Core Insights - Best Group's subsidiary, Best Software, has officially entered the Latin American market, starting with Mexico in December 2025, and plans to expand into Brazil and Argentina [1] - The rapid growth of the Latin American e-commerce market and the digital transformation gap are key drivers for Best Software's expansion [2] Market Opportunity - The Latin American e-commerce market is expected to grow at a rate of 12.2% by 2025, which is 1.5 times the global average, with a current e-commerce penetration rate of only 12%-15% [2] - Brazil and Mexico account for nearly two-thirds of the region's e-commerce market share, making them prime targets for Chinese companies looking to expand [2] Customer Demand - There is a strong push for digital services due to increasing collaboration needs among clients, with Best Software having served over 100,000 active stores in Southeast Asia since 2023 [2] - The company aims to leverage its logistics supply chain experience from China to meet the specific needs of cross-border e-commerce businesses in Latin America [2] Localization Strategy - Best Software's core products, such as Qianyi ERP, WMS, and TMS, support multi-language configurations to facilitate integrated management of orders, warehousing, and transportation [3] - The company has dispatched experienced management personnel to oversee operations and build local teams familiar with regional market rules and e-commerce ecosystems [3] Technological Edge - Best Software has integrated with over 100 major global e-commerce platforms, including Mercado Libre, Amazon, TikTok, and Shein, to quickly adapt to local needs [3] - The use of AI technology enhances operational efficiency by automating repetitive tasks and enabling smart product management [3] Future Development - Best Software has outlined a tiered development blueprint focusing on deepening relationships with outbound clients and expanding local customer bases [4] - The company plans to integrate local logistics, warehousing networks, and compliance services to create a comprehensive digital supply chain ecosystem [4] Commitment to Local Growth - Best Software aims to combine its advanced logistics technology with local market demands, positioning itself as a technical partner for merchants and contributing to the digital upgrade of regional logistics supply chains [5]

Financial Data and Key Metrics Changes - In 2024, total revenue was reported at RMB 1,468 million, down 40% year-on-year, with subscription revenue at RMB 918 million, down 31.9%, and merchant solutions revenue at RMB 20 million, down 52% year-on-year [45][53][56] - Adjusted revenue, accounting for one-off discounts and policy impacts, would have been approximately RMB 2,090 million, indicating a more reasonable comparison to 2023 [61] - Operating loss increased to RMB 1,744 million, with significant portions attributed to one-off or non-cash items [66][72] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 68% of total revenue, up 22 percentage points year-on-year, with smart retail solutions contributing 67% of subscription revenue [46][84] - Merchant solutions revenue saw a significant decline due to reduced rebates from Tencent, with expectations for stabilization in 2025 [11][12] - The company focused on high-quality development, leading to a contraction in low-margin businesses, which affected overall revenue [54] Market Data and Key Metrics Changes - The advertising gross billing reached RMB 18 billion, up 24.5% year-on-year, but profitability was not realized due to missed opportunities in platform policies [15][50] - The company maintained a strong position in the top 100 retailers, with GMV for retailers up 59% [18] - The overall market for WeChat mini shops is projected to grow significantly, with potential scales reaching RMB 2 trillion to RMB 3 trillion [32][96] Company Strategy and Development Direction - The company is focusing on key accounts and high-quality development, with a strategic contraction in non-core and low-quality businesses [8][54] - Future growth is expected to come from AI deployments and enhanced SaaS solutions, with a focus on efficiency and intelligent operations [90] - The company aims to deepen its ecosystem capabilities through cross-platform integration and partnerships with major players like Alipay and Huawei [86][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macroeconomic environment in 2024, impacting consumer retail and overall revenue [41] - There is confidence in a recovery for 2025, with expectations for subscription revenue growth and improved gross profit margins [73][39] - The company plans to enhance operational efficiency and customer mix to navigate the rebate decline and improve profitability [102] Other Important Information - The company completed a refinancing of its convertible bonds, reducing interest-bearing debt significantly [48][49] - Cash flow management improved, with a net cash inflow of RMB 300 million and free cash flow showing signs of recovery [51][68] Q&A Session Summary Question: What is the outlook for subscription business in 2025? - Management expects subscription revenue to stabilize with a growth projection of 5% to 10% in 2025, with a potential turnaround in profitability by 2026 [80][82] Question: What are the future business strategies and operation strategies? - The focus will be on key accounts, smart retail revenue, and enhancing ecosystem capabilities through cross-platform integration [84][86] Question: How will the company address the decline in advertising rebates? - The company plans to manage customer expectations and improve operational efficiency to maintain profitability despite rebate declines [99][102]