Good afternoon, ladies and gentlemen. Welcome to momo.com conference call. Our chairperson today is Terrisa. Terrisa, please begin your conference, and I'll be standing by for the Q&A. Thank you. Thanks, operator. Thank you for joining momo third quarter earnings conference call. I'm Terrisa from momo Investor Relations. Besides me, we have President Jeff and CFO Gina on the call as well. Today, we will update you on our third quarter financial performance and the major business operations, and then it will be followed by a Q&A session. We have uploaded the latest presentation and equity report on our website for your reference. Before we continue, I would like to remind you that the following discussion, including the responses to your questions, may contain forward-looking statements. These statements are based on the current expectations and assumptions that are subject to risk and uncertainties and may not be realized in the future. We do not undertake any duty to update any forward-looking statement. With that, I will turn the call over to Jeff. Thanks, Terrisa. Thanks for joining us today. To start, I will give you some highlights of our third quarter operations. First, for this quarter, we continue our existing strategy, which is growth has the priority. However, facing a high base of last year and macro uncertainties and the reopening of this year, it put pressures on our margin. Second, in order to increase our lead on logistics and to pave the way for long-term competitive advantages, we have continued expanding the logistics infrastructure, including both warehouse spaces and our own delivery fleet. Third, on the cost side, although the rising labor cost, higher marketing expenses to stimulate the demand and overhanging inflation concerns, we have been carefully managing our cost structure to maintain a good long-term competitiveness. Finally, we are facing increased macro uncertainties with rising interest rates, ongoing inflation headwinds, post-reopening and the tough comparisons. With that, we are still pleased with our third quarter performance as we continue the trend of growing and most importantly, scale up faster than the overall EC market in Taiwan and most of our competitors. With that context, you may turn to the presentation, page four. Now on to. We achieved the third-highest quarterly revenue of TWD 23.56 billion in quarter three. Among them, B2C revenue grew 14.3 year-on-year, higher than Taiwan online retail market growth rate of 5.4% year-on-year. B2C take rate was recorded as the second highest at 13.15%, just behind Q3 of last year, driven by a better product mix and increasing bargaining power with our suppliers. We have been adding new customers, and the number of active users have also increased year-on-year. Despite the high base of last year, the customer acquisition momentum hasn't stopped. Compared to third quarter last year, we have added 12 warehouses, which has increased 20% of our total warehouse spaces. Now we move to page five. Of our customers, the average MAU, the number of users who visit momo in past months, stood at 12.13 million, higher than previous years. The number of active users, the average orders per customer, and average ticket size, driven by strong product selections and a competitive price and good services, all have shown healthy growth. Of our products, 3C, home appliance, kitchenware growth rate has slowed down, mainly affected by macro uncertainties and the previous year's high base. However, healthcare product, fashion and beauty, sport and leisure continue to show strong revenue growth. The growth was primarily driven by larger customer base, repeated purchase, and new product introduced. While we have grown to be the largest B2C player in Taiwan due to the wide coverage of product categories, we still have a large area with plenty of room to grow. For example, home care, fashion, apparel, even larger home appliance, et cetera. In order to increase our product selections quickly, particularly in the long tail part, we are incorporating 1 P plus 3 P hybrid model. We have built a platform to support this model. We have started with apparel, and we are gradually extending to other product categories. The new hybrid models allow mid small brands to leverage momo's traffic, payment, logistics infrastructure to grow their businesses. For momo, we can readily expand SKUs, tap into in-season retail, and attract new customers. Last, I want to comment on our TV operation. The TV shopping market is on a downward trend for years. However, we are still able to manage it as a profitable business. With EC revenue rising fast, TV has been less significant in Momo's operation. Though it states leveraging TV shopping's program, the product presentation capabilities, we have turned a part of the existing TV resources to live streaming to complement our EC business, which have gained traction in the viewership. Now, on logistics. The construction of southern distribution center is on track, and it should be ready by fourth quarter of next year. In the meantime, we are preparing for the central distribution center, which we will start construction in the middle of next year. Let's turn to page seven. There is information on the page showing that we are actively engaging in a series of ESG-related efforts, and have been recognized by several organizations awards, such as ranked among top 5% in Taiwan Stock Exchange corporate governance evaluation for six consecutive years. In closing, we are approaching the end of COVID-19 pandemic. Although there are still macro uncertainties and the geopolitical tension, we believe EC market will keep growing. Taiwan EC penetration rate will follow the other developed countries, and the EC market potential remains huge. momo is now one of the strongest player on the market, with other player all face different kind of challenge and difficulties. Therefore, with that, we are the best one positioned to grab this growth opportunity. Now, I will turn the call over to Terrisa to go through the financials in more detail. Thanks, Jeff. Jeff has discussed some of our financial highlights, so I will focus on my comment on the other relevant metrics from page eight. Group revenue achieved the third-highest in company history. Despite facing tough comparisons, post-COVID reopening, and increased macro uncertainties, we continue the trend of growing significantly faster than overall EC in Taiwan. Moving to page eight and nine. During the quarter, B2C increased 14.3% YoY to TWD 22.5 billion, much faster than Taiwan online retail sales growth of 5%. Again, we have further widening our revenue gap with number two. That was primarily driven by our strengthening leadership in competitive mode. B2C take rate in third quarter was recorded the second highest at 13.15% on the back of a higher margin non-3C product categories and increasing bargaining power with supplier as we scale. On pages 10-12, third quarter group EBITDA was TWD 1.16 billion, decreased 3.2% on a YoY basis due to first, higher logistics cost, including additional 12 warehouses rent and higher labor costs to reflect more headcount and rising cost of new hire in light of the national shortage of labor. Second, a larger scale of marketing campaigns to increase active users and to drive user spend and engagement across more offerings. According to the latest government data, this quarter, momo's market share in EC and mail order industry has increased to 33% versus last year's 31%. That said, higher marketing expenses was not due to increasing competitive intensity, but for reinvestment in market share gain. With that, higher B2C mix also attribute to the group EBITDA margin at 4.9%, lower than 5.7% in third quarter of 2021. Net income to parents increased 8.3% YoY to TWD 759.56 million. The basic EPS achieved TWD 3.46, which also can attribute to the consolidated operating profit of TWD 878 million, together with non-op income of TWD 62 million, which we recognize one-time disposable investment gain during the quarter. In terms of the cash and the cash equivalent and the cash flow in page 13 and 14. At the end of the third quarter, we have TWD 5 billion net cash. Operating cash flow for the first nine months was around TWD 2 billion, versus TWD 3.5 billion during the same period last year's. The shortfall was given that we paid out higher corporate income tax for last year's. While we have paid out TWD 2.4 billion for cash CapEx, including TWD 1.3 billion for central distribution land and TWD 0.7 billion for construction expenses for southern distribution center. Finally, moving to page 15. We keep reinvestment to our core business for incremental growth. That's primary for the purpose of gaining market share instead of just keeping pace with competition. Durable competitive moat allow us to achieve high return on capital over a long time. The key to invest in this reinvestment moat lie in the convictions that our growth runway ahead is long. Momo's nationwide logistics infrastructure is the key differentiating factor versus other ECPs in Taiwan. Our asset-light model means besides the three big distribution centers built by ourselves, all satellite warehouses and most of the main warehouse is rented and thus booked under the right-of-use asset. On near-term expansion, the number of satellite warehouses will reach 35 by year-end, lower than our. That was mainly due to the stricter health and safety requirement by local government, which lead to more time for preparation before official launch. Operator, now we are ready to open the lines for questions. Meanwhile, investors are also welcome to send your questions via a chat box on the webcast page. Thank you, Terrisa. Ladies and gentlemen, we are now calling for questions. If you wish to ask a question, please press star one. Thank you. Once again, please press star one for questions. The first question comes from Chung Hsu with Credit Suisse. Thank you. Hi. Thank you for taking my question. I have two questions. My first question is on revenue or sales growth. Jeff, you mentioned that the macro environment is getting tougher with consumer spending kind of softening or slowing down. Can you give us some color about your upcoming Double Eleven sales campaign, marketing campaign, level of promotions, and is there any target sales growth for this Double Eleven? We know it's always a very important event for momo. This year, you know, given that your sales growth for the first nine months is around 16, 17% against the high base last year, just wondering if you're still targeting a full year sales growth of closer to 20% for the full year. If you can have any updates for your growth target for 2023, given the increasing macro uncertainty, you know, in next year. Now, my second question is on margin. I think we see a third quarter margin down a good bit from a year ago. That is due to both moderating sales growth and also still a very proactive marketing campaign and expense increase. Should we think about an OPM margin level that we see in Q3 as a more normal level into 2023? Meaning, you know, with the base now reset lower in Q3, is this a margin that we, y ou know, 3.7%-3.8%, a level that is more normal in 2023 as well? Thank you. Okay. Thank you for your question. Regarding the Double 11 campaign, certainly it's one of the most important campaign for us and I think for most of the e-commerce player in Taiwan. As usual, we have prepared our product. We have arranged a series marketing campaign, and we are throughout all the different incentives just to push customer to do the shopping. I think it's that effort can compare with previous year and probably even with higher end of the trends. In terms of what the revenue forecast for this Double 11, really have to go back to the whole year because there are really a lot of things we didn't expect which has happened, and mainly on the macro environment. Although those factors hasn't really been eliminated or alleviated, but we still think with good promotion, we'll still be able to push customer into that shopping mode. If you look at our revenue YoY growth rate, you will find actually it mainly driven by the high base of last year. We hit the bottom in May and June, and starting from there, we're just gradually increasing the YoY growth rate from May was 6.12% YoY. Now in September, we have reached 15.26% YoY. The growth rate has continually increasing. We intend to keep that momentum. However, it's pretty difficult to give you a number what the exact growth rate or revenue amount we are expecting. Although we have a internal target, but I don't think that's right to say in public. But which implies we still try our best to focus on our strategy, making the sales growth as the first priority. Then in the meantime, carefully manage the cost we put in. For the whole year, of course, you have to really mention the 20% now seems a little bit challenging. As I said it before, we still will try our best to make the first quarter as successful as before. On the margin side, because of the high base and because of the microenvironment, customer tend to be more cost conscious. We have to really put more of the resource to stimulate the spending, which you can see on the operating spending side. There are increase mainly caused by the marketing expenses and through the issuing of momo coins. On the cost side, since second half of last year, we have increased our speed of expanding our warehouse footprint. Through almost a year, you can see we have added 12 warehouses and warehouse spaces increased more than 27%. That means the cost. However, although our revenue so far below our warehouse expansion, in terms of the percentage rate, we think that is going to be make up by if we continue grow our revenue. because of we have gone through this quickly expansion mode, and soon when we enter to next year or even later this quarter, we are getting to the We are switching from the expansion mode into the optimization mode. Because when we add so many facility in our logistic infrastructure, we really need to find the efficiencies. Through that effort, plus we continue to increase our revenue, I would think that pressure on the cost and the expense side will be easy, with time. So far, we haven't completed our forecast and the budget for 2023, so really can't comment too much on that part. Thank you, Jeff. If I may just follow up with one quick question on your sales growth. Is it fair to say that your growth target, its aggregate revenue growth is a function, somewhat tied to the overall EC industry growth? Meaning when the industry or e-commerce in Taiwan is growing at 8%, by growing at 2-3 x of EC growth in Taiwan, you're growing at 25% revenue. Now it's 5% in the EC growth, you know, you're growing at a mid-high teen. Is that a more appropriate way of thinking about it? You have a very fixed like 20% growth for 2022, you know, or 2023? Of course, we are constrained by the big market. If the market grows slow, we will certainly get affected. However, we always outperform the market and our peers. We think in the longer term, the trend will continue growing. This year, because of those uncertainties, because of the high base of last year, and because of the reopening, which happened so faster than we expected. That all affected the overall EC market growth rate in Taiwan. Just for example, because people are more cost-conscious and the reopening happened before we expected, so people may reallocate their spending more towards outdoor, leisure, travel, restaurants. However, those just like what we get benefited last year through COVID, those kind of a bubble just will go away, and they will go back to the that trajectory which EC penetration will continue to grow. That's the reason why we still believe that we have done the right thing and continue to seek for high sales growth and make our infrastructure ready to support our future growth. Okay, thank you. Thank you. Once again, please press star one for questions. Thank you. Next question is Casey with Allianz Global Investors. Thank you. Hi, Jeff, Gina, and Terrisa. Thanks for taking my question. My first question is your labor cost. Can you show just how much did the direct labor cost increase in terms of quarter on a YoY basis? And if you can break it down by headcount and hourly rate, that would be helpful. Right. Headcount, if I remember correctly, by the end of quarter three, we had around almost 500 new headcount year-on-year basis. Most of the headcount goes to the warehouses and the delivery fleet. Probably only 20% goes into the headquarters operations. Mainly we think the labor cost increase on the warehouse side is not easy to find enough labor, not to mention of course the salary you have to offer is higher than last year. I don't have the percentage with me. I think it's in single-digit range. However, because we have added so many warehouses and although those warehouses haven't really provided 100% of the capacities, but you have to restaff the people first, and they need to be trained. That's the reason why I just stated in previous question, after this expansion model, we are going to get into the optimization model, which we will churn out those efficiency. In the next years, this part of the cost increase will ease with the increase of the revenue. On a YoY basis, the major cost hike is from warehouse rental rather than you know, direct labor? I think both are the important factors. The rental and the labor costs are the major factors. The delivery cost of course is increased, but that goes with the revenue growth, so that's okay. It's not really a unique cost increase. Yes, you are right. Okay, sure. If it's for warehouse, then I guess, you know, going forward when your revenue, you know, or as you're on a uptrend, then you'll probably deliver some leverage there. My concern is if the labor, especially the hourly rate is more sticky than. Those salaries are more fixed going forward, then do you think you can still, when your revenue scale, you can still overcome the leverage here in the quarter? I think in the longer term, I think the salary will go with the inflation rate. Fortunately, Taiwan inflation rate so far is okay compared to the worldwide labor. No one can tell when this inflation super cycle going to be end. But if that do happen, that is the overall economy things, and then the salary increase will trigger the product price increase. At the end, may not affect that much to our margin, if you stretch the timelines. However, so far I don't see that will be the case, and let's hope that would not happen. Got it. My second question is regarding customer stickiness. If we look at the retention and you know, buying frequency, those metrics actually are holding up quite well even during the past quarters, you know, after COVID, sort of tough time for you. Do you think because you probably benefit from you know, more buying frequency during COVID, meaning maybe people are buying more groceries more frequently. After that, starting right now, do you think you know, the buying frequency or stickiness will revert to you know, sort of pre-COVID level? I think it's our third quarter average order per active customer only increased 2%. That probably tells the reason we just described. I think because the past two years, all those numbers are affected by COVID. However, we are thinking, I don't know whether that's true, time will tell. If we add up those three years and divide it by three, or add up this year and the previous and divide it by two, maybe that gives us a more normalized growth. Which means if this without COVID, and that's going to be the growth we're looking at. But so far, all the indicators so far were still very healthy. We use all the different tools to attract more customers. We expand our product selections to let them to buy more. Even, say, if they buy something more than the normal day during the COVID, then we just open the new line of the product, so that to move that purchasing behavior to normal. That's the positive side of being an EC player, because we just don't have the limitation of the product shelf. We can always add the product to the shelf, as long as we can provide a competitive price and the services. We always had the view, if you look at the developed country, all the EC penetration is more than 20%. Which means if any product category has EC accountable less than 20% of market share, which means that you still have room to grow. We based on that belief, and we will examine all the product category and to decide where we can should put our resources on and to drive up more revenue. Thank you. Final question, if I may. Can you share with us more, you know, the hybrid, the 1P plus 3P in apparel, I mean, what you know, what's the growth there, and what kind of contribution to GMV you have right now? Any plans or target, you know, you can reach a certain level of, you know, GMV contribution in next one to two years? Thank you. Well, so far, the numbers are not that significant in terms of actual amount. However, the grocery is large, but because it is the low base. So far we only tried on one product category, which is apparel. However, the significance part of that is we've proven that is a working model. That's going to work, and that's going to solve our problem for the long tail products. We think it's time for us to move to those categories. However, if we don't have a tool, we will not run that category efficiently. 3Ps seems to be the answer. That category could open new opportunities and many of those items with a lot of SKUs and maybe lower unit price. It's just very tightly correlated with the fashion trend, so you have to really change your SKU very frequently. All those without that new platform capability, and we call 3P model, we will just not be able to run that. Now we've proven we can run the apparel on that, and now we are trying to add other products to that platform gradually. That's the plan we have started, and they're going to continue through next year. Thanks. Any, you know, target you can share with us on how many categories you want to add? So far, I don't have anything to share with you yet. However, for things like hand tool, electronic components, let's say covers, all these kind of things belong to those long tail part and can fit into that model. Okay. Thank you very much. Thank you. Next question comes from Angela with Citigroup. Thank you. Hi, management. Thanks for taking my questions. This is Angela from Citigroup. If we review our earnings in the past two quarters, we can notice higher operating costs from warehouses were the main drag as we book higher rental fee and also labor cost from warehouse expansion. I understand we are always aiming for future growth and also more share gains by building up a strong logistics infrastructure. Year-to-date, we have added quite a few warehouses with total space up 20%-30% over the year. My question is, will the management plan to further slowdown the pace of warehouse expansion in view of likely slower economic outlook? That would be my first question. Thank you. Well, probably not because we don't positively look at next year economic outlook. I think mainly because that's how we run things, because after the fast expansion of infrastructure, the next thing we have to do is to optimize it or we need to find the efficient output of our existing operation. Because adding new warehouses and particularly adding so many satellite warehouses, it really changed our topology of logistics infrastructure and how to allocate all the different product and the goods and how to run our fleet. They all need to be optimized so that we can provide a better service to our customer and also lower our own costs. It's become a cycle. We will expand and we optimize it, and to a degree we're saying, "Okay, that's good enough," or see whether we have to expand again to catch up our future revenue growth. We just operate always in that mode. Regarding the macro environment next year, we really with honestly speaking, we don't know because there's so many things happening. However, we think that the fourth quarter is the critical period to monitor what is going to happen. We probably will base on that to adjust what we're going to do next year. Okay, got it. My second question would be, if we under the recessionary environment, if the domestic consumption turn out to be a lot weaker than expected, will we still prioritize top line over profitability? Yes. I think basically yes. However, we will only target to aim for what is reachable. Although it may be challenging, it has to be reachable. We will not throw money in vain to looking for something you will just not be able to get it. That was driven mainly by the economic conditions and customer spending behavior. That's the reason why there's a lot of uncertainty so far, so we are still working on that. Got it. Helpful. Thank you. Thank you. Next question comes from Daniel Cheng with UBS. Thank you. Hi, Jeff and Terrisa. This is Daniel Cheng from UBS. Can you hear me? Yes, please. Okay, thank you for taking my question. My first question is that is it safe to say that the warehouse addition in 2023 will be limited, given we are optimizing the new added warehouse in the past? It will be modest compared to this year. However, because there are also property we have already signed a contract but hasn't been ready yet. That will be gradually put online next year, so. We are not looking for adding or signing that many of a new warehouse as this year. That's for sure. Okay. Is there any target? We are still preparing the budget, but the guideline of our budget is what I just said. Okay. Got it. Thanks. My second question is that, what's your view towards the sales growth and the cost and expense growth? When do you expect the sales growth to outgrow cost and expenses growth again? Because I think on the one hand, if we slow down the warehouse expansion, this will slow down the cost growth. But on the other hand, sales growth seems to be severely affected by the macro uncertainty and the overall reopening. I just want to know your view towards these two factors. I don't think we have answer at the moment because I said that we are preparing for next year's budget, so we are actually going through all the numbers. There are also uncertainties we have. We haven't had a good handle on it. For example, will we get into recession or will we still facing increasing the interest rate and geopolitical tension will still exist, rising or easing. There's so many uncertainties. This is so difficult when we prepare budget. However, if everything equal, just like what we are getting now and not getting worse, and that effect going to happen, we will continue grow our revenue. Just for you, just like this year, you still so far for first nine months we got a 16% year-over-year growth. We'll make our scale even larger. You have a larger denominator and of course, the cost percentage is going to drop. If you ask me when, I really can't give you an answer. If you ask me whether you will spend more in the marketing dollar to stimulate customer spending, I don't know yet. I have to put that it doesn't mean we will spend money regardless the return. No, we watch our return carefully. However, we still put the revenue growth as a priority. As long as the marketing dollar put in, we get the return which we think is worthwhile, we will continue to do that. Because that kind of expense is just one time, and the customer you acquire, their purchasing behavior shift to online, you will get long-term benefit. So far on the market, I think we are the strongest one, and we hope we can get as much as market share as we can, as early as we can. Okay. Thank you, Jeff. That's very clear. That's all my questions. Thank you. Thank you. Next question comes from Bill with JP Morgan. Thank you. Oh, hi. Hello? Can you hear me? Yes. Hey, Jeff. Thank you for taking my question. I think the question is most covered, but one thing from my side is, I think the company have been saying that the penetration count is low. I think after COVID, the e-commerce penetration in Taiwan already go up to high teens, saying 17%-18%. I know there is still a gap, if we compare to, say, in China or Korea, but given the different, you know, landscape and demographic situation, what is the, you know, the e-commerce penetration to retail that the company think is more reasonable if we need to do some searching in Taiwan? Second is, I think given the reopening is happening and the group gradually normalize, what will be the more long-term growth rate the company is targeting at? Right. I think you are right, but that answer is different from product category to product category. If you're talking about 3C, yes, the e-commerce market share has reached to pretty high level, and even more or less than the developed country. However, other things, for example, dry food, clothes, big home appliances, they are all under 10, and even some are even under 5% of the market share in that product category. Even, say, fashion and beauty category, the cosmetics, I think we're just probably around 10% or a little bit higher. Healthy product may be a little higher than that. What we do is we just review all the different product category. We think at the least you need, you would need the all online needs to account for 10% of the market share. Even momo alone, because there are really not a big player besides momo in the B2C market. Maybe we alone should account for 10% of that as the single product category. Even if you go through that, you will find there's still a lot of opportunity. Not to mention we are not satisfied with 10%. We're probably looking for you want to in the longer run, a few years later, you want to reach 20%. I think that time will come, with the trend toward e-commerce online and the young generation getting older and take the major part of the high consumption group in the whole population. I think they are all positive sign to EC players. I think we have no doubt on that. The only thing we need to be careful is, if the market is going to grow, and the market potential is huge, we need to make sure momo still be there and be the number one to get all the growth opportunities. That's where we are, what we are working on, and we watch very carefully. Okay. Understood. Thank you. Okay. I think we are running out of time. This conclude our Q&A session. Thank you all for joining today's call. We look forward to speaking to all of you again next quarter. Thank you. Thank you. Thank you. Thank you for joining the conference. You may now disconnect. Goodbye.