RLX Technology Inc.

Hello, ladies and gentlemen. Thank you for standing by for Relics Technology Inc's fourth quarter and full year 2020 earnings conference call. At this time, all participants are in a listen-only mode. After management's remarks, there will be a question and answer session. Today's conference call is being recorded and is expected to last for about 40 minutes. I will now turn the call over to your host, Mr. Sam Tseng, head of investor relations of the company, Please go ahead, Sam.

Thank you very much. Hello, everyone, and welcome to RLX Technology Incorporation fourth quarter and full year 2020 earnings conference call. The company's financial and operational results were released through PL Newswire services earlier today and have been made available online. You can also view the earnings press release by visiting the I-Out section of our website at iout.vestpac.com. Participants on today's call will include our co-founder, chairperson of the board of the directors, and chief executive officer, Ms. Kate Wang, and myself, Sam Zhang, head of investor relations. 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 Security Litigation Reform Act of 1995. These statements typically contain words such as may, will, expect, target, estimate, intent, release, potential, continue, or other similar expressions. Forward-looking statements involve inherent risks and uncertainties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. many of which factors are beyond our control. The company, its affiliates, advisors, representatives, and underwriters do not undertake any obligation to update it or locate information, except as required under the applicable law. Please note that our LX technology incorporation, earnings press release, and this conference call include discussions of unaudited gap financial measures, as well as unaudited non-gap financial measures. Our LX Press release contains a reconciliation of the unaudited non-gap measures to the unaudited gap measures. I will now turn the call to Ms. Kate Wang. Please go ahead.

Thank you, Sam. And thank you, everyone, for making your time to join our earnings conference call today. Just a little over two months ago, on January 22nd, 2021, we successfully listed our shares on the New York Stock Exchange and started our new journey as a public company On behalf of the management team, I would like to extend our gratitude to our employees, business partners, and all our shareholders and stakeholders who have been following and supporting us. I believe many of you are joining us today not only to learn about our fourth quarter earnings results and full-year achievements, but also to hear more about our response to the regulatory developments that occurred earlier this week. We are as attentive to these developments as you are, and we'll best answer any questions you have during the Q&A session. Now, I will talk you through our operational performance in the last year and then sharing our strategies going forward. Throughout last year, we remained focused on our mission and strategy, and we have achieved a solid set of results despite the challenging macro environment. First of all, looking at the overall e-vapor market in China, user penetration has been growing steadily. According to the CIC report, China's e-vapor user penetration rate grow from 0.4 percent in 2016 to 1.2 percent in 2019, and witnessed further growth in 2020. As an industry leader of the evapomarketing in China, we are well-positioned to make Relapse a trusted brand for adult smokers, providing better alternatives for them. Secondly, on the commercial front, we pioneered and integrated offline distribution and branded store-plus retail models tailored to China's e-labor market. Under this model, we identified and leveraged a variety of distribution and retail channels that allow us our products to reach ideal smokers in a more effective manner. As of September 30, 2020, we partnered with 110 authorized distributors to supply our products across over 5,000 RELAX branded partner stores. and over 100,000 other retailers nationwide, covering over 250 cities in China, as we adopt comprehensive systems and methods to manage, supervise, and empower our distributors and retailers. In this fourth quarter, we achieved significant growth in terms of number of branded stores and productivity. An increasing number of branded store partners have been joining our region network and crossed the 10,000 mark for the first time in this fourth quarter. On the other hand, we have been expanding our retail outlets network with multiple forms. More importantly, more and more retailers have been increasingly recognizing the benefits of retailing e-vapor products and partnering with RELAX. In addition to commercial development, to continually improve adult smokers' concerns with our products, We have implemented a multiple layer development framework to provide a solid infrastructure for our technology and product development. This framework involves five development layers surrounding our eWave for products, namely accessories, interactions, applications, face transitions, and infrastructure. catering to diversified needs of ideal smokers. In December 2020, we introduced RelaxSenton, which embodies our latest technologies developed to holistically enhance user experience for ideal smokers, including a newly introduced battery capacity indicator, improved battery lifetime and charging speed, strengthened structural resistance to illiquid leakages, refined airway design, and upgraded safety features. In the meantime, we have also received wide recognition for our products globally in November 2020. Relax Infinity was granted the Golden Dean Design Award 2020. Turning to our corporate social responsibility development, we continued to consistently uphold and practice our ethical principles, including promoting the prevention of underage use of our products through our industry pioneering, guiding programs, introducing effective age verification practices to the industry. This past quarter witnessed the first anniversary of the launch of our Sunflower system, which is the first of its kind technology-driven underage access prevention system in China. according to CIC report. The Sunflower System encompasses a comprehensive set of technology-driven best practices designed to prevent underage youth through an array of advanced recognition tools to enhance on-site age verification as well as through geosensing technology. to identify the appropriate locations for opening with relaxed branded partner stores. In addition, we have zero tolerance for counterfeit products that could jeopardize adult smokers' health and interests. To that end, we launched the Golden Shield program to combat sales of counterfeit products. in cooperation with the public, media, and the local authorities. At RLS, social responsibility is not something we do on the side. It's part of our DNA and embedded into our everyday actions, operations, systems, throughout our organization. We have been caring for our user communities our partners, and our employees since day one. We have always placed special emphasis on helping minorities and disadvantaged groups through initiatives that provide better services and technological solutions to help them with their unique needs. In this regard, we recently launched three new initiatives. One to empower female entrepreneurs and working mothers. Another to assist the elderly in understanding and using technology in their everyday life. And the third to strengthen our equal opportunity guidelines. We will continue to prioritize social responsibility in our organization because It's part of who we are. Looking ahead, we plan to further solidify our leadership by continuing to invest in scientific research, enhancing our technology and product development, strengthening our distribution and retail network, fostering supply chain and production capabilities. These strategic initiatives are designed to support our growth over the long term. Here's to the end of my part. Thank you, everyone. With that, I will now turn the call over to Sam, who will discuss our key financial results.