Hello, ladies and gentlemen. Thank you for standing by for the RLX Technology fourth quarter and full year 2024 earnings conference call. At this time, all participants are in listen-only mode. After management's remarks, there will be a question-and-answer session. Today's conference call is being recorded and is expected to last for about 40 minutes. I will now turn the call over to your host, Mr. Sam Tsang, Head of Capital Markets for the company. Please go ahead, Sam. Thank you very much. Hello, everyone, and welcome to RLX Technology's fourth quarter and full year 2024 earnings conference call. The company's financial and operational results were released through PR Newswire earlier today and have been made available online. You can also view the earnings press release by visiting our IR website at ir.rlxtech.com. Participants on today's call will include our Chief Financial Officer, Mr. Chao Lu, and myself, Sam Tsang, Head of Capital Markets. Before we continue, please note that today's discussions will contain further information made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements typically contain words such as may, will, expect, target, estimate, intend, believe, potential, continue, or other similar expressions. Further information involves inherent risks and uncertainties. The accuracy of these statements likely causes actual results to differ materially from those projected or anticipated, many of which are beyond our control. The company's affiliates, advisors, and representatives do not undertake any obligation to update this further information except as required under the applicable law. Please note that RLX Technology's earnings press release and this conference call include discussions of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. Our RLX press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. I will now turn the call over to Mr. Chao Lu. Please go ahead. Thank you, Sam, and thank you to everyone for joining our earnings conference call today. I will start with an overview of our 2024 performance and organizational initiatives, followed by an update on our overseas market outlook for 2025 and the details of our 2024 financial results. 2024 was a pivotal year for RLX Technology as our first full year operating in international markets following the termination of our non-compete agreement with RLX Inc. in November 2023. Throughout the year, we focused on enhancing our organizational structure and business models to drive successful overseas initiatives while maintaining stability in the China market after entering a new regulatory framework in 2022. As a result, we capped off strong 2024 results with our seventh consecutive quarter of sequential revenue growth, supported by our continued commitment to global expansion and effective localized strategies catering to each region's unique user base. Our outstanding results demonstrate our business's resilience and our ability to deliver growth amid an evolving industry landscape. Building a solid foundation for international growth was a top priority for 2024. We critically assessed our organizational structure and strengths relative to our peers and identified key areas for improvement. Based on this review, we optimized our operational and management framework to support our long-term growth objectives. Moreover, people remain our most valuable assets. Therefore, we have invested heavily in upgrading our team, bringing in experts in FMCG, in-house product development, and regulatory compliance. Their passion for growing RLX's business and advancing the e-vapor industry has empowered us to deliver effective, sustainable business models that will propel our long-term success and growth. On the operational side, tailoring our product portfolio and business strategies to local markets was essential. We deeply analyzed local market environments and consumer behavior, then utilized our insights to develop the right products to cater specifically to the needs of each market's adult smokers. For example, in Southeast Asia, we successfully launched two open-system e-vapor product series, RELX Prime and Spin Mini, in the second half of 2024. These new product series have received strong positive feedback in Southeast Asia, reinforcing our belief that localized innovation is a critical driver for long-term growth. We also refined our route-to-market strategy by optimizing our distribution channels based on the specific characteristics of each market. Each market has its own development path, and we have been focusing on enhancing the efficiency of the distribution structure, finding the right partners, and ensuring the product channel fits. Turning now to the market environment and the trends that are emerging for 2025. As we expanded internationally throughout 2024, we encountered regulatory shifts across multiple markets. While these regulatory changes presented challenges, we viewed them as opportunities to strengthen our competitive position. Our ability to anticipate and quickly respond to evolving regulations is a key differentiator supporting our success beyond China. We proactively assess and adapt our strategies to ensure compliance while continuing to meet user demand. We also carefully monitor our existing products and channel inventory levels while building a robust product pool to remain prepared to react to abrupt, unexpected regulatory changes. Looking ahead to 2025, we have observed a slight slowdown in product innovation as the industry enters a more mature stage of development. We believe that going forward, success will be less reliant on blockbuster new products and instead depend on refined and efficient operations, channel development, and product optimization. We are confident that we are well-positioned to thrive in this environment. With our in-house e-liquid development team and production capabilities, we can hone in on key product elements like flavor, taste, and quality control to deliver high-quality products that meet user expectations both domestically and overseas. Before I move on to our financial performance, I am pleased to share that our ESG efforts continue to win recognition from leading global ESG rating agencies in 2024. We received a double-A rating from MSCI, upgraded from a single-A rating. This is the highest MSCI ESG rating in the global tobacco industry, making RLX the highest-scoring company in the global e-cigarette industry for three consecutive years. Driven by our dedication to social responsibility and value creation for all stakeholders, we will remain committed to integrating ESG best practices as we broaden our global footprint. Now, let's move on to our financial results for the fourth quarter and full year of 2024. Please note that, unless otherwise stated, all the financials we present today are in RMB terms. Starting with our top line, on a full-year basis, our revenues were RMB 2.7 billion, growing by an impressive 73.3% year-over-year thanks to our international expansion's success. For the fourth quarter, we achieved revenues of RMB 813.5 million, a 56.3% year-over-year increase. The seasonal impact of the Christmas holiday contributed positively to our quarterly results, as Christmas is traditionally a peak period for retail sales of e-vapor products. Additionally, some of our overseas distributors increased inventory ahead of the Chinese New Year holiday, which further boosted our fourth quarter sales. Turning to profitability, our full-year gross profit margin improved to 26.4% in 2024, marking a 2 percentage point increase. Notably, in the fourth quarter of 2024, our gross profit margin increased by 3.3 percentage points year-over-year to 27.2%. This improvement was primarily due to favorable changes in our revenue mix from international markets and cost optimization initiatives. In 2024, we recorded an operating loss of RMB 107.1 million. However, excluding the impact of stock-based compensation, our non-GAAP operating income for the full year was RMB 262.5 million. For the fourth quarter alone, we achieved a non-GAAP operating profit of RMB 112.6 million, marking a sequential rise for the fifth consecutive quarter and a significant milestone in our return to non-GAAP operating profitability for the full year. Our profitability improvements were primarily driven by incremental contributions from our international business, as well as the operating leverage gained as we scaled our operations in the new markets. Moving forward, we expect further improvement in our non-GAAP operating margin as we scale our business. Additionally, we are carefully managing our headcount in the middle and back office functions as we expand regionally. As a result, we expect our operating expenses to grow more slowly than revenue, which will further enhance our profitability. In terms of cash flow, we achieved an operating cash inflow of RMB 497 million in the fourth quarter of 2024, up from RMB 305 million in the same quarter of the previous year, reflecting our ongoing business growth and improvements in working capital efficiency. As we mentioned on the last call, we are currently experiencing a negative cash conversion cycle. Inventory turnover days stood at 25 days in the fourth quarter of 2024, increased from 16 days in the third quarter of 2024 due to the seasonal impact of the Christmas and the Chinese New Year holidays. Our cash position remains solid. As of December 31, 2024, our total financial assets, including cash and cash equivalents, restricted cash, and various short-term and long-term deposits and investments, stand at RMB 15.9 billion. In 2024, we returned approximately $122.9 million to our shareholders, including approximately $109 million through our share repurchase program and $14 million through cash dividends we announced in November 2024. Supported by our solid fundamentals cash position, we will deepen our commitment to delivering value to our shareholders. Our objective is to return substantially all of our non-GAAP net profits through share repurchase programs and cash dividends. In conclusion, our strategic foresight and disciplined execution helped us navigate external uncertainties and strengthened our brand image among global adult smokers. While some of these efforts may not yield visible results in the short term, we believe their long-term positive impact on our global competitiveness will prove invaluable. As industry concentration continues to increase, our comprehensive industry-leading capabilities position us to capture additional market growth and leverage the category's overall growth to create value for all our stakeholders. This concludes our prepared remarks today. We will now open the call to questions. Operator, please go ahead. We will now begin the question-and-answer session. To ask a question, you may press star, then one, on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. At this time, we will pause momentarily to assemble our roster. The first question comes from Christine Peng with UBS. Please go ahead. Hi. Thank you, management, for the presentation. I have two questions for the management. The first question is about the overseas market expansion. You have shared with us a lot of the initiatives that you have been doing in 2024. Going into 2025, what are the new initiatives you're going to implement to further drive the market share gains in the overseas market? Thanks very much, Christine. Thanks for asking. We designed our product portfolio and business strategies to align with the unique characteristics of each market. On the product side, we analyze local preferences to develop tailored flavor portfolios and product formats. Our in-house e-liquid team specializes in crafting flavors inspired by traditional foods and cultural nuance, ensuring strong resonance with regional tastes. For our route-to-market strategies, we adopt a dynamic approach, continuously reassessing plans to reflect market conditions and distribution channel characteristics. This includes identifying high-potential sales channels, such as convenience stores and vape stores, and focusing resources on the most promising opportunities. We also collaborate with distribution partners who possess deep local knowledge and resources, enabling us to build efficient and robust networks. Data-driven insights play a crucial role in our decision-making. By analyzing market trends and consumer behavior, we ensure our product aligns with local preferences, affordability, and purchasing habits, creating an optimal fit between products and channels. Thank you, management. I have another question. It is regarding the shareholder return. Are there any updates regarding the shareholder return from 2025 and onwards? Thank you very much. I mean, we have also explained that in our opening remarks, we return a significant portion of our non-GAAP net profits to shareholders through share repurchase and cash dividends. As of December last year, we have cumulatively returned $332 million to shareholders, including $305 million through share repurchases and $27 million through dividends. This year, we intend to continue these initiatives, reflecting our commitments to shareholder value. Thank you very much. Thank you. The next question comes from Lydia Ling with Citi. Please go ahead. Hi, management. This is Lydia from Citi. I also have two questions. First, I actually want to follow up on the overseas side. Do you actually share with us your detailed extension plan for this year and any growth rate target for this year? Secondly, I would also like to do you have any could share your insights regarding the industry's product evolution this year? My second question would be on the regulation side. Actually, there are the regulatory uncertainties in overseas markets. It is possible that you could elaborate your views on potential regulatory changes and how would you actually address these challenges. Yeah, any color would be very helpful. Thank you. Thank you very much, Lydia. Regarding our first question, which is about our international expansion, we plan to expand to more countries in 2025, likely in the second half of this year. Several countries in Asia-Pacific and Europe are under our consideration for this expansion. However, the macroeconomic environment, political stability, and regulatory landscapes remain unpredictable. We will make more informed decisions by mid-year based on further developments. Regarding the global industry product revolution, the typical innovation cycle in e-liquid lasts around three years. Between 2020 and 2022, disposable products reshaped the markets, driving growth and transitions within product subcategories. From 2023- 2025, the focus has shifted to high-power innovations, such as steel mesh technology, which enhanced user satisfaction and introduced higher e-liquid volume products. This trend has also driven the decline of average sales price per e-liquid milliliter, particularly as potential bans on disposables in Europe accelerate the transition. We believe 2025 will mark the conclusion of this innovation cycle as the shift to high-power or high-volume products stabilizes. For our company, sales volume in millimeter has grown faster than revenue due to lower average selling price. We expect this trend to normalize by the end of this year or early next year. We anticipate meaningful market share growth in sales volume and moderate revenue growth. Over the medium term, we are confident that these metrics will grow in parallel, supporting sustainable and healthy business growth. Regarding your second question is about the regulatory changes and challenges in our industry. The regulatory landscape varies by region. In Southeast Asia, regulations are becoming more stringent, with clearer definitions that reduce ambiguity for industry players. However, political stability in some countries has created additional uncertainties and delayed approval processes. In Europe, environmental concerns have led to bans on disposable products in countries such as the U.K. and France, while other regulations aim to minimize the appeal of e-liquid products to underage. Additionally, some European nations are introducing tax on e-liquid products. To address these challenges, we proactively evaluate our product portfolio and adjust our strategies to ensure compliance while meeting user demand. By closely monitoring inventory and collaborating with our business partners, we can swiftly adapt to regulatory changes. This agility, combined with our ability to anticipate evolving regulations, strengthens our competitive advantages and positions us for long-term sustainable growth. Thank you for your question. The next question comes from Yun Guo with CITIC. Please go ahead. Thanks, management. This is Yun Guo from CITIC. My question is about product innovation. The open system e-cigarettes benefit from the ban on the disposable e-cigarettes in Europe. What is our opinion for the open system e-cigarettes and how competitive are companies' open system e-cigarette products? Recently, the H&B products are quite popular. Do we plan to do this market? Thank you very much, Guo, for your questions. The first one is on our open system products. We believe the open system e-liquid products will experience stable demand growth in price-sensitive markets where affordability is key. Our product development strategy focuses on five priorities: puff experience, affordability, convenience, user satisfaction, and harm reduction. Our e-liquid open system products, including RELX Prime and RELX Spin Mini, are designed to address affordability and convenience. RELX Prime features added e-liquid storage bottle, significantly extending usage stage time and improving efficiency compared to other products on the market. RELX Spin Mini offers a dual-flavor pod system, catering to local user preferences by providing cost-effective solutions with superior user experiences. These innovations position us as a strong competitor in the open system markets and allow us to meet evolving consumer needs. Regarding H&B products, we observe that the e-liquid industry is growing faster globally than the heat-not-burn products. Heat-not-burn products tend to succeed in developed markets only, with strong purchasing power due to their relatively high cost. Additionally, middle-aged and younger adult smokers prefer e-liquid products for their convenience and overall experience. As a result, we currently have no plans to enter the heat-not-burn markets and will continue prioritizing e-liquid products where we hold a stronger competitive advantage. Thank you for your questions. Very clear. Thank you. Due to time constraints, now I would like to turn the call back over to the company for closing remarks. Thank you once again for joining us today. If you have further questions, please feel free to contact RLX Technology's investor relations team through the contact information provided on our website, or Piacente Financial Communications. This concludes this conference call. You may now disconnect your line. Thank you.