RLX Technology Inc.

Gentlemen, thank you for standing by for RLX Technology, Inc.' 's fourth quarter and full year 2021 earnings conference call. At this time, all participants are in 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 50 minutes. I will now turn the call over to your host, Mr. Sam Sung. Head of Investor Relations for the company. Please go ahead, Sam.

Thank you very much. Hello, everyone, and welcome to RX Technologies' 12th Quarter and Full Year 2021 Earnings Conference Call. The company's financial and operational results were released through PLA's wire services earlier today and have been made available online. You can also view the earnings price release by visiting the IELTS section of our website at IELTS.RelaxTech.com. Participants on today's call will include our co-founder, Chairperson of the Board of Directors, and Chief Executive Officer, Ms. Kate Wang, Chief Financial Officer, Mr. Chao Lu, and myself, Sam Tsang, Head of Investor Relations. Before we continue, please note that today's discussion will contain Four looking statements made under the state power provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements typically contain words such as may, will, expect, target, estimate, intend, believe, potential, continue, or other similar expressions. Four looking statements involve inherent risks and uncertainties. The accuracy of these statements may impact a number of business rates and uncertainties that could cause actual results to differ materially from those projected on anticipated. Many of these factors are beyond our control. The company, its affiliates, advisors, representatives, and underwriters do not undertake any obligation to update this forward-looking information. except as required under the applicable law. Please note that our technology's earnings press release and this conference call will include discussions of unaudited gap financial measures, as well as unaudited non-gap financial measures. Our express release contains a reconciliation of the unaudited non-gap measures to the unaudited gap measures. I will now turn over the call to Ms. Kate Wong. Please go ahead.

Thank you, Sam. And thanks, everyone, for making time to join our conference call today. As many of you might have become aware, just hours ago, the State Tobacco Monopoly Administration released an updated drug consultation paper regarding national electronics cigarette product standards. At the same time, administrative measures for electronic cigarettes have been made official, effective starting on May 1, 2022. While we didn't expect the announcement of this regulatory development to coincide with our earnings review, We welcome the finalization of these regulatory measures as it delivers certainty regarding timelines, molded transactions, product specifics, amongst others. The removal of these uncertainties and accelerated timelines will provide our organization with more concrete directions in our business operations and planning. We believe the new standards and measures will significantly improve adult smokers population's positive recognition of our product safety and the nature of harm reduction. They are confident that the lightweight restriction on flavors will not impact the core needs of our users and millions of traditional cigarette smokers for harm reduction. The experience and data from other markets supports the same view. Against the backdrop of the evolving regulatory landscape for e-cigarettes, the recurring COVID-19 outbreaks throughout 2021. We remained committed to enhancing our relations and executing our founding strategy and mission. Further, stemming our industry-leading position as a trusted program for adult smokers. We ended 2021 on a solid note, with our core strengths and fundamentals thriving. Although we faced our share of challenges during the year, our financial highlights include fourth quarter revenue growth of 17.7% year-over-year, which propelled a year-over-year increase of 123.1%, in our three-year 2021 net revenue. I will share more details regarding our financial results and underlying drivers later. With that, I'd like to start by outlining the backdrop with regulatory environment in the fourth quarter. The fourth quarter ushering in the meaningful regulatory development. for China's evapour industry. With the introduction of the draft administrative measures and the draft national standards for evapour products, the regulators have introduced an electronic filing system to provide a means for all value chain participants and composing manufacturers distributors, retailers, and supply chain partners to register their business details. In addition, all EVA programs are also required to register each of their products or SPAs, including product characteristics and specifications. We believe that As these new rules and policies take hold, the barriers to entering China's eVapor industry will become more difficult to penetrate given the substantial compliance and product development requirements. Moreover, given ongoing regulatory scrutiny of eVapor product quality and safety, Sales of counterfeit products will be further accrued, and users' rights will be better protected. In sum, we firmly believe that the new regulatory framework will support the overall evaporation industry and allow its participants to move forward confidently and embrace healthy, sustainable, long-term growth. In response to updated regulations announced in December 2021, in the fourth quarter, we proactively implemented an array of refinements across both the front and back ends of our operations. On the product and supply end, we swiftly adjusted certain features in our product suite and pipeline product based on the drug national standards, drawing on our state-of-the-art product development capabilities to enhance our child loss design, e-liquid formula, and other technical design elements. Although we embraced a more agile approach to supply chain management, prudently managing our key components and materials procurement orders according to the draft national standards, which may impact our inventory preparation. On the sales and channel management front, we adopt a new approach to managing active inventory for distributors and retailers to avoid over or under supply. In addition, we offer assistance to our distributors and retailers with the required registration on the electronic filing system and maintain active communication with them to understand their needs and track the potential impact of the new policy enforcement on their operations. Now I'd like to provide some updates on our scientific research progress. We worked diligently to improve our scientific research capabilities and are firmly convinced that scientific evidence-based communication is paramount when addressing users' and shareholders' concerns about the harm reduction efficacy of e-cigarettes. One area of particular focus for RLS is cross-disciplinary fundamental research on atomization mechanism through which we explore the long-term health effects of vaping. As China's pioneering vapor brand, we initiated China's first clinical research on vaping safety studying the acute effects of traditional cigarettes and electronic cigarettes on the human respiratory and cardiovascular systems. In February 2022, we successfully registered our clinical research on the China Clinical Trial Registry a primary registry in the World Health Organization Registry Network, further validating the strengths of our scientific research capability and underscoring our progress in advancing these studies. As China's national standards for e-cigarettes come into effect, ILS will continue to devote more resources to R&D and support a regulatory framework that's recognized these harm reduction opportunities by the small country population. Our accomplishments in 2021 positioned us for a good start as we head into the new year of 2022. I'm pleased with our achievements so far in 2022. Our strategic initiatives are designed to capture any growth potential ahead of us within a clearer regulatory regime. As we continue to improve our product performance, develop scientific research, and promote digitalization upgrades, we are poised to further grow and increase the value we bring to all of our stakeholders. With that, I will now turn the call over to our CFO, Cao Lu. He will elaborate for some of last quarter's initiatives and go over our operational and financial results in more detail. Thank you.