Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to the Dingdong Limited third quarter 2022 earnings conference call. At this time, all participants are in a listen only mode. Please note that this event is being recorded. I will now turn the conference over to the first speaker today, Nicky Zheng, Director of Investor Relations. Please go ahead, sir. Thank you. Hello, everyone, and welcome to Dingdong third quarter 2022 earnings call. Visitors today are Mr. Changlin Liang, our Founder and CEO, and Ms. Le Yu, our CSO. You can refer to our third quarter 2022 financial results on our IR website. It's ir.100.me. You can also access a replay of this call on our IR website when it becomes available a few hours after its conclusion. For today's call, management will provide their prepared remarks first, and then we will be hosting a question-and-answer session. Before we continue, I would like to refer you to our safe harbor statement in our earnings press release, which also applies to this call. As we will be making forward-looking statements, please note that our numbers stated in this following management prepared remarks are in RMB terms. We will discuss non-GAAP measures today, which are more solidly explained and reconciled to the most comparable measures reported in our earnings release and filings with the SEC. I will now turn the call to our first speaker today, the Founder and CEO of Dingdong, Mr. Liang. Mr. Liang, please go ahead. Thank you, and welcome to Dingdong's Q3 earnings call in 2022. Today, I would like to discuss our Q3 operational performance, some thoughts on product development capabilities, and our next steps. First, let's dive into our Q3 performance. As we expected, revenue in Q3 was CNY 5.94 billion with a non-GAAP net loss margin of 4.8%. We quickly adapted to the changing business environment in the third quarter last year and began our strategy of efficiency first with due consideration to scale. Consequently, our non-GAAP net loss margin narrowed substantially to 4.8% from 31.9% from a year ago. With such momentum, we're confident of approaching non-GAAP breakeven in the fourth quarter this year, which would be sooner than expected during our IPO. By then, Dingdong will have evolved from a startup that needed external financing to a self-sustaining company with strong survival capabilities. The key drivers of our achievement are our commitment to product development, service upgrades, and supply chain efficiency, all of which contribute to our profitability and competitive moat. Next, I would like to share our thoughts on product development. On previous calls, I introduced our strategies and practices for enhancing product development capabilities. Today, I'll focus on the rationale behind it. First, we have a conviction in the pursuit of a better life. For the longest time, traffic was the only thing that mattered in China's e-commerce industry. Low pricing was an obvious and straightforward way to acquire users. As a result, consumption downgrade became a trend. However, Dingdong was founded to address the mothers' concerns over their children's food safety. Since day one, we have been dedicated to producing safer, healthier, and better quality food products. We have unwavering faith in pursuing a better life and will strive towards the goal. Second, we aim to create value for the consumer and society. Most startups are trapped in a competitive zero-sum dilemma, which is limiting. Dingdong has escaped from such a mindset and emphasized value creation instead, which is unlimited and liberating. As our consumers constantly evolve with emerging pursuit for a better life, we have infinite market opportunities to capture and demands to fulfill. As you know, Dingdong has advocated the Clean label of no additives unless necessary. The ingredients on the packaging of certain food products in the market outline various chemicals, flavorings, colorings, and preservatives, sometimes written densely all over. The Clean label we advocate for and implement enables more consumers to access healthy and safe food products. It also forces the entire industry to strive towards creating value for society. Today, an increasing number of people around us are obese and even suffer from diabetes due to excessive carbohydrate and sugar intake. This is why Dingdong has put tremendous effort and resources into developing delicious but low-carb, low-GI food products. Over time, we expect to generate more products in this category to align with our current health and nutrition concept. We rarely pay attention to the competition, but rather focus on value. We embrace infinite value creation and are unrestricted by the competitive landscape. This is the principle that drives our product development and also our proposition and faith. Third, we do not just sell food products. We provide solutions that help you improve your life. Dingdong is in the food industry, a business that provides satisfaction and creates value for people. Eating is not only a basic physical need, but also brings psychological pleasure. Moreover, you are what you eat. Eating is changing and shaping us, our families, and the entire society and nation. Oftentimes, the consumer comes to us for more than just a meal. If you ask the mother how she wants to feed her child, she does not specify. All she wants is something that her child likes that helps them grow taller, healthier, smarter, and even become a better person. That's why we curated Mom's Choice with traceability, scientific nutrition, and minimum additives. This curation meets mothers' needs and eases their concerns over food safety. 在商品建设上，叮咚不但为消费者的美好生活提供美好食品，而且要利用专家的知识，结合我们对用户的深刻理解，提供美好生活的解决方案。 Therefore, when we develop products, we aim to provide not only quality food for a quality life, but also solutions embedded with expertise and deep consumer insights. 最后我想简单说说进一步的展望。在过去一年多时间，叮咚买菜的亏损率大幅度缩窄。我非常有信心，叮咚在Q4基本实现non-GAAP标准下的盈利。叮咚将成为一个能够完全自我造血的公司。 Lastly, I would like to discuss the next steps. Our loss ratio narrowed remarkably over the past year, giving me full confidence in nearing non-GAAP breakeven in Q4. When it happens, Dingdong will become a fully self-sustaining company. 叮咚将继续在商品领域上发力，开发出更多的美好食品，也不断加强供应链建设，同时提升我们的服务力。商品力、供应链能力和服务力将构成叮咚买菜的核心竞争力。美好的商品会不断吸引更多用户，让用户信任和依赖，这将带来规模的持续增长，而供应链能力和服务力将不断增强叮咚的盈利能力。所以叮咚是一个特别有成长空间和潜力的公司。 Dingdong will keep investing in product development to generate more quality products, building a stronger supply chain and upgrading services. These capabilities will form our competitive moats. Moreover, quality products naturally gain traction because consumers can trust and rely on them, bringing continuous growth in scale. While the supply chain and service capabilities are instrumental to profitability. All the above will allow Dingdong great potential and room for growth. 为人们的美好生活奋斗，不但为消费者创造价值，能够不断创造公有、不但创造价有价值的公司，自己一定也有价值。而长期看，价值也会体现在价格上。所以谢谢大家一直支持叮咚，我们一起努力，创造长期价值。 A company striving to achieve a better life and create value for the consumer has unbeatable value. In the long- term such value will translate into premium pricing. Thank you all for your continuous support. Let's generate long term value together. 好，我的发言到此结束，谢谢大家。下面请公司CSO Le Yu介绍财务情况。谢谢。 Thank you, everyone. With that I'll hand the call over to Miss Le Yu, our CSO, to go over the financials. Thank you, Mr. Liang, and hello everyone. Before I walk you through our detailed financial results, please note that all numbers stated in the following remarks are in RMB terms. Revenue in Q3 2022 was CNY 5.94 billion, down slightly by 4% year-over-year. However, in the first three quarters of this year, we achieved a 23.1% revenue growth while narrowing the net profit margin by 31.7 percentage points. Our higher revenue in Q3 last year was driven by extensive subsidies and concessions granted to our users. In contrast, in Q3 this year we were committed to enhancing product quality and order fulfillment efficiency while reducing operational costs on the strategy of efficiency first with due consideration to scale. As a result, we achieved a significant growth in gross profit, growing by 58.2% year-over-year, a testimony to our product development capabilities and operational efficiency. We expect to roughly breakeven on a non-GAAP basis in Q4 this year, with GMV returning to our year-over-year growth trajectory. Let's take a detailed look at the Q3 performance. The GMV to revenue conversion rate was 91.3%, up 3.1 percentage points from a year ago. Gross margin for the third quarter was 30% up 11.8 percentage points from a year ago. The improvement in gross margin has been significant over the past year, but we still anticipate more room for growth in both the short and the long term. Our fulfillment cost might be higher than those of the traditional supermarket model because we are more deeply engaged in the supply chain. However, such a commitment also generates higher gross margin. For example, in our supply chain we standardize and digitalize the management of fresh grocery in city clusters by introducing different storage temperatures in our regional processing centers. In contrast, most of our peers from traditional supermarkets or using online models outsource such processes to suppliers. As a result our expense ratio of the regional processing centers in Q3 was 7.3%. In addition we conducted a higher proportion of direct sourcing and order-based farming and kept raising standards and quality control of our products. The far-reaching participation in the supply chain has yet to be fully reflected in our current gross margin. We expect it to translate into higher profitability as we mature. The fulfillment expense ratio for Q3 was 26.8% down 10.5 percentage points year-over-year. Primarily owing to improved average order value and optimization of frontline worker efficiency. We also recorded a 25% improvement year-over-year in AOV this quarter driven by better product development capabilities and Dingdong's brand dominance in consumer mindshare. Our frontline fulfillment stations delivery efficiency increased by 15.8% and in-warehouse staff efficiency improved by 29.6% year-over-year. The marketing expense ratio for the third quarter was 2.1%, down 4.8 percentage points from a year ago. In addition the customer acquisition cost per new transacting user dropped significantly by 32.6% year-over-year, driven by better product development capabilities and brand image. The general expense ratio declined to 2% from 2.5% a year ago. The R&D expense ratio grew slightly to 4.3% from 4.2% a year ago. Going forward, we will continue our investment in food R&D agriculture technology, and technical data algorithms while minimizing wasteful expenses at headquarters to cut costs. We believe infrastructure investment in the above three areas will strengthen our competitive advantage and create long-term value for investors. In Q3, GAAP net loss margin was 5.8%, narrowed by 26.7 percentage points from a year ago. The non-GAAP net loss margin was 4.8%, narrowed by 27.1 percentage points compared to Q3 last year, and 3 percentage points compared to Q1 this year before the COVID lockdown. Excluding a one-time expense of CNY 52.7 million our adjusted non-GAAP net loss margin was 3.9%. In Q3, we reduced our operating cash outflow from CNY 407 million to CNY 244 million by introducing supply chain finance. At the end of Q3 we had CNY 5.9 billion in cash equivalents, restricted cash, and short-term investments. In summary, since we emerged from the lockdown in Q2 and our product development capabilities gained traction we observed a solid upward trend in our online penetration, AOV, growth margin, and operational efficiency. At the same time, we offered higher product quality to meet consumers' growing demand for a better life. As a result, Dingdong's members or our loyal users were highly sticky, with a net month retention rate of 84.2% and a net month GMV contribution of over 400 on average. The longer these members stayed with us, the more their monthly GMV increased. We believe Dingdong is becoming an integral part of more users' lives. Going into Q4, we expect to return to our year-over-year growth trajectory and be close to non-GAAP breakeven. When we achieve that, we will have lowered our non-GAAP net loss margin by over 30 percentage points from 31.9% when we began the efficiency first strategy in Q3 last year. Such a notable optimization in less than one and a half years would have demonstrated the vitality and the profitability of our business model. This concludes our prepared remarks for today. Operator, we are now ready to take questions. Thank you. We will now begin the question- and- answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then two. When asking the question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call. Today's first question comes from Ashley Xu with Credit Suisse. Please go ahead. Thank you, management, for taking my question. Just want to check, given the overall this macro environment, have we sensed any change in consumer's behavior? What's the key changes we have seen? Thank you. Thank you for your question. We all know that consumers are constantly changing and so are our consumption habits. This is the fascinating part of our industry. Change is the only constant and so are our efforts to serve the users. 从叮咚买菜最近的用户消费行为看，我看到了几个消费变化的趋势跟大家分享。第一呢，年轻人越来越重视养生。叮咚买菜开发了一款西梅酵素饮料，因为富含二十种果蔬酵素和四种益生菌，对肠胃健康很好，一上线就是爆款，基本上全是五星好评。我们又沿着这个思路开发了无添加白砂糖的小精灵复合果汁、轻发酵芒果汁。 Consumers are paying more attention to health and wellness. That's why Dingdong developed a prune enzyme drink. With over 20 kinds of fruit and vegetable enzymes and four kinds of probiotics, it is perfect for your GI tract and became a big hit as soon as it was launched with basically all five-star reviews. Following this trend, we subsequently developed more products, such as lime compound juice without added white sugar and lightly fermented mango juice, which are all very popular. Later, we curated the Qingyang Planet page to meet the needs of youngsters pursuing health and wellness. Another trend is meal for one, but it's nothing perfunctory. Instead, it's a dish with balanced nutrition. That's why we have been developing certain prepared meals, emphasizing nutritional balance at a smaller portion, which truly caters to this trend. 再次从搜索结果和购买行为习惯来看，年轻人越来越希望吃得不一样，有变化。另外我们也发现烘焙啊，轻咖啡啊等一些轻食商品的消费在迅速上升。还有从叮咚各分类的占比看，加工食品，包括预制菜和一些包装食品占比在不断提升。 In addition from their search results and purchasing behaviors, we notice young consumers expect to diversify their meals with changes and surprises. We also notice that categories such as bakeries and coffee are trending up. Lastly, the ratio of processed foods, including prepared meals and packaged foods, has been increasing in our product category mix. 除了看到这些变化以外，我们更多关注消费者消费中一直不变的需求。首先，大家希望食品的品质要好，美味健康。其次，大家希望吃的品类丰富，并且要有变化，有创新和惊喜。另外，大家希望送得快，想吃的时候能够立刻送到。最后，大家也希望有合理的价格。简单总结用户不变的需求就是好、多、快，价格合理。要满足用户永远不变的需求，要求我们不断提升商品力，提高供应链能力，提高服务能力。这其实就是叮咚一直强调的核心竞争力。 While it's important to identify changes, our core focus remains to address the constant demands in consumer consumption. First it's a common hope for all to enjoy better quality, taste and nutrition in food. Second it's desirable to have varied, innovative categories. In addition, fast delivery is expected. People want instant gratification. Finally consumers expect reasonable pricing. To sum up, people expect quality, diversity, speed, and affordability. To meet the ever-changing needs of users, we need to have better product development, supply chain, and service capabilities. All of these are the core competitiveness that Dingdong has always been focused on. 好，谢谢。 Thank you. Thank you. Our next question today comes from Thomas Chong at Jefferies. Please go ahead. 晚上好，谢谢管理层接受我的提问。我们上个季度提了我们的宝妈严选，想问一下管理层对这个板块的思考，还有重视，运营的情况如何？ Thanks, management, for taking my questions. We have been talking about 宝妈严选 since last quarter. Just want to ask management about the strategy in this area and how is the operation so far? Thank you. 好，谢谢您的问题。妈妈这个群体的需求一直是我们很关注的点，深刻理解妈妈们的需求，从而给妈妈们提供针对不同年龄段的孩子的营养美味的膳食解决方案，让妈妈们安心购买，这非常符合我们的创业初心，让孩子们吃得健康，让每个家庭放心。 Thank you for your question. Mothers' needs have always been important to us. Offering nutritious and tasty meal solutions to children of various age groups based on our understanding of mothers' needs really aligns with our founding motivation which is to provide healthy food products to children and ease families' concerns over food safety. 目前宝妈严选的全国月均交易额已达到8,800多万，其中上海是宝妈严选的起点，约占整体一半的体量。同时，宝妈严选的运营口径毛利率整体高于大盘三个点。在商品的层面，我们有了三文鱼、肉肉和肉肉花卷等持续百万单品，叮咚独有的为宝妈群体定制的橘子包、香蕉包也受到了妈妈们的喜爱。同时，我们也在推进配料表的解读性。高蛋白、低脂、低糖等指标在商品详情中呈现。 We saw more than CNY 88 million average monthly GMV of Mom's Choice products nationwide. Half of it actually came from Shanghai, where we kicked off this program. Mom's Choice on the operational level, Mom's Choice GMV on average is higher than the GMV gross profit margin across the country in terms of the national average. Regarding our product offering, we have best-selling SKUs that exceeded millions in sales each, such as Salmon for kids and Twisty Rolls with minced pork. Our exclusive orange bun and banana bun customized to appeal to children are also very popular among the mothers. At the same time, we enhance the readability of our ingredient list to highlight high protein, low- fat, low- sugar, and other key nutritional facts that are important to mothers. Going forward, we'll develop scientific and nutritious food solutions for children based on our understanding of different families' needs. Our goal is to cultivate children's love for food so that they grow up healthy and strong, and their mothers have peace of mind. Thank you. Thank you. Ladies and gentlemen, our next question today comes from Robin Leung with Daiwa. Please go ahead. Hi. Thanks management for taking my question. Could management provide some updates on the competitive landscape especially competition with community purchase or other on-demand players? Thank you, Robin, for your question. Dingdong does not focus on competition. Rather, we prioritize value creation. We're not limited by the competitive landscape. We embrace the infinite opportunities in the space. From an industry perspective fresh groceries and food products are a $10 trillion market in China, and a business model that is valuable to users can stay. Business models that align with user consumption trends and create more benefits for users will have a brighter future and survive economic cycles. Although the online penetration rate of the fresh grocery category remains low, it is going up fast and strong. At the same time, industry competition has become more benign and rational. Our long-term strategies are to enhance our product development, supply chain, and service capabilities. We're not doing it for competition purposes, but consequently, these efforts allow us to gain competitive advantages. First, regarding building product development capabilities. Since the suppliers of fresh groceries and most foods are scattered and technologically backwards, we're determined to go deep into the source of the supply chain i mproving our in-house product R&D, actively developing differentiated products that aligned with consumption trends, and expanding our product and process capabilities. Such heavy liftings will pay off over time with a strong first-mover advantage and long-term value. We are in the era of surplus and our supplies have been extremely enriched. That's why customized, differentiated SKUs that meet the needs of consumers can provide a better product experience, which can greatly improve our user stickiness. Dingdong's long supply chain involvement can also bring higher gross profit margins, stronger profitability, and self-sustainability. 从服务而言，所谓工欲善其事，必先利其器。我们持续迭代优化前置仓的布局和更精细的管理库存库位，同时将精细化库容信息进行数据透明化，从而使得单个前置仓能容纳更多的SKU和商品件数，给单仓的商品丰富度和日均V的上升提供更大的空间。同时，前置仓是分布式组织，不好管理，我们选择用企业价值观和精细化的SOP进行双重规范。我们会不断地使用各类方式进行培训强化，并对SOP中的各项动作进行数据透明化，使SOP可以行之有效地执行下去。 In terms of developing services, as the Chinese saying goes, "A craftsman must sharpen his tool to do his job." We iteratively optimize the layout of the frontline fulfillment stations and manage inventory stocking with a granularity and transparency so that each frontline fulfillment station can accommodate more SKUs and items. This brings abundance in our product diversity and enhances the upper limit of daily GMV. At the same time, the frontline fulfillment stations are distributed across the country, which takes work to manage. We adopt dual standardization in our management, leveraging corporate values and our granular SOP. We'll keep strengthening training and make data transparent to each action in the SOP so the SOP can be effectively implemented. 所以总的来说，我们虽不强调竞争，但我们的长期策略会构建更强的竞争力，创造更高的价值，未来会在竞争中占据优势。谢谢。 To sum up although we do not focus on competition, our long-term strategies build competitiveness and create high value, allowing us to gain an advantage in the future. Thank you. Thank you. Our next question comes from Amy Chen at Delta Investments. Please go ahead. 谢谢管理层接受我的提问。我的问题是叮咚的前置仓模式到底能够盈利吗？ I gonna translate my question myself. Thank you for answering my question. I want to know in your opinion is the frontline fulfillment station business model could really make profit? And if yes, when will Dingdong achieve profit? Thank you. 好，我想请瑜乐来回答这个问题。 好的，谢谢。谢谢你的问题。那目前呢，我们的规划呢，是在今年的Q4基本上实现non-GAAP口径下的break even。我们认为呢，一个商业模式是否能够盈利呢，首先要看它是否为用户创造了价值。那么就叮咚而言呢，我们建立了源头的供应链能力，根据用户深度的定制，自行的这个研发商品，然后呢自行的生产这种差异化的商品，我们经营的呢是既刚需高频又很难运营的品类，然后呢又将这些商品快速地送到用户的家门口，那这些呢都是很有价值的事情。 All right. Our CSO, Ms. Le Yu, will take this question. Thank you for your question. We expect to roughly achieve non-GAAP breakeven in Q4. We believe that whether a business model is profitable or not depends on whether it creates value for users. We have built our supply chain capabilities to customize, research, and produce differentiated products based on user demand. We operate in high consumption frequency categories that are difficult to manag and we deliver these products quickly to users' doorstep, all of which are valuable. 其次，一个商业模式是否能够盈利，还得看整体的行业是不是有利润的空间。那么生鲜从产地到用户的手中的价差还是很大的，只是供给端的分散和低效，会导致行业整体的毛利并不是很高。那么在逐渐打通供应链的瓶颈以后，我们能看到叮咚的毛利率在过去的一段时间里面正在快速地增长。 Secondly, whether a business model can be profitable depends on the profit margins of the industry. The price markup of fresh groceries from the origin to the user is significant, but the dispersion and inefficiency of the supply side lead to low gross margins for the industry. After gradually breaking through the bottleneck of the supply chain we managed to raise the gross profit margin of Dingdong very rapidly. 第三呢，一个商业模式是不是能够赚钱呢，得看这个公司在供应链里面做了哪些事。那么叮咚呢在供应链里面拓展的长度和深度都是行业内首屈一指的。 Third, whether a business model can make money depends on their engagement in the supply chain. The width and depth of our expansion in the supply chain are second to none in the industry. 那么在供应链的起点呢，生鲜品类上面，我们源头直采的比例呢是很高的，而且呢正在逐步提升与大中型的这种农场主直接签署订单农业的这样子的一个份额。那么我们也选择自己在分选中心进行生鲜的标准化和信息化。那么在这个非生鲜的食品品类呢，我们更是亲自下场。 Firstly, let's look at the upstream. In the fresh food category, we have a high proportion of direct sourcing from the starting point of the supply chain, and we are gradually increasing the share of order-based production directly signed with large and medium-sized farmers. We choose to carry out the standardization and informatization of fresh food in the regional processing centers while establishing our in-house production and processing capabilities in the non-fresh food category. Regarding the downstream, the user only needs to place an order on a mobile phone before we deliver the goods to their doorsteps in about half an hour, which is extremely convenient. Thank you. Dingdong not only creates value for its users but also operates in an industry with great profit margin potential. In addition, it has been more deeply involved in the supply chain than its peers do. All of the above will naturally translate into stronger financial performance. Since we adopted the efficiency first strategy in Q3 last year, our gross margin has gone up over 11 percentage points from a year ago. Fulfillment expense is down 10 percentage points, and the loss ratio narrows by over 26 percentage points. Such a rapid reduction of losses is not only unique in the industry, but also rare in other industries. There is no doubt that Dingdong can achieve profitability. Thank you. Thank you. As there are no further questions at this time, I'd like to hand the conference back to our management for closing remarks. Thank you again for joining our call today. If you have further questions please feel free to contact us or request through our website. We look forward to speaking with everyone in our next earnings call. Have a good day. Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.