Viomi Technology Co., Ltd

Hello, ladies and gentlemen. Thank you for standing by for the Biomi Technology Company Limited's earnings conference call for the third quarter of 2022. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Claire Gee, from the company's IR department. Please go ahead, Claire.

Thank you. Hello, everyone, and welcome to Wyoming Technology Co-Limited's earnings conference call for the third 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 earnings press release and sign up for the company's email distribution list by visiting the IR session of the company's website at ir.wyoming.com. Participating in today's call are Mr. Chen Xiaoping, the founder, chairman of the board of directors, and 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 provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve 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 reports on Form 20F, and other filings are filled with the U.S. 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 wellness earnings price release and this conference call include discussions of unaudited gap financial information as well as unaudited non-gap financial measures. In addition, wellness price release contains a reconciliation of unaudited non-gap measures to the annotated most directly comparable gap measures. I will now turn the call over to our founder and CEO, Mr. Chen Xiaoping. Mr. Chen will deliver his remarks in Chinese, followed immediately by an English translation. Mr. Chen, please go ahead. Hello, everyone.

Welcome to the third quarter of 2022. In the third quarter, we achieved a sales revenue of 6.8 billion RMB, which is slightly lower than our previous expectations, mainly due to the continuous softening of market demand and the repeated uncertainty of the epidemic in China. The sales revenue also dropped. In addition to the red-light environment, Xiaomi's small business in 2022 The year-round full stop has also had a certain impact on the scale of the same period. At the same time, the impact of the ratio of product sales and ratio change, the third quarter, the ratio of the relatively higher-quality products has increased significantly, causing the overall profit margin to fall temporarily. In the fourth quarter, we will expect the profit margin to return to normal levels. In order to create long-term product competitiveness and brand visibility, we have continuously invested in elevator and flat advertising. We have also joined up with Langchao Studio and Gongmao Home Appliances, to launch a video interview program. We and our own media people, including investors Zhang Xuanlin, the chairman of Gongmao, Li Feng, and others, on how to re-explore the future of Chinese people with all-knowledge, conducted in-depth discussion. In such an interview to ask all-knowledge questions, we faced our own media people, Yili Jing, about all-knowledge questions about all-knowledge. We provided a comprehensive solution to all-knowledge problems based on Yunmi. Through the four major capabilities and four services, and cover the whole scene of smart home appliances and smart home appliances products, so that more people can live in their future home earlier. Under the effect of the economic downturn, under the large background of the decline in size, the promotion of product strategies and brands has led to a temporary loss in our business. But we can see that with the gradual expansion of smart home appliances, the turning point of the industry is coming, and we are already leading the growth of all smart products. In the past few months, we have continued to conduct AI Help for 2.0 The focus on software upgrade from customer health, energy-saving, environmental protection, active intelligence, and natural interaction to four-dimensional product replacement is a step forward from the software end of a fully intelligent solution. At the same time, a series of smart home appliances will be launched at the hardware end. For example, the 1,200-carat Muscle Pro with an A.I. wood-fired alpha A.I. generator with an A.I. wood-fired A.I. generator with an A.I. wood-fired alpha A.I. generator This product has achieved a good result in the pre-production and operation stages. In August of this year, we held the first year of the company's Science and Technology Year, giving a generous award to the company's technology team and technology talents. This year, we are giving the Tesla Model 3 award to the technology stars as a major incentive to continue to stimulate our innovation level. Then in the first half of this year, after Guangdong Province set up the Boshu Work Station, we successfully set up the Boshan Enterprise Boshou Work Station. Then in the future, Yunmi will continue to cultivate industry top talent for society with universities and professional institutions, and restore some of our automated products and innovations to promote all-automated industry development. Then until the end of the third quarter, we have applied for a global patent. Five thousand and five hundred pieces. The global collection of limited edition. Three thousand and five hundred pieces. The collection of invention patents. Two thousand and one hundred pieces. In the most recently announced. Two thousand and two. Boshan Manufacturing Company. One hundred walls. We are ranked 38th, 60th, and 73rd among the 100 famous companies in Foshan and 100 companies in Foshan. At the same time, we are ranked 20th in Foshan's innovation ranking. This is a recognition of Yunmi's technological innovation capability and a confirmation of our comprehensive strength. In the third quarter, we will continue to promote the expansion strategy of our large shopping malls. In Hebei, Anhui, Hubei, Fujian, etc., we will open more than 200 to 400 bottles of 4S Chenjin-style experience stores. At the same time, the sales of 3G shopping malls will steadily increase. In Hunan, Guangxi, Ningxia, etc., many offline stores will sell tens of thousands of yuan or even tens of thousands of yuan shopping orders. We have chosen to be more diversified to meet the needs of consumers at various prices. In terms of overseas markets, in September this year, we will launch a number of new products at the Berlin EFA Electronics Exhibition. The Berlin EFA Electronics Exhibition will mark our first time in the global consumer electronics market to be recognized by the European market. We have also planned for more products to be launched in the fourth quarter of this year. It is expected that the external scale will continue to break through. In the future, in the face of continuous We will continue to improve our business in the following three aspects. First, we will continue to improve the layout and layout of our full-fledged smart product line from the product end. Today, we can adjust our resource configuration to improve some of our technical innovation. Second, we will continue to optimize our structure, make shortcuts, improve our operating efficiency, and reduce our operating costs. Third, maintain sufficient cash assets. Currently, we have a cash balance of about 1.1 billion yuan. To meet the needs of the company's liquidity and operation funds, we will provide stable security for the company's long-term development. We also hope that in the future, we will be able to provide long-term feedback to shareholders and users in the management, products, and promotion. Thank you.