ATRenew Inc. (RERE) Q4 2025 Earnings Call Transcript

Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to AT Renew, Inc., fourth quarter and full year 2025 earnings conference call. At this time, all participants are in 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, Ms. Jessie Jin, Head of Investor Relations. Please go ahead, ma'am.

Thank you. Hello, everyone, and welcome to Agree News' fourth quarter and full year 2025 earnings 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 will open the call to questions from the analysts. The fourth quarter and full year 2025 financial results were released earlier today. The earnings price release and investor size accompanying this call are now 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 quality performance and business strategy, followed by Rex, who will address the financial highlights. Both Kerry and Rex will participate during the Q&A session. Please note our safe harbor statements. Some of the information you will hear during this 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 AT renew does not take any obligations to update our assumptions on these statements. Also, the call includes discussions of certain non-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. And now I'd like to turn the call over to Kerry for business and strategy updates. Hello everyone, and thank you for joining H3 News 4th quarter and 4th year 2025 earnings conference call. We are pleased to review our rapidly improving quarterly operating results and share our outlook for 2026 in alignment with our long-term development strategy. 最终实现了集团强劲的业绩增长 在四季度的财务数据层面 集团再次实现了收入和利润的快速提升

四季度集团的总收入达62.5亿元 同比增长29% Nangap的经营利润达1.8亿元 同比增长38.1% In 2025, the total total revenue of 214.5 million yen increased by 28.9% and the revenue of 5.6 million yen increased by 35.5% and the revenue of the company's initial goal of the company's initial goal.

I would like to begin by expressing my gratitude to our team for their hard work and dedication throughout 2025. By that fastly strengthening our core capabilities and enhancing the user experience, we successfully seized upon the growing domestic demand for second-hand consumer electronics recycling and trade-in services, delivering robust growth across the company. In the fourth quarter, we once again achieved strong growth in both revenue and profit. Total net revenues reached 6.25 billion RMB, representing a 29% year-over-year growth. Non-GAAP operating profit reached 180 million RMB, up 38.1% year-over-year. For the full year 2025, total net revenues grew 28.9% year-over-year to 21.05 billion RMB, while non-GAAP operating profit reached 560 million RMB, up 35.5% year-over-year.

Both revenue and profit exceeded the expectations we set internally at the beginning of the year. 具体来看,第四季度持续贯彻优先EP的发展策略,产品收入实现了30.7%的快速同比增长,配合头部品牌厂商旗舰机型的新机发布以及电商大触,我们做好回收和移旧换新。 过程中夯实线下场景及履约交付能力 结合2195间爱回收门店与2154名上门员工 进一步扩大了面对面交付的覆盖范围 其中与上半年相比 京东已就换新线下交付的比例实现大比例提升 我们从价格 溢价率 时效性等各个方面与京东共同投入 持续打造行业最佳的已旧换新实践 加强用户已旧换新新制 在效率与体验方面 屏风与高峰的上门旅约时效性均实现了大幅的提升 客数等用户满意度指标进一步优化 at our fourth quarter performance.

We continue to prioritize our one strategy, which drove a robust 30.7% growth in net product revenue. By coordinating with major flagship device launches and the e-commerce promotional campaigns, we effectively carried out recycling and trading programs. Throughout this period, we further strengthened our offline presence and fulfillment capabilities, expanding our face-to-face reach through a network of 2,195 AHS stores and a team of 2,154 two-door service members. Notably, the proportion of offline fulfillment for JD.com's trading program increased compared to the first half of the year. Together with JD.com, we made joint efforts across multiple dimensions, including recycling prices, negotiated rates, and fulfillment timeliness. Those efforts continued to define the industry-besting cloud trading practices and reinforced consumer mindshare.

Furthermore, our two-door fulfillment timeliness improved during both peak and off-peak periods, while customer satisfaction metrics, including compliance rates, were further optimized. 基于大前端更充分的货源获取能力 我们得以发挥自身供应链的厚度优势 为终端用户打造更多的合规翻新产品 试剂度合规翻新产品的收入同比增长90.8% 其中以销定修策略为手机翻新零售业务贡献了32%的业绩占比 扩大了零售的虚拟库存 为需求端用户提供了更丰富的产品选项 随着优先零售的超盘策略 EP2C的产品收入同比增长88% EP2C的占比同比提升12.7%至41.7% 创历史性高 进一步验证了我们C端收,C端卖的闭环产业链能力 未来我们可以附用EP2C零售的价格能力 反补到回收端的定价 形成更好的动态价格机制 反向拉动回收业务的增长

Leveraging our enhanced front-end supply access We further utilized our deep flow client chain capabilities to deliver a broader range of combined refurbishment products to our retail users. This led to a mighty 0.8% year-over-year surge in combined refurbishment product revenue in the fourth quarter. Notely, our on-demand refurbishment strategy contributed to 32% of refurbishment revenue for phones, expanding our retail virtual inventory, and offering a diverse area of product options for our on-demand customers. Driven by our retail-first strategy, 1P2C retail revenue increased by 88% year-over-year, and its share of total product revenue rose 12.7 percentage points year-over-year, to a record high of 41.7%. This milestone further validates the ability of our end-to-end circular ecosystem to efficiently source from end-resale back to cut consumers at scale. Moving forward, we will leverage the pricing capabilities developed through 1P2C Retail to optimize pricing strategies at the resulting end, creating a more effective dynamic pricing mechanism, and in turn driving growth of our recycling business. 自营出口通路逐渐成熟 2025年连续四个季度保持环比增长 单月业绩超过5000万元人民币

过程中我们采用国行货源一盘货的业务逻辑 只需一次质检 即可实现出口商品的统一上架销售 我们通过持续推动海外业务线上化的方式 有效提升存货管理与经营效率 为后继建设海外业务平台化能力创造基础 同时我们坚持合规运营的理念 受邀参与了二手商品跨境标准的制定和各地的意见征询工作 坚持标准化运营 提升与海关等监管部门的合作效率 保障了出口流程的时长可控

持续优化海外捕获效率和资金的使用效率 As discussed in previous quarters our overseas business primarily operates under a 1P business model allowing us to broaden our export channels and connect first-hand supplies with higher price global demand Our self-operated export channels continue to mature steadily delivering sequential growth for four consecutive quarters in 2025, with peak monthly revenue recently reaching 50 million RMB. We have adopted an integrated inventory system for all China-sourced supplies. This allows products to undergo a single inspection before being listed and sold across export markets. The continued online transformation of our overseas business has significantly improved inventory management and operational efficiency, establishing a solid foundation for further platformization. Meanwhile, compliance remains central to our approach. We have been invited to participate in developing cross-border standards for second-hand goods and policy consultations in multiple regions. Our adherence to standardized operations, paired with increased efficiency in our cooperation with regulation authorities, such as customs ensures a controllable export process timeline and continuously optimizes overseas restocking efficiency and capital utilization.

PYPY is in the transformation of the trade-off strategy for customers to provide a more profitable experience of the product. The market has also experienced the scale of the market and the revenue growth.

Regarding our platform business, service revenue increased by 8.8% year-over-year in the fourth quarter, with an overall take rate of 4.79% in line with expectations. PYPY marketplace maintained a solid pace of growth, while PiPi enhanced the retail experience for merchants during its strategic shift toward the confinement model.

Our multi-capitalry recycling services once again achieved impressive growth in both scale and revenue. 一方面, 拍鸡囊作为行业最大的B2B平台, 为商家提供销售效率的保障, 保卖业务拉动了行业商家积极上架商品, 抓住货源推动拍鸡囊平台的入仓质检比例提升至81%, 环比进一步增加2%。 我们还在多个城市的通讯市场选址,落地了9个潜质在城市端的潜质检测点,为本地商家提供了更容易触达的授钱服务网络,通过当面交流质检标准提升效率。 此外呢 我们还发现了一个现象和趋势 拍机堂极致性价比的口碑得到了许多下沉市场用户 尤其是大学生的青睐和自发传播 越来越多的个人用户会登陆拍机堂 或者通过专业带逃的服务来拍机堂购买极致性价比的二手手机

也是因为这些C端购买业务的高速增长 截至2025年末 开机当的注册用户数超过了166万 同环比均实现了规模化的增长 In B2B, PJT Marketplace continues to strengthen merchant services and economic benefits and build innovative capabilities, staying firmly on course with its strategic roadmap with take rate unchanged compared with the third quarter. First of all, as the largest B2B marketplace in the industry, PGT ensures sales efficiency for merchants. Our guaranteed sales service incentivizes merchants to actively list products, driving the platform's warehousing inspection penetration rate to 81%, up two percentage points quarter over quarter. Additionally, we launched nine front-end inspection nodes in key communication markets to provide local merchants with easier access to pre-sale support and align inspection standards face-to-face for higher efficiency. We also observed a key trend. PJT's value for money reputation is gaining traction in many lower-tier markets, especially among college students, fueling strong organic growth. Increasingly, individuals are buying second-hand phones featuring cost-optimized performance on the platform, either directly or through dedicated purchasing agents. Thanks to the surge in retail and demand, as of the end of 2025, the total number of registered users on PJD Marketplace exceeded 1.66 million, growing at scale both year-over-year and quarter-over-quarter.

在 B2C平台业务方面 电商行业的POP模式在2025年接受了挑战 幸运的是我们提前进行了寄卖能力的部署 为从事二手优品零售的中小商家 打造了便捷且易使用的直达C端能力 在寄卖模式下 电商行业的POP模式在2025年接受了挑战 幸运的是我们提前进行了寄卖能力的部署 为从事二手优品零售的中小商家打造了便捷且一使用的直达C端能力 在既卖模式下 胎胎团队为商家提供客服 质检 店铺运营 流量管理和售后等支持 将非标的二手生意变得标准化 让二手商家的生意变简单 增加了二手商家的线上 也方便了C端用户挑选好货

In terms of our B2C Marketplace business, the POP model faced challenges in 2025. Fortunately, we proactively deployed consignment capabilities to help small and medium-sized merchants reach consumers directly with convenient and easy-to-use capabilities. Under this model, the PyPy team provides merchants with end-to-end support, including customer service, quality inspection, store operations, traffic management, and after-sales services, standardizing the non-standard pre-owned business. This simplifies operations for second-hand sellers, increases the online supply of pre-owned goods, and makes it easier for users to discover high-quality items. In the fourth quarter, GNV from consignment increased by 253% year-over-year, accounting for 24% of the total GMV of PiPi marketplace business, a notable increase in proportion. 其中得益于透明的价格体系和便捷的服务可及性

黄金回收的GMV同比增长136.3% 并且通过优化为T度收费的模式 黄金回收的Tech Rate实现了小幅度的环比改善 此外基于我们独特的商业模式和持续改善的回收体验 In driving innovation, our multi-category business, which has been internally incubated since 2022, continues to exceed expectations.

In the fourth quarter, user enthusiasm for multi-category recycling surge, driving overall recycling GMV up by 125.7% year-over-year, with accelerated growth across all categories. Among them, gold recycling GMV rose by 136.3% year-over-year, benefiting from transparent pricing and convenient service accessibility. Through the optimization of tiered fee structures, the take rate of gold recycling achieved a modest sequential improvement. In addition, recycling services for second-hand luxury products continued with robust growth in the fourth quarter.

Thanks to its unique business model and improving recycling experiences, its take rate expanded by 1.2 percentage points quarter over quarter, mainly due to increasing demand in the peak season and our improved pricing strategy. 内存价格持续上涨,直接推动了新机的售价走高,这一趋势也为二手行业带来了新的发展机遇,主要体现在以下三个方面,一,二手产品的价格也随之提升,市场价格整体平稳坚挺,有利于二手行业的长期健康发展。 第二点 内存涨价对苹果产品的市场份额更为有利 而苹果产品正是我们业务的核心驱动力 第三点 目前已旧换新仍然有较高的渗透空间 在新机价格上涨的背景下 叠加国部 各大厂商与平台会更加重视已旧换新业务 并持续加大投入 As we move into 2026, we are seeing meaningful changes in the external market environment.

Recently, the continued rise in memory prices is directly pushing up new device prices, and this trend is creating new opportunities for the print-only industry. We see this playing out in three ways. First, pre-owned product prices are rising alongside new devices, keeping overall market pricing firm and healthy, which supports the long-term development of the industry. Second, memory price increases actually work more in favor of Apple's market share, and Apple products are the core drivers of our business. Third, trading penetration still has significant room to grow. As new device prices going up and national subsidies in place, manufacturers and e-commerce players will place even greater emphasis on trade-in programs and continue to increase their investment. Taking all of these together, our view is that the 2026 market environment is not positive for the playing-owned industry, and support continued steady and healthy industry development. 下面,延续之前的战略,我会结合万物新生的三级发展战略来更新我们对于2026年的期盼 第一级战略,继续夯实我们二手手机3C业务基本盘的健康增长

在国股延续,心机涨价,二手行业,健康繁荣的大背景之下 我们将坚定不移地做好回收纽约交付端的用户体验 拉通一盘货,将超盘的底层能力再提升一个台阶 结合合规翻新增值,发力,严选销售 实现更高比例的C端收,C端卖的产业链地环 形成正向的飞轮效应 并且我们将在AI定价 AI超盘 AI自检上持续投入 继续降本增效 向外追求更高速度的增长 向内追求更低成本和更高的效率 这是我们手机3C业务基本盘的核心驱动 Stage 1, we will continue to solidify the healthy growth of our core second-hand consumer electronics business.

Against the backdrop of extended government subsidies, rising prices for new devices, and a thriving, healthy second-hand market, we remain unluring in our commitment to optimizing the user experience in recycling fulfillment and delivery. We will leverage our integrated sources of supply, further strengthen our underlying pricing capabilities. together with our combined refurbishment capabilities to drive more retail sales. We aim to achieve a higher proportion of direct engagement with consumers at the front of recycling and retailing, forming a closed-loop value chain and creating a self-reinforcing flywheel effect.

Furthermore, we will continue to invest in AI-driven pricing operations and quality inspections to further reduce costs and enhance efficiency, Pursuing accelerated growth externally while striving for lower costs and higher efficiency internally is the core driver of our second-hand consumer electronics business The second strategy is to continue to strengthen the world's first return product On the other hand, we have developed the ability to build a new market market market 并在抖音和小红书两个重要的用户营销平台积极建设了爱回收品牌,分别从广阔的消费者群体里围绕二手手机3C的品类建设品牌新制,以及从更关注品质生活方式的用户群体里建设奢侈品回收的品牌新制。 品牌营销在二手行业发展的早期阶段仍然是一个具有战略意义的投入,但是考虑到二手手机3C和其他高质品类仍然是一个相对低频的业务,我们对于品牌营销费用保持审慎的投入,保持自己的节奏。 另一方面 爱回收品牌亦通过生态企业爱分类 进一步渗透到全国的社区场景 借助爱分类在社区端运营的5万余台智能回收机 全年拓展了245个消费品牌 共建合作生态 共同引导绿色消费新时尚 F&A不仅是重要且独特的社区基础设施 并且结合我们在社区高频场景的用户运营手段和策略

我们相信 F&A会越来越成为二回收主营业务增长的重要驱动 Stage 2, we will continue to strengthen AHS Recycle's position as China's leading recycling brand Over the past two years, we have rapidly built strong new media brand marketing capabilities and cultivated the EHS Recycle Brand on two user engagement platforms, Douyin and Xiaohongshu. Through these efforts, we have strengthened brand awareness for putting on consumer electronics among a broader consumer base, and our luxury goods recycling identity resonated with users who prioritize quality lifestyles. While brand marketing remains a strategically important investment in the early stage of second-hand industry development, We will remain prudent with brand marketing investments and progress at our own pace, given that pre-owned consumer electronics and other high-value categories remain relatively low-frequency businesses. At the same time, we will drive penetration of the AHS Recycle brand into communities nationwide through Lovry, the ecosystem extension of AHS Recycle. Loveraging more than 50,000 Lovry recycling kiosks across communities, we expanded partnerships with 245 consumer brands to co-establish a collaborative ecosystem and jointly pioneered green consumption. Lovry is not only a critical and unique community infrastructure. Furthermore, by leveraging our user operations and strategies tailored for high-frequency community scenarios, we are confident that it will increasingly become a key growth driver for our core business. 第三季战略后继勃发努力实现海外战略的突破 这是我们基于万物新增过去15年在中国积累的行业经验 标准能力自动化能力平台能力所展开的 从出口外销业务出发并积累能力

我们将进一步提升海外平台化的水平 提升行业效率 为未来的发展打开空间 此外 基于我们在自助回收机上的能力和经验 我们也在积极与合作伙伴一起 打造海外本地回收的解决方案 把在内地 把在中国内地积累的技术和供应链能力

stage three we will leverage our accumulated strength in china to achieve strategic breakthroughs in international markets this builds on the deep industry experience along with strong standardization automation and platform capabilities we have built over the past 15 years in china starting from our export business and the capabilities we've built along the way, we expect to improve our overseas platform capabilities to enhance industry efficiency and unlock new avenues for future growth. Furthermore, building on our experience with recycling kiosks, we are actively working with partners to develop localized recycling solutions overseas, bringing the technology and supply chain capabilities we have built at home to global markets. We look forward to bringing more news to you. In conclusion, we remain confident in healthy development of the print-on industry and the continued growth of our business in 2026. Now, I'd like to turn the call to our CFO Rex for financial updates. Good day, everyone. I'm pleased to report our fourth quarter and four-year results of 2025, marked by both revenue and profits reaching record highs. Over the past year, we effectively leveraged strategic opportunities arising from China's trade-in programs and industry dynamics. By consistently enhancing fulfillment capabilities, we delivered best-in-class trade-in experiences, while solidifying our brand presence as China's leading recycling brand, further reinforcing our market leadership. In the fourth quarter, our total revenue exceeded the high end of our guidance, increasing by 29% to 6.25 billion RMB, while non-gap operating income surged by 38.1% to over 180 million RMB. For the full year, revenue grew by 28.9% to 21.05 billion RMB, while non-gap operating income rose by 35.5% to nearly 560 million RMB. These results underscore our robust fulfillment capabilities on the recycling side and the growing influence of our brand, which have been pivotal amid the rapid development of China's circular economy. Before taking a detailed look at the financials, 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 revenue growth was firmly driven by continued net product revenue growth. Net product revenues increased by 30.7% to 5.83 billion, largely attributable to the growth in online sales of free-owned consumer electronics.

Net product revenue for the full year reached $19.38 billion, representing a year-over-year increase of 30.6%. 第四季度,服务收入为4.2亿元,同比增长8.8%。 主要得益于排济堂业务以及平台模式开展的多品类回收业务贡献的服务收入增长。 四季度平台综合收费率为4.79%。 本季度多品类贡献近8,000万元的服务收入, 占服务收入的18.8%。 全年服务收入16.7亿元,通名增长12.4%。 全年多品类回收业务贡献2.5亿元, 服务收入通名增长93.4%, 贡献服务收入的14.9%。

2020年这一比例为8.6%。 Net service revenues were 420 million in the fourth quarter, representing an increase of 8.8%. The increase was largely driven by PJT Marketplace and the multi-category recycling business. The overall tick rate of our marketplaces was 4.79% for the fourth quarter of 2025. During the quarter, our multi-category recycling business contributed nearly $80 million of revenue, accounting for 18.8% of service revenues. Service revenue for the full year reached $1.67 billion, representing an increase of 12.4%. Our multicultural recycling business contributed $250 million, representing an increase of 93.4% year-over-year. This accounted for 14.9% of total service revenues in 2025, compared to 8.6% in 2024. Now, let's discuss our operating expenses. To provide greater clarity on the trends of our actual operating-based expenses, we will mainly discuss our NANGAAP operating expenses, which better reflect how management views our operating results. The reconciliations of GAAP and NANGAAP measures are available in our earnings release and the corresponding flow of 6K furnished with the US SEC.

Thank you very much.

In the fourth quarter of 2025, merchandise costs increased by 28.9% to $5.03 billion in line with the growth in product sales. Growth profit margin for our 1P business was 13.7% compared with 12.5% in the same period last year. The gold margin improvement in our 1P business was firmly driven by high-efficiency C2B recycling scenarios, compliant refurbishment capabilities incorporated in our supply chain, and an increasingly diversified retail channel mix. This allowed us to increase the proportion of higher-margin retail sales, with 1P2C revenue accounting for 41.7% of product revenue in the fourth quarter of 2025, up from 29% in the same period of last year. 1P2C revenue accounts for 36.8% of product revenue in the full year of 2025, up from 27.2% in 2024. Merchandise costs for the full year increased by 27.6% to $16.7 billion, with a 1P growth margin of 13.8% compared to 11.8% in 2024.

Thank you.

In the fourth quarter of 2025, fulfillment expenses increased by 21.7% to $480 million. Non-GAAP fulfillment expenses increased by 22.4% to $480 million. Under the non-GAAP measures, the increase was mainly driven by higher personnel and logistics expenses, reflecting a greater volume of recycling and transaction activities compared to the same period in 2024. Additionally, operation-related costs rose as we expanded our store network and enhanced operation center capacity in the fourth quarter of 2025. Non-GAAP fulfillment expenses as a percentage of total revenues increased to 7.7% from 8.1%. Non-GAAP fulfillment expenses for the full year increased by 28.3% to $1.75 billion, while the non-GAAP fulfillment expenses as a percentage of total revenues remain stable at 8.3%. In the post quarter of 2025, selling and marketing expenses increased by 23.3% to $460 million. Non-GAAP selling and marketing expenses increased by 44.1% to $460 million. The increase was primarily driven by an increase in commission expenses associated with channel service fees. As a result, our non-GAAP selling and marketing expenses as a percentage of total revenues increased to 7.4% from 6.6%. Non-GAAP selling and marketing expenses for the full-year increased by 47.3% to 1.6 billion, while NGAP selling and marketing census as a percentage of total revenues increased to 7.6% from 6.6%. In the fourth quarter of 2025, general and administrative expenses decreased by 34.1% to 60 million. Non-GAAP GNA expenses also decreased by 25.6% to 57.6 million, primarily due to a decrease in personnel costs. Non-GAAP GNA expenses as a percentage of total revenue decreased to 0.9% from 1.6%. Non-GAAP GNA expenses increased by 4.1% to 260 million, while non-GAAP GNA expenses as a percentage of total revenues decreased to 1.2% from 1.5% in 2025. In the fourth quarter of 2025, the search and development expenses increased by 9.8% to 62.6 million. Nungap R&D expenses increased by 14% to 60.3 million. The increase was primarily driven by elevated personnel expenses. Non-GAAP R&D expenses as a percentage of total revenues decreased to 1.1%.

Non-GAAP R&D expenses for the full year increased by 21.4% to 230 million, while non-GAAP R&D expenses as a percentage of total revenues decreased to 1.1% from 1.2%. 利润层面第四季度能盖经营利润超1.8亿元 去年同期能盖经营利润为1.3亿元 同比增长38.1% 本季度能盖经营利润率为2.9% 去年同期为2.7% 较上年同期增长19% 全年能盖经营利润近5.6亿元 去年同期能盖经营利润为4.1亿元 同比增长35.5% 全年能盖经营利润率为2.6% 去年为2.5% 较上年同期增长

As a result, our land gap operating income exceeded $180 million in the fourth quarter of 2025 compared to land gap operating income of $130 million in the fourth quarter of 2024, representing an increase of 38.1%. Land gap operating profit margin was 2.9% for the quarter compared to 2.7% in the fourth quarter of 2024, representing an increase of 19 basis points. Our length of operating income for the full year was nearly $560 million compared to length of operating income of $410 million for the full year of 2024, representing an increase of 35.5%. Length of operating profit margin was 2.6% in 2025 compared to 2.5% in 2024, representing an increase of 13 basis points. During the fourth quarter of 2025, we repurchased a total of approximately 1.3 million ADSs for approximately 5.8 million US dollars. Today, along with our earnings release, we announced the fiscal year 2025 cash dividend in the amount of 0.1 US dollar per ADS. The total amount is expected to be approximately 23.5 million US dollars. Now turning to the business outlook, for the first quarter of 2026, we anticipate total revenues to be between 5,860 million RMB and 5,960 million RMB, representing an increase of 25.9% to 28.1% year-over-year. Please note that this forecast only reflects our current and preliminary views on the market and operational conditions. which are subject to change. This concludes our prepared remarks. Operator, we are now ready to take questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star and 2. When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call. The first question today comes from Wan Jia with CICC. Please go ahead.

I have one question. During the recent two sessions, the government confirmed the scale of national subsidies for consumer trading programs. However, storage prices have been risen for several quarters, and in March, we've seen manufacturers raising new devices prices. How do you view the impact on the pre-owned consumer electronics industry this year, and will you revise your 2026 guidance?

Thank you. 国家持续对手机、平板电脑、智能手环、手表投入已旧换新的补贴,并将智能眼镜也纳入了补贴的品类范围。 2025年,我们的已旧换新业务的驱动主要来自于6000元以上的高端手机的销售,并不直接享受国补的红利。 对于万物新生的二手手机三式业务而言 我们判断2026年将与2025年类似 仍然是从为用户实现旧机回收变现 为用户做好以旧换新去出发 不会太多的涉及新机销售的 国家以旧换新补贴的直接推动 但国家推行以旧换新,以及让补贴真正落实到终端用户的核销措施,让我们更加坚定,以旧换新的国民心智正处于提升的路径上。 Thank you.

I'd like to take the first question. For 2026, the government has extended trading subsidies for mobile phones, tablets, and smartwatches. smart glasses have now also been added to the list. In 2025, the trading subsidy has been applied to the new device cells, which were priced under 6,000 RMB, which we were not eligible to compensate this kind of national subsidy. However, as we were able to capture the upgrade, the need from consumer trading process, that we will benefit from the similar process in 2026. for our pre-owned consumer electronics businesses. Our role hasn't been changed. We help users monetize their old devices, and we make trade-ins hassle-free. To be clear, we are not involved. But with that said, with the broader policy push, including measures ensuring subsidies reach retail users, continues to strengthen public awareness of trade-ins. That growing awareness drives momentum that works directly in our favor.

In 2025, due to AI-based design and software development and software development, the technology has increased and improved and improved and improved and improved and improved and improved and improved. In 2016, the market has increased and improved and improved and improved. 以苹果产品为主的二手消费电子产品市场出现了更清晰的格局 由于苹果新机的价格相对稳定 我们业务中的苹果品牌业务的占比出现了环比的提升 部分手机品牌厂商上调了新机售价 这对二手回收行业而言既是机会也是挑战 机会在于大力投入已旧换新 将有可能成为电商和品牌厂商的更高优先级的事项

部分已旧换新的场景可以叠加国家补贴 和我们更好的回收价格 服务更多用户的已旧换新需求 从而实现回收货源的快速增长 In 2025, driven by large-scale AI deployment and applications, the industry began to see memory shortages and significant price increases, putting component costs pressure on new device manufacturers, particularly in smartphones. In 2026, as memory prices rose more rapidly, Android manufacturers had to raise new device prices, while Apple kept its pricing relatively stable. This widening gap has reinforced Apple's position in the print-on-market, and we have seen the share of Apple products in our business increase on a sequential basis. More broadly, rising new device prices created both opportunities and challenges. On the one hand, trade-ins are likely to become a higher priority for e-commerce platforms and manufacturers. Certain trade-in scenarios can be combined with national subsidies and by offering more competitive recycling prices. We can serve more users' trade-in needs and drive rapid growth in supply sourcing. On the other hand, competitive pricing and high-quality user experiences have become even more crucial as more consumers adopt the print-on alternatives. 延续去年成立的UEC用户体验委员会的机制 保持对多个用户满意度指标高频且严格的检视 积极拥抱用户的反馈并快速响应用户需求 展望全年 我们期待总收入保持快于行业的双位数增长节奏 通过规模效应和费用把控,利润率能够回升到提升路径中 On pricing, we remain committed to our retail-first strategy, maintaining our target of retail revenue at 50% of our 1P business We are exploring using 2CU curated sales prices as a benchmark to set more competitive trade-in prices On experience, our user experience committee established last year will continue to run frequent and rigorous reviews across key satisfaction metrics, ensuring we remain responsive to user feedback and act on it swiftly. Looking ahead to the full year, we expect the growth of our total net revenue to continue outpacing the double-digit growth of the broader industry. Continued scale expansion and disciplined cost control positions us to return margins to uh to an upward trajectory okay thank you thank you the next question comes from rafael say with dbs please go ahead hey carry on that song go away when you're going to show how much bbs rafael thank you for your question and thank you so much for sharing with you I'll translate in English.

May I ask a management what is the store opening target in 2026?

Thank you. In 2025, we saw the opportunity to develop the two-time business development. In the beginning of the year, we would decide to enter the business development of the network.

Looking back at 2025, we recognized early that national subsidies would accelerate foreign-owned industry growth, so we invested decisively in offline fulfillment, expanding our store network and scaling up our two-door service team.

In 2021, we will continue to develop the standardization of the 3C platform, and to increase the high-quality cost of the multi-market revenue revenue, and to increase the cost of the cost of the company. In the middle-term city, we will also invite the company to develop the 2C platform. and to develop the 2C platform.

In 2025, In 2005, we had a net addition of 451 AHS standard stores. Going forward, our priority remains the extension of our standard stores, with consumer electronics as the core. We will also increase the proportion of multi-category resecting services for high-value products across our stores, which will drive higher per-store profit contribution. In lower tier cities, we will continue to grow through local franchisee partners and city partners to jointly develop the pre-owned market, allowing us to extend our store coverage in an asset-like way. and built a tight-end power of the market, and quickly doubled its increase by the new service network of the active service network.

By doing this 2-buffet power of the network, the new service network of the active service network has improved 70%. The consumer experience will continue to increase.

Beyond stores, we also built a nationwide two-door service team. Daily order generating head time grew by over 1,000, effectively extending our store network with a flexible workforce. This on-demand capacity allowed us to quickly fill the fulfillment gap when trade-in volumes surged. With both our store network and two-door team working together, our face-to-face trade-in fulfillment ratio exceeded 70% and user experience continued to improve.

In the year of 2020, we will use the上述 strategy. 中长期来看,我们5000家门店的目标保持不变, 但是在过程中会根据线上流量的增长 以及品牌战略需要适时的调整开店节奏

For 2026, we will follow the same approach We will enhance store quality in high-tier cities Expand our store footprint in lower-tier cities And flexibly adjust our two-door service team to match seasonal demand Our AHS stores serve not only as fulfillment locations, but also as important touch points for our brands. Our store network and online traffic need to grow in tandem and reinforce each other. Over the medium to long term, our target of 5,000 stores remains unchanged, but we will adjust the pace of store openings as needed based on online traffic growth and our broader brand strategy.

Thank you.

The next question comes from Brian Lanter with Zach's Small Cap Research. Please go ahead.

The print-owned consumer electronics industry has stable fundamentals and a well-established brand landscape. Rising new device prices reinforce our commitment to the 1P retail strategy. And we expect both resecting and retail prices to trend upward. Meanwhile, as higher margin retail product revenue represents a growing share of our mix, we anticipate gradual 1P growth margin extension as well.

单订单资减费用相比人工资减 节约约30%

大规模应用自动化技术效能 并逐步落实小范围的自动化传输 等设施的部署 创造冷GAP预约费用率的优化空间

因此我们将持续优化商品的自动化运营的规划 发挥东莞和长州运营中心

Over the long term, what matters to us is the improvement in our Nangap operating margin driven by economies of scale This plays out in several areas One comes from our automated quality inspection technology, which can reduce quality inspection costs per order by approximately 30% compared to manual inspection. We continue to refine our automation roadmap and are scaling these capabilities at our Dongguan and Changzhou operation centers to drive efficiency gains. We are also beginning to deploy automated logistics infrastructure on a smaller scale. Together, these efforts are expected to improve our non-gap fulfillment expense ratio. On the selling and marketing side, the industry is still at an early stage, So we do need to increase our pricing attractiveness with sales vouchers. Over the medium to long term, we plan to maintain disciplined spending in brand marketing to solidify Ahs Recycle as the top brand for recycling services in consumers' minds. As the industry matures and brand trust depends, we see a clear opportunity to improve our selling and marketing expense ratio. Thank you for the question.

Yes, there are no further questions at this time. I'd like to turn the conference back over to management for closing remarks.

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, feel free to email us at iratatrenew.com. Have a great day.

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