Here Group Limited

Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Qantas Things earnings conference call. At this time, all participants are in a listen-only mode. We will be hosting a question and answer session after management's prepared remarks. Please note that today's event is being recorded. I will now turn the conference over to Ms. Leah Guo, Investor Relations Director of the company. Please go ahead, ma'am.

Thank you. Hello, everyone, and welcome to Qantas News Earnings Call for the third quarter of fiscal year 2025. With us today are Mr. Peng Li, our founder, chairman, and CEO, and Mr. Ting Jie, our CFO. Mr. Li will provide a business overview for the quarter, then Ting will discuss the financials in more detail. Following their prepared remarks, Mr. Li and Ting will be available for the Q&A session. I will translate for Mr. Lee. You can refer to our quarterly financial results on our IR website at ir.quantuscent.com. You can also access a replay of this call on our IR website when it becomes available a few hours after its conclusion. Before we continue, I would like to refer you to our safe harbor statement in our earnings press release, which also applies to this call. as we will be making forward-looking statements. Please note that all members' status in the following management's prepared remarks are in RMB terms, and we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported in our earnings relief and filings with the SEC. I will now turn the call over to the CEO and founder of Quantosync, Mr. Li.

Okay, good morning everyone. Thank you for joining us Q3 2025 earnings call. I'm pleased to share an update on our performance and the strategic direction as we continue our transformation journey. This quarter marked a significant milestone in our evolution. We achieved revenue of RMB 570.7 million. This reflects our ongoing strategic shift from traffic-driven to product-driven business models. More importantly, we completed the consolidation of LiceOne on March 31st. This positions us at the forefront of the high-growth pop toy market. I should note that our Q3 results include only balanced sheet consolidation from this acquisition. Profit consolidation began on April 1st and will be reflected in our Q4 results. Before I discuss our existing new venture, let me update you about our existing businesses. They continue to demonstrate the strength of our disciplined approach to growth. We maintain strict ROI assessment across all results allocation decisions. This ensures we invest promptly in promising opportunities while maintaining financial discipline. In our financial literacy program, our offerings remain well received by users. We expanded our community outreach with three major financial anti-fraud education initiatives this quarter. These programs not only fulfill our social responsibility commitments, but also strengthen our broad presence among the general public and the broader society. Our senior-focused recreation and leisure courses continue to excel with strong retention rates. Particularly noteworthy is our calligraphy program, which has achieved repeat purchase rates exceeding 65%. We also developed an innovative combination of online learning and offline graduation trips, successfully delivering our first trip to over 60 participants with a 100% satisfaction rate. Our second cohort of over 50 participants demonstrates the growing demand for this integrated approach. Building on this success, the 6th annual Qianshi Cup Calligraphy Competition attracts over 800 participants. Selected works were featured at national education events in Beijing's Chaoyang District. Expanding beyond calligraphy, our study tour business now spans 16 cities across four course categories. We delivered over 60 sessions. Early pre-sales for our 2025 tour packages generated a strong initial response. This validates strong market demand for our integrated approach. Meanwhile, our health and wellness product business through Zhixiutang continues to deliver stable performance while serving senior customers with expanding portfolio of tailored products and services enhancing our revenue diversification and depending engagement with the key cohorts. Our existing business continues to generate positive cash flow, providing a solid foundation for our strategic expansion. The solid performance in our existing business stems from a fundamental philosophy. This philosophy has guided us throughout our history. We identify promising market opportunities through careful analysis and disciplined execution. Our proven formula combines through market evaluation, test and scale methodology, and data-driven decision making. What sets us apart is our commitment to sustainable growth. We build on brand strengths and product excellence rather than traffic-driven models. We have true long-term value creation comes from developing core competitions. There are in product development and the brand beauty. This approach ensures more stable, sustainable growth compared to businesses relying primarily on marketing expenditures. This disciplined approach has preserved our robust cash position. It enables us to capture Capital lies on strategic opportunities like the last one, acquisition, while maintaining financial resilience. We continually evaluate all our business lines based on ROI performance and the strategic fit. This ensures optimal results allocation. This brings us to our most significant strategic move this year. Our entry into the pop toy market represents the nature evolution of our strategic philosophy. Let me share why this market captured our attention. According to Frost and Sullivan, the global top toy market is massive and is expected experience steady growth in the future. In terms of GMV, the global toy market grew at a CAGR of 5.2% from RMB 631.2 billion in 2019 to RMB 773.1 billion in 2023. and is expected to further grow at a CAGR of 5.1% to reach RMB 9,993.7 billion in 2028. The PopToy business exemplifies our product-driven growth strategy with success factors such as premium IP quality, innovative product design, and sustained investment in IP cultivation and operations. When amplified through precision marketing and operational strategies, the fundamentals collectively forge enduring brand loyalty and long-term IP vitality. After careful market evaluation, we identified LessOne as the ideal platform to enter this high-growth market. What made this partnership so compelling was how LessOne's product development expertise perfectly complements our strength in market operations. This creates powerful synergies. Last one has demonstrated excellence in IP development and event guard design intelligence. This perfectly complements our established competencies in marketing and operations ecosystems. Private traffic momentization and omni-channel commercialization Together, we create a complete value chain from IP creation to monetization. I'm pleased to report that we are already seeing promising results since our management team began executing last month's growth strategy in December 2024. Let me walk you through our two-pillar approach to building this business. Starting with product excellence and brand development, Let's Run has built a strong IP matrix. This features popular characters such as Wakuku, Youli, Funini, Fela, and Pidou. Among other distinctive IPs, Since our investment in December 2024, we focused on operating IP Wacoku. This was incubated in 2024 and achieved excellent market performance in Q1 2025. The market validation has been remarkable. Our Wacoku Pandata raised released on March 29th achieved the second highest single-day sales record in our key distributor partners Beijing flagship store history. This exceptional performance demonstrated both our market strategy and innovation capabilities. Built on this momentum, the launch of a second-generation Wakuku fuzzy series, the Fox and Bunny Trick-or-Treat collection on May 11 at key distribution partner locations in Shanghai and Nanjing achieved record-breaking single-day sales at our flagship partner store in Shanghai. This performance highlights our product's strong customer appeal in China's premium urban markets, including major economic hubs and their rapidly developing counterparts. The subsequent online release on May 20th on leading Chinese customer platforms generated immediate purchase momentum with impressive sales figures and sustained growth in user engagement and organic content creation. Bakuku has built breakout cultural momentum through its distinctive design and aesthetic appeal. The brand has earned unsolicited endorsements from A-list celebrities. Today, prominent artists, actors, and athletes are showing are showcasing Wacoku products. This approach is driving deep engagement and user-generated content across social media platforms. What makes this even more impressive is the Wacoku Semi-Thon, which has now surpassed 1 billion organic impressions across digital platform. Another significant IP in our portfolio has made significant strides in establishing itself as a culturally relevant IP through a variety of initiatives, such as partnering with contemporary luxury women's wear brand to create a limited edition within art stores. This was launched through exclusive pop-up events at prestigious locations. Tai Gu Li sanatorium in Beijing and SKP in Xi'an. This collaboration significantly evaluated the IP's artistic credentials. Additionally, our groundbreaking blue and white theory has successfully bridged the gap between heritage and modernity. We will first integrate cultural heritage with contemporary design, creating collectibles and lifestyle products that bring traditional craftsmanship to modern customers. Moving to our second pillar, distribution and the market expansion. We are implementing a comprehensive omni-channel strategy. We are exploring innovative direct-to-customer retail formats through expansion pop-ups, and I'm excited to share some progress. Our first pop-up store debuted on May 24 at Beijing Chaoyang Joy City, consistently ranked among the capital's most visited shopping destinations. This isn't just a retail place. immersive space that brings together four key elements, cultured IP exhibitions, integrative art installations, exclusive product drops, and social sharing environments. At the same time, we attracted a semi-IP showcase at Beijing Solana lifestyle shopping park. As of our earnings disclosure date, Lezwan has established segmented sections in key distribution partner stores across multiple core commercial districts nationwide. We've completed product coverage and standardized display pilots in key cities and major commercial areas. We initially formed a nationwide network of offline consumer touchpoints and broad display presence. Simultaneously, we are enhancing our online capabilities to empower less ones. Our multi-platform approach now includes self-operated channels on social media platforms, which are driving a strong initial response and encouraging user-generated content engagement. Looking beyond China, we are expanding internationally with new sustainability there is Indonesia, Thailand, and Malaysia. Our collaboration on June 2nd with key distribution partners at their Bangkok flagship store marks a significant step in our global partnership strategy and our first international offline pop-up. In Southeast China, we are partnering with top-tiered local influencers, generating buzz and sales through social platforms, which is boosting brand awareness in the region. Moving forward, we will focus on advancing our IP-driven products international expansion plan. to strengthen our presence in global markets and enhance our content and product reach. Our first international collaboration demonstrates both the global appeal of our IP portfolio and our systematic approach to international expansion. I know many of you have questions about potential risks to this long-term viability of the pop toy industry. Let me address the key concerns we are hearing from investors. The reason we are confident in the long-term viability of this industry comes down to fundamental customer behavior shifts. Pop toys have become powerful vehicles for self-expression, particularly among millionaires, nails, and Gen Z. The sector has proven resilient, with key players sustaining strong growth, even in economic downturns. This stems from the industry's collector-driven model and accessible pricing, which foster lasting engagement. Today's consumers increasing prioritize emotional value over pure functionality. They are seeking comfort, identity, affirmation, and connection through their purchases. And PopToys deliver exactly that. As we look to the future, Q4 will reflect full consolidation of last month's operations, giving clearer visibility into our combined performance potential. While maintaining steady operations in existing businesses, We are accelerating pop toy business growth through dedicated teams and strategic resource allocation. All of this is guided by consistent ROI tracking to ensure that we maximize returns on every investment. Our proven test and scale approach remains key. we expect positive cash flow. Through we anticipate some near-term profit volatility as we continue to optimize and scale our options. Beyond all operational strategies and market tactics, What truly matters for long-term success are two key elements, product excellence and brand power. These are essential for fueling sustainable growth and delivering long-term value to shareholders. Thank you for supporting our transformation journey. We are excited about the road ahead. and we'll keep you updated on our progress. I will now turn it over to Tim for a detailed review of our financial results. Thank you, everyone.