PDD Holdings Inc.

Ladies and gentlemen, thank you for standing by and welcome to PDD Holdings Inc. First Quarter 2024 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, I would like to refer you to our safe harbor statement in earnings price release. which also 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 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 Jiajun 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 first quarter ended March 31st, 2024. And during the Q&A session, Lei and Jiajun will answer questions in Chinese and will help translate. Please note that the English translation is for reference only and in case of any discrepancy, statements in their 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 all for joining our early call for the first quarter of 2024. 2023 was the first year on our journey towards high-quality development. We are encouraged by the positive feedback from our users and merchants and are more confident in our strategic direction. 2024 is a critical year to deepen our execution. In the first quarter, we benefited from an improving macro environment and achieved steady growth. Our total revenue reached IMD 86.8 billion, which represents a 131 year-on-year increase. Looking ahead, we will continue to work on the fundamentals of our business through our investment in supporting high-quality consumption, broadening high-quality supply, and promoting a high-quality ecosystem. Our proactive transition to high-quality development will inevitably bring challenges and difficulties. But still, we decided to embark on this journey and are determined executing well because we are seeing a few irreversible long-term market shifts. First of all, we clearly see a trend of consumption upgrades. And in response to this, we are innovating our service offering to cover more consumption scenarios. And at the same time, actually engaging with our merchants to broaden our product selection. For example, this year, we are deepening our cooperation with top brands from around the world to bring a new product to our platform. In addition to meeting consumers' demand for more savings and better services, we hope to deepen connections with our consumers and strengthen our platform's market share in new product categories and among new customer groups. High-quality consumption will not be possible without strong supply chain capabilities, and over the years, we have built our valuable experience across the entire e-commerce supply chain. Through technology innovation and investment in research and development, our supply chain know-how is transformed into easy-to-use tools and services to empower our merchants with cost-saving digital solutions. This measure has proven to be effective in terms of attracting more merchants to our platform, broadening our product selection, and reducing product costs, all of which are essential to support high-quality consumption. And lastly, an ecosystem that encourages compliant business conduct is the foundation to long-term growth of our platform. As commerce integrates with digital technology at a record pace, consumers and regulators are holding e-commerce platforms accountable for higher standards. And we are taking the initiative to build an industry-leading compliance program and to leverage our technology capabilities to empower SME businesses with our compliance know-how. This is to foster a healthy commandment that attracts quality merchants that are willing to play by the rules and drives our bad actors, thereby creating a positive feedback loop. When it comes to consumer well-being and economic interest, we always stand behind the former. We are focused on building long-lasting trust with our consumers and not on short-term gains. We also adopt a similar long-term orientation to other aspects of our business. As a company that is still in the growth mode, we will continue to focus on long-term value creation and invest firmly into opportunities with great potential. We are not guided by short-term goals, and this is also reflected in how we manage our global business. Our global business is still in an exploration stage and there's plenty of room for improvement. We are prepared to respond positively to challenges and we view these as important opportunities to improve ourselves. We are in this for the long term and will not be distracted by short-term results. Instead, we will focus our efforts on building our key capabilities. Firstly, supply chain capabilities. We will continue to roll out tailored fulfillment solutions in different markets to improve supply chain efficiency and reduce cost. We welcome quality merchants from around the world to join us in providing a rich variety of quality products for consumers worldwide. Secondly, legal and compliance capabilities. With the goal of building an industry-leading compliance program, we will make firm investments to create a safe and trustworthy shopping environment for our users, uphold our compliance standards we will conduct forward-looking research into laws and regulations in the market we operate and transform our know-how into tools that can be easily assessed by our merchants. And thirdly, service capabilities. In response to the diverse needs and quality standards of global users, we will keep up our investment technology and operations to improve overall user experience. as we bring more value to consumers and merchants along the road. We are hopeful that our platform will be increasingly recognized and welcomed by local communities we serve. We do not expect this to be easy, as we are prepared for investments over the long run. Finally, I would like to say that we are operating in a constantly evolving industry. which competition and opportunities are both emerging at rapid pace. Competition has been intensifying in the past quarter, which will inevitably increase our expenses and affect some organic growth. On the other hand, new technologies and new markets also offer us tremendous opportunity for growth. At this moment, I want to revisit our first shareholder letter when the company went public. We are not a conventional company, and we hope to show you the true colors of our company, no matter how bumpy or rough the numbers may seem to be. Our business does not follow a linear path, and our earnings will almost certainly fluctuate. we suggest our shareholders not to measure our overall performance with results from a few quarters. Our financial performance may be on these market expectation accounts, but as long as we keep focusing on long-term value creation, and ultimately, this short-term fluctuation will converge to our growing intrinsic value. And now, I will hand it over to our co-CEO, Justin