Zepp Health (ZEPP) 24 May 222022 Q1 Earnings call transcript

Hello, ladies and gentlemen. Thank you for standing by, for Zepp Health Corp's First Quarter 2022 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

were Health and company's quarter results and press are welcome earlier everyone Wire Corporation's via financial in News release to operating posted The Hello, today call. Zepp first Services our conference XXXX and online. issued earnings

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

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

inherent and uncertainties. Forward-looking statements involve risks

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

you have been challenging, Against our a that geopolitical Thank We The jobs, representing compounded aligned everyone. ongoing with last revenue by year-over-year. for in call. XX% alert. first came Hello, our achieved joining pleased billion are quarter given we the pandemic, COVID-XX these in our decrease that several RMBX.X guidance. of bad months revenue,

Band by the X affected was spending. reduced shipments, for in waiting discretionary as well revenue Band are Our Mi as Mi launch, decrease the new consumers as generation

pleased conditions. (ph) logistic continues health the their and the further As products market. expand products, appeal sales sales now our overseas cut revenue. for control supply health however focus with typically other lockdowns consumers quarter. back our we to largely once manage as to effectively, impacted channels, total see interruptions than also To of with pandemic the and continue our broad amidst shift we China, them restrictions in help deepen outlets out and inflationary on more the technology, revenue We towards self-branded the as again measures these lifestyles partnerships XX% of due demonstrates of users which due contributes been mix to first headwinds, retail This build part first enhance to connecting highlight to our our and and all we chain should environment, a also in has were to our that that also slow Besides seasonality. quarter quarter prevention our

people's by also daily and lifestyle part with smart by products operations, a lives. despite revenue XXX% performance to surged care As services of are our North supported transforming more where achievements evolution, saw testament the a in successful only region, strong but our uncertainties, particularly to result, are year-over-year. self-branded health These challenges we than not devices, wearables American we own

the We to our devices provide undeniable growth. wearable benefits tailwinds continued other and software, to of future hardware with innovations in expect coupled sensors, smart

be we mega preparing enhance view we market watches. established our income year, series as have To big among (ph) power will have end, style and a this sport passing health which comprehensive our and basic our dimensional watch product product AI As popular sensors incorporate and These our our in-house to are our to smart enhancements most realize health Later the algorithm Today, this leader technology trend, help relentlessly newcomers in users launched strive (ph) of upgraded our we we to fitness into enhanced T-Rex to been harness product X, designs system, their next we devices also we frequency and and working to to generation upgrade goals. that outdoor unveil plus, and related ableism others. lines. BIP GPS. GTS meaningful GTR this both data, functionalities,

continuously we existing user new Additionally, upgrade to and enhance add experience. features products to our

firmware as downloads stability. series out rolled GTR X the alarm (ph) late a calls, and X ipsum for well (ph) in automatization future, we text GTS and fitness a devices and clock for incoming added as April for Amazfit example, update systems function For music

hearing with One smart professionals our come guided made more and want our others first, Zepp to possible notice. Clarity than adjustable, fruitful. supporting and for not experience We customer hearing at and offers Xiaomi for best-in-class, to healthcare ensure with the audiology comfortable, Last discrete aid devices. continues also device also the a inroads grade meaningful this best don't exploration those Notably users. by to least, and be It Zepp in collaboration of Clarity but this industry, launched those especially, the recently product loss in One who product for first medical the invisible our line,

we launched look forward journey of of one and X step successes line to taking Just and past today, product further. Mi on previous powerful we this building the Band generations the its

community. Together should Zepp that first and China, and can innovation health improve OS with user launched committed our students remain through innovation the people's we Science contest. wearables develop technology, to of continue we health collaboration drive apps both University by we with technology and habit. of devices to universities our health management engaging campus As smart Inspiring with connecting Technology technological

with collaborate also OS worldwide and will theory Caltech on Zepp healthy values Zepp to and by The ecosystem. our UC, users wellness we to here their call We at help users to manage design health continue hold join our that event choices. lives encourage their their better Berkeley

our has vibrant progress flourishing economy macro are Our globally amidst Zepp is to inclusive and than making ecosystem design conclude, to our developed and OS on user Contributing we basis community watch the more innovative that To apps ever. platform. uncertainties. drawn

product the challenges. capture expansion. on focusing opportunities AI well and Data to industry in (ph) supply invest innovation by conflicts Despite that portfolio Big logistic enormous pandemic and healthcare and from short-term services chain impact Going forward, we as will resurgence the associate continue technological in the as geopolitical Health in and ableism our chips,

prospects will are to our over With Zepp’s call long-term as remain about results. turn now needs over the while excited our we tomorrow, users financial to shaping that, We technologies today. of first of highlights very Leon the go the quarter I dedicate of meeting to

I by development. the to Wang. Zepp’s metrics would start of you, highlighting driving some Thank like key

packed mostly have XXXX, March within March deliveries conditions and our this in into have been creating to briefly performance. in is confidence, to these to issues further Despite also slowdown our compared XXXX, to ongoing in is addition on team paying our are and in a turbulence The sales driven these light headwinds our details products the against our XXXX, continue of the up all we very alternative faced, to Separately, notably and that ongoing has interrupted inflation which Shenzhen constrained to and shortages route would which than in also pandemic-related elaborate on so to seeking I I headwinds. performance, continues on XXXX global supply constrain proud say hard providing chip generated adverse QX. QX. to macro the resolve overall availability chain and lockdowns difficult range decrease impact by gross conflict situation. consumer in we margin. supply Tianjin shortage in consumer down shaping Moreover, the our some albeit very revenues and in between These and had macro parts, the meantime to the our weighed guidance of product a impact far our was have results decrease through Kong QX geopolitical all vital our self-branded cost of Russia working supply escalating a global performance, reported with the our Before semiconductor the in restrictions Furthermore, QX spending. XXXX XXXX like the down Delta in disruptions discretionary financial among we to chain, Ukraine sales. of year challenges. the our led self-branded the revenue was factors our River product. environment Income again our in supply QX Together, strife of ongoing Hong especially QX significant solutions China's affected export our COVID-XX growth countries, In since Shenzhen chain revenue Band billion chain RMBX.X our worldwide. early Mi has environment, Yangtze with XX% be

enhance we will contributed total further the self-branded momentum our quarter. gain We Our capabilities revenue continue recognition and believe the of our brands XX% globally. market products self-branded products of as our product develop over to

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

while mix, fourth XXXX. quarter margin The mostly of the increased supported year XXXX the was by an and Our gross was sell-branded with last the affected to pandemic QX XX.X% XX.X% in refinements products. lower for quarter costs first of our freight of improvement compared margin was quarter the product gross XXXX increase for versus XXXX, XX.X% proportion versus by and including a first

sales. been focal gradually absolute as both Turning now a as in A terms are a fixed, has costs, to it time which point expenses amount of Mi, these reduce of and of of so creativity percentage well operating expenses. to takes portion key

expenditures While already growth, we expenses QX seen a I'm we since decreasing controls have that have to with to total pleased cost carefully operating balance the trend fuel our report in to XXXX.

continue in a growth profitable following in forward, to deliver our order level, operating current from the to quarters. Going their we'll right-size expenses

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

with was sales, during of lower compared the they a mostly were XX.X% XXXX, quarter percentage of sales. when driven which XX.X% operating increase represented expenses first topline. at the However, of by This

period XXXX, first revenue decrease XX.X% of year-over-year, revenue, overseas local in same due X.X% explained RMBXXX.X protect revenue Hence, levels controls. R&D the QX X.X% was and advertising revenue effective year-over-year, XX.X% compared same self-branded above, RMBXX.X markets. product and were serve the XXXX year. Given the largely the controls. higher the given for of last streamlining million low RMBXXX.X with expenses of though quarter of were QX and expenses of reflects of just lower mainly XX.X% XX.X% I comprising to million period to spending R&D selling increase XX.X% G&A of increase in to XXXX, accounted research to costs effective same for comprised due absolute decrease spending compared may expenses promotions we’re representing The the revenue year-over-year, the personnels with of million, the XX.X% a for terms on period in headwinds, sales consistently in and cost XXXX. XXXX future versus a It of in for profitability. X.X% our marketing the

adjusted income, quarter with for the loss net loss compared RMBXX.X million of first first of of XXXX the saw XXXX. Regarding net of RMBXX.X quarter adjusted net million

balance Now to sheet. turning

versus grow the XX, QX inventories our our Shenzhen December March, component by As hence XXXX. key million lockdown in RMBXXX.X XXXX impeded supply, production, in

robust. In cash the continue XX, chip circumstances, as billion the with of will our $XX XX, the In ease sheet optimistic shortage up equivalents of RMBX.XX RMBX.XX remains start of the QX half balance strategy a this our disciplined program. XXXX, allocation working reflecting and supply year. despite and issues are share our the toward program March approved XXXX, as We to chain in second March as XXXX, XXXX we to was And confidence November of over compared and in the practices. billion challenging we Board implement million continue financial capital performance. management growth to repurchase repurchase Cash

bought to program. and shares have of on XX, this $X.X carry million XXXX buyback March We worth until with intend back

out paid XXXX to on for company special the XX, addition, dividends holders In ADS April the XXXX.

to quarter RMBX.XX the the Due second billion XXXX the net Lastly, our moving for quarter outlook. outlook with to to challenges, projects revenue XXXX. of of billion RMBX.X our currently in billion, be ongoing and compared second RMBX.XX between

by the driven Band was effects while uncertainty much sales May on quarter well Mi March X product as also reflects Mi is performance in discretionary today This launched second and The lower X outlook the the pandemic new of the spending. as of Band delays launch component very potential XX, XXXX. timing, consumer XXXX, as COVID-XX continued launched electric

outlook, operating we'll the customer to working go preliminary note which estimates outlook well Please the disciplined conditions to and and on This ahead. control as all measures through concludes reflects and management's existing this cost please market current We'll Operator, questions. is Given subject as XXXX. conditions, our open remarks. continue prepared the apply capital of strict are now to demand, call market based that and management our change.

will from We session. Jan will now with Lu come begin the Instructions] Securities. first Our question (ph) PS question-and-answer [Operator

You may now go ahead.

and for taking my for first quarter. you you. Thank question, Thank congratulations

some to return, share Thank impact that very COVID seriously impact the found mean you. I view the I and the customer? can supply operation chain you in of First clarify? COVID about about your (ph) Shanghai and that is all,

Thank of Shanghai Yangtze China right, versus The Yeah. the out are much. of because River Shenzhen us area, very in is factories mentioned. just based the most those which chain you of Delta small than supply and on -- our impact rather I relatively impact to

Shanghai limited this However, is we factories kind our in for region. of Suzhou, creating a which some or for in products actually -- us making factory was Since impact -- company the constrained in the do our as well. one lockdown for of as is have with Shanghai, relatively new to our

However, Shanghai cities China two the for who among well right dampens purchasing the is -- a the things in obviously Shanghai. try sales that as lot for will as lockdown across to who sales so Shanghai regions, there of we of watches, outlook compensate in our QX products in are -- one top the China, shortfall promote consumers for was different however, our our and QX we But could our in China. months

Thank question you. by in see a some markets. And development global And chain, there that is emerging even food the so partly, the price market Okay. still second day. day (ph) glad I is political that we rise changes

the electronics market and year? do of in smart consumer So how forecasted you the watch part next market the

also income So, and Ukraine, specific good do in question. there in yeah, discretionary do is extent in script few notice some that income like in to we the it's I very markets We and see the some We a that and see much do a see a we inflation, markets which on also slowdown consumer by States. Russia issues, mentioned Europe slowdown all United is that people's as the right. squeezed discretionary

over our is others, discretionary States of But, there taking however, also performing consumers. parts than on for in of also the degree we certain better actually brands decrease overall, certain some Europe, the the right. United So from a in interesting signs, a see we’re other example, brands spend and

our QX see as us in you for come. a and if fluid smart very have, market still QX have overall to insights a this the and still the in the number is number from our on which doesn't look in can our is of we have new growth growth product XXXX the guidance, revenue we better at moment to the picture or already with see we years is at that the QX level, should high market you do launches the they are much probably future than report, with at to whole pointing the growth even our which we So similar hopes of together then, a at that time, in to reflect this latest of early level year still least the QX IDC predict. single-digit very But, -- that extent. least all to as And watch

we're the So which as about relatively well. wearables operated optimistic in still we market

Okay. Thank you.

you. Thank

next Kevin Our Chen from question come with China Renaissance. will

go You ahead. may now

brand or and to contribution? And it this revenue down for characterize do driven outlook. to you’d Xiaomi rest this your congratulation management growth, a pointing for we also you, Mi I own rebound as Q-on-Q upcoming mostly product the strong the my I a and was XX% the you guidance as results. you. very question, XQ, Since Brand the Thank product your only well? new regarding going related which by see how good year? quarter, question think this trend our taking Thank Hi. that have how past see about forward the for on do it's of

Yeah, Kevin. Good question.

very a is to product on So launch as the in quarterly is the linked and the -- quarter-on-quarter I rebound already outlook, time. number much on QX pointing said, our new strong

I year fact can Band QX, only you this X, will as the in launch and Xiaomi now, was year, which year, last the June for actually then launched account the a last had selling just March quarter, said X. per time Mi was As and but now start was full in we new X

only instead product So whole months of for account for we new the the sales count quarter.

together the of continue your So year self-branded year actually sales. the question regarding that number explain would kind products sales one this between think, our I the QX Xiaomi. revenue, grow versus QX with Xiaomi to On mix difference last in

So level July increase would increase that versus Xiaomi current definitely in revenue quarters, into and would August. the would outgoing and we expect that also the go

the mention in new going scheduled new launch launched QX. be we new watches not and It's as to his and So Mix, and basically, as to are June our products. we Wang also going Xiaomi POP and to because going very are which GTS today script product in much our going on the QX. our to to launched it's mentioned in BIP -- And T-Rex obviously it's grow, then be also in that QX self-branded to well series

skewed so QX kind is more launch also creates outlook on So last earlier some right. bit our mismatch year. year. it actually year for the our June for of products this and self-branded rather towards then, sales time in a than was All that QX, And revenue the little

that just is, year same for will be the -- products for should quarters, a in year in company or course, I'm least products we're in the our full And QX, proportional between So at self-branded overall I I question this revenue looking answers single-digit a our full mentioned QX, mix at But versus of the level in what XXXX revenue coming on -- think overall the in bigger still on that well, the saying will a weight growth. amount previous number. of Xiaomi’s basis, absolute QX, as with self-branded and Xiaomi a sure in see ourselves. mix you of take mix increase the

gives hope I the you for year. that outlook on So the some flavor

clear. year? due question regarding or ASP product I Very are would own products. brand of you. a kind have this upgrade And focusing the second profitability our Right. margin Thank to our upgrades? change new this expect you these we on how Also functional What wise

Okay.

answer think that consumer That's takes, have for different products, on self-branded of product products product self-branded to this increase let trend on of me cater ones. continue, to we we the QX and should know ASP right. part. we the of to I products our this And easy the the an lineup see year try want right. so the different as ASP, QX kind definitely increase then from Now, to year you Obviously, and do last see self-branded

product of sports outdoor T-Rex the very for right. X much accuracy hardcore and newly on outdoor. focusing And activities, GPS a and the example, is For the launched example,

products. and Samsung be actually competitive of to and Apple have kind POP mass, the price a to QX which is the the the of series, very our have of to which with these launch theory, We address white-labeled While of demand our to which users going end, which much BIP and Watch the on product bigger focus we're sensitive much very all our then the one which is the and do in much and is compete watch. are to very those very potentially towards low who for value we creating level so-called entry March watch products, biggest going is used are GT

mentioned going have So update, of And different different we I would product us you year -- most lineup the it different the are more using launched more think we trying make consumers. is from from, year consumers. will to script That's apps, also we standby Both appealing et we're be specs this we're have and of ecosystem see OS that number are is our coming SpOX last and feature appeal And update that's from the come the as to Zepp and I which going which house creating we functions, before, it's the think our one. cetera. definitely sure battery, screen, and pressure of for to the the And cetera, upgrade OS, watches. from have, be (ph) it which to Zepp our on et the measurements the our third from time going blood watch. other one based in to to essentially

So those self-branded our ASP is lift products. for going three to our hopefully

Thank Leon. you, Thank Okay. you.

next from will Credit Our with Clive question Suisse. Cheung come

go now ahead. may You

Hi. Good taking my question. you for and thank evening,

The now Leon’s is comment expansion on follow-up to first OS. Zepp a question in just

was of could Zepp or I challenging macro environment demonetization at accelerate think OS. given least. shipments I we see shipment to slowdown in decline looking in and the growth being

app OpEx. second question is application or That's In offerings? offering new question. terms of, on my My first the

target we of approximately and in of achieving quarter. or think OpEx I terms RMBXXX kind million, previously have of take, give a per

any lower on this year, color for have of Given or this OpEx? any you. the or slower of do target amount we level a Thank revenue planning

Thank I now. are very good those you, questions mean Clive.

compared our the the apps that inside which Zepp are So OS going add not Spotify, working you amount. and music products going for services, going certain we helping example We're users. make of which actually factors by is help focusing have third-party went to going users we quality. example being we which then and those mere amount different that noticed better popular and the the OS are GoPro we sleep together OS demonetization. of we a QX we're let one to it last actually the have OS are of on actually the for to more, appreciated right. as type year, which sure, And for the the we few you we actually of a actually more of actually others, Zepp comment Yes, with our probably Zepp is services, for small actually differentiating trying me just And first sleep handful countries which for in the We're for -- online have by do to AI-powered focus that and hardware the in to as connecting of right. functionality, with more speak, speak out we're type rolling geographies announced

and to Zepp we widen definitely OS. would of link popular third-party and actually towards try obviously, So our OS Zepp more the use apps build to try

people actually because on trying question. in goes before the lot is your certain million a to I OpEx, doing right. this we a cost right-size then, the little move our first year, past we're our quarter, step level year. may answers might cost actually of more, -- a rightsizing going actually linked first on In we're you take, you mean you all that if And Even million, below same way to step quarter, into quarter that We're actually are down our line base. right. our the cost incur the you allow always a been per And people, OpEx topline the average, want for need RMBXXX would of or but as this well, team this threshold. hopefully but we change bit then make and hovering that spend to quarters cost to So for last see is has the above $XXX and speak. of per you to as if right, around a signaling the the give take

you for So in able would step should onwards. the still see but to a a million from QX down of kind cost, similar QX, be mark probably then see you RMBXXX

rebound can achieve once level, a comes cost upside the so we On amount and the back. that the capture

If think use level, reported you're guidance can current for would XX% time of I big we its that XX% which to you a down looking on being, step range for a the how QX. in versus be,

Okay. very Thanks, Very Leon. Thank much. you clear.

[Operator from Instructions] question Templeton. Abhishek come with will Sahoo next Our

You ahead. may now go

for taking my Yeah. Hi. Thanks question.

the first on the in the mix have So question I current is is, quarter.

in the So Amazfit? growth in you how the coming is quarters, -- expect going that growth the of seeing Amazfit kind would you're to in what forward what And products? sustain

Yeah.

So mean, Abhishek, question. I good very

So end having the QX number script, slow consumers. seasonality a I mentioned this we're of is is quarter demand And because QX year from the a perspective, for in and also also lowest there as a QX, Shenzhen kind of a the of, whereby quarter in the the actually lockdown our quarter. is perfect and week then a towards storm there is Ukraine Russia, of for the calculate factory kind

for only self-branded products. revenue but together, the on ones, all compounded it's not kind hammered Xiaomi of QX, more So our so our that’s

which of outlook right. have look already see actually should but all a reported the effect, if we maybe you least positive than a on should versus out that the QX, supply a that decline, for double-digit So that And ease growth impact not this be the all it if I our year, chain, we growth all self-branded at strip at the at and continue us. to products you year, we grow which say reported in lockdown would obviously, China, rate, kind last

to on with it's So working self-branded to number want the that overall. be change that year bigger not than QX, products, sure, is or product for towards. going something, year still going whether which I for full par we're be is sure for we the last for but the self-branded mix think to the then sales And

revenue previous company's all So still from basically, from the single-digit coming self-branded XXXX towards moment analyst, be a that, be to in at that overall or growth, an amount right. answers flat versus in will for absolute as perspective looking products time, small I will the least this at And with at mentioned we're our other all achieve year. growth the

sales think what QX, I you which would color QX the giving the gives the hope So quarters and for as to mix as lowest, you which QX Double will is be seasons, the Christmas QX. make the Day this sales then QX year. a will year, Prime seasonality high improving, the look for that perspective, revenue for be that’s growth you from and and traditionally at well and in is also I XX QX and a going are the gradually see how that

related products. favor Leon. the shift self-branded point Thanks. And a while of mix to just on also in Thanks, Got it. the continues

know shouldn't percentage higher currently that reporting. that come much we the lead XX% products number You a margin have thought are shouldn't of than at the I rate? a would margins self-branded that in much that terms to higher

that's (ph) should, question. I a That good Abhishek, mean

So already what there change. here that step versus saw a QX, you is is

QX of as QX, that in then we had QX lockdown go more So type extremely accounted of of already our the are for for the macro factors XX% those were because versus there and QX increase high also on the but was going already XXXX then overall in the rate versus those the we there is was than of mix And self-branded X% right, one-offs cost margin freight and our so. products the second example, half way the and year. run into issues, gradually certain

launch, what be QX. products in there's QX, and zero that effect in QX there saying a in going new there see of -- going was QX, you self-branded then a I'm to push products gross gradually is up lot product together QX going would was definitely of these and So up also and that then the would a margin be then definitely QX with the -- to perspective, there no and in the also few seasonality self-branded in of which is that from

to think answer yes, the So, I would the gradually half gross and your the see that bottom entered year. question, into you of now up as should second we going the of margin

pace are ADR of is the one. view? are also, the issue the from Shouldn't Is that if done any we currently? the for updates expectations risk the your we delisting of listing were full that that is So looking Understood. buyback And Thanks. that believe you we there at I to and year. in And buybacks, to of the at the we and on just year scenarios your undervalued, wanted another right? by have a that business is go far. so gradual improvement quantum accelerate be any the we all understand what through If

Yeah.

So me on buybacks. let first comment Yes. the

to that X.X So by the honest continue of we as then, we're March shares number March back million, continuing and XX be was to actually -- buyback at XX, the we speak. buy XX, our

out publish by think of results. QX we QX, I end the

move that to see will going up. have the with we the definitely the second will year, And do of buyback as we space towards that. then still do You we this and continue number half

committed in options, Hong the where including PCAOB do our as think the tech we're to the that firms will our with second closely. definitely do Chinese considering delisting working that's And So, you and And systematic to regard companies. is risk with listing to mentioned, across different closely we're continue risk situation clearance. which Kong We I so. audit the a and then, all overhand -- the get actually monitoring very

But in to at least why do So we as that take negative being don't or company it -- guess that say, will worked buyback continue we that's and committed we we those to upon mid-term, for think short any or we from that a or our front. and to there's are do. that as undervalued -- out in I on another the updates is to to if be see push impact release risk we'll speak, sure,

think other into from my Got think declining or category were a we the the how and we to Then if categories. Xiaomi? expanding the evolving, right. as the lines, how mean, relationship finally, other product for should Are the our relationship smart could relationship categories Xiaomi are it. in nature if not side, continue of about should forward, I bands about we please? be the engagement going what with discussions for we And

No.

very been strong, always has and is right. Xiaomi with relationship our So

different we too strong factors cannot part And on of discussion to Band of relationship them then and we're would that's working there that, say and we why question, separate your X progress categories, by as form call. launched the We that of Mi press our will CEO But now on that's exploring then whenever and for together still much with a answer a different that doing on unfortunately this So the we in for next sure, issue products generation in the but already, start that. is definitely release with Xiaomi, on then remain we're next right, bands today right. year. mentioned second and already CEO

so best. the you Thank and very all it. Leon, much, Got

Thank you.

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

joining once you us for today. again Thank

Department further If this Zepp’s Relations conference free feel through provided Investor our contact please website. call. you This contact on concludes the information questions, have to

now You you. disconnect your may line. Thank