Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to ATRenew Inc.'s Fourth Quarter and Full Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. We will be hosting a question-and-answer session after management's prepared remarks. Please note today's event is being recorded. I will now turn the call over to the first speaker today, Mr. Jeremy Ji, Director of Corporate Development and Investor Relations of the company. Please go ahead, sir.

Thank you. Hello everyone and welcome to ATRenew's fourth quarter and full year 2024 earnings press release conference call. Speaking first today is Kerry Chen, our Founder, Chairman and CEO and he will be followed by Rex Chen, our CFO. After that, we'll open the call to questions from analysts. The fourth quarter and full year 2024 financial results were released earlier today. The earnings press release and IR deck accompanying this call are available at our IR website, ir.atrenew.com. There will also be a transcript following this call for your convenience. For today's agenda, Kerry will share his thoughts of our quarterly performance and business strategy followed by Rex who will address the financial highlights. Both Kerry and Rex will join the Q&A session. Please pay attention to the safe harbor statements. Some of the information you will hear during our discussion today will consist of forward-looking statements and I refer you to our safe harbor statements in the earnings press release. Any forward-looking statements that management makes on this call are based on assumptions as of today and that ATRenew does not take any obligations to upgrade our assumptions on these statements. Also, this call includes discussions of certain 4non-GAAP financial measures. Please refer to our earnings press release which contains a reconciliation of non-GAAP measures to GAAP measures. Finally, please note that unless otherwise stated, all figures mentioned during this conference call, are in RMB and all comparisons are on a year-over-year basis. I'd now like to turn the call over to Kerry for business and strategy updates.

[Interpreted] Hello everyone and welcome to ATRenew's fourth quarter and full year 2024 earnings conference call. We are excited to share our business updates, our strategic insights into the pre-owned industry and our development roadmap for 2025. First, I'm delighted to report that we realized total net revenues and profit ahead of target for the fourth quarter and full year 2024. Revenues for the fourth quarter exceeded the high end of our guidance, growing 25.2% year-over-year to RMB4.85 billion. Full year revenue reached RMB16.33 billion representing a 25.9% year-over-year growth, significantly outpacing the growth rates of the pre-owned electronics industry as well as the national retail sales of consumer goods. On profitability, our non-GAAP income from operations was RMB130 million in the fourth quarter and RMB410 million in the full year 2024. Growing 61% and 62.8% year-on-year respectively. In terms of margins, non-GAAP operating margins as we expected were 2.7% in the fourth quarter and 2.5% in full year 2024. The total number of transactions grew healthily to over 35.3 million with China's stronger support and subsidies backed by ultra long special treasury bonds to large scale renewal of equipment and trading of consumer goods in 2025, AHS Recycle stands at the forefront of a promising growth era. Zooming in product revenues for the fourth quarter grew by 26.6% year-over-year. We focused on growing our 1P business and further advancing our user experience. This allows us to enhance the end-to-end cycle of direct engagement with consumers at the front of recycling and retailing. On recycling from consumers we forced an increasing volume of firsthand supplies from individual users as their demand increased. AHS stores have been the quality scenario for fulfillment. In the meantime, we collaborated with JD.com as we master industry leading know how and supply chain capabilities. Together…

[Interpreted] Hello everyone. I am pleased to announce that we achieved strong financial performance in 2024, driving revenue and profitability growth as we developed our core recycling businesses and cultivated our innovative businesses. Total net revenues for the year increased by 25.9% to RMB16.3 billion. Adjusted operating income grew significantly, rising 62.8% to RMB410 million, and we are proud to have achieved our first GAAP operating income for the year as well. These results demonstrate our success in building out our economies of scale and delivering on our missions of driving sustainable development. Before taking a detailed look at the financials of the fourth quarter of 2024, please note that all amounts are in RMB and all comparisons are on a year-over-year basis unless otherwise stated. In the fourth quarter total revenues increased by 25.2% to RMB4,849 million, primarily driven by ongoing growth in our net product revenues. Net product revenues increased by 26.6% to RMB4,461 million, primarily due to the growth in our refactoring scale and the sales offering on consumer electronics through our online channels. Net product revenue for the full year reached RMB14.84 billion, representing a year-on-year increase of 27.3%. Net service revenues were RMB389 million in the fourth quarter representing an increase of 10.7%. The increase was primarily due to an increase in the service revenue generated from PJT marketplace and multi category recycling businesses. The growth in service revenues went along with the upward trend in our marketplace's overall gross transaction value, delivering an overall marketplace take rate of 5.36% in the fourth quarter of 2024. During the quarter, our multi category recycling business contributed over $40 million to service revenues, representing over 10% of service revenues, a significant increase from 5.5% in the same period of 2023. Net service revenue for the full year…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] When asking the question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone in the call. At this time, we will pause momentarily to assemble the roster. The first question that we have is from Joyce Ju of Bank of America. Please go ahead.

Hi management, thank you for taking my question. Could you kindly share your plans to capture the growth opportunities in 2025 on the back of nationwide consumer electronics trading subsidies? May you help us quantify the add-ons from this year's subsidy? What's the outlook for of your top line? Like you know, for this year? Thank you.

[Interpreted] Thank you for the question. We believe China's pre owned electronics market had significant untapped potential. Looking upstream, new smartphone shipments in China rebounded in 2024 by nearly 6% year-over-year to 290 million units. This was driven by a steady increase in replacement demand and support its consumption policies. Meanwhile, according to IDC research, China's preowned smartphone recycling transaction industry has sustained a double-digit growth. The natural trading subsidies are inevitably a growth engine for our recycling business. By leveraging our unique industry position and front-end capabilities, we will strive to seize opportunities and increase our penetration rates in core scenarios. As China deploys national subsidies to mobile smartphones, tablets and smartwatches in 2025, we witnessed a significant increase in CtoB recycling volume in January and February thanks to our front end fulfillment pricing and system capabilities. We aim to further deploy our compliance refurbishment capabilities and high turnover capabilities of PJT marketplace. This is to drive more efficient and profitable circulation of pre-owned consumer electronic products. Through AHS stores and official website, we are meeting the growing consumer demand for high quality pre owned products nationwide. On our recycling service capabilities, we expand our user range by offering a broader area of product service capabilities in addition to more stores and larger two door service teams. We deliver upward recycling results and take rates for product categories while further establishing our product catalog and pricing capability. As a result, we aim at an accelerated growth of the top line in 2025. On tactics, we plan to speed up store openings and expanding our Qiuzhou service team by net adding 800 stores and 1000 two door staff in 2025. This advances our national face to face fulfillment network that will provide instant recycling and cash back services. We convert more customers with such a unique user experience. We will also boost brand investment by amplifying AHS presence on new media platforms like Douyin and Xiaohongshu, reinforcing AHS Recycle's position as the top-of-mind brand name for recycling services and attracting more users to our offline and online touchpoints. Given the bright growth outlook for the pre-owned market, we should value rational investment into brand awareness and fulfillment capabilities in preparation for long-term development. In the mid to long term, our industry leadership and economies of scale will gradually deliver sustained profitability. Thank you for the question.

The next question we have is from Jiao Wan of CICC. Please go ahead.

Hi, good evening. Thank you for taking my questions. We know you have made great progress in reducing costs through automatic quality inspection and operations in recent years. Do you pay attention to recent AI models like Deep Seek and have a plan to optimize your business with AI? Thank you.

[Interpreted] ATRenew is a scenario driven industry Internet company. It achieves scale effects and enhances the standardization of operations through its own recycling and platform businesses accumulating enormous know how. We have AI applications in some business scenarios. For example, in our automated quality inspection centers in Donghua and Hangzhou, we have extensively deployed AI image recognition to automatically determine the appearance and inspect main boards and components, improving inspection accuracy, reducing costs of quality inspection and reducing manual inspection errors. At present, some of our business procedures need human operation and there is considerable room for efficiency improvement through AI. Since the fourth quarter of last year, we have actively embraced a cutting-edge trend and achieved some initial industry application innovations through the deployment of some open source large language models, for example the efficiency improvement of the compliance check of our store operations, digital operation trainings at operation centers, coding for back office related requirements, internal knowledge, database, et cetera. This year we will further deploy AI applications in more departments and business scenarios focusing on the development of AI plus circular economy innovative applications in the fields of intelligent customer service, intelligent quality inspection and intelligent pricing to achieve cost reduction and efficiency improvement in more recycling scenarios and business processes and bring more value to customers. In addition, we expect AI will be more widely deployed on mobiles and PC terminals leading to the renewal of AI hardware. Given we have focused on personal and household electronic products, we believe this presents a significant long term business opportunity for us. Thank you.

Thank you.

The next question we have is from Michael Kim of Zacks Small-Cap Research. Please go ahead.

Great. Good morning or good evening, everyone. Just one follow-up question for me. Can you just flush out your updated thinking on capital management priorities, particularly as it relates to reinvesting for growth versus returning capital to shareholders via buybacks? Thanks.

[Interpreted]. I will address this question. As mentioned earlier, we remain optimistic about the growth of the second-hand recycling industry over the next three to five years. Therefore, we have set real acceleration as our internal target for 2025. Consequently, we will make some OPEC 3 investments in-line with the business scale to enhance the service capabilities on the front end for users and to build the user perception of AHS Recycle's brand name. The emerging businesses that we have focused on developing over the past one to two years such as Multi category recycling, compliant refurbishment and Apple's official trading program have already demonstrated healthy growth and profitability and thus basically requiring no additional investment. Our business model is generally asset light but operational intensive. We will adopt a balanced approach when expanding our store network and fulfillment capabilities in 2025. The adjustment and upgrade of our South China Operations center is complete so there will not be too much additional CapEx in 2025. We aim to maintain a healthy non-GAAP operating profit margin to support businesses reinvestment and shareholder return. We are confident in our business outlook and will further execute on our current repurchase plan. We will also balance the use of cash and invest more when industry opportunities grow. The ultimate goal is to increase long term shareholder returns. The repurchase program is valid until the end of June 2025. We will continue to actively engage with our Board of Directors during the interim for extension.

Got it. Thanks for taking my question.

As there are no further questions at this time. I'd like to hand the conference back to management for closing remarks.

Thank you. Thank you all again for joining us. A replay of today's call will be available on our IR website shortly, followed by a transcript when ready. If you have any additional questions, please feel free to email us at ir@atrenew.com. Have a good day.

This conference is now concluded. Thank you for attending today's presentation. You may now disconnect.