Good day, ladies and gentlemen, thank you for standing by and welcome to Boqii’s Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. Currently all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections you may disconnect at this time. Now, I will turn the floor over to Mandy Luo, Boqii’s IR Manager. Mandy?

Thank you, operator, and good morning everyone. Welcome to Boqii’s fourth quarter and fiscal year 2022 earnings conference call. Joining us today are Mr. Louis Liang, Chairman and CEO; Ms. Lisa Tang, Co-CEO and CFO; as well as Mr. Kai Fang, our Chief Strategy Officer. [Foreign Language] We released results earlier today. The press release is available on the company's IR website at ir.boqii.com, as well as from Newswire Services. A replay of the call will be available on our site later today. [Foreign Language] Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding this and other risks and uncertainties are included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statement except as required under the applicable law. [Foreign Language] Please note that certain financial measures that we use on the call, such as adjusted net loss, adjusted net loss margin, EBITDA, and EBITDA margin are expressed on a non-GAAP basis. Our GAAP results and reconciliations of GAAP to non-GAAP measures can be found in our earnings press release. [Foreign Language] Also, please be reminded that unless otherwise stated, all figures mentioned during the call are in Chinese renminbi. [Foreign Language] With that, let me now turn the call over to our Chairman and CEO, Ms. Louis Liang. [Foreign Language] Over to you, Louis.

Thank you, Mandy. And many thanks to everyone for joining the call today. Fiscal year 2022 represent another changing year for every one of us, whether you are from the U.S., China, or other parts of the world. Before we start, no matter where you are, we appreciate your utmost confidence and support in Boqii, and we are glad that we were able to deliver encouraging results despite the frustrating COVID-19 pandemic. [Foreign Language] Reflecting on our operations, the [serve] [ph] supply-chain disruption in China has no doubt created difficulties to our daily operations and [put close] [ph] the pressure on our fulfillment. The regional outcome has also limited spending and affected the performance of the retail market, yet not over negatives as the lockdowns have led to more time at home. more time with our beloved pets and in return delivering the sales of pet products ranging from daily necessity to healthcare, cleaning and grooming products. [Foreign Language] As a result, we were able to deliver growth in GMV and revenue, as well as improve our efficiency and expand our margins, but more importantly, we provide ourselves on delivering the required pet products to the large community, despite lockdowns and supply-chain disruptions. That would not be possible if we are without our extensive in-house facilities and proven fulfillment capability. [Foreign Language] Looking back, we aim to be the liable and trusted platform for pet parents since day one, and I believe we have done so. Especially during the pandemic, we firmly believe our value is much more than a simple e-commerce business as a leading platform with expensive product range, extensive [outreaching channel] [ph], engaging community, and rich content. We have funded an ecosystem that can effectively connect pet parents and industrial panels. As we continue to [indiscernible], we believe we are well positioned to capture the leasing products and serve [needs] [ph] for our pet parents, as well as the marketing needs of the underserved [SMES] [ph]. [Foreign Language] Financially, we are also moving closer to breakeven. We have the utmost confidence that if we all facilitate our value, recovery and generated shareholder return, this would also provide us the capital to explore other opportunities and go beyond [organic growth] [ph], and adding further growth impact to our business. [Foreign Language] However, we remain optimistic in our future development. As senior management, we will continue to work with passion, while keeping a keen eye on our operation, as well as potential market opportunities in order to repay your trust and confidence. Let me pass the time to our Co-CEO, Lisa, to update you on our achievement during the year. [Foreign Language]

Thank you, Louis. During the year Boqii has put great effort to enhance its infrastructure. [This includes] [ph] improving our warehousing efficiency expanding our online marketing capability, increasing our offline top points, as well as reaching new collaboration with industry partners, hospital SaaS, and the [indiscernible]. All in the hope to better serve our pet parents and the brand partners. [Foreign Language] Supported by our expanding SKU selection of Chinese [indiscernible] 624 this year, a year-over-year growth of 33.5% along with our growing brand equity and the introduction of new membership program. We were able to attract new users and boost retention during the year. Our active buyer has increased by 13.4% year-over-year to 5 million with the number of orders also increased by 52.5% to 9.8 million for the year. During the steady growth in the user base, our GMV and the product sales also recorded [satisfactory improvement] [ph] increased by 19.4% and 17.4% respectively. [Foreign Language] Our community engagement strategy also proved to be a success. By offering users a platform to discuss interactions and make purchases, Boqii has become a go to place for pet parents, satisfying their product, service, and social needs as 80% of pet parents in the [PRC] [ph] our first generation pet owners. The useful pet care – our platform have also made us a good information hub. [Foreign Language] Supported by our comprehensive outreaching channels, including [OTT] [ph], [mini program] [ph], WeChat account and video channel that will give us the key private traffic, as well as third party traffic from search engine, T-mall, JD, TikTok and [indiscernible], which will give us significant volume. We are able to create vibrant ecosystem that is characterized by high user [indiscernible], low retention costs, and high sales conversion. Specifically in fourth quarter, our customer acquisition…

Thank you, Lisa. In the following, I'd like to share more on our financial performance for the year. [Given the] [ph] supply chain disruption and the customer market difficulties brought by COVID-19, we still delivered strong results in the year with steady growth from four quarters. [Foreign Language] Our full-year revenue grew 17.4% to RMB1.2 billion with notable increase in revenue from online marketing and information service. Gross profit was RMB242.7 million, up 29.6% from the fiscal year 2021, and gross margin driven by the increasing product, GPM and growing contributions from online marketing and information service was 20.5%, up by 200 basis points. [Foreign Language] Our total sales and marketing expenses were RMB171 million, up by 6.7% from 160.2 million. Sales and marketing expenses as a percentage of total revenue was 14.4% down from 15.8% from last year, mainly due to the lower customer acquisition cost enjoyed from the growing revenue contributions of [indiscernible] as well as the adoption of more cost efficient channels across our marketing. [Foreign Language] Fulfillment expenses slightly increased to 134 million as compared to [120.2 million] in last fiscal year. Fulfillment expenses as a percentage of revenue was 11.3% down from 11.9% in the fiscal year 2021, mainly due to the improved utilization of warehouses and lower delivery service price through negotiation with third party service providers. As a result, post the fulfillment margin increased to 9.2%, compared to 6.6% in last year. [Foreign Language] General and administrative expenses were RMB76.2 million, down by 33.1% from RMB114 million in fiscal year 2021. General and administrative expenses as a percentage of total revenue was 6.4%, down from 11.3% in fiscal year 2021. The decrease was mainly due to lower share SBC expenses of RMB11.7 million, compared to RMB42.1 million in the last fiscal year, with…

[Operator Instructions] Our first question today comes from Darren Aftahi from Roth Capital Partners. Please go ahead with your question.

Hi. Thanks for taking my question and good evening. I'm just kind of curious if you could maybe try and quantify how bad COVID impacted your business during the quarter? And then, post March how has that changed? [Foreign Language]

Darren, thank you for your question. Actually, as you all know Shanghai's pandemic started from early March and that has really impacted the supply chain and the pet supply chain as well. So, it was like the situation back in 2020, and we did see some influences. However, during the pandemic, we also developed a new way to connect with our customers. We use [Group V] [ph] as mentioned in the earnings call that has made up for some of the sales drops, but still we saw some influence from the pandemic. On the other hand, we're also seeing that the pandemic hurt the offline scenario even harder, and that might have more longer – that might have longer influences, but still during this time, we see the online demand is still there. If we can find a solution to the logistics and the supply-chain block, we believe – which is also what we are doing right now, we believe we can set up this influence in some time and that will not hurt our overall sales.

Great. And then a couple more if I may. You touched on your membership program. I'm just kind of curious could you give any general sense for the level of spend of members versus [non-members] [ph] in the quarter?

Hi, Darren. This is Louis. I was dropped off like [indiscernible] bad signal. Regarding membership program, yes, we are still seeing the same pattern with the member versus member spending. In general, the member spending about times, three times over the non-numbers over the same quarter. And in terms of post, our [P&T] [ph], as well as the margin contribution. So – but we see some like kind of a little bit flat in terms of like growth rate, which means that kind of still the same growth rate, but we do see kind of acceleration. of the growth rate in terms of adding the members, mainly due to that as we mentioned earlier. For the membership program, it's not only about online discount, it’s more about kind of a many other multi-offline plus online benefit to the members. So, on that front, we're still working hard, but once that one number could definitely reflect how strong like our brand recognitions like with our members will be, our CAC cost drove dramatically from the [indiscernible] to the RMB5.7 per customer. That would be including the non-members. So, average that out, you will see like, how [indiscernible] our membership programs are.

Great. And then two more for me. One, what level of revenue gets you to adjusted EBITDA breakeven? And then I may have asked this on the last call, but just given where your stock is and your cash position, what are your general thoughts about a shareholder buyback plan? Thanks.

Okay. Maybe I'll just before we jump on to the detailed financial numbers, I'll just kind of touch up on the buyback plan. Yes, definitely we are open for the buyback plan and it's in our wardrobe. And given the current market condition or we think if I can [follow-up] [ph] in terms of [indiscernible] all the ADRs in general. Therefore, we will deliberately choose the best timing that's of the company best for the buyback. So, we are not rushing to market, but definitely hitting our wardrobe.

And Darren, one point to add is that we expect that when our quarterly revenue achieved between 350 million and 400 million, meanwhile, our GPN reached 25% and we will achieve breakeven, maybe in the December quarter or the September quarter.

Great. Thank you, Louis.

[Operator Instructions] And ladies and gentlemen, at this time, I'm showing no additional questions. I'd like to turn the floor back over to management for any closing remarks.

[Foreign Language]

Hi, Darren, and hi investors. Lisa just made some final remark regarding the questions from our retail investors. I believe that will be the end of our sharing today. And thank you for your time and attention. We'd like to see you in the next call as well.

Ladies and gentlemen, that will conclude today's presentation. We do thank you for joining. You may now disconnect your lines.