Atour Lifestyle Holdings (ATAT) Q1 2026 earnings call transcript

I would now like to turn the call over to Mr. Lu Hu, IR Director. Thank you. Please go ahead, sir.

Thank you, operator. Good morning and good evening, everyone. Welcome to our first quarter 2026 earnings conference call. Today, you will hear from our founder, chairman, and CEO, Mr. Wang Haijun, and our EVP co-safo, Mr. Wu Jianfeng. Before we continue, please be aware that today's discussion will include forward-looking statements and federal securities laws. These statements are subject to various risks and uncertainties. And actual results may differ significantly from what it stated or implied in our comments today. The company is not obligated to update any forward-looking statements except as required by applicable laws.

Additionally, during this call, our management will discuss certain non-GAAP financial measures solely for comparison purpose. For a clear understanding of these measures and the reconciliation of gap-to-non-gap financial results, please refer to the earnings release issued earlier today. First of all, a webcast replay of this conference call will be accessible on our website at ir. yaduo. com, where a copy of the results presentation is also available. Now, I will turn the call over to Mr. Wang, our CEO.

Thank you, everyone. Thank you, Luke. Hello, everyone. Thank you for joining Atour's First of Quarters 2026 Earnings Call today.

for the consumer market to create a more natural environment. In this background, the hotel market is continuing the sustainable and sustainable development of the design. The development of the consumer market is to turn on the more detailed and more efficient. The consumer market also has from the traditional build-up drive, to the experience. The consumer demand is from the focus of the performance and quality quality, which is to look for the experience of the personal experience and the value value. In this time period, we will be able to capture the development of the new development, to promote the new development, to transport the products, production, and the组织 of each environment, and to make it a long-term growth and lasting.

We are also more confident to keep the first approach of the user's approach, to the original experience and the product of the product, and to the original product of the year-old market. Please turn to our slides. Entering 2026, China's service consumption is accelerating its transition from scale-driven expansion to value-driven upgrades centered on quality and experience. Supportive policies are being refined and implemented, while industry competition is becoming more rational.

Together, these factors are shaping a healthier environment for the consumer market. Against this backdrop, the hotel market has continued its moderate recovery alongside structural upgrades, with development focus shifting toward deeper cultivation of refinement and differentiation. Meanwhile, the retail market is also evolving from traditional manufacturing-driven models to an experience-driven approach. Consumers are increasingly prioritizing holistic experiences and emotional value over functionality and value for money. At this pivotal moment, we will firmly seize the innovation opportunities arising from these transformations by embedding innovation across every dimension of our products, operations, and organization, and converting these opportunities into a long-term, sustainable growth engine. We are also more convinced than ever that our user-first philosophy, with experience as our cornerstone and a brand as our anchor, is the fundamental path for a tour to navigate industry cycles.

Now, I would like to provide more details on our business performance for the first quarter of 2026. First, the住宿 business. The first-year-old集团 is a product of the company's business. It has been extended to the entire year's new business. The key to the ROARP is the boost. The ADR is the main driving force. It is the more efficient market market. It is the way we have the continue to reflect. The first-year-old集团 is the value of the ROARP. The second-year-old集团 is the value of the ROARP. Let's begin with our hotel business. In the first quarter, performance across our overall hotel portfolio and our mature hotels continued to improve sequentially.

We achieved positive year-over-year RevPar growth, primarily driven by a steady increase in ADR. This reflects a return to value-based competition in a healthier industry environment, alongside the steady compounding of our brand equity. In the first quarter, our RevPAR was R&B 311.6, representing 102.4% of the level in the same period of 2025. Specifically, OCC reached 100.6% and ADR stood at 102.1% of their levels in the same period of 2025. Red Bar for our mature hotels in operation for more than 18 months was 98.3% of the level in the same period of 2025, with OCC and ADR at 99.2% and 99.4%, respectively of their levels in the same period of 2025.

and will be established on a real quality basis. The first-year-old new hotel hotel hotel is 110 seats. The last-year-old hotel hotel hotel is 2088 seats. The second-year-old hotel hotel is 750 seats. It is a healthy level.

As for our hotel network, we have adhered to a quality first principle and maintain strict quality control for every new signing and new hotel opening, ensuring growth is built on a solid quality foundation. In the first quarter, we opened 110 new hotels. By the end of the first quarter, our total number of hotels in operation reached 2088.

As of the same date, our pipeline of hotels under development remained at a healthy level of 751. 渠道方面 我们的中央预定渠道延续稳健的表现 一季度CIS渠道销售兼业占比为63.7% 其中企业协议销售兼业占比为19.3% With that, we also have to use a set of rules and a set of rules and a set of rules and a set of rules to ensure the experience of the public service. Especially during the summer, we received a wide variety of user-views. This represents our commitment to the long-term service and the commitment to the future of the program. It also represents that we hope the user will be more safe and enjoyable. On the hotel channel front, our CRS channel continued its steady performance, accounting for 63.7% of total room nights sold in the first quarter.

The contribution of room nights sold to corporate members was 19.3% during the quarter. At the same time, we are safeguarding the experience of guests who book through our official channels with our price assurance policies, including the price drop refund and a best price guarantee, as well as various other practical measures. During the Chinese New Year holiday in particular, the seamless execution of these safeguards earned widespread positive feedback from users.

This reflects our long-term commitment to deepening our membership operations and strengthening member loyalty, while also representing our consistent commitment to providing users with a more reassuring experience.

We hope that the business will continue to bring long-term value. On the other hand, the customer will provide high-size price products, increase the purchase effect, increase its整体的加盟 experience. On the other hand, the customer will be able to provide an equal service experience, and to ensure the customer can feel safe and safe. We will continue to do the purchase of the eight-day promise.

We will continue to do the purchase of the price, and the price, the sales, and the service. We will also create a critical system for the customer. as well as the use of the product of the market and the market. We also have the use of the use of the product and the use of the product and the use of the product. We will continue to increase the product of the market and increase the product of product value. As our hotel network expands and our brand strength steadily grows, our supply chain capabilities are advancing in parallel. More high-quality suppliers are joining our supply chain network. The platform's offerings are becoming more diverse, and franchisees are increasingly willing to consolidate their procurement with us.

We want our supply chain business to consistently deliver long-term value in two aspects. First, by empowering our franchisees and suppliers with high-quality products at attractive value, helping them improve procurement efficiency and enhancing the overall franchisee experience.

Second, by ensuring a consistent stay experience for users, giving them greater convenience and a peace of mind when using our products. We adhere to our eight commitments to supply chain procurement, establishing reliable mechanisms across pricing, after-sales service, and customer care. At the same time, we are deepening collaborative R&D with upstream suppliers to improve the practical functionality of existing products and develop new ones that deliver greater value. We will take innovation as our driving force to continuously enhance the core capabilities of our supply chain, jointly elevating the value of the Atour brand.

Next, I would like to share the latest developments across our hotel brands. In a highly competitive hotel market, A tour pioneered and continues to lead the upper-mid-scale segment. Over the past decade, we have earned strong customer word of mouth and steadily built clear, resilient brand mindset. This long-term commitment has enabled us to build differentiated competitive advantages that are difficult to replicate, supporting our resilience and sustainable growth through ever-changing market conditions. Atour 3.6, our latest Atour hotel product, was built around a systematic redesign of the key moments in the guest journey, grounded in an in-depth deconstruction of real guest experiences. This has allowed us to create a verifiable and scalable operational standard and product model. Since its launch over a year ago, Atour 3.6 has continued to receive positive market feedback, validating our product competitiveness in the upper-mid-scale market.

A tour origin represents our continued effort to explore and expand the possibilities of the upper mid-scale segment and marks a concrete step forward in our brand-led excellence strategy. Going forward we will continue to refine a tour origin with a long mindset while advancing more refined operations and quality upgrades We will roll out the deep sleep system hotel and further integrate cultural elements and service details from Yunnan. We hope a tour origin will bring the tranquil strength rooted in Yaduo village to more corners of urban life, further enriching what the Chinese experience represents. In the first quarter, RevPAR of Atur Origin Hotels in operation exceeded RMB 400. The two upper-mid-scale brands developed in parallel, forming a differentiated and complementary price tier.

In the high-end product, the SAHO酒店 has continued to keep the product of the market and has continued to expand the development of the market. The second part of the SAC is the SAC. For the upscale brand, Sa-He Hotel continues to build brand visibility and recognition while expanding its development potential. In the first quarter, RefPAR of Sa-He Hotels in operation exceeded R&B 910, with ADR surpassing R&B 1,000. Meanwhile, Sa-He has attracted a more diverse customer base with a higher proportion of international customers and family travelers. On overseas review platforms and social media, SAHE has also received a growing number of organic recommendations and positive reviews from international users. This demonstrates the unique appeal of SAHE's deep Chinese cultural roots and opens up broader possibilities for its future development.

We are taking a long-term view on Saha. We will continue to drive brand upgrades, bringing China's homegrown philosophy and expression of upscale living to a broader global audience. Fan He's development calls for patience. We will remain disciplined in scale, pursue continuous refinement in product and service, and translate our long-term vision into every tangible experience.

In the use of the user, the user has covered more than the客群, and more than the young people of the認可. The market range of the range is also in a wide range. The product has been reduced to the size of the user. The 3.3 has been opened up to 20% of the hotel. With the more expensive product experience and more high-quality experience, this product has been in the user's口碑 and the customer's service. It is a high-reported rating. In the sales level, the 3.3 product has been improved. The 3.3 product has been improved. E-Gidu, Xingu 3.3, Zaiying Jiu-Den Roar Pa, Xang-Diao 3.0 de chan-Pi, gau chu, ban-fengen-shishishishang.

For our mid-scale brand, demand for more differentiated stay experiences continues to grow, an opportunity that aligns closely with Atura Lite's positioning. Atura Lite continued its steady, long-term trajectory in the first quarter. On the customer side, Atura Lite has been attracting a more diverse customer base. gaining increasing recognition among younger users while steadily broadening its business traveler base.

This has further built the brand's differentiated momentum. A Tour Light 3.3 has now opened in more than 20 hotels. It enhanced the product experience and more efficient operating model have earned strong recognition from both customers and franchisees. Operationally, Atura Lite 3.3 has demonstrated stronger pricing power. In the first quarter, rev part of Atura Lite 3.3 hotels in operation was more than 10% higher than that of the 3.0 version.

In 2016, we will continue to increase the overall-level and system-based economy and product-market performance, improve the two-line and the other cities, improve the quality of the product, and improve the growth of the product, and improve the growth of the market for the future. We fully recognize that brand development is not built overnight. it requires us to first focus on product refinement and operating system development so that we can build strong brand equity and support healthy, sustainable growth.

In 2026, we will continue to comprehensively and systematically enhance to our lights operational efficiency and product competitiveness and continue to focus our expansion on second tier and above cities, pursuing quality light expansion and laying a more solid foundation for the next stage of Atura Light's development.

Moving on to our retail business. Entering 2026, Atul's retail business sustained its strong growth momentum, with core categories continuing to deliver outstanding performance. Retail revenue reached RMB 1 billion and 71 million in the first quarter, representing 54.4% year-over-year growth. A tool planet also ranked among the top brands in the betting category on major third-party platforms, with our product and brand strength continuously being validated by the market.

We recognize that maintaining long-term competitiveness requires continuous innovation, responding faster and more precisely to meeting the evolving needs and expectations of our users. As our understanding of users' sleep needs deepens, we are steadily turning latent demands into tangible product strength. We approach each product iteration as a systematic solution, grounded in scientific testing and validation. As Atoa Planet's product capabilities continue to grow, we are proud to enter a new stage defined by the technological innovation and the standard setting. 枕头品类方面,一季度亚朵星球延续断层领先的优势,在主流第三方平台稳居品类销售第一,我们始终以真实的睡眠需求为导向,将其贯穿于枕头品类的每一次产品升级,积累了良好的口碑。 In the pillow category, Atoa Planet maintained its strong and clear leadership in the first quarter, consistently ranking first in category sales on major third-party platforms.

We have remained guided by genuine sleep needs, integrating this principle into every product upgrade within the pillow category, consistently building a strong word of mouth. During the Chinese New Year, we launched a special edition of the Deep Sleep Memory Foam Pillow Pro 3.0. Paired with a supporting brand campaign, we sought to turn a sleeping product into a meaningful expression of emotion, helping users rest fully in body and mind during the holiday, and fall naturally into deep sleep.

3 million. For our Comforter category, market share is steadily increasing, with very strong growth continuing into the first quarter. The Deep Sleep Thermo-Regulating Comforter series has consistently achieved strong sales and garnered significant user preference, with cumulative sales exceeding 3 million units since its launch. At the end of March, we launched the latest upgrade in the series, the Deep Sleep Thermo-Regulating Comforter Pro 3.0 summer season. This new generation delivers systematic improvement in dynamic temperature and humidity control, featuring a fully upgraded two-way temperature regulation technology that helps smooth out temperature fluctuations.

Its moisture absorption and permeability have also been enhanced with each innovation cycle in the Comforter category. our product strength continues to improve, enabling us to more precisely capture users' pain points and translate them into practical applications through enhanced R&D capabilities. Within just 45 days of launch, the GMB of Deep Sleep Thermal Regulating Comforter Pro 3.0 summer season exceeded R&B 100 million.

In the new products, the sales market is also very good. For new categories, sales momentum also has been very positive. Recently, we launched the summer edition of the Deep Sleep Launchware in line with the season and introduced the new color options for the Deep Sleep Fitted Cheat. As our sleep ecosystem continues to evolve, a tour planet's product mindshare among users is becoming stronger, and a trust between the brand and users is reinforced through each experience. The year of the year, the year of the year, the year of the year, the year of the year, the year of the year, the year, the year, the year, the year, the year, the year, the year, the year, the year.

2026年, we continue to build a new theme for this key place, to promote the local and the local market market, to improve the audience's value and value of the value. We also have to look at the same quality and value of the company's brand, to create a more diverse product of the product. We hope that we can continue to become the with the family members of the customer with the warm-up and warm-up and the family members of the customer. It makes every customer feel comfortable with the experience of the customer.

Turning to membership, by the end of the first quarter, our registered individual members reached 116 million, representing a 20% year-over-year increase. In 2026, we will continue to focus on deep sleep as a core scenario, deepening the synergy between our hotel and retail businesses to enhance members' sense of membership value and benefits. At the same time, we are actively exploring partnerships with like-minded brands, jointly creating expanded quality lifestyle experiences.

We hope a tour membership will continue to evolve as a lifestyle membership brand that accompanies users with warmth, helping every member find experiences where body and mind return to inner peace.

Finally, I would like to share Atour's progress on ESG. We recently released the Atur Group 2025 ESG report Atur started from Yaduo Village in Renan and we have always been dedicated to a founding aspiration of doing good Over time, this simple goodwill has become the spiritual foundation of Atul's growth. We have embedded ESG principles into our corporate mission and core values, continuously enhancing our ESG governance and advancing environmental responsibility across our hotel and retail operations.

Through industry support and social assistance programs, we continue to give back to Yaduo Village and the surrounding communities, fostering goodwill and extending warmth. 2025 年底我们正式成立了亚朵工艺基金会 希望以更系统的方式推动工艺事业 传播人们关怀 近期 聚焦一线客房服务群体 我们推出了专属的工艺项目 不仅面向亚朵自身伙伴 也向全国服务业客房从业人员开放 我们秉持每一个人都值得善待的理念 希望将亚朵的温度延伸到整个行业 to make the connection of the love and love more deeply.

service industry, guided by our belief that everyone deserves kindness, aim to extend a towards warmth to the broader industry, and enable these connections of goodwill to generate a more far-reaching impact.

grounded in the present and looking to the long term, we will continue to uphold our mission of creating an intimate ambience where people can warmly connect, stay true to our founding aspiration, and fulfill our corporate responsibilities. We will remain committed to doing the right things with warmth, steadily move toward our long-term vision of a timeless tour warmth along every journey, and continue to contribute steadfast and warmth strength to the industry and society. I will now turn the call over to our co-CFO, Mr. Wu Jianfeng, who will discuss our financial results.

Thank you, Haijun. Hello, everyone. I would like to present the company's financial performance for the first quarter of 2026. Our net revenues for the first quarter of 2026 grew by 47.5% year-over-year to RMB 2811. Revenues from our monetized hotels for the first quarter of 2026 grew by 51.9% year-over-year to RMB 1,568 million. The increase was primarily fueled by the ongoing expansion of our hotel network, as well as supply chain business development. Revenues contributed by our leased hotels for the first quarter of 2026 decreased by 8.0% year over year to RMB 118 million. The decline was primarily due to a decrease in the number of leased hotels as a result of our product mix optimization.

The total number of our leased hotels decreased from 25 as of March 31st, 2025 to 19 as of March 31st, 2026.

Revenues from our retail business for the first quarter of 2026 increased by 54.4% year over year to RMB 1071 million. The growth was driven by increasing brand recognition, successful product innovation, and a broadened range of product offerings.

Growth profit of our hotel businesses for the first quarter of 2026 increased by 29.5% year-over-year to RMB 550 million. The decline in the growth margin was primarily due to the changes in the revenue structure.

Growth profit of our retail business for the first quarter of 2026 increased by 58.3% year-over-year to RMB $564 million. The increase in the growth margin was attributable to the increasing contribution from higher margin products. Setting and marketing expenses accounted for 14.3% of net revenues for the first quarter of 2026, compared with 14.8% of the same period of 2025. The decrease was made primarily due to improved efficiency of investment in our retail business. and administrative expenses, excluding share-based compensation expenses, accounted for 4.2% of net revenues for the first quarter of 2026, compared with 4.1% for the same period of 2025. Technology and development expenses accounted for 1.8% of net revenues for the first quarter of 2026, compared with 2.1% for the same period of 2025.

Adjusting net profit margin for the first quarter of 2026 was 17.4%, representing a decrease of 0.7 percentage points year over year. Adjusting EBITDA margin for the first quarter of 2026 was 25.5%, increased by 0.6 percentage points year over year. We maintained a healthy cash position as of March 31st, 2026. Cash and cash equivalents totaled RMB 3.7 billion with net cash of RMB 3.4 billion. Today, in accordance with our annual dividend policy, we declared the first cash dividend of 2026, totally around US dollar 72 million as a reward for our shareholders trust and support. That concludes our financial highlights for the first quarter of 2026 and for the full year of 2026 we currently expect total net revenues to increase by 24% to 28% compared with the full year of 2025.

Now let's open the floor for Q&A.

Thank you, Sijia. Let me answer your question. In Q1, we had a relatively more concentrated pace of closures with a total of 37 hotels being closed. The main reason was that some projects we had confirmed last year to be closed were carried over to this year for finalization and resulting in that lag in the numbers. For our full year target for hotel closures this year remains unchanged at 80 hotels. Moreover, thanks to the proactive structural adjustments we initiated last year, the quality of our operating hotels now has clearly improved. In this process, we have also gradually sorted out and established a set of long-term mechanisms. For older hotels that have been in operation for many years, we will provide targeted support and customize the renovation plans to lower the barrier to upgrading, along with partial fee waivers and financial support policies to effectively help these older hotels enhance their market competitiveness.

关于开店方面的话,我们还是按照我们的节奏在有序的推进 去坚持我们好店的这样一个逻辑。 我们新开的一定是符合我们的定位, 能够为住客提供高品质体验的酒店。 那么截止到一季度末为止,我们管道内的储备的项目有751家,也保证了充足并且高质量的储备,因此我们对于全年的开店的目标还是保持不变。 And as for new openings, we are proceeding steadily according to our planned pace and adhering to the premier hotel logic. Newly opened hotels must be the ones that have met our positioning and can provide high quality experience for guests. As of the end of Q1, we had 751 projects in the pipeline, ensuring an ample and high quality reserve. Therefore, we are maintaining our full-year hotel opening targets unchanged.

Thank you, Dan. In the second year, we are still looking at that the travel travel is still strong. Thank you, Dan. Entering Q2, we had observed that leisure travel remained strong. In particular, spring break in some regions during April further boosted travel demand, and the more dispersed travel schedule has led to a more balanced distribution of holiday passenger flows. However, when we look ahead, market volatility still exists. Therefore, we maintain a cautiously optimistic attitude about RAVPA performance in Q2. that from the long-term趋势 we also saw 各类政策的积极的驱动 持续的激发 服务消费的潜力 也为整个行业注入了 比较强的消费活力 那么尽管外部环境的变化 在短期可能会 扰动出行的市场 但是我们觉得 整个住宿业 整体仍然处于 波动式复苏的阶段 在这个背景之下 我们可能不会 刻意追求短期的表现 and to further expand more widely and more private customers and leisurely and continue to clean our users' features, and make our customers the most safe and safe choice.

As for long-term trends, we also see various proactive policies continuously to unlock the potential of service consumption and injecting strong vitality of consumption into the industry. Although changes in the external environment may cause short-term fluctuations in the travel market, the accommodation industry as a whole remains in a stage of fluctuating recovery. Against this backdrop, we will not deliberately pursue short-term performance. Instead we will strategically expand our reach to a broader range of business travelers and leisure travelers continuously refine our service details that guests can truly feel and make a tour the most reassuring and reliable choice for travelers when staying.

Thank you, Dan.

First, we will keep strengthening our national national city and national national security, and keep the basic basic business and national security needs. Second, we also have to choose to explore the national security and national security areas, such as the national security market, and some with a stable power of 5A-level city. In this category, we have a market base and have a long-term growth area of the market. The appropriate selection of the market has a development of the market.

Thank you, Lydia. In March, we mentioned that the market was gradually returning to rationality, and the franchisees are adopting a more mature mindset, so they are not over-optimistic nor anxious about short-term fluctuations. And regarding our signing strategy, first, we will continue to strengthen our presence in the core cities and prime commercial areas across China, capturing the fundamental demand from high-frequency business travel and urban cultural tourism. On the other hand, we are selectively capturing the growth opportunities from leisure demand, For instance, in key potential markets such as strong third-tier cities and cities with 5A-rated cynic spots that generate stable visitor flows.

In these promising areas with solid market foundations and long-term growth potential, we are carefully selecting projects with strong development prospects.

The quality of the product is the quality of the product. 这样的品质观呢 带来一个重要的结果 我们的溢价能力不是靠成本压缩化来的 而是靠用户的感知化来的 这也让我们有能力持续的向上探索价格的边界 Thirdly, in the long run, the quality of signed projects is of critical importance. However, there is no consensus in the market on what quality truly means. Let me take this chance to introduce to you the Auteur's concept of quality. Our concept of quality goes beyond mere hardware upgrades and structural improvements. It is rather rooted in experience and aims to build a comprehensive quality composite. Leading product strength is the foundation. The ability to open hotels in the core areas is a key capability. And the continuous refinement of experience is our competitive moat. Such a quality philosophy leads to one important outcome.

Our pricing power is not achieved through cost cutting, but it is earned through guest perception. This gives us the ability to continuously push in pricing boundaries upward. New brands like SAHE and Atoor Origin have emerged upon this logic. They are not replacements for existing products of ours, but rather the expansions of the Atoor brand's imaginative horizon. Thank you.

Thank you, Chen Xin. I want to increase our sales sales. I also want to share the future of the product development. Let's give a example. The new design of the COOMB PRO next year. We were released in the first year's product. It should be removed from the traditional design of the traditional design. It's a double-dial design. I think this is a product of the development of the development. 到了第二代 我们也意识到一件事 用户对凉的真实的需求不是那种极致的冰凉 而是自然舒适的凉床感 于是呢 我们重新优化了透气系统和面料的结构 把被动的凉感升级为主动的控温和排施 我想呢 第二代呢 是需求的升级的创新 Thank you, Chen Xin. The growth of our retail business is not just about the numbers.

So right now, what I really want to share is our product methodology behind this growth. Let me give you one example. Let's take the Deep Sleep Thermal Regulating Comforter Pro Summer Season Series as an example. When we launched its first generation three years ago, we changed the traditional duvet cover design and created a one-piece design with a cool-to-the-touch feel on both sides. That was a product structural innovation, as I think.

With the second generation, we realized that users' real need for coolness is not about extreme coldness, but a naturally comfortable, refreshing feel. So we re-engineered the ventilation system and the fabric structure, upgrading from passive cooling to active temperature control plus moisture wicking. This second generation is demand-driven innovation. When we launched the third generation this year, we targeted the pain points of fluctuating indoor temperatures in summer, aiming to create a dynamic system that actively responds to environmental changes. So the third generation further improves dynamic temperature control and humidity control. This is what I think has deepened scenario-driven innovation.

This is the basis of the data that we have been tested. This example also represents our base behind the method. It is also our whole business business business. It is that every time of the exchange, it is made by the user's experience to transform the way to the ideal, to be able to do it, to be able to do it, to be able to do it, to be able to do it, to be able to do it, to be able to do it.

Three times of the exchange, we find the most difficult to do it with the co-sets. It is not only a material, It means that the customer can always feel the system of the ability to express the system and the ability to express the system of the ability to express the system. After these three iterations, the definition of our product has fundamentally changed. From a cool comforter to an air permeable comforter and then to a comforter that breathes. What drives this change are the repeatedly validated needs that emerge from real user scenarios. This example of Comforter is also the methodology of our retail business. Each iteration transforms previously vague user sensations into a definable, measurable and a replicable technical standard.

So after these three iterations, we've now come to realize that the most insurmountable mode is not a specific material or patent, but rather the systematic capability to continuously stay close to users and constantly translate their feelings into standards.

Also, let me add to the retail revenue guidance you asked about. Thanks to the solid groundwork late in the first quarter and the strong sales momentum of our new products, we are confident that we will surpass our previously announced full-year revenue target. Therefore, we are raising our full-year retail revenue guidance to grow 30% to 35% year-on-year. Thank you.

and using the gap of the net利润 as a基準 and using the 100% of payout ratio to perform our股東回報計劃 Thank you, Chiwei. Regarding shareholder returns, we have always placed a great importance on this. Today, we also announced our first dividend distribution plan for this year with a total amount of approximately 72 million U. S. dollars, representing about 31% of the previous year's net profit.

In addition, since we began repurchases last year and as of Q1 this year, the total repurchase amount has exceeded 100 million U. S. dollars. Going forward, we will continue to follow our comprehensive shareholder return plan that combines dividends and share repurchases, still targeting approximately a 100% payout ratio based on the previous fiscal year's gap net profit as our shareholder return policy.

Thank you for joining us today. If you have any further questions, please feel free to contact our IR team. We look forward to speaking with you again next quarter. Thank you and goodbye.