ATRenew Inc.

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to the AT Renew Inc's second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. We will be hosting question and answer session after management's prepared remarks. Please note, today's event is being recorded. I'll now turn the call over to the first speaker today, Mr. Jeremy Gee, Director of Corporate Development, and investor relations of the company. Please go ahead, sir.

Thank you. Hello, everyone, and welcome to HRE News second quarter 2025 earnings conference call. Speaking first today is Kerry Chen, our founder, chairman, and CEO, and he'll be followed by Rex Chen, our CFO. After that, we'll open the call to questions from the analysts. The second quarter of 2025 financial results were released early today. The earnings press release and investor slides accompanying this call are now available at our IR website, ir.aqa.com. There will also be a transcript following this call for your early convenience. For today's agenda, Harry will share his thoughts over our quarterly performance and business updates, followed by Rex, who will address the financial highlights. Both Carrie and Rex will participate during the Q&A session. Please note that our safe harbor statements. Some of the information you hear during our discussion today will consist of forward-looking statements, and I refer you to our safe harbor statements in the earliest press release. Any forward-looking statements that the management makes on this call are based on assumptions as of today. and that AT Renew does not take any obligations to upgrade our assumptions on these statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings press release, which contains a reconciliation from non-GAAP measures to GAAP measures. Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB, and all comparisons are on a year-over-year basis. I'd now like to turn the call over to Kerry for business and strategy updates.

Hello, investors and analysts. Welcome to the second quarter of the WanWu Xingsheng Group in 2025. I'm very happy to be here. Hello, investors and analysts. Welcome to the second quarter of the WanWu Xingsheng Group in 2025. 我们非常高兴与各位更新二季度预期达成的收入增长和经营动态, 并回应各位对于集团经济发展的关注。 我们还会对下半年的业务布局以及能力建设进行一些分享。 Hello everyone, and thank you for joining HRE News second quarter 2025 earnings conference call.

We are pleased to update you on our above expectation revenue growth and operational dynamics this quarter. address your questions on the progress and share our business plans and capability building initiatives for the second half of this year.

首先,我们在二手行业稳定快速发展的轨道上, 通过持续的创新领跑行业的发展, 实现了超出指引区间高端的收入。 奥基路集团总收入达49.9亿元人民币, 同比增长32.2%。 One batch of product revenue increased by 34% to 45.6 billion yuan. Three batches of service revenue increased by 15.4% to 4.3 billion yuan. The revenue has exceeded the expected expectation of 300 million in the previous quarter. Nungap's operating profit rate is 2.4%. In the context of increasing brand investment, accelerating opening up, and strengthening the construction of various capabilities, First, riding the stable and rapidly growing trajectory of the second-hand industry,

We achieved revenue exceeding the high end of our guidance through continuous innovation and industry leadership. In the second quarter, our total revenue reached 4.99 billion RMB, representing year-over-year growth of 32.2%. Within this, 1P product revenue grew by 34% year-over-year to 4.56 billion RMB, while 3P service revenue increased by 15.4% year-over-year to 430 million RMB. with revenue growth rates significantly exceeding the guidance we set last quarter. NAMGAP operating profit margin was 2.4%, meeting our full-year target alongside brand investment, accelerated store expansion, and enhanced capability-building initiatives. These solid results stem from our enhanced front-end development of recycling scenarios and continuously strengthened in-store and doorstep fulfillment capabilities. Through the best-in-class user experience, AHS Recycle is building stronger brand recognition as China's top recycling brand.

具体来看,一批业务中得益于国补与618电商大厝, 以及我们和更多优质的消费电子锦牌官方渠道 共建了回收和已旧换新的供应链能力。 CDB回收业绩在二季度保持了快速的双位数增长, 尤其是在京东已旧换新场景看到了颇为亮点的孔碧珍。

Taking a closer look, within our 1P business, our C2V recycling business maintained robust double-digit growth in the second quarter, benefiting from national subsidies and during the 18th e-commerce promotional campaigns, alongside expanded partnerships with high-quality consumer electronics brands to jointly develop recycling and trading supply chain capabilities. Notably, we observed a distinctive year-over-year growth performance in JD's trading scenarios.

The achievement of the recovery performance is also closely related to the delivery capability of our front end. We firmly implement the goal of accelerating the opening of stores. As of the end of the second quarter, the total number of stores that love to recover in the country reached 2,092 stores, including 987 self-serviced stores in the first and second-tier cities and 1,105 joint stores in the low-mid-tier cities, which are convenient for users to deliver to the store. In addition, As a result, our channel expansion and delivery ability construction has created a better recovery and long-term change experience for users.

The resulting achievement is closely tied to our front-end fulfillment capabilities. We remain committed to our accelerated store expansion strategy. By the end of the second quarter, we operated 2,092 AHS stores nationwide, including 987 self-operated stores in Tier 1 and Tier 2 cities and 1,105 jointly-operated stores in lower-tier cities. enabling users to access nearby in-store services in a convenient manner. Additionally, our self-operated two-door service team expanded to 1,160 personnel at the end of the second quarter. Benefiting from our intelligent order dispatch and fulfillment capabilities, we have broadened our coverage area and strengthened our capacity to manage volume surges during major promotional periods while enhancing fulfillment timeliness. Consequently, our channel expansion and fulfillment capability upgrades collectively create superior recycling and trading experiences for users.

值得一提的是,我们的门店和上门交付团队共同承接了一二线城市近90%的订单量, 在三线城市承接了近80%的订单量。 我们持续通过自主可控的交付网络建设提升面对面交付, Mostly, our in-store and two-door teams collectively handle nearly 90% of orders in the first and second tier cities.

and about 80% in the third and fourth tier cities. We continuously increase the proportion of orders with face-to-face services, order confirmation and payment by expanding our self-operated fulfillment network, therefore enhancing user experience. In lower tier cities, temporary constraints in store density and two-door staffing limited our face-to-face fulfillment order ratio to below 50%. leaving significant room for store expansion, two-door capability building.

在二季度新增笔记本和智能手表品类, 单季度的GMV突破1亿元。 In terms of our supply chain capabilities,

We continue leveraging the mature end-to-end capabilities while expanding combined refurbishment capacity. In the second quarter, refurbished products contributed 13.5% of 1P revenue. Notably, our on-demand refurbishment model added laptops and smartwatches to its scope, generating over 100 million RMB GMV in the quarter. Compliant refurbishment operations expand retail-ready products for our channels such as PiPi selection, AHS official website, AHS store, and Zouyin platforms. Consequently, 1P2C retail revenue surged 63.7% year-over-year in the second quarter, accounting for 34.4% of product revenue. This continuous improvement reflects our value creation for more retail users.

我们的3P平台业务收入在二季度也取得了有效的增长。

Our 3P service revenue also sustained growth in the second quarter, increasing by 15.4% year-over-year with an overall take rate of 5.3%. Let's zoom in on the three core business segments. C.

B2B Tai Chi Tang strengthens industry openness and provides open supply chain services for platform merchants and Douyin users. Among them, the entry-level self-improvement of Tai Chi Tang platform has increased significantly. The entry-level self-improvement ratio of B2B platform business has increased from 62% in the first quarter of 2024 to 73% in the second quarter of 2025. First, our B2B marketplace, Paiji Tang, sustained a strengthened industry openness by providing open supply chain services to merchants and Douyin users.

Specifically, warehousing inspection GMV search year-on-year, increasing the warehousing inspection penetration rate for B2B platform operations from 62% in the first quarter of 2024 to 73% in the second quarter of 2025. Meanwhile, we also capture new user traffic and growth opportunities through the innovative specialty buyer model with cumulative registered users exceeding 1.16 million In the second quarter, Pai Ji Tang achieved robust double-digit growth in overall performance.

第二,在B2C派派的平台业务发展中,我们此前分享过,为中小二手商家提供更多运营便利的寄卖模式, 即由派派团队为商家进行商品和店铺的管理流量的运营以及售后等服务。 寄卖模式下,前台展示一致,服务标准一致。 For more users to achieve high-quality and cost-effective second-hand goods,

Second, our B2C marketplace in developing PiPi's 3P business. As we previously shared, we have implemented a consignment model designed to provide enhanced operational convenience for small and medium-sized second-hand merchants. Under this model, the PiPi team handles product and store management, traffic operations, and after-sales services on behalf of merchant users. This consignment approach ensures consistent front-end product lifting standardized service quality, managed product quality, and reliable after-sales support, resulting in comprehensive improvements to both sales performance and user experience. Daily in-stock inventory volumes of Pi Pi Consignment service have now increased by 100% compared to the first quarter of this year. Pi Pi's Consignment GNV in the second quarter surged 128% year-over-year, driving a modest recovery in the platform's take rate, and delivering cost-effective second-hand product transactions to a broader user base.

第三,多品内回收业务的GMV与相关服务收入 在本季度均实现了接近110%的同比增长 收费率3.4% 服务能力随着我们加速开店的战略进一步拓展 截止6月末已有692家 We have upgraded the product recovery service, combined with AI technology applications, improved product automatic recognition ability, comprehensively improved user recovery experience and price experience, and created the best user experience in the industry.

Third, take care to recycling GNV and related service revenue both increased by nearly 110% year-on-year this quarter, with a take rate of 3.4%. Service coverage expanded alongside our accelerated store opening strategy. As of June 30th, 692 self-operated stores and 112 jointly operated stores launched multicultural resecting services, tailoring offerings to local user consumption habits based on store locations and commercial districts. Building on our upgraded luxury resecting services at AHS self-operated stores, we leverage AI technology to enhance automated identification capabilities to improve the resecting and pricing experiences for users. thus defining a best-in-class user experience. Our platform-based multi-category recycling service boosts local store efficiency without additional keypacks, enabling further expansion of our high-quality offline store network.

以上是我们在运营层面行之有效的实践。 对于集团的长期战略,我们在7月初举办了一次线下调研交流, The aforementioned reflects our effective operational practices.

As for our long-term strategy, we would like to take this earnest call as an opportunity to update our investors and analysts on H-Renew's three strategic goals, which we last spoke on during our Offline Investor Day in early July.

In the context of domestic supply and policy promotion and internal demand consumption, we use unique change scene values and comprehensive supply chain capabilities and strategic partners such as Jindong and Apple to create the best rescue and change experience for users. Through the comprehensive supply chain capabilities of fusion QC, QB, and hybrid transformation, The first goal, against the backdrop of national subsidies and policies stimulating domestic consumption,

we leverage the value of our unique trading programs and comprehensive supply chain capabilities to partner with strategic allies such as JD.com and Apple, delivering the best-in-class trading user experience. By integrating our comprehensive supply chain capabilities across B2C, B2B, and compliant refurbishment operations, AT&T Renew continues to strengthen our positioned as China's largest and most robust leader in the transaction and service of pre-owned consumer electronics. According to third-party data from CIC, China's resecting penetration rate for pre-owned consumer electronics remains in single digit, versus over 30% in developed economies, indicating substantial growth potential.

第二个目标,在居民消费环境发生变化的背景之下, The second goal, in response to the changing consumer landscape, we leverage AAC

AHS recycles distinctive brand value and utilizes our nationwide network of over 2,000 AHS stores to continuously expand our platform-based recycling businesses across additional high-value product categories. This strategy creates new growth opportunities for us in the second-hand recycling market, and we are committed to establishing AHS Recycle as China's top recycling brand.

Third goal. 在绿色消费大潮兴起的背景之下,我们将发挥独特的商业模式优势, 结合商场加社区的独特线下场景能力, 将低频高值场景的商业变现与高频低值场景的用户获取形成闭环, 致力于成为绿色消费模式的创新典范。 Moving up to the third goal, capitalizing on the surging momentum of rain consumption,

We will leverage our unique business model advantage, combined with our distinctive zero-track offline presence, spanning both shopping malls and communities. This positioning enables us to create a closed-loop ecosystem that seamlessly integrates commercial monetization and user acquisition across both low-frequency high-value and high-frequency low-value transactions, reinforcing our commitment to becoming a pioneer of sustainable consumption.

One thing worth emphasizing is that almost all business models allow users to take money from wallets, but the second recovery business model is to fill the wallet of the user. This is a very unique business model. On August 1, the second recovery green wallet product has been launched. Because of the green behavior of the user, users can buy more and more products here with extremely high discount benefits. 我们将通过与更多的消费品牌 联名推广环保回收与绿色消费 让越来越多的用户参与进来 真正让回收和绿色消费成为新时尚 这是我们更加长远的目标 也是爱回收的使命 让闲置不用都物尽其用的价值体现 I'd like to point out that all business models take money from their accounts

while AHS Recycle adds money to our users' accounts. Our business model is unique and disruptive. On August 1st, we launched the AHS Recycle Green Wallet, enabling users to purchase a growing range of products at surprise discounts in recognition of their eco-friendly actions. Through co-branded partnerships with consumer brands, we promote eco-friendly recycling and green consumption engage an increasing number of users, and set a new trend of genuine new lifestyle. This represents our long-term vision and embodies our mission to give a second life to all idol groups.

以上三个目标是我们践行长期使命的方向规划, 也是支持业绩加速发展的战略基础。 我们在今年年初曾经判断, 今年具有国家手机数码产品已就换新, 所以说在年初的预算中,判断今年的收入增长会不降反升,略快于去年收入的同比增速,进入三季度我们对达成全年经营目标保持充分的信心。

These three strategic goals represent our roadmap for fulfilling our long-term commitments and form the fundamental strategy driving accelerated business growth. Earlier this year, we identified emerging opportunities from national trading subsidies from consumer electronics alongside the expanding secondhand market. Accordingly, our initial guidance estimated that this year's revenue growth will not only sustain its momentum but accelerate further slightly surpassing last year's growth. As we enter the third quarter, we have strong confidence in meeting our full-year operational objectives.

出于对集团业绩的充分信心, 我们欣然宣布一项三年期的股东回报计划。 在2025年至2027年, 将集团年度LandGap净利润不低于60%的比例返还给股东。

Based on strong confidence in our performance, we are pleased to announce a three-year shareholder return program committing to return no less than 60% of our annual non-GAAP net profit to shareholders via dividends, share repurchases, or a combination of both from 2025 through 2027.

最后,补充一个 ESG dynamic. In June this year, we released the fifth annual ESG report and set the first target of carbon emissions, which is based on the year 2024. The goal is to reduce the greenhouse gas emission intensity of area 1 and area 2 by 35% in 2030, and to reduce the emission intensity of area 3 by 50%. Regarding other ESG highlights and efficiency improvements, One more thing, our ESG progress.

In June this year, we released our fifth annual ESG report, marking a significant milestone with our first carbon reduction commitment. Using 2024 as our baseline year, we have set ambitious targets to reduce scope 1 and scope 2 greenhouse gas emission intensity by 35% and scope 3 emission intensity by 50%. You are more than welcome to explore more about our ESG highlights and improvements from the full report, which is available on our investor relations website. 下面请CFO Rex对财务数据进行解读。 Now I'd like to turn the call over to CFO Rex for financial updates.

各位投资者和分析师大家好,我们很高兴与各位分享2025年第二季度取得强劲的财务表现。 Hello everyone, we are pleased to report strong financial performance in the second quarter of 2025.

As national trading subsidies for consumer electronics fueled by market growth, We witnessed a surge in the demand for used device recycling and trade-in, enabling us to capture accelerated opportunities through high-precision trade-in services, upgraded fulfillment capabilities, and a stronger AHS recycle brand.

第二季度,营收再次超过指引高端,突破49.9亿元,同比增长32.2%。

Total revenue in the second quarter once again surpassed the high end of our guidance, increasing by 32.2% to over 4,990 million RMB, and adjusted operating income was over 120 million RMB, compared to adjusted operating income of 94.1 million RMB in the same period of 2024. 在解读财务数据之前,请注意,除非另有说明,所有金额均以人民币为单位,所有增数数据均为同比。 Before taking a detailed look at the financials, please note that all amounts are in RMB and all comparisons are on a year-over-year basis as otherwise stated.

第二季度,集团总收入的增长动力主要来自产品收入的持续文件增长。

In the second quarter, the growth of total revenues was primarily driven by continued growth in both our net product revenue and net service revenues. Net product revenues increased by 34% to 4,560 million, largely attributable to the growth in online sales of pre-owned consumer electronics.

In the second quarter, the service income was 4.3 billion yuan, with a growth of 15.4%. This is mainly due to the increase in service income contributed by the multi-level recovery business in the platform model. In the second quarter, the comprehensive fee rate of the platform was 5.3%, which is slightly higher than the stable price. During this period, the multi-level recovery business contributed more than 63 million yuan of service income, with a growth of 14.7% in this quarter, showing a healthy growth trend.

Net service revenues were $430 million in the second quarter, representing an increase of 15.4%. The increase was largely driven by the growth in service revenue from our 3P multi-category recycling operations. The overall take rate of our marketplace was 5.3% for the second quarter of 2025, up slightly year-over-year and quarter-over-quarter. During the quarter, our multi-category recycling business contributed over 63 million of revenue, accounting for 14.7% of service revenues and representing a healthy upward trend.

在运营费用方面,我们主要讨论能gap口径的费用分析,以展示管理团队视角的费用趋势。 关于gap和能gap口径之间的调整,请参考我们的财务报告与成交给美国证券交易委员会的6K表格。 Now, let's discuss our operating expenses.

To provide greater clarity on the trends in our actual operating-based expenses, we will mainly discuss our non-GAAP operating expenses, which better reflect how management views our operating results. The reconciliations of GAAP and non-GAAP results are available in our earnest release and the corresponding form 6K furnished with the US SEC.

商品成本增加32.3%至39.6億元, 與產品銷售的增長一致。 我們一批業務的毛利率為13.2%, And last year, the same period was 12.1%. The improvement of EP2C is mainly due to our performance, C2B recovery scene, the standardization capability in the supply chain, the diversified selection of retail channels, and the increase in the ratio of higher 2C retail. In the second quarter, the ratio of EP2C and the retail income in the product income reached 34.4%. Last year, the same period was 28.2%. At the same time, Apple officially requested a new business. Merchandise costs increased by 32.3% to 3,960 million, in line with the growth in product sales.

Growth profit margin for our 1T business was 13.2%, compared with 12.1% in the same period last year. The growth margin improvement in our 1P business was primarily driven by high-efficiency C2B recycling scenarios, compliant refurbishment capabilities incorporated in our supply chain, and an increasingly diversified retail channel mix. This allows us to increase the proportion of higher margin retail sales, with 1P2C revenue accounting for 34.4% of product revenue in the second quarter of 2025, up from 28.2% in the same period last year. Additionally, the high base impact from Apple's trading program in 2024 has eased, with a significantly improved growth margin in this segment through better pricing strategies.

履约费用增长26%至4.1亿元,能盖配履约费用增长27.3%至4.1亿元。 能盖配履约费用增长主要原因有,一, Fulfillment expenses increased by 26% to 410 million.

Non-GAAP fulfillment expenses increased by 27.3% to 410 million. Under the non-GAAP measures, The increase was mainly driven by higher personnel and logistics expenses, reflecting a greater volume of restructuring and transaction activities compared to the same period in 2004. Additionally, operation-related costs rose as we expanded our store network and enhanced operation center capacity in the second quarter of 2005. Nangat fulfillment expenses as a percentage of total revenues decreased to 8.2% from 8.5%.

Selling and marketing expenses increased by 14.9% to $410 million.

Non-GAAP selling and marketing expenses increased by 36.7% to $390 million. The increase was primarily driven by higher advertising and promotional campaign-related spending, as well as an uptick in commission expenses associated with channel service fees. As a result, non-GAAP selling and marketing expenses as a percentage of total revenues increased to 7.8% from 7.5%.

General and administrative expenses increased by 6.9% to 77.5 million.

Land-gap G&A expenses also increased by 33.6% to 75.1 million. primarily due to an increase in personnel costs. Land-gap G&A expenses as a percentage of total revenues remain stable at 1.5%.

Technology and content expenses increased by 25.5% to 62.5 million

Non-GAAP technology and content expenses increased by 33.2% to 58.2 million as well. The increase was primarily driven by elevated personnel expenses. Non-GAAP technology and content expenses as a percentage of total revenues remained stable at 1.2%.

利润层面第二季度的能改进利润超1.2亿元。

As a result, our Nangat operating income was over 120 million in the second quarter of 2025, compared to Nangat operating income of 94.1 million in the second quarter of 2024. Nangat operating profit margin was 2.4% for this quarter, compared to 2.5% in the second quarter of 2024, representing a modest decline of six basis points. The margin stabilized at 2.4% compared to the previous quarter.

During the second quarter,

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to the AT Renew Inc's second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. We will be hosting question and answer session after management's prepared remarks. Please note, today's event is being recorded. I'll now turn the call over to the first speaker today, Mr. Jeremy Gee, Director of Corporate Development and investor relations of the company. Please go ahead, sir.

Thank you. Hello, everyone, and welcome to HRE News second quarter 2025 earnings conference call. Speaking first today is Kerry Chen, our founder, chairman, and CEO, and he'll be followed by Rex Chen, our CFO. After that, we'll open the call to questions from the analysts. The second quarter 2025 financial results were released early today. The earnings press release and investor slides accompanying this call are now available at our IR website, ir.aqa.com. There will also be a transcript following this call for your early convenience. For today's agenda, Harry will share his thoughts on our quarterly performance and business updates, followed by Rex, who will address the financial highlights. Both Carrie and Rex will participate during the Q&A session. Please note that our safe harbor statements. Some of the information you hear during our discussion today will consist of forward-looking statements, and I refer you to our safe harbor statements in the earliest press release. Any forward-looking statements that the management makes on this call are based on assumptions as of today. and that AT Renew does not take any obligations to upgrade our assumptions on these statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings press release, which contains a reconciliation from non-GAAP measures to GAAP measures. Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB, and all comparisons are on a year-over-year basis. And now I'd like to turn the call over to Kerry for business and strategy updates.

Hello, investors and analysts. Welcome to the second quarter of the World Trade Organization Group's second quarter of the World Trade Organization Group's second quarter of the World Trade Organization Group's second quarter of the World Trade Organization Group's second quarter of the 我们非常高兴与各位更新二季度超预期达成的收入增长和经营动态, 并回应各位对于集团经济发展的关注。 我们还会对下半年的业务布局以及能力建设进行一些分享。 Hello everyone, and thank you for joining HRE News second quarter 2025 earnings conference call.

We are pleased to update you on our above expectation revenue growth and operational dynamics this quarter. address your questions on the progress and share our business plans and capability building initiatives for the second half of this year.

首先,我们在二手行业稳定快速发展的轨道上, 通过持续的创新领跑行业的发展, 实现了超出指引区间高端的收入。 奥基路集团总收入达49.9亿元人民币, 同比增长32.2%。 One batch of product revenue increased by 34% to 45.6 billion yuan. Three batches of service revenue increased by 15.4% to 4.3 billion yuan. The revenue has exceeded the expected expectation of 300 million in the previous quarter. Nungap's operating profit rate is 2.4%. In the context of increasing brand investment, accelerating opening up, and strengthening the construction of various capabilities, First, riding the stable and rapidly growing trajectory of the second-hand industry,

We achieved revenue exceeding the high end of our guidance through continuous innovation and industry leadership. In the second quarter, our total revenue reached 4.99 billion RMB, representing year-over-year growth of 32.2%. Within this, 1P product revenue grew by 34% year-over-year to 4.56 billion RMB, while 3P service revenue increased by 15.4% year-over-year to 430 million RMB. with revenue growth rates significantly exceeding the guidance we set last quarter. NAMGAP operating profit margin was 2.4%, meeting our full-year target alongside brand investment, accelerated store expansion, and enhanced capability-building initiatives. These solid results stem from our enhanced front-end development of recycling scenarios and continuously strengthened in-store and doorstep fulfillment capabilities. Through the best-in-class user experience, AHS Recycle is building stronger brand recognition as China's top recycling brand.

具体来看,一批业务中得益于国补与618电商大厝, 以及我们和更多优质的消费电子锦牌官方渠道 共建了回收和已旧换新的供应链能力。 CDV回收业绩在二季度保持了快速的双位数增长, 尤其是在京东已旧换新场景看到了颇为亮点的孔碧珍。

Taking a closer look, within our 1P business, our C2V recycling business maintained robust double-digit growth in the second quarter, benefiting from national subsidies and during the 18th e-commerce promotional campaigns, alongside expanded partnerships with high-quality consumer electronics brands to jointly develop recycling and trading supply chain capabilities. Notably, we observed a distinctive year-over-year growth performance in JD's trading scenarios.

The achievement of the recovery performance is also closely related to the delivery capability of our front end. We firmly implement the goal of accelerating the opening of stores. As of the end of the second quarter, the total number of stores that love to recover in the country reached 2,092 stores, including 987 self-serviced stores in the first and second-tier cities and 1,105 joint stores in the low-mid-tier cities, which are convenient for users to deliver to the store. In addition, As a result, our channel expansion and delivery ability construction has created a better recovery and long-term change experience for users.

The resulting achievement is closely tied to our front-end fulfillment capabilities. We remain committed to our accelerated store expansion strategy. By the end of the second quarter, we operated 2,092 AHS stores nationwide, including 987 self-operated stores in Tier 1 and Tier 2 cities and 1,105 jointly-operated stores in lower-tier cities. enabling users to access nearby in-store services in a convenient manner. Additionally, our self-operated two-door service team expanded to 1,160 personnel at the end of the second quarter. Benefiting from our intelligent order dispatch and fulfillment capabilities, we have broadened our coverage area and strengthened our capacity to manage volume surges during major promotional periods while enhancing fulfillment timeliness. Consequently, our channel expansion and fulfillment capability upgrades collectively create superior recycling and trading experiences for users.

值得一提的是,我们的门店和上门交付团队共同承接了一二线城市近90%的订单量, 在三线城市承接了近80%的订单量。 我们持续通过自主可控的交付网络建设提升面对面交付, Mostly, our in-store and two-door teams collectively handle nearly 90% of orders in the first and second tier cities.

and about 80% in the third and fourth tier cities. We continuously increase the proportion of orders with face-to-face services, order confirmation and payment by expanding our self-operated fulfillment network, therefore enhancing user experience. In lower tier cities, temporary constraints in store density and two-door staffing limited our face-to-face fulfillment order ratio to below 50%. leaving significant room for store expansion and two-door capability building.

在工艺链方面,我们持续发挥成熟的端到端能力, 进一步发挥合规翻新整备能力。 二季度合规翻新在EP中的收入占比进一步提升到13.5%, 其中以销定修在二季度新增笔记本和智能手表品类单季度的GMV突破1亿元。 In terms of our supply chain capabilities,

We continue leveraging the mature end-to-end capabilities while expanding compliant refurbishment capacity. In the second quarter, refurbished products contributed 13.5% of 1P revenue. Notably, our on-demand refurbishment model added laptops and smartwatches to its scope, generating over 100 million RMB GMV in the quarter. Compliant refurbishment operations expand retail-ready products for our channels such as PiPi Selection, AHS Official Website, AHS Store, and Douyin platforms. Consequently, 1P2C retail revenue surged 63.7% year-over-year in the second quarter, accounting for 34.4% of product revenue. This continuous improvement reflects our value creation for more retail users.

我们的3P平台业务收入在二季度也取得了有效的增长,

Our 3P service revenue also sustained growth in the second quarter, increasing by 15.4% year-over-year with an overall take rate of 5.3%. Let's zoom in on the three core business segments. C.

B2B Tai Chi Tang strengthens industry openness and provides open supply chain services for platform merchants and Douyin users. Among them, the entry-level self-improvement of Tai Chi Tang platform has increased significantly. The entry-level self-improvement ratio of B2B platform business has increased from 62% in the first quarter of 2024 to 73% in the second quarter of 2025. First, our B2B marketplace, Paiji Tang, sustained a strengthened industry openness by providing open supply chain services to merchants and built-in users.

Specifically, warehousing inspection GMV search year-on-year, increasing the warehousing inspection penetration rate for B2B platform operations from 62% in the first quarter of 2024 to 73% in the second quarter of 2025. Meanwhile, we also capture new user traffic and growth opportunities through the innovative specialty buyer model with cumulative registered users exceeding 1.16 million In the second quarter, Pai Ji Tang achieved robust double-digit growth in overall performance.

第二,在B2C PiPi的平台业务发展中,我们此前分享过,为中小、二手商家提供更多运营便利的寄卖模式, 即由PiPi团队为商家进行商品和店铺的管理流量的运营以及售后等服务。 寄卖模式下,前台展示一致,服务标准一致。 For more users to achieve high-quality and cost-effective second-hand goods,

Second, our B2C marketplace in developing PiPi's 3P business. As we previously shared, we have implemented a consignment model designed to provide enhanced operational convenience for small and medium-sized second-hand merchants. Under this model, the PiPi team handles product and store management, traffic operations, and after-sales services on behalf of merchant users. This consignment approach ensures consistent front-end product listing standardized service quality, managed product quality, and reliable after-sales support, resulting in comprehensive improvements to both sales performance and user experience. Daily in-stock inventory volumes of Pi Pi Consignment service have now increased by 100% compared to the first quarter of this year. Pi Pi's Consignment GNV in the second quarter surged 128% year-over-year, driving a modest recovery in the platform's take rates, and delivering cost-effective second-hand product transactions to a broader user base.

第三,多品内回收业务的GMV与相关服务收入 在本季度均实现了接近110%的同比增长 收费率3.4% 服务能力随着我们加速开店的战略进一步拓展 截止6月末已有692家 We have upgraded the product recovery service, combined with AI technology applications, improved product automatic recognition ability, and comprehensively improved user recovery experience and price experience, creating the best user experience in the industry.

Third, take care to recycling GNV and related service revenue both increased by nearly 110% year-on-year this quarter, with a take rate of 3.4%. Service coverage expanded alongside our accelerated store opening strategy. As of June 30th, 692 self-operated stores and 112 jointly operated stores launched multicultural resecting services, tailoring offerings to local user consumption habits based on store locations and commercial districts. Building on our upgraded luxury resecting services at AHS self-operated stores, we leverage AI technology to enhance automated identification capabilities to improve the resecting and pricing experiences for users. thus defining a best-in-class user experience. Our platform-based multi-category recycling service boosts local store efficiency without additional keypacks, enabling further expansion of our high-quality offline store network.

以上是我们在运营层面行之有效的实践。 对于集团的长期战略,我们在7月初举办了一次线下调研交流, The aforementioned reflects our effective operational practices.

As for our long-term strategy, we would like to take this earnest call as an opportunity to update our investors and analysts on H-Renew's three strategic goals, which we last spoke on during our Offline Investor Day in early July.

In the context of domestic supply and policy promotion and internal demand consumption, we use unique change scene values and comprehensive supply chain capabilities and strategic partners such as Jindong and Apple to create the best rescue and change experience for users. By integrating the comprehensive supply chain capabilities of QC, QB and Heguifanxin, The first goal, against the backdrop of national subsidies and policies stimulating domestic consumption,

we leverage the value of our unique trading programs and comprehensive supply chain capabilities to partner with strategic allies such as JD.com and Apple, delivering the best-in-class trading user experience. By integrating our comprehensive supply chain capabilities across B2C, B2B, and compliant refurbishment operations, AT&T Renew continues to strengthen our positioned as China's largest and most robust leader in the transaction and service of pre-owned consumer electronics. According to third-party data from CIC, China's recycling penetration rate for pre-owned consumer electronics remains in single digit, versus over 30% in developed economies, indicating substantial growth potential.

第二个目标,在居民消费环境发生变化的背景之下, 我们以爱回收独特的品牌价值, 付用全国超过2000家以上的爱回收门店资源, 持续以平台模式探索更多高值品类商品的回收业务, 在二手回收领域开辟增长新路径, 致力于将爱回收打造成为国民第一回收品牌。 The second goal, in response to the changing consumer landscape, we leverage AIS

AHS recycles distinctive brand value and utilizes our nationwide network of over 2,000 AHS stores to continuously expand our platform-based recycling businesses across additional high-value product categories. This strategy creates new growth opportunities for us in the second-hand recycling market, and we are committed to establishing AHS Recycle as China's top recycling brand.

Third goal. 在绿色消费大潮兴起的背景之下,我们将发挥独特的商业模式优势, 结合商场加社区的独特线下场景能力, 将低频高值场景的商业变现与高频低值场景的用户获取形成闭环, 致力于成为绿色消费模式的创新典范。 Moving up to the third goal, capitalizing on the surging momentum of rain consumption,

We will leverage our unique business model advantage, combined with our distinctive zero-track offline presence, spanning both shopping malls and communities. This positioning innovates us to create a closed-loop ecosystem that seamlessly integrates commercial monetization and user acquisition across both low-frequency high-value and high-frequency low-value transactions, reinforcing our commitment to becoming a pioneer of sustainable consumption.

One thing worth emphasizing is that almost all business models allow users to take money from wallets, but the second recovery business model is to fill the wallet of the user. This is a very unique business model. On August 1st, the second recovery green wallet product has been launched. Because of the user's green behavior, users can buy more and more products here with extremely high discount benefits. 我们将通过与更多的消费品牌 联名推广环保回收与绿色消费 让越来越多的用户参与进来 真正让回收和绿色消费成为新时尚 这是我们更加长远的目标 也是爱回收的使命 让闲置不用都物尽其用的价值体现 I'd like to point out that all business models take money from their accounts

while AHS Recycle adds money to our users' accounts. Our business model is unique and disruptive. On August 1, we launched the AHS Recycle Green Wallet, enabling users to purchase a growing range of products at surprise discounts in recognition of their eco-friendly actions. Through co-branded partnerships with consumer brands, we promote eco-friendly recycling and green consumption engage an increasing number of users, and set a new trend of genuine new lifestyle. This represents our long-term vision and embodies our mission to give a second life to all idol groups.

以上三个目标是我们践行长期使命的方向规划, 也是支持业绩加速发展的战略基础。 我们在今年年初曾经判断, 今年具有国家手机数码产品已就换新, 所以说在年初的预算中,判断今年的收入增长会不降反升,略快于去年收入的同比增速,进入三季度我们对达成全年经营目标保持充分的信心。

These three strategic goals represent our roadmap for fulfilling our long-term commitments and form the fundamental strategy driving accelerated business growth. Earlier this year, we identified emerging opportunities from national trading subsidies from consumer electronics alongside the expanding secondhand market. Accordingly, our initial guidance estimated that this year's revenue growth will not only sustain its momentum but accelerate further slightly surpassing last year's growth. As we enter the third quarter, we have strong confidence in meeting our full-year operational objectives.

出于对集团业绩的充分信心, 我们欣然宣布一项三年期的股东回报计划。 在2025年至2027年,

Based on strong confidence in our performance, we are pleased to announce a three-year shareholder return program committing to return no less than 60% of our annual non-GAAP net profit to shareholders via dividends, share repurchases, or a combination of both from 2025 through 2027.

最后补充一个ESG动态, 今年6月我们发布了第五份年度ESG报告, 并首次设定了碳减排的目标, 即以2024年为基准, 目标于2030年将范围一和范围二的温室气体排放强度下降35%, One more thing, our ESG progress.

In June this year, we released our fifth annual ESG report, marking a significant milestone with our first carbon reduction commitment. Using 2024 as our baseline year, we have set ambitious targets to reduce scope 1 and scope 2 greenhouse gas emission intensity by 35% and scope 3 emission intensity by 50% by 2030. You are more than welcome to explore more about our ESG highlights and improvements from the full report, which is available on our investor relations website.

下面请CFO Rex对财务数据进行解读。

Now, I'd like to turn the call over to CFO Rex for financial updates.

各位投資者和分析師,大家好。 我們很高興與各位分享,2025年第二季度取得強勁的財務表現。 在國家消費電子以及換新補貼政策落地的背景下, 二手電子產品的回收及交換升都率屆時提升。 我們精準服務以及換新場景, 持續建設旅院交付能力和供應能力, 加強該回收的品牌力, 並以此有效抓住了加速增長的機會。

Hello, everyone. We are pleased to report strong financial performance in the second quarter of 2025. As national trading subsidies for consumer electronics fueled by market growth, we witnessed a surge in the demand for used device recycling and trade-in, enabling us to capture accelerated opportunities through high-precision trade-in services, upgraded fulfillment capabilities, and a stronger age as recycle brands. In the second quarter, once again surpassed the high end of our guidance, increasing by 32.2% to over 4,990 million RMB, and adjusted operating income was over 120 million RMB compared to adjusted operating income of 94.1 million RMB in the same period of 2024. 在解读财务数据之前,请注意,除非另有说明,所有金额均以人民币为单位,所有增数数据均为同比。 Before taking a detailed look at the financials, please note that all amounts are in RMB and all comparisons are on a year-over-year basis and are otherwise stated.

In the second quarter, the growth of total revenues was primarily driven by continued growth in both our net product revenue and net service revenues.

Net product revenues increased by 34% to $4,560 million. largely attributable to the growth in online sales of pre-owned consumer electronics.

第二季度服务收入为4.3亿元,同比增长15.4% 主要得益于平台模式开展的多品类回收业务贡献的服务收入增长 二季度的平台综合收费率为5.3% 同环比稳中略深 期间多品类回收业务贡献超过6300万元的服务收入

That service revenues were $430 million in the second quarter, representing an increase of 15.4%. The increase was largely driven by the growth in service revenue from our 3P multiclassware recycling operations. The overall take rate of our marketplace was 5.3% for the second quarter of 2025, up slightly year-over-year and quarter-over-quarter. During the quarter, our multi-category recycling business contributed over 63 million of revenue, accounting for 14.7% of service revenues and representing a healthy upward trend.

在运营费用方面,我们主要讨论能GAP口径的费用分析,以展示管理团队视角的费用趋势。 关于GAP和能GAP口径之间的调整,请参考我们的财务报告与呈交给美国证券交易委员会的6K表格。

Now, let's discuss our operating expenses. To provide greater clarity on the trends in our actual operating-based expenses, we will mainly discuss our non-GAAP operating expenses, which better reflect how management views our operating results. The reconciliations of GAAP and non-GAAP results are available in our earnest release and the corresponding form 6K furnished with the US SEC.

The cost of goods increased by 32.3% to 39.6 billion yuan, which is the same as the growth of product sales. Our business turnover is 13.2%, and the same period last year was 12.1%. The improvement of business turnover is mainly due to our performance, C2B recovery scene, and the standardized preparation ability in the supply chain. It has diversified the advantage of the selection of retail channels to increase the retail revenue of higher 2C sales. The second quarter's EP2C ratio and retail revenue in product revenue reached 34.4%, and last year's volume was 28.2%. At the same time, Apple's official demand for new business revenue has been gradually reduced due to the high technical impact in 2020. The revenue rate of the business segment has also continued to optimize its price strategy, which has been increased by the same period last year.

Merchandise costs increased by 32.3% to $3,960 million, in line with the growth in product sales. Growth profit margin for our 1P business was 13.2%, compared with 12.1% in the same period last year. The growth margin improvement in our 1P business was primarily driven by high-efficiency C2B recycling scenarios, compliant refurbishment capabilities incorporated in our supply chains. and an increasingly diversified retail channel mix. This allows us to increase the proportion of higher margin retail sales, with 1P2C revenue accounting for 34.4% of product revenue in the second quarter of 2025, up from 28.2% in the same period last year. Additionally, the high base impact from Apple's trading program in 2024 has eased, with a significantly improved growth margin in this segment through better pricing strategies.

Fulfillment expenses increased by 26% to $410 million.

Non-GAAP fulfillment expenses increased by 27.3% to $410 million. Under the non-GAAP measures, the increase was mainly driven by higher personnel and logistics expenses, reflecting a greater volume of recycling and transaction activities compared to the same period in 2004. Additionally, operation-related costs rose as we expanded our store network and enhanced operation center capacity in the second quarter of 2005. Nangap fulfillment expenses as a percentage of total revenues decreased to 8.2% from 8.5%.

销售费用增加4.9%至4.1亿元 Nangap销售费用增加36.7%至3.9亿元 主要原因为广告和推广活动相关的费用增加 以及渠道服务相关的佣金费用的增加 Nangap销售费用率从7.5%上升至7.8%

Selling and marketing expenses increased by 14.9% to $410 million. Non-GAAP selling and marketing expenses increased by 36.7% to $390 million. The increase was primarily driven by higher advertising and promotional campaign related spending, as well as an uptick in commission expenses associated with channel service fees. As a result, Non-GAAP selling and marketing expenses as a percentage of total revenues increased to 7.8% from 7.5%.

General and administrative expenses increased by 6.9% to 77.5 million,

Nangap G&A expenses also increased by 33.6% to 75.1 million, primarily due to an increase in personnel costs. Nangap G&A expenses as a percentage of total revenues remained stable at 1.5%.

研发费用上升25.5%至6,250万元, Nangap研发费用上升33.2%至5,820万元,

Technology and content expenses increased by 25.5% to 62.5 million. Land-gap technology and content expenses increased by 33.2% to 58.2 million as well. The increase was primarily driven by elevated personnel expenses. Non-GAAP technology and content expenses as a percentage of total revenues remain stable at 1.2%.

As a result, our non-GAAP operating income was over 120 million in the second quarter of 2025,

compared to NANGAP operating income of 94.1 million in the second quarter of 2024. NANGAP operating profit margin was 2.4% for this quarter, compared to 2.5% in the second quarter of 2024, representing a modest decline of 6 basis points. The margin stabilized at 2.4% compared to the previous quarter.

第二季度,我們使用了約400萬美金回購160萬股ADS, During the second quarter of 2025, we repurchased a total of approximately 1.6 million ADSs for approximately 4 million US dollars.

As of June 30, 2025, we had repurchased a total of approximately 12.3 million ADSs for approximately 31.1 million U.S. dollars and the previous 50 million U.S.

dollar share repurchase program.

On June 30th, we announced that the Board of Directors authorized a new share repurchase program under which the company may repurchase up to $50 million of its shares over a 12-month starting from June 30, 2025. The share repurchase program will be implemented in conjunction with the three-year shareholder return plan previously shared by Careers.

As of June 30, 2025, cash and cash equivalents, restricted cash, short-term investments, and funds receivable from third-party payment service providers totaled 2.35 billion RMB.

Our financial reserves are sufficient to support reinvestment in business development and shareholder returns.

关于2025年第三季度的指引, 我们预计总收入将在50.5亿元至51.5亿元, 对应同比增长24.7%至27.1%以上指引, 仅反映当前我们对市场和运营状况的初步看法, 预期有可能变化。 Now turning to the business outlook.

For the third quarter of 2025, We anticipate total revenues to be between 5,050 million RMB and 5,150 million RMB, representing a year-over-year increase of 24.7% to 27.1%. Please note that this forecast only reflects our current and presuming reviews on the market and operational conditions, which are subject to change.

以上是我们的业绩重点分享,欢迎各位提问交流。

This concludes our prepared remarks. Operator, we are now ready to take questions.

Yeah, hello, this is Joyce from Bank of America. Could you hear me? Yes. Yes. Because we want to see whether our growth trend is relatively strong in this quarter. And then we want to know what the company's growth plan for the second half of this year is like. What kind of business leaders are going to deal with it? Because last August, the country's domestic home supply brought a gradual growth in the industry. As well as our goal for this year's overall income and profits this year. Will there be some updates? Let me translate it for you. Given such strong growth momentum in the first half, what are the company's growth expectations for the second half of the year? What are your measures to tackle the high base in the third quarter due to the home appliances national subsidy that was implemented in August last year? Additionally, will the company actually have an updated version of the three-year revenue and profit target? Thank you very much.

OK, thank you. Let me answer this question. From a long-term perspective, we believe that the circular economy model of old and new and second-hand consumption has a long-term potential. The proportion of new products will also gradually increase, because the new generation of consumers have a stronger recognition of their own price. The acceptance rate of second-hand green consumption is also increasing day by day. From the perspective of development, From a longer-term perspective, we believe the circular economy model centered on trade-ins and second-hand consumption holds enduring potential, with its share of new product consumption gradually rising.

This stems from younger consumers' heightened appreciation for quality-to-price ratios and increasing acceptance of growing secondhand consumption. Viewing industry development through an evolutionary view, this will be a long-term process requiring progressive brand and service recognition building, normalizing trade-ins as the default purchasing method for new products. Like other sectors, it necessitates user education and mindset cultivation.

In the current stage, including in the next two years, one of the core things we need to do is to build up the ability to restore the contract payment as much as possible, including the ability of the store and the upper door, to make the recovery service safe, convenient, and of good price. The other is to take the national first recovery brand, iRevolution, this C-end brand, and make a good brand reputation, supporting iRevolution's good development in the next 10 years, 20 years, and even longer.

At the current stage and during the next two years, we are focusing on two core strategy priorities. First, we are maximizing our recycling and fulfillment capabilities, including in-store and two-door capabilities, allowing safe, convenient, and competitively priced recycling and services more accessible. Second, we are positioning AHS Recycle as China's leading recycling brand while building strong brand equity. Ensuring AHS Recycle can effectively serve users' second-hand recycling and purchasing needs for the next decade and even next generation.

今年9月份,头部品牌厂商新机发布带来重要改款。 我们期待二回收将抓住机会,服务好用户的回收和以旧换新的需求。 在收入预期方面,我们对于下半年的增长充满信心。

In September this year, new device launches from leading brands will generate significant upgrade opportunities. We expect to capitalize on this cycle to serve Chinese consumers' reflecting and trading demands. We are confident in realizing our revenue growth targets for the second half of this year.

在利润预期方面,今年我们对品牌的能力建设加大投入的策略没有变化。 Regarding profitability expectations, we maintain our strategy of enhanced investment in brand and capability building, supporting healthy profit outlooks.

We anticipate scale effects to gradually drive improvements in operating profit margins, starting next year to create longer-term value.

Okay, thank you.

Thank you. Operator, please open the line to the second question.

From Michael Kim of SAC Small Cap Research. Please go ahead.

Great. Good morning and good evening, everyone. Just one question from me. Just from a supply standpoint, any notable trends in trade-in activity via JD.com or your offline stores in terms of volumes or the underlying mix of products? And then related to that, any updated thoughts on how the subsidies have obviously impacted volumes more recently and sort of what Eaning, do you think we might be in as it relates to subsidy-driven growth? Thanks.

Okay, thank you for your question. 首先呢,从二季度的经营结果来看, 智能手机仍然是CDB用户回收需求最旺盛的一类, 其中受益于用户对于已就换新的认知和接受度的提升。 to maintain a faster increase in the number of resale and resale scenes shared with Jindong. At the same time, with the increase in the number of resale and resale opportunities of our previous stores and top-level teams, the proportion of users choosing to resale and resale offline from the first line to the four-line city can reach up to 80%, so as to obtain a better resale and resale experience.

Our results of the second quarter demonstrate that smartphones remain the strongest C2B recycling category, benefiting from rising user acceptance of trade-ins. The trade-in program co-launched by JD.com and AHS Recycle sustained robust growth. Enhanced in-store and two-door fulfillment capabilities enabled 80% offline fulfillment adoption across Tier 1 to Tier 4 cities, elevating user experience.

For the national stock market, we maintain close attention to the relevant policies. From the documents of the relevant departments in recent years, we can clearly feel the country's determination to support consumption and promote consumption at the national stock market level. During the fall of the national stock market policy, we actively improve the ability to deliver contracts and actively respond to the needs of users to change their minds and save money. Regarding national subsidies, we closely monitor policy developments.

Recent government directives signal a strong commitment to stimulating consumption through substantial subsidy allocations. During implementation, we optimized fulfillment to capture subsidy-driven replacement demand, delivering impressive double-digit growth in C2V recycling results. The recycling results were particularly strong in JD's trading scenarios.

其中,在我们所服务的电商以及换印厂经理, 有独特的苹果换苹果的模式, 由品牌厂商直接 Not only our Apple-to-Apple training model offers brand-funded incentives for devices that were not eligible for the national subsidy,

Other brand partners we collaborate with have implemented similar promotional strategies. Brand owners and e-commerce platforms have a stronger motivation to invest in trading subsidies.

展望未来的发展路径, 我们认为以旧换新和二手消费的新制的发展将有更强的确定性, 可以成为更主流的消费方式。 Moving forward, trading and second-hand consumption will gain further traction as mainstream behaviors.

We will expand reselling and trading scenarios, strengthen store and Door-to-door fulfillment. Amplify AHS Recycle's brand influence and deliver superior value and user experiences.

Okay, thank you.

Operator, please take the next question, please.

Okay. Good evening, management. Congratulations for the strong results. I have two questions. The first one is, could you please share the adjustments you made to the Apple's official business and overseas business, and what impact did they have on your financial performance? The second question is, could you share some progress regarding new cooperation channels with brand manufacturers in the recycling sector? Thank you.

Thank you. In the last three months, Apple's Chinese official website and its branch, QiJianDian, have supported exchange-based business. Since March last year, LiuKui has been realized. The impact of high-tech income in the first quarter of 2024, which was previously shared, has basically been eliminated. It is expected that the business segment will make better product revenue contributions this year and a positive business profit contribution to the large group of companies.

Our Apple trading business, which operates through Apple China's official website and direct flagship stores, has maintained profitability since March of last year. We have successfully absorbed the impact from the high revenue base established in the first quarter of 2024, which we previously discussed. We anticipate this business segment will contribute solid product revenue for the full year while generating positive operating profits for us.

In addition to the Apple brand, we have also established cooperation scenarios with a series of high-end brand manufacturers in China, and in cooperation scenarios such as Huawei Business City and Xiaomi Business City, we have achieved a significant proportion of recovery and resale benefits. This year, in addition to Zuyin's love of recovery, we have also expanded official cooperation with brand manufacturers such as Mendeley,官wang, Jindong, Apple官wang, QiJianDian, and Zhifubao channels, as well as Rongyao, Dajiang, Zhongxin.

Beyond Apple, we partner with high-quality domestic brands, capturing significant recycling and trading shares on platforms like Huawei Mall, Xiaomi Mall. We have established a wide area of mature C2B recycling scenarios, including AHS stores, JD.com, Apple official website and flagship stores, and Alipay. This year, we tapped into Honor, DJI, and JTE's official retail scenarios and built new partnerships. We embedded second-hand supply chain into new scenarios.

High-quality recycling supply sources remain a core strategic priority.

We will actively identify better supply scenarios and leverage efficient supply chain capabilities to enhance service experiences and price transparency for users.

另外呢,关于海外业务,我们正在积极探索中, 并且已经取得了有效的突破。 我们期望下个季度能有更多的信息和大家分享。 In addition, regarding the international business, we are making active operations and explorations, so we look forward to provide more color on our progresses next quarter. OK,谢谢。

Thank you.

Thank you. Thank you all again for joining us. The replay of today's call will be available on our AI website shortly, followed by a practical transcript already. If you have any additional questions, please feel free to email us at ir.atmenu.com. Have a nice day.