Yunji Inc. (NASDAQ:YJ) Q2 2025 Earnings Call Transcript

Yunji Inc. (NASDAQ:YJ) Q2 2025 Earnings Call Transcript August 21, 2025

Operator: Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to the Yunji’s First Half 2025 Earnings Conference Call. With us today are Mr. Shanglue Xiao, Chairman and Chief Executive Officer; and Mr. Nan Song, Senior Financial Director. As a reminder, this conference call is being recorded. Before we start, please note that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on the company’s current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors of Yunji and its industry. These forward-looking statements can be identified by terminologies such as will, expect, anticipate, continue or other similar expressions.

For a detailed discussion of these risks and uncertainties, please refer to the company’s related documents filed with the U.S. SEC. Any forward-looking statements that the company makes on this call are based on assumptions as of today and are expressly qualified in the entirety by cautionary statements, risk factors and other details of its filing with the SEC. The company does not undertake any obligation to update these statements, except as required under applicable law. With that, I will now turn it over to Mr. Shanglue Xiao, Chairman and CEO of Yunji. Please go ahead, sir.

Shanglue Xiao: [Interpreted] Hello, everyone and welcome to Yunji’s First Half 2025 Earnings Call. Thank you for your continued interest and support. Over the past 6 months, we have remained firmly anchored to our organic health strategy. While overall market conditions and a weakened consumer confidence have led to a slight decline in our total revenue, we believe that staying committed to organic health is the right strategy and represents an important opportunity for Yunji’s future development. And we have centered our strategy on organic health positioning [ Youjiang ] Organic Milk as our flagship product to shape our brand image in this space. The product achieved an RMB 5 million in sales at launch, helping establish Yunji’s health-focused brand awareness among consumers.

Building on this success, we will gradually expand the concept from this foundation. Additionally, [ Youjiang ] milk will serve as an important tool for Yunji’s expansion, helping us better penetrate the retail market developed through community leaders. Over the past 6 months, our other major products have also performed exceptionally well. [indiscernible] slimming coffee achieved sales of over RMB 10 million. Probiotic bolus reached nearly RMB 7 million, while freeze-dried sea buckthorn powder and [indiscernible] each generated more than RMB 5 million in sales. This success comes from our organic health strategy and our scientific weight management product selection, both aligned closely with the national health agenda outlined in Healthy China 2030, a government initiative that sets long-term goals to improve public health and health care by 2030.

This marks our approach sustainable in the long term and holds tremendous development potential. Moving forward, we will continue to expand our brand influence, fully integrated organic health concept and continually optimize our product mix. Our beauty brand, SUYE, offers high-value products that align closely with the consumer preferences in today’s market. Its approach of combining major products with high-impact promotions has an achieved positive market feedback. The SUYE PRO-XLANE FIRMING ESSENCE LOTION generated over RMB 4 million in sales at launch and more than [ 32 ] of the buyers being returning dormant users. The entire SUYE PRO-XLANE FIRMING Series, including creams, lotion and essences generated sales exceeding RMB 10 million.

Q&A Session

In terms of the channels and brand development, we are actually expanding public domain channels, upgrading our Tmall infrastructure, establishing partnership with top influencers for live streaming sales and enhancing WeChat channels content. Currently, our WeChat channel transaction volume ranks higher than 92% of our peers. As we expand our public domain sales, we will continue monitoring market expenses and constantly improving cost efficiency. Our Jianxin Tea Therapy business is currently in the incubation phase. Thanks to the strong growth potential and the customer loyalty of the tea therapy program, we successfully reached our goal of building a 100% tea therapy team in the first half of the year where the frequent users maintained a solid 50% participation rate.

More notably, participants in the tea therapy program have gradually expanded from existing members to [indiscernible] high net worth individuals. At present, our channel members booking through the program account for nearly 15% of often all participants, creating significant opportunities for further business growth. Meanwhile, the tea therapy program will help Yunji further establish our organic health image and provide quality traffic for our organic health products. In the first half of 2025, over 90% of the tea therapy users purchased our main products, effectively supporting sales of our other health products. The rapid growth of internet retail is posing new challenges for our community retail group leaders. Under this trend, community group leaders are more inclined to embrace private domain e-commerce and connect with the store suppliers.

Therefore, in the future, we will focus on expanding our community group leader channels, placing organic foods in community group leaders’ stores. This will not only empower community group leaders but also allow more people to conveniently enjoy our organic products, ultimately achieving mutual benefits and win-win results. With that, I will hand over to Ms. Nan Song, our Senior Financial Director, to go through the financial results.

Nan Song: Thank you, Shanglue. Hello, everyone. Before I go through our financial results, please note that all numbers stated in the following remarks are in RMB terms and all comparisons and percentage changes are on a year-over-year basis unless otherwise noted. During the first half of 2025, market uncertainties still posted challenges to our operations, even though our financial position allowed us to continue advancing our strategic initiatives. We continue to assess the profitability of both new and existing business lines and make timely adjustments to adapt to shifting market conditions, ensuring we’re meeting our leveraged financial foundation while driving ongoing improvements. Now let’s take a close look at our financials.

Total revenue were RMB 158.3 million compared to RMB 233.8 million a year ago. Revenues from sales of merchandise were RMB 131.7 million and revenues from our marketplace business were RMB 24.5 million. The changes were primarily due to softer consumer confidence and our ongoing strategy to refine product selection across all categories and optimization our supply and merchant bases, which affected our sales. Despite these challenges, our gross margin remained relative solid at 47.3%. This was due to sustained customer loyalty towards our promised levels and our effective product curation trait that emphasis high margin. High [indiscernible] within our integrated product portfolio. Now let’s take a look at our operating expenses. Fulfillment expenses decreased to RMB 20.6 million from RMB 42.6 million a year ago.

This was primarily driving by lower warehousing and logistics costs from reduced merchandise sales with [indiscernible] personnel expenses for staffing structure [indiscernible] sales and marketing expenses were RMB 50.1 million compared to RMB 47.5 million a year ago. This was primarily due to high member management fees from growing the membership base and increased personnel cost to support expansion into markets, partially offset by lower advertising expenses. Technology and content expenses were RMB 15. 3 million compared to RMB 25.5 million a year ago. The decrease was mainly due to a reduction in personnel costs resulting from staffing structure optimization. General and administrative expenses were RMB 93.4 million compared to RMB 33.5 million a year ago.

The increase was mainly due to a high allowance for credit losses, partly offset by lower professional service expenses and personnel costs. Excluding the onetime loss, G&A expenses decreased by 35.6%, reflecting the result of our expenses optimization effect. Total operating expenses in the first half of 2025 were RMB 179.4 million compared to RMB 149.1 million in the same period of 2024. Loss from operations was RMB 100.4 million compared to loss of operating of RMB 32.4 million a year ago. Net loss was RMB 100.7 million compared with net loss of RMB 8 million a year ago, while adjusted net loss was RMB 100.5 million compared with adjusted net loss of RMB 6.7 million a year ago. Basic and diluted net loss per share attributed to ordinary shareholders were both RMB 0.05 compared with basic and diluted net income per share of — in the same period of 2024.

Turning to recorded as of [ January ] 30, 2025, we had a total of [ RMB 217.1 million ] in cash and cash equivalent expected cash and short-term investment on our balance sheet compared to [ RMB 242.8 million ] as of December 31, 2024. Our liquid assets provide adequate coverage for our payable obligation. In addition, we are [indiscernible] to making the most of our working capital and [indiscernible] managing our assets to best support our operations. To sum up, during the first half of 2025, we continue to optimize our cost structure while ensuring efficient capital allocation. We remain committed to maintaining financial discipline and driving improved profitability while supporting long-term sustainable growth. Our continued focus on [indiscernible] integration together with our commitment to efficient asset utilization play a key role in achieving this improvement.

Looking ahead, we will concentrate on continuously improve our gross margin, aiming to achieve breakeven and strengthening our overall financial position with a strategic focus, where we are prepared to manage future [indiscernible] and capture growth opportunities in a evolving market environment. This concludes our prepared remarks for today. Thank you.

Operator: That brings us to the end of today’s call. Thank you for attending. You may now disconnect.