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Good day, and welcome to Quhuo '25 H1 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Qishu Wang. Please go ahead.

Thank you, operator. Hello, everyone. Welcome to Quhuo's First Half Year of 2025 Earnings Conference Call. The company's results were released earlier today and are available on our website. On this call today are Leslie Yu, Chairman and CEO; and CFO, Barry Ba. Leslie will review business operations and company highlights followed by Barry, who will discuss financials and guidance. They will be available to answer your questions in the Q&A session that follows. Before we begin, I would like to remind you that this call may contain forward-looking statements made under the safe harbor provisions of the Private Securities Ligation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions related to the events that involve known or unknown risks, uncertainties and other factors, all of which are different to predict -- are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties and factors is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under the law. With that, I will now turn the call over to our Chairman and CEO, Mr. Leslie Yu. Please go ahead.

Thank you, Qishu, and thank you all for joining our 2025 first half earnings conference call. In the first half of 2025, China's local service industry experienced significant structural shifts with intense market competition becoming the new normal. Against this backdrop, Quhuo has adhered to a clear dual track strategy. First, optimizing the structure of our core business to pursue quality growth. And second, accelerating the development of second core business to strengthen the group's earnings foundation. I will now share our operating performance and the strategic progress over the first 6 months of 2025 along these two dimensions. And also look ahead to Quhuo's future vision. For the first half of 2025, Q4 achieved total revenue of RMB 1.13 billion. Let me begin with our core business, on-demand delivery solutions. During the first half of 2025, particularly in the second quarter, the domestic food delivery market saw significant changes in the competitive landscape. These changes were mainly reflected in two areas. First, the delivery was surpassed a part of the cost burden to service providers. To respond to rapid order fluctuation and safeguard service quality, we made targeted investments in workforce management and operations. Second, structural adjustments by major upstream customers received the competitive landscape, leveraging our long-standing service capabilities and reputation, we took on new business share, while integrating and launching this new sites added short-term costs. Beginning in May this year, we observed signs of increased market share, which we believe will lay a solid foundation for scalable profitability. Although these measures placed pressure on short-term profitability, we believe the company's overall financials remain sound. At the same time, we proactively closed a number of underperforming sites, and concentrated resources on higher return areas in order to further strengthen our overall network health. These initiatives reflect both our confidence in and commitment to the long-term value of on-demand delivery business. We believe that as the integration period ends and operating efficiency improves, the scale benefits and the profit potential of the business may become more evident in the second half of 2025. While consolidating our core business, our second core business housekeeping and accommodation solutions and vehicle export solutions are now contributing meaningful profitability. In the first half of 2025, our housekeeping and accommodation segment reported strong growth, with revenue up 70.8% year-over-year, and gross profit up 63.4% year-on-year, becoming an important driver in optimizing Quhuo's profit structure. This performance was primarily driven by our two business units. First, Chengtu Homestay achieved 83.6% revenue growth, and 390.8% gross profit growth with gross margin rising to 55.2%. We believe this strong performance reflects our replicable operating model and effective marketing. Our self-developed mini program now fully rolled out, allow users to browse and search for home listings, communicate with hosts and complete reservation and payments in one seamless process. This closed-loop system greatly improves the booking experience, making it faster, more transparent and more reliable for both guests and hosts, while also enhancing operational efficiency. Based on this mature system, Chengtu plans to open that platform to more homestay operations in China, providing standardized management tools and marketing support and transitioning from a property management service provider to a platform operator. Second, LaiLai's accommodation business recorded a 63.6% year-over-year increase in revenue, primarily supported by its new cooperation with Beike, a leading housing transactions and service platform in China. This cooperation extends beyond the traditional sales with LaiLai providing a more comprehensive property service solution for the properties listed on Beike's platform, covering property preparation and maintenance, ongoing household services and tailored offerings. In service delivery, LaiLai has translated years of localized service experience and technological advantage into practice. By leveraging its proprietary digital dispatch system, it integrates cleaning, repair and other service orders into a unified scheduling platform, supporting efficient management and high-quality fulfillment. This cooperation already covers Chengdu, Beijing, Shanghai, Ningbo and Jinan, and is expected to expand to Shenzhen, Guangzhou, and other cities. We believe it may generate scalable and sustainable revenue growth for LaiLai. LaiLai's ability to deliver standardized high-quality property services provider provides a solid foundation for new initiatives. Building on this, we also participate in the Better Life #1 Fund Trust plan initiated by China Foreign Economy and Quhuo Trust. Phase 1 and Phase 2 of this plan totaled RMB 60 million are designed to enhance the quality and the rental value of intrusted properties through standardized renovation and long-term asset management, ultimately generating stable returns for investors. Within this project, LaiLai is responsible for upgrading property quality and providing ongoing property management services, ensuring continuous value creation and compliant operations. Meanwhile, Quhuo in its role as a strategic partner works alongside the Trust Fund to design the pathway from operating assets to data assets, and ultimately to financial assets and jointly manage and share in the returns. Through this cooperation, we have put into practice the four pathways from business operations to financial value. Leverage the standardized renovation and service capabilities built by LaiLai as solid operating assets, reply on the real and valuable data assets continuously accumulated through operations for risk pricing and asset management and optimally achieve asset financialization through trust corporation, completing a critical upgrade to financial assets. This process not only broadens the Qihuo's business foundry, but also provides new direction for the integration of industry and finance. These advances in the housekeeping and accommodation segment not only provide financial returns, but also support our business model initiatives, provide opportunities for longer-term growth for Qihuo. Our third major growth driver comes from international business. In the first half of 2025, used car exports achieved 17.8% gross profit growth with gross margin improving from 4.2% to 7.0%. We believe this reflects the continued optimization and upgrading of our business model. We currently operate with two models in Quhuo. The first is traditional sales model, under which vehicles are sold upon export with a cash cycle about 3 to 4 months with a gross margin typically at around 7%. The second is the technological empowerment and resources cooperation model, which we believe to carry greater potential. Here, we leverage our accumulated technology, operations and management expertise from domestic ride building sector and package solutions for overseas partners to jointly operate vehicles and share with long-term higher margin income. This model offers significantly higher profitability and unique economics with a payback period of roughly 24 months, which means revenue growth may be realized more gradually, but on a stronger foundation. Our cooperation in Azerbaijan with Volt Auto and Bolt provides an example of this model. By deploying our SaaS platform and management expertise, we are helping partners shift from onetime vehicle sales to a recurring service-based model. Till now, hundreds of vehicles have been under management with a project level margin of 43%, well above the project model. The success of this pilot has already led partners to place multiple follow-on orders, validating its replicability and long-term profit potential. Looking ahead, we plan to draw on the asset financialization experience gained in the accommodation segment to address cash cycle challenges in this model, enabling broader expansion into new markets, driving our international business to evolve from linear growth based on vehicle sales to a higher quality development model of maintaining scale through sales and creating profit through operations. We believe this approach building a global automotive ecosystem through technology empowerment and management expertise will raise our earnings ceiling and establish more durable competitive advantages. To conclude, in the first half of 2025, despite pressures in the on-demand delivery business, we maintained resistance in our core business and made progress in our second business. We believe these results reflect further the soundness of our strategy and the strength of our execution. Looking forward, we plan to remain focused on our dual track strategy of optimizing core operations and cultivating new growth. On our core business side, we recently entered into a cooperation with JD, Jingdong Takeaway, to provide delivery services in some cities. We believe this not only demonstrates recognition of our operational capabilities, but may also substantially add incremental volume under the new competitive landscape in on-demand delivery. On the new initiative side, our supply chain empowerment partnership with New World has been progressing steadily. Since May this year, it has generated approximately RMB 14.4 million in revenue and is expected to contribute approximately RMB 60 million for the full year. We view this as an early milestone in our transition from a fulfillment service provider to a supply chain enabler, which may create new opportunities to capture additional value from our delivery network. We plan to continue focusing on our operational efficiency and refining our business models while seeking key market opportunities in order to deliver more sustainable long-term returns for our investors. This concludes my remarks. I will now turn the call over to our CFO, who will provide a detailed overview of our financial performance.

Thanks, Leslie. Hello, everyone. This is Barry Ba, the CFO of Quhuo Technology Limited. Welcome to Q2, First Half of 2025 conference call. Please be reminded all the amounts told here will be in RMB unless stated otherwise. Total revenue decreased by 30.2% from RMB 1.619 million in the 6 months ended by June 30, 2024, to RMB 1,131.4 million in the 6 months ended by June 30, 2025, due to the following reasons. Revenue from on-demand delivery solutions were RMB 1,039 million, representing a decrease of 30.7% from RMB 1,499 million in the 6 months ended June 30, 2024, primarily because we optimized our business by disposing of several underperforming service stations, which led to a decrease in the revenue scale. Revenue from mobility service solutions, consisting of shared-bike maintenance, ride-hailing, vehicle export solutions and freight service solutions were RMB 57.4 million, representing a decrease of 42.8% from RMB 100.5 million in the 6 months ended June 30, 2024, primarily due to one, a decrease in units of vehicles sold in our vehicle export solutions business as a result of introduction of new business model and a decrease in purchase of vehicles for sales; and second, optimization of our business by ceasing from our ride-hailing solutions service in several underperforming service cities. Revenue from housekeeping and accommodation solutions and other services were RMB 34.8 million, representing a sharp increase of 70.8% from RMB 20.4 million in the 6 months ended by June 30, 2024, primarily due to the adoption of online promotion channels in addition to traditional platform-based customer acquisition. Cost of revenues were RMB 1,127 million, representing a decrease of 29.3% Y-o-Y, primarily attributable to the decrease in our labor costs and the service fees paid to service station managers in line with the decrease in the revenue. As a result of foregoing, our gross profit were RMB 24.8 million and compared with RMB -- sorry, as a result of foregoing, our gross profit were RMB 24.8 million and RMB 4.1 million in the 6 months ended 2024 and 2025, respectively. G&A expenses were RMB 76.3 million, representing an increase of 7.7% from RMB 70.9 million in the 6 months ended June 30, 2024, primarily attributable to: one, an increase of professional service fee from RMB 14.5 million in the first half of 2024 to RMB 25.2 million in the first year of -- first half of 2025, due to the issuance cost of ADSs occurred in the first half of 2025 of RMB 9.7 million; and the second, increase of welfare and business development expense and office expense from RMB 12.4 million in the first half of 2024 to RMB 15.1 million in the first half of 2025, resulting from the expansion into new cities for its housekeeping service and offset by a decrease of labor cost from RMB 36.6 million in the first half of 2024 to RMB 30.6 million in the first half of 2025 as a result of our expense control through technological optimization. R&D expenses were RMB 3.6 million, representing a decrease of RMB 27.3 million from RMB 4.9 million in the 6 months ended by June 30, 2024, primarily due to the decrease in the average compensation level for our R&D personnel as we restructured our R&D team. We recorded a gain of disposal of assets, net of RMB 7 million and RMB 5.7 million in the 6 months ended by June 30, 2024 and 2025, respectively, primarily due to the transfer of certain long-term assets to third parties. Our interest expense remained stable at RMB 2.2 million and RMB 2.3 million in the 6 months ended by June 30, 2025 and 2024, respectively, primarily relating to the stability in our average short-term bank borrowings. We recorded other income, net of RMB 1 million in the 6 months ended by June 30, 2025, compared to other loss, net, of RMB 3.1 million in the 6 months ended June 30, 2024, primarily due to the disposal of investment in the mutual fund in the second half of 2024. We recorded income tax benefit of RMB 17.9 million in the 6 months ended June 30, 2025, as compared to income tax benefit of RMB 2.6 million in the 6 months ended June 30, 2024, primarily due to the reversal of unrecognized tax benefit recognized in the previous years and has been passed the retroactive period. As a result of foregoing, we have net loss of RMB 53 million in the 6 months ended of June 30, 2025, compared to an increase of 14% from RMB 46.5 million in the 6 months by June 30, 2024. EBITDA loss were RMB 60.2 million as compared to EBITDA loss of RMB 34.8 million in the first half of 2024. In terms of balance sheet, as of June 30, 2025, the company has cash, cash equivalents and restricted cash of RMB 33.1 million and short-term debt of RMB 118 million. And this concludes my prepared remarks. Thank you for your attention. We are now pleased to take your questions. Operator, please go ahead.

[Operator Instructions] The first question today comes from [ Sally Gao ] of Private Investor.

My question is, could you explain Quhuo's specific role in the Trust corporation and what impact this cooperation may have on future financial performance?

Okay. This is Leslie, and thank you for the question. Our cooperation with the Trust builds on our traditional BPO fulfillment services, but we take a step further. We're turning business revenues into data assets and then into investor financial assets. So this is not only strengthen liquidity, but also increase asset returns. Quhuo is one of the initiator of this project and core operator. To be more specific, that is operational base, it makes sure that our properties are upgraded and managed at a higher standard, creating stable rental income. On top of that, Quhuo Group works to pool the receivables generated. And through trust structures, we monetize the future cash flows in advance and unlock capital. The financial impact is quite direct. First, it brings in higher margin income such as asset management fees and capital gains, which is very different from traditional labor services and improves our profit mix. Second, it also improves cash flow, giving us more flexibility to expand both our core and new business. So this is not just a single business success. It proves our new model of combining on-the-ground operations with financial empowerment, opening up a lighter, more profitable and sustainable growth path for the company.

This concludes our question-and-answer session and concludes our conference call. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the Quhuo's '24 H1 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Qishu Wang, Investor Relations. Please go ahead.

Thank you, operator. Hello, everyone. Welcome to Quhuo's first half of 2024 earnings conference call. The company's results were released earlier today and are available on our IR website. On this call today are Leslie Yu, Chairman and CEO; and CFO, Barry Ba. Leslie will review business operations and company highlights followed by Barry, who will discuss financials and guidance. They will be available to answer your questions in the Q&A session that follows. Before we begin, I would like to remind you that this call may contain forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions and relate to the events that involve known or unknown risks, uncertainties and other factors. All of them are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties and factors is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under the law. With that, I will now turn the call over to our Chairman and CEO, Mr. Leslie Yu. Please go ahead.

Thank you, Qishu, and thank you all for joining our 2024 first half earnings conference call. In the first half of 2024, the global economy environment remains complex and volatile, particularly in the context of uncertainty in both domestic and international market, which caused numerous challenges for our industry. However, Quhuo maintained stable business growth and these fluctuations through strategic foresight and lean operational business. In the first half of 2024, Quhuo achieved a total revenue of RMB 1.62 billion. In terms of profitability, although we experienced a short-term loss in the first quarter due to market and seasonal factors during the Chinese New Year. We successfully rebounded in the second quarter. Our gross margin not only returned to normal levels but also surpassed the last year's performance, reaching 5.6%, demonstrating our enhanced resilience and profitability are made much wanted. On the cost control front, thanks to our continuous lean management, general and administrative expense decreased by 13.2% year-on-year in the first half of 2024, which reflects our ongoing efforts to improve operational efficiency. Looking at the business segments, despite the fluctuation in the overall market environment, our Mobility Services segment performed very well, with total revenue increasing by 71.7% year-on-year. Our revenue from shared-bike maintenance service grew by 6.2% year-on-year, while ride-hailing service revenue increased by 47.5% year-on-year. Particularly on Quhuo's International vehicle export solutions, the revenue increased by 389% year-on-year, successfully exporting 815 new energy vehicles overseas in the first half, making a new growth driver for us with just one year and further expanding our business coverage in international markets, showcasing our international competitiveness. The housekeeping service segment also performed very well, with gross profit increasing by 28.5% year-on-year and the gross margin rising from 13.8% in the same period last year to 24.6%, reflecting our success in optimizing operational efficiency and enhancing service quality. Additionally, with the rapid expansion of our housekeeping business, our overall service coverage has significantly expanded now covering 132 cities, a 21.4% increase year-on-year. This growth not only indicates strong market demand for our housekeeping services, but also further solidifies our leadership in this field. In 2024, against the backdrop of changing international dynamics and the restructuring of the domestic market, companies must focus on long-term trends, seizing enduring market demand to provide a sustained and stable value. In this context, Quhuo focuses on addressing three key issues to deliver continuous commercial and social value to the market. First, values in the employment, China's new employment forms has led developed on driving forces of the digital and ensuring economies with increasing attention and support from policymakers, particularly in enhancing the protection of workers employed in new forms. For over a decade, Quhuo's platform employment platform has consistently provided valuable job opportunities for a large number of workers. As of June 30, 2024, the platform has accumulated over 770,000 registered workers. Whether in on-demand delivery, mobility services, housekeeping services, or other large services, Quhuo's platform has created a stable and flexible jobs for workers, providing a source of income in a complex market environment and providing comprehensive support including essential leaving guarantees and commercial insurance, ensuring their security. This is not only creates value for society, but also further strengthens our position as industry leader. Second, as the consumption and tourism environment gradually recover, Homestay as a new business format of tourism has received a significant promotion at the national level. In July 2023, the National Development and Reform Commission proposed to calculate and publish a bench of related tourism oriented homestays and build a number of high-quality homestays. In response to this trend, Quhuo's Homestay segment Chengtu is actively advancing the development of homestay operations in China. We are committed to fully developing the self-operated model, providing high-quality services, building a strong brand image and expanding our business scale. Additionally, we are exploring a more comprehensive homestay services Chengtu model, covering the entire process from booking to aftersales services while expanding our booking mini program and multi-platform sales channels to further enhance customers' experience and market coverage, providing sustainable growth momentum for the company. Following the government's proposal in the first half of the year to consumer existing housing inventory in response to the new change in the supply-demand relationship with the real estate market and society's expectations for high-quality housing, Quhuo is currently collaborating with a leading long-term rental platform in China to explore a combined short-term and long-term rental model for idle properties. Actively revitalizing existing housing inventory to generate income for property owners and provide more consumers with quality housing services. This initiative not only improves the operational efficiency of this asset but also creates considerable commercial value for the company. As policies becoming more clear, we believe this business will bring significant growth plans to the company. Finally, in light with the current challenges in domestic automotive overcapacity and the revenue value disposal of the second-hand vehicles, Quhuo has successfully opened a new international market through our vehicle export and the ride-hailing solutions abroad. In recent years, the development of new energy vehicle industry has crucial introducing trafficking related emission providing high-quality carbon peak shipment reducing dependency on oil exports and supporting the consumption of our global automotive powerhouse. In 2023, China exported 1.2 million new energy vehicles, 77.6% year-on-year increase, accounting for over 60% of the global production and sales. According to forecast, this figure is expected to grow steadily in 2024. This growth changes not only highlights Chinese leadership in the global new energy vehicle market, but also provides vast opportunities for Quhuo's international market expansion. Quhuo has a unique competitive advantage in the field of on energy vehicle exports. With over five years of experience in life-saving operations and more than two decades of experience in vehicle exports, accumulating deep market understanding and professional capabilities. Through partnership with multi automated brands, the construction of a national-wide vehicle sourcing network and a strong vehicle refurbishment resources, along with close cooperation with 58 overseas distributors globally. Quhuo has successfully leveraged stable sales channels and broad market expansion opportunities, demonstrating tremendous growth potential. With the continuous rise in global demand for new energy vehicles, Quhuo will further expand our market share and business coverage in the second half of the year, creating new growth opportunities for the company and our global partners. Additionally, our technology empowerment projects in overseas markets are also making positive progress. Leveraging our accumulated operational and technical capabilities in on-demand delivery and ride-hailing, Quhuo is forming strong mutually beneficiary partnership with overseas partners through technology and management empowerment. The on-demand delivery and the rising system development of overseas markets are currently being piloted in selected cities across. By integrating the export supply chain of new energy vehicles, we are gradually building Quhuo International overseas business ecosystem. Maintaining the continuous expansion of our overseas business, while consolidating our competitive advantage. Overall, despite the challenges faced in the first half of 2024, Quhuo has maintained steady business growth and continuous innovation. This success is due to our forward-looking strategic planning and a keen grasp of market change in complex global environment, supported by redefined management practices. Looking forward, Quhuo will continue to lead the company's development with a long-term strategic vision, optimizing our operational model and the resource allocation, seizing new key market opportunities. This concludes my remarks, and I will turn the call to our Chief Financial Officer. Barry will provide a detailed review of our financial performance.

Thank you, Leslie. Hello, everyone. Welcome to Quhuo's first half of 2024 conference call. Please be reminded that all amounts quoted here will be RMB unless stated otherwise. Total revenue decreased by 6.7% from RMB 1,736.3 million in the six months ended June 30, 2023 to RMB 1,619.9 million in the six months ended June 30, 2024 due to the following reasons. Revenue from on-demand delivery solutions for RMB 1,499.1 million, representing a slight decrease of 9.1% from RMB 1,649.6 million in the six months ended June 30, 2024 -- 2023, primarily because we optimized our business by disposing several inferior business districts, which leads to a decrease in the revenue scale. Revenues from Mobility Service Solutions consisting of share-backed maintenance, ride-hailing and vehicle export business solutions for RMB 100.5 million, representing a remarkable increase of 71.7% from RMB 58.5 million in the six months ended June 30, 2023, primarily due to the growth of our vehicle export solutions which generated revenue of RMB 58.6 million. Revenue from housekeeping and accommodation solutions and other services are RMB 20.4 million, representing a decrease of 27.8% from RMB 28.2 million in the six months ended June 30, 2023, primarily due to the transaction of business model in our hotel services. Cost of revenue of RMB 1,595.2 million, representing a decrease of 4.5% year-over-year, primarily attributed to the decrease in our labor cost and the service fee paid to team leaders in line with the decrease of revenue from on-demand delivery solutions. Speaking of expense, general and administrative expense were RMB 7.9 million, representing a decrease of 13.2% from RMB 81.6 million in the six months ended June 30, 2023, primarily due to the decrease in first professional service fee from RMB 22.2 million in the first half of 2023 to RMB 14.5 million in the first half of 2024. And the second reason is that welfare and business development expense and office expense from RMB 17.3 million in the first half of 2023 to RMB 14.2 -- sorry, RMB 12.4 million in the first half of 2024. And the third reason, shared-based compensation expense from RMB 3.5 million in the first half of 2023 to nil in the first half of 2024. All above are owing to our experience control through technological optimization. R&D expense were RMB 4.9 million, representing a decrease of 25.7% from RMB 6.6 million in the six months ended June 30, 2023, primarily due to the decrease in average compensation level for our research and development personnel as we restructured our R&D team. We record other loss net of RMB 3.1 million in the six months ended June 30, 2024 compared to other income net of RMB 9 million in the six months ended June 30, 2023, primarily due to a decrease in fair value change of investment in the mutual fund. We recorded income tax benefit of RMB 2.6 million in the six months ended June 30, 2024, as compared to income tax benefit of RMB 2.4 million in the six months ended June 30, 2023, primarily due to the increase in deferred tax asset benefits. As a result of foregoing, we have a net loss of RMB 5.7 million or RMB 46.5 million in the six months ended June 30, 2023 and 2024, respectively. Adjusted net loss was RMB 46.5 million as compared to adjusted net loss of RMB 1.8 million in the first half of 2023. Adjusted EBITDA loss was RMB 34.8 million as compared to adjusted EBITDA of RMB 11.1 million in the first half of 2023. In terms of the balance sheet as a result of June 30, 2024, company has cash short-term investments and restricted cash of RMB 104.9 million and the short-term debt of RMB 104.2 million. This concludes my prepared remarks. Thanks for your attention. We are now pleased to take your questions. Operator, please go ahead.

[Operator Instructions] And the first question comes from [indiscernible] Limited.

My question is, what are the company's plans for Quhuo International in the second half of 2024? And how do you see its growth prospects? Thank you.

Okay. This is Leslie. On Quhuo International serves as the platform for Quhuo's global expansion. We have entered the international markets through the trade-off new energy used vehicles, which help us to connect outstanding partners' resources with domestic production capacity. And we have started building brand recognition in overseas market. I think that we have successfully achieved our first stage growth with the business now in face of continuous revenue generation and sales sustained profitability. Talking about the second half of 2024, we will be moving into the next stage of development. Based on the first stage, we will focus on defining and innovating our overseas business model. By redefining our partner roles and unifying long-term profit sharing mechanism to drive faster growth in both revenue and profit. Additionally, we will be developing systems to optimize new business processes with our partners to ensure a successful establishment of new business ecosystem. So we expect this phase not only to bring scale growth for Quhuo International, but also to achieve a significant qualitatively further solidifying and expanding our position in the international market. So for the second half of 2024, we are looking forward to step into the Phase 2 of our international business. Yes. Thank you.

And this does conclude the question session as well as the event. Thank you so much for attending today's presentation. You may now disconnect your lines.

Good day and welcome Quhuo Limited 2023 H2 and Full Year Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Qishu Wang. Please go ahead.

Thank you, operator. Hello everyone. Welcome to Quhuo's second half and full year of 2023s earnings conference call. The company's results were released earlier today and are available on our AR website. On the call today are Leslie Yu, Chairman and CEO, CFO, Barry Ba. Leslie will review business operations and the Company highlights, followed by Barry, who will discuss financials and guidance. They will be available to answer your questions in the Q&A session that follows. Before we begin, I would like to remind you that this call may contain forward-looking statements made under the Safe Harbor provisions of the Private Securities Legislation Reform Act of 1995. Such statements are based on management's current expectations and the current market and operating conditions and relate to the events that involve known or unknown risks which are beyond the Company's control, which may cause the Company's actual results, performance, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, and factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required under the law. With that, I will now turn the call over to our Chairman and CEO, Mr. Leslie Yu. Please go ahead.

Thank you, Qishu. And thank you all for joining our second half and full year 2023 earnings conference call. In 2023, we achieved a total revenue of RMB133.7 [ph] million with a gross profit of RMB166.6 million. The adjusted net income reached RMB5.5 million representing a remarkable growth of 64.7% compared to the full year of 2022. The company achieved positive results in various key financial indicators, such as net income and income per share of ordinary shares marking a historical achievement. Thanks to the strategy of the improved profitability after increase in revenues, implemented by the company starting in 2021. We have achieved outstanding performance with positive EBITDA in four consecutive financial reporting periods. Additionally, in 2023, we successfully identified the dual engines driving the second growth curve of our company's business namely the used vehicle export business and SaaS+ services, leading to a significant improvement in the company's profitability. In terms of vehicle export solution in the full year of 2023, we successfully exported approximately 1,900 used vehicles from China to countries and regions like Jordan, generating a revenue of RMB154 million for the company. Within a short span of seven months, with an investment of RMB30 million in working capital, we achieved an average monthly revenue of RMB22 million. The high cash turnover rate and the short payment cycle in the international trade arena confirm the sustainability and replicability of this business. The use of vehicle export business was initiated with the official launch of Quhuo International in February 2023 and it went live in May 2023. Since then, Quhuo has set its insights on the international market, entering a new phase of global development. Looking back at the achievements of Quhuo International, several factors have contributed to its success. Firstly, the broad overseas market has a strong demand of new energy vehicles, providing favorable conditions for the export of such vehicles. Secondly, China's dominant position in the global market for new energy vehicles has led to rapid growth in the used vehicle-exporting industry. China's customs data shows that our 69,000 used vehicles vehicle exported from China in 2022 and the total exceeded 160,000 in 2023. Much of the projection it indicated that the volume of Chinese used vehicle export is expected to reach 400,000 vehicles by 2025. Lastly and most importantly, Quhuo possesses unique advantages that differentiate us from other used vehicle traders. On the technological and operational front, Quhuo’s mobility solutions management team has deep expertise in the right trading sector for over five years. They also have more than two decades of experience and resources in the vehicle trading industry, which has provided them with a profound understanding of the used vehicle export market and the ecosystem. Additionally, Quhuo has accumulated over 10 years of professional capabilities in large-scale operations and technology. In terms of vehicle sourcing, Quhuo has partnered with multiple automobile brands and expanded our reach to medium and large-scale auto manufacturers, dealerships, and the used vehicle market. So, our existing wide selling business since the first half of the 2023 establishing a national wide vehicle sourcing network. In terms of vehicle refurbishment, Quhuo has accumulated a wealth of vehicle maintenance and repair resources through our previous wide-filling operations. We have also established a unique network of vehicle refurbishment resources through self-construction and partnerships. Furthermore, at the sales channel level, Quhuo currently has close cooperation with 58 overseas distributors worldwide, providing stable sales channels and new opportunities for market expansion. All these factors together build Quhuo’s competitive advantage in the global used vehicle trading market, signaling fast business prospects and the trend and it’s development potential. Another important engine for a second growth is the empowerment of SaaS+ service, primarily focused on housekeeping and accommodation solutions nowadays. Starting from the first half of 2023, the company began piloting the transition to the SaaS+ service empowerment model in the housekeeping services after successfully validating our self-operated model. After six months of market validation, the company's housekeeping and accommodation solutions began a comprehensive transition towards a SaaS+ empowerment model, starting in the second half of 2023. This shift allows other small and medium-sized life-service providers to utilize Quhuo’s material operation systems and service products to better meet customer needs. This transformation of the business model drove rapid growth in the GMV of the housekeeping and accommodation solutions in 2023, reaching RMB514 million, a 53% increase, compared to 2022. Furthermore, thanks to the successful implementation of SaaS+ service empowerment, the profitability of the business segment significantly improved. The growth profit increased by 48.7% year-on-year, and the growth profit margin rose from 13.4% to 26.4% in housekeeping and accommodation solutions sector. What's even more pleasing is that the empowerment of SaaS+ service has also led to significant cost decrease. The overall operating cost of housekeeping and accommodation solutions decreased by 35.5%, with a remarkable 53.4% [ph] increase in the operation cost of the hotel services, showcasing significant cost reduction effects. Throughout the year 2023, through the innovative empowerment of SaaS+ service, we not only significantly enhanced the capabilities of local service provider, but also deeply integrated SaaS+ service into our business operation, achieving significant transformation results. Since strategy effectively reduced the cost of the entire supply chain, improved operation efficiency, and brought significant economic benefits to the company. Overall, Quhuo's revenue is primarily from three types; Platform fulfilment service, SaaS+ service, and the international trade and the technology service. Platform fulfilment service is the earliest business segment that Quhuo venture into and serves as the cornerstone of the company. It mainly involves on-demand delivery and mobility service solutions, and it generates revenue through service fee for order fulfillment. This segment is an important component of the company's revenue as it being steadily developing. In 2023, the revenue from fulfilment service is RMB3.5 billion. SaaS+ service as mentioned earlier, is one of the engines for the second-gross curve, focusing primarily on housekeeping and accommodation services. It generates revenue through charging for flexible improvement platform services. The great achievement made by SaaS+ service in 2023 has given us the confidence to establish extensive cooperation with more new customers, and expand SaaS+ service into more business areas. Currently, we are in discussion with leading medical institutions, long-term rental platforms, and senior living apartments in China, intending to enter the medical and health [ph] care industries. International trade and revenue is another engine for the second growth curve, derived from mobility solutions, especially in the used vehicle export business. Facing the always-painting in the intangible international trade of used vehicles, such as authentic of transactions, transparency of processes, guarantee of vehicle qualities, and inadequate after-sales services. Quhuo International will launch a unique used vehicle export chain platform called Carnuxt. This platform aims to create a stable [ph] way marketing environment for car manufacturers, dealers, and consumers while providing win-stop solutions to challenges related to the quality of used vehicle products, sales channels, and after-sales services. Recently, there has been a push in China for a new round of large-scale equipment review and consumer goods trading programs, which will result in more used vehicle entering the market. This aligns with the growing demand for used vehicles in overseas markets. Leading the advantages of Carnuxt's trading platform and high-quality services Quhuo aims to see this business opportunity, consolidate our leading position in the international trade of used vehicles and explore greater market potential for used vehicles in China. SaaS+ Quhuo’s three major service models have jointly constructed and integrated and diversified commercial landscape. With the cornerstone sector being the fulfillment services, which serve as a stabilizing force for the company's revenue and profits. Meanwhile, the SaaS+ service and international trade serve as vital drives for the company's proactive business expansion, leading to higher opportunities for overall business growth. They also seek to diversify the company's income streams and enhance its profitability, thereby opening up significant growth potential for the company. In conclusion, whether through the transformation of the SaaS+ business or Quhou International expansion efforts, Quhou has brought about new opportunities in the employment market. In the future, we will also extend our material on-demand delivery service to overseas markets. Through partnership with local on-demand service platforms, we aim to further develop global delivery services, providing more choices and opportunities for workers both domestically and abroad. Since the initial team, we have contributed to promoting employment growth, enhancing good labor market flexibility and further driving sustainable social economic development. I concluded my prepared remarks here and now I will hand over the call to our CFO Barry to provide further insights into our financial situation.

Thanks, Leslie. Hello everyone, welcome to Quhuo's second half and full year of 2023 conference call. Please be reminded that all amounts quoted here will be RMB unless stated unwise. Before I go into our full year results, I would like to draw your attention to something notable that occurred during the second half of 2023. For the six months ended December 31, 2023, revenue was RMB1,966.1 million a slightly increase compared with 2022 same period, which was RMB1,956.6 million. Now let's look at the segment result. Revenues from on-demand food delivery solutions were RMB1,763.2 million, representing a decrease of 6% from RMB1,874.9 million in the second half of 2022, primarily because we enjoyed more preferential policies and subsidies during the second half of 2022 primarily because we enjoyed subsidy and amid the COVID-19 pandemic, which was significantly reduced in the six months ended December 31, 2023 following the relief of the pandemic. Revenues from mobility service solutions, consisting of shared-bike maintenance, ride-hailing, vehicle export solutions and freight service solutions, were RMB175.3 million, representing an increase of 239.6% from RMB51 million in the second half year of 2022, primarily due to the success of vehicle export solutions, which generated revenue of RMB142.5 million. Revenues from housekeeping and accommodation solutions and other services were RMB27.5 million, representing a decrease of about 8.3% from RMB30 million in the second half of 2022, primarily due to the transition of business model in hotel services. The cost of revenues was RMB1,866.3 million, representing a 3.8% year-over-year increase primarily in line with the increase in our total revenues. General and administrative expenses were RMB102.7 million, representing a decrease of 9.9% from RMB114.1 million in the second half of 2022, primarily due to the improvement in company management efficiency and the decrease in share-based compensation expenses from RMB7.3 million in the second half of 2022 to a net benefit of RMB4.3 million in the second half of 2023. R&D expenses were RMB5.7 million, representing an increase of 6.6% from RMB5.4 million in the second half of 2022, primarily due to the increase in investment in SaaS+ technology. Speaking of income, we recorded other income, net, of RMB10.7 million, compared to other loss, net, of RMB17.8 million in the second half of 2022, primarily due to the fluctuation in the fair value of our investment in a mutual fund. Income tax expense was RMB1.5 million, as compared to income tax expense of RMB14.3 million in the second half of 2022, primarily due to the lower estimated annual effective tax rate for the second half of 2023. Net income attributable to Quhuo Limited was RMB13 million, compared with net income attributable to Quhuo Limited of RMB11.8million in the second half of 2022. Adjusted EBITDA was RMB24.1 million, compared with adjusted EBITDA of RMB47.8 million in the second half of 2022. Adjusted net income was RMB7.4 million, compared to the adjusted net income of RMB17.4 million in the second half of 2022. Now let's move to the full year of 2023. During the fiscal year of 2023, total revenue was RMB3,702.4 million, compared with total revenues of RMB3,820.4 million in 2022. Revenues from on-demand food delivery solutions were RMB3,412.8 million, representing a decrease of 6.2% from RMB3,638.7 million in 2022, primarily due to we enjoyed more preferential policy and subsidy during 2022 amid the COVID-19 pandemic, which was significantly reduced in 2023 following the relief of the pandemic. Revenues from mobility service solutions were RMB233.8 million, representing an increase of 116.4% from RMB108.1 million in 2022, primarily due to the success of vehicle export solutions, and we exported around 1,900 units of new energy vehicles and electric mopeds from China and generated revenue of RMB 154.5 million. Revenues from housekeeping and accommodation solutions and other services were RMB55.7 million, representing a decrease of 24.2% from RMB73.6 million in 2022, primarily due to the transition of business model in hotel service. Regarding the cost of revenue which was RMB3,535.8 million, which remained relatively stable as compared to the cost of revenues in 2022. Now let’s move to expenses. G&A expense were RMB184.3 million, representing a decrease of 13.7% from RMB213.6 million, primarily due to the decrease in share-based compensation expense from RMB19.8 million in 2022 to a net benefit of RMB0.5 million in 2023. R&D expense remained relatively stable at RMB12.4 million in 2023 compared with RMB12.5 million in 2022. Other income, net was RMB16.7 million in 2023, as compared to other loss, net of RMB26.1 million in 2022, primarily due to the fluctuation in the fair value of our investment in a mutual fund. Income tax benefit was RMB0.9 million in 2023, as compared to income tax expense of RMB21.0 million in 2022, primarily due to the lower estimated annual effective tax rate for the year of 2023, and the increase in deferred tax asset benefit. Net income attributable to Quhuo Limited was RMB3.3 million in 2023, as compared to net loss attributable to Quhuo Limited of RMB13.1 million in 2022. As our CEO Leslie said before in 2021 we proposed a strategy of improving profitability after increasing revenue. The effectiveness of this strategy was proven in 2022 and 2023. As we have achieved the positive EBITDA for four consecutive half years which is a remarkable accomplishment. It signified the company's persistent profitability over the past two years demonstrating a stable and sound operational performance. Other income, net was RMB16.7 million, compared to other loss, net of RMB26.1 million in 2022, primarily due to the fluctuation in the fair value of our investment in the mutual fund. Income tax benefit was RMB0.9 million compared to income tax expense of RMB21 million in 2022, primarily due to the lower estimated annual effective tax rate for the year of 2023, and the increase in deferred tax asset benefit. Net income attributable to Quhuo Limited was RMB3.3 million compared with net loss attributable to Quhuo Limited of RMB13.1 million in 2022. Adjusted EBITDA was RMB35.2 million compared with adjusted EBITDA of RMB58.6 million in 2022. Adjusted net income was RMB5.5 million compared with adjusted net income of RMB3.3 million in 2022. In terms of the balance sheet in 2023 as of December 31, 2023 the company had cash, short-term investments and restricted cash of RMB114.8 million and short-term debt of RMB92.7 million. This concludes my prepared remarks. Thank you for your attention. We are now pleased to take your questions. Operator, please go ahead.

[Operator Instructions] It appears we have no questions at this time. I would like to turn the conference back over to management for closing remarks. I'm sorry if we want to wait for if there is any investor wants to have a question. Maybe give us more five minutes. Okay, so if there is no more questions, we will finish our conference call here. Thank you everyone for listening. And if you have more questions, you can find us and contact us from our website. Okay, thank you everyone. And goodbye. Pardon me. It looks like we do have some questions who have dialed in. The first one is from Bill Lee with a Tiger [Indiscernible]. Please go ahead.

Thank you. This is Bill from Tiger. Thank you to the management for sharing. My question is what is the Quhuo’s strategic plan for the next steps? Thank you.

Okay, this is Leslie and CEO of Quhuo. Regarding the future plan, firstly, that over the past decade, and we concentrate on building our core competence is a lean operation, through our self-operated model. But we expected that after the exploration in 2023 from 2024 onwards, we would like to define our strategy to from self-operation to collaborative empowerment which means we will explore more opportunities in collaboration and more focusing empowerment. So we consider three main areas to implement this collaborative empowerment strategy. And the first phase [ph] is on domestic side, we will focus on providing fast class service empowerment, not just empowering local life service operators in housekeeping and condition. We also we are extending our subclass service to broader business areas. For example, like elderly [ph] care, because China is now in aging population and medical services and also, we will empower long-term rental apartments. On the international trading side, we were more focused on empowering our trading partners worldwide. So, we plan to launch a trading platform we call this Carnuxt, which will are working closely with our 58 service dealers worldwide. We plan to transform them into our regional operational collaborative service partners. So, we will work together with us to further explore opportunities worldwide to address the issues of transparency and securities for used vehicle export trade. With this initiative, and we hope that we can through issuing Carnuxt certificates provide more quality assurance for our trading partners worldwide, and expand more opportunities in the development of new energy vehicles. And obviously, further increasing Quhuo's market share and revenue in international in the market. And another part of collaborative empowerment we think about is on the on-demand delivery business. We did some investigation and feasibility studies, and we believe that overseas on-demand delivery market is characterized by significant consumer scale and high growth potential. As the projection data, as we said, that the market size of overseas market for on-demand delivery is reached about more than $600 billion by 2032. But however, we see the problems and the problems like poor service experience and high delivery cost and also insufficient capacity to handle large volumes of orders in the peak time. So, we think it's a good opportunity for Quhuo. So, in 2024 we will focus on Southeast Asia and the Middle East as our pioneer stations for overseas expansion. And we will cooperate with the local on-demand platform and some restaurants and also localize like service providers. And we will mainly to support service experience and high cost in the overseas delivery service market. And we believe that the experience, expertise and also the technology what we accumulated in the past 10 years in China, we will empower our working partners in overseas and we expect to achieve more business growth in overseas market. And our plan is by 2025, we aim to achieve the business implementation in more than five new countries, and explore other regional markets and furthermore. So about our future plan, in summary, in 2024, we're considering that firstly we are maintaining our domestic cornerstone business, stable growth. And at the same time, we will actively seek a growth opportunity in the overseas market. So enhance the company's profitability and growth space through the international expansion of used vehicle and also on-demand delivery together with our domestic SaaS+ service. Thank you very much. I hope that I can clarify that what we are going to do in the future. Yes. Thank you.

Okay, operator please check if there’s more questions.

[Operator Instructions] There are no further questions at this time. I'd like to hand the call back over for closing remarks.

Okay. If there's no more questions, we will finish our conference call here. And thank you everyone for listening tonight. If there's more questions, you can contact us from the IR website. So that's all. Thank you. Goodbye.

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