Yunji Inc.

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to Yungi's second half 2025 earnings conference call. With us today are Mr. Shang-Lu Hsiao, 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 note that this call will contain forward-looking statements and within the meaning of the Private Securities Litigation Reform Act of 1995 that are based solely on the company's current expectations and current market operating conditions and relate to events that involve known or unknown risks, uncertainties, and other factors of Yunji 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 U.S. 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 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-Lu Xiao, Chairman and CEO of Yunji. Please go ahead, sir.

各位投資者,分析師朋友們,大家好。 歡迎參加雲集財報電話會。 感謝大家一直以來的關注和支持。 Hello, everyone, and welcome to雲集's earnings call.

Thank you for your continued interest and support.

雲集始終堅守成為全球有機生活引領者的戰略定位。 在有機健康生活領域精根細作,穩步前行。 2025年下半年,我们持续深化高毛利产品组合策略,稳固客户粘性基本盘,同时积极探索,稳步布局销售渠道拓展工作。接下来,我来为大家介绍一下公司财务表现和战略执行情况。 B&G has remained committed to its strategic positioning of becoming a global leader in organic healthy living while making steady progress in the organic and healthy living market.

In the second half of 2025, we continue to refine our premium product strategy, further strengthen customer loyalty, and actively explore and expand our sales channels. Now let me walk you through the company's financial performance and strategic execution.

In the second half of 2025, the company will achieve a total revenue of RMB1.59 billion. The sales revenue of the product after removing the non-contracted electricity balance of 1.28 billion yuan compared to the rise of 0.16% in the second half of 2024. At the same time, the company's net loss was greatly reduced, from 1.1 billion yuan in the same period in 2024 to 33 million yuan, down to 70%. Behind this is the product strategy, operation, marketing, and financial control. In terms of user operation, the company still maintains a 69.7% high resale rate, In the second half of 2025,

the company achieved a total revenue of around 159 million RMB, excluding the impact of the revenue recognized from long-age incentive payables to inactive vendors. Merchandise sales revenue was 128 million RMB, up 0.16% compared to the second half of 2024. Meanwhile, the company's net loss significantly narrowed from 115 million RMB in the same period of 2024 to 33 million RMB, representing a 70% reduction. This was driven by the combined impact of our product strategy, operational efficiency improvements, and disciplined financial management. In terms of the user operations, the company maintained a high repurchase rate of 69.7%, which not only reflects the user's high recognition of UNG's products and services, but also serves as the core foundation for the company's steady development. These results reflect the growing effectiveness of our displaying the product selection and operational execution with the quality and efficiency of the company's development In the second half of 2025, we firmly continue to cultivate our core business segments and achieve the phased progress.

First of all, we continue to evolve the large health strategy, promote the deep integration of organic foods and large health areas, and create a distinct feature of key co-operative products. We are close to the national large health strategy, accurately digging into the needs of users' health consumption. Therefore, our organic foods and health products continue to gain the trust of consumers. In 2025, the company will have five organic foods and health products, with a sales of over 10 million. Separately, Yangsheng Hu Daza Xie, Jingqiu Yisheng Jun,

First, we continue to advance our health strategy, further integrating organic food within the health sector and building a distinctive portfolio of food and medicine homology products. By closely aligning with China's national health strategy and precisely addressing consumers' health-focused needs, Our organic food and health products have continued to earn the trust of consumers. In 2025, five of the company's organic food and health products each generated sales of over 10 million RMB, including the Yangchun Lake Hairy Crab, the Probiotic Bolus, Light Slimming Coffee, Yunjia Organic Milk, and Bai Yun Shan Free Dried Sea Buckthorn Power.

As consumers continue to increase their recognition and attention to health, we will continue to launch key member series products, such as the gold tea launched in the fourth quarter of 2025. With the core advantage of natural health, it quickly becomes a popular product for users. The product relies on high-quality raw materials and fine-grained pottery to achieve rapid growth in sales while maintaining high horsepower, becoming a new highlight of the health and life business. As consumer awareness and the demand for health and wellness continue to grow, we further expanded our portfolio of food medicine homology products.

One example is in the poly...

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Okay. So one example is the Polygonatin T, which we launched in the fourth quarter of 2025 with its natural and health-focused advantages. the Polygonitin tea quickly became one of our most popular products. Supported by premium ingredients and refined processing techniques, the Zhihua Zun Polygonitin tea achieved rapid sales growth, making it a new highlight within our healthy living business. As of the end of December 2025, sales of this product had exceeded 18 million RMB. In the future, we will continue to enrich the food and medicine homology product categories and further improve the health and wellness product metric to meet users' diversified health consumption needs.

我们为树叶量生打造了支价比的策略,精准适配当下理性消费的趋势,稳步占领市场份额。 树叶深度期和消费者对支价比的核心需求,推出多款明星单品及产品组合。 and has been highly recognized by the market for many years. In 2025, the sales volume of the Suye Jindotai series will increase by 20% in the previous year. The sales volume of the Dami Jemimushi single product will increase by 32% in the previous half of last year. The sales volume of the Bosch Yin series will increase by 26% to 26.2 million yuan from 2070 in 2024. The good performance of Suye has proven the potential of the price-to-value strategy, and has established a solid foundation for the subsequent market expansion.

We developed a tailored value-for-money strategy for Suye closely along with today's more rational consumer spending trends, and this has helped the brand steadily strengthen its market position to meet consumers' core demands for quality products at attractive prices. We have introduced a range of flagship Suye products and product bundles that have been well-recognized in the market over the years. In 2025, sales of a three-year polypeptide series increased by 20% year-over-year, while sales of the direct-cleaning mousse increased by 32% year-over-year. Sales of the prozolane fermi series also increased by 26%, from 20.7 million RMB in 2024 to 26.2 million RMB in 2025. This year's strong performance confirms the forward-thinking nature of our value-for-money strategy and lays a solid foundation for further market expansion.

At the same time, we use our experience services to create a difference-making competitive advantage. We gradually merge from a product sales platform to a product and experience platform, and further improve user contact. We have built a perfect supply chain detection system, allowing users to participate in product quality verification throughout the process, from the origin of the organic to the root of health. to establish a deep brand trust. For example, in October 2025, we held the Baiyueshan Dungan Sake Powder Garden Tour. We organized members to walk into the Qinghai Sake原产区, allowing members to visually witness the whole process of wild sakes from organic planting to healthy processing. This transparent garden mode continues to gain members' trust in the product. The number of members who sign up for the garden activities has steadily increased, attracting more and more members to join.

At the same time, we created and differentiated the competitive advantages through the experience and show services, gradually transforming from a product sales platform into a product plus experience platform, further enhancing user engagement and loyalty. We have created a comprehensive supply chain traceability experience, allowing users to participate in the verification of the product quality throughout the process. Rainforest helps from the source through organic standards and building deep trust in brand. For example, in October 2025, we organized the Baiyun Shan Free Dried Sea Buckthorn Powder Traceability Tool, where we organized members to visit the Qinghai Sea buckthorn production area, allowing members to directly witness the entire process. From organic cultivation to scientific processing of wild seed buckthorn, this transparent traceability model has continually strengthened members' trust in our products. Participation in these traceability programs has grown steadily, attracting an increased number of members.

In addition, we have deepened the experience of the service. We have established a solid foundation for consumers to recognize key-to-key products. from which the key component product layout was introduced. Now, the company's experience service has broadened the whole chain of products, from the quality verification of the front-end supply chain source to the deep interaction of the back-end materials and other services. The design of the whole chain of products experience design not only improves the participation and brand credibility of users, but also builds emotional links between users and platforms. This is also the core competitiveness of our transition from product to experience platform in the future.

In addition, we continue to enhance our T-therapy experience services, laying a solid foundation for broader consumer recognition of the food medicine homology products and supporting the expansion of our offerings in this category. Today, our experience services expand the food product journey from front-end supply chain traceability that validates product quality to back-end interactive services. such as the TSRB. The end-to-end experience design not only enhances user participation and brand trust, but also builds emotional connections between users and the platform. We believe this will serve as a core competitive strength as we continue our transition toward a product plus experience platform.

At the same time as stabilizing core business, we clearly understand that growth is the core theme of corporate development. 2025年下半年,我们在巩固现有用户基础的前提下,积极探索多元化的货客渠道,力求实现增长和效率的平衡,推动公司的可持续发展。 As we continue to strengthen our core business, we remain neatly aware that growth is a constant priority for any company.

In the second half of 2025, while consolidating our existing user base, We actively explore diversity for our customer acquisition channels, seeking to balance growth with efficiency and support the company's sustainable development.

We launched a series of precision operations, which are efficient for all users. For example, at a certain event, we sent an invitation to 50,000 users to apply. Of these, 54.87% of the users successfully applied through the invitation. The generalization of the operation error has brought about an objective activation rate, allowing the commercial value of the storage users to be fully released. In the first hundred years of 2026, we will continue the storage user activation strategy. The focus is to launch a super new third-party exclusive activity, creating exclusive entrances and promoting selected products in the app. Currently, the activity's daily user activity is 25% higher than usual. In addition, we have increased the root depth of the offline channels, We efficiently activated existing users through a series of targeted operational initiatives.

For example, In one campaign, we sent repurchase invitations to over 50,000 dormant users and 44.87% of those users subsequently placed the order on the platform. These targeted initiatives delivered strong activation and conversion results, fully unlocking the commercial value of our existing user base. In the first half of 2026, we extended the existing user activation strategy focusing on launching the Super Wednesday campaign. Through our dedicated entry point in our app, we are featuring a curated selection of the products, and the campaign has already driven a 25% increase in daily active users compared with normal days. In addition, we put greater emphasis on expanding our offline channels In 2025, we entered nine new cities through our local delivery model and added more than 4,000 new community leaders. These community leaders helped us attract a large number of high-loyalty, high-value quality users, accumulating valuable user assets for the company's long-term development.

各位朋友们,回顾2025年下半年,我们步履坚实,展望2026年上半年,我们目标清晰。 As we look back on the second half of 2025, we made steady and solid progress.

Looking ahead to the first half of 2026, our priorities are clear, In the year ahead, ING will remain committed to its strategic positioning as a global leader in organic living, with products and appearances serving as our dual growth engines and with efficiency and growth as our core priorities.

We will continue to contribute to the healthier and more organic lifestyles for families in China.

This concludes my prepared remarks for today. With that, I will hand it over to Mr. Song Lin, our Senior Financial Director, to go through the financial results.

Thank you, Song Lin. Hello, everyone. Before I go through our financial results, please note that all numbers stated in the following remarks are in Army terms. and all comparisons and percentage changes are our year-over-year basis on life advice logic. Throughout 2025, we operate in a challenging and uncertain market environment, nevertheless supported by our resilient financial position. They continue to advise our strategic priorities over curated premiums, but talk to our users while remaining disciplined in cost management and making timely adjustments to adapt to dynamic market conditions. Now let's take a closer look at our second half 2025 financials. Total revenues were 158.7 million compared to 183.8 million a year ago. Revenues from sales of merchandise were $136.4 million. The fifth figure encroached the impact from the revenues recognition of large and insensitive syllables to inactive members. Including this impact, our measured sales grew by 0.16% compared to the same period of reflecting the health growth of our core business and demonstrating the effectiveness of our strategic focus on organic health products and the product labels. Revenues from our marketplace business were $22.1 million. The change in total revenues was primarily driven by our deliberate decision to scale back the marketplace business While refining our product offering across all categories and optimizing our selection of suppliers and merchants, G-Stage moves the demand to strengthen our market position for sustainable growth. On the cost side, total cost of revenues increased by 3% to RMB $92.7 million, primarily due to the high merchandise sales, which are recognized on our growth basis. Our growth margin remained resilient during that period. This was supported by strong customers' loyalty to our provided label products. Together with our effective product curation strategy, which focuses on selecting and promoting premium high retaining categories across our integrated portfolio. Now let's take a look at our operating expenses in the second half of 2025. Fulfillment expenses decreased to $13.3 million from $33.6 million a year ago. The decrease was primarily due to lower personal costs, driven by a more optimized Allocation of staffing resources. Sales and marketing expenses were $42.6 million compared to $49.5 million a year ago. The change is primarily due to our fished-over promotional efforts from online to offline channels and provide normal initiatives reflecting our agile marketing approach that dynamically allocation resources based on market conditions and the customer's engagement effectiveness. Technology and content expenses was $13 million compared to $28.1 million a year ago. This was mainly due to the reduction in personal cost as a lot of staffing structure, refinement, general and The administrative expense decreased to $33.5 million from $96.9 million a year ago. The decrease was mainly driven by lower impairment charges on high-level assets other than goodwill, a loss for credit losses, and reduced personal costs resulting from a reduction in hand-cut. Our expense is subjective. Optimization demonstrated the effectiveness of our refined management approach, while we strategically invested in sales and marketing for offline China development, a key component of our customers. Acquisitionly strategic, we achieved significant reduction across other expensive categories As a result, total operation expenses in the second half of 2025 decreased to $112.4 million from $200.1 million in the prior year period. A 44% reduction correspondingly lost from operations narrowed significantly to $43 million from $103.9 million a year ago. This discipline extends the management's flexibility, continuous improvement in operating efficiency, and our progress towards profitability. Net loss was $32.6 million compared with $115.1 million a year ago, while adjusted net loss was $32.5 million compared with 114 million in the prior year period. The continued narrowing of losses reflects the stressing of our strategic focus on organic health and our health effect of offering bad experience to our users rather than simply operating as a e-commerce transaction platform. Basic and diluted net loss per share attributed to ordinary shareholds were both narrowed to 0.02 from 0.06 in the same period of 2024, turning to equitably as of December 31, 2025, We had a total of $216.1 million in cash and cash adjustment and short-term investment on our balance sheet. Compared to $242.8 million as of December 31, 2024, our liquid assets remained sufficient to cover our payable obligations At the same time, we continue to focus on optimizing, waking, capture, and managing our efforts efficiently to support our operations. To summarize, in 2025, this benchmark overview may market growth, cautious consumer sentiment, and increasingly selective spending behavior. We continue to deliver study improvement in our professional performance, reflecting the resilience of our business, as well as the effectiveness of our disciplined product selecting and operational execution. Our solid financial position continues to support our long-term strategic priorities while our continued focus on resource integration and efficient asset utilization has played an important role in driving this improvement. Looking forward, we will remain focused on progress toward break-even and future strengthening our operating financial position while preserving the flexibility to navigate to an dynamic and market environment to support sustainable long-term growth. This concludes our prepared remarks for today. Thank you.

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