Financial Data and Key Metrics Changes - Revenue declined by 17.5% to HKD 89.7 billion, while operating profit grew by 9.8% to over HKD 14.7 billion [7] - Gross profit margin increased by 550 basis points to 29.5%, and operating profit margin expanded by 400 basis points to 16.4% [7] - Profit attributable to shareholders decreased by 9% due to losses from gold loan contract revaluation amid gold price volatility [7] - Total dividend proposed is HKD 0.32 per share, representing a payout ratio of 87.8% [7] Business Line Data and Key Metrics Changes - Revenue from fixed price gold products surged by 105.5% year on year, contributing significantly to gross profit margin improvement [11] - The contribution of fixed price product categories to the group's revenue increased to approximately 29% from 19% a year ago [28] - Same store sales in Mainland declined by 19% for self-operated stores and 14% for franchise stores, while Hong Kong and Macau saw a 26% decline [29] Market Data and Key Metrics Changes - E-commerce sales in Hong Kong and Macau increased by 91%, driven by a revamped website and successful key IP collection launches [21] - In other markets, retail sales value grew by over 9%, with new store openings in Thailand, Malaysia, and Japan [22] - E-commerce contributed 6% to retail sales value and 14% to volume in Mainland business [19] Company Strategy and Development Direction - The company is focused on brand transformation and product optimization, with plans to unveil further differentiated signature collections [13] - New image stores are being strategically opened in prime locations to enhance customer experience and sustain market leadership [13] - The company aims to expand its presence in high-potential new territories while revitalizing existing markets [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the upcoming year, expecting continued momentum in same store sales growth [29] - The company is closely monitoring macroeconomic conditions, gold price movements, and government policies to inform business decisions [42] - The commitment to brand transformation is expected to enhance competitiveness and long-term growth prospects [42] Other Important Information - The company launched the Zhuhai Folk Jewelry Sustainability 2049 blueprint, integrating sustainability into operations [9] - The CTF Rouge collection achieved approximately HKD 4 billion in retail sales value, exceeding expectations [11] - The company maintained a healthy cash balance of RMB 7.6 billion and reduced financial leverage [39] Q&A Session Summary Question: What are the expectations for same store sales growth? - Management expects same store sales growth to return to positive at some point in fiscal year 2026, supported by current observations [29] Question: How is the company managing its capital structure amid uncertainties? - The company is maintaining a disciplined approach to managing its capital structure and gearing ratio to enhance financial stability [40] Question: What are the plans for international expansion? - The company is set to kick off strategic expansion in high-growth Southeast Asia markets to capture rising local demand for Chinese gold jewelry [22]

Financial Data and Key Metrics Changes - Group revenue reached RMB2.34 billion, up 9% year over year [6] - Revenue from office software and services decreased 6% year on year to RMB301 million [14] - Online games revenue increased 40% year on year to RMB370 million [16] - Gross profit increased 10% year on year to RMB1.19 billion, with a gross profit margin of 82% [17][19] - Net profit attributable to owners of the parent was RMB284 million, slightly down from RMB285 million year on year [19] Business Line Data and Key Metrics Changes - Kingsoft Office Group revenue reached RMB1.301 billion, marking a 6% year on year increase [8] - WPS individual business generated revenue of RMB857 million, up 11% year on year [8] - Online gaming business revenue reached RMB1.037 billion, a 14% year on year increase [11] Market Data and Key Metrics Changes - WPS Office global monthly active devices reached 647 million, an 8% year on year increase [9] - Monthly active devices for the PC version increased by 11% year on year to 301 million [9] - Monthly active devices for the mobile version increased by 5% year on year to 346 million [9] Company Strategy and Development Direction - Kingsoft Office Group focuses on AI integration and global expansion, enhancing product experiences and user engagement [6][10] - The gaming business aims to deepen the ecosystem around flagship IPs while exploring new genres [11][12] - The company plans to enhance its international presence and develop multiple game categories beyond martial arts [28] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth through AI collaboration and product innovation [12][57] - The company is optimistic about the gaming sector's performance despite market uncertainties [49] - Management highlighted the importance of empowering enterprises through AI solutions [57] Other Important Information - Research and development costs increased 16% year on year, driven by AI-related expenses [18] - The company maintains a strong cash position with cash resources of RMB26 billion [20] Q&A Session Questions and Answers Question: Strategic plans for gaming business and updates on Metro Break launch - Management emphasized the need for quality games, diversification into multiple genres, and international market expansion [28][30] - Metro Break is expected to launch in July, with an official announcement in June [31] Question: Updates on WPS office business overseas - Management discussed plans for multiple language versions and operational strategies to enhance overseas presence [34][36] Question: Major optimizations for Metro Break and performance expectations - Management noted ongoing modifications based on player feedback and expressed cautious optimism for post-launch performance [42][45] Question: Trends in active user base and revenue growth for JX3 - Management indicated stable performance for JX3, with expectations for continued engagement despite seasonal fluctuations [46][49] Question: Potential collaboration with Xiaomi in AI - Management outlined a strategic focus on AI development and collaboration with Xiaomi to enhance enterprise solutions [51][57]

Financial Data and Key Metrics Changes - Group revenue reached RMB2.34 billion, up 9% year over year [5] - Revenue from office software and services decreased 6% year on year to RMB301 million [12] - Revenue from online games increased 40% year on year to RMB370 million [14] - Gross profit margin increased by one percentage point year on year to 82% [15] - Profit attributable to owners of the parent was RMB284 million, slightly down from RMB285 million year on year [18] Business Line Data and Key Metrics Changes - Kingsoft Office Group revenue reached RMB1.301 billion, marking a 6% year on year increase [7] - WPS individual business generated revenue of RMB857 million, up 11% year on year [7] - Online gaming revenue reached RMB1.037 billion, a 14% year on year increase [9] Market Data and Key Metrics Changes - WPS global monthly active devices reached 647 million, an 8% year on year increase [8] - Monthly active devices for the PC version increased by 11% year on year to 301 million [8] - Monthly active devices for the mobile version increased by 5% year on year to 346 million [8] Company Strategy and Development Direction - Kingsoft Office Group will focus on AI collaboration and global expansion, sustaining R&D investment [10] - The gaming business will prioritize the development of flagship IPs and explore new genres [10] - The company aims to enhance its international presence and diversify game categories beyond martial arts [27] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the gaming business's ability to adapt and innovate despite market challenges [46] - The company is committed to empowering enterprises through AI and enhancing its own capabilities before assisting others [56] - Management highlighted the importance of quality and passion in game development for future success [28] Other Important Information - Research and development costs increased 16% year on year to RMB828 million [16] - The company had cash resources of RMB26 billion as of March 31, 2025 [19] Q&A Session Summary Question: What are the strategic plans for the gaming business going forward? - Management emphasized the need for quality games, diversification into multiple genres, and internationalization of products [28] Question: Updates on the launch schedule for Metro Break? - The game is expected to launch in July, with an official announcement in June detailing the release specifics [30] Question: Updates on the overseas business of WPS Office? - Management discussed plans for multiple language versions and a comprehensive strategy for overseas operations [34][36] Question: Major optimizations for Metro Break post-testing? - Management mentioned modifications based on player feedback and design adjustments to enhance gameplay experience [42] Question: Trends in active user base and ARPU for JX3? - Management noted stable performance but acknowledged a slight year-on-year decrease compared to the previous quarter [45]

Financial Data and Key Metrics Changes - In Q1 2025, Xiaomi achieved total revenue of RMB111.3 billion, up 47.4% year on year, marking a record high [25] - Adjusted net profit exceeded RMB10 billion for the first time, reaching RMB10.7 billion, up 64.5% year on year [36] - Gross margin reached 22.8%, up 0.5 percentage points year on year, also a historical high [25] Business Line Data and Key Metrics Changes - Smartphone revenue was RMB50.6 billion, accounting for 45.5% of total revenue, up 8.9% year on year [26] - IoT revenue reached RMB32.3 billion, up 59% year on year, marking a record high [17] - Internet service revenue was RMB9.1 billion, up 12.8% year on year, with gross margin improving to 76.9% [30][31] Market Data and Key Metrics Changes - Xiaomi returned to number one in smartphone shipments in Mainland China, increasing market share by 4.7 percentage points year on year to 18.8% [14] - Global smartphone shipments reached 41.8 million units, with a market share of 14.1% [27] - In the high-end smartphone segment in Mainland China, Xiaomi's market share increased from 21% to 25% year on year [15] Company Strategy and Development Direction - Xiaomi aims to invest RMB200 billion in R&D from 2026 to 2030, focusing on core technologies like AI and chips [8] - The company is committed to premiumization, with strategies to enhance product capabilities and expand into high-end markets [71][72] - Xiaomi plans to enhance its smart manufacturing capabilities and expand its product offerings in the IoT and EV sectors [51][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth despite increased competition in the IoT space, emphasizing the importance of product strength and user experience [41][44] - The company acknowledged challenges in the smartphone market but remains focused on improving product structure rather than just sales volume [61] - Management believes that the EV business will continue to grow, with a strong product lineup and efficient production capabilities [21][66] Other Important Information - Xiaomi's R&D expenses reached RMB6.7 billion in Q1 2025, up 30% year on year, with a record number of R&D personnel [34] - The company has been recognized for its efforts in ESG, achieving significant milestones in sustainability and green transformation [37][38] Q&A Session Summary Question: Strategies for AIoT business amidst increased competition - Management noted that Xiaomi is still in a high growth stage and has not felt significant competitive pressure yet, focusing on production capacity [42][44] Question: Impact of EV sales on smartphone sales and pricing strategy - Management reassured that they do not anticipate a negative impact on Su-seven sales and emphasized strong product demand [48][66] Question: Efficiency and profitability of smart factories - Management highlighted the importance of supply chain integration and shared resources among different product lines to enhance efficiency [51][53] Question: Future use of self-developed chips in products - Management confirmed that the focus is currently on flagship chips, with plans to explore their use in other product categories in the future [86][88] Question: Competitive landscape in overseas markets - Management acknowledged challenges in India but sees significant growth potential in Africa, emphasizing the need for tailored strategies in different markets [102][104]

Financial Data and Key Metrics Changes - In Q1 2025, Xiaomi achieved total revenue of RMB111.3 billion, up 47.4% year on year, marking a record high [11][22] - Adjusted net profit exceeded RMB10 billion for the first time, reaching RMB10.7 billion, up 64.5% year on year [12][32] - Gross margin reached 22.8%, up 0.5 percentage points year on year, also a historical high [22] Business Line Data and Key Metrics Changes - Smartphone revenue was RMB50.6 billion, accounting for 45.5% of total revenue, up 8.9% year on year [23] - IoT revenue reached RMB32.3 billion, up 59% year on year, marking a record high [15][26] - Internet service revenue was RMB9.1 billion, up 12.8% year on year, with gross margin improving to 76.9% [27][32] Market Data and Key Metrics Changes - Xiaomi returned to number one in smartphone shipments in Mainland China with a market share of 18.8%, up 4.7 percentage points year on year [12][25] - Global smartphone shipments reached 41.8 million units, with a growth rate of 40% year on year, significantly outperforming the broader market [13][24] - In the high-end smartphone segment, Xiaomi's market share increased from 21% to 25% year on year [13][77] Company Strategy and Development Direction - Xiaomi aims to invest RMB30 billion in R&D in 2025, with a total investment exceeding RMB102 billion from 2021 to 2025 [5][6] - The company is focusing on becoming a global leader in hardcore technology, particularly in AI and chip development [6][10] - Xiaomi plans to enhance its premiumization strategy across various product lines, including smartphones and home appliances [66][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth despite increased competition in the IoT sector, emphasizing the importance of product strength and user experience [39][40] - The company acknowledged challenges in the EV market but remains optimistic about its product capabilities and market position [92][93] - Management highlighted the importance of adapting strategies to different regional markets, particularly in India and Africa [99][100] Other Important Information - Xiaomi's R&D team reached a historical record of 21,731 employees, with R&D expenses in Q1 2025 amounting to RMB6.7 billion, up 30% year on year [30][31] - The company has been recognized for its efforts in ESG, completing 95.94% of its electronic waste recovery target [33][34] Q&A Session All Questions and Answers Question: What strategies will Xiaomi implement to face increased competition in the IoT sector? - Management noted that Xiaomi is still in a high growth stage and has not felt significant competitive pressure, emphasizing the importance of production capacity [38][39] Question: How will Xiaomi ensure the success of its EV business amidst potential price competition? - Management expressed confidence in the Su-seven model's strong performance and stated that production capacity is currently inadequate, alleviating concerns about price reductions [44][92] Question: Can you elaborate on the efficiency and profitability enhancements from the smart appliance and EV factories? - Management explained that the smart manufacturing platform will enhance supply chain efficiency across different product categories [48][49] Question: How will the introduction of the X Ring chip impact pricing and gross margin in the smartphone business? - Management indicated that the focus is currently on flagship chips, and while the self-developed chip usage rate won't significantly impact gross margin yet, they are optimistic about future growth [81][96] Question: What is the outlook for Xiaomi's smartphone market share in overseas markets, particularly in India and Africa? - Management acknowledged a decline in India due to unresolved issues but sees significant growth potential in Africa, focusing on mid to high-end products [98][99]

Financial Data and Key Metrics Changes - In Q1 2025, total revenue reached RMB111.3 billion, up 47.4% year on year, marking a record high for the company [25][13] - Adjusted net profit exceeded RMB10 billion for the first time, reaching RMB10.7 billion, up 64.5% year on year [36][25] - Gross margin was 22.8%, a historical high, up 0.5 percentage points year on year [25][26] Business Line Data and Key Metrics Changes - Smartphone revenue was RMB50.6 billion, accounting for 45.5% of total revenue, up 8.9% year on year [26] - IoT revenue reached RMB32.3 billion, up 59% year on year, marking a record high [17][29] - Internet service revenue was RMB9.1 billion, up 12.8% year on year, with a gross margin of 76.9% [30][31] Market Data and Key Metrics Changes - Xiaomi regained the number one position in smartphone shipments in Mainland China with a market share of 18.8%, up 4.7 percentage points year on year [14][28] - Global smartphone shipments reached 41.8 million units, with a market share of 14.1% [27][28] - In the high-end smartphone segment in Mainland China, Xiaomi's market share increased from 21% to 25% year on year [15][81] Company Strategy and Development Direction - The company aims to invest RMB30 billion in R&D in 2025, with a total investment exceeding RMB102 billion from 2021 to 2025 [7][8] - Xiaomi is focusing on becoming a global leader in hardcore technology, particularly in AI and chip development [5][8] - The company plans to enhance its premiumization strategy across various product lines, including smartphones and home appliances [72][75] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory despite increasing competition in the IoT space [41][42] - The company is optimistic about its EV business, with plans to deliver 76,000 new EVs in Q1 2025 [21][22] - Management acknowledged challenges in the smartphone market but emphasized a focus on improving product structure rather than just sales volume [61][62] Other Important Information - Xiaomi's R&D team reached a historical record of 21,731 employees, with R&D expenses totaling RMB6.7 billion in Q1 2025 [34][35] - The company has been recognized for its efforts in ESG, completing 95.94% of its electronic waste recovery target [36][38] Q&A Session Summary Question: What strategies will Xiaomi implement to face increased competition in the IoT market? - Management noted that Xiaomi is still in a high growth stage and has not felt significant competitive pressure yet, emphasizing the importance of maintaining product availability and quality [42][43] Question: How will Xiaomi ensure the success of its EV business amidst potential price competition? - Management expressed confidence in the Su-seven model's strong sales and indicated that production capacity is currently a greater concern than pricing [48][49] Question: Can you elaborate on the efficiency and profitability enhancements expected from the smart appliance and EV factories? - Management highlighted the importance of building a smart manufacturing platform that enhances supply chain efficiency across different product categories [50][52] Question: What is the outlook for smartphone shipments and pricing strategies in light of market conditions? - Management indicated that while there may be some adjustments in growth expectations, the focus will be on improving product structure rather than just increasing sales volume [60][61] Question: How does Xiaomi plan to utilize its self-developed chips in future products? - Management clarified that the focus is currently on flagship chips, with plans to explore their use in other product categories as capabilities develop [86][88] Question: What is the competitive landscape in overseas markets, particularly in India and Africa? - Management acknowledged challenges in India but sees significant growth potential in Africa, emphasizing the need for tailored strategies in different markets [102][104]

Financial Data and Key Metrics Changes - In Q1 2025, total revenue increased by 10.9% year on year to RMB 32.6 billion, with adjusted net profit reaching RMB 4.6 billion, representing an adjusted net margin of 14% [7][38][44] - Gross profit margin approached 55%, with gross profit growing by 10.4% year on year to RMB 17.8 billion [8][42] - Cost of revenue increased by 11.5% year on year to RMB 14.8 billion, accounting for 45.4% of total revenue [42] Business Line Data and Key Metrics Changes - Revenue from online marketing services grew by 8% year on year to RMB 18 billion, driven by AI technology integration [17][39] - E-commerce GMV grew by 15.4% year on year, with the number of monthly average active paying users reaching 135 million [20][21] - Live streaming revenue increased by 14.4% year on year to RMB 9.8 billion, marking a return to positive growth [28][41] Market Data and Key Metrics Changes - Average daily active users (DAUs) on the Kuaishou app reached a record high of 408 million, with average daily time spent per DAU at 133.8 minutes [13][14] - The overseas business achieved a revenue increase of 32.7% to RMB 1.32 billion, marking its first-ever quarter of operating profit [31][38] Company Strategy and Development Direction - The company is focusing on AI technology integration across its business lines to enhance user experience and operational efficiency [7][11] - Clean AI is positioned as a foundational infrastructure for video creation, with plans for continuous technological iteration and product innovation [49][51] - The company aims to leverage its omni-domain operational advantages to enhance e-commerce and marketing services, particularly in lower-tier cities [66][77] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit growth in online marketing services in the second quarter, driven by improved client placements [64] - The company anticipates that AI investments will contribute positively to profitability in the medium to long term, with expectations of narrowing losses in AI-related areas [82] - The focus remains on user-centric approaches and long-term technology investments to drive growth and shareholder value [36][45] Other Important Information - The company repurchased approximately HKD 1.42 billion worth of shares, accounting for about 0.68% of total shares outstanding [44] - The average daily advertising spending on IGC marketing materials remained at RMB 30 million [12] Q&A Session Summary Question: Update on Clean AI's commercialization and growth strategy - Clean AI's revenue reached RMB 150 million in Q1, with paid prosumer subscriptions accounting for nearly 70% of revenue [49][50] - The company plans to maintain its leading position through continuous technological advancements and operational activities, particularly in overseas markets [52][53] Question: How AI is empowering existing businesses - AI has significantly improved marketing material production and client conversion rates, with average daily GMV of AI-generated live streaming highlights increasing by over 300% year on year [56][60] - The intelligent customer service system achieved a resolution rate of up to 80% [60] Question: Trends in online marketing services and key growth strategies - The company expects a return to double-digit growth in online marketing services, with strong contributions from content consumption and local services sectors [64][66] - Marketing spending in the short play industry grew over 300% year on year, indicating strong growth potential [66] Question: Strategy for the six eighteen shopping festival - The company will provide significant traffic resources and subsidies, focusing on user engagement and tailored strategies for different product types [72][75] - AI capabilities will be leveraged to empower merchants and improve operational efficiency [77] Question: Investment plan on AI and its impact on profitability - AI investments are expected to increase, particularly in R&D personnel costs, but the impact on overall profit margin will be relatively small [81][82]

Financial Data and Key Metrics Changes - In Q1 2025, total revenue increased by 10.9% year over year to RMB 32.6 billion, with adjusted net profit reaching RMB 4.6 billion, representing an adjusted net margin of 14% [6][37][41] - Gross profit margin approached 55%, with gross profit growing by 10.4% year on year to RMB 17.8 billion [7][41] - Cost of revenue increased by 11.5% year on year to RMB 14.8 billion, accounting for 45.4% of total revenue [41] Business Line Data and Key Metrics Changes - Revenue from online marketing services grew by 8% year on year to RMB 18 billion, driven by AI technology integration [16][38] - E-commerce GMV grew by 15.4% year on year, with the number of monthly average active paying users reaching 135 million [20][24] - Live streaming revenue increased by 14.4% year on year to RMB 9.8 billion, marking a return to positive growth [27][40] Market Data and Key Metrics Changes - Average daily active users (DAUs) on the Kuaishou app reached a record high of 408 million, with average daily time spent per DAU at 133.8 minutes [12][14] - The overseas business achieved a revenue increase of 32.7% to RMB 1.32 billion, marking its first-ever quarter of operating profit [30][37] Company Strategy and Development Direction - The company is focused on integrating AI technology across its business lines to enhance user experience and operational efficiency [6][10] - Clean AI is positioned as a foundational infrastructure for video creation, with plans for continuous technological iteration and product innovation [48][50] - The company aims to leverage its omni-domain operations to enhance e-commerce capabilities and support merchants through AI-driven tools [20][76] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth despite a complex global macro environment, emphasizing the importance of AI in driving operational efficiency [6][44] - The company anticipates a year-over-year rise in AI-related expenditures, particularly in R&D, but expects this to have a manageable impact on overall profitability [80] Other Important Information - The company repurchased approximately HKD 1.42 billion worth of shares, accounting for about 0.68% of total shares outstanding [43] - The company plans to continue enhancing its content and business ecosystems while focusing on long-term technology investments [44] Q&A Session Summary Question: Update on Clean AI's commercialization and growth strategy - Clean AI's revenue reached RMB 150 million in Q1, with paid subscriptions accounting for nearly 70% of revenue, and plans for further product iterations and global outreach [48][50] Question: How AI is empowering existing businesses - AI has significantly improved marketing material production and customer service, leading to increased conversion rates and operational efficiencies [56][59] Question: Recent trends in online marketing services and key growth strategies - The company expects double-digit growth in online marketing services in Q2, driven by improvements in content consumption and local services sectors [63][68] Question: Strategy for the six eighteen shopping festival - The company will provide substantial traffic resources and subsidies, focusing on user engagement and tailored support for merchants and KOLs [71][74] Question: Investment plan on AI and its impact on profitability - AI investments are expected to increase, particularly in R&D, but the overall impact on profit margins is projected to be manageable, with AI seen as a potential second growth curve [80]

Financial Data and Key Metrics Changes - In Q1 2025, total revenue increased by 10.9% year on year to RMB 32.6 billion, with adjusted net profit reaching RMB 4.6 billion, representing an adjusted net margin of 14% [7][38][44] - Gross profit margin approached 55%, with a gross profit of RMB 17.8 billion, reflecting a 10.4% year on year growth [8][41] - Cost of revenue rose by 11.5% year on year to RMB 14.8 billion, accounting for 45.4% of total revenue [41] Business Line Data and Key Metrics Changes - Revenue from online marketing services grew by 8% year on year to RMB 18 billion, driven by AI technology integration [17][39] - E-commerce GMV increased by 15.4% year on year, with the number of monthly average active paying users reaching 135 million [22][40] - Live streaming revenue returned to positive growth, increasing by 14.4% year on year to RMB 9.8 billion [28][40] Market Data and Key Metrics Changes - The overseas business achieved a revenue increase of 32.7% to RMB 1.32 billion, marking its first quarter of operating profit [31][38] - Local services GMV saw rapid growth, with over 65% of growth coming from lower-tier cities [33][36] Company Strategy and Development Direction - The company is focusing on AI technology integration across its business lines to enhance user experience and operational efficiency [7][12] - Strategic initiatives for the 618 shopping festival include significant traffic resources and subsidies to boost merchant sales [69][72] - The company aims to maintain its leading position in AI technology while expanding its user base and enhancing monetization strategies [49][78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit growth in online marketing services in the second quarter, driven by improved client placements [62] - The company anticipates that AI investments will contribute positively to profitability in the medium to long term, with expectations of narrowing losses in AI-related areas [78] Other Important Information - The average daily time spent per DAU on the Kuaishou app was 133.8 minutes, with total user time spent rising by 5.9% year on year [14] - The company repurchased approximately HKD 1.42 billion worth of shares, accounting for about 0.68% of total shares outstanding [44] Q&A Session Summary Question: Update on Clean AI's commercialization and growth strategy - Clean AI's revenue reached RMB 150 million in Q1, with paid subscriptions accounting for nearly 70% of revenue, and plans for further product iterations and global expansion [48][49][52] Question: How AI is empowering existing businesses - AI has enhanced marketing material production and customer service, leading to increased conversion rates and operational efficiencies [56][58] Question: Recent trends in online marketing services and key growth strategies - The company expects a return to double-digit growth in online marketing services, with strong performance in content consumption and local services sectors [62][66] Question: Strategy for the 618 shopping festival - The company will provide substantial traffic resources and subsidies, focusing on user engagement and tailored support for merchants [69][72] Question: Investment plan on AI and its impact on profitability - AI investments are expected to increase, particularly in R&D, but the overall impact on profit margins is projected to be manageable, with AI seen as a future growth driver [78]

Financial Data and Key Metrics Changes - The company's revenue increased by 18.1% year over year to RMB86.6 billion in Q1 2025 [5][26] - The cost of revenue ratio decreased by 2.3 percentage points year over year to 62.6% [26] - Selling and marketing expenses ratio decreased by 1 percentage point year over year to 18% [26] - Total segment operating profit grew to RMB11.2 billion, up from RMB6.9 billion last year, with operating margin increasing from 9.5% to 13% [26][27] - Cash generated from operating activities increased to RMB10.1 billion [26] Business Line Data and Key Metrics Changes - Core local commerce segment revenue grew by 17.8% year over year to RMB64.3 billion [32] - The new initiatives segment revenue increased by 19.2% year over year to RMB22.2 billion, driven by grocery retail and overseas business [33] - The number of annual active in-store merchants increased by over 25% year over year [16] Market Data and Key Metrics Changes - The number of Meituan instant shopping transacting users exceeded 500 million, with young consumers born after 1990 accounting for two-thirds [61] - Daily order volume for Meituan instant shopping nearly doubled year over year during Valentine's Day [30] - The InstaMart business saw order volume increase by about 50% year over year [31] Company Strategy and Development Direction - The company plans to invest RMB100 billion over the next three years to drive high-quality growth in the food service industry [10][69] - The focus is on empowering merchants, elevating supply quality, stimulating consumption, and enhancing the overall business environment [69] - The company aims to solidify its market leadership while promoting healthy and sustainable industry development [44][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the irrational subsidy competition in the industry but expressed confidence in the company's ability to maintain market leadership [40][44] - The company expects volatility in short-term financial results due to intensified competition but remains optimistic about long-term growth potential [47][50] - Management emphasized the importance of enhancing user experience and operational efficiency through AI technology [24] Other Important Information - The company has launched a pension pilot program for couriers, aiming to enhance their rights and benefits [73] - The Bright Kitchen program aims to improve food safety and quality by encouraging high standards among food delivery merchants [71] Q&A Session Summary Question: Impact of JD's subsidy program on order volume growth - Management stated that they are prepared to invest as needed to maintain competitiveness and highlighted their position as the largest player in the food delivery market [38][39] Question: Strategy for expanding Meituan Insta Shopping - Management confirmed robust growth in non-food categories and emphasized the importance of expanding product coverage and quality standards [58][60] Question: Details on the RMB100 billion food subsidy promotion plan - Management outlined the plan's focus on empowering merchants, elevating supply quality, and stimulating consumption [69][70] Question: Progress of KITA in Hong Kong and Saudi Arabia - Management reported strong growth in both regions and outlined plans for further expansion [82][84] Question: Capital allocation strategy amid overseas expansion - Management emphasized a balanced approach to capital allocation, focusing on core local commerce cash flow while supporting new initiatives [100]