Hello! And thank you for standing by for Energy Monster Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Hansen Shi. Please go ahead.

Thank you. Welcome to our 2023 fourth quarter and full year earnings conference call. Joining me on the call today are Mars Cai, Energy Monster’s, Chairman and Chief Executive Officer, and Maria Xin, Chief Financial Officer. For today's agenda, Management will discuss business updates, operation highlights, and financial performance for the fourth quarter and full year 2023. Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call, as we will make forward-looking statements. Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that unless otherwise stated, all figures mentioned during this call are in RMB. I would now like to turn the call over to our Chairman and Chief Executive Officer, Mars Cai for the business and operation highlights.

Thank you, Hansen. Good day, everyone. Welcome to our 2023 fourth quarter and full year earnings call. During 2023, our operations underwent a notable transformation after overcoming the challenges of the previous years. We were able to achieve historical high GMV with growth rate of 27% year-over-year during 2023, filled by a combination of recovery in offline traffic and expansion of our mobile device charging network, but partially offset by a softer than expected consumption environment. The general recovery in foot traffic of last year compared to 2022 has been apparent and especially significant during holidays and weekends. The scale of our network also increased significantly during this year, led by the combination of network partner and direct models. Total POI count reached 1.2 million as of the end of last year, up 237,000 from the end of 2022. Furthermore, we achieved positive possibility with non-GAAP net income reaching RMB 108.1 million. A stock turned around from the non-GAAP net loss of RMB 683 million in 2022. These robust operational and financial recoveries underscore our dedication to seizing opportunities within China's mobile device charging service industry, while adhering to our philosophy of efficient expansion. We are confident that this transformation will continue to unfold throughout 2024, as we remain focused on the pursuit of strategies aimed at sustainable growth and enhanced profitability. Now as for the fourth quarter of last year, we were able to deliver strong year-over-year results, with GMV increasing by 42%. Generally, the fourth quarter is a light season for our operation due to the generally colder weather. However, we continue to see highlights during the quarter. Total POIs increased by more than 45,000 during the quarter, despite seasonality and the rebalancing of our direct model POI portfolio. GMV during the National Golden Week in October displayed…

Thank you, Mars. Now, let me walk you through the fourth quarter and full year 2023 financial results in greater detail. For the fourth quarter of 2025, revenues were RMB 486.6 million, representing a 18.3% year-over-year decrease. Mobile device charging revenues, which consist of revenues generated from both direct and the network partner models, were RMB 465.7 million and accounted for 95.7% of our total revenues for the quarter. Revenues generated from direct models, which comprise of mobile device charging services fee of RMB 210.9 million and product sales of RMB 4.8 million, were RMB 215.7 million for the fourth quarter of 2023, down 19.8% year-over-year. The decrease was primarily due to the decrease in number of POIs operated under direct model. Revenues generated from network partner models, which comprise of mobile device charging solution fee of RMB 16.6 million and sales of cabinet and power banks of RMB 189.4 million, or RMB250 million for the fourth quarter of 2023, down 21.6% year-over-year. The decrease was primarily due to the change in the contractual arrangement with network partners. And there is a new contractual arrangement. Mobile device charging revenues generated under the network partner is net of incentive fees paid to the network partners. The decrease was partially offset by the increase in the sales of cabinet and power bank to network partners. Other revenues, which accounted for 4.3% of our total revenues, were RMB 20.9 million for the fourth quarter of 2023, up RMB 167.7 year-over-year. The increase was primarily attributable to new business initiatives and the increase in users and advertisement efficiency. Cost of revenues were up 41% year-over-year to $198.7 million for the fourth quarter of 2023. The increase was primarily due to the increase in sales of cabinet and the power bank under the new contractual…

Thank you. [Operator Instructions] Your first question comes from Charlie Chen with China Renaissance. Please go ahead.

Thank you, management for taking my question. I actually have two questions. One is, can you elaborate a little bit more on the rebalancing of POIs from the direct-to-network partner model? How exactly does this work and is there a more specific target for the balance of the two models? My second question is the outlook for 2024. Can management give a bit more color on the overall outlook in terms of growth and profitability? Thank you.

Thank you, Charlie. I think your question is regarding how we rebalance the two models, business models, and also what's the future of the models, the trend. It's a great question. We definitely spent a lot of time discussing these strategic questions, and I think we are getting there. The collaboration of our POI allocation between the two models stems primarily from two factors, actually. Firstly, the remarkable expansion of our network partner model since 2022. The growth in the number of the network partners have picked up significantly as a result of the two. We are able to increase the effective coverage of POIs in regions where we have our direct model present and at the same time enhance the regional diversification. That's why our POI count under the network partner model have consistently trended up in the last few years. Secondly is the adjustment of our direct model POIs, which we have consistently performed. During the pandemic, the closure rate of the POIs was significant, very high, the normal times. This has resulted in our direct model having to terminate partnership and remove cabinets from large number of POIs during that period. During the general recovery phase of last year, we proactively looked at each POI under the direct model, underperforming ones that generate a negative economics. Even after the recovery in food traffic in 2023, are then terminated under the direct model. Again, the rebalancing between the two models is driven by the increase in network partner count and decrease in direct model POI that are underperforming. Going forward, I think the trend of increasing contribution of network partner model will persist in the foreseeable future. We will naturally find the balance between the two over time, but I would like to emphasize a bit on how…

Thank you, Charlie. The consumption power in China has been a bit mixed in the past few months. We are seeing mixed results with holidays and weekends recovering in normalization, but weekdays have been a little softer. We do not offer a guidance on the top line growth or profitability, but in 2024, we will continue to drive our growth and given the potential in untapped POIs within China and introduce more ways to optimize our costs and expenses. We are confident that we can best capture the opportunities in the mobile device charging service market in China, as well as continue delivering the value to our shareholders. Thank you.

Thank you. [Operator Instructions]

Once again, thank you for joining us.

Thank you. We are now approaching the end of the conference call. I will now turn the call over to Energy Monster's CFO, Maria Xin, for closing remarks.

Okay. Once again, thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you for your continued support, and we will look forward to speaking with you in the coming months. Thank you.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.