Ladies and gentlemen, thank you for standing by and welcome to A2L Lifestyle Holdings First Quarter 2026 Earnings Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a Q&A session. Today's conference is being recorded. I would now like to turn the call over to Mr. Lu Hu, IR Director. Thank you. Please go ahead, sir.

Thank you, Operator. Good morning and good evening, everyone. Welcome to our first quarter 2026 earnings conference call. Today, you will hear from our founder, chairman, and CEO, Mr. Wang Haijun, and our EVP co-safo, Mr. Wu Jianfeng. Before we continue, please be aware that today's discussion will include forward-looking statements and federal securities laws. These statements are subject to various risks and uncertainties. And actual results may differ significantly from what is stated or implied in our comments today. The company is not obligated to update any forward-looking statements except as required by applicable laws. Additionally, during this call, our management will discuss certain non-GAAP financial measures solely for comparison purpose. For a clear understanding of these measures and the reconciliation of gap-to-non-gap financial results, please refer to the earnings release issued earlier today. First of all, a webcast replay of this conference call will be accessible on our website at ir.yaduo.com, where a copy of the results presentation is also available. Now, I will turn the call over to Mr. Wang, our CEO.

Thank you, Luke. Hello, everyone. Thank you for joining Atour's first quarter 2026 earnings call today.

与行业竞争的理性回归 为消费市场 营造了更加良性的 生长环境 在此背景下 酒店市场延续温和复苏下的 结构性升级 发展重心转向 精细化与差异化的深耕 零售市场的消费市 也从传统制造驱动 走向体验驱动 消费需求从注重功能 与性价比 向追求身心体验与

Please turn to our slides, entering twenty-twenty-six Next, China's service consumption is accelerating its transition from scale-driven expansion to value-driven upgrades centered on quality and experience. Supportive policies are being refined and implemented, while industry competition is becoming more rational. Together, these factors are shaping a healthier environment for the consumer market. Against this backdrop, the hotel market has continued its moderate recovery alongside structural upgrades, with development focus shifting toward deeper cultivation of refinement and differentiation. Meanwhile, the retail market is also evolving from traditional manufacturing-driven models to an experience-driven approach. Consumers are increasingly prioritizing holistic experiences and emotional value over functionality and value for money. At this pivotal moment, we will firmly seize the innovation opportunities arising from these transformations by embedding innovation across every dimension of our products, operations, and organization and converting these opportunities into a long-term sustainable growth engine. We are also more convinced than ever that our user-first philosophy, with experience as our cornerstone and a brand as our anchor, is the fundamental path for a tour to navigate industry cycles.

Now, I would like to provide more details on our business performance for the first quarter of 2026. 首先是住宿业务,一季度集团大盘及成熟酒店的经营表现均延续了逐季度改善的趋势,大盘RAWPA恢复度实现转正,其中ADR的稳健提升是主要驱动,这背后是在更加良性竞争环境下的价值回归,也是我们品牌力的持续沉淀与释放。 1季度集团大盘ROARPA为311.6元,是2025年同期的102.4%,其中 OCC为25年同期的100.6%,ADR为25年同期的102.1%,再赢超过18个月的成熟酒店ROARPA为25年同期的98.3%,

Let's begin with our hotel business. In the first quarter, performance across our overall hotel portfolio and our mature hotels continued to improve sequentially. We achieved positive year-over-year rev part growth, primarily driven by a steady increase in ADR. This reflects a return to value-based competition in a healthier industry environment, alongside the steady compounding of our brand equity. In the first quarter, our REVPAR was R&B 311.6, representing 102.4% of the level in the same period of 2025. Specifically, OCC reached 100.6% and ADR stood at 102.1% of their levels in the same period of 2025. RevPAR for our mature hotels in operation for more than 18 months was 98.3% of the level in the same period of 2025, with OCC and ADR at 99.2% and 99.4%, respectively of their levels in the same period of 2025. As for our hotel network, we've adhered to a quality first principle and maintain strict quality control for every new signing and new hotel opening, ensuring growth is built on a solid quality foundation. In the first quarter, we opened 110 new hotels. By the end of the first quarter, our total number of hotels in operation reached 2,088. As of the same date, our pipeline of hotels under development remained at a healthy level of 751. On the hotel channel front, our CRS channel continued its steady performance, accounting for 63.7% of total room nights sold in the first quarter. The contribution of room nights sold to corporate members was 19.3% during the quarter. At the same time, we are safeguarding the experience of guests who book through our official channels with our price assurance policies, including the price drop refund and a best price guarantee, as well as various other practical measures. During the Chinese New Year holiday in particular, the seamless execution of these safeguards earned widespread positive feedback from users.

This reflects our long-term commitment to deepening our membership operations and strengthening member loyalty, while also representing our consistent commitment to providing users with a more reassuring experience. 同步的是我们供应链能力的系统性提升 越来越多的优质供应商加入到我们的供应链的体系 平台可选品类更加丰富 加盟商通过平台集中采购的意愿也在不断提高 我们希望供应链业务能够持续带来长期价值 一方面富能供应商提供高质价比的产品 提高采购效率 提升其整体的加盟体验 另一方面保障用户获得一致性的住宿体验 让住客在使用产品时能感受到便利与安心 我们持续践行供应链采购八大承诺 在价格售后服务等方面形成可靠机制 也在深化与上游供应商的合作研发 优化现有产品的实用功能 同时开发更有价值的新产品 我们将以创新为驱动 推动供应链核心能力的不断进阶 共同驱动亚夺品牌价值的提升 As our hotel network expands and our brand strength steadily grows, our supply chain capabilities are advancing in parallel.

More high-quality suppliers are joining our supply chain network. The platform's offerings are becoming more diverse, and franchisees are increasingly willing to consolidate their procurement with us. We want our supply chain business to consistently deliver long-term value in two aspects. First, by empowering our franchisees and suppliers with high-quality products at attractive value, helping them improve procurement efficiency and enhancing the overall franchisee experience. Second, by ensuring a consistent state experience for users, giving them greater convenience and peace of mind when using our products. We adhere to our eight commitments to supply chain procurement, establishing reliable mechanisms across pricing, after-sales service, and customer care. At the same time, we are deepening collaborative R&D with upstream suppliers to improve the practical functionality of existing products and develop new ones that deliver greater value. We will take innovation as our driving force to continuously enhance the core capabilities of our supply chain, jointly elevating the value of the auteur brand.

Next, I would like to share the latest developments across our hotel brands. 构建起难以复制的差异化壁垒 始终保持可持续发展的韧性 亚朵酒店最新产品亚朵3.6通过对用户真实住宿体验的深度拆解 重构了全流程中的关键体验节点 并由此打磨出一套可验证可复制的运营标准和产品模型 亚朵3.6发布一年一年多以来 持续收获市场的积极反馈 In a highly competitive hotel market, a tour pioneered and continues to lead the upper-mid-scale segment.

Over the past decade, we have earned strong customer word of mouth and steadily built clear, resilient brand mindshare. This long-term commitment has enabled us to build differentiated competitive advantages that are difficult to replicate. supporting our resilience and sustainable growth through ever-changing market conditions. Atour 3.6, our latest Atour hotel product, was built around a systematic redesign of the key moments in the guest journey, grounded in an in-depth deconstruction of real guest experiences. This has allowed us to create a verifiable and scalable operational standard and a product model. Since its launch over a year ago, Atour 3.6 has continued to receive positive market feedback, validating our product competitiveness in the upper-mid-scale market. A tour origin represents our continued effort to explore and expand the possibilities of the upper mid-scale segment, and it marks a concrete step forward in our grant-led excellence strategy. Going forward, we will continue to refine a tour origin with a long-term mindset, while advancing more refined operations and quality upgrades. We will roll out the deep sleep system hotel-wide, and further integrate cultural elements and the service details from Yunnan. We hope A Tour Origin will bring the tranquil strength rooted in Yaduo village to more corners of urban life, further enriching what the Chinese experience represents. In the first quarter, rough part of A Tour Origin hotels in operation exceeded RMB 400. The two upper mid-scale brands developed in parallel, forming a differentiated and a complementary price tier. For the upscale brand, Saha Hotel continues to build brand visibility and recognition, while expanding its development potential. In the first quarter, RFPAR of SAHE Hotels in operation exceeded R&B 910, with ADR surpassing R&B 1,000. Meanwhile, SAHE has attracted a more diverse customer base with a higher proportion of international customers and family travelers. On overseas review platforms and social media, SAHE has also received a growing number of organic recommendations and positive reviews from international users. This demonstrates the unique appeal of SAHE's deep Chinese cultural roots and opens up broader possibilities for its future development. We are taking a long-term view on Saha. We will continue to drive brand upgrades, bringing China's homegrown philosophy and expression of upscale living to a broader global audience. Zaha's development calls for patience.

We will remain disciplined in scale, pursue continuous refinement in product and service, and translate our long-term vision into every tangible experience. 越来越多年轻用户的认可 商务客群的范围也在逐步拓宽 品牌的差异化势能持续积累 轻居3.3已陆续开出超过20家酒店 凭借更优质的产品体验和更高效的经营模型 这一代产品在用户口碑和加盟商反馈上均获得高度认可 经营层面 轻居3.3产品溢价的能力更强 一季度轻居3.3再营酒店ROARPA

For our mid-scale brand, demand for more differentiated stay experiences continues to grow, an opportunity that aligns closely with Atura Lite's positioning. Atura Lite continued its steady, long-term trajectory in the first quarter. On the customer side, Atura Lite has been attracting a more diverse customer base, gaining increasing recognition among younger users while steadily broadening its business traveler base. This has further built the brand's differentiated momentum. A Tour Lite 3.3 has now opened in more than 20 hotels. It enhanced the product experience and more efficient operating model have earned strong recognition from both customers and franchisees. Operationally, Atour Light 3.3 has demonstrated stronger pricing power. In the first quarter, rough part of Atour Light 3.3 hotels in operation was more than 10% higher than that of the 3.0 version. We fully recognize that brand development is not built overnight. It requires us to first focus on product refinement and operating system development, so that we can build strong brand equity and support healthy, sustainable growth. In 2026, we will continue to comprehensively and systematically enhance Atura Light's operational efficiency and product competitiveness and continue to focus our expansion on second tier and above cities, pursuing quality light expansion and laying a more solid foundation for the next stage of Atura Light's development. Moving on to our retail business. Entering 2026, Atul's retail business sustained its strong growth momentum, with core categories continuing to deliver outstanding performance. Retail revenue reached RMB 1 billion and 71 million in the first quarter, representing 54.4% year-over-year growth. A tour planet also ranked among the top brands in the betting category on major third-party platforms, with our product and brand strength continuously being validated by the market. We recognize that maintaining long-term competitiveness requires continuous innovation, responding faster and more precisely to meeting the evolving needs and expectations of our users. As our understanding of users' sleep needs deepens, we are steadily turning latent demands into tangible product strength. We approach each product iteration as a systematic solution, grounded in scientific testing and validation.

As a 12-planet's product capabilities continue to grow, we are proud to enter a new stage defined by the technological innovation and the standard setting. 枕头品类方面,一季度亚朵星球延续断层领先的优势,在主流第三方平台稳居品类销售第一,我们始终以真实的睡眠需求为导向,将其贯穿于枕头品类的每一次产品升级,积累了良好的口碑。 In the Pillow category, Atura Planet maintained its strong and clear leadership in the first quarter,

consistently ranking first in category sales on major third-party platforms. We have remained guided by genuine sleep needs, integrating this principle into every product upgrade within the pillow category, consistently building a strong word of mouth. During the Chinese New Year, we launched a special edition of the Deep Sleep Memory Foam Pillow Pro 3.0. Paired with a supporting brand campaign, we sought to turn a sleeping product into a meaningful expression of emotion, helping users rest fully in body and mind during the holiday, and fall naturally into deep sleep.

300,000,000.

For our comforter category, market share is steadily increasing, with very strong growth continuing into the first quarter. The Deep Sleep Thermo-Regulating Comforter Series has consistently achieved strong sales and garnered significant user preference, with cumulative sales exceeding 3 million units since its launch. At the end of March, we launched the latest upgrade in the series, the Deep Sleep Thermo-Regulating Comforter Pro 3.0 Summer Season. This new generation delivers systematic improvements in dynamic temperature and humidity control, featuring a fully upgraded two-way temperature regulation technology that helps smooth out temperature fluctuations. Its moisture absorption and permeability have also been enhanced. With each innovation cycle in the comfort category, our product strength continues to improve, enabling us to more precisely capture users' pain points and translate them into practical applications through enhanced R&D capabilities. Within just 45 days of launch, the GMB of Deep Sleep Thermal Regulating Comforter Pro 3.0 summer season exceeded R&B 100 million. For new Caligories, sales momentum also has been very positive. Recently, we launched the summer edition of the Deep Sleep Launchwear in line with the season and introduced the new color options for the Deep Sleep Fitted Sheet. As our sleep ecosystem continues to evolve, a tour planet's product mindshare among users is becoming stronger, and a trust between the brand and users is reinforced through each experience. Turning to membership, by the end of the first quarter, our registered individual members reached 116 million, representing a 20% year-over-year increase. In 2026, we will continue to focus on deep sleep as a core scenario, deepening the synergy between our hotel and retail businesses to enhance members' sense of membership value and benefits. At the same time, we are actively exploring partnerships with like-minded brands, jointly creating expanded quality lifestyle experiences. We hope Atura membership will continue to evolve as a lifestyle membership brand that accompanies users with warmth, helping every member find experiences where body and mind return to inner peace.

Thank you.

Finally, I would like to share Atul's progress on ESG. We recently released the Atul Group 2025 ESG report. Atul started from Yaduo village in Yunnan, and we have always been dedicated to a founding aspiration of doing good. Over time, this simple goodwill has become the spiritual foundation of Atul's growth. We have embedded ESG principles into our corporate mission and core values, continuously enhancing our ESG governance and advancing environmental responsibility across our hotel and retail operations. Through industry support and social assistance programs, we continue to give back to Yaduo Village and the surrounding communities, fostering goodwill and extending warmth.

2025 年底 我们正式成立了亚朵工艺基金会 希望以更系统的方式推动工艺事业 传播人文关怀 近期 聚焦一线客房服务群体 我们推出了专属的工艺项目 不仅面向亚朵自身伙伴 也向全国服务业客房从业人员开放 我们秉持每一个人都值得善待的理念 希望将亚朵的温度延伸到整个行业

让善意的连接产生更深远的影响。 service industry, guided by our belief that everyone deserves kindness, aim to extend a towards warmth to the broader industry, and enable these connections of goodwill to generate a more far-reaching impact. grounded in the present and looking to the long-term, we will continue to uphold our mission of creating an intimate ambience where people can warmly connect, stay true to our founding aspiration, and fulfill our corporate responsibilities. We will remain committed to doing the right things with warmth, steadily move toward our long-term vision of a timeless tour, warmth along every journey, and continue to contribute steadfast and warm strength to the industry and society. I will now turn the call over to our co-CFO, Mr. Wu Jianfeng, who will discuss our financial results.

Thank you, Hai-Jun. Hello, everyone. I would like to present the company's financial performance for the first quarter of 2026. Our net revenues for the first quarter of 2026 grew by 47.5% year-over-year to RMB 2,811 minutes. Revenues from our monetized hotels for the first quarter of 2026 grew by 51.9% year-over-year to R&B $1,568 million. The increase was primarily fueled by the ongoing expansion of our hotel network as well as supply chain business development. Revenues contributed by our leased hotels for the first quarter of 2026 decreased by 8.0% year-over-year to R&B $118 million. The decline was primarily due to a decrease in the number of leased hotels as a result of our product mix optimization. The total number of our leased hotels decreased from 25 as of March 31st, 2025 to 19 as of March 31st, 2026. Revenues from our retail business for the first quarter of 2026 increased by 54.4% year-over-year to RMB 1071 million. The growth was driven by increasing brand recognition, successful product innovation, and a broadened range of product offerings. The growth of our hotel businesses for the first quarter of 2026 increased by 29.5% year-over-year to R&B $550 million. The decline in the growth margin was primarily due to the changes in the revenue structure. The profit of our retail business for the first quarter of 2026 increased by 58.3% year-over-year to R&B $564 million. The increase in the gross margin was attributable to the increasing contribution from higher margin products. And marketing expenses accounted for 14.3% of net revenues for the first quarter of 2026, compared with 14.8% of the same period of 2025. The decrease was primarily due to improved efficiency of investment in our retail business. Federal and administrative expenses, excluding share-based compensation expenses, accounted for 4.2% of net revenues for the first quarter of 2026, compared with 4.1% for the same period of 2025. Technology and development expenses accounted for 1.8% of net revenue for the first quarter of 2026, compared with 2.1% for the same period of 2025. Adjusting net profit margin for the first quarter of 2026 was 17.4%, representing a decrease of 0.7 percentage points year over year. Adjusted EBITDA margin for the first quarter of 2026 was 25.5%, increased by 0.6 percentage points year-over-year. We maintained a healthy cash position as of March 31, 2026. Cash and cash equivalents totaled RMB 3.7 billion, with net cash of RMB 3.4 billion. Today, in accordance with our annual dividend policy, we declared the first cash dividend of 2026, totaling around US$72 million, as a reward for our shareholders' trust and support. That concludes our financial highlights for the first quarter of 2026, and for the full year of 2026, we currently expect total net revenue to increase by 24% to 28% compared with the full year of 2025. Now let's open the floor for Q&A.

We will now begin the question and answer session. To ask a question, please press star 1 and 1 on your telephone and wait for a name to be announced. For the benefit of all participants on today's call, if you raise your questions in Chinese, Please, please immediately repeat your questions in English. Please limit your questions to one at a time. If you wish to have follow-up questions, please rejoin the queue. One moment for the first question. Your first question comes from the line of Sujie Lin of CICC.

Please go ahead. of the time of the year, the speed of the time of the year is faster, so will it affect the whole year of the year? The other thing is, is there any change on the new opening? Thank you, management. Congrats on another strong quarter. So we noticed a faster pace of hotel closures in Q1. So we want to know whether that will affect the full year closure targets. And additionally, is there any change regarding the guidance on new openings?

好 谢谢思杰 我来回答你这个问题 先谈一下关电 我们一季度的关电的节奏相对会集中一些 共关了37家电 主要的原因是去年我们已经确定要关闭的部分的项目 是顺延到了今年收尾 所以体现在数字上的话存在一定的滞后性 那么我们对于今年全年的关电目标的话 还是维持80家不变 先谈一下关店 我们一季度的关店的节奏相对会集中一些 共关了37家店 主要的原因是去年我们已经确定要关闭的部分的项目 是顺延到了今年收尾 所以体现在数字上的话存在一定的滞后性 那么我们对于今年全年的关店目标的话 还是维持80家不变 此外基于去年主动发起的这样的结构性的调整

Thank you, Sijia. let me answer your question. In Q1 we had a relatively more concentrated pace of closures with a total of 37 hotels being closed. The main reason was that some projects we had confirmed last year to be closed were carried over to this year for finalization and resulting in that lag in the numbers. For our full year target for hotel closures this year remains unchanged at 80 hotels. And moreover, thanks to the proactive structural adjustments we initiated last year, the quality of our operating hotels now has clearly improved. And in this process, we have also gradually sorted out and established a set of long-term mechanisms. For older hotels that have been in operation for many years, we will provide targeted support and customize the renovation plans to lower the barrier to upgrading, along with partial fee waivers and financial support policies to effectively help these older hotels enhance their market competitiveness. And as for new openings, we are proceeding steadily according to our planned pace and adhering to the premier hotel logic. Newly opened hotels must be the ones that have met our positioning and can provide high-quality experience for guests. As of the end of Q1, we had 751 projects in the pipeline, ensuring an ample and high-quality reserve. Therefore, we are maintaining our full-year hotel opening target unchanged. Thank you.

Thank you, Zizie. Next question, please.

Questions? One moment for the next question. Our next questions come through the line of Dan Chi of Morgan Stanley. Please go ahead.

This is Dan from Morgan Stanley. My question is about REVPA trend for Q2. Can the management share some color with us? And whether there's any change in the management's visibility on the full year REVPA outlook? Thank you.

Thank you, Dan. Again, entering Q2, we had observed that leisure travel remained strong. In particular, spring break in some regions during April further boosted travel demand, and the more dispersed travel schedule has led to a more balanced distribution of holiday passenger flows. However, when we look ahead, market volatility still exists. Therefore, we maintain a cautiously optimistic attitude about REVPAR performance in Q2. As for long-term trends, we also see various proactive policies continuously to unlock the potential of service consumption and injecting strong vitality of consumption into the industry. Although changes in the external environment may cause short-term fluctuations in the travel market, and the accommodation industry as a whole remains in a stage of fluctuating recovery. Against this backdrop, we will not deliberately pursue short-term performance. Instead, we will strategically expand our reach to a broader range of business travelers and leisure travelers, continuously refine our service details that guests can truly feel, and make a tour the most reassuring and reliable choice for travelers when staying.

Thank you, Dan. Next question, please.

Moment for the next question. Our next question comes from the line of Lidia Ling of Citi. Please go ahead.

Hi, Management. This is Lidia from Citi. So could you share with them like the whole venture sentiment on the opening recently and also whether your company make any changes to your signing strategy? 中国的核心城市核心商圈的布局抓住高频的商务出行和城市文旅需求的基本

那第二方面呢我们也在有选择的去捕捉休闲需求增长红利的部分 比如说墙三线的重点的潜力是潜力市场以及一些具备稳定流量的5a级的景区所在的城市 在这类具备市场基础,并且拥有长期增长空间的潜力的区域,精准的筛选具有发展前景的项目。 Thank you, Lydia.

In March, we mentioned that the market was gradually returning to rationality, and the franchisees are adopting a more mature mindset, so they are not over optimistic nor anxious about short-term fluctuations. And regarding our signing strategy, first, we will continue to strengthen our presence in the core cities and prime commercial areas across China, capturing the fundamental demand from high-frequency business travel and urban cultural tourism. On the other hand, we are selectively capturing the growth opportunities from leisure demand, for instance, in key potential markets such as strong third-tier cities and cities with 5A-rated scenic spots that generate stable visitor flows. In these promising areas with solid market foundations and long-term growth potential, we are carefully selecting projects with strong development prospects.

The third thing is to look at the long-term market. The quality of the product is the most important. But in the market, the quality of the product is not the same. We will also share this opportunity to share the quality of the product. The quality of the product is not only in the design of the architecture and the structure of the building, but it is in the experience as the core, to achieve an overall quality of the品質. The first product is the base of the product, the core of the product is the ability, and the experience of the continued growth is the壁壘. 这样的品质观呢带来一个重要的结果 我们的溢价能力不是靠成本压缩化来的 这也让我们有能力持续的向上探索价格的边界 我想向萨和亚朵建议这些新的品牌就是我们在这个品质逻辑下生长出来的 是对现有产品的替代 而是对亚朵品牌想象空间的一个拓展

Thirdly, in the long run, the quality of signed projects is of critical importance. However, there is no consensus in the market on what quality truly means. Let me take this chance to introduce to you the at-horse concept of quality. Our concept of quality goes beyond mere hardware upgrades and structural improvements. It is rather rooted in experience and aims to build a comprehensive quality composite. Leading product strength is the foundation. The ability to open hotels in the core areas is a key capability. And the continuous refinement of experience is our competitive moat. Such a quality philosophy leads to one important outcome. Our pricing power is not achieved through cost-cutting, but it is earned through guest perception. This gives us the ability to continuously push pricing boundaries upward. New brands like Saha and Atoor Origin have emerged upon this logic. They are not replacements for existing products of ours, but rather the expansions of the Atoor brand's imaginative horizon.

Thank you, Lydia. Next question, please.

A moment for the next question. Our next question comes from the line of UBS of UBS. Please go ahead.

Let me translate to English. This is Chen Xin from UBS. And my question is about retail business. Q1 retail revenue outperforms the market practitioners. What factors have contributed to the sustained popularity of your new products? Given the positive trend, has management provided any updates to the full-year retail revenue cadence?

Thank you. I think that the growth of the sales industry is not only left in the magnitude of the numbers, but I also want to share the concept of the development behind the development of the product. Let me give you an example. This is our new version of the KOMB PRO next year series. When we released this first product, it should be removed from the traditional equipment. I think this is a product structure of the design. In the second century, we also realized that the user's real need is not a very simple cold, but a self-舒服. So, we renewed the system and the design of the design. 把被动的两感升级为主动的控温和排施 我想呢第二代呢是需求的升级的创新 到今年我们推出第三代产品的时候 我们也针对夏季的室内的温度忽冷忽热这一个痛点 我们希望能够为用户打造的是能够主动响应环境变化的动态的系统 所以第三代我们进一步提升了动态的控温和控室的性能 我想这是场景的深化的创新 Thank you, Chen Xing

The growth of our retail business is not just about the numbers So right now what I really want to share is our product methodology behind this growth Let me give you one example Let's take the Deep Sleep Thermal Regulating Comforter Pro Summer Season Series as an example. When we launched its first generation three years ago, we changed the traditional duvet cover design and created a one-piece design with a cool-to-the-touch feel on both sides. That was a product structural innovation, as I think. With the second generation, we realized that users' real need for coolness It's not about extreme coldness, but a naturally comfortable, refreshing feel. So we re-engineered the ventilation system and the fabric structure, upgrading from passive cooling to active temperature control plus moisture wicking. This second generation is demand-driven innovation. When we launched the third generation this year, we targeted the pain point of fluctuating indoor temperatures in summer, aiming to create a dynamic system that actively responds to environmental changes. So the third generation further improves dynamic temperature control and humidity control.

This is what I think has deepened scenario-driven innovation. 再到一床会呼吸的被 推动这个变化的呢 是用户在真实的使用场景里 那些被反复验证过的需求 呃这个例子呢 也代表了我们这条被子背后的方法论 其实也是我们整个零售业务的方法论 就是每一次的迭代 都是把原来模糊的用户的感受 转化为一个可以定义 可以衡量 可以复制的技术的标准

After these three iterations, the definition of our product has fundamentally changed. From a cool comforter to an air permeable comforter, and then to a comforter that breathes. What drives this change are the repeatedly validated needs that emerge from real user scenarios. This example of Comforter is also the methodology of our retail business. Each iteration transforms previously vague user sensations into a definable, measurable, and a replicable technical standard. So, after these three iterations, we've now come to realize that the most insurmountable mode is not a specific material or patent, but rather the systematic capability to continuously stay close to users and constantly translate their feelings into standards.

Thank you, Chen Xin. Next question, please.

Also, let me add to the Retail Revenue Guidance you asked about. Thanks to the solid groundwork late in the first quarter and the strong sales momentum of our new products, we are confident that we will surpass our previously announced full-year revenue target. Therefore, we are raising our full-year retail revenue guidance to grow 30 to 35 percent year-on-year. Thank you.

Thank you, Chen Xin. Next question, please.

Thank you for the questions. We will now take the last question coming from the I translate my question in English.

I'm Giwei from CITICS. We noticed that you had also announced dividend plan for the first half year. Could you share whether there have been any changes or developments in the shareholder return policy?

Thank you, Qiwei. Regarding shareholder returns, we have always placed a great importance on this. Today, we also announced our first dividend distribution plan for this year with a total amount of approximately 72 million U.S. dollars, representing about 31% of the previous year's net profit. In addition, since we began repurchases last year and as of Q1 this year, the total repurchase amount has exceeded 100 million U.S. dollars. Going forward, we will continue to follow our comprehensive shareholder return plan that combines dividends and share repurchases, still targeting approximately a 100% payout ratio based on the previous fiscal year's GAAP net profit as our shareholder return policy. Thank you. Thank you.

That concludes today's question and answer session. I will now turn the conference back over to Mr. Luke for any additional or closing comments.

Thank you for joining us today. If you have any further questions, please feel free to contact our IR team. We look forward to speaking with you again next quarter. Thank you and goodbye.

We conclude today's conference call. Thank you for participating. You may now disconnect.