Yunji Inc.

Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to the UNG's first half 2025 earnings conference call. With us today are Mr. Shang Lu Xiao, Chairman and Chief Executive Officer, and Mr. Nan Song, Senior Financial Director. As a reminder, this conference call is being recorded. Before we start, please know that this call will contain forward-looking statements. within the meanings of the Private Securities Litigation Reform Act of 1995 that are based on the company's current expectations and current marketing operating conditions and relate to events that involve known or unknown risks, uncertainties, and other factors of UNG and its industry. These forward-looking statements can be identified by terminologies such as will, expect, anticipate, continue, or other similar expressions For a detailed discussion of these risks and uncertainties, please refer to the company's related documents filed with the US SEC. Any forward-looking statements that the company makes on this call are based on assumptions as of today and are expressly qualified in the entirety by cautionary statements, risk factors, and other details of its filing with the SEC. The company does not undertake any obligation to update these statements except as required under applicable law. With that, I will now turn it over to Mr. Shang Liu, Chairman and CEO of Yunji. Please go ahead, sir. Apologies, ladies and gentlemen. We seem to have disconnected with our speakers. Please hold while we reconnect. ¶¶ ¶¶ Ladies and gentlemen, we've reconnected with our speaker line. Please proceed with the presentation.

Hello, everyone, and welcome to Yunji's First Half 2025 Earnings Board.

Thank you for your continued interest and support.

过去半年,我们始终锚定有机健康的战略方向。 尽管整体市场环境下消费者信心不足, 导致公司整体收入又有回落, 但我们坚信,

Already past the six months, we have remained firmly anchored to our organic health strategy. While overall market conditions and weakened consumer confidence have led to a slight decline in our total revenue, we believe that staying committed to organic health is the right strategy and represents an important opportunity for ING's future development.

Around the organic health strategy, we will use organic milk as the starting point to shape the organic health brand image. The product's initial sales amount is up to 5 million yuan. Successfully introducing the new brand of cloud-based organic health into the consumer's perception. Using organic milk as the starting point, we will gradually and gradually spread the cloud-based organic health concept.

And we have a center on our strategy on organic health, positioning Youjiang Organic Milk as our flagship product to shape our brand image in this space. The product achieved an R&B 5 million in sales at launch, helping establish Yunji's health-focused brand awareness among consumers. Putting on this success, we will gradually expand the concept from this foundation. Additionally, Yunjiang milk will serve as an important tool for Yunji's expansion, helping us better penetrate the retail market developed through community leaders.

此外,油浆牛奶还将成为云集拓新的重要抓手, 助力我们更好地开拓社区团长的市场。 过去半年,其他大单品表现同样亮眼, Qingran Coffee, sales of over 10 million. Jingqiu Yisheng Jun, sales of nearly 3 million, 7 million. Donggan Sha Ji Fen, Benchao Xiao Ji Gao, etc., sales of more than 5 million yuan. This is in the direction of our organic health strategic layout plus scientific weight loss selection. This is in the direction of the strategic theme of health in China 2030, the national health, high-level integration. Therefore, from a long-term point of view, it has continuity and has a huge development potential. Over the past six months, our other major products have also performed exceptionally well.

Flying Slimming Coffee achieved a sales of over 10 million RMB, Pro by Audius Bowlers reached nearly 7 million RMB, while Freeze Dry Seed Box Thorn Powder and Herbal Sonia Paste and Each generated more than 5 million RMB in sales. These success comes from our organic health strategy and our scientific weight management product selection. Both align closely with the national health agenda, all one in Healthy China 2030, a government initiative that sets long-term goals to improve public health and healthcare by 2030. This marks our approach, sustainable in the long term and holds a tremendous development potential. Moving forward, we will continue to expand our brand influence through an integrated organic health concept and continually optimize our product mix.

树叶的高市价比产品精准契合了当前大环境下消费者的消费意愿。 其采用的大单品匹配高市能的推广组合的策略在市场层面收获了积极的反馈。 博士银树叶精粹水单品首发销售额突破了400万元。 The number of silent users in the next generation is 32%, including Bosnian series, including face cream, water, essence, etc. The sales volume is more than 10 million yuan. In terms of channels and brand introduction, we actively build apartment channels, rebuild Tianmao building, establish cooperation with the head of the company, and expand the delivery business. At the same time, we deep-rooted the number of videos and the content of the video. Currently, the number of videos has sold more than 92% in the same line.

在拓展公寓销售的过程中,我们要持续监控营销费用,不断提升费用的使用效率。 Our beauty brand Suye offers high-value products that align closely with consumer preferences in today's market. Its approach of combining major products with high-impact promotions has achieved positive market feedback. The Suye Pro-Zilin Firming Essence Lotion generated over 4 million RMB in sales and launch, and more than 32 of the buyers being returning dominant users. The entire three-year pro-zeal-in-ferming series, including creams, lotions, and essences, generated sales exceeding 10 million RMB. In terms of the channels and brand development, we are actually expanding public domain channels, upgrading our T-Mall infrastructure, establishing partnerships with top influencers for live streaming sales. and enhancing WeChat channel content. Currently, our WeChat channel transaction volume ranks higher than 92% of our peers. As we expand our public domain sales, we will continue monitoring market expenses and constantly improving cost efficiency.

The new tea business is in the process of reshaping. With the strong growth potential of the tea business and the connection with customers, the goal of building a team of 100 people in the past 100 years has been achieved. The number of people participating in the tea business has remained at 60%. What is more important is that the number of people participating in the tea business has gradually expanded from the existing members to the external high-profile people. Currently, the number of external people developing through the tea business is close to 15%. Our ginseng tea therapy business is currently in an incubation phase.

Thanks to the strong growth potential and customer loyalty of the T therapy program, we successfully reached our goal of building a 100-person T therapist team in the first half of the year, with frequent users maintaining a solid 50% participation rate. More notably, participants in the T therapy program have gradually expanded from existing members to as-known high-net-worth individuals. At present, external members working through the program account for nearly 15% of all participants, creating significant opportunities for further business growth. Meanwhile, the T-Therapy program will help UNG further establish our organic health image and provide quality traffic for our organic health products. In the first half of 2025, over 90% of T-Therapy users purchased our main products, effectively supporting sales of our other

How is the product? How is the product?

The rapid growth of instant retail is posing new challenges for community retail group leaders. Under this trend, community group leaders are more inclined to increase private domain e-commerce and connect with the source suppliers. Therefore, in the future, we will focus on expanding our community group leader channels, placing organic foods in community group leaders' stores. This will not only empower community group leaders, but also allow more people to conveniently enjoy our organic products, ultimately achieving mutual benefits and win-win results.

With that, I will hand over to Ms.

Nan Song, our Senior Financial Director, to go through the financial results.

Thank you, Songli. Hello, everyone. Before I go through our financial results, please note that all numbers stated in the following remarks are in OMB terms, and all comparisons and percentage changes are only year-over-year basis unless otherwise noted. During the first half of 2025, market uncertainties still posed challenges to our operations. Even so, our foundation's position allows us to continue advancing our strategic initiatives. We continue to assess the profitability of both new and existing business lines and make timely adjustments to adapt to shifting market conditions. Ensuring we maintain a leader-like foundation while driving ongoing improvements Now let's take a close look at our foundation. Total revenue were 158.3 million compared to 233.8 million a year ago. Revenues from sales of merchandise were 131.7 million and revenues from our marketplace business were 24.5 million. The changes were primarily due to software-consumed confidence and our ongoing strategy to refine product selection across all categories and optimization of our supply and merchant basis, which affected sales. Despite this challenge, our growth margin remained relatively solid at 47.3%. This was due to sustained customer loyalty towards our product levels and our effective product curation straight-to-the-data efforts. High margin, high retention categories within our integrated portfolio. Now let's take a look at our operating expenses. Fulfillment expenses decreased to £20.6 million from £42.6 million a year ago. This was primarily driven by lower warehousing and logistics costs from reduced merchandise sales. With low personal expenses for staffing, structure, sales and marketing, expenses were $50.1 million compared to $47.5 million a year ago. This was primarily due to high member management space from growing the membership space and increased the personal cost to support expansion into market, partially offset by lower advertising expenses. Technology and content expenses were $15.3 million. Compared to $25.5 million a year ago, the decrease was mainly due to a reduction in personal costs resulting from staffing structure optimization. General and administrative expenses were $93.4 million. Compared to 33.5 million a year ago, the increase was mainly due to a high allowance for credit law fees, partly offset by lower professional service expenses and their personal costs. According to the one-time allowance, J&A expenses decreased by 35.6%, deflecting the loss of our expenses of Total operating expenses in the first half of 2025 were $179.4 million, compared to $149.1 million in the same period of 2024. Loss from operating was $144 million, compared to loss of operating of 32.4 million a year ago. Net loss was 100.7 million. Compared with net loss of 8 million a year ago, well-adjusted net loss was 100.5 million, compared with adjusted net loss of 6.7 million a year ago. Basic and established net loss probability to ordinary shareholders were both 0.05, compared with basic and diluted net income per share of new interest in period of 2024. Turning to recorded as of January 30, 2025, we had a total of $217.1 million in cash, and the cash equivalent expected cash and short-term investment on our balance sheet compared to $242.8 million as of December 31, 2024. Our liquid assets provide adequate coverage for our payable obligations. In addition, we are decorated to marking the master of our working capital and the master managing our assets to best support our operations. During the first half of 2025, we continue to optimize our cost structure while ensuring efficient capital allocation. We remain committed to maintaining financial display and driving improved profitability while supporting long-term sustainable growth. Our continuing focus on loss integration together with our commitment to efficient asset utilization play a key role in achieving this improvement. Looking ahead, we are concerned to continuously improve our growth margin. Aiming to achieve break-even and strengthen our overall financial position with strategic focus, we are well prepared to manage future handover and capture growth opportunities in an evolving market environment. This concludes our prepared remarks for today. Thank you.

That brings us to an end of today's call. Thank you for attending. You may now disconnect.