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Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to ATRenew Inc.'s Q1 2026 earnings conference call. At this time, all participants are in a 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, Miss Jessie Jin, Head of Investor Relations. Please go ahead, ma'am.

Thank you. Hello, everyone, welcome to ATRenew's Q1 2026 earnings conference call. Speaking first today is Kerry Chen, our Founder, Chairman, CEO. He will be followed by Rex Chen, our CFO. After that, we will open the call to questions from the analysts. The Q1 2026 financial results were released earlier today. The earnings press release and investor slides 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 quarterly 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 statement.

Some of the information you will hear during our discussion today will consist of forward-looking statements, and I refer to you our safe harbor statement in the earnings press release. Any forward-looking statements that management makes on this call are based on assumptions as of today, and that ATRenew does not take any obligations to upgrade our assumptions on these statements. This 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. 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. I'd like to turn the call over to Kerry for business and strategy updates. Hello, everyone, and thank you for joining ATRenew's Q1 2026 earnings conference call.

We are pleased to review our operating results and share our latest perspective regarding capability building in the second-hand industry this year. Amid overall revenue and scale expansion, we continue to advance our 1P-centric strategy, strengthening our core foundation in the recycling and trading of secondhand consumer electronics. To drive greater value for retail users, we optimized our 1P2C ratio by securing first-hand supply sources and enhancing compliant refurbishment output.

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On the supply side, we capitalize on industry trends by prioritizing trading scenarios that deliver superior user experiences, while shifting more fulfillment to offline via two-door services. In 2026, the government maintained strong support for trade-ins and further advanced fiscal and financial coordination. Against this backdrop, AHS Recycle continues to work closely with JD.com to create industry-leading trade-in solutions, providing a seamless one-stop trade-in experience at highly competitive prices to meet diverse consumer needs. As a result, within the JD sourcing channel, trade-in orders outpaced overall growth, with volume share further expanding year-over-year to about 70%.

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Throughout the recycling fulfillment process, we actively guide users towards face-to-face transactions in offline settings. In the Q1, we expanded beyond our network of 2,156 stores across major cities and scaled up our door-to-door service team to 2,248 professionals, bringing our services directly to users' doorsteps. This strategy has lifted our face-to-face fulfillment ratio to 80%, fostering deeper connection and trust through AHS Recycle's fulfillment capabilities and brand presence. Looking ahead to peak seasons, like major promotional campaigns and flagship device launches, we will further implement flexible workforce solutions to enhance face-to-face fulfillment timeliness and user experience even during the busiest times.

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During the Q1, we leveraged our proprietary compliant refurbishment business to add depth to our supply chain, with compliant refurbished product revenue increasing 76.1% year-over-year. Our on-demand refurbishment model was a standout performer, growing by roughly 180% in revenue. Our compliant refurbishment capabilities allowed us to provide more quality secondhand devices directly to consumers. In terms of retail channels, we expanded across Paipai Selection, our official website, and new media channels, which drove nearly 150% year-over-year growth in 1P2C retail revenue from refurbished devices. March marked a significant breakthrough, with monthly retail sales of compliant refurbished products topping RMB 200 million.

As a result, 1P2C accounted for 45.1% of our product revenue in the Q1 of 2026, rising 12.1 percentage points from 33% year-over-year and 3.4 percentage points from 41.7% quarter-over-quarter. This strategic pivot toward direct-to-consumer sales allows us to align our recycling prices with real-time retail trends, ensuring we offer better recycling prices, maintain a strong price advantage, and create greater value for end users.

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Regarding high-quality products from older generations, specifically M-3 and M-4 models, we targeted differentiated demand for device generations in the international markets to drive compliant exports. This strategy allows us to steadily expand our global scale and unlock an additional, over 4% gross profit margin.

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Turning to our 3P business. PJT Marketplace also delivered healthy and rapid growth in both scale and revenue, further reinforcing its position as industry infrastructure. As we onboarded more new users, we offered free shipping on the first three orders to those new users on PJT Marketplace. We are also replicating the operational capabilities PJT Marketplace has built in serving large clients and extending them to small and medium-sized merchants. By streamlining platform processes, we have lowered the barrier to using platform and improved both transaction efficiency and convenience, enabling small and medium-sized merchants to sell their products at better prices.

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Leveraging PJT Marketplace's robust supply chain capabilities as the industry's leading B2B platform, we deliver high-quality supplies to those merchants while reaching fragmented markets through Douyin's user base. By the end of the Q1, the number of total registered merchants on PJT Marketplace nearly doubled year-over-year to almost 2 million. Notably, the number of registered contracted buyers surged by over 120% as an influx of small and micro buyers seeking high-quality value for money products came up to the platform. This validates the effective implementation of our PJT Marketplace supply chain strategy to penetrate fragmented markets.

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In our overall 3P business model, Paipai continues to shift toward the consignment model. Under this model, the Paipai team provides merchants with standardized operational services, making the pre-owned retail easier for them to manage. Since the Q2 of last year, Paipai Consignment has continued to provide merchants with broader access to curated retail channels. In the Q1, the consignment business maintained a rapid double-digit growth, helping pre-owned retail merchants move closer to consumers.

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Multi-category recycling sustained rapid growth in the Q1, with overall recycling GMV up 81.5% year-over-year. Among them, gold recycling GMV grew 83.3%, and secondhand luxury recycling GMV grew 58.8%, both showing solid growth momentum. By the end of March, we launched multi-category recycling services across 966 AHS stores, adding nearly 300 stores compared to the end of March last year. Looking ahead, we expect to roll out this capacity to more self-operated AHS stores through the rest of the year, while also working with more franchisees to build gold recycling service capabilities. Alongside the growth of our multi-category business, we are also upgrading the locations and layouts of our stores, creating a better fulfillment experience and conveying greater brand value to both new and existing users.

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In summary, the overall 3P service take rate was 4.92% in the Q1, in line with our expectations.

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These results validated the effectiveness of the three-stage development strategy we previously shared. Based on 2026 market dynamics, let me revisit the long-term nature of our strategy. Stage one, we continue to solidify the healthy growth of our core second-hand consumer electronics business. In our category assessment within the second-hand industry, we identified second-hand consumer electronics as a category with both scale and enormous room for further penetration. As national trade-in policies promote consumption and industry upgrades, we are actively positioning ourselves in recycling and trade-in scenarios. Strengthening the brand recognition of AHS Recycle to serve broader user replacement and upgrade needs, enabling more electronic products to achieve a second life cycle and creating greater value for society.

Throughout this process, we are steadfastly building our 1P business capabilities, increasing our use of AI tools, optimizing pricing experiences and end user services and supply chain efficiency, while expanding our industry value chain through compliant refurbishment and creating more value to retail users through higher portion of retail sales.

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Stage two, we are strengthening AHS Recycle's position as China's leading recycling brand. We believe that in the second-hand service industry, pricing, trust, and convenience are the three core pillars that define the long-term user experience. In an industry's long-term development path, brand equity holds enduring value. Young trade-in scenarios, we maintain independent and prudent brand investments in AHS Recycle across Douyin and Xiaohongshu. Combined with the revived initiatives, AHS Recycle has partnered with an increasing number of consumer brands to penetrate more mainstream commercial districts, from local communities to shopping districts, from campuses to workplaces. By securing these unique scenarios and locations, AHS Recycle encourages more younger users to participate in recycling and green consumption.

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Stage three, we continue to advance breakthroughs in our overseas strategy. The B2B business in overseas markets represents a business model we are familiar with. By accumulating reputation and capabilities of export of China source supplies, we continue to explore global version of PJT Marketplace and product development while systematically building capabilities to directly serve end consumers.

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Now, let me share a few thoughts on the 2026 market environment. In-industry data shows that new device shipments in China have dipped slightly this year by about 4%. However, if we look at the brand mix, Apple and Huawei remain mainstream brands in the pre-owned market. Both grew against the broader trend in the new device market, supported by their supply chain capabilities and pricing advantages. This has validated the three opportunities we previously identified. First, pricing trends in the pre-owned market remain broadly stable and resilient, laying a solid foundation for the long term healthy development for the industry. Second, Apple products, which are closely tied to our core business drivers, have demonstrated market share advantages. Third, brands and platforms continue to place greater emphasis on trade-in programs. Their increased investment here supports our efficiency in acquiring firsthand recycling supply.

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Taking these together, we expect to deliver robust and rapid growth this year. By leveraging our efficient automated quality inspection technology and value-added supply chain capabilities, we will further unlock economies of scale.

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Now I'd like to turn the call over to our CFO Rex for financial updates.

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Good day, everyone. I'm pleased to share our financial performance for the Q1 of 2026. Our revenues grew rapidly and profits reached a record high. As China's circular economy continues to advance and trade-in programs for consumer electronics remain ongoing, we sustained strong growth momentum in the Q1. During the quarter, we leveraged our direct to customer recycling scenarios and face-to-face fulfillment capabilities, enhanced our supply chain and retail capabilities, and further strengthened user mindshare of the AHS Recycle brands.

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In the Q1, total revenue exceeded the high end of our guidance, increasing by 32.4% to RMB 6.16 billion, while Non-GAAP operating income surged by 70.2% to over RMB 190 million.

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Before we review the financials in detail, please note that all figures are in RMB and all comparisons are on a year-over-year basis unless otherwise stated.

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In the Q1, total revenue growth was primarily driven by continued growth in net product revenue. Net product revenues increased by 34.4% to RMB 5.73 billion, largely attributable to the growth in online sales of pre-owned consumer electronics.

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Net service revenues were RMB 430 million in the Q1, representing an increase of 10.4%. The increase was largely driven by PJT Marketplace and multi-category recycling business. The overall take rate of our marketplace was 4.92% for the Q1 of 2026. During the quarter, our multi-category recycling business contributed over RMB 83 million in revenue, accounting for 19.3% of service revenues.

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Now let's discuss operating expenses. To provide greater clarity on the trends of our actual operating based expenses, we will mainly discuss our Non-GAAP operating expenses, which better reflect how management views our operating results. The reconciliations of GAAP to Non-GAAP results are available in our earnings release and the corresponding form 6-K is furnished with the U.S. SEC.

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Merchandise costs increased by 33.2% to RMB 4.82 billion, in line with the growth in product sales. Gross profit margin for our 1P business was 15.9%, compared with what 15.2% in the same period last year. The gross margin improvement in our 1P business, this was primarily driven by high efficiency C2B recycling scenarios, combined refurbishment capabilities incorporated in our supply chains and an increasingly diversified retail channel mix. This allowed us to increase the proportion of higher margin retail sales, with 1P2C revenue accounting for 45.1% of product revenue in the Q1 of 2026, up from 33% in the same period last year.

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Fulfillment expenses increased by 22.5% to RMB 520 million. Non-GAAP fulfillment expenses increased by 22.7% to RMB 520 million. Under the Non-GAAP measures, the increase was mainly driven by higher personnel costs, driven by the growth of our business compared to the same period in 2025. Additionally, operating center related expenses rose along with the increasing volumes of recycling and transactions. Non-GAAP fulfillment expenses as a percentage of total revenues decreased to 8.5% from 9.1%.

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Selling and marketing expenses increased by 17.9% to RMB 490 million. Non-GAAP selling and marketing expenses increased by 27% to RMB 490 million, primarily driven by an increase in commission expenses in relation to channel service fees. Non-GAAP selling and marketing expenses as a percentage of total revenues decreased to 8% from 8.3%.

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General administrative expenses increased by 25.9% to RMB 79.8 million. Non-GAAP G&A expenses also increased by 33% to RMB 79 million, primarily due to an increase in personnel costs. Non-GAAP G&A expenses as a percentage of total revenues remain flat year-over-year at 1.3%.

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Research and development expenses increased by 33.5% to RMB 73.4 million. Non-GAAP R&D expenses increased by 36.4% to RMB 72.3 million, primarily due to an increase in personnel costs. Non-GAAP R&D expenses as a percentage of total revenues increased to 1.2% from 1.1%.

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As a result, our Non-GAAP operating income exceeded RMB 190 million in the Q1 of 2026, compared to Non-GAAP operating income of RMB 110 million in the Q1 of 2025, representing an increase of 70.2% year-over-year. Non-GAAP operating profit margin was 3.1% for the quarter, compared to 2.4% in the Q1 of 2025, representing an increase of 69 basis points.

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As of March 31st, 2026, cash and cash equivalents, restricted cash, short term investments, and funds receivable from third party payment service providers totaled RMB 1.72 billion. Our financial reserves are sufficient to support reinvestment in business development and shareholder returns.

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During the Q1 of 2026, we repurchased a total of approximately 0.5 million ADSs for approximately $2.7 million. On June 30th, 2025, the board has authorized a Share Repurchase Program under which the company may repurchase up to $50 million of our shares over 12 months. As of March 30, 2026, we repurchased approximately $11 million under this program. Today, the board has authorized the extension of the existing Share Repurchase Program for 12 months from June 30th, 2026, with key terms unchanged.

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Turning to the business outlook. For the Q2 of 2026, we anticipate total revenues to be between RMB 6,240 million to RMB 6,340 million, representing an increase of 25%-27% 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.

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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 keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. 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 Raphael Lim with DBS. Please go ahead.

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[Non-English content] I'll recap in English. Congratulations for the brilliant Q1 results. Does management have any updated guidance on revenue and profit growth for the full-year of 2026? Thank you.

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Thank you for the question. We continue to actively pursue our full-year operating targets. From a strategic perspective, we will continue to prioritize our 1P business, which spans the end-to-end value chain and enables us to deliver a better user experience and create greater value.

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In terms of scale growth, we've seen the government's continued promotion of consumer electronics trading programs, the expansion of eligible categories, and meaningful subsidy support together with dedicated investments by brand manufacturers and platforms, including JD.com in trading scenarios. These factors allows us to capitalize on this momentum and secure more for first-hand supply efficiently and at lower cost. They also reduce our reliance on traffic-driven marketing and performance advertising for high-value, low-frequency consumer electronics categories.

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For our international business, we are advancing at a steady pace. In the Q1, overseas revenue grew rapidly year-over-year. This was largely driven by our solid domestic inventory base as our compliant export supply chain capabilities gradually strengthen. Meanwhile, we are exploring opportunities to bring more of the capabilities we have built in China to overseas markets. These include resourcing fulfillment, platform capabilities, and export opportunities of automation technologies and among others. We will also remain disciplined in our international expansion investments while actively applying new AI technologies to accelerate business from the incubation stage towards rapid growth.

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As a forecast, we look forward to update you with more development from the overseas business during the next earnings conference call.

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Regarding efficiency improvements, building flexible fulfillment capabilities in our 1P scenarios, as well as integrating AI across automated quality inspection, R&D and operations will be key priorities as we strengthen our 1P model. In terms of AI enabled productivity, we actively encourage AI learning and knowledge sharing across the organization. We have already made progress in areas such as in store compliance, audits and risk control, recycling pricing algorithm optimization and coding efficiency. Going forward, we will gradually expand these applications, laying the groundwork for long term organizational efficiency gains and improved profitability.

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Taken together, we expect to scale in 2026 at a pace faster than what we expected internally at the beginning of the year. We also expect to achieve meaningful margin improvement.

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Thank you for the question.

The next question comes from Wan Jiao with CICC. Please go ahead.

[Non-English content] Congratulations for the strong results. I have one question. Could you please give us more color about your plan for store expansion and your fulfillment capacity increase in 2026? Thank you.

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Thank you for the question. During the Q1, we reviewed our nationwide store network based on factors such as location, quality and traffic performance. We optimized our store footprint by phasing out certain underperforming stores while further improving the efficiency of our high quality stores so they can better and more efficiently capture online traffic. We also maintain focus on store quality. By expanding service categories, we continue to increase the proportion of stores capable of providing multi-category recycling services.

By the end of the Q1, 841 of our 965 self-operated AHS stores had enabled multi-category service capabilities. Alongside more user-friendly store layouts and upgraded in-store experiences, further strengthening AHS's recycled brand image and fulfillment experience. We have our AHS velocity at store openings. It follows a leapfrog pattern, opening new stores, solidifying store performance, then further ramping up store openings. We will continue to follow this rhythm based on our past experience. Looking at the long term, our goal of reaching 5,000 stores in China remains unchanged.

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At the same time, we added nearly 500 door-to-door service teams nationwide year-over-year. This helped increase the proportion of face-to-face fulfillment in key service scenarios, including JD's trading services, expand fulfillment coverage, improve service speed, and further reinforce our industry leading fulfillment experience. In addition, we are also building our flexible workforce capacity. During peak seasons, such as major promotional campaigns and flagship device launches, we can quickly activate additional door-to-door capacity to ensure fulfillment experience and quality while meeting face-to-face demand. Thank you for the question.

The next question comes from Brian Lantier with Zacks Small-Cap. Please go ahead.

Good evening, and I'll add my congratulations on the strong performance this quarter. I was wondering if you could provide some insight into the growth of inventory in the Q1. Specifically, is the inventory build mostly due to anticipated demand growth or changes in the product mix? How should we think about normalized inventory going forward?

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Thank you for the question. Our recycling and trading business continue to gain user recognition, especially during the trading scenarios. As we build stronger user mindshare, we are also enhancing the customer experience by offering more attractive pricing. Against the backdrop of the rising upstream costs for new devices, especially memory price hikes, second-hand market prices have remained relatively stable compared to past cycles, and we have even seen price increases in some products. We are not in a hurry to reprice our high-quality inventory for faster turnover, and part of it will be sold in the Q2 as inventory will normalize. The increase in inventory is consistent with our strategy of strengthening 1P2C sales. On average, inventory turnover days for 1P2C retail are longer than those of bulk sales.

Therefore, as our revenue mix continues to shift towards 1P2C, inventory turnover days may increase to some extent. That said, as PJT Marketplace remains an important piece of industry infrastructure, it supports our strong pricing capabilities. Therefore, the increase in inventory is not expected to have significant impact on turnover in our core businesses. Thank you for the question.

This concludes our question and answer session. 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, please feel free to email us at [email protected]. Have a good day.

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

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to ATRenew Inc.'s 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. Jeremy Ji, Head of Investor Relations. Please go ahead, ma'am.

Thank you. Hello, everyone, and welcome to ATRenew's 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 the full year 2025 financial results were released earlier today. The earnings press release and investor slides 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 quarterly 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 statement.

Some of the information you will hear during the 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 ATRenew does not take any obligation 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. I'd now like to turn the call over to Kerry for business and strategy updates. Hello, everyone, and thank you for joining ATRenew's fourth quarter and full 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. I would like to begin by expressing my gratitude to our team for their hard work and dedication throughout 2025. By steadfastly strengthening our core capabilities and enhancing the user experience, we successfully seized upon the growing domestic demand for secondhand 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 RMB 6.25 billion, representing a 29% year-over-year growth. Non-GAAP operating profit reached RMB 180 million, up 38.1% year-over-year.

For the full year 2024-2025, total net revenues grew 28.9% year-over-year to RMB 21.05 billion, while non-GAAP operating profit reached RMB 560 million, up 35.5% year-over-year. Both revenue and profit exceeded the expectations we set internally at the beginning of the year.

在效率与体验方面，平峰与高峰的上门预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。

Looking closer at our fourth quarter performance, we continue to prioritize our one team 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 trade-in 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 to-door service members. Notably, the proportion of offline fulfillment for JD.com's trade-in 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 best-in-class trade-in practices and reinforce consumer mindshare.

Furthermore, our to-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后注优势，为终端用户打造更多的合规翻新产品。四季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，1P2C的产品收入同比增长88%。1P2C的占比同比提升12.7个百分点至41.7%，创历史新高。进一步验证了我们C端收C端卖的闭环产业链能力。未来我们可以复用1P2C零售的价格能力，反哺到回收端的定价，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 supply chain capabilities to deliver a broader range of compliant refurbishment products to our retail users. This led to a 90.8% year-over-year surge in compliant refurbishment product revenue in the fourth quarter. Notably, our on-demand refurbishment strategy contributed to 32% of refurbishment revenue for phones. Expanding our revenue virtual inventory, our retail virtual inventory, and offering a diverse array 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 revenues 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 and resell back to consumers at scale.

Moving forward, we will leverage the pricing capabilities developed through 1P2C retail to optimize pricing strategies at the recycling end, creating a more effective dynamic pricing mechanism and in turn, driving growth of our recycling business.

在此前介绍的国际化战略方面，我们的海外业务主要以一批模式开展，拓宽出口通路，连接一手货源与全球更高价格的购买需求。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。同时呢，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，保障了出口时，出口流程的时长可控，持续优化海外补货效率和资金的使用效率。

As discussed in previous quarters, our overseas business primarily operates under our 1P business model, allowing us to broaden our export channels and connect firsthand supplies with higher-priced 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 secondhand goods and policy consultations in multiple regions.

Our adherence to standardized operations, paired with increased efficiency in our cooperation with regulatory authorities such as customs, ensures a controllable export process timeline and continuously optimizes overseas restocking efficiency and capital utilization.

在平台业务方面，四季度服务收入同比增长8.8%，平台的综合收费率为4.79%，符合平稳发展的预期。其中，拍机堂业务保持扎实的增长节奏。拍拍在向寄卖模式的战术转身过程中，为商家提供更优质的零售体验。多品类业务再次实现了亮眼的规模与收入增长。

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. PJT Marketplace maintained a solid pace of growth while Paipai enhanced the retail experience for merchants during the strategic shift towards a consignment model. Our multi-category recycling services once again achieved impressive growth in both scale and revenue.

B2B交易平台拍机堂延续了三季度的策略，继续落实商家服务、让利与创新服务能力建设。四季度的拍机堂3P收费率环比稳定。一方面，拍机堂作为行业最大的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，推动拍机堂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，落地了九个城市端的潜质检测点，为本地商家提供了更容易触达的售前服务网络。通过当面交易、当面交流质检标准，提升效率。此外，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录拍机堂，或者通过专业代淘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，截止2025年末，拍机堂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 continued to re-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, PJT ensures sales efficiency for merchants. Our guaranteed self-service incentivized merchants to actively list products, driving the platform's warehousing inspection penetration rate to 81%, up 2 percentage points quarter-over-quarter. Additionally, we launched 9 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 value for money reputation is gaining traction in many lower-tier markets, especially among college students, fueling strong organic growth. Increasingly, individuals are buying secondhand 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 PJT Marketplace exceeded 101.66 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直达、易使用的直达C端能力。在寄卖模式下，拍拍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供给，也方便了C端用户挑选好货。四季度，拍拍寄卖业务的GMV同比增长253%，占拍拍平台业务GMV比例提升至24%。

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 Paipai 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 secondhand sellers, increases the online supply of pre-owned goods, and make it easier for users to discover high-quality items. In the fourth quarter, GMV from consignment increased by 253% year-over-year, accounting for 24% of the total GMV of Paipai marketplace business. A notable increase in proportion.

在创新业务方面，我们自2022年开始内部孵化的多品类业务持续交出超预期的答卷。四季度用户对于多品类回收的热情高涨，整体回收的GMV同比增长125.7%。各品类都实现了规模的加速增长。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%。同时…… 并且呢，通过优化为季度收费的模式，黄金回收的take rate实现了小幅度的环比改善。此外呢，基于我们独特的商业模式和持续改善的回收体验，我们的二手奢侈品回收业务在四季度继续实现了高速增长，并且基于旺季需求增长及定价逻辑的优化，take rate环比提升了1.2%。

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 surged, 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 secondhand 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.

进入2026年，外部的市场环境发生了明显的变化。近期呢，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。主线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，目前以旧换新仍然有较高的渗透空间。在新机价格上涨的背景下，叠加国补，各大厂商与平台会更加重视以旧换新业务，并持续加大投入。综合以上分析，我们判断2026年的市场环境对于二手行业整体利大于弊，有利于行业的持续稳健和健康发展。

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 pre-owned 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, trade-in penetration still has significant room to grow. With 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 net positive for the pre-owned industry and supports 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。

With 2026 underway, we have clear expectations for our full year growth, guided by ATRenew's three-stage development strategy we are carrying forward.

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。在国补延续、新机涨价、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履约交付端的用户体验，拉通一盘货，将操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端卖的产业链闭环，形成正向的飞轮效应。并且我们将在AI定价、AI操盘、AI质检上持续投入，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 one, 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 secondhand market, we remain unwavering 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 inspection 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 secondhand consumer electronics business.

第二级战略，持续加强爱回收国民第一回收品牌的定位。一方面，我们在过去的两年时间里快速建设了新媒体品牌营销的能力，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的品牌建设、品牌性质，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性质。品牌营销在二手行业发展的早期的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五万余台智能回收机，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。爱分类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。我们相信爱分类会越来越成为爱回收主营业务增长的重要驱动。

Stage two, 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 AHS Recycle brand on two user engagement platforms, Douyin and Xiaohongshu. Through these efforts, we have strengthened brand awareness for pre-owned 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 L, the ecosystem extension of AHS Recycle.

Leveraging more than 50,000 LOVERE recycling kiosks across communities, we expanded partnerships with 245 consumer brands to co-establish a collaborative ecosystem and jointly pioneer green consumption. LOVERE 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.

第三级战略，厚积薄发，努力实现海外战略的突破。这是我们基于万物新生过去十五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，把在中国内地积累的技术和供应链能力实现出海。期待能够在后面与大家进一步更新进展。

Stage three, we will leverage our accumulated strengths 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 pre-owned 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.

[Foreign Language]

Good day, everyone. I'm pleased to report our fourth quarter and full 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 RMB 6.25 billion, while non-GAAP operating income surged by 38.1% to over RMB 180 million.

For the full year, revenue grew by 28.9% to RMB 21.05 billion, while non-GAAP operating income rose by 35.5% to nearly RMB 560 million. 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 primarily driven by continued net product revenue growth. Net product revenues increased by 30.7% to RMB 5.83 billion, largely attributable to the growth in online sales of pre-owned consumer electronics.

Net product revenue for the full year reached RMB 19.38 billion, representing a year-over-year increase of 30.6%. Net service revenues were RMB 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 take rate of our marketplaces was 4.79% for the fourth quarter of 2025. During the quarter, our multi-category recycling business contributed nearly RMB 80 million of revenue, accounting for 18.8% of service revenues. Net service revenue for the full year reached RMB 1.67 billion, representing an increase of 12.4%. Our multi-category recycling business contributed RMB 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 base expenses, we will mainly discuss our non-GAAP operating expenses, which better reflect how management views our operating results. The reconciliations of GAAP to non-GAAP measures are available in our earnings release and the corresponding Form 6-K furnished with the U.S. SEC.

第四季度商品成本增加28.9%至50.3亿元，与产品销售的增长一致。我们1P业务的毛利率为13.7%，而上年同期为12.5%。1P毛利率的改善主要得益于我们发挥C2B回收场景、供应链中的合规翻新整备能力、多样化的严选零售渠道的优势，提升毛利较高2C零售的占比。第四季度1P 2C占比及产品收入中的零售收入占比达到41.7%，去年同期为29%。去年1P 2C占比36.8%，2024年为27.2%。全年商品成本167亿元，同比增长27.6%。全年1P毛利率为13.8%，上年为11.8%。

In the fourth quarter of 2025, merchandise costs increased by 28.9% to RMB 5.03 billion in line with the growth in product sales. Gross profit margin for our 1P business was 13.7% compared with 12.5% in the same period last year. The gross margin improvement in our 1P business was primarily 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 RMB 16.7 billion, with a 1P gross margin of 13.8% compared to 11.8% in 2024.

第四季度履约费用增长21.7%至4.8亿元。Non-GAAP履约费用增长22.4%至4.8亿元。Non-GAAP履约费用增长的主要原因有：一，与2024年同期相比，回收交易量的增加导致人力和物流费用增加。第二点，2025年第四季度拓展线下交付网络和运营能力，运营费用相应增长。Non-GAAP履约费用率从8.1%下降至7.7%。全年Non-GAAP履约费用为17.5亿元，同比增长28.3%。全年Non-GAAP履约费用率保持8.3%不变。

In the fourth quarter of 2025, fulfillment expenses increased by 21.7% to RMB 480 million. Non-GAAP fulfillment expenses increased by 22.4% to RMB 480 million. Under the Non-GAAP measures, the increase was mainly driven by higher personnel and logistics expenses, reflecting a greater volume of recycling transaction activities compared to the same period in 2024. Additionally, operations-related costs rose as we expanded our store network and enhanced operations center capacity in the fourth quarter of 2025. Non-GAAP fulfillment expenses as a percentage of total revenues decreased to 7.7% from 8.1%. Non-GAAP fulfillment expenses for the full year increased by 28.3% to RMB 1.75 billion, while the Non-GAAP fulfillment expenses as a percentage of total revenues remained stable at 8.3%.

第四季度销售费用增加23.3%至4.6亿元。Non-GAAP销售费用增加44.1%至4.6亿元，主要原因为与渠道服务相关的佣金费用的增加。Non-GAAP销售费用率从6.6%上升至7.4%。全年Non-GAAP销售费用为16亿元，同比增长47.3%。全年Non-GAAP销售费用率从6.6%上升至7.6%。

In the fourth quarter of 2025, selling and marketing expenses increased by 23.3% to RMB 460 million. Non-GAAP selling and marketing expenses increased by 44.1% to RMB 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 RMB 1.6 billion, while Non-GAAP selling and marketing expenses as a percentage of total revenues increased to 7.6% from 6.6%.

第四季度管理费用下降34.1%至6,000万元。Non-GAAP管理费用下降25.6%至5,760万元，主要由于人力费用降低。Non-GAAP管理费用率从1.6%下降至0.9%。全年Non-GAAP管理费用为2.6亿元，同比增长10%，10.1%。全年Non-GAAP费用，管理费用率从1.5%下降至1.2%。

In the fourth quarter of 2025, general and administrative expenses decreased by 34.1% to RMB 60 million. Non-GAAP G&A expenses also decreased by 25.6% to RMB 57.6 million, primarily due to a decrease in personnel costs. Non-GAAP G&A expenses as a percentage of total revenue decreased to 0.9% from 1.6%. Non-GAAP G&A expenses increased by 4.1% to RMB 260 million, while Non-GAAP G&A expenses as a percentage of total revenues decreased to 1.2% from 1.5% in 2025.

第四季度研发费用上升9.8%至6,260万元。Non-GAAP研发费用上升14%至6,030万元，主要由于人员成本增加。Non-GAAP研发费用率从1.1%下降至1%。全年Non-GAAP研发费用为2.3亿元，同比增长21.4%。全年Non-GAAP研发费用率从1.2%下降至1.1%。

In the fourth quarter of 2025, GAAP research and development expenses increased by 9.8% to RMB 62.6 million. Non-GAAP R&D expenses increased by 14% to RMB 60.3 million. The increase was primarily driven by elevated personnel expenses. Non-GAAP R&D expenses as a percentage of total revenue decreased to 1% from 1.1%. Non-GAAP R&D expenses for the full year increased by 21.4% to RMB 230 million, while Non-GAAP R&D expenses as a percentage of total revenue decreased to 1.1% from 1.2%.

利润层面，第四季度Non-GAAP经营利润超1.8亿元，去年同期Non-GAAP经营利润为1.3亿元，同比增长38.1%。本季度Non-GAAP经营利润率为2.9%，去年同期为2.7%，较上年同期增长19个基点。全年Non-GAAP经营利润近5.6亿元，去年同期Non-GAAP经营利润为4.1亿元，同比增长35.5%。全年Non-GAAP经营利润率为2.6%，去年为2.5%，较上年同期增长13个基点。

As a result, our Non-GAAP operating income exceeded RMB 180 million in the fourth quarter of 2025 compared to Non-GAAP operating income of RMB 130 million in the fourth quarter of 2024, representing an increase of 38.1%. Non-GAAP 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 Non-GAAP operating income for the full year was nearly RMB 560 million compared to Non-GAAP operating income of RMB 410 million for the full year of 2024, representing an increase of 35.5%. Non-GAAP operating profit margin was 2.6% in 2025 compared to 2.5% in 2024, representing an increase of 13 basis points.

第四季度我们使用了约$5,800,000美元，回购近130万股ADS。今天我们随财报宣布了2025年度现金分红，总金额为$23,500,000美元，对应每ADS分红$0.1美元。

During the fourth quarter of 2025, we repurchased a total of approximately 1.3 million ADS for approximately $5.8 million. Today, along with our earnings release, we announced the fiscal year 2025 cash dividend in the amount of $0.1 per ADS. The total amount is expected to be approximately $23.5 million.

关于2026年第一季度的指引，我们预期总收入将在58.6亿元至59.6亿元，对应同比增长25.9%至28.1%。以上指引仅反映当前我们对市场和运营状况的初步看法，预期有可能变化。

Now turning to business outlook. For the first quarter of 2026, we anticipate total revenues to be between RMB 5,860 million and RMB 5,960 million, representing an increase of 25.9%-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.

以上是我们业绩重点分享，欢迎各位提问交流。

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 keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. 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 Jiao Wan with CICC. Please go ahead.

管理层晚上好，感谢接受我的提问，也恭喜咱们这个强劲的业绩。然后我有一个问题，就是关于今年两会期间，咱们也知道这个国家也明确了消费者以旧换新补贴的投入力度，但是呢，同时这个存储的价格也是过去多个季度持续上涨。然后三月份也看到了一些厂商去上调新机价格。那请问以上因素叠加在一起，对咱们就是从咱们的角度来看，对今年二手的3C行业的影响是怎么样的？包括说咱们是否会因为这些因素调整26年的指引？我自己翻译一下。Congratulations for this strong quarter. I have one question. During the recent Two Sessions, the government confirmed the scale of national subsidy for consumer trade-in programs. However, storage prices have been rising for several quarters, and in March, we've seen manufacturers raising new device 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.

好，感谢提问，我来回答一下这个问题。首先，对于2026年，我们看到国家持续对手机、平板电脑、智能手环、手表投入以旧换新的补贴，并将智能眼镜也纳入了补贴的品类范围。 2025年，我们的以旧换新业务的驱动主要来自于六千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3C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，不会太多地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 trade-in subsidies for mobile phones, tablets and smart watches. Smart glasses have now also been added to the list. In 2025, the trade-in subsidy has been applied to the new device sales, which were priced under RMB 6,000, 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 trade-in 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 used old devices and we make trade-ins hassle free. With that said, 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.

2025年，由于AI的大规模建设与应用，行业逐步出现了存储短缺和存储价格大幅上涨的情况。以智能手机为代表的新机厂商普遍面临零部件涨价的挑战。在2026年的趋势上，存储价格更快速地提升，让安卓厂商出现了相对被动的提价。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。机会在于大力投入以旧换新，将有可能成为电商和品牌厂商的更高优先级的事项。部分以旧换新的场景可以叠加国补，和我们更好的回收价格，服务更多用户的以旧换新需求，从而实现回收货源的快速增长。挑战在于会有更多的新用户涌入到二手交易的场景，为用户提供更好的价格和体验都将是至关重要的事项。

In 2025, driven by large-scale AI deployment and applications, the industry began to see memory shortages and significant price increases, putting pressure on component costs for 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 pre-owned 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 pre-owned alternatives.

在价格方面，我们将继续积极推进零售优先的操盘策略，将零售收入占1P业务的占比提升到50%以上的目标不变。尝试以C端严选的销售价格去制定更高的C端回收价格。在体验方面，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 2C 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 an upward trajectory.

Okay.

Thank you.

The next question comes from Raphael Tse with DBS. Please go ahead.

[Foreign Language] Hey, Kerry Chen, Rex Chen, I'll translate in English. May I ask management what is the store opening targets in 2026? Thank you.

Looking back at 2025, we recognized early that national subsidies would accelerate pre-owned industry growth. We invested decisively in offline fulfillment, expanding our store network and scaling up our to-door service team. In 2025, we had a net addition of 451 AHS standard stores. Going forward, our priority remains the expansion of our standard stores with consumer electronics as the core. We will also increase the proportion of multi-category recycling 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 light way. Beyond stores, we also built a nationwide to-door service team.

Daily order generating headcount 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 to-door team working together, our face-to-face trade-in fulfillment ratio exceeded 70% and user experience continued to improve. 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 to-door service team to match seasonal demand. Our AHS store serves 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 Lantier with Zacks Small-Cap Research. Please go ahead.

more color on the improvement trajectory. Thank you.

好的，感谢。二手手机3C行业的基本盘和品牌格局相对稳定。在消费电子经济价格上涨的周期，我们保持高优先级发展1P2C的零售策略。预计二手回收和销售价格有望保持动态向上发展的趋势。过程中，毛利率更高的2C销售占比提升，也会小幅度改善产品收入毛利率表现。

The pre-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. We expect both recycling and retail prices to trend upward. Meanwhile, as higher margin retail product revenue represents a growing share of our mix, we anticipate greater 1P growth margin expansion as well.

从长期角度看，更重要的是有规模效应带来的能带净利、净利润率的提升，其中一方面来自于自动化质检技术的应用，单订单质检费用相比人工质检节约约30%。因此，我们将持续优化商品的自动化运营的规划，发挥东莞和常州运营中心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，创造能带履约费用率的优化空间。

Over the long term, what matters to us is the improvement in our Non-GAAP 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-GAAP fulfillment expense ratio.

在销售费用率方面，由于行业发展处于早期，需要在销售环节投入一定的促销优惠，以提升商品的性价比。同时，我们预期呢，在中长期将保持对品牌营销的有节制的投入，巩固爱回收国民第一回收品牌的用户心智。但随着行业的成熟与品牌用户信任的建立，我们有信心在营销费用率层面推动相对显著的改善空间。

On the selling and marketing side, the industry is still at an early stage. 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 a top brand for recycling services in consumers' minds. As the industry matures and brand trust deepens, 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 [email protected]. Have a great day.

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