DSC Holdings Ltd.

Junhong Yao, Gongwei Zhang, Bofei Kong After the meeting is over, the recording and relevant text records will soon be posted on the website of the company's investor relations. Next, I would like to invite Ms. Wang Jianan, the director of the investment director of Dazao. Ms. Wang, please start.

Hello, everyone. Thank you for participating in today's press conference. We will discuss the financial performance of the company in the second quarter of 2026. Our press conference has already been published on the company's website. Before we start, I would like to remind you that today's discussion will include the preliminary statement made by the U.S. Securities Regulatory Reform Act Security Act in 1995. Qin Zou, Junhong Yao, Bofei Kong In addition to the legal requirements, the company does not carry the obligation to update any preemptive statements. In addition, please note that unless there is a description, all the money mentioned today will be counted in RMB. In this press conference, we may also mention non-US credit card standard financial indicators. Related to non-US credit card standard financial indicators and the most comparable US credit card standard financial indicators, please refer to the relevant materials released on the Investor Relations website. The management of today's press conference includes the founder of the company, the chairman and chief executive officer, Mr. Junhong Yao, and the chairman and chief financial officer, Ms. Zou Qing. Now, I will hand over the meeting to our chief executive officer, Mr. Junhong Yao. Mr. Junhong Yao, please start.

Hello, everyone. Thank you very much for attending the first press conference since the launch of DaShouChi. In June, DaShouChi completed its IPO in Nasdaq. This is an important milestone in the company's development process. It also made us officially enter the stage of the international capital market. We clearly realized that we must use the perfect disclosure, solid execution, and long-term business results to repay the trust of shareholders. In the second quarter of this year, China's car market was completely suppressed, and the operating environment was not good. However, the company's various business indicators are still stable and have achieved a significant reduction in losses. Revenue increased by 3.7% in the same ratio, and the net loss was adjusted by 61.5% in the same ratio. This reflects our progress in operating efficiency, profit improvement, and other aspects. There are two other business trends in this quarter that are worth introducing later. The first is that AI products create value in real business scenarios. Second, China's export of second-hand goods is growing rapidly. We begin to carefully explore international opportunities. Next, let's take a look at the changes in the industry environment. In the first half of this year, Chinese car market competition has escalated, and the price drop has become the main theme of this industry. This has directly led to the rapid decline in the storage of second-hand car dealers. The data from Dafeng shows that the main car type of medium-sized second-hand car dealers has dropped by 10% to 15% in a short period of two months, which has brought huge challenges to the second-hand car dealers. According to industry experts, more than 70% of Chinese second-hand car manufacturers suffered losses in the first half of 2026. With the change of the industry, the second-hand car with experience and feeling, the old business model, under new challenges and impacts, car manufacturers have made some changes. Car manufacturers also feel that they must pay great attention to operation efficiency in order to stand firm in a turbulent environment and make profits in a high-pressure market environment. Some of the top car manufacturers that woke up earlier are more and more important. Based on real-time market data for purchase decisions, for pricing decisions, and for monitoring of some storage risks, they also got some benefits from it. Data drive is no longer a concept, but directly determines whether the car is profitable or not, and even some of the business priorities of survival. Car manufacturers are suppressing and quickly improving their digitalized operating system provided by large companies. and AI services. Although the overall environment is not good, despite this, China's second-hand car trading volume is still growing. According to data from the China Transport Association, in the first half of this year, the second-hand car trading volume increased by 1.5%, reaching 9.72 million units. This is also a historical milestone. A brighter thing happened in June. In June this year, the second-hand car trade volume exceeded the first-hand sales volume of new cars. It became a historical milestone. We believe that the industry is in turmoil. It will take a while for a new, stable pattern to form. I often use the term of the second-hand car industry. No matter how the industry changes, Liyu Zhang, Junhong Yao, Gongwei Zhang, Bofei Kong We provide smart operating systems for Chinese second-hand car manufacturers, and based on the system, provide second-hand car manufacturers with the necessary trading services and AI services. According to the report of Zou's Group, the market share of Dafeng cars has remained at more than 90% for a long time. This allows us to have a sky-high data dynamic in the Chinese second-hand car industry. This data is huge, precise, and real. At the same time, it is also our exclusive. In addition to data, Dafeng also allows us and second-hand car manufacturers to establish a long-term stable and deep online connection. Based on our dynamic in the industry and the online connection with car manufacturers, we have continuously launched a number of car manufacturers' just-needed transactions. There are B2B mixed services among them. We are ranked second in China in sales services between mixed services. There is a second-hand car inspection certification service. Our inspection certification service has linked more than 4,000 inspectors in 250 cities. The coverage rate is the lowest in the country. There are car dealerships and car dealerships. We have established more than 100 motorhomes in all provinces across the country. We have connected more than 40,000 large and small motorhomes and delivered more than 2,600 lines. It is the largest single-car delivery service in China. We also have some vehicle channel business. We build high-efficiency transparent connections between vehicle and financial institutions, vehicle and traffic platforms, and improve dual-side transaction efficiency. The mission of LHC is to promote the digital civilization of the automotive industry. By digitizing, networking, and digitizing, it will be able to supply and upgrade the second-hand car industry. This will be the pursuit of LHC all its life. We always believe that the value of a company's foundation lies in how much value it can create for society. LHC will also receive sufficient rewards in creating positive values for the industry. The third aspect I want to communicate with you today is the two business trends that occurred in this quarter. The first is AI. The second-hand car industry has been digitalizing this road for more than 10 years. Now this AI makes us have the opportunity to promote the industry into intelligent. We have stated many times in our interviews that the big car is a basic facility for AI applications in the second-hand car industry in China. This is indeed a great opportunity for us. Any AI application in any industry is inseparable from large-scale models, high-quality industry data, and digitized application scenarios. In China, we have two of these three elements in particular, data and application scenarios. Liyu Zhang, Junhong Yao, Gongwei Zhang There are three main categories of AI applications provided to car dealerships. One is the tool category, the second is the digital employee category, and the third is the platform-level smart body construction. Next, let me introduce some of the tools we have launched so far. 1. Business Assistant 2. Business Assistant Each car that is purchased by the car dealer is provided with new market data every hour to help the car dealer determine whether it is worth buying and what price to buy. For example, the retail market that we provide to the car dealer, we will tell him about every car he has launched, whether it is more than the total or more than the total in this city. The same car that was sold in the same market an hour ago is really more than 20 cars. The same car was on sale an hour ago. What is the price? If this car was purchased for wholesale, then we will provide it with wholesale sales. For example, which city sells the most, which city sells the most of this car. All these information can be obtained from the sales assistant. In our recruitment book, we included a Yunnan car dealer. His name is Yang Hang. He shared with us a case of his own using a sales assistant. There is a car dealer who wants to sell his Dazhong Polo. The price is not less than 50,000 yuan. The five buyers in the store all think that the maximum is 40,000 yuan. If the price is too high, it will definitely not be sold or it will lose money. . . . . . So he asked his employees that you can no longer judge based on feeling and experience. You still have to follow the data to make a decision. Of course, the bank is one of the barriers between us and our environmental assistant. Now this tool is also used by many car manufacturers. The second reason is the temperature assistant. The temperature assistant can help car manufacturers save the cost of building cameras and fields. You can take a photo of the car and put it in the digital exhibition hall on the high-end. The third application is the chemical assistant. There are a lot of second-hand cars, and sales often can't remember all the characteristics and sales points of all types of cars. The chemical assistant can help him quickly obtain the characteristics and sales points of each car to facilitate communication with customers. This application can also help sales analyze communication records and lock in the real needs of customers. The application of the tools is video assistant. Video assistant can be based on the car pictures and video and car information in the Dafeng system. Help the car manufacturer to generate one thing to generate various styles of short videos for marketing and promotion on the Internet. The application of the tools was released relatively late. It was released in March this year. It basically covers our QR system. We also see from some data that it was quickly recognized by the car manufacturer. . . . . . . . . . . . . . . . There are already two types of employees on the line. One of them is a self-media operator. His main job is to actively interact with customers in the comments section of live broadcasts and short videos, form sales clues, and push large-scale CIMs to distribute to the consumer to follow up. By the end of June, the self-media operator have already deployed 3215 employees in Dafeng. The second reason is that we call it management assistance. The right to access the business data of the store is granted to Dafeng's OpenClock. Management assistance can provide real-time business analysis and management advice for the boss. Until the end of June, the paid management assistant has deployed 295 of them. There are many entrepreneurs in the second-hand car industry in China. The number is about 80 to 1 million. We will thoroughly scan different positions. The feasibility of being replaced by IIT gradually promotes the training and promotion of digital employees in the industry. The two most likely positions are sales and procurement. There are a lot of these two positions and the cost is very high. According to our field survey, The sales and procurement of these two employees will probably consume 35% to 50% of the total profit of the car dealership, so this cost is very high. If we can make a replacement, I believe that the space for the future transformation of these two digital employees will be relatively large. Currently, we are training sales digital employees, and there has been some progress. I believe that in the near future, it will be open for car dealers to use. Our third AI application is called platform-based intelligence. This is also a key direction for our next exploration. Due to our huge, detailed, real-time exclusive data collection, we have the opportunity to create an application that can cover the entire industry. The application of platform-based intelligence contributes to reducing the friction between business participants and the industry. I hope that in the near future, I can also share with you the progress in this regard. In addition to AI business trends, the second trend I would like to share with you is internationalization opportunities. According to the data published by the China Transportation Association, in the first half of 2026, our second-hand cars had a total of 32.5 million exports and 61% growth. Of course, there are also industry experts who analyzed that most of the second-hand car exports last year were zero-power second-hand cars, that is, fake second-hand cars. Therefore, the country introduced a new rule at the end of last year. This new rule has already been implemented on January 1st of this year. The main content of the new rule is to register cars that are not full for 180 days. Only after the confirmation and permission of the manufacturer can it be exported. This new rule blocked the loophole of fake second-hand car exports. At the same time, it also promoted the real second-hand car export trade in the industry. As a result, we can infer from the previous phenomenon and data. This first half of the year, the real second-hand car export volume achieved a double growth compared to last year. China's second-hand car exports really broke out under the influence of two factors. The first factor is that China's new second-hand car prices are too fast and too much, which makes the price of Chinese second-hand cars have global competitiveness. The second factor is that the new rules block the export of fake second-hand cars, and foreign trade car manufacturers have turned to make true second-hand car exports. We will continue to observe and explore Of course, we think we have two advantages when it comes to large car internationalization. The first advantage is that large cars have China's largest second-hand car real-time real-time car storage. Second-hand car dealers use large windmills to manage the real-time storage. The total amount of real-time storage is basically maintained at more than 1.7 million units. As far as I know, the storage information of other platforms is about 300,000 units. At the same time, we have the service of detecting logistics, storage, and other services. This makes us serve the foreign trade type When the car has a unique competitiveness The second advantage is that according to our company's research, most countries and regions in the world The number of second-hand car dealers is very low Our Dafeng car system has the feasibility of global reproduction Of course, in addition to We have the advantage that we can do the basics. How to do it, what stage to do what, we will decide the subsequent investment and development rhythm based on actual progress. Please rest assured, shareholders. Dazhou has been established for 14 years. These years, we have experienced many black swan events that concern life and death, and we have also experienced large-scale division and reorganization. Most of today's business is rebuilt in extreme challenges. Bai Ze Bu Nao is our base company. We have just started our new journey. Thank you very much for your attention. I hope that we will have more opportunities to communicate and interact more in the future. That's all for my sharing. Next time, I will leave it to the CFO, Zhou Qing, to introduce the financial performance of the company's second quarter.