PDD Holdings Inc.

Good day and thank you for standing by. Welcome to the Pinduoduo Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. This DIY set for this conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Jason Xu. Please go ahead.

All right. Thank you, operator. Hello, everyone, and thank you for joining us today. Pinduoduo earnings relief was distributed earlier and is available on our website at inventor.pinduoduo.com, as well as through Globe Newswire services. On today's call, our Chairman and Chief Executive Officer, Chen Lei, will make some general remarks on our performance for the past quarter and our strategic focus going forward. Our VP of Finance, Tony Ma, will then elaborate further on specific strategic initiatives and take us through our financial results for the second quarter and the June 30th, 2021. Before we begin, I would like to refer you to our safe harbor statement in the earnings press release, which applies to this call, as we will make certain forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP measures to GAAP measures. So now it is my pleasure to introduce our Chairman and Chief Executive Officer Chen Lei. Lei, please go ahead.

Thank you, Jason. Hello, everyone, and thank you for joining our results announcement for the second quarter of 2021. Thanks to our users' trust, our total revenue for this quarter, excluding revenue for merchandise sales, was RMB 21.1 billion. This represents a year-on-year increase of 73%. Our annual active buyers reached 800,000 49.9 million for 12 months, ending on June 30th. Over the quarter, average MAU increased to 738.5 million, representing 87% of our annual active buyers. Our results this quarter demonstrate our enduring commitment to serve our users as well as their trust in us. We feel fortunate and are grateful for their consistent support, and we will continue to do our best to serve them and all our stakeholders. Pinduoduo takes our responsibility to our users and society very seriously. Without them and their support, we will not be where we are today. This is why we are always there with them and for them in their times of need. After heavy rains struck Henan province last month, we immediately mobilized our networks of partners to provide relief. Close to 20,000 grocery pickup points at Zenzou City helped to distribute emergency supplies to residents living in their vicinity. With Henan's agricultural supplies disrupted by COVID-19 and the rain, we linked up Henan's Dodo Grocery Network with neighboring networks, including Sandong and Anhui, to ensure that residents continued to have supplies they needed at stable prices. As user demand in Henan rose significantly, we also increased our warehousing by four times and doubled our manpower there. In addition to these efforts, we contributed 100 million RMB towards the rescue and relief effort. Our support for Henan is in the same spirit as our earlier initiatives to leverage our platform to contribute to society. When COVID-19 disrupted traditional agricultural supply chains last year, we launched our Help the Farmer initiative. connecting farmers directly with consumers across the country. Through our various efforts, we helped over 1.13 million farmers sell over 2.06 million tons of agricultural produce by the end of 2020. This helped farmers reduce forage and losses and consumers get what they needed. As consumers turn to online grocery shopping to minimize contact, existing delivery systems become overwhelmed, resulting in significant backlogs. We responded by launching Dodo Grocery, a next-day self-pickup service that connects local demand and supply. Dodo Grocery uncrossed the backlog, providing users more affordable and fresher produce in an efficient manner. It has since become an important offering to our users, helping to create and preserve millions of jobs along the entire agri-food value chain in the process. It has also proven its worth as a support network in times of need in Zhengzhou. We will continue to improve it to benefit users, farmers, and their communities. Improving agriculture has been at the front and center of our business from the very beginning. Agriculture touches the daily life of everyone and has a relatively low digitization rate. With many of our team being engineered by training, we hope to apply technology to agriculture so as to make a large positive impact on society and contribute to the national effort to modernize agriculture and vitalize rural communities. Applying technology to agriculture is the best way for us to achieve our mission, which is to benefit all, to put people first, and to be more open. We are gratified that Pinduoduo serves over 16 million farmers acting as their portal to a digital economy. Farmers are the bedrock of the agri-food system. To help them thrive is to help our agri-food system and society at large thrive. We have seen firsthand how online agriculture retail and technology have benefited farmers. We are pleased that farmers and our partners recognize it too, which is why we have spread the word and helped a number of farmers on our platform grow so quickly. We want to bring even more farmers on board and work with them to improve their lives and livelihoods. This is possible only if it also works for our users and society at large. This is why we are focusing on playing a role in strengthening food security, safety, and technology. And now, let me elaborate. First, food security. It's important to secure consumer access to a wide variety of affordable and nutritious food. For this, we need to help our farmers sell better and earn more so that they can cultivate more efficiently and sustainably. On the supply side, we need to upskill farmers as we have been doing through Duoduo Academy and in partnership with local government and agronomic institutes to apply new technologies. On the demand side, we need to create awareness of the produced aggregate demand to them. While China has a diverse selection of unique agricultural products, consumers often do not know about many of them. We want to change this by promoting their rich offerings nationwide. It is in this spirit that we recently launched our third harvest festival. Leveraging our $10 billion program and the fresh sale, this year's edition featured over 1,000 unique quality produce from 400 quality agricultural production regions. Since inception of the $10 billion program, our zero commission policy for agricultural produce has attracted over 10,000 quality agri-merchants to the program. selling over 20,000 agricultural SKUs. I want to take this opportunity to pledge that we will maintain our zero-commission policy for agricultural products to help farmers build a more resilient, efficient, and profitable business. Second, food safety. We want to help improve standards across agricultural systems. Our supply chain itself will continue to help build up the agri-focused infrastructure. We are investing to improve demand and supply matching, culture integration, and smarter law planning. This effort will also reduce agriculture's environmental footprint by cutting resource use and emissions from storage and transportation. We are still at the very beginning of this infrastructure buildup. However, we are confident of its long-term benefits. Third, food technology or agri-food technology. We can only create a vibrant and sustainable agri-food system by seeking solutions from the cutting edge of science and working with farmers to apply these solutions. I would like to highlight the work we are doing in precision farming. Early this month, we launched a second smart agriculture competition together with China Agricultural University and Zhejiang University. We challenged teams from around the world to plant tomatoes. Last year, we challenged teams to deliver cost-effective productivity improvements with strawberries. The technology teams performed very well, demonstrating the cost-adjusted benefit of adopting precision farming by producing three times more fruit than the experienced farmers. Two of these teams have since started to commercialize their technology, which will result in real productivity gains for farmers. After last year's successful run, we are stepping up our criteria. On top of cost-effective productivity improvements, teams will need to demonstrate their farming technology can improve a tomato's nutritional profile while exerting less impact on the environment. We welcome all the interesting teams with relevant skills to join this competition. First, Agritech will make agriculture more attractive to the tech-savvy internet-native younger generation. We want to help them apply their tech skills in agriculture. To date, we have directly contributed to over 100,000 new farmers returning and working in their hometowns. We will continue to strengthen our training for new farmers, and we are targeting to train another 100,000 of them over the next five years. While we have made headway in our agriculture improvement initiatives, there is still a lot to be done to support our farmers and apply technology to agriculture to make it smarter, more resilient, more sustainable, and benefit all. As China's largest online agriculture platform, we launched a dedicated 10 billion agriculture initiative today. which seeks to address the critical needs in the agricultural sectors and rural areas. Commercial values of profits are not a goal, but rather we strive to facilitate advancement of agri-tech, promote digital inclusion, and provide agri-tech talents and workers with greater motivation and sense of achievement. Although the $10 billion agriculture initiative will clearly impact the short-term earnings per share for shareholders, it has already received support and approval from the Board of Directors, and it will be personally overseen by myself. We will then hold a shareholder meeting to seek the support of majority shareholders. This is an important and challenging task which we will invest in patiently. All profits from Q2 and any potential profits in the future quarters will first be allocated towards this initiative until a total 10 billion yuan commitment is fulfilled. Thank you, and now let me pass the time to Tom.