Viomi Technology Co., Ltd. 2H and Full Year 2025 Earnings Call - Global Water push fuels growth, but H2 subsidy drop dents domestic sales

Operator: Hello, ladies and gentlemen, thank you for standing by for Viomi Technology Co., Ltd. earnings conference call for the second half and full year of 2025. At this time, all participants are in listen-only mode. Today’s conference call is being recorded. I will now turn the call over to your host, Miss Claire Ji, the IR Director of the company. Please go ahead, Claire.

Claire Ji, IR Director, Viomi Technology Co., Ltd.: Hello everyone, and welcome to Viomi Technology Co., Ltd.’s earnings conference call for the second half and the full year of 2025. As a reminder, this conference is being recorded. The company’s financial and operating results are posted online. You can download the earnings press release and sign up for the company’s email distribution list by visiting the IR section of the company’s website at ir.viomi.com. Participating in today’s call are Mr. Xiaoping Chen, the founder, chairman of the board of directors and chief executive officer, and Sam Yang, the head of our capital and investment department. The company’s management will begin with prepared remarks, and the call will conclude with a Q&A session. Before we continue, please note that the company’s discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve inherent risks and uncertainties. As such, the company’s actual results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company’s annual report on Form 20-F and other filings filed with U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required by law. Please also note that Viomi’s earnings press release and this conference call include discussions of unaudited GAAP financial information, as well as audited non-GAAP financial measures. In addition, Viomi’s press release contains a reconciliation of the audited non-GAAP measure to an audited most directly comparable GAAP measure. I will now turn the call over to our founder, Mr. Xiaoping Chen. Mr. Chen will deliver his remarks in Chinese, followed immediately by English translation. Mr. Chen, please go ahead.

Xiaoping Chen, Founder, Chairman of the Board of Directors, and Chief Executive Officer, Viomi Technology Co., Ltd.: 大家好，感谢大家来参加我们2025年的下半年和全年的业绩电话会。2025年下半年，随着中国不断的复苏，以及公司在海外市场拓展、新品的研发和品牌建设方面的一些战略投入，我们实现了9.5亿元人民币的销售收入，非母净利润约2,125万元人民币。从全年来看，核心业务基本盘依然稳固，全年实现总销售收入24.3亿人民币，同比增长14.6%，非母净利润约1.32亿人民币，净利润率5.8%。在过去的一年当中，我们推行Global Water的这么一个战略的持续落地，组建了跨国的专业团队，覆盖北美、东南亚和欧洲等地，以全球化的视野，赋能技术研发、市场布局和业务的拓展，不断地去围绕多元化的用户饮水需求进行技术突破，用AI的技术为用户带来更好的产品体验，努力成为全球领先的净水科技公司。在北美市场，我们亚马逊的渠道表现亮眼，在去年下半年环比实现三位数的同比增长，在Black Friday大促跻身净水类目的销售第十九位，在途家的五官奥新锐市场上排到第四名。高端的旗舰矿物质净水器Master One已进一步地公布了产品矩阵。在东南亚市场，我们与马来西亚线下的主要渠道达成战略的合作，并持续深化。针对当地推出体积小巧、搭载矿化和制冷功能的inno矿泉台面净水器。在品牌建设方面，我们邀请来自于不同国家的知名演员和歌手担任品牌代言人，出席线下的发布会，走进净水超级工厂，构筑科技健康的品牌形象。在今年的四月份，我们将携手全新的品牌形象，高端品牌形象亮相美国WQA的水展，这是全球水处理行业最具影响力的盛会之一，我们将向北美乃至全球的合作伙伴展示云米对于AI for Better Water的这么一个全新的产品定义。在制造和研发端，我们持续地夯实核心竞争力。云米的净水超级工厂全球化的布局迈出了关键一步，海外的精品工厂已部署完毕，展现集成、急热、制冷、制冰等模块化产品，为北美、欧洲、东南亚等海外市场的差异化提供敏捷的供应链的支撑。截止2025年全年底，全球的专利突破1,950项，布局14个国家和地区。对于在AI的智能算法、矿物质的精准调节和制冷的细分界等等领域，构筑起系统性的技术壁垒，为全球的业务拓展奠定坚实的基础。在股东回报方面，我们于2025年7月宣布派发$0.88美元的特别股息。今年的同年10月，公司获批第一轮的2,000万美元的股份回购，回购的额度，截止2025年12月31号，已累计回购103万股，总金额约250万美元。在近期发布的业绩预告当中，我们进一步宣布将向每ADS派发$0.066美元的特别股息，即总金额约3,100万元人民币的股东回报。感谢广大股东长期的信任和支持，我们始终珍视和股东的共同成长，致力于为股东提供长期价值。在2026年，我们将更坚定地执行Global Water的战略目标，在接下来四个方面取得突破。第一个就是聚焦海外，深耕战略市场，拓展更多的国家和地区，依托净水超级工厂的敏捷优势，持续推出本土化的新品，提高品牌的影响力，向更多的市场延伸。第二，坚持走差异化的路线，国内持续强化昆仑系列的健康新质，以技术差异化和产品创新引领品质升级，提升云米在净水市场的行业地位。第三，净水技术领航，加大AI和技术的深度融合，让技术创新成为公司穿越周期和持续增长的核心引擎。第四，深化合作，持续深化和全球战略合资伙伴的进一步合作，释放净水超级工厂的规模效应。云米将秉承长期主义，为全球用户创造价值，带来持续的股东回报。谢谢。

Claire Ji, IR Director, Viomi Technology Co., Ltd.: Thank you, Mr. Chen. I’ll quickly translate our founder’s remarks before discussing our financial performance. Hello everyone. Thank you for joining us today on our earnings conference call for the second half and full year of 2025. In the second half of 2025, amid the phasing down of the national subsidies scheme for home appliance trade-ins and the company’s strategic investments in overseas markets expansion, new product development and brand building, we delivered a total revenue of CNY 951 million and a net income attributable to ordinary shareholders of the company of CNY 21.2 million. For the full year, our core business remained solid, achieving total revenue of CNY 2.4 billion, representing a year-over-year increase of 14.6%.

Net income attributable to ordinary shareholders of the company stood at CNY 141.6 million, with a net profit margin of 5.8%. Over the past year, our global water strategy has continued to achieve milestones highlighted by the establishment of a multinational professional team covering North America, Southeast Asia, and Europe. Empowered by a global perspective, global across R&D and market expansion, we have constantly achieved technological breakthroughs addressing users’ diverse drinking water demand. By leveraging AI technology to enhance user experience, we are establishing ourselves as the world-leading water technology company. In the North American market, our Amazon channel delivered an outstanding performance in the second half, achieving triple-digit growth in sales on a sequential basis. During the Black Friday promotional season, our products ranked nineteenth in the water purifier category and fourth in under sink RO tankless segment.

Our premium flagship product, the Master One Mineral Water Purifier, further enriched our product portfolio. In the Southeast Asia market, we continue to deepen our strategic cooperation with online-offline channels in Malaysia through the launch of the compact Inno mineral water dispenser tailored for the local market and featuring both mineralization and cooling functions. On the brand building front, we engaged famous actresses and singers from different countries to serve as brand ambassadors. They participate in offline launch events and visit our facilities, strengthening our brand technology and health image. In April 2026, we will unveil our new brand series at the WQA Convention in Miami, showcasing our latest AI technologies and innovations at one of the most influential professional events in the global water treatment industry and presenting our redefined vision of better water to partners in North America and around the world.

In manufacturing and R&D, we kept boosting our competitive edge. We achieved a key milestone in the global expansion of Wellment’s water purifier gigafactory, commencing full operations of our overseas premium production line. This production line integrates module functions such as instant heating and cooling and ice making, providing agile supply chain support to meet differentiated needs and the markets in North America, Europe, and Southeast Asia. As of the end of 2025, our global patent application has surpassed 1,950, spanning 14 countries and regions. We have built highly competitive technological capabilities in areas such as AI-driven water quality algorithms, precision mineral control, and intelligent self-cleaning, laying out a solid foundation for the continued expansion of our global business. In terms of shareholder returns, we declared a special dividend of $0.088 per ADS in July 2025.

In August of the same year, we authorized a new share repurchase program of $20 million. By the end of 2025, we had repurchased a total of 1.03 million ADS, amounting to approximately $2.5 million. In our recently issued and published earnings release, we declared another special dividend of $0.06 per share, with an aggregate amount of CNY 31 million for shareholder return. As a gesture of gratitude for the long-standing trust and support of our shareholders, we deeply value the journey we take with our shareholders and remain committed to creating long-term value for them. In 2026, we will pursue our Global Water vision with greater determination, targeting breakthroughs in four key areas.

First, for overseas markets, we’ll deepen our presence in core strategic markets, such as North America and Southeast Asia. We are actively expanding into more countries and regions, leveraging the agility of our water purifier gigafactory. We will continue to launch new localized production, extending our brand influence into broader markets. Second, to advance our differentiation in the domestic market, we will further strengthen the health-centric positioning of the Kunlun series with its alkaline mineral concept. Third, on the technology front, we will deepen the integration of AI across water purification scenarios, making technological innovations the core engine that enables Viomi to navigate market cycles and achieve sustained growth. Fourth, we will continue to strengthen collaborations with global strategic partners, fully leveraging the scale effects of water purifier gigafactory to elevate both scale and efficiency.

Through this committed long-term approach, Viomi will continue to create value for global users and deliver sustainable return to you, our shareholders. Thank you. That concludes our founder’s remarks. I’ll now turn the call over to our Head of Capital and Investment Department, Mr. Sam Yang, to discuss our financial performance. Thank you.

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: Thank you, Mr. Chen and Claire. Thank you to everyone for joining us today. Let’s take a look at our unaudited financial results for the second half of 2025. We recorded net revenue of CNY 950.6 million, a decrease of 25.9% from CNY 1,282.4 million for the same period of 2024. Primarily due to the decrease in the home water systems. Now let’s look at the performance across three categories. Revenues from home water system were CNY 628.2 million, a decrease of 32.1% from CNY 925.7 million for the same period of 2024. Primarily due to the decline in additional service fees for water purifiers.

Revenues from consumables were CNY 112.2 million, a decrease of 17.9% from CNY 133.7 million for the same period of 2024. Primarily due to the decreased sales of water purifier filters to Xiaomi. Revenues from kitchen appliances and others were CNY 210.2 million, a decrease of 4.5% from CNY 220 million for the same period of 2024. Primarily due to the reduction in orders from Xiaomi as well as construction of Wellme brand product in this category. Gross profit were CNY 223.8 million compared to CNY 289.5 million for the same period of 2024.

Gross margin was 23.5% compared to 22.6% for the same period of 2024. The slight increase in gross margin was merely due to the elimination of the impact one-off cost incurred during the divestment of certain IoT at home business and our assets. Total operating expenses were CNY 248 million, an increase of 12% from CNY 221.5 million for the same period of 2024. Due to increased selling and marketing expenses, and a partial offset by decreasing G&A expenses. In greater detail, R&D expenses were CNY 76.3 million, an increase of 12.7% from CNY 67.7 million for the same period of 2024. Mainly attributable to an increase of investment in new product development.

Selling and marketing expenses were CNY 148.6 million, an increase of 29.8% from CNY 114.6 million for the same period of 2024. Mainly due to an increase in brand promotion investment, as well as higher personnel costs resulting from channel expansion. G&A expenses were CNY 23.1 million, a decrease of 41.2% from CNY 39.3 million for the same period of 2024. Primarily due to a decrease of employee compensation costs for credit losses. Net income attributable to company was CNY 21.2 million and the non-GAAP net income was CNY 28.2 million. Additionally, our balance sheet remained healthy. As of December 1...

As of December 31, 2025, the company had cash and cash equivalent of CNY 806.6 million. Restricted cash of CNY 164.4 million. Short-term deposits of CNY 258 million and short-term investment of CNY 82.6 million. Next. Let’s briefly discuss key financial results and audit for the full year 2025. Net revenues were CNY 2,428.2 million, an increase of 14.6% from CNY 2,119 million for 2024. Revenues from home water systems were CNY 1,686.6 million, an increase of 12.6% from CNY 1,498.4 million for 2024.

Revenues from consumables were CNY 235.4 million, a decrease of 14.2% from CNY 277.7 million for 2024. Revenues from kitchen appliances and others were CNY 506.2 million, an increase of 47.6% from CNY 342.9 million for 2024. Gross profit was CNY 615 million compared to CNY 548.7 million for 2024. Gross margin was 25.3% compared to 25.9% for 2024. Total operating expenses were CNY 529.4 million, an increase of 24.6% from CNY 424.9 million for 2024.

In greater detail, R&D expenses were CNY 165.6 million, an increase of 15.9% from CNY 142.9 million for 2024. Selling and marketing expenses were CNY 277.7 million, an increase of 31.5% from CNY 211.2 million for 2024. G&A expenses were CNY 86.1 million, an increase of 21.6% from CNY 70.8 million for 2024. Net income attributable to ordinary shareholders of the company was CNY 141.6 million, and the non-GAAP net income attributable to all the shareholders of the company was CNY 155.7 million. Thank you.

Claire Ji, IR Director, Viomi Technology Co., Ltd.: Yeah, this concludes our prepared remarks. We will now open the call for Q&A. Mr. Chen, our founder, and Mr. Sam Yang will join this session and answer questions. Operator, please go ahead.

Operator: Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. For the benefit of all participants on today’s call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Please stand by for the first question. First question today is from Jinyu Zhang from CICC. Please go ahead.

Jinyu Zhang, Analyst, CICC: Okay. Good evening, Viomi management team, and thank you very much for hosting this earnings call and giving me the opportunity to raise questions. Well, I have three questions covering brand development, overseas strategy, and profitability growth.

First and foremost, could you share the overall performance of the company’s self-owned brand, the Viomi, in 2025? Additionally, what are the key investment priorities and initiatives for Viomi’s brand building this year? Thank you.

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: 谢谢景瑜，一会儿我先说中文，待会儿Claire帮我翻译。我们如果看2025年我们的自有品牌的话，我们的规模主要来自于国内的线上。在整个这个线上渠道里面，我们在京东排名是比较靠前的，我们在年度的排名是去到了第十名。另外，在美国的亚马逊，在这个渠道里面，我们净水机排名的销量是在第十九位。如果我们再看细一点，我们把北美分线上跟线下来看的话，我们将来会用不同的品牌跟这个定位来做拓展，来提升我们品牌的这个声量。那在下一阶段，我们会在美国圣地亚哥的WOC的这个展会参加，然后我们也会去参加美国迈阿密的WQA的这个展会，我们会用全新的产品，然后全新的系列。这是我们在北美线下探索的第一步，也是我们向全球、向北美的合作伙伴会呈现我们对AI for Better Water的这个全新的定义。

Claire Ji, IR Director, Viomi Technology Co., Ltd.: To answer your question. In 2025, our brand revenue was primarily from domestic online channels. We have ranked as 10th place among the annual brands listed on JD. We also ranked 19th place in sales on Amazon U.S., which is a great progress. Moving forward, we will adopt a differentiated strategy in North America by launching distinct brands and positionings on online and offline channels. In particular, in April, we will participate in the World of Coffee in San Diego, and we will debut our new brand series at WQA Convention in Miami. This marks the first step into North American offline market and showcasing the partners across the U.S. and the world. Our redefined vision of better water. Thank you.

Jinyu Zhang, Analyst, CICC: Thanks to Sam and Claire. It’s very clear. Here moving to my second question on overseas expansion. Viomi has successfully entered the U.S. and the Malaysia markets. What are the differences in your market strategies between these two regions? And also could you outline the overseas expansion goals for 2026? Thank you.

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: 好问题，我们来回答一下第二题。在美国跟马来，我们都组了本地的团队。美国呢，我们是主打线上的亚马逊的自营渠道，所以我们在亚马逊推出了这个叫RO的净水器，那这个卖得还不错。然后接下来，我们会针对北美的线下，我们会推出一系列的新品，那它就会覆盖全屋的系统，就不单纯是厨下的RO净水器了。那在马来，我们主要还是聚焦在线下，那线下的话，它的产品形态主要是以台面的为主。当然马来人比较喜欢喝冰水，所以我们会叠加冰水的这样的一个功能，它会比较符合当地的饮水需求，然后我们会进一步地去拓展线下的合作伙伴跟产品线。当然海外的市场，有比较大的不确定性，当然地缘政治当下也比较多变，但我们认为，其实海外的机会是很广阔的，我们是具备这种核心竞争力的。所以，海外市场对于我们公司来讲，是我们中长期战略的一个重要的着眼点。我们预计，海外应该会在2026年会有三位数以上的增长。

Claire Ji, IR Director, Viomi Technology Co., Ltd.: To answer your question, we have built local teams for both United States and Malaysia. Especially in United States, we launched the Viomi branded under-sink water purifiers on Amazon, which is the online channel. Next, we will bring new brands and products tailored for the U.S. offline markets in the second quarter. This will cover not only the under-sink products, but also the whole-house filtration systems. In Malaysia, our focus is offline with countertop units as the main product format, adding features like ice and cold water that match the local drinking habits. Next, we’ll expand more offline partnerships and diversify our product lineup. For the overseas markets in total, in the future, there are still plenty of uncertainties overseas and the geopolitical tensions continue to create headwinds. Still we see strong opportunities globally and we believe we are well positioned. That’s why the global expansion will remain a key part of our long-term strategy. For 2026, we expect a triple-digit growth in the overseas revenue. Thank you.

Jinyu Zhang, Analyst, CICC: Yes, very clear. Thank you, Damian and Claire. My last question comes to the company’s profitability. Well, we see the company’s profitability improved notably in 2025 after focusing on the water business. For 2026 or and moving forward like next two to three years, what are the core pathways for further enhance profitability and sustain this positive momentum? Thank you.

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: 我先回答一下，就是关于这个，我们主要是有三个途径吧。那第一呢，是我们拓展海外，就是把这个自有品牌的这个规模，继续扩大。当下呢，其实我们的毛利率呢，还处于就是平均水平，主要是我们自有品牌的这个规模呢，占比还不太高。所以我们希望是透过这个海外市场呢，把海外市场的这个自有品牌的份额呢给提升起来，那这就有利于把我们自有品牌的份额给提升，那就能够提升，进一步提升我们的盈利能力。然后第二个呢，是自有品牌的这个耗材收入的这个提升，这个是长期的、持续的能够改善盈利的一个驱动力。那我们的这个自有品牌的净水器的销量呢，在不断地提升，那预计应该在未来的一到两年后应该会产生持续不断的这个耗材收入。然后第三个呢，就是我们进一步地去丰富我们的产品矩阵，那我们会把台面的这个产品，包括这个不同的这种功能的机器，包括甚至是，比如举个例子，这种制冰的，以及这种有复合功能的这种产品，还有这个更高单价的和毛利更高的这种全屋的这种过滤的这种产品，我们会全面去覆盖，那这些产品呢会更完整，然后也会让我们这个产品线呢更宽，去覆盖这个全球的市场。

Claire Ji, IR Director, Viomi Technology Co., Ltd.: OK, to translate the answers. There are three main paths. First is expand overseas markets and accelerate the growth in our Xiaomi branded business. Currently, our margin is still on a low level, mainly because our Xiaomi branded products sales still makes up a relatively small part of the business. So by pushing into the international markets and growing the shares of our own branded sales, we can improve the profitability. The second path is about the consumables revenue. The consumables revenues from our own branded products will be a long term driver of the margin improvement. As more people are using Xiaomi water purifier globally, the consumable revenues will start kicking about 1-2 years after the equipment sales, and we start to see the trends. Third, we will broaden our product lineup, which is adding more countertop options like ice makers, multifunctional countertop water dispensers, and higher margin whole home filtration systems. These new categories will help us reach more customers and build a stronger, more complete product portfolio. For the global expansion. Thank you.

Jinyu Zhang, Analyst, CICC: Yes, very clear. Thank you very much for your time and detailed answers. I have no further questions.

Claire Ji, IR Director, Viomi Technology Co., Ltd.: Thank you, Jinyu.

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: 谢谢景瑜。

Operator: Thank you. We’ll now take the next question. This is from Shi Jingxing from CMS. Please go ahead.

Shi Jingxing, Analyst, CMS (China Merchants Securities): 好的，感谢陈总和Claire，我是招商证券的分析师史景星，我这边也是有两个方面的问题吧，先请教一下。第一个呢是想拆解一下，我们看到了就是在去年下半年国补退坡之后，这个终端其实出现了下滑。那其实今年26年还是面临着上半年的高基数，所以可能想请教一下，在今年这种国补退坡的压力之下，我们的增长的来源和动能，可以帮我们做一个剖析和展望吗？然后这个问题里面有一个细的细节，就是最近我有关注到云米跟燃气公司也有很多的战略合作最近发布，包括新奥能源、中国燃气，同时呢还有跟海信集团也在企业端也有一个很深化的合作，所以想请教一下在这方面的细分领域合作对我们今年的增长会贡献多大的一些帮助。这是第一个问题，感谢。

Claire Ji, IR Director, Viomi Technology Co., Ltd.: OK, I’ll quickly translate the question first. Can you analyze the impact of the national subsidy reduction on the domestic market, especially when we see in the second half of 2025 the negative impact has caused the revenue decline? Can you forecast the future impact and offer some guidance? We recently noticed the B2B from the business development. Can you offer some heads up about the top line contribution about cooperation with China Gas, this kind of business development? Thank you.

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: 谢谢石老师，我大概先回答一下，待会儿Claire帮我翻译。我们来看，其实2025年这个国补，确实对净水器是有一定的刺激作用，尤其是去年上半年的基数会比较高。所以今年对比去年上半年来讲的话，会有些挑战。但是我们如果看净水器这个品类，其实有另外一个层次的考量，这个主要是就是这个品类的渗透率还是比较低的。在中国来看的话，它的需求其实还没有释放。所以我们预计，整个2026年应该会这个行业回归正常值。净水这个品类，其实对于销售下行，是有抗下行周期的能力的。我们认为，会有越来越多的消费者会选择净水器，这个趋势应该是不可逆。然后2026年，我们在看，其实净水器在国家层面已经没有补贴了，所以大家其实也可以看到，虽然有些品牌可能显示还会有那个15%左右这样的一些补贴，那有些品牌其实没有做了。对于我们而言的话，我们已经停止了这个。另外，就是石老师提的这个关于我们跟这种燃气公司的合作，比如像中燃、新奥这些燃气公司，我们觉得这种合作，其实是一种互惠互利的全新的合作模式。因为第一是他们的展厅跟服务网点在中国是很多的，他们基本上可以覆盖将近5,000多万个家庭，而且它那个使用的场景也是中央装的，所以跟我们厨下净水器又特别吻合。我们觉得那个品类也是高度互补，因为我们是一个很好的进入下沉市场的通路。所以2026年，我们认为这是一个比较好的试点，我们认为这应该是一个不错的、能够给双方都带来增量的好的合作机会。

Claire Ji, IR Director, Viomi Technology Co., Ltd.: OK, I’ll quickly translate the answer. As you can see, the impact of the national subsidy on water purifier is obvious in 2025. Due to the high base last year, domestic market will face challenges in the first half of 2026. For product like water purifier however, where penetration is still relatively low, so the customer demand is still growing. We expect the 2026 to return to the category’s normal growth pace, and then remain relatively resilient even if consumer spending suffers. As we see more and more people are choosing to use water purifiers, and we believe that trend is irreversible. Starting in 2026, water purifiers are no longer covered by national subsidies. You might see some brands still offering 15% off on online commerce platforms while others don’t. We didn’t offer that percentage off. We have faith in our product competitiveness. To answer your questions about the cooperation with the gas companies, we recently reached the cooperation with China Gas and ENN Energy, companies like this. The way we see is we are exploring new partnership models with these companies and their showrooms and service centers across the country reaching over 50 million household users. Both our products highly rely on the installation service support and the distribution scenarios fit perfectly with under-sink water purifier and the product categories complement each other. This gives us an efficient way to enter lower-tier markets. 2026 will be a pilot year for the partnership. This is expected to be a great opportunity for both parties, and we expect it will bring incremental growth. Thank you.

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: 石老师开始第二题呗。

Shi Jingxing, Analyst, CMS (China Merchants Securities): 好，是。然后第二个问题就是，首先还是回到利润率的这个方面上，整个上半年的时候，就是2025年上半年的时候，当时利润率还比较不错，然后是下半年的时候，这个利润率的下降应该是跟品牌补贴会有一些关系嘛。所以也想了解说今年的话国补退坡，那品牌也就换言之不用再去补贴，那我们的毛利率应该就会有一种回升。所以想请教一下，可能从这个业务的层面讲，我们今年会不会有一个什么样的，具体的回升的一个幅度或目标？就这个角度，谢谢。

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: 好问题。这个我们刚刚那个问题可能跟那个瑾瑜那个有一点点类似，就是我们，我再稍微补充一下，就是关于这个问题。我们提升这个，就是2026年呢，其实本质上对于公司来讲的话呢，我们有几个点要去做的。那第一呢是我们继续扩大规模，那扩大规模的主要途径是通过海外市场的扩张，那尤其是北美跟马来市场的这个扩张，我们会有更多的产品，然后会走进更多的渠道。那第二个事情呢，就是关于我们在这三个途径会做的这个事情。那这三个途径呢，是我们会进一步地会提高我们这个耗材的这个收入。那耗材呢，大家知道其实过去一两年我们卖了不少这个净水器出去，那随着这个年份往后的推移，我们的这个耗材的收入会进一步的累积，那耗材的这个毛利呢是有保障的，那这是其中一个。然后另外一个呢，就是我们自有品牌的份额的这个占比，我们会进一步的会加大。那在过往呢，其实我们自有品牌的这个占比呢还不太高，所以我们希望通过刚才讲的这种海外的这种扩张啊，跟品类的这种扩充啊，这样的话呢，我们能够提高我们这个品牌的这个占比，那进一步地提升我们的这个份额，然后提高我们的这个营业能力。然后最后一个呢，就是关于我们的一个产品，那在整个这个产品线上呢，我们原来产品其实是以厨下机为主，那厨下机呢，我们的那个毛利呢，其实在行业的平均水平，那我们现在会推出一些高毛利的产品，那这些高毛利产品包括我们做的这种叫全屋的呀，以及这种叫复合功能的这种台面机啊，这些我们会提升单价以及毛利。所以我们希望说通过这些几个组合的动作做下去，能够让我们的这个毛利啊有一个保障，利润有一个不错的这个表现。

Claire Ji, IR Director, Viomi Technology Co., Ltd.: OK, I’ll quickly translate the answer to you. That is a similar question to one of the previous questions. The first one is we will extend our overseas market scale, especially in the United States and Malaysia, and we will use more diversified products to enter more channels, for example, for the United States, we will explore offline channels for the first time with new brand and new products with higher margins. The second strategy is to increase the consumable revenues. As you can see, the consumable revenues has a very promising guarantee of the improvement of profitability. We have our own branded water purifier sales has increased during the past few years. We see the trend of consumable revenues to kicking in after one to two years after the equipment sales.

This will be a long-term driven factor for the margin expansion. Thirdly is to improve our own brand revenue contribution by both overseas expansion and product portfolio expansion. Lastly, we will have more diversified product line. As of today, we still most of our revenues comes from the under-sink water purifier product format. Our profit margin is within the industry level. However, we will extend more diversified products with higher profit margins than ASPs like the whole house water filtration systems and countertop products equipped with diversified functions like cooling, ice making, and so on. Thank you.

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: 谢谢施老师。

Shi Jingxing, Analyst, CMS (China Merchants Securities): 好的，我就这些，感谢好东西，感谢Live的这现场，谢谢。

Claire Ji, IR Director, Viomi Technology Co., Ltd.: 好的，谢谢。

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: 谢谢。

Operator: Thank you. We’ll now take the next question. This is from Brian Lantier from Zacks Small Cap Research. Please go ahead.

Brian Lantier, Analyst, Zacks Small Cap Research: Thank you very much. Most of my questions have already been covered. I just wanted to say I’m encouraged by the move to offline distribution in the U.S. Just sort of big picture, looking at the impact of the subsidies is significant, obviously in your six-month results. I think if you look year-over-year, you have a 14% top-line growth rate. If I’m looking out over the next 3-5 years, is that sort of what you view as the normalized growth rate for the business, 10%-15% top-line?

Claire Ji, IR Director, Viomi Technology Co., Ltd.: 我先翻译一下问题。就是您，我们看到这个国补的影响，对于这个二五年整体的影响，但我们也看到二五年整体的收入是有14个多点的一个提升。那我想问一下，就是在接下来，公司怎么看这个常态，未来三年或者是更长一段时间的一个常态化的增长预期。

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: 因为我们有些投资人可能是说中文的，所以我就用中文回答一下，待会儿你也可以再用英文回答。我们现在看的就是行业的这个常态的增长呢，其实是在高三位数。如果我们看我们自有品牌的话呢，我们应该是高于行业。这主要是有几个原因啊，就第一个是我们自有品牌的这个品牌力呢，在不断的提升，然后呢我们在国际市场呢，再进一步的开拓。然后另外一部分呢，就是我们的这个增长呢，是跟大客户，就是我们讲说非小米业务啊，就是我们非小米品牌的这个业务呢，是跟大客户是同屏的，比如像这个小米。所以在当前的这个情况下呢，我们认为其实增长呢是特别珍贵的，我们预期呢，应该是在2027年以后，我们会进入低单位数的常态化的这个增长这样一个阶段。

Claire Ji, IR Director, Viomi Technology Co., Ltd.: OK, I’ll translate the answers to your question. According to our estimation, with the industry’s normal growth rate would be at a high single-digit level if without impact of the national subsidy and so on. Well the brand growth rate will be higher than the industry mainly because driven by the enhancement of our brand strength and the expansion of our international market growth. However another major part of our business revenue is our major client, key clients business such as Xiaomi. This will be aligned with the key accounts their business performance and in the current environment the growth is precious. Overall we anticipate that the company has the potential to enter into a nominal growth rate of a low double-digit growth in 2027. Thank you.

Brian Lantier, Analyst, Zacks Small Cap Research: Great, thank you, that’s all I had.

Claire Ji, IR Director, Viomi Technology Co., Ltd.: OK, thank you Brian.

Sam Yang, Head of Capital and Investment Department, Viomi Technology Co., Ltd.: Thank you, Brian.

Operator: Thank you. That concludes the question and answer session. I would like to turn the conference back over to management for any additional or closing comments.

Claire Ji, IR Director, Viomi Technology Co., Ltd.: OK, thank you once again for joining us today. If you have further questions, please feel free to contact us through the contact information on our website or our investor relations consultant Piacente Financial Communications. Thank you.

Operator: Thank you. This concludes today’s conference call. Thank you for participating and you may now disconnect.