Ladies and gentlemen, good day, and welcome to the Yatsen Fourth Quarter and Full Year 2023 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Irene Lyu, Vice President, Head of Strategic Investment and Capital Markets. Please go ahead.

Thank you, operator. Please note the discussion today will contain forward-looking statements relating to the company's future performance and are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect Yatsen's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. Please see the earnings release issued earlier today for a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results. Joining us today on the call from Yatsen's senior management are Mr. Jinfeng Huang, our Founder, Chairman and CEO; and Mr. Donghao Yang, our CFO and Director. Management will begin with prepared remarks and the call will conclude with the Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on Yatsen's Investor Relations website at ir.yatsenglobal.com. I'll now turn the call over to Mr. Jinfeng Huang. Please go ahead, sir.

Thank you, Irene, and thank you, everyone, for participating in Yatsen's Fourth Quarter and Full Year 2023 Earnings Conference Call today. I would like to begin with the macro overview before diving into the details of our strategy and progress across our segments and the brands. China's beauty market experienced a modest recovery in 2023. According to the trusted data published by the National Bureau of Statistics of China, total retail sales of consumer goods grew by 8.3% year-over-year for the fourth quarter and 7.2% for the full year. Against this backdrop, total beauty retail sales were up 1% year-over-year for the fourth quarter and 5.1% for the full year. Online beauty sales, patents were mixed in 2023. Sales on Tmall decreased while sales on Douyin increased year-over-year for both the fourth quarter and the full year. We made solid progress this quarter amid a still soft retail environment, returning to a growth statutory capital as we executed our strategy transformation plan. Perfect Diary's brand repositioning is also proceeding as intended. To pave the way for future growth, we remain focused on building strong brand equity through superior products and consumer satisfaction while continued investments in brand building and R&D. Our total net revenue for the fourth -- for the quarter beat our guidance, up 6.7% year-over-year. Net revenues from our Skincare brands for the fourth quarter grew by 17.6% year-over-year. Our Clinical and Premium Skincare brands, including Galénic, DR.WU and Eve Lom delivered another solid performance, recording a 23.4% year-over-year growth in combined net revenues and further elevating their contribution to total net revenues. Net revenues from Color Cosmetics brands declined slightly by 1.8% year-over-year for the fourth quarter. In terms of channel optimization, we continued to strategically close underperforming offline stores. As of the end of 2023, we…

Thank you, David, and hello, everyone. Before I get started, I would like to clarify that all financial numbers presented today are in renminbi amounts and all percentage changes refer to year-over-year changes unless otherwise noted. Total net revenues for the fourth quarter of 2023 increased by 6.7% to RMB 1.07 billion from RMB 1.01 billion for the prior year period. The increase was primarily attributable to a 17.6% year-over-year increase in net revenues from Skincare brands, partially offset by a 1.8% year-over-year decrease in net revenues from Color Cosmetics brands. Gross profit for the fourth quarter of 2023 increased by 10.6% to RMB 790.1 million from RMB 714.6 million for the prior year period. Gross margin for the fourth quarter of 2023 increased to 73.7% from 71.1% for the prior year period. The increase was driven by increasing sales of higher gross margin products and more disciplined pricing and discount policies across all of our brand portfolios. Total operating expenses for the fourth quarter of 2023 increased by 67.7% to RMB 1.33 billion from RMB 792.9 million for the prior year period. As a percentage of total net revenues, total operating expenses for the fourth quarter of 2023 were 124% as compared with 78.9% for the prior year period. Fulfillment expenses for the fourth quarter of 2023 were RMB 62.7 million as compared with RMB 62.5 million for the prior period. As a percentage of total net revenues, fulfillment expenses for the fourth quarter of 2023 decreased to 5.8% from 6.2% for the prior year period. The decrease was primarily attributable to further improvements in logistics efficiency. Selling and marketing standards for the fourth quarter of 2023 were RMB 717.4 million as compared with RMB 535.2 million for the prior year period. As a percentage of total net revenues,…

[Operator Instructions] The first question today comes from Maggie Huang with CICC.

This is Maggie Huang from CICC. Firstly, congratulations on our revenue returning to growth and beating our guidance. And I have 2 questions. The first one is regarding Perfect Diary. We are glad to see the great performance of our new products like Essence Lipstick in Q4. So for this year, do you have a target revenue contribution from the new products? And how should we expect on the revenue growth and net margin of the brand Perfect Diary? That's my first question. And my second question is regarding women's day shopping festival. So how is the performance of our brands so far? And is that in line with our expectation? That's my question.

Thank you, Maggie. For your first question on the performance on Perfect Diary. Since our launch of the Biolip Essence Lipstick, its performance has been trending up. So for example, last year December, the new lipstick is ranking #2 on both Tmall and Douyin. So it's performing well. And in terms of new product contributions to the brand, last quarter, so fourth quarter of 2023, is a little below 40%. And we believe this year, it will turn up to above 50%. So that's for the new card. And you also asked for margin. So basically, for this new product launch and also the Perfect Diary's brand upgrade, we are seeing some good feedback and results so far. First of all, the gross margin is much higher for this new product compared to the old product. And also the brand average selling clients also increased a lot to around 140 to 150 on both Tmall and Douyin. And also in terms of consumer profile, we're also attracting more customers from higher -- with higher affordability and beauty spending in general. So that's for your question number one. And then for question number two, regarding to the women's day's performance so far, the women's day shopping festival already started. And looking at overall market, the performance is relatively modest. So as a result, for our brands, we're also seeing a relatively steady growth. So we are more -- putting more resources efforts for the bigger shopping festival for example 618 and Double 11.

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Yatsen directly or at Piacente Financial Communications. Our company information for both IR in China and the U.S. can be found in today's press release. Thank you, and have a great day.

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