Viomi Technology Co (NYSE:VIOT) Q4 2018 Earnings Conference Call Transcript

Mar 18, 2019 • 08:00 am ET

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Viomi Technology Co (NYSE:VIOT) Q4 2018 Earnings Conference Call Transcript

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Q & A
Operator
Operator

(Operator Instructions) The first question comes from Lillian Lou of Morgan Stanley.

Analyst
Lillian Lou

Thanks a lot of detailing of 2018 performance and congratulation on a good growth. I have three questions. First of all, I think that Mr. Chen talked about in 2019 there are going to be 56 new SKUs to be launched and we're getting more into Viomi branded the full set of home appliance category. So can you give us a little bit small detail guidance in terms of the category growth i.e. by each major category, such as water purifier, home -- the refrigerator, washing machine, et cetera?

And second question is, obviously, I think where India -- the company's India (ph) expansion phase, so how do we think about the expense ratio in 2019 compared to the level of 2018?

And the lastly, also I think Mr. Xiaoping said that we are adding new channels including, Pinduoduo, etcetera, okay, you give a little bit breakdown of the channel split and in the -- in terms of the percentage of revenue? Thank you.

Executive
Shun Jiang

Yes. Thanks, Lillian. Why don't I take that one? So your first question on the individual product category growth split. I think we won't go into too much detail on this call, but in terms of the major categories, I think the Viomi-branded products, so in particular, the smart kitchen products, which included the refrigerators, dishwashers, the range hoods and the ovens as well as the other smart products, such as the washing machines and the water heaters, we do expect to experience very robust growth in these product categories. So we've guided at least 100% revenue growth in the first quarter, and I think we are confident of achieving similar levels of growth for the full year. I think the majority of the growth will come from these product categories.

Having said that, we still expect to have strong market demand as well as robust growth from our water purifier business, but this particular product, given that it's in a more mature phase of development, will have a slightly lower growth rate as compared to, say the smart kitchen or other smart products as well as the value-added products categories. So I think in summary, the Viomi product categories, you can probably expect in excess of the 100% growth that we've guided for the first quarter. And for the water system, you can probably expect a similar level of growth or slightly higher than the fourth quarter year-on-year growth, which was in the 20% year-on-year for the water purifiers.

For your second question about expenses, as well as kind of our profit margin, so I think as we alluded to during the call, given the current stage of our development and considering the vast growth opportunities, we believe prioritizing top line growth and market shared gains in the near term will allow us to maximum shareholder return over the long-term, but having said that, we have always prided ourselves on delivering a robust top