[Management View]
Total net revenue was RMB 4,653.5 million in Q1 2025, up 27.5% YoY, exceeding guidance. Non-GAAP operating income increased by 39.5% YoY to over RMB 110 million. The 1P2C retail segment and marketplace initiatives were key growth drivers. Management emphasized investments in store networks, localized fulfillment, and technology.

[Outlook]
Second quarter revenue guidance is RMB 4,710 million to RMB 4,801 million, implying 24.7%-27.4% YoY growth. The company plans to continue expanding its store network and enhancing fulfillment capabilities.

[Financial Performance]
Total net revenue increased by 27.5% YoY to RMB 4,653.5 million. Non-GAAP operating income rose by 39.5% YoY to over RMB 110 million. Non-GAAP operating margin improved to 2.4% from 2.2% in Q1 2024. 1P business revenue grew by 28.8% YoY.

[Q&A Highlights]
Question 1: How effective has the national subsidy been in promoting recycling and trading programs? Do you see the same growth momentum in your secondhand recycling and resale businesses and results? (Line breaks here)
Answer: The national subsidy has driven accelerated growth of the 1P business. The average recycling price in the 1P business is approximately RMB 1,500, creating a strong incentive for users to leverage the trade-in service of AHS Recycle. The company remains confident in China's commitment to stimulating consumption and expects long-term penetration growth in recycling programs.

Question 2: Can you please explain the increase in the non-GAAP fulfillment margin and sales marketing margin? Is there any adjustment to this year's total revenue and margin target? (Line breaks here)
Answer: The improvement in non-GAAP operating profit margin was due to pricing strategy and balanced control of expenses. The non-GAAP fulfillment expense ratio rose by 0.9% YoY, and the non-GAAP selling expenses ratio increased by 2.2% due to higher promotion and advertising expenses. The company aims to gradually improve its non-GAAP operating profit margin.

Question 3: Can you share details on the progress of store openings in the first quarter of 2025? (Line breaks here)
Answer: As of March 31, 2025, there were 1,886 AHS Recycle stores nationwide, with a net increase of 458 stores YoY. The company transitioned some joint-operated stores to a self-operated model in high-tier cities to handle incremental trading volumes and improve user satisfaction.

Question 4: Can you discuss how much traction you've seen as a result of your increased focus on marketing and advertising? How should we be thinking about incremental expenses or customer acquisition costs? (Line breaks here)
Answer: AHS Recycle has solidified its position as a leading brand in recycling through high-quality services and strategic new media campaigns. The product revenue from AHS Mini and the official website grew faster than the overall 1P business. The company will continue to strengthen the AHS Recycle brand and refine its recycling service offerings.

[Sentiment Analysis]
Analysts were positive and congratulatory about the strong quarter. Management was confident and focused on strategic growth and operational efficiency.

[Quarterly Comparison]
| Key Metrics | Q1 2025 | Q1 2024 |
|------------------------------|---------------|---------------|
| Total Net Revenue | RMB 4,653.5M | RMB 3,650.0M |
| Non-GAAP Operating Income | RMB 110M+ | RMB 79M |
| Non-GAAP Operating Margin | 2.4% | 2.2% |
| 1P Business Revenue Growth | 28.8% | N/A |
| 1P2C Retail Revenue Growth | 73.5% | N/A |

[Risks and Concerns]
Potential risks include fluctuations in national subsidy policies, competition in the recycling and resale market, and operational challenges in expanding the store network and fulfillment capabilities.

[Final Takeaway]
ATRenew reported a strong Q1 2025 with significant revenue and profitability gains driven by the 1P2C retail segment and marketplace initiatives. The company plans to continue expanding its store network and enhancing fulfillment capabilities, supported by national subsidies and strategic partnerships. Management remains confident in the long-term growth potential of the recycling and resale market.