Yunji Inc. (YJ) Q2 2026 Earnings Call Transcript

Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Yungi's first half 2026 Earnings Conference Call. With us today are Mr. Shang-Lu Shao, Chairman and Chief Executive Officer, and Ms. Nan Song, Senior Financial Director. As a reminder, this conference call is being recorded. Before we start, please note that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on the company's current expectations and current market operating conditions and relate to events that invoke known or unknown risks, uncertainties, and other factors of UNG and its industry. These forward-looking statements can be identified by terminologies such as will, expect, anticipate, continue, or other similar expressions. For a detailed discussion of these risks and uncertainties, please refer to the company's related documents filed with the U.S. SEC. Any forward-looking statements that the company makes on this call are based on assumptions as of today and are expressly qualified in the entirety by cautionary statements, risk factors, and details of its filing with the SEC. The company does not undertake any obligation to update these statements, except as required under applicable law. With that, I will now turn the call over to Mr. Sheng Lu Xiao, Chairman and CEO of Yunji.

Please go ahead, sir. and experience the both-power movement, and continue to grow.

Next, I will show you the performance of the company's performance and performance. and experience dual engine strategy as we continue to deepen our presence in the organic health living market. I want to walk you through the company's financial performance and a strategic execution. Let me begin by sharing some financial highlights, which reflect our proactive approach to optimizing our structure and improving quality and efficiency. The total revenue for the first half was 96.3 million RMB compared with 158.3 million RMB in the first period last year. This reflects the structural adjustment from our proactive efforts to optimize the merchandise mix, including discontinuing relationships with certain third-party merchants whose offerings did not meet our enhanced product standards. While this affected our near-term revenue, we believe it has strengthened our merchandise mix in support of our long-term strategy. Self-operating merchandise now accounts for approximately 70% of the total sales, of which private label products accounted for 56%. Private label products with higher margins are increasingly becoming the core support for our revenue, while our experiential initiatives such as supply chain traceability continue to strengthen customer engagement and maintain stable customer retention, supporting improved profitability and long-term development. 与用户体验建设。我们对未来盈利改善十分有信心。 directed resources toward high retention, high margin private label products, and toward enhancing the user experience. We remain confident in our path to improve the profitability. Next, let me walk you through our business progress in the first half. 配合产品与体验双引擎,负能云集有机健康生态。 Our strategy rests on to NGIN's product and experience. On the product side, we continue to build out our organic health, organic food, and beauty and skin care metrics. With food and medicine homology products as a growing focus within organic health, together, our product and experience dual NGIN approach powers NGIN's organic health ecosystem.

Thank you.

In our organic health segment, we continue to deepen our presence in the broader health and wellness market, with a particular focus on food-managing homology products that address the health needs of the modern families in China. Our first flagship product in this category is Polygonation tea, which launched in the first quarter of 2025. Supported by premium origin sourcing, generating quality, and refined processing techniques, the product received market feedback that exceeded our expectations. It quickly became a key growth driver of our food-managing homology product line. In the first half of 2026, Polygonation Tea delivered rapid sales growth and successfully validated a complete growth model. This demonstrates that our product strategy for entering the Chinese wellness and health market has a long-term market potential. In our organic food segment, we have integrated our organic philosophy into consumers' daily meal occasions, particularly breakfast, the most important meal of the day. By capturing a high-frequency daily consumption occasion, we have established an effective customer acquisition channel. Together with our organic house product, this is a complementary portfolio that balances high and low frequency consumption patterns and short and long term consumption cycles. In our beauty segment, we remain focused on offering customers high-quality, high-value skin care and beauty products. In the current market environment, increasingly rational consumers favor products that deliver high value with affordable price, and Suya's long-standing brand positioning aligns closely with this trend. As a result, this brand has continued to earn consumer recognition and maintain a stable market position, with segment sales broadly stable compared with the same period last year. And at the same time, certain products have still out. Suya Skincare Condensing Anson Oil launched in the second half of 2025 has continued to receive positive feedback from consumers and achieved 29% sequential sales growth in the first half of this year.

Thank you for joining us. and枸杞原浆溯源,使得单品销售额同比增长13%, 环比增长366%。

这验证了我们打造溯源体验,强化用户触达这一策略是高效可行的,值得我们长期坚持。 End-to-end supply chain traceability experience is a core competitive advantage that sets WingG apart from traditional e-commerce platforms. This is also a key method in building our customer loyalty. Our traceability experience turns product quality from an abstract concept into something users can see and verify for themselves. In the first half of 2026, we continued to increase our investment in supply chain traceability experience. With all of our initiatives focused on strengthening user trust, improving repurchase conversion. In total, we conducted approximately 30 traceability events during the period, and these events collectively delivered strong sales conversion. For example, a traceability event for our Bai Yuashan Birch SEP product held on April 13th drove the product's first half sales up 128% year-over-year and 146% compared with the second half of 2025. Similarly, a traceability event for Baiyushan, Wolfberry, Peru held on June 17th drew the product's first-half sales up 13% year-over-year and 366% compared with the second half of 2025. These results confirm that our traceability experience strategy is effective in strengthening user engagement, reinforcing our confidence in pursuing this approach over the long term.

We will hook up into plunder in foreign policy broad and 生活解决方案,創造更大的社会价值。 carefully evaluating our asset and expense structure

to ensure resources are allocated in support of our long-term strategic priorities. Ultimately, our goal is to provide better organic health living solutions for families across China and to create greater social value. Thank you for your continued interest and support. Despite a complex market environment, we remain confident in our strategic direction, and we will continue to put user value at the center of our approach as we balance growth and profitability to drive the company's long-term sustainable development. 我的分享到此结束。接下来,欢迎我们公司财务高级总监宋南为大家详细分享财务情况。 and the percentage of changes are on a year-overse, otherwise not yet.

In the first half of 2026, the market environment remains a challenge. As Songwe outlined, we stay firmly committed to our strategic position as a global leader in organic living, advancing our products and experience dual and just digitally, supported by our relevant financial position, we remained disciplined in cost management and made timely adjustments to adapt to these conditions. Now let's take a close look at our financials. Total revenues were $96.3 million compared to $158.3 million in the same period a year ago, revenues from sales of merchandise were $82.4 million, and revenues from our market price business were $13.7 million. The change in our total revenues for the period was primarily driven by software consumer spending amid a broader macro environment in China. Together with our choice to stay aligned with the organic health philosophy guiding our business as part of the effort, We also proactively activate certain services that do not align with our standard features that show opening our merchandise mixes in support of our private label and organic health authorities given is this JTJ that the creation we had that and to see today this is infected on our revenues backdrop for the period and we continue to believe it represented the light the right long-term path for the business On the cost side, the total cost of revenues decreased by 31.9% to RMB $56.8 million, primarily due to the long motion dial cells, which are recognized on a growth basis, excluding the impact of direct recognition of incentive payables to negative members, which carries no associated cost of revenue, our gross margin demand result at 41% during the period. This is supported by our continued focus on selecting premium high retention categories together with our provider-level product. Now let's take a look at our operating expenses. Fulfillment expense decreased to $10.3 million from $20.6 million in the same period a year ago. The decrease was primarily driven by lower oil housing and logistics expenses resulting from reduced merchandise sales. Together with long personal costs from staffing, structure, refinement, sales, and market expenses were $39.5 million compared to $50.1 million in the same period a year ago. The change is primarily due to long-term management fees and reduced business promotion expenses. Technology and content expenses were $12.4 million compared to $15.3 million in the STEM period a year ago. This was mainly due to the reduction in personal cost, a result of continued staffing structural reform. General and administrative expenses decreased to $47.5 million from $93.4 million in the STEM period a year ago. The decrease was mainly driven by reduction in loss for credit loss on the third part, no receivable, and partially offset by increasing impediment for property and equipment. Our expected display extended across nearly every category this period. with year-over-year reduction reflecting both a small merchandise space and our ongoing staffing and cost-effective measures. As a result, totally operating expenses in the first half of 2026 be greater to $109.7 million from $139.4 million in the same period of 2025, a 38.8% reduction with the boundary loss from operation narrowed significantly to $39.4 million from $100.4 million in the same period a year ago. This expense display supports our continued progress towards profitability, even as revenue festered pressure from the software environment displayed earlier. Net loss was $72.4 million compared with $100.7 million a year ago, While adjusted net loss was $72.3 million, compared with $100.5 million a year ago, the year-over-year level of both net loss and adjusted net loss deflects our expected decline together with our continued focus on stressing customer engagement and managing a stable customer retention. Basic and narrowed net loss per share are attributable to ordinary shareholder were both narrowed to 0.04% from 0.05% in the same period of 2020. 5. Turning to liquidity as over June 30, 2026, we have a total of 242.1 million in cash and cash equivalent with structural cash and short-term investment on our balance chart compared to 216.1 million as a December so the first 3025 we maintain this sufficiently quality to meet our terrible or obligation will continue to optimize working capital and demand through our asset if fashion today in support of our operation looking at the first half as a whole in the gesture and charlie accurate environment And we made future progress on cost display and then narrowed our loss on a year-over-year basis. This reflects our continued execution of the restrictive priorities showing us our discipline in cost management and our focus on green health and provide label products. Our solid financial position continues to support these priorities and will remain disciplined in how we manage the cost and allocate in support of our strategic position as a leader in organic health living. Looking forward to our tremendous focus on improving our operation merging as we balance growth and profitability in support of the company's long-term temporal development.

This concludes our prepared remarks for today. Thank you. Operator, are you listening?

That brings us to an end of today's call. Thank you for attending. You may now disconnect.