A：The third quarter 2025 earnings release highlights strong total revenue growth and a significant improvement in profitability, with a narrowed non GAAP operating loss. The quarter was marked by robust gross margin expansion and strong performance across segments such as Bc, PBM, and BBA, driven by merchandising and marketing initiatives, and a new store opening.

A：Bao Jun Group's performance was driven by Bc, which achieved its most profitable third quarter with a non GAAP operating profit of 28 million. PBM product sales grew 20% year over year, supported by the GA brand's strong performance. E-Commerce revenue grew 2.4% year over year, and while BC product sales revenue decreased 8.9% year over year, the gross margin expansion across segments contributed to the overall profitability.

A：Vincent Chu believes that the company is firmly on track with its strategic transformation, which includes a resilient e-commerce foundation, accelerating brand management momentum, and technology acting as a catalyst.

A：The company anticipates that 2026 will mark an inflection point, transitioning from transformation investment to sustained profitable growth.

A：Profitability improved significantly, with a year-over-year increase in the blended gross margin for product sales at group level to 34.3%, and a 26.1% increase in gross profits to 277.4 million. The gross margin for e-commerce product sales expanded to 30.1%, and the gross margin for BVM was 56.5%, reflecting success in merchandising and marketing initiatives.

A：Sales and marketing expenses increased by 10.7% to 886.6 million due to higher costs in BC, mainly attributed to higher spending on creative content and digital marketing. Expenses also increased for BBN due to a larger offline network and more marketing initiatives.

A：The non GAAP loss from operations was 10.8 million, which is a significant improvement from 85.2 million in the same period last year. Bc's adjusted non GAAP operating income was 28.1 million, showing an improvement of 30% compared to a loss of 38.7 million in the prior year.

A：As of September 30, 2025, the company's cash and cash equivalents, including restricted cash and short-term investments, reflect an accounting update related to the expiration of options linked to the minority investment in Baton's warehouse and logistics.

A：The reclassification of Bao Tong's investment was prompted by the redemption of shares within a specified period starting from August 2024, which led to the adjustment of the investment classification from a complex financial instrument between liabilities and equity to noncontrolling interest and equity item.

A：BC's e-commerce business experienced a solid performance in the third quarter with a stabilizing revenue base, a significantly improved revenue mix, and quality, resulting in a notable improvement in profitability. Operating profit reached 28 million, making this the most profitable third quarter in recent years for BC.

A：Strategic changes included a focus on profitability over volume by optimizing selected clients in the health and nutrition category and shifting certain clients in the beauty and cosmetics category from a DC mode to a service model. These changes, based on a review of each segment's market dynamics, resulted in stronger profitability and a 20% increase in turnover to A and efficient levels.

A：The focus on quality and profitability led to healthy growth in the beauty and cosmetics, alcohol, and apparel categories. BC is expanding its pipeline within distribution and applying deeper expertise and a more brand owner-oriented mindset, which is expected to drive top line growth in 2026.

A：Services revenue grew by 6% in the third quarter, primarily driven by strong performance across all operations. The growth is attributed to the core and category with all key segments generating encouraging top line growth, and the strong performance of the service model.

A：BC was accredited as a premium service partner, signifying leadership on a viral life platform. BC continued to pioneer live stream content and formats, including scenario-based showcases and celebrity collaborations, to drive quality business contributions and enhance brand E's overall success.

A：Efficiency-enhancing measures, including the ongoing application of artificial intelligence and automation tools and lean cost control initiatives, played a critical role in the current quarter's profitability. These efforts helped to drive the bottom line and set a foundation for long-term value.

A：BDM maintained strong growth momentum with a 20% year-over-year increase in total revenue to 396 million. The growth was driven by improvements in same store sales, traffic, average transaction value, and network expansion. Gross profit grew by 28% year over year to 223 million, with a slight increase in gross profit margin. These results highlight the effectiveness of merchandising and marketing initiatives and improved overall profitability.

A：Key marketing initiatives for Gieves included appointing Chen Yi as the brand ambassador, launching the 'Minded Gap Bridge Gap' campaign using music to engage younger audiences, and introducing the 'Gift Club' capsule collection while upgrading offline stores. These efforts helped to attract customers, strengthen the brand image, and deliver meaningful business results. In merchandising, a higher mix of online exclusive and segmented products was introduced across different marketplaces, and Gieves continued to collaborate with major platforms and participate in promotional events to accelerate traffic and conversion.

A：Bao Brand Management's offline portfolio now stands at 171 stores following Hunter's network expansion. A National Panda conference was hosted in September, gathering 12 top business partners from all important provinces, half of whom were new partners with strong brand portfolios and operating expertise. These new partnerships have aligned with the company's expansion plan by enhancing business in key cities in North, Southwest, and South China.

A：The recent Double 11 campaign delivered a quarter of healthy growth and brand revitalization, supported by integrity marketing campaigns. There were significant improvements in brand performance across all key divisions, and the company is on track to achieve gift brand break-even in the upcoming fourth quarter. The success reflects strengthening emotional relevance and culture momentum for the brand.

A：According to the company's observation, consumer sentiment is improving as consumers are more targeted in their spending, focusing on value and waiting for promotions, discounts, and benefits from the brand. The strongest consumer willingness is noted in the sports, apparel, and snack categories. Post the recent promotions, it is expected that the consumption willingness and brand investment in marketing budgets and new inventory will strengthen further.

A：During the past double 11, many brand partners focused on improving their P&L, leading to better results from their global strategy. This year, the company anticipates stronger support from brands in terms of marketing fees and inventory allocation for the new year. Next year, the strategy for the Bec division is to expand margins and optimize cost efficiency, while for the BBC business, priorities include successful brand operations, developing synergy between BDM and Bec, and increasing ownership in the distribution business to enhance profitability.

A：The strategic priorities include expanding margins and optimizing cost efficiency for the Bec division, and ensuring each existing brand in the BBC portfolio is successful with strong operations and potential for future growth. The company is also focusing on developing the goods distribution model, which has been successful, and plans to expand this model into more brands. There is an emphasis on investing in data warehouses and AI technology to leverage past successes and drive future growth. The company is also careful in selecting new brands for the BBC portfolio to ensure success and applying its high-ownership business knowledge to new categories.

A：The company views the strategic shift as a merging of content with traditional e-commerce, where content is intertwined and plays a crucial role before transactions. The brand, Boston, is adapting to this change by focusing on building content and emotional linkage, rather than just directing traffic to stores. This approach involves integrating content with transactions and investing marketing fees in content-driven initiatives.

A：Yes, the company's relevant categories have benefited from the stabilization and recovery of premium consumption, especially after the double 11 event. The luxury category has been taking the lead in driving results and has maintained a 60% YoY growth for the past three years, highlighting the significance of content-driven strategies in this sector.

A：The company's strategy for creating emotional linkage involves investing in content and closely tracking the ROI of that content to transactions. Platforms provide tools and mechanisms to validate content investments, allowing brands to adjust and harmonize marketing spending with e-commerce operations. This includes focusing on content that drives transactions, not just traffic, to achieve future growth.

A：Management is confident about the company's performance in both the B2C and B2B sectors in the coming quarter, due to day-to-day business management. For the full year 2026, the company aims to deliver another solid growth while developing synergies between B2C and B2B, anticipating significant improvements in profitability. The priority is to ensure each brand meets expectations and to develop synergy between platforms. New brand acquisitions will be handled cautiously.

A：The collaboration with a top-tier brand ambassador has resulted in a 25% increase in young customer segments and a broader increase in the customer base. The campaign has also seen a rise in user-generated content discussing the brand and products within the younger generations. The initiative promoted key category products and further strengthened brand and product awareness. Additionally, the kids and baby business has seen synergy as nearly all stores sell both adult and children products, resulting in increased unit transactions and family customer purchases.

A：In the long term, the company expects to continue expanding its customer base, brand awareness, and sales by capitalizing on the marketing assets from the recent campaign. They foresee double-digit growth in Q4 and expect a continuous double-digit increase in sales for the next year. With the introduction of a new store image and further store expansion, the company aims to improve profit and maintain the momentum of sales growth.