Financial Data and Key Metrics Changes - For the full year 2024, the company's revenues reached RMB 2.7 billion, representing a 73.3% year-over-year growth due to successful international expansion [19] - In Q4 2024, revenues were RMB 813.5 million, a 56.3% increase year-over-year, positively impacted by the Christmas holiday and increased inventory by overseas distributors ahead of the Chinese New Year [19][20] - The full-year gross profit margin improved to 26.4%, a two percentage point increase, while Q4 gross profit margin rose by 3.3 percentage points year-over-year to 27.2% [21][22] - The company recorded an operating loss of RMB 107 million for 2024, but the non-GAAP operating income was RMB 262.5 million, with Q4 non-GAAP operating profit at RMB 112.6 million [22][24] - Operating cash inflow for Q4 2024 was RMB 497 million, up from RMB 305 million in the same quarter of the previous year [24] Business Line Data and Key Metrics Changes - The company tailored its product portfolio and business strategies to local markets, launching two open system e-vapor product series, RLX Prime and Spin Mini, in Southeast Asia [12][13] - The focus on localized innovation has been a critical driver for long-term growth, with positive feedback received for the new product series [12] Market Data and Key Metrics Changes - The company observed a slight slowdown in product innovation as the industry matures, with a shift from blockbuster new products to refined operations and product optimization [15][16] - Regulatory shifts across multiple markets presented challenges but were viewed as opportunities to enhance competitive positioning [14] Company Strategy and Development Direction - The company prioritized building a solid foundation for international growth in 2024, optimizing its operational and management framework to support long-term objectives [10] - Investment in human resources was emphasized, bringing in experts to enhance capabilities in FMCG, product development, and regulatory compliance [11] - The company aims to return a significant portion of non-GAAP net profits to shareholders through share repurchase and cash dividends, having returned approximately $122.9 million in 2024 [26][37] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of agility in adapting to regulatory changes and emphasized the need for compliance while meeting user demand [15][48] - The company expects further improvement in non-GAAP operating margins as it scales operations and manages headcount effectively [23] - Management expressed confidence in the company's positioning to thrive amid evolving market conditions and regulatory landscapes [16][27] Other Important Information - The company received a double A rating from MSCI in 2024, the highest ESG rating in the global tobacco industry, reflecting its commitment to social responsibility [17] Q&A Session Summary Question: What new initiatives will be implemented to drive market share gains in overseas markets in 2025? - The company plans to align product portfolios and business strategies with local market characteristics, focusing on tailored flavor portfolios and dynamic route-to-market strategies [32][34] Question: Any updates regarding shareholder return from 2025 onwards? - The company intends to continue returning a significant portion of non-GAAP net profits to shareholders, having cumulatively returned $332 million to date [37] Question: What are the detailed expansion plans for this year and growth targets? - The company plans to expand to more countries in 2025, with several countries in Asia Pacific and Europe under consideration [42] Question: Insights regarding the industry's product evolution this year? - The company noted that the focus has shifted to high-power innovations, with expectations for meaningful market share growth in sales volume and moderate revenue growth [44][45] Question: Views on potential regulatory changes and how to address challenges? - The company proactively evaluates its product portfolio and adjusts strategies to ensure compliance while meeting user demand, enhancing competitive advantages [48][49] Question: Will open system e-cigarettes benefit from the ban on disposable e-cigarettes in Europe? - The company believes open system products will see stable demand growth in price-sensitive markets, focusing on user experience and affordability [52][53]