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Tuya Inc. American Depositary Shares, each representing one Class A Ordinary Share
Q4 2022 Earnings Conference Call
3/2/2023
spk_0: good morning and good evening ladies and gentlemen thank you for standing by than welcome to to you eat fourth quarter and four year twenty twenty two earning conference call online for be needed during the presentation portion of the call with an opportunity for questions than answers at the end if you would like to ask a question please press dar one on your telephone keypad i would now it to turn the cop or to be burst speaker today mr red tie investor relations director of to you please go ahead sir
spk_1: if you hello everyone welcome to our fourth quarter too long for ensuring go during a day of honor and york to yeah if the jury and out of the a pokemon video the fourth quarter to downplay through financial results and work out of the conference call are available at ihop or to or call a replay of the call will ocho be available on our website a few hours before we continue i refer you to our they publish them an hour early prosperity which applies for us we will make a full of women with that our now turn a call our father and the old me the jury one jury will deliver his remarks in tiny which will be followed
spk_2: by corresponding english translation
spk_1: after that happened yet reality are you feeling own answer to that you don't wait
spk_2: however one tiger would join all fours korean a four year twenty twenty two is cool are you in dorset we ought to trade i said the meeting of it as you know the whole included to put some thought she'd be decided that from that okay to think about that it's over to can be softening into i'm putting around in don't totally or anything job or are you near term be shabaab and passes with how are they learning chooses them so get him bouncing from his job and this is what loyal human once the child shall be that i'm sheila two nights or honey and even begin to you fucking neighbors on the and that them by mean going got a article if you know she did a that doesn't shot it utah i'm gonna yell games and shot and go by me about you have been to send them money that poses the the not that includes into ot a union that you're making can be so that been a job thirty nine units can see that were making decent you do not get increasingly and vomiting just i don't get okay so you're thinking about missing from be so that and back then on that been teaching you know team i only heard early training go to us economy from be adding a union know to get audio you mean come on that you have been says it he don't own a non intrusive in the new to the sending in public them are in would do anything to keep and thirteen that we have anything from the into his daughter the out behind year without at higher that we were using both idiot the earnings are you new legal code you toggle him sometime in the hopi adding a the into with i do let you waco
spk_1: toggle can do anything
spk_3: in twenty twenty two week period darfur feel for around your declined due to events would be starting as consumer product and market turned down up to seven years of hyper rose thinks reception
spk_1: our twenty two hundred to four year round and decreased by just over thirty seven to two hundred and ten million dollars in a fourth quarter and market consumption was is popping around you could decrease bad about forty percent year over year to forty five million dollars notably industry how when a point
spk_3: plays the greater the mouth and old duelist execution operational efficiency management and seem development where's boston will responded to macroeconomic adversity with the series of coffee control and efficiency pullman badges doesn't matter span from product offerings to operating procedures to efficiency improvements enabling us to say that for each says gross margin loan narrowing the nunca
spk_1: now lot by on an access year over year from one hundred and nine million dollars and twenty twenty one to seventy seven million dollars and twenty twenty two
spk_3: additionally or two for not gonna off know what about eighty three percent year over year to find million dollars from thirty one million dollars that cashews been operating activities with about one hundred and forty thousand dollars in cuba for and the seventy million dollars seventy million dollars in four year twenty twenty two which was down forty four percent compared to in one hundred and twenty six million dollars and twenty twenty one this improvements reflect our determination and confidence in the long term growth prospects of the industry
spk_2: we have also with purchased a total over fifty three million dollars she is in twenty twenty one and then we purchased the total over fifty nine million dollars is in twenty twenty two but he only one that to concerned about her cookie jar w and africa you believe that it's also as a job for with a bit of a the or cookie he which is you to the both in a look that goes off than of them because that into it and they enough little sushi to to a couple why don't you go you funded as the up with and that eating been gone so gullible hesitate get closer to enjoy that code about that but that with atlanta putting on money on that and job which is how would you change by good thing he led to the couple ago or you are following my were and world come in buy it in detail on the when each other during him nine hundred and today that you did occur covered under job hunting or union town and him the in him met what your job to job don't think cinco to to their friends into a comeback or in that on saturday it was younger woman who did we are day debating the your we more know me the p my cooking from eating out and up with with have without us and go to the moon just i want an issue don't come to the docking pile or your time he's and panda and either be my would have jacopo door for that
spk_3: put i ago talking about it we other people use that he doesn't behave attributable to your this impact the hooker would have way more he had a single twenty twenty two with the faint our commitment to a customer centric approach and implemented a strategy to better focus on large customers
spk_4: notably within ourselves triangle sit on a back to back up them accusations and the customer service system that combine our efforts me sales solution architects and customer deliveries enabling us to provide targeted services to customers with diverse nice and our to customers months apart resulting more
spk_1: efficiently as kind of doctor within colby control measures are and i'm seeing a major the palm elitist quickly began visit from customers and participating exhibitions full life
spk_3: during the year will apply to more there was only one hundred new brand customers around the global including notable customer such as honeywell were from benevolence he'll come from south korea
spk_1: well at from india
spk_3: watch on the home apply to on the information via one foundation and many more compared to the acquisition of over to southern brown counseling twenty one to twenty twenty two happened we've reflected of recalibrated focus on the qualify of new customers in our customer acquisition efforts or penetration rate is really truly good model and him number of large scale global brand customers
spk_2: we intend to partner even more with brand get a large day or have a high rules and bros potential full leverage our technology elusive and all our you making part in to break it off ruined ah from ecosystem to develop a when we relationships with customers based on their skill and influence
spk_3: the them alone begging by combining from i'm from says feel season so what's your timing couldn't couldn't sit family and in the money by found the theme from it's only when a tremendous effort to reduce costs and carry out patients the management's across many functions such as refining are and be project and showing called
spk_2: toss managing marked expenses and with acquisitions travel out and from same expenses a three and a fixed assets to front of rating agency the wound that she and she had to wonder for the
spk_3: rather than from to offensive she had own that would you buy new in town that would you do with the way you to the with wouldn't he complain about that additionally equally july fourteen funny to we completed our gop on a with the on call which further complimented our international business strategy
spk_2: this move has friends and our probation to international capital markets and has also helped to provide data protection for our shareholders
spk_3: so immediate we are so good at all that good at an early and the that at the time you live what you need a good to the and a good i or do even got demoted them we are you more subdued pete a fucking a good you add to that i doubt go for peninsula
spk_2: to better off than our business model competitive advantages and competitive landscape essential to have a comprehensive understanding of the games and chance shaping our sector things to the outbreak in twenty twenty go for our briefly reviewed past few years and ensure our alan the internet a union can get were kind other one kinda have been my father he's a job yeah that's the way that them to that out you can i think i have been settled on your question by the home be totally funny and gotten ductility doing anything get them during a union the tiny thing that audio union shouting you each and a house you into that from that she's i injected oh god you going near act origin said okay
spk_3: and again she told me that on top of a see again he might not agreeing to their own you build from two of them to get up under combat good too many uses a million bucks a team that he should abandon them the highest are you putting in the acting governor he was on the including the doors and twenty nineteen to twenty twenty one by leveraging hours strong of the wicked a bully and robots platform base the jewelry expenses experience with came the largest out the development at the leading industry and have benefited from the strongest repel wins also total revenue it should be robust growth during the three years traveling from one hundred million dollars and twenty twenty twenty nine thing to three hundred million dollars and twenty twenty one in a second half of twenty twenty one are supplied monks match emerged in the consumer electronics sector due to the coven induced global inflation rising shipping costs and supply chain disruptions this mismatch have a significant impact on been it plants across the balance him and was for them magnified by the global events such as the russia ukraine conflict and energy shortages in two thousand twenty two daughters image we piled up throughout the dust
spk_2: read popping a house cycle these talking on a high inflation computers are higher london's a good position to himself against the day out the timing is macaroni salad and only that change your to handle sort out when when johnny leaning on the job and keep on canada to thank him conducts i owe him by her into it other day and da ga energy he also dungy hundred encouraging
spk_3: to the that gonna put it on earth the and choose to the holiday sale idiot when you make with a map compete with as who you can have been the already failed at silva can be job and would somebody for doubting you uses it can be done about yoga according to industry consultancy i see global shipments of consumer electronics alley pro no such a smartphone products is expected to have a secret the biceps seven percent each one planning to versus twenty twenty one looking at us truth makers to downstream brands and ritual channels everyone's struggling a jockey our customers are increasingly conservative for delving low visibility you're from the mansions in the queue for holiday still season map card data showed that united states holiday sales of electronics products decline of by five point three percent year over year
spk_2: a significant weakening versus sixteen point two percent gain in the previous previous year right for you only get to whole me to talk to him he my couldn't you gotta put all my thing and jonjo comes on your that she's earning earning people are into those them she was joking but a digital technologies and on also of a felony at their job he didn't he kinda cool job with uncle new york a bundle divorcees over the phone so fun with it either
spk_5: junko yoshida see was kinda comments zulia to maybe there could be intimate with those that at us senses said oh and you might tell ya that we could you can go chances and you to michelle the canada who you on that having them with value on and people can do it you can be it than than ten feet on the line gets
spk_1: i'm fine
spk_3: come out faster if you the having earned income beaten by humans the after the and funny funny to we have discussions with many of our whole when customers and channel partners with toda that the rid of marketing tool for remained are week many brands adopted partial sales strategy seen the fourth quarter you gotta the and promotions during the holiday season as they may need to ah
spk_1: for more discount to still the newly consumer demand but this may only be done in limited incremental purchases at the same time average discount represents impenetrable last go and please contact we need to provide customer when more valuable and cost effective products and services
spk_3: on product of men strategy which in both the developments copy back be products and services based on our product augmentation strategies
spk_2: that the what thousand and belief of more valuable house and into wicked software and hardware products solutions our our rural average selling price of algae past has increased the bad about eleven percent you'll be able to and twenty two things i mean he bad if you don't have a it that that they get hundred one that was in the your thing when he came back from canada thing when couldn't you know go as a few again in january own you engine is in funded yoshida or anything gang banging from which was okay i'll see you different i mean to eat on here with us i was know how to them into the corner or can do to the lonesome at we either earning earning more that team and in your how would you do anything sweet young and on the confirm that could be here romeo you're go you see with that why we have given him mail
spk_3: see that to them the time that's an order to think you might be home with get the challenges a leading out algae player to rethink their position and transform be a strategies technology giants such as google sat and i m reported to be shutting down the algae services in twenty twenty three low average song may sally's algae be losing twenty twenty three for the more we have noticed that from probiotic intelligence service provider or fucking to salvage your company's due to the financial constraints
spk_2: in contrast we had not as follows of over nine hundred and fifty million dollars at the end of funny funny to have an arm be driven as a like technology company we have no interest bearing double back loans or anyone from apple capital commitments reflecting our strong have to positions fantasy and i plan to the language you on paper without giving you the the financial my something funky your monitor the as he is he then the me and he got a food you don't have in the out in which it isn't though you'd and given up new your the need to even need a fucking joking that i have been you can get out it or you did attend associates to to the he did up to new her countries and to they didn't quit be that indians that father says you send him get a cheese and then she doesn't know you so you them into worry that would on the kingdom attacking them back and gunpowder simple they did you really really so the me somebody from been done that on more that
spk_6: who did you don't hold your to me jumping into an outside the or the again somebody that good
spk_2: hi defend definitely
spk_3: the wow to somebody and that are you had to be these two hundred thirty thirty two when he of don't go getting impunity you could be taking a long term perspective and looking at the industrial landscape while conflict and about the future growth prospects for i'll see according to the comprehensive analysis of the data from your monitor i see bcg and other well known research institutions the current countries will read about she's only about four to five cents of are low level perhaps slightly higher home and commercial uses on our due to his baby attribute although not as frequent or necessary and coughing up foot it's will certainly continue to a three and four the country people's daily lives as economy's recovery and society gross history shows that people always tried to create a bad light through continuous compete competition and innovation was the pantry penetration reaches a certain stage it usually takes a pure power to reach the that the breeze through point four point three could change he these are typical doubtful in addition the i'll try
spk_2: consumer electronics industry in also extremely for rack mounted which is both a challenge and an opportunity to build competitive barriers federal date recommend the are you basing are going down either thing and grudges happening or daniel down without such your family or daugherty against a backdrop of emergency industry opportunities and a more favorable competitive landscape was were primarily focused on rigorous to navigating does recycling twenty twenty three
spk_1: he can kinda dull out of provide and was sent from jumping the without finding that are hiding that them from japan good at that time with it see it would have been salad when al qaeda i to get up with them here who looked on collude that already descending into me on provide the you know kinda like he did
spk_3: how we don't need an inch other women are to connect with and you know when we don't you know he was it is in order to see them have done the got her first went to meet you to know i'll keep you belt platform model will refine our business model to try to digitalization know the consumer sector the commercial sector and down the industrial sectors he says of the enterprise services is all with our i and the fragmentation of i'll be set that a measly and process to for into a cycle and was baton duffel will leverage develop products and apply themselves as to adjust the allergy patients see challenges and the long till for that happens and as penetration racing pool
spk_2: or capabilities to power valuable categories use cases and in that matches will become increasingly competitive yeah from julliard value of season an political come into intimate with on guidebook southern and other to thirty thirty shots would i do that without looking into a time he it and gotten the that we would end up until you you need them down on value him to read now pay me to thinking don't have a dog who can be method of among her who comprise who methods and them he does the typical who came to the the nancy
spk_3: gotta you the about the would have went on to move cobol we have a fifty fitting the find you dear that been bullied him that he went and middle if we want with their fate of of with a young on inside met at a time the latin a good lord he wanted them go companies are how you could go back and the of of until the coupled with what in he said well
spk_7: had a business jet secondly will boost the bros and a penetration rate of our to the product categories to collect reasons with offering das my comments and ecosystem partners continuous improvements in the organization of performance all of those triangle system and old ogoni technology and reasons of these cheap
spk_3: ron adams for example in twenty four need to we assisted a leading not american electrical and relaxing customer in reducing the developing raffling off matter this allowed them to obtain matter certification faster and so on the customer technology issues and i aren't being batsman challenges nothing those thought with synchronized go lady solution and the technologically the returns from to i am see as a to now customers and effect of and planning their product go mad at an early stages of a member of the see as a board of directors well well positioned to collaborate back to the with our upstream and dolphin partners to promote
spk_2: and the front line implantation process of matter for that just kinda bullies enable us to help our customers see opportunities which will be a testament to the stress of our we ought to proceed from the family to go so with billion with with kids with enticing film out half the time this season of do not have come in and get it there were times and doesn't keep on the as been added to do cause you to look when we are
spk_3: talking heads economy income presence as you can jack booted out you put you was you that albany hired a couple israel in a you get into when i he then got under some union the to the time you can usually one at a junior team that code at times that little he with the so one technology innovation bench short on our kills more private hall which components how existing now he pouts product system q enables us to adjust the need for independent control over our people are skill conglomerate such as our fortune five hundred customers in addition to also off comes from to access the full range of capabilities of i'll keep up and powerful to boot out the or al pp and is factor with improve the sustainability and adulteration in the past year with one number of top clients from different regions and industries and the completely completely several major benchmark
spk_2: rodgers was indonesia helical and china cop reason this year should will continue to gentlemen long term collaboration opportunities with large to your tongue local customs to have to mom that the news is that a she do i'm going on in utah down the of i fucking hundred have a gym
spk_1: day
spk_2: them built into a sunday night he doesn't anything so the the to have a good comedian occultism for without who time you back he people get i'm yeah medical doctors in and
spk_3: package young sunday's game that unforgettable digital zoom in and go that to began he was detained him to it got them without the way to gonna you can use the bathroom thank you to the pilot total buckle on one income of when switching from them without him than diet the bigger than a the judging kid he we usually doesn't sound that anything against phone despite and we met the many vehicles majesty see it a longstanding courts additional product line to demonstrate strong resilience currently structural an expanse of my patients have not substantially affected customers park service delivery product development or to the know in recent of abilities and each product line
spk_2: what highly motivated by encouraging results and our really when been of reasons we're confident and contribute in to pursue our goal of should be pretty but as soon as possible as one of our top priorities while carefully neutering any that the new potential product lines which trump value propositions such as
spk_8: gateways voice control products aldo trouble for that and some a level of bouncers and now consumer products with a balanced approach feminists how would you mean by many to choose to say about is he cannot get up with that allen alternate portal into several jesse couple that everyone closer look at our operating and financial performance that concludes the remarks by jury as i review our results note that four months or in us dollars and all comparisons are all yeah we're basis unless otherwise stated for the full year and fourth quarter of two thousand and twenty two and our total revenue was two hundred eight point two million dollar and forty five point two million dollar dollar thirty one point one percent and thirty nine one six percent respectively
spk_9: within that allowed to pass revenue would are hundreds of people one to one hundred fifty two point nine million and thirty two point six million decreasing forty one point five percent and forty seven point four percent respectively
spk_8: please note that chinese renminbi experienced significant fluctuations in two thousand and twenty two and a weekend against the us dollar at the thought of the year the exchange rate was six point three eight on be to one us the of by the end of the year
spk_10: it had a decreased to six point nine six on ninety to one us the
spk_8: as a result the revenue earned income in be converted to approximately a point five million dollar less than it would have if the two thousand twenty one average exchange rate has been used thought and the other revenue in the full year two thousand twenty to encrypt five six point six percent to twenty nine point nine million from eighteen point six million in two thousand and twenty one assigning a strong growth momentum the growth with mainly driven by our continuing efforts in offering value added services and the virus software products with strong value proposition for our customers however it is worth pointing out that we have implemented all customer focused and the key a common strategy in two thousand and twenty two as a result will be left him more resources proactively oh hi that your customers due to the strategies put on services including assessed value added a list of such as oh yeah i'm at and the customization so that makes there's a slow momentum compared to past quarter although although both martin slightly increased to forty three percent in two thousand and twenty two from forty two point three percent in two thousand and twenty one demonstrating the resilience of of value proposition decides thinking had we i'll keep pot roast lodging slightly decreased from forty two point four percent
spk_11: in two thousand and twenty one to fulfil forty one point one percent in two thousand twenty two including a nephew poupon four percent
spk_12: hans impact caused by a three point seven million accrued eventually alone for certain slow moving out he chip and the raw materials you in a year
spk_13: now let's move on
spk_8: activities and the related expenses please note that we are presenting in our operating senses are not gap basis by excluding sure they become compensation benefits from our cat numbers to provide better clarity on the channel called actual operating base expensive so that you can reveal performance in the same way as all management team in the pool year of two thousand and twenty two non gaap total operating expenses decreased by twenty three point one percent to one hundred eighty eight point six million from two hundred forty five point three million in two thousand and twenty one for the fourth quarter of two thousand and twenty two not get total operating expenses were thirty three point five million dollar forty six point four percent where you from sixty six point three million in the same period to the
spk_9: and twenty one or the other two thousand and twenty two as a result of our internal cost control measures and the ruthless
spk_8: realignment initiative we reduced our team thought by approximately forty seven percent to one hundred one thousand eight hundred thirty five compared to the end of two thousand twenty one this would result in an effect of direct financial savings of more than eighteen million dollar a year without him restructuring of optimization with paid a total of over i am be sixty eight million in one time additional severance payments and office leave termination and the reservation costs in two thousand and twenty two excluding the impact of this one time nonrecurring consensus will reduce our no guess operating sense in two thousand and twenty two by approximately twenty seven percent compared with two thousand twenty one additionally the fourth quarter
spk_13: to talk and hundred two also lucked out fifth consecutive quarters
spk_8: with substantial decreasing all and longer operating expenses coupon non up operating buses were nearly fifty percent lower than the highest point in the third quarter of two thousand twenty one i would name of food samples of initiative few in two thousand twenty two with streamlined on be improved all efficient the evacuation procedures and implemented and appointed
spk_14: very management initiative since then around one hundred major projects have been submitted and revealed covering areas such as corporal them upgrade you'll probably be welcome and high value revenue generation and the
spk_8: have a bit of expansion project from oh cool product lines such as gateway central control to energy for also undergo strict efficiency evolution and avenue we successfully kept our cloud infrastructure costs with thing they expected the beach during two thousand and twenty two and a were implement a serious or follow up measures to encourage all i the him to carry our technology iteration and the structural upgrade for more efficient users of cloud services on the much in front of unless he worked closely with our business division
spk_15: to include multiple wrong of both analysis together we faced challenges and executed optimization an improvement plan for several exhibition will we've built boots our internal professional design team provided substantial support among which the maximum reduction of budget hostile to construct
spk_8: three in a single event reached about thirty five percent were also pocketing companies in to be software price services and a technology sector as benchmark
spk_9: to that house all bust him budget as an industry average level and to make every dollar we fed worthwhile
spk_8: in addition we have raised the bar all employees business traveler requirements they are not required to provide clear explanation of the purpose duration that check it out of our comfort of their trips and undergo a repeal after work to ensure that travel costs are creating value or not sperling out of control additionally every team leader is responsible for this outcome one will pay for up amendment was successfully this post about all one thousand four hundred idol laptop saved from have had come optimization at price to times their ahmed attacked the book value recovering millions of caching on the with that our knockout lot from operations narrowed by fifteen point eight six percent to ninety nine point two million in two thousand twenty two from one hundred seventeen point five million in two thousand and twenty one are non gaap net loss significantly narrowed by
spk_9: twenty five point four percent to seventy some point two million in two thousand and twenty two from one hundred nine one three million in two thousand and twenty one are non gaap net loss improved more than our a gun lot
spk_8: from operations in full year two thousand twenty two mainly due to our interest come into bottom hundred to do to work executed the treasury management which generated over twenty two million dollars the interesting calm during the year with nearly
spk_9: come in dollar in the fourth quarter alone
spk_16: we're fully committed to reducing clock and been hunting efficiency which has significantly contributed to our ability to minimise losses especially be repeated of revenue decline
spk_8: such as the fourth quarter of two thousand twenty two as a result of it as the initiatives we were able to achieve all low lowest quarterly non gaap net loss of on point two million since the start of two thousand and nineteen moving on to balance sheet and the cash eventually and accounts receivable which are all of my efforts other didn't catch up the question declined quarter over quarter in two thousand and twenty two
spk_17: decreases resulted from all active effort to minimise operation risk such as you went to depreciation and credit losses as well as improve operating capital efficiency what insurance business deliberate as well as upstream and downstream cooperation on net cash youth operating activities
spk_9: his for the year two thousand and twenty two decreased by forty four percent to seventy point seven million from one hundred twenty six for one nine two thousand and one and the pie about life in my point seven percent to one hundred thirty eight thousand for the fourth quarter of two thousand and twenty two wrong with quickly three point two million in the same pure a year ago
spk_13: thanks to a significant reduction in operating expenses
spk_9: or the middle a big improvement in cash flow with affected by seasonal fluctuations in operating capital nonetheless all cash will significantly improved since cute will two thousand and twenty two and it's not as a much more controllable level as of december thirty first two thousand and twenty two cash cash equivalents and sure
spk_8: hum worthless that will mainly can deposit totaled nine hundred fifty four point three million dollar up a point four million
spk_18: quarter over quarter and the about one hundred
spk_8: eleven point eight million compared to the end of two thousand and twenty one primarily due to operating cash offload and forty eight point seven million in payments for sure reporters during the year
spk_9: if we looked ahead
spk_8: there are a few important factor to keep in line with inflation remain high and the consumer sentiment continues to be a week and the fragile additionally we recognize that offering player union to make efforts to reduce the in montreal this is all anticipation but the industry outlook for the seer to depend the primary on fostering this talking if the doctor internal can be stock smoothly and the considering that two thousand and twenty two was a lobos this year we may see a possible republic in the second half of the year assuming no other oh
spk_0: precedented events occur nonetheless there are various factors that may lead to have that and him and accordingly we remain committed to execute an hour determined strategies watch continuously monitoring the market you arm and
spk_19: with that operator we are now ready to take question
spk_0: me the to avoid traffic or simply for a star followed by one on your toes and keypads before any reason you would like to remove their question please press start alibi to
spk_20: again repressed question press star one
spk_21: and a reminder of do you do you treat your phone please remember to pick up your him said before asking your question will cause here briefly on questions are registered the first question is some the mind move with morgan stanley you may proceed and for the option to the of culture
spk_22: you're just mission to the doctor bemoaned will be a key thing to watch a full potential of the bombed or this year
spk_23: well of the the to float on this bugs
spk_8: could you prefer sheer based on all of the breezes would you to overrule even a level a tool poor customer god and go on the that about good was with you though
spk_24: mali both year
spk_8: sent you
spk_25: the can thank you yeah
spk_9: of as an upstream company we won't be able to accurately predict the downstream you entry level
spk_15: including oh yeah
spk_9: run and the radio channels
spk_8: across the globe
spk_26: however as far as we know we can share from the information from both the market consumption
spk_8: and eventually aspect starting with a bit more information on the consumer industry that regarding us consumers jury has mentioned
spk_27: the of fourth quarter credit card consumption data that was not very optimistic
spk_8: as for retailers best by which may lead self consumer electronics products
spk_9: popped about the trend of a fifteen percent decline in filled in november compared to october when it most it's cute to a performance
spk_8: at the end of november full brand well know what to call leading bread such as i robert and our little or united states and a lot other either experienced or decline to for revenue or reported week sales performance you will with increased discount effort
spk_28: being retail channels
spk_15: in other typical consumer products were to coach such as multiple according to a report by or media global smartphone shipments think kill for two thousand twenty two whereby fifteen point four percent compared to the same period of love for you
spk_8: the top five global brands including apple them phone and show me or experienced
spk_9: different degrees of decline in shipment ranging from thirteen percent
spk_8: the twenty nine percent in china call with cases picked between late november two thousand and twenty two too early january two thousand and twenty three this coupled with spring festival holiday significantly flow dog economy activities in the country and had a substantial impact on electronic product comes function
spk_9: and overseas supply
spk_8: that news that offered felt review
spk_29: it's that the warm weather observed across worry puff of europe this winter
spk_8: as partially elevated the energy crisis however a natural gas prices of the other historically high level and the current expectations in the consumption market remain of dude we were saying similar region know ten from activation of must devices
spk_9: on the and the market
spk_8: november last year the us settlement has been slightly dong yoga year
spk_9: for china segment has continued to decline the european settlement has delivered a year over year growth rate of over twenty percent and the remaining region have a combined double digit yeah you growth rate
spk_8: in terms of consumer behavior each consumer is weighing the option especially considering the a significant impact of inflation all necessities such as food feel and accommodation people may be interested in new technologies and the chen such as be are of a i but inflation and a weak economically mormons have a significant inhibitory effect on discretionary spending for purchasing products that have immediate practical value of a higher cost effectiveness
spk_9: is particularly important for every one of such consumer run owner and the retailer continue to just under a high inflation to find a new valid point
spk_8: in the first two months of two thousand twenty three we continue to see flat performance in the lighting category in terms of and the market consumption and activation what there has been a rebel in electrical product related to electricity in energy saving censor security and home appliance products have performed are up to a fable are you over you in terms of downstream even three the piece of these boxing is mainly a dictated by the retail channels according to morgan stanley's research reports or at the end of last year he went repeat boxing in the fourth quarter of two thousand and twenty three will move from the retail thought to the retail distributor's runs are expected to return to a relatively normal human to level around late que to photo by the oh yeah in the second half of two thousand twenty three this is basically consistent with all estimation that we shared with everyone during last quarter's owning cool after nearly two quarters of industry wide be stalking efforts in the second half of two thousand twenty two our brand the customers currently have of but were rise in their perceptions number one thing certain words coast such as floor home appliances believe that that eventually pressure has somewhat elevated
spk_9: and the supply train sentiment in improving
spk_27: resulting in a rebound in regional film
spk_9: however we have a group of general brand customers
spk_30: i'm who indicated that he went free pressure it remains high and that they need to continue monitoring the situation
spk_8: the gulf stream consumption environment the isn't strong enough for everyone in the value chain to start placing their the orders aggressively yet as for oh yum
spk_31: that you trait of some poor oh yeah customers
spk_8: it's the a high in fact one of the customers would hire you entry level he still maintaining and eventually close to forty percent of the annual procurement what are you from us
spk_25: in two thousand and twenty one
spk_8: when the upstream and downstream players will aggressively stocking up however them are currently a fucking to for keep that the downstream is entering a more orderly is talking faith
spk_9: so in summary market consumption varies widely by region with europe performing rubbery relatively better a larger us has yet to see a rebound
spk_8: ah from our perspective the pace of overall you to this talking will be relatively slow in the first and second quarter additionally due to the relatively higher comparison base in the first half of two thousand and twenty two we expect industry to performance in the first half of two thousand and twenty three to remain mediocre
spk_32: in the second half of two thousand and twenty three if he eventually be fucking progress as smoothly as we all hope the energy crisis improved and inflation stabilizers and slowly decline
spk_0: the overall industry may reach a turning point for recovery when compared to the robert me though a base in the second half of two thousand twenty two feel
spk_33: cross the road train
spk_34: so at that point consumers and the business may begin rebuilding their confidence
spk_35: so this is my offer to the first question operator of his go for a second question certainly
spk_36: the next question is from the line of timothy so with goldman sachs you may proceed
spk_33: grace and human footage
spk_37: russian on an achievement
spk_8: cause such as you mentioned you need done some jobs cost talks control or just wondering commitments one on these years shows is essentially own told us about is issue and on to succeed thank you timothy in two thousand and twenty two are we implemented various measures to reduce costs increase operation efficiency and improve internal operations the execution of this smashers worth old awfully difficult but for from an external perspective the downsizing of our had called each quarter may seem like frequent adjustments in response to that namic changes in market condition here we can provide some additional insight
spk_9: people to that unique model of oh i o t development have one we saw the inflation chen start in late killed three two thousand twenty one ahead of other software in the internet technology peers in the market
spk_8: are we don't talk to our team expansion efforts
spk_9: then and the begin to develop an extensive organization organizational restructuring plan
spk_8: in two thousand and twenty two we completed our strategic reorientation around our sales triangle as well as the production and the research upgrade centered on our children private cloud this strategic adjustment included him the focus of our product line and on the efforts as well as trench in employees arrangements to feel each position would suitable candidates
spk_9: we also restructure the our you management and evaluation system for on the project
spk_8: to ensure the value of our on the effort this approach process were reflected in our favorite team adjustments which significant reduction in team size every quarter however our product id and the service support functions remained stable throughout currently all expenses have reached a relatively reasonable level in the current business the alarm and despite the increase in labor costs due to factors such as and you adjustments in salaries and social security's will offset some of the savings we made from both facing our headquarters had called in addition except for specific necessary professional service expensive such as suffocation compliance and legal fees lola continue adopt a more strict and the closure approach towards know labour expenses
spk_38: marketing and the travel expenses to ensure that expenses remain in line with our targets
spk_9: there is fear much we can do to increase efficiency in terms of expenses and will continue in two thousand and twenty three and twenty two thousand twenty four going forward
spk_8: on the other from that it should be emphasized that considering the seasonal fluctuations in revenue the situation will vary from for the to quarter operating losses and a net loss will fluctuate with changes in revenue and a gross profit
spk_0: and the net loss and quarters with the lower revenue will be relatively larger
spk_20: overall are we expect a substantial reduction seen expense
spk_39: in two thousand and twenty three compared to two thousand twenty two we also expect a better operating cash flow in two thousand and twenty two twenty three or compared to on two thousand and twenty two we aim to achieve the goal of i'll break even on non gaap spaces as soon as possible as we have communicated previously
spk_40: are flooded with my answer to the second question and operator of his move to the a good question
spk_8: for me you are christian as from a line of the mean grown with see i see you may proceed oh thanks for to my question on a given your strong capital position with high little passions short term investment in on several consecutive quarters ah what is your future strategist will cash in have you considered using it for exploring new a quotation scenario and what's your investment plan things thank you
spk_9: now we're committed to our conservative and a cautious capital strategy
spk_8: in order to maintain cash reserves were earning unexpected risk as of december thirty first without than twenty two on net cash balance exhibit nine hundred fifty million dollars of which a hundred twenty million dollar is in fact bank deposit with maturity of ranging from six months to one year and some fixed deposit interest rates go as high as six point five percent annually we collaborate with several large very reputable commercial banks to manage all fall and distraught to obtain the back deposit while ensuring the safety of our principal in two thousand and twenty two weird shipped and interest income of more than twenty two million your dollars which provided foliage report to our overall cash flow oh a strong cash position has made it easier for up to implement adjustment in operation support new buses and the westmont incubate new products and a safeguard oh crescendo activities
spk_41: we also use out hush to follow share repurchases with think regularly limits as the way to reword our shareholders and the demonstrate a long term confidence in the company and the from august two thousand
spk_8: twenty one to the end of two thousand twenty two we have repurchased more than one hundred ten million us dollars of stock in addition auto the had when in the consumer affect her and the stock market lead us to reassess already westland strategy for the ecosystem train in two thousand and twenty two we continue to track and monitor promising i would two companies solution provider and the emerging industries we are prepared for opportunities where we can leverage our capital or other mean to palmer integrate or consolidated prospect at the right time in terms of exploring and the weapon in new application use cases in two thousand and twenty three will will continue to focus on two areas for is acquiring and filming
spk_9: major a high value customers
spk_8: secondly we will folks product line with potential and strategic value for the former we will continue to refine our private cloud product
spk_42: we have already completed to benchmark project for china guess
spk_8: and indonesia telecom in two thousand and twenty two i will will replicate the success successful cases to serve other large group of profitable in addition of value added services such as cloud storage also have generated follow it revenue in two thousand and twenty wrote more than ten phone compared to the previous you will will continue to penetrate the top telecom books in each region with all private cloud over and out of work at the bluetooth in cold storage service helping to build cost effective i would he pressed one and the sustainable revenue generating customer operation in terms of product line in coverage categories such as gateway central control and others there are both consumer grade and a commercial grade specifications
spk_9: we also the future market potential of products with increase integration with proper were as it's cool i'll revenue from gateway and central control products also world by more than eighty percent in two thousand and twenty two
spk_43: a five problem consumer products from commercial and the non consumer devices that come need professional need to have more technical barriers and higher union prices
spk_44: for example our community industry at gateway prop products
spk_19: with increased integration a price
spk_8: modern armed the pencils them up for unit with a gross profit margin of around seventy percent less some simple a hotel commercial gateways can achieve unit price renew from less than a hundred to a few hundred rp of caught will will also continue to strengthen the clippers
spk_45: it is of other consumer great product line
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