PDD Holdings Inc.

Ladies and gentlemen, thank you for standing by and welcome to PDD's Holdings Inc. Fourth Quarter and Fiscal Year 2022 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 that today's conference is being recorded. I would now like to hand the conference over to your host today, Mr. Chen Peng. Sir, please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining us today. My name is Chen, and I will help host the earnings call. PDD Holdings earnings release was distributed earlier and is available on our website at investor.pddholdings.com. as well as through Global Newswire Services. Before we begin, I would like to refer you to our Safe Harbor Statements in 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 non-GAAP measures to GAAP measures. Joining us today on the call are Chen Lei, our Chairman and Chief Executive Officer, and Liu Jun, our VP of Finance. Lei will make some general remarks on our performance for the past quarter and our strategic focus. Jun will then take us through our financial results for the fourth quarter and fiscal year ended December 31st, 2022. 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.

Hello, everyone. Thank you all for joining us on our earning call for the fourth quarter and the fiscal year of 2022. Let me begin by summarizing our results for Q4 and the full year of 2022. Our total revenue for this quarter was RMB 39.8 billion. which is a 46% increase compared to the previous year. Our total revenue for the past year was RMB $130.6 billion, which represents a growth of 39% year-over-year. In 2022, we focused on strengthening our core capabilities, We invested over RMB 10 billion in research and development last year, which is the highest amount since our establishment. Our goal is to further improve our technological know-how and bring the benefits of digitalization to our users and ecosystem partners. We will continue to invest in RMB as a long-term commitment to better serve our users and society as a whole. During the past year, we are encouraged to see many of our young colleagues take on more responsibilities and step into bigger roles. These young talents are full of passion and creativity and have demonstrated their ability to take on new challenges, explore different possibilities, and asking our vision with patience and determination. We will continue to provide more personal development opportunities for them to grow as future leaders. As a young company still in the investment stage, we will remain agile and energetic as we move forward. And we are committed to adapting to trends in consumer preferences. My team and I are eager to keep exploring and identifying the right opportunities. When we find the right opportunities, we will invest and execute relentlessly to create value for consumers and the society. In Q4, we observed rising sentiment among our users. To support consumption recovery, we actively elaborated resources in the Pinduoduo platform. During the promotion season, we stepped up our investment to further improve consumer engagement and build their trust. For example, during the Double 11 period last quarter, we provided robust coupons and discounts in a simple and straightforward way, making shopping easier and more enjoyable for our consumers. We are also working hard to enlarge the diversity of products. of our platform to address our consumers' diverse needs. With efforts of our platform, as well as merchants, we saw decent performance across various categories during the promotion season. For example, categories such as mobile phones and cosmetics showed encouraging growth among users with different demographics. The auto volume of many seasonal agricultural products more than doubled, which helped to boost consumer awareness of various local agricultural production regions. As the Chinese New Year happened earlier this year, we launched a Chinese New Year promotion in late December to meet consumer needs. We worked closely with merchants all over the world who curate more product selections for consumers. And we are happy to see that our efforts have taken off with many imported produce, such as cherries from Chile and the salmon from Norway, receiving very positive feedbacks. We are glad to contribute to in supporting consumer confidence. As consumption continues to recover and consumer sentiment continues to improve, everyone can see the potential and opportunities in this market. As the industry evolves, we notice a number of recent moves by our peers. I believe healthy competition is beneficial for the industry. But sometimes, when competition intensifies, Some companies may take different actions. For us, we will always adhere to our own beauty as a company, focus on our own sustainable development, embrace competition, even when sometimes it involves unsustainable practices from peers. We always think about how to better serve our consumers. We are also fully aware that we still have a long way to go before we can fully meet consumers' evolving needs. We are committed to deepening our value proposition of more savings, more funds. In addition, we will continue to invest in supply chains to improve supply chain efficiency and satisfy consumers' increasing needs for quality products. In the manufacturing industry, sector, for example. Pinduoduo can quickly gather consumer insights to help manufacturers make more informed decisions on project design and production. This enables the creation of products that better match consumer needs and passes on the savings to consumers. In the past year, we rolled out multiple initiatives to help manufacturers directly engaged with end consumers. Take a manufacturer in the personal care sector as an example. It used our insights to identify opportunities for personalized quality products among a younger generation. As a result, the manufacturer developed personal care products with present features and designs, which received excellent market feedback. This also helped manufacturers to gradually establish its own brand. Over the past seven years, we have helped incubate thousands of manufacturers' brands in this way. Our prudent insights and technology can help manufacturers better position themselves, develop popular products in rapid-changing markets, and reduce uncertainty in production. We are dedicated to build a platform that is accessible to all merchants and brands regardless of size. In the agricultural sector, we continue to utilize our resources and technology to promote digital inclusion and generate a positive impact. We devote ourselves to facilitating the adoption of agri-tech solutions. Since 2020, Pinduoduo has hosted a flagship smart agriculture competition for three consecutive years, offering a stage for young agricultural researchers and growers to explore practical technology solutions that improve yield, shorten production cycles, and promote sustainability. We also have teams from previous competitions to commercialize their technical solutions on a large scale. By promoting agri-tech adoption, we hope to push forward agricultural modernization. Another key driving force is the training of new farmers. These young new farmers have returned to their hometown after years of experience in large cities. They are tech savvy about the latest tools, such as live streaming, and they are full of energy and drive. With the help of insights from our platform, they can develop good understanding of consumer needs and play an important role in their local communities. On average, one such new farmer can bring five to 10 other young people into e-commerce. creating around 50 local job opportunities directly or indirectly. In addition, our efforts in supply chain have generated a meaningful positive impact for the society. For example, last quarter, bad weather in winter caused a supply chain disruption, which prompted us to quickly assemble a dedicated team and launch a nationwide campaign with People's Daily. Through our Helpless Farmer channel on Pinduoduo platforms, we provided dedicated traffic support to help affected farmers to sell their unsold seasonal produce by reaching more end consumers in a short period of time. Our Duoduo grocery teams all across the country also have played an important role as each team visited various agricultural production regions in their harvest. Sauce also produced directly from farmers and quickly matched it with local consumer demands to sell it. With our team's strong efforts, we were able to sell nearly 15,000 tons of agricultural produce nationwide during this campaign. And we are encouraged to see that our supply chain capabilities and create tangible value for the sector and the society. We are proud to receive the FAO 2022 Innovation Award from the United Nations Food and Agriculture Organization, which recognizes innovation that creates an impact in the agricultural supply chain. This award is a vote of confidence in our holistic and proactive approach to agriculture. And it motivates us to keep forging ahead so that more and more people can enjoy the benefits of digital inclusion and technology adoption in agriculture. Here, I would also like to provide an update on Tmoo, a new global online marketplace that we launched in September 2022. Timu and Pinduoduo are sister companies under the parent company PVD Holdings, which has built the sourcing, logistics, and fulfillment capabilities developed to support its various businesses. We strive to create our own unique value with Timu, so we always start from the fundamental consumer needs and explore how we can serve them well. People will stick to the values of empowerment, diversity and inclusion, integrity, as well as social responsibility. As we enter the new year, we remain committed to creating value for all stakeholders. And therefore, we will remain patient and invest for the long term. Our goal is to further improve the services we provide to consumers. and bring more businesses into a digital economy to increase opportunities for local communities and small businesses. Thank you for your continuous support. And now, let me turn it over to Jun to update you on our financial performance.