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spk05: Hello, ladies and gentlemen. Thank you for standing by for Viomi Technology Company's LTD's earnings conference call for the second quarter of 2022. At this time, all participants are in a listen-only mode. Today's conference call is being recorded. I would now like to turn the call over to your host, Ms. Claire Gee from the company's IR department. Please go ahead, Claire.
spk03: Thank you, Anita. Hello, everyone, and welcome to Valme Technology Co., Ltd.' 's earnings conference call for the second quarter of 2022. As a reminder, this conference is being recorded. The company's financial and operating results were issued in a press release earlier today and are posted online. You can download the earnings press release and sign up for the company's email distribution list by visiting the IR section of the company's website at ir.valme.com. Participating in today's call are Mr. Chen Xiaoping, the founder, chairman of the board of directors, and the chief executive officer, and Mr. Cai Weicheng, the head of our finance department. The company's management will begin with prepared remarks, and the call will conclude with a Q&A session. Before we continue, Please note that today's discussion will contain forward-looking statements made under the safe harbor provision of the United States Private Security Litigation Reform Act of 1995, forward-looking statements involving inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's annual report on Form 20F. and other failings as filed with the United States Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required by law. Please also note that the well-missed earnings price release and this conference call include discussions of unaudited gap financial information, as well as unaudited non-gap financial measures. In addition, Viomi's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited, most directly comparable GAAP measures. I will now turn the call over to Viomi's finder, the CEO, Mr. Chen Xiaoping. Mr. Chen will deliver his remarks in Chinese forward immediately by an English translation. Mr. Chen, please go ahead.
spk00: Hello, everyone. Thank you for joining us in the second quarter of 2022. In the second quarter, we achieved a sales income of about 9.24 billion RMB, meeting our previous expectations. The main two reasons for the same decline in sales revenue are the following. The first is that compared to last year, the high sales volume of the same-age Xiaomi phone, we have completely stopped the business of Xiaomi phones this year. The second is that we have seen that since this year, the epidemic has repeated in various places, and the market efficiency in the second quarter has continued to decline. The overall demand for home appliances is relatively weak. In order to cooperate with the high-end new products and the high-end transformation of the brand, we continued to increase the promotion of the brand in the second quarter, increasing the appropriate investment of advertising fees. In addition to continuing to put in e-sports and flat advertisement, we also entered into the young target group and cooperated with Tmall to jointly sponsor this program of designer idealists who are famous in Mango TV. In a relatively remote period of the red market, our promotion of brands and products temporarily used the loss of the second quarter of business. But we believe that these mistakes can help us build a long-term brand awareness. From the sales situation of our 618 and the recent high-end products in the past few months, the marketing investment in the past few seasons has helped us improve the sales ratio of high-end products and strengthen the brand influence of our technology brand. In the second quarter, we continue to implement high-quality business strategies in three aspects. First, continue to improve the product structure of SQ. Second, focus on the business and product line of core products to build the product. The third is the reduction in the production and supply of products. Our production quality has been continuously improved. In the second quarter, the net profit has been increased by 1% since the same period last year. Since the fourth quarter of 2020, the net profit has been continuously increased. Even though we faced many challenges in the first half of the year, such as the recurrence of the epidemic and the deterioration of consumer market, it brought some pressure to our sales section. But in the past few months, with the development of our full-fledged smart solution program, we have made a lot of progress in product innovation, channel deepening, and strategic cooperation. We have investigated the long-term impact of product power and brand influence. First of all, at the product end, we launched a series of AI new products at the internal product launch conference at the end of March this year. For example, the high-end AI large-capacity refrigerator BOS equipped with the AI monitoring function of the full-fledged new air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled air-cooled Super series water purifier, and Royal series high-end AI double washing machine. Among them, the air conditioner, water purifier, intelligent interactive screen, and other new products have been interviewed in the second quarter. In addition, we have continued to launch a series of new intelligent home appliances, including the upgraded 3D structure light human face recognition i-LINKER series intelligent door lock, and the AI voice control panel HomePad Plus, which manages all equipment and intelligent scenarios. The AI technology with these new products improves the user's intelligent experience, providing a good market reputation and feedback. Our high-end products' sales growth and product influence are also constantly growing. In this year's 618 grand opening, some of our high-end products are leading the way in the product sales on the e-commerce market, such as the Space series air conditioner, AIG Super and RC Face AI refrigerator and other products. At the same time, based on the high-end series of products designed by Li Zhan Shi and Qian Wu Si Rong, they have also continued to land all over the country. In the first quarter, in Beijing, Guangzhou, Shanghai Changsha, Kunming, and other local offline stores have signed a series of orders of 200,000 to 400,000 customers. Then, in Chengdu, Zunyi, Yinchuan, and other local offline stores, customers have ordered more than 230,000 to 340,000 high-end sets of set meals in the second quarter. Consumers have been recognized for our high-end products and set plans. It is also the result of our brand's continuous transformation and development of AI products. Taiwan Taiwan Taiwan Taiwan Taiwan I bought an AI remote control, a kind of visual detection module, and the smart switching method of the remote control. In July of this year, it won the 23rd Chinese patent excellence award. Our independent research and development, equipment and assembly modules, and in April, it won the 8th Guangdong patent award. These are all recognition of our technological innovation, as well as recognition of our intellectual property rights. Secondly, in terms of channels, we continue to carry out the channel strategy of large business and large electricity in the country, with offline commercial cooperation. In the second quarter, we will open a number of new CS and WES facilities in Hulan, Anhui, Guizhou, and other places. These large stores will use the experience of unified store decoration and pure gold, to pass on the brand charm of technology to consumers, to help us as long as it is a fast landing of a comprehensive solution. In the overseas sector, we are also under the influence of the international market in the second quarter. The price of oil is high, and the demand for general materials continues to rise. Europe's consumption continues to decline, which brings certain challenges to our overseas sales in the second quarter. However, we have made positive progress in our channel optimization and China-made products. With the stable cooperation of our new large-scale agents, we will also expand and expand the Southeast Asian market. With the high-endization and high-end sales ratio of our overseas small-scale machines, in the second half of the year, we will further enrich the product layout of smart cleaning items, At the same time, other products overseas will also make some progress. Thirdly, we will continue to deepen strategic cooperation in the second quarter to promote the industrial co-improvement of smart home appliances. In the first half of this year, we reached strategic cooperation partners with Jindong, Tianmao and China Telecom. In May, we also reached strategic cooperation with domestic home design companies. The two sides will deeply integrate the full-fledged smart and full-fledged customized business to speed up the development of full-fledged smart solutions. We will continue to focus on four aspects in the second half of the year. SQ continues to optimize our product structure. Increase innovation and innovation, while creating AI products, deepening the smart experience of full-scale scenarios. Third, create more offline immersive consumer scenarios, promote more one-stop full-scale smart solution solutions, improve consumer experience and long-term brand value. Fourth, carry out stricter cost and cost control, establish a solid foundation for long-term health growth. Thank you, Mr. Chen.
spk03: I will quickly translate our founder's remarks before discussing our financial performance for the second quarter of 2022. Hello, everyone. Thanks for joining us, second quarter 2022 earnings conference call. In the second quarter, our total net revenues reached 924 million RMB, in line with our previous guidance. The year-over-year decline in revenues was mainly due to two factors. First, this year we cut off the selling of Xiaomi branded sweeper robots, which had a high prior year base for comparison. Second, since the beginning of this year, owing to the widespread COVID-19 recurrences, market consumption continued to decrease in the second quarter, along with the soft demand industry-wide. To support the release of premium new products and our high-end brand transformation, we continue to enhance our brand promotion and increase advertising spending during the second quarter. In addition to the launch of a large number of elevator and print ads, we reached more targeted young groups by parenting with Tmall and becoming a co-sponsor of the well-known variety show Design Ideal Future, broadcasted on Mango TV platform. Our investment in branding and product promotion during a relatively weak period in the macro environment resulted in a temporary operating loss in the second quarter. But we believe these measures will help us to build long-term brand awareness. Furthermore, judging from our performance during the six months a shopping festival, and the sales of our high-end products in recent months. Our marketing investment over the past few quarters has boosted the contribution of high-end products to ourselves and enhanced our trending technology branding positioning. In the second quarter, we continue to execute our high-quality business operations strategy. First, continue to streamline SPUs and optimize our product mix. Second, focus on core business and product lines to build best-selling products. And third, implement cost control and efficiency improvement measures in production and supply chain. This effort leads to ongoing optimization of our business operations, with growth margin increasing by about 1% year-over-year, representing consecutive year-over-year improvements since the fourth quarter of 2020. despite COVID-19 recurrences and weak consumer standing exert considerable pressure on ourselves, we made significant progress in product innovation, channel expansion, and strategic cooperation. In addition, we continue to develop our one-stop IoT home solutions, further solidifying the foundation for our long-term product enhancement and branding influence. With respect to our products, we introduced a series of new AI products at our strategic new product launch event in March, including Space Pro, our all-space AI air conditioner featuring for multi-high removal. Our large screen refrigerator with AI fitness functionality. Our royal series of AI laser interactive smart screen incorporating 4K ultra-high definition display. Super 2, our 2,000-gallon super large-flag water purifier, which generates ultra-microbubbles to remove pesticide residues, and our royal series of AI twin-top washing machines. Among them, the air conditioner, water purifier, and interactive smart screen came to market in the second quarter. In addition, we also introduced a series of new smart home devices, such as iLink, Our smart lock with upgraded 3D facial recognition technology, as well as HomePad Plus, our AI screen-based control interface for managing all smart home appliance across scenarios. This new AI-equipped product provides our consumers with a superior smart home experience and have received favorable market feedback and reviews. Furthermore, sales, growth, and product influence among our mid- to high-end products are also increasing. During the recent 618 shopping festival, some of our mid- to high-end products topped the e-commerce sales chart in their respective categories, such as our space series of air conditioners, super series of water purifiers, and the 21 space AI large green refrigerators. Meanwhile, based on our one-stop IoT home solutions, we are accelerating the implementation of our premium bundle home solution offering nationwide. After our offline merchants in the first quarter signed the whole home solution order, ranging from 200,000 RMB to 400,000 RMB with customers in Beijing, Guangzhou, Changsha, and Kunming, then some offline merchants in Chengdu, and certain other cities followed suit in the second quarter, recording multiple high-end whole-home solutions orders exceeding 200,000 RMB and 300,000 RMB. Our consumer fascination and adoption of our premium AI products and our bundle-home solution offerings are a testament to the success of our safe transformation into a premium brand and our investment in research and development for our AI products. The successful launch of our new AI products, which received positive market feedback and the smooth adoption of bundle home solution offerings, was not possible without our unremitting effort in technological innovation and product research and development. As of June 30, 2022, our cumulative global patent applications and registered patents reached more than 5,400 and 3,300 respectively. Our research and development achievements have also been recognized by industry and professional institutions. In July, the Intelligent Gear Shifting Method of our AI range hood, a visual detection module, won the 23rd China Patent Excellence Award. Also in April, we took the silver at the 8th Guangdong Patent Award with one of our water purifiers with the integrated waterway module technology. These awards are not only the recognition of our technological innovation capability, but also the formation of our intellectual property strength. Second, we continue to execute our large-scale and better merchant channel strategies. In the second quarter, we cooperated with our newly signed offline merchants and opened additional Xiaomi 4S and 5S Starship stores in provinces including Hunan, Anhui, and Guizhou, etc. These flagship stores enhanced our training technology, brand positioning through unified storefront decoration and immersive scenario experience and helped implement our one-stop IoT home solution. As to our overseas business, in the second quarter, the sovereign international macro environment, including the increase in oil and bulk road material prices, lead to sluggish demand in the European market and brought certain challenges for our overseas sales. At the same time, we made positive progress in channel optimization and our meat to high-end transformation. We have established stable cooperation with newly joined large international agents and expanded the market in Southeast Asia. With the trend of high-end sweepers sold overseas, the sales population of the mid- and high-end models has further increased. As we progress through 2022, we will further enrich the product offerings of intelligent cleaning products and simultaneously roll out some other categories of products in overseas markets. Third, we continue to deepen our strategic cooperation with more channels in the second quarter to promote the integrated and stable development of the smartphone industry. In the first half of this year, we built partnerships with Jindong.com, Tmall, and China Telecom. In May, we expanded our strategic cooperation with KUKA, one of the leading domestic home design enterprises. KUKA and Wellme will jointly integrate smart home ecology and a whole host of customization business while accelerating the popularization of our one-stop IoT home solutions to facilitate the integration, intelligence, and quality upgrading of home scenarios. In addition, we are exploring strategic cooperation with additional channels and companies to create a more convenient and smart living experience and promote the development of smart home ecology for families. We successfully navigated the challenging caused by the pandemic and the weak micro industry environment in the first half of the year and made progress in developing new products and enhancing brand awareness. Moving forward, we will continue to focus on four aspects. First, streamlining SKUs and continuously optimizing product portfolio. Second, devoting more resources to improving product competence, building best-selling products, and providing a more immersive scenario experience. Creating more offline immersive consumption scenes and facilitating the implementation of our one-stop IoT home solutions to lay out the foundation for user experience improvement and the long-term brand value development. Fourth, implementing more disciplined costs and expense control measures to lay a solid foundation for long-term healthy growth and create value for our customers and shareholders in the long run. Thank you. That concludes our funder's remarks. Now, Mr. Caiwei Chen, the head of our finance department, will go over our second quarter 2022 and audited financial results and the third quarter outlook in more detail.
spk02: Thank you. Now, I will go over the detail of an audited financial results of the second quarter of 2022. Net revenues were 924.2 million RMB compared to 1050 of 1,658.9 million RMB for the second quarter of 2021. That revenue is in line with the company's previous guidance. In addition to the overall weaker consumption environment, the decrease was mainly due to the complete cutoff sales of Xiaomi branded repair robots this year, as well as its high prior year base for comparison. and the ongoing product portfolio adjustments in some categories. Revenues from IoT at home portfolio decreased by 54.2% to 524.5 million RMB from 1,146.3 million RMB for the second quarter of 2021. The decline was primarily due to the complete cutoff of sales of Xiaomi branded swivel robots as well as SKU adjustments for some categories. Revenues from home water solutions decreased by 17.4% to 180.9 million RMB from 218.9 million RMB for the second quarter of 2021. The decline was primarily due to the decreased demand of water purifiers. Revenues from consumables decreased slightly by 1.9% to 103 million RMB from 102.2 million RMB for the second quarter of 2021. Revenues from small plants and others decreased by 38.1% to 118.5 million RMB from 191.5 million RMB for the second quarter of 2021, primarily due to product portfolio adjustments within this category and the decreased demand for small appliances products. Gross profit was 204.5 million RMB compared to 351.8 million RMB for the second quarter of 2021. Gross margin increased to 22.1% from 21.2% for the second quarter of 2021, primarily driven by the company's continued effort to shift business and product mix towards higher gross margin products and partially offset by the decreases in selling prices of some products for cleanup due to the product portfolio adjustment in this quarter. Total operating expenses decreased by 14.6% to 264.6 million RMB from 309.7 million RMB for the second quarter of 2021, primarily due to the year-over-year decrease in selling and marketing expenses. In more detail, research and development for the second quarter of 2021, mainly due to the increase in research and development experts and related salaries and expenses, as well as the increased input in new product development. Selling and marketing expenses decreased by 24.6% to 162 million RMB from 214.9 million RMB for the second quarter of 2021. mainly due to decrease in marketing expenses, partially offset by the increased expenses on advertising activities to enhance the company's branding recognition. General and administrative expenses decreased by 20.3% to 22.9 million RMB compared to 28.8 million RMB for the second quarter of 2021, primarily due to the decrease in estimate allowance for accounts and notes receivables recognized in the current period. Net loss attributable to ordinary shareholders of the company was 39.6 million RMB compared to the net income attributable to ordinary shareholders of the company of 46.1 million RMB for the second quarter of 2021. Non-GAAP net loss attributable to ordinary shareholders of the company was 33.9 million RMB compared to the non-GAAP net income attributable to the ordinary shareholders of the company of 59.5 million RMB for the second quarter of 2021. Additionally, our balance sheet maintained healthy. As of June 30, 2022, the company had cash and cash equivalents of $800 million. 16.3 million RMB, restricted cash 46.8 million RMB, short-term deposits of 10 million RMB, and short-term investments of 237 million RMB. Now let's turn to our outlook. For the quarter of 2022, we currently expect net revenues to be between 740 million RMB and 840 million RMB. We estimate that the year-over-year change in revenues will be mainly due to the uncertainty pertaining to the potential effects of COVID-19 recurrences, as well as the potential impact of overall market demands in the third quarter of 2022. The above outlook is based on the current market conditions and reflects the company's current and preliminary estimates of market and operating conditions and customer demand. all of which are subject to change.
spk03: This concludes our prepared remarks. We will now open the call for Q&A session. Our finder and Mr. Tsai will join this session and answer questions. Operator, please go ahead.
spk05: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. For the benefit of all participants on today's call, if you wish to ask your question to the company's management in Chinese, please immediately repeat your question in English. The first question today comes from Hilde Ling with Morgan Stanley. Please go ahead.
spk04: Hi. Thank you, management, for the presentation. I have three questions allowed me to ask. So the first one is about the expectation for the second quarter, not for the second quarter, but the second half of this year in terms of the sales and also the margin expectation. And what do you think about the key drivers behind such a set of sales expectation? So this is the first question. The second one is about the overseas market expansion or overseas sales. We are seeing that the macro is being quite volatile. The European market is quite weak, but the U.S. market has been relatively more resilient, and there seems to be a little bit of improvement in the inflation as well, or less pressure from it. What do you see about the overseas sales trends nowadays, and what's your expectation in the second half of the year? The third question is about the robotic robot vacuum segment. How is that performing in the first half this year? And how do you see for this segment to perform in terms of the demand in the second half? That kind of pressure has been reduced a little bit. I would like to ask Mr. Guan, how should we look at the demand for overseas income in the second half of the year? The third small problem is related to the situation of small and medium-sized enterprises. I would like to ask how the operating situation is in the second half of the year. How should we look at the performance of the entire market in the second half of the year? Thank you.
spk02: Okay, thanks for these questions. For the first question, regarding the sales and margin expectation, in terms of revenue guidance for the second half of this year, as usual, we don't get specific guidance, especially under the macro environment with more uncertainties due to COVID-19 and the macro market. But we expect the revenues to be driven for several perspectives. First, the sales of The sales of our new high-end products have been increasing over the past several months, and some SKUs hit the back-selling list during major promotion seasons. We estimate our AI-centric premium products will help to drive the need to long-term revenue growth. Second, we have been preparing for exporting additional product categories, including some big home plans. to overseas market in the near future, which will partially mitigate the impacts from the weak consumer demands and help drive the growth in the short term. With respect to growth margins, we still estimate it to maintain a stable level, let's say at least over 20% for the whole year. As we will continue to promote premium products with higher margins and take product portfolio adjustments, we expect the overall gross margin to be a reasonable level in the mid-term. For the second question about the overseas sales, from our observation, we estimate the overseas consumer demands will still be relatively weak. not only in the U.S., but especially in Europe. As we see, due to the international geopolitics, the increasing prices of crude oil and raw materials alongside the falling euro exchange rate, the overall consumer sentiment in Europe is relatively low, and we expect this to change into the second half of this year. While we are taking some actions to mitigate the impacts of weak consumer sentiment in overseas markets, first we see the South Eastern Asian market is relatively dynamic and we see a growing market with great potentials. So at this moment we will increase the sales of our products in South Eastern Asia. Second, in the following months we will start to sell additional product categories in addition to swipper robots, which we think could help drive the growth of our overseas market. We will share more details regarding this due course. For the third question about our vacant robot, the sales of our own branded swipper robots were relatively weak compared to the same period of last year, mainly due to the overseas market, including international geopolitics The increasing prices of crude oil and raw materials alongside with the Euro exchange rate, such as we mentioned just now. Euro is back to this trend to the second half of this year. However, as we discussed previously, we are making some efforts to mitigate this impact. Like we will increase the sales in South Eastern Asian market. And second, in the following months, we will sell additional product categories in addition to SWIFT robots, like some big plans, which we will share more details regarding this in due course. Thank you.
spk04: Thank you, Mr. Guan. May I ask a small question? That is about the contribution of the company's overseas and domestic income. I would like to ask, how much does overseas income and profits account for us? If we look at our growth or expansion plan in the future, we should be Sorry, allow me to follow up a little bit of the question. So in terms of the revenue and net profit contribution, how much of it is coming from overseas markets? And if we think about it in the future, is the company planning to expand, put more focus in the domestic market or put more focus in the overseas market? Thank you.
spk00: In the second half of this year, we are optimistic about the development of overseas products. On the one hand, in addition to the original cleaning products, we are also making good progress in other products in Europe. Because the supply chain in Europe cannot be established at this level, we will have a better growth space overseas. I will quickly translate Mr. Chen's answer. We are quite optimized about our overseas revenues for the second half of the year.
spk03: As we mentioned before, except the cleaning products, we plan to introduce new categories of products, like big appliances, to overseas markets. And we are looking for the overseas revenue percentage to achieve more than 20%. Although the revenue percentage of the oversea market of the first half of the year is around 10%. Thank you.
spk04: Thank you very much. That's all for me. Thanks.
spk05: The next question comes from Alex Wang with CICC. Please go ahead.
spk01: Thank you for your presentation, . My first question is, how is the company's current cooperation with Xiaomi? What is the contribution from the supplier to Xiaomi in the company's revenue? What is the outlook for related future revenue groups? Will the future cooperation continue to expand or adjust? My second question is, in terms of a smartphone solution, What is the contribution of the new smartphone solution in the company's revenue? Could you give me information about how the update demands account for the revenue? My third question is, in the second quarter of 2022, is there any performance pressure brought from the real estate? How does the company view the impact from the real estate industry in the future in China? Thank you for your introduction. My first question is, how is the cooperation between the company and Xiaomi? What is the ratio of Xiaomi's revenue to the company's revenue? What is the growth and growth of future business? Will the future cooperation with Xiaomi continue to expand or adjust? My second question is about the company's all-in-one smart business. How much of this business accounts for the company's income? In addition, can you talk about the ratio of renewal needs and replacement needs in revenue? My third question is, in the second quarter of 2022, did the company feel the performance pressure brought by the real estate market? How does the company view the impact of real estate on the performance of the industry and the company's performance? Thank you.
spk02: Okay, thank you for the questions. For the first question about Selmy business, firstly, we always maintain stable cooperation with Selmy, and the revenue contribution of the Selmy branded business has been stabilized around 40% over the past several quarters, and we expect it to maintain at this level in short to mid-term. In terms of categories we cooperate, except the Xiaomi branded sweeper robot that we scale back due to our relevant source strip, we don't have material changes on other categories we cooperate. We currently cooperate on home water solutions, smart kitchen products, and some other small appliances. We will maintain the current cooperation and see if we have further reciprocal opportunities to explore cooperation and additional categories. For the second question about the home solution, first of all, the IoT at Home solution offering is one of our selling methods with bundled sales and certain services, and so far it's not separately calculated as a revenue disclosure factor. The premium bundle offerings we recently started promoting are mainly through our offline merchants. As we previously shared, our offline merchant partners, our offline merchant side holds home solution orders ranging from 200,000 RMB to 400,000 RMB with customers in Beijing, Guangzhou, Changsha, and Kunming in the first quarter. and accomplish multiple high-end whole home solution orders, assisting 200,000 RMB and 300,000 RMB in the second quarter in Chengdu, Zunyi, Yinchuan, and some other cities. And regarding your question about the impact from real estate, we are not already impacted by it as we don't have direct cooperation with real estate industry or in terms of declaration for housing full. but our sales are directly impacted to a second degree as an influence on the overall demand for home appliances for new apartments. We observe the impact on the overall industry's trending views as some cities have implemented policies to stimulate real estate industry, though it takes time to recover. In addition, We think the home appliance industry, in particular, the smart home appliance demand is less dependent on the real estate than before, with the increasing young people starting to replace the old ones with the smart home products. So we think the size of incremental housing markets and smart home industries also rely on the stock housing market, which is more flexible. than traditional home plants industry. Thank you.
spk00: I would like to add these three points, which are actually quite important. The first one is that the cooperation between Xiaomi and us is very stable. We are now communicating and expanding our cooperation in product categories. We should continue to deepen and even strengthen our cooperation in this field. The future performance contribution of the company will grow. This is the first one. The second one is that The third problem is actually a problem. Because now China's real estate is in decline. In decline, in fact, for the management of this kind of enterprise, it actually raises a new challenge. They are thinking about how to put your users and your customers its value can be further excavated. Therefore, we push for all-in-one intelligence. In fact, it is an increase in the proportion of the set-up and the price of the single customer. This is a very important way to deal with this kind of economic downturn or economic structural adjustment. So all-in-one intelligence is essentially a means of catching the concentration of the industry and increasing it. Just like the original all-in-one certification. In fact, it is also the concentration of such an industry in the home industry. In fact, it is the concentration of such an industry in the home industry. So we expect that in the coming few years, the proportion of this set will show an upward trend. So from the future, it is to be able to deal with this kind of Okay, I will quickly translate
spk03: briefly translate our founder's response. For the first question, our cooperation with Xiaomi is quite stable by now and in the near future. And now we are, recently we are working on new corporations to introduce new categories to the market. And we are looking forward the Xiaomi revenue would be increased increasing to our total revenue. And about the second question, the three small questions are actually one topic of the macroenvironment of the real estate industry is decreasing. It brings new challenge to our company. And to dig out the new supply, the to digging out the new consumer needs. We aim to improve the unit price of per customer and we are looking forward to enhance the bundle sales offering and we are looking forward to this from those sales of revenue to be 30% industry-wide. Thank you. Okay, that concludes our response to your question. Thank you.
spk05: As there are no further questions now, I'd like to turn the call back over to the company for any closing remarks.
spk03: Okay, thank you once again for joining us today. If you have further questions, please feel free to contact us through the contact information on our website or the PS&T group, the company's investor relations consultant.
spk05: This concludes the conference call. You may now disconnect your line. Thank you for attending.
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