Zepp Health Corp (ZEPP) 2024 Q4 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for Zepp Health Corporation's fourth-quarter and full-year 2024 earnings conference call. (Operator Instructions) Today's conference call is being recorded.

女士們、先生們，大家好。感謝您參加 Zepp Health Corporation 2024 年第四季和全年財報電話會議。（操作員指示）今天的電話會議正在錄音。

I will now turn the call over to your host, Ms. Grace Zhang, Director of Investor Relations for the company. Please go ahead, Grace.

現在我將電話轉給主持人、公司投資人關係總監 Grace Zhang 女士。請繼續，格蕾絲。

Hello everyone and welcome to Zepp Health Corporation's fourth-quarter and full-year 2024 earnings conference call. The company's financial and operating results were issued in a press release by the Newswire services earlier today and are posted online. You can also view the earnings release and slides referred to on this call by visiting the IR section of the company's website at ir.zepp.com.

大家好，歡迎參加 Zepp Health Corporation 2024 年第四季和全年財報電話會議。該公司的財務和營運結果已於今天稍早由新聞專線發佈在新聞稿中並在網路上發布。您也可以造訪公司網站 ir.zepp.com 的 IR 部分，查看本次電話會議中提到的收益報告和幻燈片。

Participating in today's call are Mr. Wayne Wang Huang, our Chairman of the Board of Directors and Chief Executive Officer; and Mr. Leon Cheng Deng, our Chief Financial Officer. The company's management will begin with prepared remarks, and the call will conclude with a Q&A session. Mr. Mike Yeung, our Chief Operating Officer, will join us for the Q&A session.

參加今天電話會議的有我們的董事會主席兼執行長黃汪先生；以及我們的財務長 Leon Cheng Deng 先生。公司管理階層將以準備好的發言開始會議，最後以問答環節結束會議。我們的營運長楊麥克先生將參加我們的問答環節。

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 are included in the company's annual report on Form 20-F for the fiscal year ending December 31, 2023, 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 under applicable 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，該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信息，包含在公司截至 2023 年 12 月 31 日的財政年度的 20-F 表年度報告以及向美國證券交易委員會提交的其他文件中。除適用法律要求外，該公司不承擔更新任何前瞻性聲明的義務。

Please also note that Zepp's earnings release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial information. Zepp's press release contains reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.

另請注意，Zepp 的收益報告和本次電話會議包括未經審計的 GAAP 財務資訊以及未經審計的非 GAAP 財務資訊的討論。Zepp 的新聞稿包含未經審計的非 GAAP 指標與未經審計的最直接可比較 GAAP 指標的對帳。

I will now turn the call over to our CEO, Mr. Wayne Wang Huang. Please go ahead.

現在我將電話轉給我們的執行長黃韋恩先生。請繼續。

Hello everyone. Welcome and thank you for joining our fourth-quarter 2024 earnings call. In 2024, we expedited the transition towards a brand-empowered high-margin business model for Amazfit brand products. We delved deeper into technological innovation and enhanced our global marketing footprint. Despite macroeconomic headwinds and supply bottlenecks, our overall sales in the fourth quarter of 2024 rose by more than 40% quarter-over-quarter, aligning with our guidance.

大家好。歡迎並感謝您參加我們的 2024 年第四季財報電話會議。2024年，我們加速Amazfit品牌產品品牌賦能的高利潤商業模式轉型。我們深入推動技術創新，擴大全球行銷影響力。儘管面臨宏觀經濟逆風和供應瓶頸，但我們 2024 年第四季的整體銷售額較上季成長超過 40%，與我們的預期一致。

Our gross margin for the year 2024 reached 39%, compared with 26.2% full-year 2023. At the same time, we finished the year with $112 million cash-on-hand, provides ample runway for us to invest and responding to market demands.

我們 2024 年的毛利率達到 39%，而 2023 年全年為 26.2%。同時，我們在年底時持有 1.12 億美元現金，為我們投資和響應市場需求提供了充足的空間。

Let's delve deeper into our remarkable product accomplishments. In 2024, Zepp Health experienced remarkable breakthroughs in variable technology, AI-powered health innovation, and the expansion of its ecosystem. The successful launch of the T-Rex 3 was a significant turning point, generating a strong surge in market demands and leading to substantial sequential growth in sales.

讓我們更深入地了解我們卓越的產品成就。2024年，Zepp Health在變數技術、人工智慧健康創新以及生態系統擴展方面取得了顯著突破。T-Rex 3的成功推出是一個重要的轉捩點，引發了市場需求的強勁增長，並導致銷量大幅環比增長。

Our T-Rex 3 has been meticulously crafted with a strategic approach to directly change the industry-leading sports and outdoor watches offered by our competitors. With its military-grade durability, extended battery lines, offline mapping functionality, and highly accurate GPS navigation, the T-Rex 3 has completely transformed the landscape of adventure-focused smartwatches, establishing new benchmarks for performance. What makes the T-Rex 3 truly exceptional is its status as one of the pioneering smartwatches to fully incorporate AI technology. Powered by Zepp OS 4.0 and OpenAI GPT 4.0, it further solidifies our dominant position in the AI-driven wearable market.

我們的 T-Rex 3 採用策略方針精心打造，旨在直接改變競爭對手提供的業界領先的運動和戶外手錶。T-Rex 3 具有軍用級耐用性、擴展電池線、離線地圖功能和高精度 GPS 導航，徹底改變了以冒險為重點的智慧手錶的格局，樹立了新的性能標竿。T-Rex 3 的真正獨特之處在於它是完全融入 AI 技術的先驅智慧手錶之一。在Zepp OS 4.0和OpenAI GPT 4.0的支持下，它進一步鞏固了我們在人工智慧驅動的可穿戴市場中的主導地位。

Just six months following its introduction, we have seen a consistent rise in user activations, accompanied by an overwhelming amount of positive feedback from both users and key opinion leaders. We are confident that the T-Rex 3 will continue to maintain its strong up trajectory, driving higher sales of Amazfit products with attractive profit margins, and bringing us closer to achieving our goal of near-term profitability.

在推出僅六個月後，我們就看到用戶活化量持續上升，同時也獲得了來自用戶和關鍵意見領袖的大量正面回饋。我們相信，T-Rex 3 將繼續保持強勁的上升趨勢，推動 Amazfit 產品的銷售和可觀的利潤率，並使我們更接近實現近期盈利的目標。

At CES 2025, we further diversified our fitness and lifestyle lineup with the launch of Amazfit Active 2. Integrating health checking, advanced biosensing, AI-driven coaching, multi-satellite navigation, and seamless smart interactions, Active 2 have received solid reviews from mainstream media in Europe and the United States. With its exquisite design and rich functions, it is hailed as a $100 product that challenges the industry leader. The product is extremely popular and the momentum is rising fast. It is expected to experience explosive growth in the second quarter.

在 2025 年 CES 上，我們推出了 Amazfit Active 2，進一步豐富了我們的健身和生活風格產品線。Active 2 集健康檢查、先進的生物感測、人工智慧指導、多衛星導航和無縫智慧互動於一體，獲得了歐洲和美國主流媒體的一致好評。憑藉著精緻的設計和豐富的功能，被譽為挑戰行業領導者的百美元產品。該產品極受歡迎，勢頭迅猛上升。預計第二季將出現爆炸性成長。

Additionally, the upcoming Amazfit Bip 6 series, first introduced at the European launch of Active 2, we further expand our reach in the entry level segment by delivering exceptional price performance value. We have started production in scale and shipments into the main online and offline channels in EMEA and USA. This will propel further our sales growth in the second quarter.

此外，即將推出的 Amazfit Bip 6 系列首次在 Active 2 歐洲發布會上推出，我們透過提供卓越的性價比進一步擴大了我們在入門級市場的影響力。我們已開始規模生產並向歐洲、中東和非洲地區以及美國的主要線上和線下管道出貨。這將進一步推動我們第二季的銷售成長。

Beyond smartwatches, we continue to expand the Zepp ecosystem into AI-powered health solutions. At CES 2025, we introduced Amazfit V1TAL, an AI-powered nutrition tracking device that seamlessly integrates with our ecosystem. Unlike traditional food tracking methods, V1TAL utilize AI-powered image recognition to automatically log meals, track nutrition, and provide real-time dietary insights. By analyzing eating behaviors and offering personalized recommendations, V1TAL extends Zepp Health's AI-driven approach beyond fitness into holistic lifestyle management.

除了智慧手錶之外，我們還將繼續將 Zepp 生態系統擴展到人工智慧驅動的健康解決方案。在 2025 年 CES 上，我們推出了 Amazfit V1TAL，這是一款由人工智慧驅動的營養追蹤設備，可與我們的生態系統無縫整合。與傳統的食物追蹤方法不同，V1TAL 利用人工智慧影像識別自動記錄膳食、追蹤營養並提供即時飲食建議。透過分析飲食行為並提供個人化建議，V1TAL 將 Zepp Health 的人工智慧驅動方法從健身擴展到整體生活方式管理。

Additionally, we have launched a related food log feature in the Zepp app which provides users with nutritional analysis and dietary recommendations based on their food intake using their phone cameras. This feature is currently available for free download to users in Europe and North America.

此外，我們在 Zepp 應用程式中推出了相關的食物日誌功能，該功能使用手機相機根據用戶的食物攝取量為他們提供營養分析和飲食建議。該功能目前可供歐洲和北美用戶免費下載。

We are also exploring the use of DeepSeek to further reduce the cost of processing food image and videos to prepare for our large-scale service deployment in the future. These functionalities and products add into our sports recovery and health monitoring ecosystem, establish a unique advantage in sports recovery and health management, enhancing the overall brand value.

我們也正在探索利用DeepSeek進一步降低處理美食圖片和影片的成本，為未來大規模服務部署做好準備。這些功能和產品融入我們的運動恢復和健康監測生態系統，在運動恢復和健康管理方面建立了獨特的優勢，提升了整體品牌價值。

As we advance our global strategy, we continue to elevate brand recognition and expand our influence through strategic marketing and partnerships. This quarter, we welcomed five-time Olympic medalist, Gabby Thomas; and Italian tennis star, Jasmine Polini, as our global athlete partners. Their partnerships enhance our brand visibility on the global stage while also showcasing how Amazfit smart wearables empower top tier athletes with data-driven insights to optimize training, recovery, and overall performance.

在推動全球策略的同時，我們透過策略行銷和合作夥伴關係不斷提升品牌知名度並擴大影響力。本季度，我們歡迎了五屆奧運獎牌得主 Gabby Thomas；以及義大利網球明星 Jasmine Polini 作為我們的全球運動員合作夥伴。他們的合作提升了我們在全球舞台上的品牌知名度，同時也展示了 Amazfit 智慧型穿戴裝置如何透過數據驅動的洞察力為頂級運動員提供支持，以優化訓練、恢復和整體表現。

Moreover, our strategic partnership with HYROX, a rapid growing sport in Europe and North America, has brought unique features to Amazfit smartwatches. We are the only smartwatch brand that supports HYROX competition and training, providing valuable assistance to athletes in this sport. We continue to deepen our collaboration with HYROX and are set to launch even more powerful HYROX-related products.

此外，我們與歐洲和北美快速發展的運動項目 HYROX 建立的戰略合作夥伴關係為 Amazfit 智慧手錶帶來了獨特的功能。我們是唯一支持HYROX比賽和訓練的智慧手錶品牌，為這項運動的運動員提供寶貴的幫助。我們將繼續深化與HYROX的合作，並準備推出更強大的HYROX相關產品。

At the same time, we are further differentiating ourselves from competitors, staying ahead by being the first to support various emerging sports. With these partnerships, the major key account partners are flying in the United States and Europe have greatly increased confidence in us. They have offered us more offline display space to replace competitors' contests. This will bring us significant new growth opportunities in the coming quarters.

同時，我們也進一步與競爭對手區分開來，率先支持各種新興運動，保持領先地位。透過這些合作關係，美國和歐洲的主要大客戶合作夥伴對我們的信心大大增強。他們為我們提供了更多的線下展示空間來取代競爭對手的比賽。這將為我們在未來幾季帶來重大的新成長機會。

Let's recap our 2025 product strategy. By leveraging Active 2 and Bip 6 series, we are expanding our market share on a bigger scale, increasing the entry levels user base and strengthening our brand influence in the value-for-money segment, especially the emerging market. At the same time, in the mid- to high-end segment, our T-Rex series has successfully outperformed fresh products from competitors, achieving higher profitability and steady growth. This has also allowed us to convert more entry level users into professional users and mid- to high-end smartwatch users.

讓我們回顧一下我們的2025年產品策略。透過借助Active 2和Bip 6系列，我們正在更大規模地擴大我們的市場份額，增加入門級用戶群，並加強我們在性價比領域，特別是新興市場的品牌影響力。同時，在中高端市場，我們的T-Rex系列成功超越競爭對手的新產品，實現更高的獲利能力和穩定的成長。這也使我們能夠將更多的入門級用戶轉化為專業用戶和中高階智慧手錶用戶。

Furthermore, by supporting rapidly emerging sports like HYROX, enhancing the analysis of food intake in relation to exercise, and offering ecosystem products and services such as V1TAL and hearing, we provide a differentiated value to compete with the industry leaders. This strengthens our brand positioning and creates a unique marketing positioning.

此外，透過支持HYROX等快速崛起的運動、加強與運動相關的食物攝取量的分析以及提供V1TAL和聽力等生態系統產品和服務，我們提供差異化價值來與行業領導者競爭。這加強了我們的品牌定位並創造了獨特的行銷定位。

Now, moving to the OS part of our business. We are continuing to develop Zepp OS and simultaneously compiling the advanced technologies of OpenAI 4.5 within Zepp OS. Additionally, we are exploring the use of DeepSeek to significantly reduce cost on a larger scale. The main watch chips that we successfully designed in the past few years have already served as the main chips in the T-Rex 3, Active 2, and Bip 6 models. The usage of these chips has reached a milestone of 1 million units. Through the close integration of Zepp OS with these chips, our watches has achieved better graphic performance and computing speed as well as lower power consumption. This has enabled our watches to gain a more unique competitive edge compared to competing products, achieve a faster time to market, and a guaranteed supply chain.

現在，轉向我們業務的作業系統部分。我們正在繼續開發 Zepp OS，同時在 Zepp OS 中編譯 OpenAI 4.5 的先進技術。此外，我們正在探索使用 DeepSeek 來大規模大幅降低成本。我們在過去幾年中成功設計的主手錶晶片已經作為T-Rex 3、Active 2、Bip 6等型號的主晶片。這些晶片的使用量已經達到了100萬台的里程碑。透過Zepp OS與這些晶片的緊密結合，我們的手錶實現了更好的圖形性能和運算速度以及更低的功耗。這使得我們的手錶比競爭產品獲得了更獨特的競爭優勢，實現了更快的上市時間並擁有了有保障的供應鏈。

Looking ahead, we remain confident in Zepp Health's long-term growth trajectory. As we evolve beyond smart watches, we are building a comprehensive smart wearable ecosystem that seamlessly integrates advanced AI-driven health solutions, performance tracking, and holistic wellness management. With a robust product portfolio, continued technological advancements, and strategic brand partnerships, we are well-positioned to expand our global customer base and drive sustained self-branded sales growth.

展望未來，我們對 Zepp Health 的長期成長軌跡仍然充滿信心。隨著我們超越智慧手錶的發展，我們正在建立一個全面的智慧穿戴生態系統，無縫整合先進的人工智慧驅動的健康解決方案、性能追蹤和整體健康管理。憑藉強大的產品組合、持續的技術進步和策略品牌合作夥伴關係，我們有能力擴大全球客戶群並推動自主品牌銷售的持續成長。

To underscore our confidence in Zepp Health's long-term outlook, we will continue our share repurchase program in 2025, reflecting our dedication to delivering value for our shareholders.

為了強調我們對 Zepp Health 長期前景的信心，我們將在 2025 年繼續我們的股票回購計劃，以體現我們致力於為股東創造價值的決心。

I will now turn the call over to Leon to go over the highlights of our fourth quarter financial results.

現在我將把電話轉給 Leon，讓他來回顧我們第四季財務表現的亮點。

Thank you, Wayne. And greetings, everyone. Thank you again for joining our fourth-quarter 2024 earnings call. I would like to start by addressing recent U.S. tariff announcements on inbound goods to be sold in the U.S. which we do not expect to materially impact our U.S. consumer pricing or gross margin due to our proactive supply chain management. This is thanks to the terrific job our team has done to diversify our manufacturing and sourcing over the past years.

謝謝你，韋恩。大家好。再次感謝您參加我們的 2024 年第四季財報電話會議。首先我想談談美國最近宣布的對在美銷售的進口商品徵收關稅的問題，由於我們積極主動的供應鏈管理，我們預計這不會對我們的美國消費者定價或毛利率產生重大影響。這要歸功於我們的團隊在過去幾年中為實現製造和採購多元化所做的出色工作。

According to Counterpoint, global sales of smartwatches have fallen for the first time by 7% in 2024 on device shipment in large part due to a sharp decline in the popularity of the market leader, Apple. Shipments of Apple watches fell by 19%, with North America as the biggest driver of the decline where the absence of Apple Watch Ultra 3 and minimal feature update in the Series 10 lineup led consumers to hold back purchases. Despite the overall decline, sales in China grew from 19% of the market to 25%. This was the first time it recorded more smartwatch sales than India or North America, according to Counterpoint.

根據 Counterpoint 的數據，2024 年智慧手錶全球銷量首次下滑 7%，這在很大程度上是由於市場領先者蘋果的受歡迎程度急劇下降。蘋果手錶的出貨量下降了 19%，其中北美是下滑的最大原因，因為沒有 Apple Watch Ultra 3 以及 Series 10 系列的功能更新很少，導致消費者抑制購買。儘管整體銷售下滑，但中國市場的銷售佔比卻從 19% 成長至 25%。據 Counterpoint 稱，這是其智慧手錶銷量首次超過印度或北美。

Another large contributor to the global sales job was India, which fell from 30% of the market, to 23%. This was partly because of a bubble in ultra-cheap devices from Indian manufacturers which was now bust due to a lot of complaints about the quality of the devices.

全球銷售職位的另一個重要貢獻者是印度，其市佔率從 30% 下降到 23%。部分原因是印度製造商的超廉價設備引發了泡沫，而現在由於大量有關設備品質的投訴，泡沫已經破滅。

However, Counterpoint expects a recovery in the global market with single-digit percentage growth in 2025, and it predicts the uptake in sales will be driven by the increasing adoption of AI features and a greater emphasis of providing a wider range of health data which plays to the core of our strategy.

然而，Counterpoint 預計全球市場將在 2025 年復甦，實現個位數的百分比成長，並預測銷售額的成長將受到人工智慧功能的日益普及以及更加重視提供更廣泛的健康數據的推動，這也是我們策略的核心。

Now I will shift to our Q4 and full-year 2024 commentary. In Q4, the successful launch of the T-Rex 3 reinforced our leadership in performance-driven smartwatches. During the quarter, we maintained our strategic focus on building a sports-oriented brand identity, positioning ourselves as a premium yet accessible global brand. And we're set to capitalize this in 2025.

現在，我將轉向我們對 2024 年第四季和全年的評論。第四季度，T-Rex 3 的成功推出鞏固了我們在性能驅動智慧手錶領域的領先地位。在本季度，我們繼續堅持戰略重點，致力於打造以運動為導向的品牌形象，將自己定位為高端且平易近人的全球品牌。我們將在 2025 年實現這一目標。

Our overall sales coming within the guidance range, demonstrating a 40%-plus quarter-over-quarter growth. This strong performance was primarily driven by the successful launch of the T-Rex 3.

我們的整體銷售額在預期範圍內，季增 40% 以上。這一強勁表現主要得益於 T-Rex 3 的成功推出。

Compared with the fourth quarter of 2023, our revenue declined year-over-year due to three key factors. Firstly, a continued decline in Xiaomi product sales. Secondly, the supply constraints of T-Rex 3 series. And thirdly, by consumer-related macroeconomic issues resulting in a softer global consumer market. However, as we look ahead to the first quarter of 2025, we expect our Amazfit branded sales to continue in their strong momentum, propelling higher sales growth year-over-year.

與2023年第四季相比，我們的營收年減，原因有三個關鍵因素。首先，小米產品銷售持續下滑。其次，T-Rex 3系列的供貨限制。第三，與消費相關的宏觀經濟問題導致全球消費市場疲軟。然而，展望 2025 年第一季度，我們預計 Amazfit 品牌銷售將持續保持強勁勢頭，推動銷售額年增。

Looking at the full-year 2024, our revenue declined compared to 2023, primarily due to declining Xiaomi product sales as well as limited new product launches for Amazfit branded products with only the T-Rex 3 (inaudible) in the fourth quarter of the year. However, 2025 will be a different story. We are posed to launch one to two new products every quarter, introducing a different seasonality pattern impacting demand. This shift has been evident from Q4 2024 into Q1 2025.

展望 2024 年全年，我們的收入與 2023 年相比有所下降，主要原因是小米產品銷量下降以及 Amazfit 品牌產品的新產品發布有限，該年度第四季度僅推出了 T-Rex 3（聽不清）。然而，2025年將是另一個故事。我們計劃每季推出一到兩款新產品，引入不同的季節性模式來影響需求。這種轉變從 2024 年第四季到 2025 年第一季已經很明顯。

Now, moving on to gross margin, which can be influenced by various factors such as product mix, product launch timing, and product life cycles, including model upgrades. Our Q4 2024 gross margin stood at 37%, continuing the margin expansion trend which we initiated in the second half of 2023. However, this was slightly lower than Q3 2024 due to somewhat promotional pricing which is customary for the holiday season. The gross margin for our self-branded products remains strong, driven primarily by the higher margin T-Rex 3. Looking ahead, we expect the positive trend to continue in 2025, supported by the launch of Active 2 and Bip 6 and many other new products in the pipeline.

現在讓我們來談談毛利率，它會受到產品組合、產品發佈時間和產品生命週期（包括模型升級）等多種因素的影響。我們的 2024 年第四季毛利率為 37%，延續了我們在 2023 年下半年開啟的利潤率擴張趨勢。然而，由於節日期間的慣例促銷價格，這一數字略低於 2024 年第三季。我們自有品牌產品的毛利率依然強勁，主要得益於利潤率較高的T-Rex 3。展望未來，我們預計，在 Active 2 和 Bip 6 以及即將推出的許多其他新產品的支持下，這一積極趨勢將在 2025 年繼續保持。

From a margin perspective, 2024 was the year of gross margin expansion. Gross margin percentage in 2024 was 38.5%, compared to 26.2% in full-year 2023, helped by better product mix and higher brand awareness. In 2025, this trend is expected to continue with the introduction of higher margin products further supporting our profitability.

從利潤率角度來看，2024年是毛利率擴大的一年。2024 年毛利率為 38.5%，而 2023 年全年為 26.2%，這得益於更好的產品組合和更高的品牌知名度。到 2025 年，隨著利潤率更高的產品的推出，這一趨勢預計將持續下去，從而進一步支持我們的獲利能力。

Now, let's turn our attention to costs. We remained steadfast in our commitment to cost management, continuing with the program that we began in Q3 2020 on reducing overall operating costs. In 2024 Q4, total adjusted operating expenses were $29.3 million, compared to $25.9 million a year ago. The increase was primarily due to spend on promotional campaigns during the holiday seasons to build brand recognition and drive revenue growth.

現在，讓我們把注意力轉向成本。我們堅定不移地致力於成本管理，繼續執行 2020 年第三季啟動的降低整體營運成本的計畫。2024 年第四季度，調整後總營運費用為 2,930 萬美元，去年同期為 2,590 萬美元。成長的主要原因是節日期間的促銷活動支出，以建立品牌知名度並推動收入成長。

Adjusted operating cost was $110 million in the full-year 2024, compared to $112 million in 2023 and $171 million in 2022. We will maintain our cost-conscious approach in the coming quarters. Concurrently, we remain committed to invest in R&D and marketing activities to maintain our long term competitive edge.

2024 年全年調整後營運成本為 1.1 億美元，而 2023 年為 1.12 億美元，2022 年為 1.71 億美元。在接下來的幾個季度中，我們將繼續保持注重成本的做法。同時，我們仍致力於投資研發和行銷活動，以維持我們的長期競爭優勢。

R&D expenses in the first quarter of 2024 were $10.1 million, nearly flat compared to last year, as we consistently evaluated a resources efficiency to ensure maximum return on investments and productivity. We're committed to investing in new technologies and AI to secure our long term technology leadership.

2024 年第一季的研發費用為 1,010 萬美元，與去年相比幾乎持平，因為我們持續評估資源效率，以確保最大程度的投資回報和生產力。我們致力於投資新技術和人工智慧，以確保我們長期的技術領先地位。

Selling and marketing expenses in the fourth quarter of 2024 were $13.2 million compared to $11.8 million a year ago. The increase was primarily due to spend on promotional campaigns during the high season to build brand recognition and drive sales growth. At the same time, we consistently pushed on retail profitability and channel mix improvement which included meticulous refinement of our retail channels and strategic staffing arrangements across sales regions. We're committed to investing efficiently in marketing and branding to ensure our sustainable growth.

2024 年第四季的銷售和行銷費用為 1,320 萬美元，而去年同期為 1,180 萬美元。成長的主要原因是在旺季期間開展促銷活動以建立品牌知名度並推動銷售成長。同時，我們不斷推動零售獲利能力和通路組合改善，包括對零售通路的細緻完善和跨銷售區域的策略性人員配置安排。我們致力於有效投資行銷和品牌建設，以確保我們的永續發展。

G&A expenses were $6.1 million in the first quarter of 2024, compared to $4 million in the fourth quarter of 2023. The increase was largely attributable to provisions for bad debt and foreign exchange rate fluctuations. We remain committed to strict cost control over discretionary spending, ensuring expenses are aligned with driving sustainable growth. In 2025, we aim to keep operating costs at or below 2024 levels, maintaining a lean and efficient structure or strategically investing in high-impact areas.

2024 年第一季的 G&A 費用為 610 萬美元，而 2023 年第四季為 400 萬美元。成長的主要原因是壞帳準備和外匯匯率波動。我們將繼續致力於嚴格控制可自由支配支出的成本，確保支出與推動永續成長一致。2025 年，我們的目標是將營運成本維持在 2024 年的水平或以下，保持精簡高效的結構或在高影響領域進行策略性投資。

Our adjusted operating loss for Q4 2024 stood at $7.4 million. The loss was mainly driven by lower sales volume, resulting in insufficient coverage of operating expenses. It was the narrowest in the past four quarters, demonstrating sequential improvement and path to profitability in near term. This reflects our ongoing efforts to enhance efficiency and then align expenditures with revenue growth.

我們 2024 年第四季的調整後營業虧損為 740 萬美元。虧損主要由於銷售量下降，導致無法覆蓋營業費用。這是過去四個季度以來的最窄增幅，顯示公司業績將持續改善，並有望在短期內獲利。這反映了我們不斷努力提高效率，使支出與收入成長一致。

GAAP net loss for the first quarter of 2024 was $36.9 million which included operating loss of $9 million, certain investment-related impairments of $13 million, and deferred tax asset valuation allowance of $14 million. Allow me to further elaborate on this. To optimize the operation of the company's core business, the company implemented a one-time impairment at the end of this year for certain projects it had invested in past years. By the end of this year, the company has comprehensively divested from these investments and completed liquidation procedures where possible.

2024 年第一季的 GAAP 淨虧損為 3,690 萬美元，其中包括 900 萬美元的營運虧損、1,300 萬美元的某些投資相關減損以及 1,400 萬美元的遞延所得稅資產估價準備。請容許我進一步闡述這一點。為優化公司主營業務運營，公司於今年末對部分以前年度投資項目實施了一次性減損。截至今年底，公司已全面退出上述投資，並完成了可能的清算程序。

Going forward, there will be limited impairment concerns from these investment projects. This impairment measure is designed to streamline the business operations, allowing the company to focus on its main and core business and drive more efficient developments. In addition, there's another $140 million technical accounting treatment on deferred tax assets booked in past years. Both are non-recurring and non-cash in nature.

展望未來，這些投資項目的減損擔憂將有限。此項減損措施旨在簡化業務運營，使公司能夠專注於主要業務和核心業務並推動更有效率的發展。此外，還有針對過去幾年確認的遞延所得稅資產的1.4億美元技術會計處理。兩者本質上都是非經常性和非現金的。

Let's now shift our focus to the balance sheet. As Wayne has mentioned, we continue to optimize our working capital, achieving an inventory level of $57 million in Q4 which was the lowest since 2018. Inventory management remains a top priority and we'll continue to keep inventory levels tight to improve cash flow efficiency.

現在讓我們將注意力轉移到資產負債表。正如韋恩所提到的，我們繼續優化我們的營運資金，第四季度的庫存水準達到 5700 萬美元，這是自 2018 年以來的最低水準。庫存管理仍然是重中之重，我們將繼續保持庫存水準緊張，以提高現金流效率。

By February 2025, we have successfully refinanced the majority of our short-term debts maturing in 2025 into long-term debt instruments with a lower coupon rate. Following this adjustment, long-term debt accounts for around 75% of the company's overall debt structure. And since Q1 2023, $56 million of the total debt has been retired, and the capital structure will be further optimized as operating cash flow strengthened.

截至 2025 年 2 月，我們已成功將大部分 2025 年到期的短期債務再融資為票面利率較低的長期債務工具。此調整後，長期債務占公司整體債務結構的75%左右。且自2023年第一季起，已償還總債務5,600萬美元，隨著經營現金流的加強，資本結構將進一步優化。

As of December 31, 2024, our cash balance stood at $111 million, compared to $140 million in Q4 2023. The decline is mainly due to lower operating profit offset by a better working capital management. Compared to Q3 2024, the shortfall was mainly due to operating activities.

截至 2024 年 12 月 31 日，我們的現金餘額為 1.11 億美元，而 2023 年第四季為 1.4 億美元。下降的主要原因是營運資本管理改善抵銷了營業利潤的下降。與 2024 年第三季相比，缺口主要由於經營活動造成。

We remain committed to our share buyback program in 2025, reinforcing our confidence in the company's long-term value and our commitment to delivering returns to shareholders.

我們將繼續致力於 2025 年的股票回購計劃，以增強我們對公司長期價值的信心以及為股東帶來回報的承諾。

Looking ahead, for Q1 2025, we expect revenue in the range of $40 million to $45 million. This would mark a year-over-year growth of 14% to 29% in the self-branded product sales, highlighting the momentum of our brand expansion strategy.

展望未來，我們預計 2025 年第一季的營收將在 4,000 萬美元至 4,500 萬美元之間。這將標誌著自主品牌產品銷售額年增14%至29%，凸顯了我們品牌擴張策略的動能。

To conclude, despite challenges in 2024, we navigated the year effectively by focusing on disciplined cost management while expanding our self-branded product expansion. As we enter 2025, we're well-positioned for sustained growth with a robust product pipeline, margin expansion strategy, and disciplined cost management. We remain confident that these strategic initiatives will drive long-term value for the investors, employees, and customers.

總而言之，儘管 2024 年面臨挑戰，但我們透過專注於嚴格的成本管理並擴大自有品牌產品的擴張，有效地度過了這一年。進入 2025 年，我們將憑藉強大的產品線、利潤擴張策略和嚴謹的成本管理，為持續成長做好準備。我們堅信這些策略舉措將為投資者、員工和客戶帶來長期價值。

Thank you all for your time today. I will now open the call for questions. Operator, please go ahead.

感謝大家今天的寶貴時間。我現在開始回答問題。接線員，請繼續。

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

謝謝。我們現在開始問答環節。（操作員指令）

[Dev] Rajeev, Fundamental Research Corp.

[開發人員] Rajeev，基礎研究公司

Hi. Regarding the new tariffs on Chinese smartwatch imports to the U.S., Leon, you mentioned there'll be minimal impact, due to supply chain management. Could you please expand on this point, maybe give some color, please?

你好。關於美國對中國智慧手錶徵收的新關稅，Leon，您提到由於供應鏈管理的原因，影響將很小。您能否就這一點進行詳細說明，或提供一些說明？

Hi Sid. Thank you. I think it's -- you know that we have been working on dual sourcing strategy for a long time, at least for two to three years already, right? And then the U.S. tariff is very much on the goods which have been manufactured in China and shipped to the United States. So what we're trying to do is trying to mitigate that part of the shipments through our manufacturing base in Southeast Asia so that we can not avoid the tariff impact which has been applied to the Chinese goods into United States.

你好，Sid。謝謝。我認為——您知道我們已經致力於雙重採購策略很長時間了，至少有兩到三年了，對吧？美國關稅主要針對的是在中國生產並運往美國的商品。因此，我們正在嘗試透過東南亞的製造基地來減輕這部分貨物運輸的壓力，這樣我們就可以避免對中國商品進入美國徵收關稅的影響。

Are you able to give or disclose what percent of your overall manufacturing comes from outside China?

您能否透露一下，你們整體製造業務中有多少百分比是來自中國以外的？

I think, for now, you can take the all of the products which are coming to United States to satisfy our revenue in the United States are coming out of non-China regions. So from that perspective, I think 20% to 25% of the overall portfolio is actually non-China manufacturing base related.

我認為，就目前而言，所有進入美國以滿足我們在美國收入的產品都來自中國以外的地區。因此從這個角度來看，我認為整體投資組合中 20% 到 25% 實際上與非中國製造業基地有關。

Okay. So that means you're probably better off than, say, Apple given that most of their manufacturing is in China, so they'll be significantly impacted by these new tariffs.

好的。所以這意味著你可能比蘋果的情況更好，因為他們的大部分製造業務都在中國，所以他們會受到這些新關稅的嚴重影響。

Yeah, to some extent, I think, yeah.

是的，在某種程度上，我認為是的。

You talked about taxes and impairment loss on investments. Could you give more color on that as well? Why did taxes go up so much? And what was the primary driver of the $10 million impairment loss from investments?

您談到了稅收和投資減損損失。您能對此進行更詳細的說明嗎？稅收為何上漲這麼多？那麼造成1000萬美元投資減損損失的主要原因是什麼？

As I just mentioned, the impairment losses is very much coming out of, we have made some small investments on our upstream and downstream, say, technology companies or similar companies in our domain which potentially have some synergies. I think that applies to most of the multinational companies. They all have kind of strategic investment department themselves. So in the past years, we also have made similar investments to some sort of the downstream and upstream companies which is placed into the similar kind of industry or have potential synergies with us. And you know that every year, you need to do an impairment assessment on whether or not these companies, the value of the investment is still the value which you have invested a few years ago.

正如我剛才提到的，減損損失很大程度上來自於我們對上游和下游進行了一些小額投資，例如科技公司或我們領域內可能具有協同效應的類似公司。我認為這適用於大多數跨國公司。他們自己都有某種戰略投資部門。所以在過去的幾年裡，我們也對一些處於類似產業或與我們有潛在協同效應的上游和下游公司進行了類似的投資。而且你知道，每年你都需要做一次減損評估，看看這些公司的投資價值是否仍是你幾年前投資的價值。

And I think we all know that in the past years, given the macro headwinds, et cetera, some of those startup companies or mature companies or chip companies, some of those companies, their performance is not playing according to what we have invested a few years ago. So from that perspective, given the prudent principle which the auditors want us to apply, then you need to to do an assessment on those investments you made in the past and impair them whenever possible to actually reflect the fair market value of those investments, right? And that was the reason for the $13 million investment impairment which we provided.

我想我們都知道，在過去幾年裡，考慮到宏觀逆風等等，一些新創公司、成熟公司或晶片公司的表現並不像我們幾年前投資的那樣。因此從這個角度來看，考慮到審計師希望我們採用的審慎原則，您需要對過去的投資進行評估，並儘可能地減值，以實際反映這些投資的公平市場價值，對嗎？這就是我們提供1300萬美元投資減損的原因。

On the deferred tax asset, I think it's more technical. You know that there is the so-called deferred tax asset. It happens whereby if you report it in a certain year a loss, which unfortunately, we did report a loss in the past year, then you can recognize some of that as a tax shied going forward. But then again, per the accounting principle, you have to apply a prudent principle if you think some of those deferred tax assets, because also the deferred tax asset has to be used within a certain period of time, right, and if you think a part of that may not be used in the upcoming year or so or it's going to expire in the upcoming one year or two, then you have to apply impairment or a value allowance provision to those deferred tax assets.

關於遞延所得稅資產，我認為這更具技術性。你知道有所謂的遞延稅務資產。如果你在某一年報告了虧損，不幸的是，我們去年確實報告了虧損，那麼你可以將其中的一部分視為未來的避稅。但是，根據會計原則，如果您認為其中一些遞延所得稅資產，您必須應用審慎原則，因為遞延所得稅資產也必須在一定時期內使用，對吧，如果您認為其中一部分可能不會在未來一年左右使用，或者將在未來一兩年內到期，那麼您必須對這些遞延所得稅資產應用減值或價值準備金。

But as I said, those adjustments which we made by Q4 2024 on the investment impairment and also on the tax deferred tax assets, they are non-cash and one-off in nature. So it's not going to repeat again. And then I think after we provisioned for those amounts, also the risk of a further provision on those topics in the year of 2025 would be limited.

但正如我所說，我們在 2024 年第四季對投資減損以及遞延稅項資產所做的調整本質上是非現金和一次性的。所以它不會再重複了。然後我認為，在我們為這些金額作出準備之後，2025 年進一步針對這些主題作出準備的風險也將受到限制。

Thank you so much, Leon. Just one more question if I may, this is regarding the market in general. Now, Apple sales of smartwatch was down significantly last year. Samsung reported modest growth. But the Chinese players have been growing rapidly. Are you seeing internally a big shift in demand towards lower-priced players? Is that an accurate assumption?

非常感謝，Leon。如果可以的話，我還有一個問題，這是關於整個市場的問題。現在，蘋果智慧手錶的銷售量去年大幅下滑。三星報告稱其業績溫和成長。但中國球員一直在快速成長。您是否發現公司內部對低價球員的需求發生了巨大轉變？這是一個準確的假設嗎？

No. I said -- I mean, on the contrary, I think what we have seen and what has been, I also put it in my prepared notes, is that although the market overall actually declined, there are a few bright spots. So I think in the outdoor and in the sports part of the smartwatch market, there's a bright star, I think you know which brand I'm talking about. Garmin is actually performing very well. And we all know that Garmin smartwatches are not cheap, right? So I think, from that perspective, what we see is that -- you also can see it from our Q4 result, after we successfully launched the T-Rex 3 watch, we actually gained share rapidly in Q4 in most of the developed countries where we operated in.

不。我說——我的意思是，相反，我認為我們所看到的和已經發生的事情，我也寫在了我準備好的筆記中，那就是儘管市場整體實際上有所下滑，但也存在一些亮點。所以我認為在智慧手錶市場的戶外和運動部分，有一顆耀眼的明星，我想你知道我在談論哪個品牌。事實上，Garmin 的表現非常出色。我們都知道 Garmin 智慧手錶並不便宜，對吧？所以我認為，從這個角度來看，我們看到的是——您也可以從我們的第四季度業績中看到，在我們成功推出 T-Rex 3 手錶後，我們在第四季度在大多數已開發國家的市場份額實際上迅速增長。

So we see, yes, there's a decline from the market. But that decline, I think to some extent, is coming out of there's not so many feature changes in the Apple watch and also people are waiting for Apple Watch Ultra 3 which didn't arrive in the year, and that actually drove the decline on the market leader, Apple, right? On the other hand, I also mentioned that India market kind of collapsed on the super low end and super cheap smartwatch market front.

所以我們確實看到市場出現下滑。但我認為，從某種程度上來說，這種下滑是因為 Apple Watch 的功能變化不大，而且人們在等待 Apple Watch Ultra 3，但這款產品今年卻未能上市，而這實際上導致了市場領先者蘋果的下滑，對嗎？另一方面，我也提到，印度市場在超低端和超廉價智慧手錶市場上有點崩潰了。

So what is growing is China, whereby we are a part of that. And also what is growing is the sports watch segment whereby we took a very good share growth in Q4 on that segment. And also, what is going to grow in 2025 is also AI-driven, right? And then you heard from Wayne and myself, we talked about we're actually one of, if not, the first one in adopting AI on the smartwatch. So we think given where the market growth and the potential is for 2025, we're actually quite optimistic about our growth trajectory in 2025.

中國正在發展，我們是其中的一部分。另外，運動手錶領域也在不斷增長，我們在該領域的第四季度取得了非常好的份額成長。而且，2025 年的成長也是由人工智慧驅動的，對嗎？然後你聽到韋恩和我說過，我們實際上是第一個在智慧手錶上採用人工智慧的公司之一，如果不是的話。因此，我們認為，考慮到 2025 年的市場成長和潛力，我們對 2025 年的成長軌跡實際上非常樂觀。

Thank you so much, Leon. Congratulations on a strong Q4 revenue growth.

非常感謝，Leon。恭喜第四季營收強勁成長。

Thank you, Sid.

謝謝你，席德。

[Ankit Upadhyay], a private investor.

私人投資者[Ankit Upadhyay]。

Thank you so much for having me on the call. I'm a long term shareholder in Zepp Health and I will ask a few questions on the long-term strategy. To start off, I'd like to defer to Mr. Huang, the CEO, on the company's vision. In your 2019 open letter to the employees, you spoke about building a global health ecosystem. How do you think you are tracking against that vision? And especially, when we put into the perspective the fact that most of the revenue still comes from the wearables, how do you think you're doing against that vision five years down the line?

非常感謝您邀請我參加電話會議。我是 Zepp Health 的長期股東，我想問幾個關於長期策略的問題。首先，我想請執行長黃先生談談公司的願景。在您2019年致員工的公開信中，您談到了建立全球健康生態系統。您認為您如何實現這個願景？尤其是，當我們考慮到大部分收入仍然來自穿戴式裝置時，您認為五年後您將如何實現這一願景？

Ankit, thank you for the call. I think I will defer this question to Mike Yeung, our COO. And then maybe Wayne is going to comment on that if he has any other things to add to it.

Ankit，謝謝您的來電。我想我會將這個問題轉交給我們的營運長 Mike Yeung。如果韋恩還有其他要補充的話，他可能會對此發表評論。

Sounds good.

聽起來不錯。

Yeah. I'll try to answer the question. Besides the smartwatch, as you know, we're also continuously diversifying our product portfolio. We have many other form factors now, covering rain, earbud, we even have hearing aid. So basically, diversifying our product category can enable us to get into the different segments of the customer base. And at the same time, we're continuously experimenting and rolling out services that might make sense.So we have the sleep monitoring service that is still growing very healthy, so that also helped create a subscription business for us.

是的。我將盡力回答這個問題。如您所知，除了智慧手錶之外，我們還在不斷豐富我們的產品組合。我們現在有許多其他外形尺寸，包括雨衣、耳塞，甚至還有助聽器。因此從根本上來說，產品類別的多樣化可以讓我們進入不同細分的客戶群。同時，我們也不斷嘗試和推出可能有意義的服務。所以我們的睡眠監測服務仍然發展得非常健康，這也有助於我們創建訂閱業務。

We're talking about longer term. So as we diversify our product portfolio into into different sectors and then try to cover different customers, we can try to cross-sell and upsell. As well as, at the same time, try to deliver the services where the margin would be much higher, where it makes sense. In the even longer term, we will also look into more of the 2B area. Besides 2C right now, we're just primarily focusing on consumer. But as we go in the longer term, we can do partnerships with insurance and other enterprises where we can get the whole ecosystem to be more well developed. So that's a very longer term view. Does that answer your question?

我們談論的是長期的事情。因此，當我們將產品組合多樣化到不同領域並嘗試涵蓋不同的客戶時，我們可以嘗試交叉銷售和追加銷售。同時，嘗試在合理的範圍內提供利潤更高且優質的服務。從更長遠的角度來看，我們也將更專注於2B領域。目前除了2C之外，我們主要關注的是消費者。但從長遠來看，我們可以與保險公司和其他企業建立合作關係，使整個生態系統更加完善。這是一個非常長遠的觀點。這回答了你的問題嗎？

Yeah. That helps. Thank you so much. My second question would be around the relationship with Xiaomi. So while they still remain the shareholders and they have a board seat, the disengagement on the product side also coincided with them gaining their market share rapidly. What's the perspective on that? What's the view at the Zepp management on that?

是的。這有幫助。太感謝了。我的第二個問題是關於與小米的關係。因此，雖然他們仍然是股東並在董事會佔有一席之地，但產品方面的脫離也恰逢他們迅速獲得市場份額。對此的看法是什麼？Zepp 管理階層對此有何看法？

I will take this one, Ankit. Number one, our relationship with Xiaomi is very strong, okay? As what you mentioned, they hold 20% of the company, they have the board seat, and we have a very close relationship with Xiaomi operating-wise, right? But on the other hand, I think I need to repeat on the transformation journey which we have been going through in the past two or three years. Maybe I would just put it in one simple word to it. I think it boils down to our transform our target is actually to transform ourselves from (inaudible) alike OEM/ODM type of a company to a company which has its own brand and then, so to say, a new Garmin-type of branded smartwatch type of company, right? So that is actually the strategic shift which we would like to do.

我要這個，安基特。第一，我們和小米的關係非常牢固，好嗎？正如您所說，他們持有公司 20% 的股份，在董事會佔有一席之地，而且我們與小米在營運方面有著非常密切的關係，對嗎？但另一方面，我認為我需要重複我們過去兩三年所經歷的轉型歷程。也許我只會用一個簡單的字來表達。我認為歸根結底，我們的轉型目標實際上是從（聽不清楚）類似 OEM/ODM 類型的公司轉型為擁有自己品牌的公司，然後可以說是新的 Garmin 類型的品牌智慧手錶公司，對嗎？所以這其實是我們想要做的策略轉變。

And then, from a profitability perspective, we first want to shift the company to the situation whereby our self-branded products sales is actually sufficient enough to cover all our operating expenses and we're going to be profitable on that.

然後，從獲利能力的角度來看，我們首先希望將公司轉變為這樣的狀態：我們的自有品牌產品銷售額實際上足以覆蓋我們所有的營運費用，並且我們將從中獲利。

And then from that moment onwards, as a second step, we can look at whether or not to expand that revenue base with Xiaomi or as Mike just mentioned, any big 2B customers to expand again. Because the issue is, you have seen in the past in our financial reports, Xiaomi is actually very big from a revenue perspective. But then year-over-year, the margin on that business is actually decreasing rapidly. And then also Xiaomi, as a listed company, they have made a very open announcement towards the market saying that on the hardware front, they're not going to make any profit on it. They are going to just do a cost-plus 5% on it, right?

從那一刻起，作為第二步，我們可以考慮是否透過小米或 Mike 剛才提到的任何大型 2B 客戶來擴大收入基礎，以再次擴大收入基礎。因為問題是，正如你從我們過去的財務報告中看到的，從收入角度來看，小米的規模實際上是非常大的。但與去年同期相比，該業務的利潤率實際上正在迅速下降。然後小米作為一家上市公司，他們已經向市場公開宣布，在硬體方面，他們不會從中賺取任何利潤。他們只會在其成本基礎上加收 5% 的費用，對嗎？

And then if we continue on this path forward, I think, yeah, and you will see a declining trend on the Xiaomi revenue and the profit which we're going to chunk out of it, right? So that's why we're trying to actually get to first use our self-branded product sales to sustain our profitability and to expand again to this journey. So that is actually a well-thought strategy which we kind of embarked two to three years ago.

然後，如果我們繼續沿著這條道路前進，我想，是的，你會看到小米的收入和我們從中獲得的利潤呈下降趨勢，對嗎？因此，這就是為什麼我們實際上試圖首先利用我們的自有品牌產品銷售來維持我們的盈利能力並再次擴展到這一旅程。所以這其實是我們兩三年前開始實施的一個深思熟慮的策略。

And then I think we're coming to the end of the tunnel, so we see the light at the end of the tunnel right now. So you see that, yes, overall revenue, year-over-year, '24 compared with '23, there's a decline. But it's very much driven by the Xiaomi revenue decline, but then it does not impact too much on the bottom line. And at the same time you, saw the gross margin expansion of the company from 26% to close to 40%, right? And then, yes, at Q4 2024 or throughout the year of 2024, we do have a cost coverage issue whereby our revenue needs to hit certain threshold in order to get profitable, but that was very much related to a different product launch cadence which was in 2024.

然後我想我們就要走到隧道的盡頭了，所以我們現在看到了隧道盡頭的光亮。因此，您會看到，是的，24 年的總收入與 23 年相比，年比有所下降。但這很大程度上是由小米收入下滑造成的，但對利潤的影響並不太大。同時，您看到公司的毛利率從26％擴大到接近40％，對嗎？是的，在 2024 年第四季或全年，我們確實存在成本覆蓋問題，即我們的收入需要達到一定的門檻才能實現盈利，但這與 2024 年的不同產品發布節奏密切相關。

If you track us, as what you said, looking at 2024, there's only one new product which we have launched, that is the T-Rex 3. And after we launched that, we received immediate traction and popularity on that product. And then that drives the quarter-on-quarter run rate of the of the revenue to grow by more than 40% Q4 versus Q3, right? And Wayne also has alluded to it and so do I, in 2025, we're going to have major product refreshments and new product introductions every single quarter which is going to be a different cadence than what we have experienced in 2024.

如果你追蹤我們，正如你所說，展望2024年，我們只推出了一款新產品，那就是T-Rex 3。在我們推出該產品之後，該產品立即獲得了關注和歡迎。那麼這會推動第四季營收的環比成長率比第三季成長 40% 以上，對嗎？韋恩和我都提到過，到 2025 年，我們每季都會進行重大的產品更新和新產品的推出，這將與我們在 2024 年經歷的節奏不同。

So from that perspective, I think 2025 would be a totally different year whereby we will see strong sales growth compared to 2024.

因此從這個角度來看，我認為 2025 年將是一個完全不同的一年，與 2024 年相比，我們將看到強勁的銷售成長。

I think I have given you a very long answer to the question. And coming back to Xiaomi, I think after we have finished the step to use our self-branded products to sustain our profitability, then the next step is to look at whether or not we can expand the revenue and to strike a win-win on those 2B deals. And then since our relationship with Xiaomi has been very good, and is very good, you know the Xiaomi ecosystem works in a way that every year there's going to be a new sourcing plan and then you can bid for it and then you can get that contract to produce for different Xiaomi ecosystem kind of products, right? So I think we would just embark on the plan which we set out to do. And hopefully, that answers your question.

我想我已經對這個問題給了一個很長的答案。回到小米，我認為在我們完成使用自有品牌產品來維持獲利能力的步驟之後，下一步就是看看我們是否可以擴大收入並在那些2B交易上實現雙贏。而且由於我們與小米的關係一直很好，你知道小米生態系統的工作方式是，每年都會有一個新的採購計劃，然後你可以競標它，然後你就可以獲得該合約來生產不同小米生態系統類型的產品，對吧？因此我認為我們只需著手執行我們所製定的計劃即可。希望這能回答您的問題。

Yeah. Thanks, Leon. That was a really clear answer. My last question is about the stock itself, pretty tactical question, but I think it's important. The stock continues to be very (inaudible). What's being done about it, if anything is being taken into action?

是的。謝謝，萊昂。這是一個非常明確的答案。我的最後一個問題是關於股票本身的，這是一個相當策略性的問題，但我認為它很重要。股票仍然非常（聽不清楚）。如果有的話，正在採取什麼措施？

Ankit, it's a good question, and thank you for asking this question. There are a few things. Number one is if you look at our total asset and the net equity value of the company, it's actually north of $250 million. So I think, looking at the current market cap and the share price, we're hugely undervalued. That's number one.

Ankit，這是個好問題，謝謝你問這個問題。有幾件事。第一，如果你看看我們的總資產和公司淨資產價值，它實際上已經超過 2.5 億美元。因此我認為，從目前的市值和股價來看，我們被嚴重低估了。這是第一點。

Number two, I have mentioned in the press release that we recently refinanced our short-term debts to long-term debts. So we actually pushed the tower to '27 and beyond. So there's no immediate maturity coming due in 2025 and 2026. And then with the cash we currently have on hand, I think we have ample wrong way to cater for anything and to invest on any opportunities once it emerged, right?

第二，我在新聞稿中提到，我們最近將短期債務再融資為長期債務。因此我們實際上將塔推遲到了 27 年或更晚。因此，2025 年和 2026 年沒有即將到期的債務。然後，憑藉我們目前手頭上的現金，我認為我們有足夠的能力去應對任何事情，並在任何出現的機會上進行投資，對嗎？

Number three, I think, you heard us talking, we have and we are going to continue with the stock buyback program which we kicked off two years ago, right? And then we're actually prepared to upsize the stock buyback program whenever needed, right? Because we're very confident on our strategy and our growth trajectory.

第三，我想你聽到我們談論了，我們已經並將繼續執行兩年前啟動的股票回購計劃，對嗎？然後我們實際上準備在需要時擴大股票回購計劃，對嗎？因為我們對我們的策略和成長軌跡非常有信心。

And I think last but not the least, what you see here is that it's a very much a self-help story, right? I believe that if we could prove to the market that the transformation journey of transforming from a (inaudible)-like company to a kind of a new Garmin company and then you can actually become profitable and to be honest, if you look at the ranking globally, the value share, we're actually ranked number 6 or 7, depends on the quarter you're looking at. So we're actually ranked very high, just a few place from Apple, Garmin, and Samsung, right?

我認為最後但並非最不重要的一點是，您在這裡看到的是，這是一個自助故事，對嗎？我相信，如果我們能夠向市場證明，從一家（聽不清楚）公司轉型為新的 Garmin 公司，那麼你實際上可以獲利。老實說，如果你看全球排名，價值份額，我們實際上排名第 6 或第 7，這取決於你所看的季度。所以我們的排名其實很高，只比蘋果、Garmin 和三星低幾位，對嗎？

But then if we can further expand our brand awareness and brand recognition and also, if we can actually grow our relatively share in the key countries we set out to do, those are EMEA countries and China and the United States, then I think the share price would start to recover and you will see a more liquid situation coming out of our company. But as I said, I mean, one (inaudible) does not make a summer, right? So we need -- But you have seen that from Q4 versus Q3, our sales growth is more than 40%. And our guidance for Q1 is also a year-on-year more than high teens growth rate. And then if we can continue on that, I think given two or three quarters, you should be able to see a recovery on the share price.

但是，如果我們可以進一步擴大我們的品牌知名度和品牌認知度，並且如果我們實際上可以在我們計劃開展業務的重點國家（即歐洲、中東和非洲國家以及中國和美國）擴大我們的相對份額，那麼我認為股價將開始回升，您會看到我們公司的流動性更強。但正如我所說的，我的意思是，一個（聽不清楚）並不能代表一個夏天，對吧？所以我們需要—但您已經看到，與第三季相比，我們的第四季銷售額成長率超過了 40%。我們對第一季的預期也是年比成長率超過 15%。如果我們能夠繼續這樣做，我認為經過兩三個季度，你應該可以看到股價的回升。

Thank you so much for that answer. Thank you, Leon and Mike, for those clear answers. And I wish all the best with all the initiatives while I check the time on my T-Rex 3 watch. Thank you.

非常感謝您的回答。謝謝 Leon 和 Mike 的明確回答。當我查看 T-Rex 3 手錶上的時間時，我祝所有計劃一切順利。謝謝。

Thank you, Ankit.

謝謝你，安基特。

[Nicolette Jones], Brooks Investments.

[尼可萊特瓊斯]，布魯克斯投資公司。

Thank you for taking my questions. I just actually have one of them. Could you please provide a recap and provide some more information about the new product roadmap for 2025? And any impact on growth these new products may have?

感謝您回答我的問題。我確實只有其中一個。您能否進行回顧並提供有關 2025 年新產品路線圖的更多資訊？這些新產品會對成長產生什麼影響？

I can do a quick recap of the -- Sorry, there's an echo on the line. You can hear me okay, right, operator?

我可以快速回顧一下──抱歉，電話那頭有回音。接線員，您聽得到我說話嗎？

That is correct. We were getting some background noise and I muted Nicolette's line. Please proceed.

正確。我們聽到了一些背景噪音，所以我把 Nicolette 的台詞靜音了。請繼續。

Okay. Good. So let me get back to the question. I think, briefly, if you look at our strategy, we do have basically different smartwatch lines playing on different price segments. So in January this year in CES, we have launched Active and Bip, those are our entry level value-for-money price segment products. And as Wayne just mentioned, these two product lines, since launch, the moment we launched them, it received a lot of popularity and then the activation keeps on climbing. So those two products would be our gatekeeper for the entry level price segments and then, it's going to continue to grow throughout the year.

好的。好的。那麼讓我回到這個問題。我認為，簡單地說，如果你看一下我們的策略，你會發現我們確實有不同的智慧手錶產品線，適用於不同的價格區間。所以今年 1 月在 CES 上，我們推出了 Active 和 Bip，這些都是我們的入門級性價比產品。正如韋恩剛才提到的，這兩條產品線自推出以來，就獲得了很大的歡迎，而且激活率也不斷攀升。因此，這兩款產品將成為我們入門價格段的守門人，並且將在全年持續成長。

And if you look at what I just mentioned, we have also the mid- to high-end price tier products. One of them is actually T-Rex 3 which we launched in Q3, in September 2024. And it's actually in full swing right now. The activation keep on climbing. A lot of media and YouTubers call us, the T-Rex 3, the Garmin Fenix killer, that type of reputation we received. So if we continue on this trend in this year, then obviously T-Rex 3 and the sports and outdoor part of the business would continue to grow and then it's going to also help our growth story for 2025.

如果你看看我剛才提到的，我們也有中高端價格的產品。其中之一實際上是我們在 2024 年 9 月第三季推出的 T-Rex 3。現在它確實正在如火如荼地開展。激活度持續攀升。許多媒體和 YouTube 用戶稱我們為 T-Rex 3，Garmin Fenix 殺手，我們就獲得了這樣的聲譽。因此，如果我們今年繼續保持這一趨勢，那麼顯然 T-Rex 3 以及業務的體育和戶外部分將繼續增長，然後它也將有助於我們 2025 年的成長故事。

Last but not least, you know that we also have a mid-level type of price point product and that product series is called the Balance series. And on the Balance series, the target is more towards the urban consumers who want to do light sports, but then we can actually give them the edge on all the functionalities you could expect on the smartwatch. But then we are more accurate on the GPS, on the sports functionalities, et cetera, for the urban users.

最後但同樣重要的一點是，您知道我們也有一種中等價位的產品，該產品系列稱為 Balance 系列。Balance 系列的目標客戶更多是那些想要進行輕度運動的城市消費者，但我們實際上可以為他們提供智慧手錶所能提供的所有功能。但對於城市用戶來說，我們的 GPS、運動功能等等更加精準。

So with these three product lines, and I have alluded to it, in 2024, we only have one product introduction, but in 2025, you will see that we will have new products coming out almost every quarter. And then that will obviously change the demand pattern of our sales pattern as well. So I think given that, it would drive the 2025 revenue and growth of the company to a new high versus 2024. And then you have already seen it in our guidance for 2025 Q1 and also in the Q4 2024 numbers. I hope that answers your question.

因此，對於這三條產品線，我曾經提到過，在 2024 年，我們只會推出一款產品，但到 2025 年，您會看到我們幾乎每季都會推出新產品。這顯然也會改變我們的銷售模式的需求模式。因此，我認為，鑑於這一點，它將推動公司 2025 年的收入和成長達到較 2024 年新的高度。然後您已經在我們對 2025 年第一季的指導以及 2024 年第四季的數據中看到了它。我希望這能回答你的問題。

Thank you. As there are no further questions at this time, I'd like to turn the call back over to the company's IR Director, Grace Zhang, for closing remarks.

謝謝。由於目前沒有其他問題，我想將電話轉回給公司的投資者關係總監 Grace Zhang 做最後發言。

Thank you once again for joining us today. If you have further questions, please feel free to contact Zepp Health Investor Relations department through the contact information provided on our IR website. Thank you.

再次感謝您今天的參與。如果您還有其他問題，請隨時透過我們的 IR 網站上提供的聯絡資訊聯絡 Zepp Health 投資者關係部門。謝謝。

Thank you. This concludes the conference call. You may now disconnect your lines and have a wonderful day. Thank you.

謝謝。本次電話會議到此結束。現在您可以斷開連接並享受美好的一天。謝謝。