Yunji Inc (YJ) 2023 Q4 法說會逐字稿

Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Yunji's fourth-quarter 2023 earnings conference call. With us today are Mr. Shanglue Xiao, Chairman and Chief Executive Officer; Mr. Yeqing Cui, Senior Financial Director, and Ms. Kaye Liu, Investor Relations Director of the company. As a reminder, this conference call is being recorded.

早安，晚上好，女士們先生們。感謝您的耐心等待，歡迎參加雲集 2023 年第四季財報電話會議。今天與我們在一起的有董事長兼執行長肖尚略先生；本公司資深財務長崔業清先生及投資人關係總監劉凱女士。謹此提醒，本次電話會議正在錄音中。

Now I would like to hand the conference over to our first speaker today, Ms. Kaye Liu, IRD of Yunji. Please go ahead, madam.

現在我想把會議交給我們今天的第一位發言者，雲集稅務局的Kaye Liu女士。請繼續，女士。

Hello, everyone. Welcome to our fourth quarter 2023 earnings call. Before we start, please note that this call will contain forward-looking statements within the meaning of Private Security Litigation Reform Act of 1995 that are based on current expectations and current market operating, conditions, and relate to events that involve known and unknown risks, uncertainties, and other factors of Yunji's industry.

大家好。歡迎參加我們的 2023 年第四季財報電話會議。在我們開始之前，請注意，本次電話會議將包含1995 年私人安全訴訟改革法案含義內的前瞻性陳述，這些陳述基於當前預期和當前市場運營、條件，並涉及涉及已知和未知風險的事件，雲集產業的不確定性等因素。

These forward-looking statements can be identified by terminologies such as will, expect, anticipate, continue, or other similar expressions. For a detailed discussion of these risks and uncertainties, please refer to our related documents filed with US SEC.

這些前瞻性陳述可以透過意願、期望、預期、繼續或其他類似表達等術語來識別。有關這些風險和不確定性的詳細討論，請參閱我們向美國 SEC 提交的相關文件。

Any forward-looking statements that we make on this call are based on assumptions as of today, and are expressly qualified in the entirety by cautionary statements, risk factors, and details of the company's filing with the SEC. Yunji do not undertake any obligation to update these statements expect as required under applicable law.

我們在本次電話會議中所做的任何前瞻性陳述均基於截至目前的假設，並完全符合警告性陳述、風險因素以及公司向 SEC 提交的文件的詳細資訊。雲集不承擔根據適用法律的要求更新這些聲明的任何義務。

With that, I will now turn over to Shanglue Xiao, Chairman and CEO of Yunji.

下面我請雲集董事長兼執行長肖尚略發言。

(interpreted) Hello, everyone, and welcome to Yunji's '23 earnings call. During 2023 and particularly in the fourth-quarter peak e-commerce promotion season, the prevailing trend relatively to the market was intense price competition. Major e-commerce and online streaming platforms adopt a low-price strategy alone, fostering a bargain-hunting mindset among consumers.

（同聲傳譯）大家好，歡迎參加雲集23年財報電話會議。2023年，尤其是第四季電商促銷旺季，市場的普遍趨勢是價格競爭激烈。各大電商、網路直播平台僅採取低價策略，助長了消費者的抄底心態。

However, Yunji is not merely an e-commerce platform. We are also a brand building and sales service provider. We understand the long-term repercussions of relying on low-pricing strategies, which can lower the brand identity over time. The value we deliver to users, like in our cost-effective products with low retention rates as well as in minimizing decision-making and wait times for our users.

然而，雲端集不僅僅是一個電子商務平台。我們也是一家品牌建立和銷售服務提供者。我們了解依賴低價策略的長期影響，隨著時間的推移，這會降低品牌形象。我們為用戶提供的價值，例如我們具有低保留率的具有成本效益的產品，以及最大限度地減少用戶的決策和等待時間。

Our commitment to a carefully curated product selection ensures that Yunji maintains a stable average order value even amidst the demand focus on low prices.

我們致力於精心挑選產品，確保雲集即使在需求集中於低價的情況下也能保持穩定的平均訂單價值。

The stability of our average order value is intrinsically linked to our highly developed product capabilities centered around the saying of love for food, beauty, and health. We have developed a range of cost-effective private label products. We have not only expanded existing categories, but also successfully upgraded our lineup of [medicine] product.

我們的平均訂單價值的穩定性與我們高度發展的產品能力有著本質上的聯繫，而我們的核心理念是熱愛美食、熱愛美麗和健康。我們開發了一系列具有成本效益的自有品牌產品。我們不僅擴大了現有的品類，也成功升級了我們的[醫藥]產品陣容。

Over the span of many years of product development and sales, we have identified key ingredients that resonate strongly with our user base, such as collagen and probiotics. Building on successful trials and enthusiastic user feedback, we have introduced a variety of new products across multiple categories that innovatively incorporate these popular ingredients while performing in different ways to harness these ingredients and enhance product functionality, leveraging the existing popularity of these ingredients.

經過多年的產品開發和銷售，我們已經確定了與我們的用戶群產生強烈共鳴的關鍵成分，例如膠原蛋白和益生菌。基於成功的試驗和熱情的用戶回饋，我們推出了跨多個類別的各種新產品，這些新產品創新地融入了這些流行的成分，同時以不同的方式利用這些成分並增強產品功能，利用這些成分的現有流行度。

Our new offerings have been warmly embraced by our users. We aim to cultivate loyal users of individual products who appreciate our carefully selected ingredients. In doing so, we will develop a user base that is loyal to the Yunji brand ecosystem, fostering a deeper trust in our brand.

我們的新產品受到了用戶的熱烈歡迎。我們的目標是培養欣賞我們精心挑選的成分的個別產品的忠實用戶。在此過程中，我們將培養忠誠於雲端集品牌生態系統的用戶群，並加深對我們品牌的信任。

At Yunji, we are committed to supplementing in terms of our ingredients. And we generally use the feedback. We draw upon the niche average user offering of over 5,000 years of Chinese history to sell high-quality natural ingredients, such dendrobium and (inaudible). These renowned Chinese medicinal herbs are carefully processed using advanced technology to produce healthier foods that are easier to digest and absorb.

在雲集，我們致力於成分的補充。我們通常會使用回饋。我們利用中國 5,000 多年歷史的利基普通用戶產品來銷售高品質的天然成分，例如石斛和（聽不清楚）。這些著名的中藥材採用先進技術精心加工，以生產更容易消化和吸收的健康食品。

Over the past year, I've personally journey through content and (inaudible) to authenticate the quality of our ingredients and products, ensuring that our users can consume them with convenience and peace of mind.

在過去的一年裡，我親自瀏覽了內容和（聽不清楚）來驗證我們的成分和產品的質量，確保我們的用戶可以方便、安心地消費它們。

In terms of the marketing, we recognize the powerful link between exceptional service and a strong sales performance to enhance customer service and drive sales. We are committed to the continuous improvement of our service managers to scale through a comprehensive, professional training and technical support.

在行銷方面，我們認識到卓越的服務和強勁的銷售業績之間的強大聯繫，可以增強客戶服務並推動銷售。我們致力於透過全面、專業的培訓和技術支援不斷提高我們的服務經理的規模。

Furthermore, we have invited a number of our sales managers to explore and trade product origins. This first-hand experience allows them to generate more product-related material, which they can then share with users in our community.

此外，我們也邀請了多位銷售經理來探索和交易產品原產地。這種第一手經驗使他們能夠產生更多與產品相關的資料，然後與我們社群的使用者分享。

During March, we rolled out a range of new products as part of our healthcare brand update. Alongside these products, we also unveiled a novel product plus service integrated sales model. Upon purchasing of product, user can gain access to Yunji's 28 day body image management program, which includes personalized one-on-one services and convenient online tracking via mini program. Our new healthcare products were responding to that with sales surpassing RMB80 million on launching.

三月份，我們推出了一系列新產品，作為醫療保健品牌更新的一部分。除了這些產品之外，我們還推出了一種新穎的產品加服務一體化銷售模式。購買產品後，用戶即可享受雲集28天身體形像管理計劃，其中包括個人化的一對一服務以及透過小程式便捷的線上追蹤。我們的新保健產品也響應這一趨勢，推出後銷售額超過 8,000 萬元人民幣。

When it comes to basic daily customer service, we focus our third-party merchant management, internal customer service training, and service policy optimization. We will also conduct regular customer follow-up and online services to improve and ensure overall customer satisfaction.

在基礎日常客戶服務方面，我們將重點放在第三方商家管理、內部客戶服務培訓、服務政策最佳化等。我們還將定期進行客戶跟進和線上服務，以提高和確保客戶的整體滿意度。

AI was a significant trend in 2023 and we are having -- exploring new ways to apply in our operations. During the year, our capabilities evolved significantly, and we now integrate AI into a range of functions, from basic customer service chatbots and handling routine call center tasks to more advanced support for service managers. For example, uses of our 28-day body image management program can now consult with service managers regarding their daily nutritional needs and calorie intake.

人工智慧是 2023 年的一個重要趨勢，我們正在探索在我們的營運中應用的新方法。在這一年裡，我們的能力得到了顯著發展，現在我們將人工智慧整合到一系列功能中，從基本的客戶服務聊天機器人和處理常規呼叫中心任務，到為服務經理提供更高級的支持。例如，使用我們的 28 天身體形像管理計劃，現在可以向服務經理諮詢他們的日常營養需求和卡路里攝取量。

Our AI health consultants similarly support service manages by rapidly and accurately calculating personalized recommended calorie intake in real time and provide an informed and insightful advice.

我們的人工智慧健康顧問同樣透過快速準確地即時計算個人化推薦卡路里攝取量來提供支援服務，並提供明智且富有洞察力的建議。

That concludes our strategic summary and our reflection for 2023. Moving forward, we remain committed to our strategy of a curated product selection, ensuring product cost effectiveness, enhancing brand image and actively exploring diverse marketing avenues to further elevate the Yunji brand.

我們的策略總結和 2023 年反思到此結束。展望未來，我們將持續堅持精選產品、確保產品性價比、提升品牌形象、積極探索多元化行銷途徑的策略，進一步提升雲端集品牌。

With that, I will go over to Yeqing Cui, our Senior Financial Director to go through the financial results.

接下來，我將請我們的資深財務長崔葉青查看財務表現。

Okay. Thank you, Shanglue. Hello, everyone. Before I go through our financial results, please note that all numbers stated in the following remarks are in RMB terms and our calculation and the percentage changes are on a year-over-year basis, unless otherwise noted.

好的。謝謝你，尚略。大家好。在我介紹我們的財務表現之前，請注意，除非另有說明，以下備註中所述的所有數字均以人民幣計價，我們的計算和百分比變化均按同比計算。

During the fourth quarter of 2023, our operations remained relatively stable and we continue to enforce our core operational process. Our refinements to inventory management practice allowed us to generate a stable gross profit.

2023年第四季度，我們的營運保持相對穩定，我們繼續執行我們的核心營運流程。我們對庫存管理實踐的改進使我們能夠產生穩定的毛利。

We maintain our strategic focus on inventory management, actively monitoring various product categories on a weekly or monthly basis to ensure optimal stock levels. This approach not only optimize our asset's utilization but also effectively manages our cash growth. Meanwhile, we are actively pursuing more efficient cash flow management.

我們維持庫存管理的策略重點，每週或每月積極監控各種產品類別，以確保最佳庫存水準。這種方法不僅優化了我們的資產利用率，還有效地管理了我們的現金成長。同時，我們正積極追求更有效率的現金流管理。

Now let's take a closer look at our financials. Total revenues were RMB149 million compared to RMB289 million a year ago. Revenues from sales of merchandise were RMB112 million. And revenues from our marketplace business was RMB34 million. These changes were primarily driven by ongoing refinements to our product range across all categories. This, coupled with the optimization of our supplier at the merchant network, result in a short-term impact on sales.

現在讓我們仔細看看我們的財務狀況。總收入為人民幣 1.49 億元，去年同期為 2.89 億元。商品銷售收入為人民幣1.12億元。我們的市場業務收入為 3400 萬元人民幣。這些變化主要是由於我們所有類別的產品系列不斷完善而推動的。再加上我們在商家網路中供應商的最佳化，會對銷售產生短期影響。

Despite of these challenges, our gross margin remained relatively solid at 46.6%. This was due to sustained customer loyalty toward our private labels and our effective product curation strategy.

儘管面臨這些挑戰，我們的毛利率仍然相對穩定，為 46.6%。這是由於客戶對我們自有品牌的持續忠誠度和我們有效的產品策劃策略。

Now let's take a look at our operating expense. Fulfillment expense were RMB25 million compared to RMB32 million a year ago. This was primarily driven by a decrease in warehousing and logistics expense stemming from lower merchandise sales, reduced the personnel cost due to stocking structure optimization, and a decrease of service fee charged by third-party payment settlement platforms.

現在讓我們來看看我們的營運費用。履行費用為人民幣 2,500 萬元，去年同期為 3,200 萬元。主要是由於商品銷售下降導致倉儲物流費用減少、庫存結構優化降低人員成本、第三方支付結算平台收取的服務費下降。

Sales and marketing expense were RMB29 million compared to RMB59 million. This was primarily a result of decline in member management fee and a decrease against promotion expense. Technology and content expense were RMB12 million compared to RMB17 million a year ago. The decrease was mainly due to a reduction in personnel costs resulting from staffing structure optimization and reduced server costs.

銷售和行銷費用為人民幣 2,900 萬元，去年同期為 5,900 萬元。這主要是由於會員管理費下降和促銷費用減少所致。科技和內容費用為人民幣 1,200 萬元，去年同期為 1,700 萬元。減少的主要原因是人員結構優化以及伺服器成本降低導致人員成本下降。

General and administrative expenses were RMB44.5 million compared to RMB44.9 million a year ago. This was mainly due to the reduction in personnel cost as a result of staffing structure refinements and the share-based compensation expense, partially offset by an increase in allowance for credit loss. Total operating expense in the fourth quarter decreased to RMB110 million from RMB153 million in the same period of 2022.

一般及行政費用為人民幣 4,450 萬元，去年同期為 4,490 萬元。這主要是由於人員結構優化和股權激勵費用導致人員成本減少，但部分被信用損失準備增加所抵消。第四季總營運費用從2022年同期的人民幣1.53億元下降至人民幣1.1億元。

Loss from operations was RMB40 million compared to RMB33 million a year ago. Net loss was RMB66 million compared to RMB68 million a year ago while adjusted net loss was RMB65 million compared with RMB31 million a year ago. Basic and diluted net loss per attributable to ordinary shareholders were both RMB0.03 compared with is RMB0.02 in the same period of 2022.

經營虧損為人民幣 4,000 萬元，而去年同期為 3,300 萬元。淨虧損為人民幣 6,600 萬元，去年同期為 6,800 萬元，調整後淨虧損為 6,500 萬元，去年同期為 3,100 萬元。歸屬於普通股股東的基本和稀釋每股淨虧損均為 0.03 元，而 2022 年同期為 0.02 元。

Turning to the liquidity. As of December 31, 2023, we had a total of RMB552 million in cash and cash equivalents, restricted cash, and short-term investments on our balance sheet compared to RMB669 million as of December 31, 2022. Our liquid assets were sufficient to cover our payable obligations, and we do not hold any long-term bank loans or debits on our balance sheet.

轉向流動性。截至2023年12月31日，我們資產負債表上的現金及現金等價物、限制性現金及短期投資共計人民幣5.52億元，而截至2022年12月31日為人民幣6.69億元。我們的流動資產足以支付我們的應付義務，並且我們的資產負債表上沒有持有任何長期銀行貸款或借記。

In addition, we are dedicated to making the most of our working capital at a smarter, managing our asset to better support our operations. In summary, the fourth quarter saw us taking significant strides toward our long-term strategic objectives. Our ongoing efforts to refine our inventory management system, coupled with our commitment to sustainable and effective asset management were key to this progress.

此外，我們致力於以更聰明的方式充分利用我們的營運資金，管理我們的資產，以更好地支持我們的營運。總之，第四季我們在實現長期戰略目標方面取得了重大進展。我們不斷努力完善庫存管理系統，再加上我們對永續和有效資產管理的承諾，這是取得這項進展的關鍵。

Looking ahead, our focus will remain on continuously enhancing our efficiencies, thereby ensuring our company's resilience and adaptable ability. Our strategy equip us to effectively control the future challenges and capitalize on opportunities in the evolving economic environment.

展望未來，我們的重點仍是不斷提高效率，從而確保公司的彈性和適應能力。我們的策略使我們能夠有效控制未來的挑戰，並在不斷變化的經濟環境中抓住機會。

This concludes our prepared remarks for today. Operator, we are now ready to take questions.

我們今天準備好的演講到此結束。接線員，我們現在準備好回答問題。

Thank you. We will now begin the question-and-answer session. (Operator Instructions)

謝謝。我們現在開始問答環節。（操作員說明）

Ethan Yu, First Trust China.

Ethan Yu，第一信託中國。

(spoken in foreign language)

（用外語說）

I just heard you mention customer service. We have observed that in recent months, major e-commerce platforms have launched a series of policies such as 7-day no user returns, free shipping in remote areas, et cetera. What do you think of this new policy which are biased towards consumers? Will all this strategy have any impact on our performance? Thank you.

我剛剛聽到你提到客戶服務。我們觀察到，近幾個月來，各大電商平台推出了7天無用戶退貨、偏遠地區包郵等一系列政策。對於這項偏向消費者的新政策，您怎麼看？所有這些策略會對我們的業績產生影響嗎？謝謝。

(interpreted) This issue evolves the nature of our products and use their consumption habits. First of all, we believe that to be a good platform, the selling point of your products cannot be for RMB9.9 free shipping and various consumption behavior cannot be based on imposed consumption. Yunji, especially -- Yunji's merchandise sales and private label products has always maintained a loose and customer specific policy.

（解釋）這個問題演變了我們產品的性質和使用他們的消費習慣。首先，我們認為，一個好的平台，你的產品賣點不能是9.9元包郵，各種消費行為不能建立在強制消費的基礎上。尤其是雲端集——雲集的商品銷售和自有品牌產品始終保持著寬鬆的、針對客戶的政策。

However, our quality refund rate is very low compared to other platforms, which is inseparable from our sufficient user education. We believe that loose sales are important. But what ultimately attract consumers to repurchase is a unique product offering and a cost effectiveness. Our average order value is enough to cover our cost management expenses. And we also have many loyal users in remote areas. Thank you for your question.

但是我們的優質退款率相對於其他平台來說是很低的，這和我們足夠的用戶教育是分不開的。我們認為寬鬆的銷售很重要。但最終吸引消費者重複購買的是獨特的產品和性價比。我們的平均訂單價值足以支付我們的成本管理費用。而且我們在偏遠地區也有很多忠實用戶。謝謝你的問題。

Thank you. I have no more questions.

謝謝。我沒有更多問題了。

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

（操作員指示） 由於目前沒有其他問題，我想將會議交還給管理階層進行總結發言。

Thank you for joining today. Please do not hesitate to contact us if you have any further questions. We look forward to talking with you next quarter. Bye.

感謝您今天加入。如果您有任何其他問題，請隨時與我們聯繫。我們期待下個季度與您交談。再見。

This conference is now concluded. Thank you for attending. You may now disconnect. Thank you.

本次會議現已結束。感謝您的出席。您現在可以斷開連線。謝謝。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

此文字記錄中標記（翻譯）的部分是由現場通話中的口譯員說出的。口譯員由贊助本次活動的公司提供。