Quhuo Limited

Good day and welcome to the CHUHO second half of 2024 and fiscal year earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Qishu Wang, Investor Relations. Please go ahead.

Thank you, operator. Hello, everyone. Welcome to Q4 2024 full year and second half earnings conference call. The company's results were released earlier today and are available on our AI website. On the call today are Leslie Yu, Chairman and CEO and CFO of Barrie. Leslie will review distance operations and company highlights, followed by Barrie, who will discuss financials and guarantees. They will be available to answer your questions in the Q&A session that follows. Before we begin, I would like to remind you that this call may contain forward-looking statements made under the general provisions of the Private Securities Education Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions and relate to the events that involve known or unknown risks, uncertainties, and other factors, a lot of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance, or achievement to differ materially from those in the forward-looking statements. Further information regarding fees or other risks, uncertainties, and factors is included in the company's filing with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required under the law. With that, I will now turn the call over to our Chairman and CEO, Mr. Leslie, who is critical.

Thank you, and thank you all for joining our 2024 earnings conference call. 2024 is a pivot year for Q4 as we embark on our strategic transformation. In the face of a complex and ever-changing market environment, we have chosen to define growth through value-adding strategies, replacing zero-sum games with ecosystem empowerment, and breaking business boundaries through model innovation. Our goal is to achieve a path of corporate development that balances both commercial and social value. I will now share the company's performance and strategic achievements over the past year, focusing on the three themes of deepening, empowering, and innovating, and a look ahead to the future vision of QHOR. Firstly, the strategy of beefing is targeted at strengthening the business foundation and unlocking profit potential. In 2024, Chihuahua achieved revenue of RMB 3 billion with adjusted EBITDA of RMB 9 million. The company demonstrated excellent performance with positive EBITDA for three consecutive fiscal years. Adjusted net income reached RMB 1.6 million In terms of cost control, general and administrative expenses decreased by 19% year-on-year, reflecting our ongoing effort to improve operational efficiency. RMD expenses decreased by 13% year-on-year, with the IT team achieved a continuous cost reduction and efficiency improvement through AI technology. Optimizing labor input while ensuring saturation and upgrade of technology. This effort injected more resources into high potential business, driving the health cycle of our business ecosystem. Since the second half of 2014, we have been focusing on deeply cultivating high quality business and structurally enhancing profitability. In the second half of 2014, Gross profit for bike maintenance and ride-hailing services grew by 15% and 216% year-on-year, respectively. The used vehicles export business has leveraged AI technology in the vehicle inspection process, achieving an intelligent upgrade of the inspection workflow. This has significantly improved individual operational efficiency. Shrinking the gross profit margin of the business from 1.8% to 6.2%, with the gross profit increasing by 11.5% year-on-year. Our housekeeping and accommodation services restructured the operational system through our sales development booking platform, achieving an increase in gross profit margin from 26% to 36% throughout the year. continuously strengthening the profit contribution of the business line. In a complex and ever-changing marketing environment, we firmly believe that maintaining business quality amidst uncertainty will generate momentum for long-term development. Secondly, the strategy of empowering. The strategy of empowering is targeted at stimulating collaborative dynamics and driving ecosystem synergy. Since the launch of our used vehicle export business, represented by Qigong International in May 2023, it has quickly become a new growth engine for Qigong in the past year and a half. By the end of 2004, Chippewa International had exported over 3,500 cars overseas to the Middle East, Eastern Europe, and Western Asia. And established are recognized used vehicle certification and service systems. Leveraging our experience and the technological accumulation in the localized license market, our used vehicle export business follows a technology-plus-resources output model. By empowering overseas dealers with ride-hailing operational capabilities and computing overseas operational centers and vehicle showrooms, we create a win-win ecosystem from vehicle procurement to local sales and operations. For example, in September 2024, we reached a strategic cooperation with BroadAuto and electric vehicle dealer in Azerbaijan. The mobility platform vote to jointly establish an Azerbaijan ride-hailing operation center. In addition to providing China's quiet cost performance vehicle resources, we also improved the local ride-hailing operations in Azerbaijan collaboratively. On one hand, Super International helps local partners achieve real-time route optimization and data analysis via its online SaaS platform, ensuring quick response to order demands while monitoring vehicle usage, including maintenance cycles and fuel consumption, to ensure long-term operational performance. On the other hand, Chihuahua International exports its mature ride-hailing market management experience, providing offline training and hands-on guidance for local partners' operations staff, including precise matching of drivers and order demands, using AI data analysis to predict high-demand hotspots, and achieve dynamic dispatching during actual operations. Through the comprehensive technology-plus-resources export solution, local dealers in Azerbaijan can quickly match vehicles to ride-hailing companies, enabling seamless integration from vehicle scale to market application. This has increased the sales speed of inventory vehicles and transformed pure sales margin gains into vehicle leasing operational revenue. The success of Technology-Plus-Resources solution in Azerbaijan's pilot not only drove our partner board auto to place three additional orders, but also demonstrated the feasibility of global replication of local solutions and highlighted the immense potential to lead supply chain partners in building ecological cooperation. In the future, we will replicate that better model in more overseas markets. Throughout the technology and management empowerment, we will establish deep collaborative win-win relationships with upstream and downstream partners globally, building a global automotive export and operational ecosystem. Through this kind of cooperation, we have not only enhanced the operational efficiency of the supply chain, but also provided sustainable solutions for the international market, laying a solid foundation for future global business expansion. The third part, the strategy of innovation. The strategy of innovation is targeted at activating the existing networks and opening new growth frontiers. Innovation has always been the co-driving force of cheaper development. How to leverage innovation to expand the value of existing resources and break the revenue boundaries of current business is an ongoing challenge for enterprise growth. Through multi-dimensional exploration in product plus services, platform-plus ecosystem, and technology-plus scenarios. Chihuahua reached strategic cooperation with a leading domestic food group, New World. Leveling Chihuahua's on-demand delivery network covering nearly 100 cities across China, we jointly built a distribution system for beef products, realizing the value-added values of the infrastructure network for delivery services, marking the transformation from service provider to supply chain enabler. In this partnership, we will combine newer deep expertise in the big supply chain with cheaper network advantage in all-demand delivery. jointly promoting the implementation of the on-demand production real-time fulfillment model in the restaurant beef supply chain. Specifically, after merchants place and pay for their orders, New World will prepare the beef according to demand, complete the cutting, packaging, and cold chain processing, and use Chihuahua's on-demand delivery network to quickly deliver fresh beef to restaurants. We expect this model to significantly reduce intermediate storage processes, ensuring beef freshness while reducing merchant's inventory pressure and enhancing overall supply chain efficiency. Additionally, through our proprietary Chico Plus technology platform, we have optimized delivery routes to achieve precise matching of delivery capacity, enabling new world beef products to reach end customers within hours after slaughter. Following successful pilot run, this model will be gradually scaled and contribute significant revenue in the future. It marks a key upgrade of our on-demand delivery business, from basic fulfillment services to supply chain empowerment, and is becoming a new growth driver for the company. In the future, Qiho will further explore and refine this new catering supply chain model based on its infrastructure and site network in its on-demand delivery field. The partnership with New World is just a starting point, and this model is expected to be extended to other catering sectors with high requirements for ingredient preservation, providing flexible and efficient supply chain services from most food suppliers and the restaurant business. While pursuing commercial value, we always keep in mind that the company's social responsibility. As of 2024, QHOS platform has provided flexible employment opportunities for over 830,000 workers, from delivery riders to BNB housekeepers. We not only provide jobs, but also create an assistant net for them through commercial insurance and the vocational training. At the same time, our business innovations are creating long-term social value. The new energy vehicles exported overseas reduce carbon emissions by tens of thousands of tons annually. And the fresh beef direct supply chain model with new world reduces ingredient wastage for restaurants. In 2024, Chi Ho's strategy was deeply integrated into stabilizing cash flow business as a foundation, and expanding business through innovation. Driving the company's continuous development with both commercial success and social value. We will continue to optimize operation models and resources allocation, seize key market opportunities, and create more social value while generating business value. That concludes my remarks. Next, I will hand over the call to our CFO, who will provide a detailed overview of our financial performance. Thank you.