PDD Holdings Inc.

Thank you for standing by and welcome to PDD Holdings Inc. 4th Quarter and Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in 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. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today. Sir, please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining us today. PDD Holdings earnings release was distributed earlier and is available on our website at investor.pddholdings.com, as well as through the Globe Newswire services. Before we begin, we would like to refer you to our safe harbor statement in the earnings press release, which applies to this call as well. 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 Mr. Chen Lei, our Chairman and Co-Chief Executive Officer, Mr. Zhao Jiazhen, our Executive Director and Co-Chief Executive Officer, as well as Ms. Liu Jing, our VP of Finance. Lei and Jiazhen will make some general remarks on our performance for the past quarter and our strategic focus. Jun will then walk us through our financial results for the fourth quarter and the physical year ended December 31st, 2023. During the Q&A session, Lei and Jiazhen will answer questions in Chinese and will help translate. Please kindly note that English translation is for reference only. In case of any discrepancy, statements in the original language should prevail. Now it's my pleasure to introduce our chairman and co-chief executive officer, Chen Lei. Lei, please go ahead.

Hello, everyone. Thank you for joining our earnings call for the fourth quarter and the fiscal year of 2023. 2023 was an important year for PDG Holdings. We began a journey dedicated to high-quality development. Aligned with our strategy, we wrote out a series of initiatives to empower businesses and enhance consumer value. This effort has resonated well with our users and merchants, earning their positive feedback and support. Given by a rebounding consumer market, our total revenue in the fourth quarter was RMB 88.9 billion, which represents a 123% year-on-year increase. Gas net income for this quarter was RMB 23.3 billion, Over the past year, our revenue was RMB 247.6 billion, which represents a 90% year-on-year increase. In 2023, amid a positive consumer sentiment, our platform saw a healthy resurgence in demand. In the fourth quarter, we focused on improving consumer well-being by making higher-quality products more accessible. This was achieved through a series of events, such as the Double 11 and Double 12 Shopping Festival. Our goal was always being clear. Unlock unrealized consumer potential and empower individuals to achieve higher quality of life. As a result of this effort, we have seen sustained growth in consumer engagement in our platform throughout the first quarter. In 2024, we will continue to ramp up our support for high-quality supply and enhance our ability to deliver a good value and excellent service. We will refine our supply chain insights and technology capabilities to help manufacturers reduce costs, increase efficiency, and develop more products that resonate deeply with consumers. Our support for a new generation of farmers and merchants skilled in both agriculture and e-commerce is unwavering. This is part of our ongoing effort to boost local employment and increase farmers' income. Through our 10 billion ecosystem initiative, we grow alongside our high-quality merchants, brands, and small to medium-sized businesses to build a more sustainable ecosystem. R&D is at the core of our growth as a technology company, and last year, we continued to invest in technology innovation with R&D expense reaching RMB 11 billion. This is the second consecutive year that our R&D expense has surpassed RMB 10 billion. In the fourth quarter, R&D expenses grew by 19%, reaching RMB 2.9 billion. This year, we continue to channel investments into new drivers of high-quality development. We are dedicated to advancing the role of cutting-edge technology in agriculture and manufacturing. In the fourth quarter, we reinforced our agricultural strategy through supporting projects such as the Agricultural Cloud Initiative and the Pinduoduo Academy Growing Competition. We hope to encourage the development of more resilient digital agriculture regions to further revitalize rural communities. Take the Pinduoduo Academy Growing Competition as an example. It provides a platform for college students to showcase their agricultural innovation. Pinduoduo has been an active supporter for this event for the past year running. And we also pay close attention to the development of agricultural products driven by technology. For instance, Pinduoduo offers support for specialty agricultural products through initiatives such as zero commission and 10 billion program. For agricultural produces such as orange, tangerine, grapefruit, et cetera. We formed a strategic partnership with certain producers to broaden their market reach and provided continuous platform support. We also actively fulfilled our social responsibilities. In December last year, an earthquake struck Gansu Province. We promptly donated RMB 20 million. The donation will aid in purchase of relief supplies and post-disaster reconstruction. We feel ourselves accountable for making positive contributions to our community. As for our global operation, since launching in September 2022, we have expanded into 50 countries and regions. As a newcomer, we are excited to learn from our diverse global consumers and markets as we explore technology innovation. With our supply chain expertise, we are dedicated to helping each consumer live a more fulfilling life, and we remain committed to this mission. 2023 marks the eighth year since the founding of PDD Holdings. Since our inception, we have always stayed closely to our focus on e-commerce. We have always put consumers first and embraced innovation with an open mind. Throughout this journey, our team has experienced remarkable growth and development, and we have seen ambitious young leaders emerge ready to take on greater responsibilities. Our company strives on creativity and energy of the younger generation, giving us the confidence to create unique value for our growing consumer base. And now, I will hand it over to our co-CEO, Zhao Jiazhen, to further talk about our high-quality development strategy.