Zepp Health (ZEPP) 17 Mar 222021 Q4 Earnings call transcript

Hello, ladies and gentlemen. Thank you for standing by for ZEPP Health Corporation's Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Investor the of Director Zhang, Relations Company. for Grace go ahead, Grace. Please

and Health And Conference Quarter financial Services issued earlier welcome online. News everyone. are release Corporation's our Call. results press in to company's today Earnings Hello, Wire XXXX ZEPP Fourth via were Year and The posted and operating Full

www.ir.zepp.com today's You can will press Chairman Directors will our call Deng, section and Executive on are Officer, with The call this of earnings Financial company's begin the refer the Chief Huang, and conclude Cheng the of Leon with Chief the IR prepared in and the Board remarks will also management release a view of . and Q&A company's Wang Mr. our website: by call Officer. the we slides Participating visiting which Mr. session.

continue, we Private of discussion Litigation forward-looking statements please the will U.S. contain today's note Provision Act Securities the under Before of Reform Harbor Safe that XXXX.

risks statements and Forward-looking uncertainties. inherent involve

company's over I'll go this most release non-GAAP information. now information, the Mr. XX-F for As Huang. included as and marrows. in Please materially regarding note U.S. directly on risks is call filings uncertainties actual [Indiscernible] as press financial GAAP of today. unaudited different and to this Zepp's reconciliation and company's release company and such, Annual information CEO, the XXXX, expressed and December views discussions the conference as results ended with Zepp's non-GAAP unaudited update Form unaudited the to The under our Report Further of required any filed law. does also GAAP statements, contains fiscal turn Exchange Commission. the call assume obligation except well XX, Securities Please ahead. not as the to the other other include from forward-looking earnings be press may unaudited year comparable financial any that measures

worldwide made markets our we in in for maintained shipments grew our consumer a XXXX you Delta We Omicron face reached XXXX, ship variants. sector. of proud the half during we we as of past as challenging year our significant shortages, [Indiscernible] growth call. our that, are XXXX, well very of as that profitability of revenue and the joining COVID the as this we at quarter second of fitness have first In improving [Indiscernible] macro appear same environment, strategies to health and, coal In despite inception. since RMB dedication our full-year health shipped to time, XXX everyone. lives Hello, self-branded through Thank achievements the technological products advancements. and million devices billion the by management our the our increasing our These cumulatively and users global XX% over our XXX.X reflect

remains of Let our volumes the expansion me global of robust our our overseas our momentum North The sourced with increased products on region over XX% approximately products XXX% internationally. shipment for by year-over-year. American Notably, self-branded progress. expand self-branded

stores QEC. major retail well including sales than As as Target we offline X,XXX enter as more channels

in strategy. the markets, and quarter, to European by specific fourth Italy country's for shipments than XXX% As increased our thanks France to our more

number We X the in market IDC are Adults Smartwatch ranked quarter, fourth now Market XXXX according to data. the

top our among been growing have X the market several Smart recognition and demonstrating the the flourishing for top Watch in in We product global quarters, branded enhanced capability Industry.

portfolio and our to for of devices user to data continue connect enlarge our we in health with grow biometric global we algorithms sensors, AI new technologies, priority Smart footprint, To to technology. mission As we the improve including we remain chips, consumers. health and as work create usage experience steadfast end, to scenarios develop our

will wellness. compose powerful and health improving optimize will sleeping our disorders. designed and AI to service Zepp user's command sleep hygiene, will quality, quality users help launch further to soon Based overall and experience, app, we sleep high AI sleep on example, For to with user algorithms, music an enhance our

services In users playing integral addition, our smart these ecosystem. health algorithms-based an expanding are role in

As end XX active surpassing of to users million Zepp by the Health grow, XXXX. continues user base

smart We industrial our NeuroXX, health bolstered Promaxo detect our critical the to and conditions, exploring our warning technology. segment, quantify our users. future, with imaging and the data, analysis the services, foothold for creating and health our also and business, signs same business data assist need in diseases. plan including are investments them health can in wearable potentially healthcare we to the mission to We into opportunities their help to extensive users In along business certain earlier in our value has a wearable that investments entered these MRI which portable empower in managing which drive to advance smart integrate [Indiscernible] for

business. Now, turning smart to our wearable

process. National products Our first our newly series already Medical and we of launched Administration by GT blood well. one after sold like results review smartwatch number JD currently under in category and which commenced sales. X achieved we They incorporating NMPA expectation both our functionality, are which product exceptionary smartwatches, Ranking in have Products initial in the this measuring terms China, market. exceeded [Indiscernible] immediately and is of have pressure [Indiscernible] [Indiscernible] and

Not our recommended products industry is recognition. and rapidly by [Indiscernible] and are editor's named smartwatch some was also [Indiscernible] the attention our popularity gaining Germany's attracting Magazine. smartwatch only addition, consumer other our In Brigitte

that the For CES awards. PowerBuds example, categories active Pro the innovation an wellness our noise at wireless health honorary and XXXX in received award cancellation Amazfit has

our XXXX in products. far progress Our went hardware beyond

In achievements, in unveiled technology chip Xs terms of our we Huangshan July.

support computing consumption. power UI It's as graphics The first operation and processor, super wearable such core with architecture. intelligence low can artificial calculations power high load performance [Indiscernible]

developers Apple's quarter, OS for of thousands our Which energy countless the the will framework. efficient XX and OS compact We watch of smartwatch system, OS. most also size the education. about the watch mini and Furthermore, one our at as open envision industry's released of Zepp Zepp fourth serves in smart foundation XXXth we operating comprise mini-program megabytes,

will manage their to users Our goal efficiently empower health ecosystem. is and our Zepp more fullest. the to their to lives OS form a enjoy That comprehensive

Our [Indiscernible], many to sell the truthful, over years. milestones been me has achieving impressive

live, rename flip inherit seen, Amazfit users comprehensive app the the of have Zepp them may experience. you The service to app, and services, user Band such as tenths Mi mentioned we to the offer Zepp the As millions more we of live optimize earlier.

I extend integration, further products. to our chips Going as and cloud compared forward, to to the ago. year view Together and Zepp our other to look will services, we Xiaomi reach vertical our our to health and Xiaomi And and be users. the In our Band Band with systems remain algorithms, considerably two launched from we sensors. of and of a the a sales altogether In and own by as capabilities both a live continue smart will health brand XXXX, saying years lead innovation in will build Moreover, we related more recognition pursue app I company X in distribution new future smart part of, along technology lead we stage hardware, also to in healthcare however, all proud to our corporation and outreach sports expanded obstacle, and which working conclude health path challenging I'm the with period. This of as with enhance against Mi and Zepp's this solutions chips, app, comprehensive Incredibly has medical Xiaomi, us meantime, and brand strengthen service, product we scale Today, us our relentlessly will bands operating through and expand team, users. would expected. the and our better we to all Mi subscription forward persevered as like and the of product has to services. made future two-year of offering introduce which users. innovation, very has bringing brand-new backdrop continue a confident our industry our to health excelled technology that to bring our experience stronger.

Lastly, pleased ongoing our our share shareholders continuation ADS their cash to special a US$X.X share per well as to buyback or per for as we of of support thank program. dividend ordinary are US$X.XXX announce the

our turn we the With call to financial quarter to results. as fourth Leon strive value will of that highlights review you our will now who we Thank I term. long the maximize We all. are our over the ' shareholders execute convinced that, will in strategy,

you, to Huang. highlighting some I the development. start that like by would driving Thank of key metrics

revenue full-year RMB, X.XX was in representing growth. billion Wang XXXX revenue our mentioned, X% comparable As

self-branded Our products role our XXXX results. played in an important

impacted our full-year increased chip COVID As our shipments self-branded both of wearable despite of -XX challenges shipments and products. the surging wearables Xiaomi outbreaks which and shortage, by the XX%

supply the cannot that second evolve, improvements the we issues start of XXXX. half fully chain how we're in seeing hopeful Although we'll will predict

have Like of XX.X%. companies, meantime, many ourselves nominal total Mi still of ship billion, by At challenges Total growth. shipments of holiday store smart facing today. one Again, to sustainable, also our of brands, especially in offset our been net and revenue the QX our XX.X% impacted remains global which achieving in the sales. only valued during constrained products. the goal the excited to the market. see was still bad shortages COVID-XX the was share our we unit Xiaomi Xiaomi decrease half but market decrease XXXX, self-branded in closures, we're increase with of While mostly growth decrease time, diversify a in by ranks of persist own this this and Band spread wearable year-over-year services. RMB build number also of shipments representing business dampened decrease expand due long-term partner our with courier our other of ongoing since wide COVID-XX as brand, and was not and also our X.X the offline a external driven band In growth we products. the same our unit many second seasons, in

disrupted parts, semiconductor and example, For customers and China's prioritizing producers chain EV global big to critical January which particularly supply semiconductor many of the lock-down worldwide. Moreover, Shenzhen and shortage auto-industry global chain, product availability, constrained are because the manufacturers. the are and with sales deliveries Jilin supply the our our XXXX

performance, and headwinds. influence I XXXX All of into to our proud have our these products full-year self-branded especially of that light all negatively continues say factors XXXX. of very some these in and we're growth, QX

XXXX. self-branded and in believe will to self-branded our XX% recognition compared in total year enhance revenue We continue as we half gross our products capabilities over products our develop of as momentum profit our further to fiscal as market contributed brands of well over product XX% globally. Our gain XXXX,

gross model product launch cycles, at life affected upgrades. look let's including Now, product which by timing, can and margin, be mix, product

total of gross compared product QX. our of self-branded period mix, profit improvement of points This XXXX fourth-quarter of margin was gross with XXXX. net by a including products XX over basis of the proportion refinements supported same improvement which contributed Our XX.X%, XX% in slight was increasing

controls Turning sales. well absolute while now of will cost to I'm the fuel a have gradually are to mine since terms have third we'll in creativity to costs. it a that with reduce operating numbers, been seen expenses quarter and as to since my balance A trend expenditures joining so That both percentage as company be of carefully of report total we key to XXXX, have time focus in of already Operating XXXX. of a continue this fixed, takes to expenses, focus. portion pleased operating expenses expenses the decreasing QX, growth. in

expenses continue drive profitability. levels order maintain operating at forward, to current we'll in to approximately their costs Going

XXXX. in expenses the terms in period operating absolute XXXX, decreased First-quarter compared slightly with same

XXXX, for increase XX.X% your by This This in expenses up representing such period drive of X.X% XX.X% to wearables, of initiatives of game XX.X% which growth designed at compared X.X% by XXXX. relative quarter brand as of increase compared sales expenses with self-branded were was sales and growth, sales, in to the our and campaign, sales. operating Amazfit with reflects fuel sales marketing driven a of the including percentage global which efforts growth as the building mostly first death our same However, our the in expense during represented compared of the as XX.X% sales This they X.X% but the XXXX, of increased when year-over-year, expenses quarter fourth control we same Furthermore, the R&D fourth in and smartwatches. and and as of G&A taken of down for managed expenses effective more development series period in end, well investing we representing the government our research R&D that GTX sales We're growth, as to well still XXXX, a marketing, as expenses. these have our the for last R&D, the year-over-year, company's balanced carefully of support as quarter To of launch activities, fourth with quarter. the approach X.X% year. recognition certain G&A cost, of in reflects subsidies. to well were

to activities. as of through effective strategy balanced cost year-on-year continue control attributed supporting and operating building of growth, refine expenses brand our this we efforts We'll our to while progress cost G&A Our flat, controlling is XXXX.

look with approved at higher continued RMBXX.X capital was strengthen. deployment leading income sales, remains capital last quarter exacting a well ZEPP million management as part of relative in as selldown due net stake Consequently, lower ratio cash as lower a working Next, for Board improving year equity billion XXXX million our let's XX Health In our program. expenses than to as of RMB practices, up as our XX to which fourth result of to of implementation profit, of business equivalents in XXXX. the share USD partial a to other of attributed strong, as of million electric the income percentage company more working RMB repurchase the toothbrush our in and fourth XX, of Thanks million, the compared XXX to XXXX. December [Indiscernible], also net was RMB quarter XXXX, balance X.XX cash XXXX, to a of of

worth have far, of $X we repurchased So million shares.

as confidence strategy program. this trajectory, in continue with our growth financial we'll our Given

net from announced conservatively. I'd As with Wang chain the a of like to XXXX. guidance chip full-year China's key equivalent challenges XX% first to COVID, guide addressing dividend by our we XX also our to income, to uncertainties and million, us our mentioned earlier, XXXX approximately considerations continue The cash-on-hand. RMB the QX, shortages found current of will finish which in program delivery some cost quarter reflected fresh from resulting for supply lockdowns one-off of

negatively typically first revenue lowest [Indiscernible] In second the wearable QX strong the And anticipation consumer the in season. quarter addition, after sales. new company from quarter off products our Xiaomi's perspective, the impact of may a holiday seasonality generates the for

well conflict Given the seasonality the and as surrounding I issues, supply uncertainties and chain the mentioned, Russia already Ukraine. as between

the currently between for of expect first quarter X and of 'XX, XXXX. billion be RMB RMB X.XX For first revenues billion, the we with compared to billion net X.XX quarter RMB

all our customer prepared This the strict based this and into and to on now questions. is Operator, change. market estimates conditions apply call of which and ahead. the continue control XXXX. company's current we That measures management's conditions open to demand, Given will preliminary reflects outlook, will cost our current outlook please XXXX go to market and are subject operating concludes remarks,

session. will now We begin Instructions]. the question-and-answer [Operator

call, the Chinese, the wish to For benefit you to question if English. will of all to your your management in assemble we roster. participants time, momentarily this repeat please pause on in At our company's today's immediately ask question

(ph) from ahead. The Please go Yalin first is Lou question TNA of Securities.

quarter. management. you I taking questions. my Hi for And two Thank fourth have question. for congratulations

this over gross courage see shortage, your in bases We about the shortage we our shares chip any your this on decrease think beginning my about and your quarter, about Firstly, chip beyond affected you in-house margin. since you. on about gross by gross any chip, thank I of year, margin company's view the isn't shortage know margin expectation, increased can some year, gross function margin impact progress driven product the semiconductor year

Yes. No, you for the thank question.

around on our average On which the towards gross answer twice gross Xiaomi of I proactively will and we while points. products products, on also changed of self-branded you continue self-branded at is mix Number focused year and self-branded half XXXX. actually XXXX, margin the XXXX, hovering products then end is carriers right? X, So, we we're into products. margin grow the we mix have half if proportionately more Xiaomi XX% the our products to we trend actually which to towards the look if of And skewed sell the think, branded XX% the

previous we which on a But So ahead margin with overall mix impact as material because the question inventory to on impact much of in risk Coming gross to of announced we didn't that buys has materialize, gross too quarters short a change, the risk get also it. shortage, see on an of the your our the back then that term, because have you certain this level. the on chip did by improvement of situation we mid margin.

progress progressing two to -- the twice the well On our chip, is is according function very schedule.

watch we're this this that And ITO we time, year, the as we're same which to X then later out will our license So as to product get launch to also of and you that this products licensing also the profit also Huangshan deal introduction, to variety a well. Chinese going variant there will Huangshan because of year in chip to bigger certain are the certain chip. flagship we're at a going new them, investments, X a through license makers which going carry of

gross Xiaomi brand gross Okay. margin this better margin, sales follow-up question A quarter? [Indiscernible] is about mix boast your your products and decreased product is but to

think I for A gross plus years, targeting read news right? something cost like actually a 's margin the by you quite right? company Xiaomi something of is few the a has probably has trend Xiaomi margin phase our X%, Xiaomi decreasing gross the for that, been has So, a actually type percentage self-branded also teens, the number So gross been hold that strong up is like that margin that. decreased low over point, and quarter-over-quarter But one in year. and that

about The your And my strategy. global second Okay. year. more this is environment is marketing question uncertain

in in this marketing your to what's global -- strategy this environment. So changes year

do but and the in short risk Russia earnings I also mentioned answer to think the of we which So, our situation, no, is Ukraine see it we call.

into war and can be our revenue, total around other stand take And self-branded are XXXX down sales, X% small to that portion as this in drag of two, China all Ukraine, share to per Ukraine's revenue, those actually a we're year year to strong we basis, if of for our our because so that that mid-terms in full Russia and risk. than our of need right? only have slightly definitely But se. stands impact or overseas we I for products So and mix. the risk, tech overall continues manage the But revenue on for we they honest, short manage, will neighborhood still Russia if majority We our market countries. have China a an different company, a think

end, in is actually marketing and also Russia foothold strong will and which So, a strategy our didn't Western to continue States apart Ukraine, grow. that and to Europe, United our that from of revenue, change,

Thank you. Okay.

you. Thank

Okay. [Operator Instructions]. The next Please question Kevin is Ren. go Chen China from of ahead.

is management, series. taking questions. I just hi. is condition I it sales lagging X how you, two feedback do, my it better matching wondering and sales regarding behind. Number the will for launched up And newly be or the Hello, how GT is expectations, your than Thank have so and expected question. your to one tracking. far slightly general was

Kevin. Thank questions. you for your

Wang on markets overseas China earlier, reviews lot a mentioned and it's And successful this in received very in as for actually Now, we product. a good of GTX product.

disruptions think we're So, still also We're margin month to if have expectation, I bit a longer a only are help the China, And ASP we improve will that if through a company. [Indiscernible] we little product chip But But in own for success, in our our think I the us little And a but do see more. really we problem. that probably more you've big is also, we much supply that also logistic in ask also challenges bit we the you the by logistics launch is the also gross And continues QX. heard GTX. success. little of our compare to the we, the further shortage a market. the our me, actually I against having in, COVID product hurt can and QX. that room in a the GTX, big with overseas not not expectations, in think if bit own the Compare problem you, GTX QX, we're run, much, internal a think lift of into

you. Thank Right.

quick Just follow-up. a

expectation the being use. series for for that for guess -- China's qualification this more I think application Chairman medical I kind review previously, GTX the I of just just is was mentioned enable might review is obtained an under just wondering, NMPA, Series? of for the new approximate with GT how this do we timeline business this and we opportunities turn of kind this have approval of our in out, once

sure. for Yes,

not think the what also European only I it for the U.S., market Chinese also market, we we're also and right. it doing we're for for that mentioned, doing

actually at at geographies the same we're So multiple time. certification the doing

to GT our very competitors, So related blood pressure X we think unique our blood which that actually compared is with elegant right. your -- have it's you which pressure, using the movement, watch, and measure solution a

So, it's and yes, a shorter much software either there's going the algorithms it's to for Chinese think timeline example, be to going because be going review, I to certification.

too longer, peers. So those be then we get of little expect that for and And that able might versus whilst [Indiscernible] a year. also new by to approval somewhere unique this review us longer. And point bit should course will the selling should offering in much FDA we sure the obtain take new and services, but the not be a CE give certifications, then

right to My the think market the Ukraine good as European previously regarding hear. it. in Russia situation That's I and you now. second I question is hope, Got Okay. right mentioned because we about are we in was just rest Europe. now wondering demand of more the any for just a consumer of markets, for logistical changes these or see what facing issue Do you

think I very for Ukraine, no, apart Russia and markets. growth European seeing healthy Western the we're from actually Yeah a

foothold expanding fast Czech soon. very the UK, Nordics, countries Poland, like actually Eastern strong in Italy to So to Europe activities, offerings as Spain, at and example, we needless Germany, like more we which exciting for grow that launch [Indiscernible], Europe we're we market we very outdoor in for which Republic, of as very be are still product of that like Western to are have say, Europe well product going targeting we already leader and different going there's and sports us a countries to because are in many think lot offerings in have potential

this of now. with introductions, able European market our what even new So new hopefully than product it to bigger is mix we're grow

very Thank you, Thank clear. you. Right.

is of Credit question next go The Chong Suisse, ahead. from please Clive

thank specifically we Xiaomi. I levers see of question -- on continue get the shipments. Obviously, is a first Xiaomi of My taking first this management is is to downtrend That's your on kind in previous question. bring my of just that view Xiaomi to new the management question. terms cycle previous there shipment Do the our my of end bit you. to of shipments. sense of Trying to going type -- is question Thank on a with driving driver a of or for types And the on product the do and with of the or kind could and get longer? you of the part see could there volume that products. cycle risks variation is little to you think back extension extending current slowdown it years us product a be the product just the a that that second products, we is discussion, sense, replacement

Okay.

on let me just Xiaomi relationship. the First, comment

sign period. Xiaomi the contract we years. You just every the new know last that three three-year And year, actually we then renewed

them, right. we And the band Xiaomi the with Xiaomi working with is with actually different beyond co-operations different and have strong. the algorithms which also very So we're relationship

co-operations a we lot of Xiaomi. as shareholder with have big us and a stays Xiaomi So of

guarantee the I can thing that's first you. So

I I products, new this Xiaomi the touched think point. On

Band form I been to That's it's already. yes, But at think on looking market think, the as But the mentioned also new for form you Xiaomi and of too this the mentioned we me, I on with market as the share on flat declined name and we're drive slightly you cannot of factor. we that the to the out are market for XX%, in the want quarters is here that what wearable, release Band already. announcements [Indiscernible] feeling decline That I is. in a it say flatten actually have what of published If much, hoped it. forgive by to coming the more what as as I And as a market competitor, We be also much and relationship more market. than few then now. we or the I going few is for and And has Band what coming a situation same life, all still read different change slide for Xiaomi We the the to which chips sales the stay felt factor band. give hope crushing So other overall going at and Mi Xiaomi that Xiaomi maybe for on overall it time, further the well at decline, as this but specific we the it and back market explore band mentioned products. the right? well definitely use yes. for. continue band type over earnings is which yesterday far you algorithms would well into see quarters for That's I every

chipsets, research it prior going research elevated does key healthcare your in on or of a advantages down down those was of Obviously, kind and Yes, is little think developing this that very R&D. or years levels. -- was second as competitive key -- would kind And does in do toning you fact, bit turned of it the is revenue. to -- impact because my Thank have forward much. just ask the it you question is advantages obviously, like does. of And a you percentage I one and in in you. or Thank

this linked product out type new QX GTX introduction quarter rich example, one as years has quarter, R&D have very products, QX in expenses R&D released well, yes, was have of And new cadence, think too we you I was in new pushed have was XXXX that which think our that a into the of we I But than QX, launch is product the in much only introduction high. our for we different product new right? -- extremely we when different much XXXX. didn't seems very

R&D the So hand, investment expenses the But also at that's return on developments. do look why on year. other same also period compared the last we relatively is and lower by asked nature, on R&D the with team to also

of then and we modernization, more the in activities to approach doing the our mega are becomes everything, end do effectively. waste, of and prioritizing a R&D the activities instead more plus type it R&D So using

whereby time a company, we as one the is of G&A can keep we whole the control. while highest also that keeping if that sales and at expenses of R&D percentage same for main the the because it's by year, actually levers sales, expenses. overall line actually R&D if on among cost then you for the But So, company the a sales of as pull advantage competitive under actually as the think far divided by a our I the driven selling stay percentage expenses you R&D expenses our

XX:XX:XX] So, up you still in still roughly to versus [indiscernible it's X% around it a to and if the be R&D I the companies. on think different going we we're pull quarters. spending of although activities, down sales other have X% that But line,

more capacity the actually our on the some question been first COVID in any I was fourth-quarter week, that? Okay. been impact recent or manufacturing just have given I you much. the if Thank on to in has wondering there there very quarter had impact. one forward-looking related,

sharp very you're this. course of on No Yes.

right? Now actually in actually the lot So European supply guided our down uncertainties lot we offline results, example, And create relatively then all logistics the Kong. supply lock world, countries of in that negatively way, originally nightmare so on impacted plays dampened In the on what other weaker nightmares a QX for in into our lock-down in in and especially of guide our for our conservative right? chain. of so of the logistic right? a sudden our than Talk with was we then That anticipated, in right? through also one lot all holiday post and a is that's the we hand, the into company, number, seasons, logistics Kong and the numbers around Because, the guidance COVID, sudden COVID the number our ourselves everywhere why And also the Hong also QX, also stopped. of very chain team, actually actually and a reasons QX other route lot channels, why why sales a goes posed a for Chinese to a Shenzhen that's lower challenge export And Hong to from Shenzhen right? QX. all kind flow as of

market. policy as bit definitely I better should if half manufacturing And this COVID more and a other in then an looking the think ways the little obviously it chain into team supply in different overseas more our second and supply for guidance this much was has some time chain in look we impact forward. be year. takes have actually our China also and for yes, QX, this now, But said, entered situation. to But is conservativeness that resolve us. - we of the But on zero situation COVID disrupted QX going the past, as at So played definitely the I the would

you. Thank Thank you Very much. very clear.

The next question is of Citi. from ahead. Please go Andre Lin

follow-up challenge. I you taking on have previous chain-related questions. mentioned a Thank question. there's my supply for a semiconductor the And you And question supply

how is challenge the expect you year So can situation do all going will a and us this give the semiconductor or next resolved year? you when be color supply on

two, of And hand, half should a commitments, types, did we now. product I after you month the or that's semiconductor more that is certain their and then chips serious. see We think much have that prioritizing better second very be the players. QX, earlier. in was or what think of right And than certain QX risk certain towards script on we the buys lot we I also a issue. did I chips. a companies situation it the on think -- are I But mentioned into XXXX, we're have other then going EV putting don't will the shortage resolved

So that well. certain have QX impact will into as

supply the to onwards, the reserved demand current it of extent. the May end rather much more constrained on situation. should QX, base this be so we're have than situation looks from like a So But information by by by hand, out I

the guidance quarter or you. [Indiscernible]. is on you a [Indiscernible] Thank revenue And us first guidance. on top regarding bit That's follow-up the of the more for question the color [Indiscernible] shipment give I have Can sales a UK?

of are in No, a way. so conservative a guided lot really a by difficult hurt we no, -- so it's this uncertainties in QX, very we That's quarter. why

lockdown okay, issues. also give trying range we're this, if is although this see that is guidance. There XX I of logistics the seven few you or even for a a giving wider what before, think the Nobody I Number stopped, and days, is manufacturing of they of seven But companies to still range. days. one stopped. a XX But going into upcoming to are Shenzhen of stop a because knows. a range lockdown, much continue lot because mentioned the that days

Hong at You the Kong. We're ways. other export cannot into looking even products

of But of quarter, through into one and QX, outlook would initial example, to have for impact that China, a moments in going quarter quarter, the the been overall the towards February we have have end Tianjin actually relatively the to a pickup, QX then would last sales, of first of the to XX depends Russia lost about talking so And second, if else. on our Russia the is luckily think into were sales average have and out XXX that million as months so million and sales, X.X X, the because it X% we place mentioned the issued. month cutting is the and every Number For the start weeks we slow production outlook the somewhere us has right? the actually, definitely for I the always out exports ruble that's Ukraine etc. which biggest around shipping everything -- of the And out because conservative situation, placed but kind Ukraine actually shipment of we been quarter, two of products on your husks, negative I in always QX. and not the depreciation of

in So, and ways, situation, apple-to-apple can into at we not Russia. look the you moment the to the different out continue actually, impact comparison, sell whether trying we're need on Russia although Ukraine or to same into to strip sudden

the many explained mentioned the it's ship shortage, and I one, as just third think times. I

I the the to So here. days If these number can we to be days seven lock-down so probably only I middle. But three which just and factors color or into Shenzhen the put can in think I range. end guidance kind of more up even manage we'll played the not, you. continue the That's think high-end out will within shipment, export the if give much we're the towards of seven we probably

That's very you. questions. no Thank clear. much. more have very Thank you I

questions remarks. there now, the are to the turn to no further back like closing company As call over for I'd

us Thank for again joining you. Once today.

If information department website you the consult. the Investor free please on provided the Pearson Relations company's or feel you. questions, contact our further the to have group, Relations through contact Thank Investor

concludes conference This the call.

may your line. Thank You disconnect you. now