Ladies and gentlemen, thank you for standing by and welcome to Attour Lifestyle Holdings Third Quarter 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. Today's conference is being recorded, and I'd like to turn the conference over to Mr. Luke Hu, IR Director. Please go ahead, sir.

Thank you, operator. Good morning and good evening, everyone. Welcome to our third quarter 2026 earnings conference call. Today, you will hear from our founder, chairman, and the CEO, Mr. Wang Haijun, and our EVP co-CEO, Mr. Wu Jianfeng. Before we continue, please be aware that today's discussion will include forward-looking statements under federal securities laws. These statements are subject to various risks and uncertainties. and the actual results may differ significantly from what is stated or implied in our comments today. The company is not obligated to update any forward-looking statements except as required by applicable laws. Additionally, during this call, our management will discuss certain non-GAAP financial measures solely for comparison purposes. For a clear understanding of these measures and the reconciliation of GAAP to non-GAAP financial results, please refer to the earnings release issued earlier today. Furthermore, a webcast replay of this conference call will be accessible on our website at ir.yadu.com, where a copy of the results presentation is also available. Now, I will turn the call over to Mr. Wang, our CEO.

Thank you, Luke. Hello, everyone.

and thank you for joining our tour's third quarter 2026 earnings call today.

So far this year,

We have continued to see structural diverging trends in China's consumer market. It's not just about how consumers allocate their budgets. It reflects a change in how they judge value. With more options than ever, consumers are making decisions more carefully. They rely more on real experiences and a brand reputation. They also increasingly seek an emotional connection. – choices that reflect who they are and a sense of being understood and valued. With both reason and emotion shaping consumer choices, experiential value and brand trust are becoming the industry's key differentiators. Even as the external environment and competitive landscape evolve, we remain guided by our strategy of Chinese experience, brand-led excellence. We continue to strengthen our experience advantage and connect with users through our brands. Even in a divergent market, we continue to win users' choice and trust. 下面我將展開介紹2026年第三季度各項業務的具體情況。 Now, I would like to provide more details on our business performance for the third quarter of 2026. 首先是住宿業務。 三季度迎來暑期出行忘記。

Shoudong Wang, Lijun Gao, Jianfeng Wu, Luke Hu,

Let's begin with our hotel business. The third quarter coincided with the peak summer travel season. Despite temporary weather disruptions in some regions, leisure travel demand remained resilient overall, with travel activity concentrated in the peak season. As demand patterns shifted across regions and customer segments, We continued to draw on our differentiated products and experiences to support steady growth in our hotel business. In the third quarter, our RevPar was 100.5% of the level in the same period of 2025, reflecting steady operating performance. ADR was particularly resilient, further demonstrating the brand value we have built over the years.

In terms of hotel network, we always uphold the principle of brand priority, and steadily promote growth in scale. In terms of project selection, we fully consider the long-term development space and location conditions, and continue to land high-quality projects to meet more diversified accommodation needs with more precise market layout. In the third quarter, the group has opened 128 new hotels. By the end of the third quarter, the number of hotels will reach 2,288. At the same time, the number of pipe projects is 778. and many more.

As for our hotel network, we continued to take a quality-first approach to expansion and grow at a steady pace. When choosing sites, we carefully consider their long-term growth potential and location advantages as we continue to open high-quality hotels. This targeted approach has allowed us to meet a wider range of accommodation needs, In the third quarter, we opened 128 new hotels, bringing our total to 2,288 hotels in operation as of the end of the third quarter. We also maintain a healthy pipeline of 778 hotels at the same quarter end, providing a solid foundation for the continued growth of our hotel network.

Turning to our booking channels. In the third quarter, our CRS channel continued to perform steadily

accounting for 61.5% of total room nights sold. Bookings under corporate agreements also made a stable contribution accounting for 20.7% of total room nights sold. We will continue to improve member engagement and our services for corporate clients to make our own channels more competitive and provide our hotels with a more stable, diverse customer base.

Now let me walk you through the latest developments across our hotel brands. On the one hand, the long-term advantages of Yaduo 3.6 in terms of price, level, and operating cost, provide a choice of high-end hotels with high-quality and high-quality investment, allowing more high-quality projects to release sustainable commercial value. On the other hand, the product design based on practicality and modern aesthetic is more time-consuming, allowing the product to have a longer lifespan. Atour 3.6, the latest generation of Atour Hotel, now has more than 200 hotels in operation. Just over a year after the first one opened, its product model has gradually been validated by the market.

helping Ator 3.6 build a solid reputation and enter a phase of steady expansion. With construction and operating costs that remain competitive over the long term, Ator 3.6 offers franchisees an investment option in the upper mid-scale hotel segment that balances returns and quality. These advantages also enable more high-quality projects to generate sustainable commercial value. At the same time, its design combines practicality with contemporary aesthetics, helping it stand the test of time and giving the product a longer lifespan. In the third quarter, Attour 3.6 continued to deliver outstanding performance, with Revpar of hotels in operation exceeding RMB 410, demonstrating its strong competitive position.

As an independent brand, Yaduo Jianye has shown outstanding potential development. In the third quarter, Zanying Hotel's round-up is more than 520 yuan. We continue to polish the iconic experience focus of Yaduo Jianye. Recently, we have joined hands with the outdoor lifestyle brand to extend the natural beauty of Yaduo Jianye from the hotel space to the outdoor experience of the city, allowing the guests to slow down and relax between stops and walks. You can see the distinct brand recognition of Yaduo Jianye, Attour Origin has shown a remarkable growth potential since it began operating as an independent brand. In the third quarter, RAVPAR of Attour Origin Hotels in operation exceeded RMB 520.

We continue to refine Atour Origin's signature experience touchpoints. We also recently partnered with an outdoor lifestyle brand to extend the natural tranquility of Atour Origin from hotel spaces into urban outdoor experiences. This allows guests to slow down and unwind, whether at the hotel or out exploring the city. Atour Origin's distinctive brand identity has attracted new customer groups. Its strong pricing power is also supporting steady expansion, opening up greater opportunities for us in the upper mid-scale segment.

中高端市场始终是亚洲深耕的核心赛道,也是我们把握品质住宿需求的重要阵地。 从亚洲酒店到亚洲建议,我们以不同的品牌定位和产品表达,完善了中高端品牌矩阵, 在稳固基本盘的同时,扩展了未来的增长边界。 The upper mid-scale segment has long been Atour's core focus. It is also where we capture demand for quality accommodation. With distinct positioning and product offerings,

Ator Hotel and Ator Origin have rounded out our upper mid-scale brand portfolio. Together, they strengthen our core business and create new opportunities for growth. They also allow us to serve more diverse accommodation needs and offer franchisees more flexible investment options. We will continue to refine each brand's distinct operating approach, further strengthening our dominant position in the upper mid-scale market.

In the mid-to-late market, the hotel's investment logic is returning to its firmness. The latest version of QingJu, QingJu 3.3, on the basis of solidifying investment efficiency and quality, also opens up a higher space through the advantage of experience. The flexible project adaptation capability also provides more options for city storage and property updates. For the face-to-face users, QingJu 3.3 continues to surround the ease of the brand, focusing on the core environment of the guest, with a unique brand positioning, In the mid-scale market, hotel investors are placing greater emphasis on predictability. Attour Light 3.3, the latest version of Attour Light,

balances investment efficiency with quality and, through its experiential advantages, opens up greater potential for a price premium. Its adaptability to different projects also provides more options for upgrading existing urban properties. For customers, Attour Lite 3.3 remains focused on its Stay Chill brand proposition and the aspects of their stay that matter most. With its unique positioning and relaxed atmosphere, Ator Lite 3.3 has gradually built its distinct customer base, continuously bringing new customers to the group. In the third quarter, Ator Lite 3.3 continued to make breakthroughs in operating performance, with a rough part of hotels in operation exceeding RMB 360.

Sanjidu, Qingju Sanxi, yinglaile jieduanxing ge guimou lichengbei, We will continue to adhere to the principle of good electricity

In the third quarter, Attouralite Series 3 also reached a milestone of 200 hotels in operation. As the network expands, an increasing number of guests are coming to appreciate Attouralite's distinctive positioning and product touchpoints through first-hand stays. Its brand strength has also grown steadily. The rollout of more benchmark projects has further validated Attourlite's operating model, which delivers stable returns and can be replicated at scale. This highlights the brand's long-term potential in the mid-scale market. As Attourlite enters its next stage of development, we will remain committed to the premier hotels principle. Keep strengthening our products and experiences, expand steadily in prime locations, and firmly advance toward the goal of becoming a 1,000 hotel brand.

made it difficult for them to meet the localization and individualization needs. Today, the demand standards of Chinese consumers are already at the forefront of the global market. They have raised higher requirements for product aesthetics, cultural expression, and differentiated experience. We believe that local brands still have a great potential to develop in the high-end hotel market. After a few years of accumulation, we have a more precise approach and judgment on the needs of high-end market users. In the upscale segment, Sa He continued to deliver outstanding performance

taking our brand portfolio further into higher value markets and opening up more opportunities for upscale expansion. For a long time, China's upscale hotel market was dominated by international brands. However, their globally standardized operating models made it difficult for them to localize operations and respond promptly to personalize the customer needs. Today, Chinese consumers are at the forefront of global demand trends with increasingly high standards for product aesthetics, cultural expression, and distinctive experiences. We believe local brands still have significant room to grow in China's upscale hotel market. Our experience in this market over the past few years has enabled us to more accurately capture and assess what customers in this segment need. I'm also pleased to share that we will soon unveil a new upscale hotel brand to complement our existing portfolio. With distinctive brand positioning, product designs, and experience features, we aim to serve a wider range of consumer scenarios and price points, helping bring Chinese upscale hotel brands to the world stage.

Moving on to our retail business. In the third quarter, Ator Planet sustained its strong growth momentum with retail revenue reaching RMB 1.36 billion.

From the continuous consolidation of core product advantages to the continuous breakthrough of strategic products, behind this is not only the abundance of product evidence, but also our continuous starting from user value,

and many more. In terms of product development, supply chain, content creation, and brand, the systematic ability to be constructed is the result of their mutual support. First of all, in terms of product development, we insist on starting from the real sleep experience of the user, first define the sleep problem, then find the technical solution. The systematic ability to carry large items has been verified by the market, and the direction of product delivery is also clear. Second, in terms of supply chain, We continue to expand our long-term partnership with high-quality supplier teams to ensure high-quality product experience by leading the industry's industrial standards. At the same time as improving new products and improving their quality, the problems that have troubled us before have also been greatly improved this year. Third, in terms of content creation, we don't talk about parameters and flaws. We transform the functions and principles of our products into life-saving and tangible expressions. Reinforcing our strengths in core categories and making continued breakthroughs in strategic categories

reflect more than an expanded product portfolio. These advances reflect our ongoing focus on creating value for users supported by the systematic capabilities we have built across product development, supply chain management, content creation, and brand building. These capabilities support one another and work together. First, in product development, we start with how people actually sleep. We identify the problem before looking for a technical solution. Our systematic approach to improving our blockbuster products has proven effective in the market. We also have a clearer sense of how to take each product category forward. Second, in supply chain management, we continue to expand our network of capable, high-quality suppliers who can work with us over the long term. We rely on industry-leading manufacturing standards to ensure a high-quality product experience. Alongside new product feature upgrades and continued quality improvements, we have also made significant progress this year in addressing the stock-out issues we faced in the past. Third, in content creation, we don't overwhelm users with technical specifications or rely on gimmicks. We explain what our products do and how they work in simple, everyday terms that people can relate to. This helps us build emotional connections with users and reinforces their impression that AttorPlanet truly understands them. Fourth, in brand building, AttorPlanet increasingly comes to mind when consumers think of natural deep sleep. Our consistent pricing discipline and product experience have also helped us gradually build one of our strongest assets, the trust of our users.

The latest generation product, Shensui Zen Pro 4.0, has been on the market for 17 days. The sales volume is over 100 million. The product power is recognized by the users. The quilt quality is also outstanding. In the third quarter, the quality income has increased by more than 70%. Shensui Hohenbe Pro 3.0 series of products has further verified the growth performance of the quality. In terms of strategic quality, Shensui Shui Yi 2.0 and Shensui Chuan Li 2.0 have also achieved very good sales performance.

in the third quarter, we focused on the finer details of users' sleep experience and the problems they encounter. Drawing on those insights, we rolled out a range of upgraded products in the sleep pet category, all of which showed strong sales momentum. In our core categories to date, cumulative sales of the Deep Sleep Memory Foam Pillow Pro series have exceeded 13 million units. Our latest generation Deep Sleep Memory Foam Pillow Pro 4.0 surpassed RMB 100 million in sales just 17 days after launch, demonstrating how well the product resonated with users. Our comforter category also performed strongly, with revenue up more than 70% year-over-year in the third quarter. The product lineup within the Deep Sleep Thermal Regulating Comforter Pro 3.0 series has further validated the category's growth momentum. In our strategic categories, Deep Sleep Launchwear 2.0 and Deep Sleep Fitted Sheet 2.0 also posted standout sales, giving AtorPlanet's growth a further boost.

We always believe that the sleeping market is a track that is worth continuing to climb. The demand is long-term stability, and the market space is wide. Consumers build their brand trust through real product experience. We have always believed that the sleep market deserves our sustained focus.

It offers stable long-term demand and significant market potential. Trust built on real experiences with a product is more likely to develop over time into lasting brand preference and customer loyalty. This builds greater brand value and helps the brand endure. That is why we remain confident in the long-term prospects of the sleep market. We also hope that Attour Planet will become a sleep brand that more and more consumers trust and it will help drive China's sleep consumption market toward higher quality development.

会员方面,截止三季度末,亚朵注册会员数已经超过了1.24亿。 我们看到,用户对会员价值的期待早已不只是权益的叠加, 更具差异化,更可感知的会员权益正逐渐成为持续提升会员体验的关键。 三季度, Turning to membership, we had more than 124 million registered individual members at the end of the third quarter. Members have long expected more than just a growing list of benefits.

Distinctive benefits with tangible value are becoming increasingly important to the member experience. In the third quarter, we partnered with a retail ecosystem for the first time to launch a joint membership program, extending our member experience into more aspects of everyday life, including local shopping. We hope to bring the sense of comfort and peace of mind that users find on their travels into more of their daily lives.

In the future, we will continue to start from the real needs of users, continue to carry out the promises of the highest price, the highest authority, and the highest protection, and implement differentiated authority and service to improve member connection with a stable and reliable experience, and attract more high-quality new customers. We are also continuously exploring more opportunities for cooperation in the context of quality of life. At the same time, we will continue to deepen the deepening of the deepening of the two business models of accommodation and retail.

Going forward, we will continue to put users' real needs first. We will uphold our best price, best benefits, and best room availability guarantees while offering differentiated benefits and services. By delivering an experience members can trust, we aim to strengthen member loyalty and attract more high-value new customers. Guided by users' desire for quality living, We will keep exploring more partnership opportunities across different aspects of everyday life. At the same time, with deep sleep at the center, we will also continue to deepen the synergies between our hotel and retail businesses.

多眼长远,我们的思考最终也回归到人本身。 面向用户,随着品牌和产品矩阵不断丰富,越来越多的用户都在选择压点。 to meet the needs of the users and respond to their expectations for a better life. It is always our most important long-term responsibility. It is also the starting point and standard of all our products and services. We will also put our original intentions into the products of sincere service and hard work, so that users can continue to feel the peace of mind. For our partners, we are also continuing to stimulate the organization's vitality through a series of actions, so that our partners can feel the sense of belonging and gain greater growth space. Taking a long-term view ultimately bring us back to our people. For our users, as our brand and product portfolio continues to expand, more and more users are choosing a tour.

Meeting their ever-changing needs and responding to their aspirations for a better life are always our most important long-term responsibility and the starting point and standard for all of our products and services. We will put our founding purpose into practice through sincere service and carefully crafted products so that users continue to feel at ease and cared for. For our employees, We are also taking steps to energize the organization, help them feel a sense of belonging, and give them more opportunities to grow. As the world around us changes, we will also seize opportunities and embrace change to help our organization evolve. We will fundamentally rethink traditional approaches to organization and reshape how we manage the business, laying a solid foundation for the group's long-term competitiveness. I will now turn the call over to our co-CFO, Mr. Wu Jianfeng, who will discuss our financial results.

Thank you, Haijun. Hello, everyone. I will work through our financial performance for the third quarter of 2026. In the third quarter, our net revenues grew by 30.5% year-over-year to only 3.4 billion. are supported by continuous growth across our core businesses. Let me start with our hotel business. Revenues from our monetized hotels grew by 20.4% year-over-year to RMB $1.9 billion, mainly driven by the ongoing expansion of our hotel network and development of our supply chain business. Revenues from these hotels decreased by 18.6% year-over-year to RMB 134 million, primarily due to a reduction in the number of leased hotels as a result of our product mix optimization. We had 17 leased hotels at the end of September, compared with 24 a year ago. Our hotel businesses recorded a growth margin of 37.9%, up 0.6 percentage points year-over-year, benefiting from a more federal mix as these hotels accounted for a smaller share of our hotel business. Turning into our retail business, our retail business continued to grow. with revenues up to 51% year-over-year to RMB 1.4 billion. This growth reflects the progress we have made in building our brand, expanding our product portfolio, and strengthening our supply chain capabilities. Retail growth margin was 52.1%, slightly down 0.6 percentage points year-over-year, but up 0.7 percentage points quarter over quarter. These fluctuations were primarily driven by differences in product mix across quarters. Overall, our retail growth margin has remained relatively low. Turning to overall profitability, the adjusted net profit increased 26.2% year-over-year to RMB $615 million. while the adjusted net profit margin for the quarter was 17.9%, down by 0.7 percentage points year-over-year. This decline was primarily driven by a business-mixed shift led by the rapid growth of our retail business, together with the continued investment in talent and organizational capabilities to support long-term growth. Adjusted EBITDA increased 28.8% year-over-year to RMB 883 million, with the adjusted EBITDA margin coming in at 25.7%, now 0.4 percentage points year-over-year. We maintained a healthy cash position. At the end of this quarter, cash and cash equivalents totaled RMB 2.7 billion, with net cash of RMB 2.5 billion. In line with our annual dividend policy, we declared a second cash dividend for 2026, amounting to about 69 million US dollars. This reflects our appreciation for shareholders' trust and support. For the full year, total dividend payments are expected to reach about 142 million US dollars. Finally, turning to our full year outlook, for 2026, we currently expect total net revenues to increase by 33% to 35% compared with the full year of 2025. That concludes my remarks. Now let's open for Q&A.

Thank you. We will now begin the question and answer session. To ask a question now, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star 11 again. For the benefit of all participants on today's call, if you raise your questions in Chinese, please immediately repeat your questions in English. Please limit your questions to one at a time. If you wish to have follow-up questions, please rejoin the queue. A moment for our first question. And our first question comes from the line of Lydia Ling from Citi. Please go ahead, Lydia. Your line is open.

Hello, Manager Chen. I'm Lydia from Huachi. Thank you for the opportunity to ask me a question. Congratulations to the company for still achieving a very good performance in the third quarter. Hi, management. This is Lydia from Citi. Congratulations on the very strong results in the third quarter. So my question is on the shareholder return. We saw that you actually announced the second dividend plan for this year. So, could you share your overall long-term consideration regarding your shareholder return? Thank you.

Okay, thank you, Lijun. Let me answer this question. The shareholder return is always a very important part of our long-term capital configuration. I just mentioned that the total amount of 2-4 shares this year is about $1.4 billion. At the same time, we are also promoting the return of shares according to the rhythm. Thank you, Lydia. Let me answer this question. Shareholder returns have always been a very important part of our long-term capital allocation. As I just mentioned,

The two dividends announced this year total about $140 million. At the same time, we are advancing our share repurchase at a steady pace, and the cumulative repurchase amount so far this year has exceeded $120 million. So as a result, taking the two together, cumulative shareholder returns this year have exceeded $260 million. reaching more than 110% of our 2025 net income.

We are confident in the company's long-term health development and the ability to continue to create cash flow. In the future, our goal will still be to achieve a return of about 100% based on the previous year's net profit as a standard. We will take a combination of dividend and repurchase. According to the market situation, we will implement our shareholder return plan in a dynamic manner.

We remain confident in our long-term healthy development and our ability to continue generating cash flow. Going forward, we continue to target total shareholder returns of approximately 100% of prior year's net income through a combination of cash dividends and share repurchases with execution adjusted dynamically based on market conditions. Thank you. Thank you, Lydia. Next question, please.

Thank you. And our next question comes from the line of Simon Cheung from Goldman Sachs. Please go ahead, Simon. Your line is open.

Thank you, Mr. Wang and Mr. Wu. I have a small question for you. In the fourth quarter, you may see the trend of Repa and your outlook for the next year. I just have one small question. It's in relation to the REFPLAR performance for the fourth quarter as well as your outlook going into next year.

Thank you. Thank you, Simon. In the third quarter, we continued to perform steadily despite the diversification of the industry. In the fourth quarter, we still saw a lot of demand for market support. Thank you Simon.

We maintained steady performance in Q3 despite diverging trends across the industry, and upon entering Q4, we continued to see diversified demand supporting the market. The combination of the National Day and mid-autumn holidays drove the release of long-distance travel demand, and the leisure travel market performed well. Following the holidays, the resumption of business and MICE activities continues to support the business demand in the hotel market. Looking ahead, segmented travel scenarios such as autumn break travel, inbound tourism, and ice and snail tourism will also bring some structural incremental demand in Q4.

As for the trend for next year, we will not give a specific report. As for the 2027 trend, we will not provide specific respire guidance at this moment.

However, we believe the domestic hotel industry still has a solid foundation for steady development. On the one hand, the overall industry supply growth is slowing down, creating more favorable conditions for further improvement in supply-demand dynamics. Likewise, demand will continue to show relatively strong resilience, and we are fully confident in the fundamentals of domestic demand for quality accommodation. Thank you. Thank you, Simon.

Next question, please.

Thank you. And our next question comes from the line of Jiwei Liu from Citix. Please go ahead, Jiwei. Your line is open.

Hello, management. I'm Liu Jiwei from Zhongxin Stock Exchange. Congratulations to the company for achieving a very productive quarter. My question is about the opening of the store. Hi management, I'm Jiwei from Citix. The company's hotel opening pace has varied from quarter to quarter this year. Will you adjust the 4-year hotel opening target? And how do you view hotel opening growth for 2027 and beyond? Thank you.

Thank you, Jiwei. We have newly opened 128 hotels in Sanjidu. Compared to the first half of the year, the pace has been accelerated. Combined with the progress of the re-opening project in our pipeline, we have maintained the same target of 480 new hotels in the year.

Thank you, Jiwei. In Q3, we opened 128 new hotels. In terms of the pace, it was a little bit faster than in the first half of the year. Based on the current progress of projects under construction in our pipeline, we are maintaining our full year target of approximately 480 new hotel openings. At the same time, our target of approximately 80 hotel closures still extends.

For the long-term prospects for the year 2027, we have confidence in the expansion of our hotel network. On the one hand, we have sufficient pipe reserves, which will provide a better visibility and support for our hotel opening in the future. On the other hand, the product recommendations For 2027 and beyond, we are confident in the steady expansion of our hotel network. On one hand, we have ample pipeline reserves and that provided good visibility and support for our hotel openings over the coming period.

On the other hand, the differentiated product portfolio, consistent experience advantages, and the enhanced ability to secure quality projects also provided more solid support for our hotel operations and long-term network expansion. Thank you.

Thank you, Jiwei. Next question, please.

Thank you. And our next question comes from Ronald Leung from Bank of America. Please go ahead, Ronald. Your line is open.

Thank you. Good evening, management. Could you share the recent signing trends? How does the company continue to maintain your ability to secure premier hotels? Thank you.

Thank you, Ronald.

Let me answer the question about signing the contract. The current industry should be more cautious in its development.

In terms of investment decision-making, the investors will be more comprehensive and strict in terms of project position, property conditions, cooperation brand, and investment return. However, for the hotel investors, with the same amount of investment, hotel investment is still the strongest advantage in the current consumer industry. We are also working hard to polish our brands and products, so that they have more time to test and have a longer life cycle, so that they can better help hotel investment projects.

Thank you, Ronald. Let me continue answering this question of yours about signings. Against the backdrop of a more cautious industry trend, the franchisees now are considering project location, property conditions, partner brands, and investment returns in a more comprehensive and others. However, for franchisees, at an equivalent investment scale, the hotel investment remains a quality business in the consumer sector with outstanding operational resilience and practically the strongest counter-cyclical attributes. We are also committed to making our brands and products stand the test of time and gain greater longevity. so that hotel investment projects can continue to generate stable operating value and commercial returns through their entire life cycle.

Of course, in today's competitive market environment, good projects are definitely in short supply. However, our leading products and constantly flourishing brand organizations allow us to have stronger competitiveness and initiative in obtaining high-quality projects. In terms of product, today, not only do we need to meet the needs of the function in hardware facilities and aesthetics, but also in terms of the cultural foundation of the product itself and the experience of differentiation, we need to form a very solid price ability. In terms of brand, in the past few years, we have gradually built up a more abundant and high-quality product array, from Qingjun, Yaduo, Jianye, to SaHe. These new brands of different levels gradually move towards maturity, Of course, in a market characterized by competition for existing market share, the good projects are certainly scarce. But leading products and an increasingly diverse brand portfolio gave us stronger competitiveness

and greater initiative when securing quality projects. On the product side, it is not just about meeting functional needs through hardware facilities and aesthetics. Now the cultural depth and the differentiated experience embedded in the products themselves help the products achieve solid pricing power. And on the brand side, over the past few years, we have already gradually built a richer, higher quality product matrix. New brands at different tiers such as Atour Light, Atour Origin, and Sa He have gradually matured. The synergy across our brands strengthens our collective competitive position within commercial districts and that enabled us to accommodate a wide range of property types. Thank you. Thank you, Ronald. Next question, please.

Thank you. And our next question comes from the line of Dan Chee from Morgan Stanley. Please ask your question, Dan. Your line is open.

Good evening, everyone. My question is about retail business. We see that the revenue growth of retail businesses continues to exceed the growth period. In the short term, we have some updates on the 40% value of retail sales this year. In terms of the long-term, Mr. Wang just mentioned various aspects, such as product, supply chain, content, brand, etc. In terms of the long-term, Mr. Wang just mentioned various aspects, such as product, supply chain, content, brand, etc. In terms of the long-term, Mr. Wang just mentioned various aspects, such as product, supply chain, content, brand, etc. My question is about the retail business. It continues to grow beyond our expectation. First and foremost, is there any update to full year 2026 retail revenue 40% growth target? And from a longer-term perspective, CEO Mr. Wang shared the strategic directions from product development to brand and content. What are your views on longer-term growth trajectory or growth drivers? Thank you, Steve.

Okay, thank you, Dan. Let me first talk about these long-term growth driving forces. Since this year, our retail business has maintained a good growth market. Thank you, Dan. Let me first talk about the long-term growth driving factor behind our products.

Since the beginning of this year, the retail business has maintained very strong growth momentum. In our view, the value of the retail business goes far beyond the rapid growth just in this phase. What we have always hoped for is to run the retail business with a long-term approach to build up brand value and create a consumer brand that can consistently earn users' trust and has that long-term vitality.

For the long-term development of the Asian planet, our direction is also very clear. First of all, we will continue to magnify our advantages. We define our advantages in this way. On the one hand, we continue to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our product power by continuing to maximize our Through the content, we can gradually build up the awareness of the selected products based on the sleep experience, and the long-term trust of the users, to strengthen the new position of the Asian planet in our sleep category. I think the continuous expansion of these two advantages is also the attitude and long-term thinking that we have been developing. Of course, we will face the short-term development of our long-term development, and will continue to build our long-term ability and maintain constant breakthroughs. At the same time, when we maintain the launch of new products, For the long-term development of Ator Planet, our direction is also very clear.

First, we will continue to amplify our competitive advantages, and this is how we define our competitive advantage. On one hand, we continuously solidify our product strength with continuous insight into users' real pain points, the presentation of products at Acme, and continuously evolving innovation capabilities. On the other hand, we insist on not engaging in price wars or relying on discounts and promotions. But instead, through content, we guide the users to gradually build a product selection mindset of sleep experience. And accumulate long-term trust also strengthen a 12-minus mindshare in the sleep category. And that has been how we've been following the market of the trends and also that's based upon our own thinking. And of course, Facing shortcomings in the long-term development head-on, we will also continue to build long-term capabilities and keep making breakthroughs. While launching new products, we are also thinking about our long-term product pipeline, continuously building long-term R&D capabilities and also accumulating technology. At the same time, we continue to bring in more high-quality suppliers and we work with them to strengthen our respective capabilities. By building a stronger supply chain capability, we aim to provide better support for the continued innovation and upgrading of our product categories going forward.

I would like to add on the issue of retail revenue guidance. Combined with the overall performance, we will increase the revenue guidance of retail businesses by 50% to 55% in 2026. In the past few years, while expanding the business, Let me update the guidance for the retail business.

Based on our overall operating performance, we are now raising our guidance for 2026 retail business revenue growth to 50% to 55% year-over-year. Moreover, over the past few years, while the business scale has expanded, the operating profit margin of the retail business has also consistently maintained a trend of steady improvement. In the long term, We aim for Attua Planet to deliver steady revenue growth while continuing to improve profit quality and operating efficiency, building a business that compounds value over time and consistently creates long-term brand value. Thank you.

Thank you. That concludes today's question and answer session. I would like to now turn the conference back to Mr. Luke Hu for any additional or closing comments.

Thank you for joining us today. If you have any further questions, please feel free to contact our IR team. We look forward to speaking with you again next quarter. Thank you and goodbye.

This concludes today's conference call. Thank you for participating. You may now disconnect.