 3 Pro除甲醛AI立式空調、超級家庭物聯網一站式解決方案的增強迭代。2台Pro AI 直立式空調配備新風系統，既改善了室內空氣質量，又有益於用戶家人的健康。我們也推出了Master 3超薄嵌入式冰箱洗衣機套裝，引領了目前家居裝飾產業的新趨勢。

With respect to the new product category, we recently launched a series of intelligent lighting system products. We creatively empowered and we'll keep on the empowerment of the basic functions of lighting system with our software capability, enabling our intelligent lighting system products to satisfy different needs of our users in different scenarios and easily go with the different or customized home decorating designs. We believe that the intelligent lighting system is an indispensable part of the whole-house intelligence solutions and will provide visible improvement to the smart home experience of our one-stop IoT solutions.

在新產品類別方面，我們近期推出了一系列智慧照明系統產品。我們創造性地賦能並將繼續以軟體能力賦能照明系統的基礎功能，使我們的智慧照明系統產品能夠滿足用戶在不同場景下的不同需求，輕鬆匹配不同或客製化的家居裝飾設計。我們相信，智慧照明系統是全屋智慧解決方案中不可或缺的一部分，將為我們一站式物聯網解決方案的智慧家庭體驗帶來明顯的提升。

For second half of 2023, as mentioned earlier, we will continue to explore and capitalize on our strengths and optimize our operations, focusing on the following three aspects: First, we will further deepen our roots in the water purification industry and provide the consumers with more products of higher quality, leading technology and with more comprehensive services.

2023年下半年，如前所述，我們將繼續挖掘、發揮優勢，優化運營，重點做好以下三個方面的工作：一是進一步深耕淨水行業，為消費者提供優質的淨水產品。更多更高品質的產品、更領先的技術、更全面的服務。

And second, we will remain focused on fine-tuning our product mix and iterating our whole house intelligent product metrics to deliver more helpful and user-friendly one-stop IoT @ Home solutions and improve our users' home experience.

其次，我們將持續專注於產品結構的微調，迭代全屋智慧產品指標，提供更實用、更人性化的一站式物聯網@Home解決方案，改善使用者的居家體驗。

Third, we will keep deepening our industrial layout, strengthening our ability in cost control, increasing our operational efficiency and expanding our operation channels to further improve operational performance. Thank you.

第三是不斷深化產業佈局，強化成本控制能力，提升營運效率，拓展營運管道，進一步提升營運績效。謝謝。

Okay. And my last question is about the robotic vacuum. As we all know that the competition of the robotic vacuum cleaner become very clear this year. So how has this business performed in the first half of 2023? And that's my last question.

好的。我的最後一個問題是關於機器人吸塵器。眾所周知，今年掃地機器人的競爭已經非常明顯。那麼這項業務在2023年上半年表現如何呢？這是我的最後一個問題。

Thank you. The business scale of our robotic vacuum cleaners has shrunk largely since last year. Such shrinking is mainly caused by the overdependence of our robotic vacuum cleaner in the overseas market, especially in the Europe. During the geopolitical crisis and foreign currency fluctuations occurred in the first half of 2023 in the European market, our sales of sweeper robots suffered a significant drop especially in the second quarter.

謝謝。去年以來，我們的掃地機器人業務規模大幅萎縮。這種萎縮主要是由於我們的掃地機器人在海外市場，尤其是歐洲市場的過度依賴所造成的。 2023年上半年歐洲市場地緣政治危機和匯率波動期間，我們的掃地機器人銷售量大幅下滑，尤其是第二季。

In the second half of 2023, we expect the sales of sweeper robots to have a slight rebound, with the influences of these headwind factors gradually getting relieved since July this year. But to be frank, we haven't seen any clear signals of recovery in this product category, neither overseas nor domestic and the competition is getting fiercer day by day. Nevertheless, being an essential part of our one-stop whole house intelligence solution, we will keep this product line and provide several models mainly through OEMs.

2023年下半年，我們預期掃地機器人銷售量將小幅反彈，今年7月以來這些逆風因素的影響逐漸緩和。但坦白說，目前這一品類無論是在海外還是在國內都沒有看到明顯的復甦跡象，競爭也日益激烈。不過，作為我們一站式全屋智慧解決方案的重要組成部分，我們會保留這個產品線，並主要透過主機廠提供多種型號。

In the meantime, to make up for the decline in overseas sales of our robotics vacuum cleaners, on one hand, we enriched our product categories offered in the overseas market and the revenues brought about by these new categories accounted for over 60% of our overseas market revenues in the first half of 2023. On the other hand, we are also making efforts to explore our overseas markets, particularly seeking new commercial opportunities in the emerging markets, especially in the rapidly growing Southeast Asian markets. Thank you.

同時，為了彌補掃地機器人海外銷售的下滑，我們一方面豐富了海外市場的產品品類，這些新品類帶來的收入占我們海外市場的60%以上2023年上半年，我們的市場收入將實現增長。另一方面，我們也努力開拓海外市場，特別是在新興市場，尤其是快速成長的東南亞市場尋找新的商業機會。謝謝。

And that concludes the question-and-answer session. I would like to turn the call back over to management for any additional or closing remarks.

問答環節到此結束。我想將電話轉回給管理層，以徵求任何補充或結束語。

Okay. Thank you once again for joining us today. If you have any further questions, please feel free to contact us through the contact information on our website or our Investor Relationship consultants, The Piacente Group. Thank you.

好的。再次感謝您今天加入我們。如果您有任何其他疑問，請隨時透過我們網站上的聯絡資訊或我們的投資者關係顧問 The Piacente Group 與我們聯繫。謝謝。

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.

會議現已結束。感謝您參加今天的演示，您現在可以斷開連接了。