Viomi Technology Co., Ltd Q4 FY2024 earnings call

• Strategic reorganization in 2024: Completed business reorganization in August 2024, divesting certain IoT@Home business and related assets, focusing on core home water solutions. Established IPMS (Integrated Product Marketing System) unifying product, channel, and brand strategies under a cohesive marketing framework.
• Product innovations: Launched Viomi Kunlun Mineral AI Water Purifier in H1 2024, Vortex series of under-the-sink RO water purifiers in North America. Participated in CES 2025, showcasing intelligent home water solutions.
• Partnerships: Renewed agreement with Xiaomi for 3 years, strengthened cooperation with Jingdong, and forged strategic partnership with Malaysia's leading home appliance retailer.
• Manufacturing and R&D: Water Purifier Gigafactory with highly integrated industrial chain and automated production lines; two major laboratory systems for advanced tech research and product compliance; nearly 1,800 global patent applications filed.

For the full year of 2024, net revenues were RMB2,119 million. The home water systems segment had revenues of RMB1,498.4 million, a 39% increase year-over-year, contributing approximately 71% of total revenue. Consumables segment had revenues of RMB277.7 million, a 14.5% decrease year-over-year, contributing about 13% of total revenue. Kitchen appliances and others segment had revenues of RMB342.9 million, a 45.2% increase year-over-year, contributing about 16% of total revenue. Gross profit for the full year was RMB548.7 million with a gross margin of 25.9%, compared to RMB522 million and 31.9% in 2023.

• Strengthen domestic market presence through trade-in policy incentives and AI technology to accelerate product innovation.
• Drive international market expansion, further penetrating key markets like North America and Southeast Asia with region-specific product development.
• Fortify water purification product portfolio through continuous R&D to provide smarter, healthier solutions.
• Deepen collaborations with strategic partners to maximize advantages of Water Purifier Gigafactory for growth and profitability.

• Forward-looking statements involve inherent risks and uncertainties; actual results may differ materially from views expressed.
• Risks and uncertainties detailed in the company's annual report on Form 20-F and other SEC filings.

Q: After the divestment of the IoT business in 2024, what adjustments have been made in business operation and organizational management in the second half of 2024, and what are the results so far?

A: Undertook strategic reorganization starting in H2 2023, elevated water business to strategic business unit, completed divestment of certain IoT@Home business in H2 2024, established IPMS, strengthened brand awareness, expanded market share in water purifier industry, full-year net revenue reached RMB2.1 billion, income from operations RMB156.3 million, net income RMB62.3 million reversing past two years' losses.

Q: Could you give the breakdown of the Home Water Solution in 2024, and how much did the volume and price increase respectively? And is there any new product plans for 2025?

A: Home water systems include smart water purification products, water heaters, etc., making up ~71% of total revenue. Launched Viomi Kunlun Mineral AI Water Purifier in H1 2024. In 2025, focus on refining middle to high-end product line, enhancing Kunlun series, expanding international markets with new products like ice making and instant cooling features.

Q: How comfortable are you with the strategy in the U.S. And regarding the expansion in Southeast Asia, have you named the partner, the home appliance partner in Malaysia. And will there be additional. Will that be the strategy targeting additional Southeast Asian countries going forward?

A: Entered U.S. market successfully with Vortex series on Kickstarter and Amazon, performance good. Partnered with Malaysia's biggest home appliance retailer, will launch more products in Southeast Asia, plan to target additional Southeast Asian countries with strategic partnerships.

Q: Have you identified any long-term gross margin goals, for the different revenue categories?

A: Gross margin is crucial; average gross margin of water purifier industry is targeted, expects improvement due to product mix, launching Kunlun series with good gross margin, and consumables with decent margins.