PDD Holdings Inc.

Ladies and gentlemen, thank you for standing by, and welcome to PennDOTO's fourth quarter and full year 2021 earnings conference call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, you will need to press star 1 on your telephone. I must advise you that this conference is being recorded today. I would now like to hand the conference over to your host for today's conference, Mr. Chen Please go ahead, sir.

Thank you, operator. Hello, everyone, and thank you for joining us today. My name is Chen, and I will help host the earnings call. Pinduoduo's earnings release was distributed earlier and is available on our website at investor.pinduoduo.com, as well as through Global Newswire Services. Before we begin, I would like to refer you to our safe harbor statement in earnings press release, which applies to this call. as we will make certain forward-looking statements. Also, this call contains discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP measures to GAAP measures. Joining us today on the call are Chen Lei, our Chairman and Chief Executive Officer, Liu Jun, our VP of Finance. Lei will make some general remarks on our performance for the past quarter and fiscal year 2021, and our strategic focus, Jun will then take us through our key operating and financial results for the fourth quarter and fiscal year ended December 31, 2021. During the Q&A session, Lei will answer questions in Chinese and I will help translate. Please kindly note that all translations provided are for reference purpose only. In case of any discrepancy between the original remarks and the translated version, statements in the original language should prevail. Now, it is my pleasure to introduce our Chairman and Chief Executive Officer, Chen Lei. Lei, please go ahead.

Thank you, Chen, and thank you, everyone. Thank you for joining us on our earning call for the fourth quarter and the fiscal year of 2021. Let me first recap our results in Q4 and full year 2021. Our total revenue in the fourth quarter excluding revenue from merchandise sales of RMB 27.1 billion. This represents a year-on-year increase of 28%. Our active buyers reached 868.7 million for the 12 months ending on December 31st, with 733.4 million average quarterly MAUs. Our GMV in 2021 was RMB 2,441 billion, representing 46% year-on-year growth. Total revenue for 2021, including revenue from merchandise sales, was RMB 86.7 billion, representing 61% growth year-on-year. 2021 was a year of transition for Pinto Door. Over the course of the year, during which I took over the role of chairman, we shifted our priority of sales and marketing toward research and development. I'm glad to see that this shift is well on track. It will lay a solid foundation for us over the long run. We are grateful for our users' continued trust and support. To keep up with the evolving and increasingly multi-dimensional preferences, we constantly ask ourselves how we can serve them better. As a team with engineering background, our focus has always been to use technology to benefit all. We were fortunate to be early in identifying opportunities to contribute to and create value in agriculture. Agriculture is a sector that touches everyone's daily life, yet has low levels of digitalization. Since Pinduoduo's establishment in 2015, we have been facilitating agricultural modernization and digital inclusion. And efficient, resilient, sustainable and vibrant agricultural sector benefits all the stakeholders in the value chain, and we remain focused on our goal. In 2021, we deepen our agricultural digital inclusion efforts in various ways, and they include, one, helping farmers to expand their assets to the market, two, advancing the use of smart agriculture, And three, encouraging and enabling more young and tech savvy talent into the agricultural sector. And now, let me elaborate. In the downstream, we continue to bring farmers into the digital economy by expanding their market assets. We are working hard to build a platform that effectively matches consumer demand with agricultural productions across the country. This enables farmers to ship their fresh and perishable agri-food products directly to consumers, bypassing layers of distribution to deliver in a shorter timeframe. The result is higher income for farmers, lower price for consumers, and the fresher produce consumers who receive Our platform has opened up a market of nearly 870 million users to farmers and agri-producers in China directly. We have also provided them with various tools to promote their unique agricultural produce. One commitment that we have is our zero commission policy on agricultural products. We waive sales commissions and proactively gain more exposure for agricultural products. We plan to continue this zero-commission policy on agricultural products. We aim to create a virtual cycle like what we have done for SMEs in the past, in which farmers earn more while consumers get fresher and more affordable produce. To amplify its effectiveness, we launched numerous promotional events. In 2021, we worked with various regions to create a series of agri-focused shopping festivals that introduced consumers across China to different regional specialties. We also collaborated with key partners, such as CCTV, to launch live streaming events to promote China's agricultural heritage. This event not only enhanced user awareness and appreciation of local specialties, it enabled farmers to directly talk to consumers, understand consumers' preference better, which helped them in brand building and production upgrades for quality agricultural produce. For instance, we initiated an orange festival to promote high-quality orange specialties from seven major orange-produced areas across the country, bringing regional orange varieties to consumers nationwide. Benefiting from rising order volumes on our platform, local orange farmers and agri-merchants in Hunan province witnessed a large increase in sales. This increase in sales not only improved farmers' living standards, but also gave them confidence to invest into the future. Many of them reinvested their profits into developing better products, including in shorting machines and packaging design. Moving upstream. We are advancing adoption of agricultural technology to help growers improve their productivity. A few practical and affordable technologies came out of the inaugural Smart Agriculture Competition last year, including automated crop monitoring, program dynamic adjustment for changing climate conditions, and irrigation. We have several teams commercialize these technology solutions. Today, these solutions have been applied in major strawberry growing regions across China, such as Liaoning, Anhui, and Yunnan provinces. They have helped traditional growers more than double their management capacity. Such progress is inspiring and valuable to the entire industry. We regularly organize knowledge sharing sessions to encourage adoption of technology in this sector. Earlier this month, we jointly hosted a sharing session with FAO China on harnessing smart agriculture to boost food production and security. Representatives from FAO, China Agricultural University, Chinese Academy of Agricultural Sciences, Pinduoduo, and the finalists of the Smart Agriculture Competition presented their insights at a webinar. We are honored to work closely with world-class partners in the agri-food sector, such as China Agricultural University, Zhejiang University, UNFAO, Singapore ASTAR, and Wageningen University. And we look forward to cooperating with more like-minded organizations and individuals in the future. Another important problem of Tinto Do's agricultural strategy focuses on encouraging and enabling more young and tech savvy talent into the agricultural sector. we are glad to see more and more young agricultural entrepreneurs choosing to start their businesses with Pinduoduo. As of end October 2021, over 126,000 young farming professionals born after 1995 have joined the Pinduoduo platform. Up from 85,700 in 2020, and 29,700 in 2019. Most of these young entrepreneurs are well-educated. They are digital natives who grew up with mobile technology. Therefore, they are used to buying things online and using innovations like live streaming. At the same time, many of them are motivated by the desire to contribute to their rural communities To upskill them, we have offered dedicated training programs on necessary know-how to operate their e-commerce businesses. We will devote more resources to support them as we believe they will play a key role in facilitating agricultural modernization and rural vitalization. Looking back on our efforts in agriculture, we are happy with the positive impact that we have generated. But we have only scratched the surface in the field of technology advancement and digital inclusion in agriculture. Therefore, we are stepping up our investment in this sector as a long-term commitment. The focus of our long-term mission may not always translate into near-term results that we will be patient as we do our part to contribute to agricultural modernization. As mentioned last year, I'm personally overseeing our 10 billion agriculture initiative, which aims to facilitate advancement of agri-tech, promote digital inclusion, and provide agri-tech talent with greater motivation and sense of achievement. Profits from this quarter will continue to be allocated to this initiative. Lastly, as a platform that serves over 868 million consumers, we are also shouldering more social responsibility. In July, we rapidly respond to help with flood relief efforts in Henan, making donations and launching a portal to support emergency relief distribution. In October, we did an exam to carry out emergency disaster relief and post-disaster construction work in Shaanxi. In December, we contributed towards relief efforts in Xi'an and worked with the local government to maintain necessary provisions as we fought a COVID-19 outbreak. To support the rural communities, we launched Duo Duo Reading Month. Today, we have donated carefully selected storybooks to rural communities around the country and organized reading programs. We hope that these efforts will broaden the horizons of the youth and contribute to a better future for their communities. As we step into another year, we remain laser-focused on our goals and will continue to do our best to serve all our stakeholders. And I would like to thank you all in advance for your continued support. And now, let me pass the time to Jim. Jim has been with us since 2017 and has been recently promoted to VP of Finance It's part of our plan to grow more young generation leaders. And June, please.