Zepp Health Corporation

Hello, ladies and gentlemen. Thank you for standing by for ZEPP Health Corporation's second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Grace Zhang, Director of Investor Relations for the company. Please go ahead, Grace.

Hello, everyone, and welcome to ZEP Health Corporation's second quarter 2024 earnings conference call. The company's financial and operating results were issued in a press release via the Newswire services earlier today and are posted online. You can also view the earnings press release and slides referred to on this call by visiting the IR section of the company's website at ir.zep.com. Participating in today's call are Mr. Ren Wang Huang, our Chairman of the Board of Directors and Chief Executive Officer, and Ms. Leon Zheng, our Chief Financial Officer. The company's management will begin with prepared remarks, and the call will conclude with a Q&A session. Mr. Mike Yang, our Chief Operating Officer, will join us for the Q&A session. Before we continue, Please note that today's discussion will contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995, forward-looking statements involving current risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties are included in the company's annual report on Form 20F for the fiscal year ended December 31st, 2023, and other filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that SEP's earnings press release And this conference call includes discussions on unaudited gap financial information, as well as unaudited non-gap financial information. The press release contains a reconciliation of the unaudited non-gap measures to the unaudited most directly comparable gap barriers. I will now turn the call over to our CEO, Mr. Wang Huang. Please go ahead.

Hello, everyone. Welcome and thank you for joining our call. To begin, I would like to provide an update on our strategic transformation. Our second quarter results aligned with expectations with an increase in Amazfit branded product sales and achieving a high growth margin. Despite a year-over-year decline in sales, our net loss for the first half narrowed. With several new products slated for launch in the second half of the year, we firmly believe that the worst time of our transformation is behind us. The progress we have achieved is centered on three key pillars. We are investing in new technologies, including AI, to meet the needs of our customers and maintain a competitive advantage against our peers. Second, we focus on product innovations and profitable growth. We plan to launch our hit products during the upcoming EVA event. In addition, We are enhancing the global visibility of our Amazfit branded products through sponsorship of major sports events and partnerships with renowned athletes to expand our roster of international representatives. Now, let's delve into the three pillars as we witness the transformative impact of AI applications in the industry. According to the latest Canalys reports, AI is both enhancing existing use cases and creating new ones, significantly boosting user loyalty. Zapp Health is leveraging AI to transform sports and health experiences this quarter we launched zap os 4.0 in integrating openai's gpt4 into our amazfit smartwatches for safer and more useful responses enhancing their role as wellness companions key features of zap os 4.0 include and upgraded ZAP flow with intelligent language interactions and new health-focused mini-apps. ZAP OS4 is now available for Amazfit Balance and Amazfit Active with support for other models coming later in 2024. our R&D team has made significant breakthroughs in AI technology using that flow platform as a foundation. We plan to release a new form of AI hardware within the next six months, making a new chapter in our journey in smart wearable technology. These upcoming releases not only demonstrated our technological strengths, but also highlight our long-term approach to product innovation and market strategy. As we prepare for the upcoming IFA in Berlin, we are excited to introduce several innovative products, including the highly anticipated T-Rex 3 outdoor smartwatch, and our new line of open wearable stereo OWS earbuds. In recent years, we have observed a growing demand for comfort in headphone design, which has led to increased interest in open-type headphones. Market research indicates that the open headphone segment is poised for substantial growth, presenting a promising opportunity within the Bluetooth headset market. These new offerings will highlight our latest advancements in hardware development. Additionally, I am pleased to announce that the small chip jointly designed with Whale Microchip, a subsidiary of Jiangshu Yitong, which we invested in 2021, has successfully entered mass production. This state-of-the-art chip will support ZAP OS 4.0 and will be featured in the smartwatches we launched at IFA. In our commitment to innovation, we are thrilled to introduce the Amazfit Helio Ring, our first smart ring, which complements our smartwatch lineup. Launched at CES 2024, it has received critical a claim and will soon be available in more countries. The Hero Ring is ideal for those who prefer not to wear watches while sleeping. Pairs seamlessly with Amazfit smart watches like the Cheeto Pro and Cheelex Ultra for continuous 24-7 health monitoring. It offers advanced recovery insights. And that app integrates data from both devices, empowering athletes to optimize their performance. With additional sizes, the hearing is expanding to a broader market, driving further sales growth. By integrating smartwatches, rings, and the upcoming OWS earbuds to launch at IFA. We have crafted a seamless user experience loop, establishing a comparing competitive advantage in bundled sales. We anticipate these offerings will further strengthen our market position and drive growth in the second half of the year. On the marketing front, around the time of the IFA release, we will announce a major partnership with Hydrox in Europe and North America. Moreover, we have expanded our roster of athlete ambassadors. In the second quarter, we welcomed U.S. Olympic medalist, Morgan Pearson, Italian national endurance icon, Yemen-Brahant Kripa, and Chinese marathon runner, Xiaodong Wu, to our team and my family. These partnerships enhance our presence in the running and endurance sector and demonstrate their performance advantages of our cutting-edge smart variables. This also will be a significant step in our brand strategy, further enhancing our influence in global markets. These efforts are part of our broader strategy to increase the global visibility of our brand and products. By aligning with prominent athletes and sports events, we continue to build a strong, recognizable brand identity and create meaningful connections with consumers worldwide. Through those brand and marketing investments, we have solidified our influence in major populous countries, such as China, India, and Brazil. Additionally, we achieved a breakthrough in Germany recently. Deepened our partnership with Decathlon in France. and steadily improve our global growth margin. In conclusion, our transformation journey highlights the effectiveness of our strategic direction with a strong focus on AI and expanding self-branded products. These efforts combined with increased brand visibility position us for sustainable growth. As we head towards IFA in Berlin with new product releases and rising brand awareness, we anticipate continued growth momentum in the second half of the year. Thank you for your continued support and confidence in ZAP Health. I will now turn the call over to Leon to go over the highlights of our second quarter financial results.