Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to the Dingdong Limited Q4 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. Thank you. Hello, everyone, welcome to Dingdong's Q4 2022 earnings call. With us today are Mr. Changlin Liang, our founder and CEO, and Ms. Le Yu, our CSO. You can refer to our Q4 2022 financial results on our IR website at 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 all numbers stated in the following management prepared remarks are in RMB terms. We will discuss non-GAAP measures today which are more thoroughly extend 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. (Foreign Language) Thank you everyone. Welcome to Dingdong's Q4 2022 earnings conference call. Let's first review the quarter's operational results. Our revenue of RMB 6.2 billion reflected 13.1% year-over-year growth. We recorded GAAP net profit for the first time of RMB 49.88 million, with non-GAAP net profit of RMB 116 million. Within one and a half years, we grew from a net loss margin of 37.2% to a net profit margin of 1.9%. It is a result of our dedication and validates the strategy of efficiency first, with due consideration of scale.(Foreign language). Meanwhile, our operating net cash inflow in Q4 was RMB 0.68 billion. We also achieved positive operating cash flow for the full year of 2022. As of December 31st, 2022, our cash and cash equivalents were RMB 1.86 billion and short-term investments were RMB 4.64 billion. We believe that this strong cash position speaks volumes about our resilience in adversity. We also firmly believe that we will be able to realize our vision and mission, create value for our consumers and society, and create long-term and sustainable value for our shareholders. (Forerign language).We also advanced our product development capability through direct sourcing, contract farming, in-house R&D and production, and private labels, forming a flywheel effect. In 2022, we kept growing existing strong categories such as prepared food and children's food, i.e. Mom's Choice, forming a number of differentiated Dingdong exclusive products with monthly sales of over RMB 3 million each. Moreover, foreseeing the clean labeling trend in the food industry, we created about 320 quality products with clean labeling attributes. We refined our customer profiling according to consumption scenarios and built the Qingyang Planet page for younger user cohorts to meet the increasingly precise needs of the millennials and Gen Z's in body management, nutrition, and health. I would like to share with you my thoughts and ideas. Dingdong is a startup that is dedicated to providing safe, healthy, and delicious food while innovating to improve people's lives. We firmly believe in building a better life and creating value for consumers and society instead of engaging in a zero-sum game without peers for users and market share. As the seed theory suggests, an infinite number of small things combine to create the universe. Therefore, we dream big and start small, while remaining resilient to counteract vulnerability and entropy. During this process, we stay true to our roots and remain disciplined while keeping an easy mind. These beliefs and convictions go beyond profitability. They are what fuel our passion and drive us forward, guaranteeing our achievements today and in the future.(Foreign language) I would like to also discuss our plans for 2023. In early January, the company held its annual management meeting, where we summarized the experience and lessons we have learned since our inception and made plans for the longer-term future. We also agreed that we would hold course on our current development strategy while remaining innovative. Specifically speaking, we'll deepen our penetration into existing markets and continuously tap into our users' needs to achieve profitability. At the same time, we'll emphasize innovation, particularly in food products, to develop and launch new food products catering to a broader range of users. In 2023, given the increased demand for healthier food products post-pandemic, we plan to promote product innovations across several areas to address the changing needs. These areas include the increased use of clean labeling, nutritional upgrades, and customizing health food products for specific demographics. Specifically speaking, we'll first develop healthier prepared food that is not only delicious, but cooked with little or no oil and are low in calories, salt, and sodium. We'll take the lead in promoting products with clean labels. Second, we'll improve the nutritional value of food and beverages. For example, we'll bring out low GI rice and pasta, low-carb bakery products, low-carb beer, high-fiber beverages, and low-fat and low-sodium seasonings. Third, we'll develop powerful functional foods and nutrition products for children, middle-aged, and senior citizens. For millennials and Gen Zs who are weight and health conscious, we have launched the Qingyang Planet page that can quickly generate a healthy diet plan that matches individual needs with calculated and archived calorie data.(Foreign language) one of our goals for 2023 is to strengthen our strategic cooperation with our suppliers. In late February, we'll hold a supplier conference to commend our product developers, suppliers, and service providers for their excellent products. We're highly aware that it takes a large number of exceptional companies to meet the ever-changing needs of consumers in a market as vast as China's. Dingdong is willing to be an enabler that connects great companies to create value for consumers in society. (Foreign language).2023 marks the end of three years of the pandemic. We expect drastic changes in consumer demands. Nonetheless, we'll respond proactively and strengthen our capabilities in product development, service provision, and supply chain building. Based on our current operating situation, we expect to maintain non-GAAP profitability for both Q1 and the full year of 2023. (Foreign language).Today is February the 13th and spring has come. Everything is sprouting and growing despite the cold weather, just like the situation in China. We're fully confident in the recovery and growth potential of the post-pandemic economy in our country and in our course. This concludes my speech. Next, I would like to invite Ms. Yu Le, CSO of the company, to introduce the financial results. Thank you all. 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. Product development capability has become Dingdong's core strength and the primary growth driver since we implemented a strategy of efficiency first with due consideration of scale in Q3 2021. As a result, we maintain quality growth in 2022 with annual revenue of RMB 24.22 billion, up 20.4% year-over-year. Meanwhile, we significantly optimize our operating efficiency, gross margin, and net loss margin. The conversion rate from GMV to revenue was 92.3%, increasing by 3.7 percentage points from a year ago. Non-GAAP net loss margin was 2.4%, a substantial improvement of 28 percentage points year-over-year. We also achieved a positive operating cash flow for the full year of 2020-. Let's look at the financial results of Q4 2022. Our revenue reached RMB 6.2 billion, up 13.1% year-over-year. We are also pleased to report a record positive net margin of 0.8% under GAAP and a non-GAAP net margin of 1.9%, both significantly exceeding the forecast made in Q3. Since we shifted our strategic focus to efficiency first in Q3 2021, our non-GAAP net margin has improved by 33.8 percentage points from a net loss of 31.9% to a net profit of 1.9%, which was achieved in less than a year and a half. Such a rapid and significant optimization is a testament to the vitality and the profitability of the frontline fulfillment growth model in fresh grocery e-commerce. It also shows effectiveness of deeply developing and engaging our supply chain and centering on product development capability. We expect to stand by these strategies for a long time to come. In Q4, the gross margin was 32.9%, up 5.2 percentage points from a year ago. The gross profit was RMB 2.04 billion, up 34.2% year-over-year. We deepened our partnerships with many upstream producers to advance our fresh grocery products. For the non-fresh groceries, we focused on building private labels, in-house R&D, and set production and processing in our assembly lines. We also offer the door-to-door delivery service, capturing higher downstream margins. Such extensive coverage of the whole supply chain generated a stable growth profit margin for the company. The fulfillment expense ratio in Q4 was 24.1%, down 8.5 percentage points year-over-year, reflecting Dingdong's higher operational efficiency in Q4. The sales and marketing expense ratio in Q4 was 1.5%, down 5.1 percentage points, driven by our product development capability that generated continuous organic traffic. Consumers came and stayed for the differentiated Dingdong exclusive products, which also lowered the acquisition cost per new transacting user by 47.7% year-over-year, and 26.1% quarter-over-quarter. G&A expense ratio remained stable at 2.4% compared to the same quarter last year. Benefiting from the scaling effect, we optimized the R&D expense ratio to 4.2% from 5.2% year-over-year. As always, we will keep investing in the infrastructure R&D, such as food development, agriculture technology, and technical data algorithms, which will forge a greater advantage for the company. In Q4, we achieved a positive GAAP net margin of 0.8% for the first time, optimized by 20.8 percentage points from a year ago, and a non-GAAP net margin of 1.9%, optimized by 20.7 percentage points year-over-year, significantly exceeding the forecast. COVID-19 had only mildly impact on our covered cities and regions in October and November, and our Q4 entered a trajectory of profitability in October. To break it down monthly, we achieved a positive non-GAAP net profit in October and a positive GAAP net profit in November and December. It's been five years since Dingdong was founded in 2017, and we are pleased to see our efforts pay off and our business model proven. The operating cash inflow in Q4 was RMB 682 million, and the actual operating cash inflow was increased to RMB 906 million through the introduction of supply chain finance. As of the end of Q4, the balance of cash equivalents, restricted cash, and short-term investments was RMB 6.5 billion. According to CIC, the size of China's food and other groceries market was RMB 11.9 trillion in 2021. Let's take Shanghai as an example. With a residential population of about 25 million, Shanghai's annual food consumption expenditure is about RMB 10,000 per capita. In 2022, our GMV in Shanghai was over RMB 12 billion. That translated to a 5% penetration rate in Shanghai's food consumption market. We are confident of doubling that number in the long term, generating annual revenue of over RMB 20 billion in the city alone. The total consumption of our current cities and regions is about five times that of Shanghai, which in the long term would create RMB 100 billion in annual revenue. That is why Dingdong has a higher growth ceiling. As we move ahead to 2023, we would like to discuss our outlook. Q1s are typically affected by seasonality, according to our track record with lower revenue and profitability. In Q1 2023, we expect a slow season for urban fresh grocery consumption due to the pent-up urge to return home and travel during the Chinese New Year. Despite the seasonality impact and extra frontline labor costs on holidays, we are confident of achieving non-GAAP breakeven for both Q1 and the whole year of 2023. This concludes our prepared remarks for today. Operator, we are now ready to take questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, 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 in the call. At this time, we will pause momentarily to assemble the roster. Our first question will come from Joyce of Bank of America Securities. Please go ahead. (Foreign Language).Good evening management, congrats on the profit making this quarter. As we all know, in the past couple months, there were actually, you know, a lot of constraint in terms of social activities because of the pandemic. Just try to understand, to what extent, the profitability this quarter was because of the, you know, control, pandemic control. How should we expect the profitability outlook for this year or going forward? Is this going to be a sustained trend of profit making? Thanks a lot. (Foreign Language) (Foreign Language) (Foreign language). Please take the question. (Foreign language). Thank you, Joyce, for your question. First of all, since Q3 in 2021, Dingdong has been committed to efficiency, firmly moving towards profitability step by step. Our gross profit margin in Q4 of 2022 was up nearly 15 percentage points compared with Q3 in 2021, which was achieved within one and a half years. More than 13 percentage points have been optimized in the fulfillment expense ratio and over 5 percentage points in the marketing spending ratio. As mentioned in the prepared remarks, our Non-GAAP net profit margin went up more than 33 percentage points. The ability to optimize the PNL so efficiently has validated the vitality and profitability of Dingdong's business model. (Foreign language) monthly (Foreign Language) break even. Let's look at the Q4 results. In Q4, over 80% of our inner cities achieved positive operating profits at the city level. On a monthly basis, in November 2022, when the pandemic had a mild impact on our covered cities and regions, we achieved a GAAP net profit of more than RMB 10 million. We expect this profitability to be sustainable and stable, allowing us to achieve Non-GAAP break even in Q1 of 2023, and even the whole year of 2023. (Foreign Language). If we look at the structure of our PNL, gross profit margin and fulfillment expense ratio are two key elements. Their optimization is because we have been committed to the construction of the supply chain and our product development capability for a long time to build our strength. Such long-time investment has objectively improved our gross profit margin over time. Meanwhile, within one and a half years, the delivery riders efficiency has increased by more than 25%. The frontline warehouse staff efficiency has grown by more than 40%, with utility bills down by more than 20% year-over-year, which in turn led to the rapid optimization of our fulfillment expense ratio. These are the fundamental driver of our PNL optimization. Regarding the pandemic as an impetus to the business, it was more on the overall online penetration rate, because during the pandemic, the insufficient supply in the traditional market gave users a good opportunity to experience Dingdong's differentiated product in-depth. (Foreign language) On the other hand, our operation experienced many challenges in the face of the pandemic control, such as the unsmooth supply chain, relatively difficult recruitment, restricted order fulfillment, and some additional expenses incurred for pandemic prevention. These difficulties will be resolved when the pandemic control loosens up. In summary, the above mentioned results have validated that Dingdong's business model is welcome in the market and can generate value for users and society. Therefore, our profitability is sustainable. Thank you. (Foreign language) The next question comes from Ashley Xu of Credit Suisse. Please go ahead. (Foreign Language). We have seen, it's reported that (Foreign language) has been developing and manufacturing food products. Would management share more color on this? Thank you. (Foreign language). Thank you for your question. Dingdong is a startup committed to providing healthy, delicious, and innovative food products to improve people's lives. We firmly believe that product development capability is our core strength. In addition to jointly developing quality and differentiated foods with partners, Dingdong is also innovating, developing and producing processed food products. This is what Dingdong Guyu is doing. (Foreign language). Currently, Guyu's sales accounted for 11.4% of Dingdong's GMV. For the past 2 years, Guyu has created many popular brands such as Daily Fresh, Dingdong (Foreign language), Boxing Crayfish, Black Diamond Family and Bao's Bakery. Product quality has always been a priority in Guyu. In 2022, the moderate or bad reviews on Guyu's products were 40% less than the whole companies. Guyu's products also had a 100% passing rate for inspection. In December 2022, Guyu had 80 SKUs, with monthly GMV exceeding RMB 1 million each. (Foreign Language) Compare with 2021, Guyu's GMV has more than doubled in 2022. (Foreign language) is growing rapidly and is expected to have higher revenue, which will add greater value to the company's product development capability. Thank you. The next question comes from Thomas Chong of Jefferies. Please go ahead. (Foreign language) (Foreign Language). Thanks management for taking my questions. Just in the prepared remarks, management talk about, and summarize, the experiences and the lessons that we learned since we start the business. Can management share about these experience and lessons? Thank you. (Foreign language) Thank you for your question. At the management meeting in January, we summarized our experience of the past six years and realized that the times and environment were changing. Dingdong has also entered a different stage of development. We must learn from the past practices to avoid future mistakes. We have the following three conclusions: First, we have achieved a scale of sales resulting from our previous hard work. By leveraging this scale, we can serve and understand our customers better. With a deeper understanding of the consumers, we can also develop and innovate foods while enabling our partners to create value for consumers and society with us together. (Foreign language) Second, unlike our peers, we have never been indecisive regarding specific business models. While our peers constantly doubted their existing model, switching things up and trying to find the optimal solution, we knew that the essence of our business was to serve consumers more conveniently with better products. We adopted the simplest and most convenient frontline fulfillment grid model. Sometimes the best way is the most straightforward, not the strangest or the most surprising one. (Foreign language) Third, based on the understanding of our business model, we have been deeply engaging the supply chain. These efforts include direct sourcing, contract farming, food R&D and processing, building regional centers, establishing a quality control mechanism and so on. The construction of the supply chain is time consuming and the investment is relatively large, so it may not be able to produce outcomes immediately. However, in the long run, it will allow us to serve consumers better and form a competitive mode. (Foreign Language) At the same time, we have also summed up the mistakes to avoid, which were born out of an aggressive user base and scale expansion by using low prices and excessive marketing to attract bargain hunters. These activities brought false prosperity to the company that didn't last. Haste makes waste. The business we are engaged in is very grounded and requires us to be more patient. We need to cultivate the supply chain and product development capability for the longer run without haste. (Foreign language) Thank you. The next question comes from Robin Leung of Daiwa. Please go ahead. (Foreign language). Thanks management for taking my question. Management mentioned in the prepared remarks that I think they will strengthen the collaboration with our partners. Could management share more on these partnerships? Thank you. (Foreign language) In the huge market with ever-changing consumer needs, we need to expand our partnerships to create value for users. We will break through the traditional party A and party B relationships between suppliers and retailers and support each other in-depth. Regarding the business model, we'll allow joint operation on certain categories with our partners to leverage everyone's strengths. On the technology side, we'll actively contribute to big data and IT technology to improve cooperation, efficiency and the partnership. We'll develop and innovate supply chain finance more vigorously at a financial level to support our partners. We'll proactively consider investing in certain excellent partners. Dingdong itself is a startup that has always been innovative. That's why we plan to support active, actively innovating partners in areas such as user surveys, testing, initial product iterations and marketing, among others. (Foreign language) In the nearly six years of Dingdong's operation, we have also established very good cooperative relationships with many excellent companies. This is because we share similar values, mutual trust, support and responsibility. Especially during the 3 years of the pandemic, we overcame many difficulties together to fulfill the promise to consumers. These excellent partners are a reliable guarantee for Dingdong's continuous progress, and they are also valuable resources that we have accumulated in the past 6 years. In 2023, we'll partner with more exceptional companies around the world. Thank you. (Foreign language) As there are no further questions at this time, I'd like to hand the conference back to our management for closing remarks. Okay, thank you for joining our call today. If you have any further questions, please feel free to contact us or request us through our website. We look forward to speaking with everyone in our next earnings call. Have a good day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.