Ladies and gentlemen, good day and welcome to the Yatsen First Quarter and Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Irene Lyu, Vice President, Head of Strategic Investment and Capital Markets. Please go ahead.

Thank you, operator. Please note the discussion today will contain forward-looking statements, relating to the company's future performance and are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect Yatsen's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. Please see the earnings release issued earlier today for a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results. Joining us today on the call from Yatsen's senior management are Mr. Jinfeng Huang, our Founder, Chairman and CEO; and Mr. Donghao Yang, our CFO and Director. Management will begin with prepared remarks, and the call will conclude with a Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on Yatsen's Investor Relations website at ir.yatsenglobal.com. I will now turn the call over to Mr. Jinfeng Huang. Please go ahead, sir.

Thank you, Irene, and thank you, everyone, for participating in Yatsen's first quarter 2025 earnings conference call today. I will begin with a market overview and our key financial results, followed by insights into our key strategy initiatives and operational highlights. China's beauty market saw modest growth in the first quarter of 2025. According to the China National Bureau of Statistics, beauty retail sales rose 3.2% year-over-year, slightly trailing the 4.6% year-over-year growth in total retail sales of consumer goods. Online beauty sales reflected a similar trend. Combined beauty sales on Tmall and Douyin recorded low double-digit year-over-year growth, with the Women's Day shopping festival delivering moderate performance. In terms of channels, Douyin outperformed Tmall in both skincare and color cosmetics categories. Despite a soft market environment, we delivered results in line with our guidance. Total net revenues increased by 7.8% year-over-year. Remarkably, our net revenues from skin care brands rose by 47.7% year-over-year, driven by a 58% year-over-year increase from our clinical and premium skin care brands, including Galénic, DR. WU and Eve Lom. On the profitability front, for the first quarter of 2025, our overall growth margin increased to 79.1% from 77.7% for the prior year period, driven by the greater contribution from higher-margin products. We also reduced our net loss margin by 15.5 percentage points to 0.7% from 15.1% in the prior year, through more strategic marketing spending and streamlined general and administrative expenses. Notably, we achieved a non-GAAP net income of RMB7.1 million, representing a significant turnaround from the non-GAAP net loss of RMB83.8 million for the prior year period. Our solid performance for the first quarter marked another milestone in our strategic transformation, which particularly progressed on two key fronts, accelerating the growth for our skin care brands and optimizing our cost structure to prepare…

Thank you, David, and hello, everyone. Before I get started, I would like to clarify that all financial numbers presented today are in renminbi amounts and all percentage changes refer to year-over-year changes, unless otherwise noted. Total net revenues for the first quarter of 2025 increased by 7.8% to RMB833.5 million, RMB773.4 million for the prior year period. The increase was primarily due to a 47.7% year-over-year increase in net revenues from skincare brands, partially offset by a 9.9% year-over-year decrease in net revenues from color cosmetics brands. Growth profits for the first quarter of 2025 increased by 9.7% to RMB659.1 million from RMB600.9 million for the prior year period. Growth margins for the first quarter of 2025 increased to 79.1% from 77.7% for the prior year period. The increase was primarily driven by an increase in sales of higher-gross-margin products. Total operating expenses for the first quarter of 2025 decreased by 8.6% to RMB693.2 million from RMB758.7 million for the prior year period. As a percentage of total net revenues, total operating expenses for the first quarter of 2025 were 83.2% as compared with 98.1% for the prior year period. Fulfillment expenses for the first quarter of 2025 were RMB51.8 million as compared with RMB51.4 million for the prior year period. As a percentage of total net revenues, fulfillment expenses for the first quarter of 2025 decreased to 6.2% from 6.7% for the prior year period. The decrease was primarily due to further improvements in logistics efficiency. Selling and marketing expenses for the first quarter of 2025 were RMB553.8 million as compared with RMB539.2 million for the prior year period. As a percentage of total net revenues, selling and marketing expenses for the first quarter of 2025 decreased to 66.4% from 69.7% for the prior year period. The decrease…

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. The first question today comes from Maggie Huang with CICC. Please go ahead.

Thanks for taking my question. This is Maggie Huang from CICC. Firstly, congratulations on achieving non-GAAP net income in this quarter. And I have two questions. My first question is that, how do we plan to promote the new products of Perfect Diary and Galénic, especially the foundation products of Perfect Diary and the anti-aging products of Galénic? And my second question is about our performance of this June 18th shopping festival up to now. Is that in line with our expectation? That's my two questions. Thank you.

Thank you, Maggie, for the question. For your first question regarding the Perfect Diary and Galénic new products, we think product innovation and efficacy are the most important in driving consumers' repeat purchase and favorites. Basically, right now, all our product pipelines are really with strong product innovation and are backed by very strong R&D capability, deep consumer insights, and very strong consumer communication. So, right now, for Perfect Diary and Galénic, so far, we have seen very good initial achievement results from the consumer feedback in terms of the facial makeup products and the anti-aging products, which is the foundation and also our VA serum. Once we receive more positive feedback from the consumers and fine-tune our consumer communication, then we can begin to enlarge our channel distribution and also further build these products into the serum products.

All right. Let me take your second question. Well, it's still a bit too early for us to predict our overall performance for the June 18th festival, but so far, so good. I think the sales so far is pretty much in line with our expectations. Thank you.

[Operator Instructions]. Thank you again for joining us today. If you have any further questions, please feel free to contact us at Yatsen directly. Our company information for IR in both China and the U.S. can be found in today's press release. Thank you, and have a great day.

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