Dingdong (Cayman) - Q4 2023
February 29, 2024
Transcript
Operator (participant)
Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to the Dingdong Limited Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please note that this event is being recorded. I would now like to turn the conference over to the first speaker today, Nicky Zheng, Director of Investor Relations. Please go ahead.
Nicky Zheng (Director of Investor Relations)
Thank you. Hello, everyone, and welcome to Dingdong's Fourth Quarter 2023 Earnings Call. With me today are Mr. Changlin Liang, our founder and the CEO, and Mr. Song Wang, our CFO. You can refer to our Fourth Quarter 2023 financial results on our IR website at ir.dingdong. You can also access a replay of this call on our IR website when it becomes available a few hours after its conclusion.
For today's call, management will go through their prepared remarks, which will be followed by a question-and-answer session. Before we continue, I would like to refer you to our safe harbor statements in our earnings press release, which also applies to this call.
As we will be making forward-looking statements, please note that all numbers stated in the following management prepared remarks are in RMB terms, and we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported in our earnings press release and filings with the SEC. I will now turn the call to our first speaker today, the founder and the CEO of Dingdong, Mr. Liang.
Changlin Liang (Founder and CEO)
谢谢各位投资人、各位分析师、各位 Dingdong 买菜的朋友。欢迎大家来参加 Dingdong 买菜 2023 年 Q4 的财报分析会。
Speaker 6
Hello, everyone, and welcome to Dingdong's Fourth Quarter 2023 Earnings Call.
Changlin Liang (Founder and CEO)
首先我想简单回顾一下 Dingdong 买菜 2023 年 Q4 以及全年的业绩情况。随着效率优先、兼顾规模的发展战略持续推进，我们不仅实现了连续 5 个季度的 non-GAAP 口径下的盈利，也实现了 non-GAAP 标准下的首次季度盈利。在 Q4，Dingdong 买菜实现营收 44.9 亿元，GMV 为 55.3 亿元，毛利率环比提升至 30.6%。经营性现金流净流入 1.2 亿元，non-GAAP 标准下净利润率为 0.3%。全年来看，营收 199.7 亿元，GMV 为 219.7 亿元，毛利率 30.7%，non-GAAP 标准下净利润率为 0.2%。
Speaker 6
First, let me give you a brief overview of Dingdong's performance in fourth quarter and for the full year 2023. As we consistently implemented our developer strategy of efficiency first with due consideration of scale, we not only achieved non-GAAP profitability for the fifth consecutive quarter but also marked our first full year of non-GAAP profitability. In fourth quarter, we generated revenue of RMB 4.99 billion with a gross merchandise volume or GMV of RMB 5.53 billion. Our gross profit margin increased to 30.6% sequentially, with a net operating cash inflow of RMB 120 million.
Our non-GAAP net profit margin was 0.3%. For the full year, our revenue was RMB 19.97 billion with a GMV of RMB 21.97 billion. Our gross profit margin was 30.7%, and our non-GAAP net profit margin was 0.2%.
Changlin Liang (Founder and CEO)
本季度 GMV 同比下跌，主要原因是在 2022 年同期疫情封控下消费者居家，下单需求增加。同时也受到我们 2023 年暂停部分城市及站点运营的影响。虽然 2023 年全年受到猪肉、蔬菜等 CPI 价格持续下滑的影响，但受益于我们在商品结构的持续优化和商品力上的深耕。在消费者需求有所收敛的大环境下，我们全年的笔单价还基本稳定在 72.1 CNY。虽同比疫情封控比较严重的 2022 年有所下跌，但对比 2023、2021 年增长了 23%。
Speaker 6
GMV declined on a year-over-year basis in the fourth quarter, primarily due to the high base effect during the same period of 2022 when continuing pandemic restrictions drove a surge in order volumes. It was also partly caused by the suspension of operations in some cities and stations in 2023.
Nevertheless, we have continued to optimize our commodity structure and enhance our product development capabilities to mitigate the impact of declining consumer prices for certain commodities, such as pork and vegetables, throughout 2023. As a result, the average order value or AOV remained stable at RMB 72.1 in fourth quarter. Despite declining year-over-year, the AOV was still 23% higher than in the same period of 2021.
Changlin Liang (Founder and CEO)
本季度用户在 Dingdong 的月均下单频次继续稳定在 4 次以上，同比有 4.5% 的提升。其中老用户，例如 2017 年的老用户，消费频次是 5.8 次，同比环比均有进一步提升。本季度会员月均下单人数环比提升了 1.9%，绿卡会员贡献占整体订单量以及 GMV 的比例在持续提升。非常感谢我们这群忠诚度极高的用户对 Dingdong 商品和服务的信赖。我们将持续加强产品和服务创新，继续服务好我们的新老用户。
Speaker 6
During the fourth quarter, Dingdong's users placed over 4 orders per month, a year-over-year increase of 4.5%. Notably, users who were onboarded in 2017 increased their purchasing frequency sequentially and year-over-year to 5.8 times per month. Additionally, fourth quarter saw a 1.9% sequential increase in the number of members who placed orders per month. Members' contributions to the order volume and GMV also increased. We thank our loyal users for their trust in Dingdong's products and services. We're committed to innovating our offerings to better serve new and existing users.
Changlin Liang (Founder and CEO)
annual growth of 13.5%. The company's overall average order value increased from RMB 58.6 in 2021 to RMB 72.1 in 2023, and the monthly average order frequency increased from 3.74 in 2021 to 4.0 in 2023.
Speaker 6
We made significant progress at the operational level during 2023, despite the decline in online consumption post-pandemic and the operational adjustments we undertook. Our full-year GMV declined slightly year-over-year to RMB 21.97 billion but grew substantially from 2021.
Specifically, when compared to 2021, total GMV in our core East China market grew at a staggering CAGR of 10% and 13.5% on a same-store basis. The AOV also increased from RMB 58.6 in 2021 to RMB 72.1 in 2023. Additionally, the average monthly order frequency increased from 3.7 orders per month in 2021 to four orders per month in 2023.
Changlin Liang (Founder and CEO)
Dingdong 买菜在商品力建设上也取得了骄人的成绩。我们自有品牌商品的 GMV 整体渗透率在 2023 年底 Q4 首次突破 20%，达到了 21.1%，较去年同期增加了 3.1 个百分点。用户渗透率达到了 73.6%，对比去年同期提升了 1.6 个百分点。包含预制菜的非生鲜品类，自有品牌 GMV 渗透率已经达到了 34.3%，较去年同期提升了 7.7 个百分点。
Speaker 6
Dingdong has made remarkable progress in building its product development capabilities. In fourth quarter, our private label products accounted for more than 20% of total GMV for the first time, hitting 21.1%, a significant year-over-year increase of 3.1 percentage points.
Moreover, the user penetration rate of our private label products also increased by 1.6 percentage points year-over-year, reaching an outstanding 73.6%. Notably, for non-fresh grocery categories, including prepared meals, the GMV contribution from our private label products has skyrocketed to 34.3%, a striking year-over-year increase of 7.7 percentage points.
Changlin Liang (Founder and CEO)
我们始终坚守在生鲜和食品领域，高效感知用户需求，培养出了一批成功的自有品牌和爆款产品，形成了独特的品牌矩阵，建立了消费者心智，赢得了用户的口碑和复购。三年多时间里，我们成功地运营了预制菜、猪肉、豆制品这三大品类的自有品牌。在 2023 年，这三个品类的自有品牌 GMV 渗透率都超过了 50%。
Speaker 6
We remain committed to providing our customers with fresh and high-quality grocery and food products. We're quick to identify and respond to the changing tastes of our users, which has created opportunities for us to launch several popular and highly successful private label products. As a result, we have built a unique brand portfolio that has earned the trust and loyalty of our customers.
Over the past three years, we have successfully launched private label products across three major categories: prepared meals, pork, and soy products. In these three categories of private labels, penetrated over 50% of GMV in 2023.
Changlin Liang (Founder and CEO)
这些成功的品牌包括：1. 主打家常菜的预制菜自有品牌菜常青，2023 年 GMV 约 RMB 840 million，同比 2022 年增长了 43%。四季度月均复购用户占比达到了 37%。
Speaker 6
Let me share some examples. First is Cai Chang Qing, a private label product specializing in prepared home-cooked meals. In 2023, GMV totaled approximately CNY 840 million, a significant increase of 43% from 2022. In the fourth quarter of 2023, the average number of monthly repurchasing users reached 37%, showcasing the brand's popularity among its customers.
Changlin Liang (Founder and CEO)
2. 主打面点的良心匠人，2023 年 GMV 约 CNY 500 million，同比增长了 19%。四季度月均复购率接近 40%。
Speaker 6
Second is Good Craftsman Noodles, which specializes in pastries and recorded GMV of approximately RMB 500 million in 2023, an increase of 19% from 2022, with an average monthly repurchase rate of nearly 40% in the fourth quarter.
Changlin Liang (Founder and CEO)
3. 只卖一天的日鲜猪肉品牌，是我们最早成立的品牌，2023 年 GMV 约 RMB 300 million，同比增长了 7%。四季度月均服务率 32%。
Speaker 6
Third, our oldest brand, Fresh Everyday Pork, which has a shelf life of only one day. In 2023, it drove GMV of approximately RMB 300 million, an increase of 7% from 2022, with an average monthly repurchase rate of 32% in the fourth quarter.
Changlin Liang (Founder and CEO)
4. 同时我们聚焦特色黑猪肉，打造的以黑钻世家为代表的黑猪肉自有品牌，表现也非常亮眼。2023 年 GMV 约 2.3 亿元，同比增长了 68%。四季度月均服务率超过了 36%。
Speaker 6
We also launched a specialty black pork brand called Black Diamond Family, which was well received by consumers. GMV in 2023 reached around RMB 230 million, a 68% increase from 2022. In the fourth quarter, its average monthly repurchase rate exceeded 36%.
Changlin Liang (Founder and CEO)
5. 主打豆制品的有豆制品牌，2021 年底上线。在两年多的时间里迅速占领用户心智，全年 GMV 突破 CNY 250 million，同比增长了 24%。四季度月均服务率更是超过了 41%。
Speaker 6
You Dou Zhi brand, launched in late 2021, is dedicated to producing soy products. Over the past two years, it has gained significant popularity among consumers, with an annual GMV surpassing 250 million RMB, representing a year-over-year increase of 24%. In the fourth quarter, its average monthly repurchase rate exceeded 41%.
Changlin Liang (Founder and CEO)
同时我们在2023年还把我们的自有品牌和自有供应链商品放到Dingdong买菜平台之外的外部渠道上进行销售，和市场其他的产品直接PK。一年的时间里，外销规模做到了约CNY 500 million，取得了不错的成绩，证明了我们自有品牌和自有供应链能力的核核心潜力。未来我们也会继续在市场上为消费者带来更多优质低价的好商品。
Speaker 6
In 2023, we started selling our private labels and supply chain products through external 2B channels, where they began competing directly with other products. In just one year, we generated around RMB 500 million in sales through external channels, which I believe showcases the strength of our brand and supply chain. Moving forward, we aim to continue delivering high-quality and affordable products to consumers and market.
Changlin Liang (Founder and CEO)
除了来自消费者端的肯定，我们也在生鲜和食品研发领域上获得了行业的肯定。我们在第七届 PLF 金星奖中获得了 13 项大奖，包括 11 项卓越商品奖、1 项卓越团队奖、1 项优秀操办手奖。获奖的商品包含了豆制品、预制菜、水果、乳品饮料、烘焙等众多品类。同时，在第三届金视奖瑞品牌大赏的评选中，预制菜事业部的自有品牌菜常青和 Dingdong 王牌菜在 300 多家参选品牌、约 1,300 件参赛作品、100 多位评委的评选、20,000 多消费者的调研中突出重围，成功斩获了 3 项品牌大奖。
Speaker 6
Our products have received widespread consumer and industry recognition in fresh groceries and food product R&D. We won 13 awards at the seventh PLF Gold Star Awards, including 11 outstanding product awards, one outstanding team award, and one outstanding trader award. Our award-winning products span across various categories, such as soy products, prepared meals, fruit, dairy, beverages, baked goods, and more.
At the third Golden Power Awards, Shop Brand Awards, our prepared meal private labels Cai Chang Qing and Dingdong Top Dish stood out from a highly competitive market of over 300 participating brands and approximately 1,300 participating products by securing three awards. The awards were based on the evaluations by over 100 judges and 20,000 consumers.
Changlin Liang (Founder and CEO)
与此同时，我们也首次实现了年度 non-GAAP 标准下的盈利，对 Dingdong 买菜和我们这个行业来说都很有意义。
Speaker 6
We achieved full-year non-GAAP profitability for the first time in 2023, a critical milestone for both Dingdong and the industry.
Changlin Liang (Founder and CEO)
第一，说明我们度过了艰难时期。早些时候因为宏观环境的调整和竞争格局的变化，公众对 Dingdong 买菜有生死存亡的质疑和担心。今年的成绩已经说明我们已经坚定地生存下来了。第二，Dingdong 买菜的战斗力和快速反应能力再次得到了验证。在社会发生大变革的时候，很多过去追求的能力和有效的方法都未必再持续有效，而快速反应能力和反脆弱力是生存的基础能力，必将带领 Dingdong 买菜在多变的商业环境中继续取得成功。
第三，Dingdong 买菜是这个行业中率先盈利的头部企业，也是目前头部企业中唯一盈利的。这证明了只有扎扎实实地做难的事情、做重的事情、做对的事情，才是人间正道。第四，在解决了生存问题后，2024 年 Dingdong 买菜有能力、有精力、有资源去重返增长的轨道。
Speaker 6
To start, this reflects how we have successfully navigated a highly challenging macroeconomic and competitive environment in which many raised doubts about the company's sustainability. Second, it reflects our outstanding corporate flexibility and adaptability. With the market changing rapidly, these attributes will remain critical to our long-term sustainability.
Third, it makes us the first among many in the sector to achieve profitability. Getting here was a long and difficult journey, but we stuck to our principles and vision. Lastly, having attained profitability, we're looking confidently to the future as we focus on maintaining sustainable long-term growth.
Changlin Liang (Founder and CEO)
最后，我们展望一下2024年全年以及2024年一季度的情况。我们有信心2024年的GMV能够重回增长轨道，并且在此基础上连续实现全年non-GAAP口径下的盈利。2024年Q1在考虑了一季度春节不打样所支出的成本费用之后，我们依然能够做到non-GAAP口径下的盈利。连续的non-GAAP口径下盈利不断印证着公司在目前环境下的生存能力，同时也为未来的进一步发展提供了充足的子弹。我的发言到此结束，谢谢大家。下面请公司CFO王松来介绍一下公司的财务情况。
Speaker 6
Going forward, we're confident that our GMV will regain growth momentum in 2024, and are confident that we will be able to maintain non-GAAP profitability once again. Even after factoring in the costs and expenses incurred by staying open during the Chinese New Year holiday, we expect to be profitable on a non-GAAP basis during the first quarter of 2024.
Maintaining profitability in the current environment highlights the viability of our business model and provides us with additional resources to fuel our future development. Thank you all for listening. Now, I would like to invite our CFO Song Wang to go over the company's financials.
Song Wang (CFO)
谢谢梁总。大家好，在向大家介绍我们的财务情况之前，先说明一下，我们的所有数字都是以人民币为单位的。
Speaker 6
Thank you, Mr. Liang, and hello everyone. Before I review our financial performance, please note that all our figures are in RMB.
Song Wang (CFO)
2023年Dingdong买菜实现了全年GMV 219.7亿元，收入199.7亿元，non-GAAP净利润率为0.2%，同比上年优化了2.6个百分点。我们如期实现了承诺，完成了全年non-GAAP本质下的盈利。从2021年Q3确立效率优先、兼顾规模的战略打法以来，我们经过了两年多时间的努力。在non-GAAP本质下，我们已经从2021年年度亏损30.4%大幅提升到全年盈利0.2%。
Speaker 6
In 2023, Dingdong generated GMV of RMB 21.97 billion, revenue of RMB 19.97 billion, and a non-GAAP net profit margin of 0.2%, an improvement of 2.6 percentage points when compared to last year. We successfully met our targets and achieved full-year non-GAAP profitability. Our efficiency first, with due consideration of scale strategy, which we began implemented in third quarter of 2021, has paid off. After two years of hard work, we are proud to have moved from a non-GAAP annual loss margin of 30.4% in 2021 to a non-GAAP annual profit margin of 0.2% in 2023.
Song Wang (CFO)
同时，2023年Q4，Dingdong买菜实现营收49.9亿元，non-GAAP净利润率0.3%，经营性现金流净流入1.2亿元。从2022年Q4以来，我们已经实现了连续五个季度的non-GAAP本质下的盈利，并且继三季度之后再次实现了经营性现金流的净流入。同时，在2023年末Q2短期借款余额后，我们的实际自由资金余额为20.1亿元，是连续第二个季度的净增加。
Speaker 6
In fourth quarter of 2023, Dingdong achieved a revenue of CNY 4.99 billion, a non-GAAP net profit margin of 0.3%, and a net operating cash inflow of CNY 120 million. We have achieved non-GAAP profitability for five consecutive quarters since fourth quarter of 2022. Additionally, we once again achieved net operating cash inflow. At the end of 2023, after deducting the balance of short-term borrowings, our actual self-owned fund balance was CNY 2.01 billion, a net increase for the second consecutive quarter.
Song Wang (CFO)
这是我们在过往几年里持续坚持效率优先、兼顾规模取得的成绩，足以说明我们度过了艰难时刻，已经坚定地生存下来了。我们也有充足的子弹去重返增长的轨道。
Speaker 6
Over the past few years, we have achieved great success by prioritizing efficiency while considering the scale of our operations. The success has enabled us to overcome challenging times and establish ourselves firmly in the market. We have ample resources available to resume our growth trajectory.
Song Wang (CFO)
接下来我们来看一下Q4的具体财务情况。Q4的营收为49.9亿元，受到22年Q4疫情高基数和经营层次调整的影响，同比下降了19.5%。值得一提的是，我们江浙区域逆势上涨，2023年全年来看，江浙区域的GMV和订单量都实现了同比8%以上的正增长。
Speaker 6
Next, let's review the financial performance of fourth quarter in detail. Revenue for the quarter was CNY 4.99 billion, down by 19.5% year-over-year, mainly due to the high base effect created by pandemic restrictions during the same period last year and the suspension of operations in some cities and stations. However, it's important to note that regions such as Jiangsu and Zhejiang provinces have performed exceptionally well despite the challenging environment. Both GMV and order volume in these provinces grew by over 8% year-over-year throughout 2023.
Song Wang (CFO)
Q4的毛利率为30.6%，同比去年降低了2.3个百分点。在消费者越来越理性的当下，我们更多地让利消费者，毛利率符合我们的预期。未来，我们会继续为消费者提供更高的价值，让消费者买得实惠，吃得放心。同时，我们也会利用供应链和商品力的优势，向餐桌以外的吃的场景延伸，破品类圈层，大力发展自有品牌，打造头部大单品，持续治理长尾低消商品，提升端到端的供应链效率。在Q4，我们端到端全量入损耗率为1.3%，同比降低了0.4个百分点。
Speaker 6
In fourth quarter, our gross profit margin was 30.6%, a decrease of 2.3 percentage points from the same period last year. With consumers reducing their spending, we're working to entice them to our platform by offering added benefits while maintaining a reasonable gross profit margin. Moving forward, we'll focus on providing consumers with more value so that they can buy affordable and quality products without any worries. We also plan to explore new food consumption scenarios beyond the dining table.
We're leveraging our supply chain and product development capabilities to create private label and best-selling products while also carefully managing slow-moving commodities to improve supply chain efficiency. It's important to note that our supply chain loss rate was 1.3% in fourth quarter, an improvement of 0.4 percentage points compared to the same period last year.
Song Wang (CFO)
Q4的履约费用率为23.6%，同比去年优化了0.5个百分点。2023年，我们成功完成了分选中心仓网布局的优化。Q4大仓履约费用率同比优化了1.0个百分点，全年同比节省了1.8个百分点。同时，我们为进一步提升我们的服务力，主动增加了前置仓履约时效的投入。2023年四季度，即时履约单时长为36分钟，较三季度环比快了2分钟。全年来看，我们即时单履约时长控制在38分钟以内。在2024年，我们会通过优化运力结构、履约系统的迭代升级、仓内报耗材的节降，以及前置仓节能减排等精细化运营，对前置仓进行降本增效。
Speaker 6
Fourth quarter fulfillment expense ratio improved by 0.5 percentage points year-over-year to 23.6%. Throughout 2023, we implemented various optimization measures for our network of regional processing centers, which resulted in a 1.0% and 1.8 percentage points year-over-year decline in fulfillment expense ratio in fourth quarter and in full year 2023, respectively. Additionally, we increased our investment in frontline fulfillment stations efficiency to enhance our service capabilities.
As a result, we reduced our fulfillment time to rush orders to 36 minutes during the quarter, two minutes faster than in third quarter. Throughout the year, we maintained rush order fulfillment times to within 38 minutes. In 2024, we plan to reduce costs and increase the efficiency of Frontline Fulfillment Stations through further operational refinement, such as optimizing transportation capacity, iterative upgrades to our fulfillment system, reduction of packing and consumables, and implementation of energy conservation and emissions reduction policy in Frontline Fulfillment Stations.
Song Wang (CFO)
Q4的营销费用率为2%，同比去年提升了0.5个百分点。如前面所说，在优异的财务表现和充足的现金储备的前提下，2024年我们将适当加大在营销上的投入。
Speaker 6
Selling and marketing expense ratio in fourth quarter was 2%, up 0.5 percentage points year-over-year. As mentioned, we plan to allocate additional resources towards marketing in 2024 due to our strong financial performance and sufficient cash reserves.
Song Wang (CFO)
Q4的管理费用率较去年同期优化了0.5个百分点，到了1.9%。研发费用率较去年同期优化了0.3个百分点，来到了3.8%。我们将一如既往地在食品研发、农业科技和技术数据算法等方面持续进行研发投入。
Speaker 6
General and administrative expense ratio in fourth quarter improved to 1.9%, up 0.5 percentage points from the same period last year. Additionally, R&D expense ratio improved to 3.8%, up 0.3 percentage points from the same period last year. As always, we remain committed to investing in food research, agricultural technology, and data algorithms.
Song Wang (CFO)
2023年四季度，我们实现了non-GAAP口径下的0.3%的净利润率。这是我们连续第五个季度保持non-GAAP口径下的盈利。
Speaker 6
In fourth quarter 2023, we achieved a non-GAAP net profit margin of 0.3%, our fifth consecutive quarter of non-GAAP profitability.
Song Wang (CFO)
Q4我们实现了正向的经营性现金流。经营性现金流净流入为1.2亿元。截止四季度末，现金及现金等价物、短期受限资金和短期投资的余额为53.1亿元。在扣掉短期借款余额后，我们的实际自由资金余额为20.1亿元。最后，再给大家更新一下我们在春节期间的表现。在2月24号元宵节这一天，我们单日销售超过了1亿元，是疫情后的单日最高水平。除夕到元宵节的同店数据，单量同比提升了6%，GMV同比提升了5%。华东区域单量同比提升了9%，GMV同比提升了7%。考虑到今年春节长假期间，江浙沪返乡出行的居民同比增长较大的情况下，以上表现更加难能可贵。
Speaker 6
We generated a positive operating cash inflow of CNY 120 million in the fourth quarter. As of the end of fourth quarter, the total balance of our cash and cash equivalent, short-term restricted cash, and short-term investment was CNY 5.31 billion. After deducting the balance of short-term borrowings, we have ample cash on our balance sheet with CNY 2.01 billion. I would like to update you on how we did during the Chinese New Year.
On 24 February 2024, which was the Lantern Festival, we achieved a GMV of more than CNY 100 million in just one day, setting our highest single day record post-pandemic. Additionally, between the Chinese New Year's Eve and Lantern Festival, on the same store level, our overall order volume increased by 6% year-over-year and GMV by 5%. In East China, our order volume increased by 9% year-over-year and GMV by 7%. It's worth noting that this performance is even more impressive considering that during the Chinese New Year, there were significantly more outbound residents from Jiangsu, Zhejiang, and Shanghai.
Song Wang (CFO)
我们的财务储备充分。在2024年，我们会继续用高品质的服务为消费者提供极致性价比、品质品的商品。同时，我们也会利用我们在全流动的供应链能力和系统能力来持续提升我们的运营效率和盈利能力。
Speaker 6
For 2024, our primary focus will be to maintain our high-quality services and deliver products that offer the best cost-effectiveness and quality ratio to our valued customers. Furthermore, we'll take advantage of our comprehensive supply chain and system capabilities to improve our operational efficiency and drive profitability.
Song Wang (CFO)
我们今天的发言到此结束。Operator，下面可以进入提问环节了。
Speaker 6
This concludes our speech today. Operator, we can now start the question-and-answer session.
Operator (participant)
Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two.
When asking the question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call. At this time, we will pause momentarily to assemble our roster. The first question today comes from Jiajing Chen with CICC. Please go ahead.
Jiajing Chen (Equity Research Assistant covering Internet)
嗨，梁总好，王总好。我是中金公司的分析师陈嘉静，很高兴给我这个提问的机会。也恭喜公司连续实现5个季度 non-GAAP 口径的盈利。我看到公司最近发了公告，将在2025年1月28号前回购至多2000万美元的一个股份。想请问一下关于回购，公司是怎么去考虑的呢？谢谢。我来翻译一下。 Hello Mr. Liang and Mr. Wang, I am Chen Jiajing from CICC. Congratulations on achieving five consecutive quarters of non-GAAP profitability. Dingdong recently announced that the company plans to repurchase up to $20 million of its shares by 28 January 2025. Could you give us more color on this? Thank you.
Changlin Liang (Founder and CEO)
谢谢您的问题。先向大家简单汇报一下，我们在1月底对外公告了持续一年的总回购金额上限为$20 million的股票回购计划。那我们计划在本次季报披露后的非季末期内开始回购。
Speaker 6
Thank you for your question. As you mentioned, we recently announced a stock repurchase plan that will last one year, with a total limit of $20 million. We expect to begin buying back shares once the blackout period ends following earnings.
Changlin Liang (Founder and CEO)
从长期的角度来看，我们认为我们目前的股价被严重低估了。那么对于现金储备充足的公司来说，回购股票是分配资金的好方法，特别是在股价被低估的时候，既有利于公司自身，也有利于股东。基于公司内部情况以及对未来的信心，我们认为公司目前整体经营状况良好，有充足的现金储备。同时我们也毫不担心未来一年的现金流，我们有足够的自有资金来发起这个股份回购。
Speaker 6
Our stock is significantly undervalued at the current price, especially in view of our long-term growth prospects. Given our ample cash reserves, buying back stock is an effective way to allocate capital, especially when the stock is undervalued. This program will be beneficial for both the company and its shareholders.
Based on the company's internal operations and our confidence in its future, we're convinced that our overall operations are in very good condition. We have ample cash reserves and zero concern about cash flow for the next year. This leaves us in an ideal situation and position to carry out a share buyback with our own cash.
Changlin Liang (Founder and CEO)
在目前的经济和市场情况下，我们希望通过这样的手段展现公司健康的财务情况，改善企业的内在价值，同时也展现对自己长期价值提升的信心。但同时我们也还是要明确一点，股票回购只是一种市场行为，提高企业综合价值的关键还是在于目前我们持续提高的经营能力，这样才能持续长期可持续发展。谢谢。
Speaker 6
Given current economic and market conditions, this share repurchase program reflects our strong financial position. Our goal is to increase the company's intrinsic value and show that we have confidence in its long-term growth. However, it's important to note that buying back shares is just market activity. The key to enhancing the company's overall value lies in our ability to continuously improve our operational capabilities, ensuring sustainable and long-term development. Thank you.
Operator (participant)
The next question comes from Thomas Chong from Jefferies. Please go ahead.
Speaker 5
梁总你好，感谢接受我的提问。我这边问题就是想问我们是否能对全年做个总结，然后从战略上与之前是否有什么变化。 I will translate myself. Thanks for taking my question. My question is, can you provide a summary of the year, and are there any changes in strategies? Thanks.
Changlin Liang (Founder and CEO)
好，谢谢您的问题。首先我想跟大家分享一句话，叫 "Hard times create strong men." 就是说艰难的时刻总能创造勇敢的人和勇敢的团队。那么这句话对应着我们的两个阶段。第一个是在疫情期间，我们面对着各种各样的挑战和困难，包括系统人员供应链的承接能力。我们挺身而出，坚持了下来，成为了内心强大的公司。第二就是现在，在今天这样可以说是复杂的大环境下，我们会遇到很多挑战。如果我们能够坚持下去，那我们也将成为一家更加强大的公司。
Speaker 6
Thank you for your question. Before we move forward, I would like to share a saying with you: "Hard times create strong men and strong teams." This sums up perfectly our journey through the pandemic. We faced numerous challenges and difficulties, including issues with our systems, personnel, and supply chains. But we didn't let these obstacles get the best of us. Instead, we stood up and persevered, emerging a much stronger company overall.
Now we find ourselves facing a new and challenging environment that will present more obstacles going forward. Given our recent experience, however, I'm confident we'll emerge as an even stronger company on the other end.
Changlin Liang (Founder and CEO)
坚持和变化是我们从成立之初到现在的信念。我们一直坚持在这个行业中深耕。这是坚持。在整个过程中我们又有不少变化，包括我们在2018年以后不断开新城，同时承担着很多亏损。到2021年7月，我们调整战略为效率优先，兼顾规模。至今我们连续五个季度实现盈利，从巨亏走向盈利。这是我们的变化。
Speaker 6
At our company, we've always believed in the power of persistence and change. We've worked tirelessly to drive the industry forward and have made significant progress in this regard. But we also recognize the importance of change and made any adjustment over the years. For example, we've built a presence in multiple new cities after 2018, even though it meant incurring losses over the medium term.
However, we're proud to say that since July 2021, which is when we adopted the strategy to prioritize efficiency with due consideration to scale, we've been profitable on a non-GAAP basis for five consecutive quarters. This is a testament to our commitment to both persistence and change, and we're excited to see what the future holds.
Changlin Liang (Founder and CEO)
应时而变，顺时而为，一直是我们坚信的发展之道。现在随着大环境的变化，随着消费趋势的变化，我们也需要对自己的做法做些调整。首先是深挖洞。
Speaker 6
We've always believed in the power of adapting to the changing times and following evolving consumer trends. In the current environment, it's crucial to stay on top of these changes and make the necessary tweaks to remain relevant and successful. One way to do that is by digging deep.
Changlin Liang (Founder and CEO)
一、在深耕江浙沪区域的基础上，做强我们当下的经营区域，进一步提高我们在当下区域的市场渗透。
Speaker 6
First, we'll focus on strengthening our strongest markets, particularly in Jiangsu, Zhejiang, and Shanghai. We can work towards improving our market penetration in these regions to further expand our reach.
Changlin Liang (Founder and CEO)
在当下做好一餐饭品类优势的基础上，我们也会利用供应链的优势，向餐桌以外的吃的场景延伸，破品类圈层。在自由品牌的建设上，我们会在当下已经取得长足进展的基础上，进一步提高非生鲜品类的自由品牌占比。同时打造头部大单品，始终围绕着成为中国家庭生鲜和食品购物的首选的目标努力。
Speaker 6
In addition, we'll utilize our existing strengths in the meals category and leverage the efficiency of our supply chain to expand beyond traditional dining scenarios. This will enable us to break through into new categories to reach new heights. We'll increase the proportion of private label products in the non-fresh grocery categories, building on the significant progress we already have made. At the same time, we'll focus on developing and promoting best-selling products to become the preferred choice for grocery and food shopping for Chinese families.
Changlin Liang (Founder and CEO)
在渠道建设上，从上面所讲，我们会进一步加大在现有区域用户渗透的资源投入，重回GMV增长目标。与此同时，我们会进一步加大与包括抖音、饿了么等外部渠道的合作，增加在上市渠道的市场份额。
Speaker 6
When it comes to our channel strategy, as I mentioned earlier, we plan to invest more resources in deepening our reach to users in existing regions to achieve our GMV growth targets. Additionally, we'll collaborate even more closely with Douyin and Ele.me and seek partnerships with other external channels to expand our market share in these channels.
Changlin Liang (Founder and CEO)
其次是广济粮。在延续过往效率优先、兼顾规模的基础上，我们会在2024年进一步提升供应链的效率。且经团队初步盘点后，我们已经有了相对明确的行动方案。同时在区域上，我们也会加快亏损区域在整体经营能力上的调整、改善和止血。在这两方面做好之后，我们能才能在冬天中活下来，进而更好地迎接下个春天。
Speaker 6
Our second priority is to focus on the long-term sustainability of our business. To achieve this, we'll prioritize driving efficiency while scaling our business and improving our supply chain efficiency further. We have already mapped out a number of actionable measures that we'll take this year to do so. Additionally, we aim to speed up the operational adjustments and improvements we're making in loss-making areas at a regional level to stem financial losses. This will ensure that we can survive the challenging environment we currently face and position ourselves to grow once things improve.
Changlin Liang (Founder and CEO)
正如我们以前财报分析会上所提到的，在疫情后，零售企业需要适应充满挑战的新环境、消费者购物的心态趋于确定性。这时零售终将回归到商业本质，需要更好地提供给消费者购物过程中确定的服务能力、稳定的品质保障和价格竞争力。在这个冬天，我们将持续磨练商品力、服务力、运营力以及组织能力等基本功。谢谢。
Speaker 6
As we mentioned in previous earnings calls, retailers need to adapt to a complex new post-pandemic environment. What consumers want most in the current environment is certainty, and instant delivery retail can cater to this by providing reliable service, stable quality assurance, and competitive pricing. Given this climate, we'll continue refining our core competencies, including product, service, operational, and organizational capabilities. Thank you.
Operator (participant)
As a reminder, if you have a question, please press star then one to be joined into the question queue. That's star then one to enter the question queue. As there are no further questions, I'd like to return the call to our management for closing remarks.
Nicky Zheng (Director of Investor Relations)
Thank you again for joining our call today. If you have any further questions, please feel free to contact us or request through our website. We look forward to speaking with everyone in our next earnings call. Have a good day.
Operator (participant)
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.