After the opening remarks, the telephone conference will move on to the discussion of financial reports. Participants will listen first and then ask questions, with the entire session being recorded. Those who have objections can leave at any time. Afterwards, the meeting will be hosted by the Investor Relations Manager, formally beginning the financial report discussion segment.

In the second quarter of 2025, the sales of the technology company in the Chinese market reached 318,000 units, a year-on-year increase of 54%, with a total sales of 350,000 units, a year-on-year increase of 37%. The overseas market for electric tools maintained a 4-fold growth, despite a 35% decline in the micro-mobility sector due to US tariffs. The company achieved a revenue growth of 34% and a gross profit margin increase of 20.1% through product portfolio optimization and cost control. The newly launched electric motorcycles and smart technology have enhanced product competitiveness, and it is expected that the new product line will meet the new national standards after September, driving a smooth transition in the market.

At the Oscar E motorcycle new product launch on May 13th, the N model set a Chinese record at the Shanghai F1 circuit. During the 618 shopping festival, sales reached 1.06 billion RMB, a year-on-year increase of 128%, with approximately 156 million views during live broadcasts. On July 17th, the Nxt Ultra and Fxt Ultra models sold 20,000 units in a five-hour live broadcast, generating sales of 220 million RMB, solidifying the brand's position in the high-end market. To celebrate its tenth anniversary, on June 1st, the brand will sponsor a music festival with 30,000 participants, with a total expected view count of 220 million times.

The dialogue content shows that through extensive media activities and channel expansion strategies, the brand's influence in the Chinese market has been successfully strengthened. Offline, 185 new retail stores were added, with a special focus on third and fourth-tier cities, bringing the total number of stores to 569; online, managing 11 official brand accounts, 48 localized accounts, and nearly 800 store accounts, hosting about 20,000 live streams, with an increase in viewership contributing to 77% of total sales. These measures not only optimized the distribution network but also laid the foundation for product releases in the second half of the year, significantly increasing the sales proportion of third-tier and below cities, proving the effectiveness of market penetration strategies.

The report points out that overseas business sold 31,000 units in the second quarter, a year-on-year decrease of 35%, with electric tool products performing relatively well. Electric scooter sales dropped by 41%, mainly affected by tariff adjustments and price competition in the US and European markets. The company has adopted a direct distribution strategy and achieved significant results in core markets such as Germany and Italy, with electric motorcycle sales increasing fourfold and adding 63 direct sales stores. The Asian market grew against the trend by 21%, expanding the channels to 2,100 retail points. In response to the US and European markets, the company will launch the entry-level K90 model to cater to the changing preferences in the low to mid-end market.

The dialogue emphasizes Q2's active participation in the Best Buy Achiever event and collaboration with the Best Buy Geek Squad, foreshadowing deeper retail integration in the American market. Looking ahead to the second half of the year, seasonal trends, product innovation, and channel expansion in the Chinese market are seen as key drivers of sales growth. The recovery and profitability improvement in overseas markets, especially in the electric tools, electric motorcycles, and micro-mobility sectors, will be achieved through direct distribution and market optimization strategies. The implementation of new national standards will stimulate market demand in Q3 and Q4, and the company expects to maintain a healthy gross profit margin and stable ASP, achieving sustained growth.

In the second quarter, the company's total sales volume reached 350,000 units, a year-on-year increase of 37%. The sales volume in the Chinese market accounted for the majority, reaching 319,000 units. Total revenue was 1.26 billion RMB, an increase of 34% compared to the same period last year, with revenue from the Chinese market at 1.15 billion RMB, accounting for 91%. Gross profit margin significantly increased to 20.1%, mainly due to cost control measures. Operating expenses increased by 38% to 265 million RMB, mainly due to increased sales and marketing expenses. It is expected that the revenue in the third quarter will be between 1.4 billion and 1.6 billion RMB, a year-on-year increase of 40% to 60%.

The discussion focused on the reasons for the increase in unit prices and gross profit margins in the second quarter, mainly attributed to the optimization of the product mix, especially the increase in sales volume and average selling price of electric motorcycles in the Chinese market. Additionally, cost reductions and product line adjustments also contributed to the growth in gross profit margins. Looking ahead to the third quarter, it is expected that the product mix and cost control will continue to support the stability of gross profit margins.

In the face of market changes brought about by new regulations, it is necessary to carefully observe market reactions in predicting next year's sales of electric two-wheelers. We are currently preparing to launch a compliant new product line, revamp existing products, and expand retail networks to respond to market changes and ensure sales growth.

The asker congratulates the company on its strong performance in the second quarter and asks about future trends in overseas markets. Over the past two years, overseas markets have faced significant pressure, but the asker believes that the company may have already hit bottom and rebounded, thanks to new driving technologies and the establishment of direct sales channels. The asker looks forward to a brighter development prospect for the company's overseas markets in the second half of the year and the coming year.

Discussed in the past two years in the European market, particularly in Germany and Italy, the complex process of establishing a direct distribution model, including logistics and distributor financing layout. Starting from the second quarter of this year, through the evaluation of registered vehicle data, has taken a leading position in the electric two-wheeler market in Germany and Italy, and is predicted to continue to grow, aiming to recover to the peak levels of 2020 or 2021.

The discussion focused on the expansion plan of the distributor network in the Chinese market, with an expected rapid opening of new stores in the coming years, aiming to reach 8000 to 9000 stores. Despite the large number of new stores, sales per store are increasing by 7% to 8%, indicating that expansion is not diluting sales per store and demonstrating a healthy channel growth trend. The current plan is to add 400 new stores in the next quarter, bringing the total to approximately 4700, creating significant room for growth compared to competitors.

The conversation reviewed the sales growth over the past few quarters, pointing out that while revenue growth lagged behind sales, it is expected that the next quarter's 40%-60% revenue growth rate will surpass sales growth for the first time, implying a positive shift in business development.

Discussed the possibility of Q3 revenue growth of 40%-60% potentially outpacing sales growth, analyzed the fluctuation of Average Selling Price (ASP) in the Chinese market, pointed out that Q3 is a low ASP quarter due to the high proportion of sales of low-priced car models, and that the current data only reflects a 40-day period, so the trend for the entire year is still unclear.

The conversation emphasized that in a teleconference, it is important to clearly inform participants of the method for asking questions, such as by pressing a specific key, in order to ensure that everyone can participate and raise questions, thereby improving communication efficiency and engagement.

At the conclusion of the meeting, the host expressed gratitude to all participants, emphasized the importance of everyone's support and interest, and announced that they would share updates on the company's progress in the future. The meeting was then officially adjourned.