Financial Data and Key Metrics Changes - Total net revenue for Q4 2025 increased by 20.1% year-over-year to RMB 1.38 billion, driven by a 51.9% increase in skincare brand revenues, despite a 9.1% decrease in color cosmetics revenues [11][12] - For the full year 2025, total net revenue rose by 26.7% to RMB 4.3 billion, primarily due to a 63.5% increase in skincare brand revenues [19][20] - Gross profit for Q4 2025 increased by 20% to RMB 1.07 billion, with a gross margin of 77.7% [11][12] - The company narrowed its full-year net loss margin to 2.2% from 20.9% in the prior year, achieving a non-GAAP net income margin of 0.2% [21] Business Line Data and Key Metrics Changes - Skincare brands accounted for 61.1% of total net revenues in Q4 2025, with DR.WU and Galénic being the primary growth drivers [5][6] - For the full year, skincare brands contributed 53% of total net revenues, indicating a strong focus on this segment [6] Market Data and Key Metrics Changes - China's beauty industry saw a retail sales growth of 8.2% in Q4 2025, with a full-year growth of 5.1%, marking a recovery from the previous year's decline [4] Company Strategy and Development Direction - The company is committed to three core initiatives: driving R&D-led product innovation, strengthening brand equities across its multi-brand portfolio, and improving overall profitability [6][10] - The focus on R&D has led to successful product launches, such as Galénic's VB Serum and PDRN serum from DR.WU, which cater to evolving consumer demands [7][9] Management's Comments on Operating Environment and Future Outlook - Management noted that while the market is recovering, competition remains intense, particularly during major shopping festivals [4] - The company expects total net revenues for Q1 2026 to be between RMB 958.6 million and RMB 1.08 billion, reflecting a year-over-year increase of approximately 15%-30% [24] Other Important Information - The company reported no impairment of goodwill for Q4 2025, contrasting with a significant impairment in the prior year [16] - Cash, restricted cash, and short-term investments as of December 31, 2025, were RMB 1.05 billion, down from RMB 1.36 billion a year earlier [22] Q&A Session Summary Question: Plans to improve net profit margin - Management indicated that the skincare business will continue to grow faster than color cosmetics, which typically have higher margins, thus improving the overall margin profile [27] Question: Plans to expand the skincare portfolio - The company emphasized that R&D will be crucial for the growth of its skincare business, highlighting past investments that have led to significant top-line growth [28]