Hello, ladies and gentlemen, thank you for standing by, for Viomi Technology Co., Ltd's earnings conference call for the fourth quarter and full year 2022. At this time all participants are in listen only mode. Today's conference call is being recorded. I would now like to turn the call over to your host, Miss Claire Ji, the IR Director of the company. Please go ahead, Claire.
Hello everyone, thank you, local, and welcome to Viomi Technology Company Limited's earnings conference call for the fourth quarter and full year 2022. As a reminder, this conference is being recorded. The company's financial operating results were issued in a press release earlier today and 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 is Mr.
Chen Xiaoping, the Founder, Chairman of the Board of Directors and Chief Executive Officer. 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 today's discussion will contain forward-looking statements made under the safe harbor provision 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 are filed with the 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 discussion of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. In addition, Viomi's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I will now turn the call over to our Founder and CEO, Mr.
Chen Xiaoping. Mr. Chen will deliver his remarks in Chinese, followed immediately by an English translation. Mr. Chen, please go ahead.
大 家 好 ， 感 谢 大 家 来 参 加 我 们 2022 第 四 季 度 和 全 年 的 业 绩 电 话 会 。 在 第 四 季 度 ， 受 到 疫 情 和 宏 观 经 济 的 不 利 影 响 ， 我 们 的 收 入 同 比 出 现 下 滑 。 在 过 去 的 一 年 里 ， 受 外 部 环 境 和 内 部 战 略 的 调 整 双 重 影 响 ， 我 们 的 整 体 规 模 经 历 受 到 了 较 大 的 冲 击 。 但 是 我 们 看 到 第 四 季 度 的 我 们 的 毛 利 水 平 环 比 上 升 三 点 二 个 百 分 点 ，
产 品 结 构 有 了 一 定 程 度 的 优 化 。 全 年 毛 利 率 虽 然 存 在 季 节 性 的 波 动 ， 但 总 体 与 2021 年 相 比 稳 中 前 进 。 在 次 季 度 ， 我 们 通 过 一 系 列 的 聚 焦 和 优 化 的 举 措 来 应 对 外 部 环 境 的 不 确 定 性 ， 加 速 规 模 的 恢 复 和 经 营 结 果 的 改 善 。 首 先 ， 我 们 聚 焦 优 势 品 类 ， 深 化 产 品 力 。 智 能 ， 智 能 净 水 产 品 作 为 云 米 耕 耘 最 久 的 品 类 ，
拥 有 最 领 先 的 行 业 的 技 术 实 力 。 在 第 四 季 度 收 入 同 比 逆 势 增 长 百 分 之 六 ， 环 比 提 升 更 达 到 百 分 之 一 百 三 十 三 ， 产 品 力 稳 步 提 升 。 接 下 来 我 们 再 进 一 步 理 顺 渠 道 端 的 发 力 ， 深 化 现 有 技 术 优 势 和 增 强 产 品 的 市 场 渗 透 率 。 其 次 ， 做 优 化 。 通 过 严 格 的 费 用 控 制 ， 销 售 和 研 发 费 用 在 四 季 ， 四 季 度 同 比 均 有 较 大 的 下 降 。
销 售 费 用 率 和 规 模 相 近 的 2022 年 与 第 ， 第 二 季 度 相 比 也 有 较 大 的 下 降 ， 经 营 效 率 得 到 改 ， 得 到 改 善 。 我 们 将 持 续 地 降 本 控 费 ， 精 简 组 织 建 ， 组 织 架 构 ， 提 升 运 营 的 效 率 。 在 改 善 经 营 的 同 时 ， 我 们 始 终 致 力 于 为 消 费 者 带 来 更 好 的 价 值 ， 更 好 的 全 屋 智 能 的 解 决 方 案 ， 持 续 加 强 产 品 的 智 能 化 体 验 。 在 十 月 份 ，
我 们 召 开 了 线 上 秋 季 的 软 件 发 布 会 ， 聚 焦 软 件 升 级 ， 从 客 户 健 康 、 节 能 环 保 、 主 动 智 能 、 时 尚 交 互 四 个 维 度 进 行 产 品 的 迭 代 ， 从 软 件 端 将 我 们 的 一 站 式 全 屋 智 能 解 决 方 案 进 一 步 的 强 化 。 在 十 一 月 ，Home App 的 云 米 自 研 一 站 式 全 屋 智 能 解 决 方 案 的 平 台 获 得 由 科 技 部 国 家 科 学 技 术 部 奖 励 办 公 室 发 布 的 精 锐 科 技 技 术 ，
技 ， 技 术 奖 。 云 米 的 智 能 化 解 决 方 案 获 得 权 威 的 认 可 。 在 过 去 的 几 个 月 里 ， 我 们 推 出 了 一 系 列 的 智 能 家 电 AI 产 品 ， 例 如 拥 有 AI 智 幕 息 的 Super Air Max 的 油 烟 机 ， 该 产 品 利 用 的 专 利 技 术 还 获 得 了 2022 年 粤 港 澳 大 湾 区 高 价 值 专 利 培 育 布 局 大 赛 或 简 称 湾 高 赛 的 金 奖 。 我 们 推 出 了 超 薄 全 线 的 Master 3 的 云 米 AI 洗 烘 一 体 机 ，
以 及 静 音 一 体 机 的 1200 加 仑 Master Pro 的 全 线 AI 净 水 器 。 智 能 家 居 产 品 中 还 拥 有 超 广 角 在 线 可 视 门 锁 Super Air AI 智 能 门 锁 等 新 品 。 这 些 在 软 件 端 与 硬 件 端 取 得 的 一 些 成 绩 ， 进 一 步 地 证 明 了 云 米 的 经 营 理 念 ， 始 终 以 产 品 为 核 心 ， 重 视 技 术 创 新 ， 致 力 为 消 费 者 提 供 有 用 好 用 的 全 屋 智 能 体 验 。 另 外 ，
我 们 在 技 术 创 新 和 人 才 培 养 上 不 断 的 努 力 ， 更 是 为 一 站 式 全 屋 智 能 解 决 方 案 的 不 断 优 化 提 供 了 坚 强 的 后 盾 。 继 今 年 上 半 年 设 立 博 士 工 作 站 以 后 ， 十 月 份 我 们 又 成 功 地 获 批 博 士 后 工 作 站 。 未 来 ， 云 米 将 持 续 地 和 高 校 与 专 业 机 构 一 起 为 社 会 培 养 行 业 顶 尖 人 才 ， 孵 化 全 屋 智 能 项 目 ， 推 动 全 屋 智 能 的 行 业 发 展 。
十 一 月 份 ， 在 国 家 知 识 产 权 局 ， 知 识 产 权 局 公 布 的 2022-2025 国 家 知 识 产 权 示 范 企 业 名 单 中 ， 云 米 再 度 入 列 ， 成 为 全 屋 智 能 行 业 为 数 不 多 的 上 榜 企 业 。 We have reached the fourth quarter.
We have applied for patents, and the number of global patents has reached more than 6,100. The cumulative number of granted patents is more than 3,800, and 8 patents have been applied for, exceeding 2,500. These are not only recognition of Yunmi's technological innovation capabilities, but also affirmation of our comprehensive strength. Although in the fourth quarter, we were affected by the adjustment of defense policies and large-scale outbreaks. Our store opening progress slowed down, but in the offline market terminal orders achieved new highs again. In Shenzhen, Hunan, and other provinces, the service stores have achieved tens of millions, even more than CNY 40 million orders. Yunmi's one-stop whole-house intelligent solution is constantly occupying consumers' minds. In the fourth quarter, we successfully launched air conditioners, refrigerators, washing machines, and other products into overseas markets.
Next, new export categories will become the growth point of Yunmi's overseas channels. As epidemic prevention measures are further relaxed, and China's social activities gradually recover, uncertainties for the future still remain significant. We will continue to adhere to a stable development strategy and improve our operations in the following three aspects. First, strictly control costs and improve our operational efficiency. Second, focus on core categories and optimize product structure. Third, steadily promote the implementation of overseas market new category layouts and accelerate the restoration of scale. Looking to the future, we will continue to maintain sufficient cash reserves, continuously strengthen brand awareness, and accelerate the restoration of the company's profitability to provide a solid foundation for brand development, and accelerate the realization of healthy and sustainable development to provide shareholders with long-term returns. Thank you.
Thank you, Mr. Chen. I will quickly translate our founder's remarks before discussing our financial performance for the fourth quarter and the full year of 2022. Hello, everyone. Thank you for joining us today on our fourth quarter and full year 2022 earnings conference call. Due to the adverse impact of the pandemic and the macro headwinds, we experienced a year-over-year decline in revenue in the fourth quarter, and our business scale was greatly affected by external factors and strategic adjustments throughout 2022. Nevertheless, our growth margin in the fourth quarter increased by 3.2 percentage points quarter-over-quarter of 2022. Benefiting from our pro-product portfolio optimization efforts, our full year growth margin in 2022 also kept stable as compared with 2021, despite fluctuations throughout the year.
In the fourth quarter, facing the uncertainties of the external environment, we focused on accelerating the recovery of our business scale and optimizing our operations. First, to holistically strengthen our product portfolio, we leveraged our competitiveness advantages and continued to enhance our core product categories with upgraded functionalities. As Viomi's longest standing category, our AI water purification products lead the industry with their advanced technology. We grew sales of these products by 6% year-over-year and 133% quarter-over-quarter in the fourth quarter, despite the year's challenges, reflecting our success in strengthening our product competitiveness. Going forward, we will redouble our efforts to optimize distribution channels, deepen our existing technological advantages, and further drive our products market penetration. In addition, to improve our operating efficiency, we implemented more disciplined cost control measures as a result.
Both selling and marketing, research and development expenses decreased year-over-year in the fourth quarter. In particular, selling and marketing expenses as a proportion of revenue narrowed compared with that in the second quarter of 2022 on a similar revenue scale. We will continue to optimize costs, streamline organizational structure, and improve operation efficiency. While refining our operations, we also remain committed to bring more useful and user-friendly whole house smart solution to customers and continuously improving intelligent experience of our products. In October, we hosted our virtual 2022 fall software launching event, AI: Helpful 2.0. This online event focused on software upgrades and product inter-interaction across four dimensions, including healthcare, energy conversion, and environmental protection, proactive intelligence, and natural interaction, further improving our one-stop IoT @ Home solution from the software side.
In November, Viomi's proprietary one-stop IoT home solution platform, Home App , was rewarded by Precision Science and Technology Award by the Ministry of Science and Technology and the National Office for Science and Technology Awards. Meanwhile, we launched a series of new AI smart home appliance, including one of our patent technologies, Super Air Max, an AI range hood with intelligent vision, which won a silver award in the 2022 Greater Bay Area High Value Patent Cultivation Layout Competition. We also introduced Master 3, our AI integrated washer and dryer with an ultra slim, fully embedded design. Master Pro, our 1,200 gallon AI water purifier with integrated heat purification.
In the smart home devices category, we unveiled our Guard AI smart door lock with an ultra wide angle digital peephole . Our solid progress in product innovation across both software and hardware further underscores our business philosophy. Focus on product and technological innovation to provide customers with a useful and user-friendly whole house intelligent experience. In addition to our product advancements, we constantly strive to optimize our one-stop IoT home solution through ongoing technological innovation and talent development. After receiving approval to establish a doctoral workstation in the first half of 2022, in October, we were also successfully authorized to set up a postdoctoral workstation. Moving forward, Viomi will cooperate with universities and professional institutions to cumulative top talent in industry, incubate whole house intelligent projects, and promote development of whole house intelligent in industry.
In November 2022, we were once again included in the State Intellectual Property Office list of National Intellectual Property Demonstration Enterprises from 2022-2025, reflecting our continuous efforts in innovation and intellectual property management. As of the end of the fourth quarter, we have applied for more than 6,100 global patents and accumulated 3,800 authorized patents worldwide, along with more than 2,500 inventions. These achievements are a testament to our technological innovation capabilities and our comprehensive strength. Despite the challenging environment stemming from repeated COVID-19 outbreaks as well as the negative of growing COVID policies on our store opening progress, sales of our bundled home solutions by our offline merchants still reached new heights in 2022.
In Viomi's four-star flagship stores in Yunnan, Shenzhen, and Hunan, among others, our offline merchants signed bundled home solutions orders ranging from 100,000 to over 400,000 RMB per unit, clearly demonstrating growing popularity of Viomi's one-stop IoT home solution nationwide. In the fourth quarter, we successfully introduced an array of products to overseas markets such as air conditioners, washing machines, and refrigerators. These additional product categories will serve as a new growth driver for our overseas business. We still see many uncertainties in horizon. In the post-pandemic year, with consumption confidence recovering, we will adhere to our steady development strategy, concentrating on 3 factors as we continue to optimize our operations. Continue to strictly control expenses and improve operational efficiency. Focus on core product categories and optimize co-product structure.
Finally, steadily expand domestically and introduce new product categories in overseas markets to accelerate the recovery of our business scale. As we forge ahead, we will continue to maintain sufficient financial reserves, continuously consolidate brand strength, propel the recovery of business profitability, and provide strong support for brand development as we strive to achieve healthy and sustainable growth, laying the foundation for delivering long-term returns to our users and the shareholders. Thank you. That concludes our founder's remarks. Now I will go over our fourth quarter and full year 2022 and audited financial results in more details. Net revenue were RMB 910.5 million, compared to RMB 1,332.8 million for the fourth quarter of 2021.
The decline was mainly due to a decrease in revenue from IoT @ Home portfolio and smart appliance, and others. Revenue from IoT @ Home portfolio decreased by 48.1% to 359.2 million RMB from 692 million RMB for fourth quarter of 2021. The decline was primarily due to SKU adjustments for smart kitchen products. Revenues from Home Water Solutions increased by 6 points percentage to 279.2 million RMB from 263.3 million RMB for the fourth quarter of 2021. The increase was primarily driven by an increase in revenues from larger flux water purifiers as a result of the product portfolio adjustments within this category.
Revenue from consumables decreased by 3.5% to RMB 116.2 million from RMB 120.4 million for the fourth quarter of 2021. Revenues from small appliance and others decreased by 39.3% to RMB 55.9 million from RMB 257.1 million for the first quarter of 2021, primarily due to the continued product portfolio adjustment within this category. Gross profit was RMB 209.7 million compared to RMB 341.5 million for fourth quarter of 2021. Gross margin was 23% compared to 25.6% for the fourth quarter of 2021.
The decline was primarily due to a decrease in the selling price of certain cleanup products as a result of our product portfolio adjustment. The operating expenses decreased by 20.4% to RMB 274.7 million from RMB 340.7 million for the fourth quarter of 2021, primarily due to a decrease in selling and marketing expenses, partially offset by an increase in general and administrative expenses. In greater detail, research and development expenses decreased by 23.6% to RMB 74.7 million from RMB 97.8 million for the fourth quarter of 2021, mainly due to a decrease in research and development expertise and related salaries, as well as the company's continued efforts in R&D efficiency improvement.
Selling and marketing expenses decreased by 29.7% to RMB 151.1 million from RMB 240.8 million for the fourth quarter of 2021, mainly due to a decrease in logistic and marketing expenses. General administrative expenses increased by 74.5% to RMB 48.9 million compared to RMB 28 million for the fourth quarter of 2021, primarily due to an increase in the estimated allowance for accounts and notes receivables from a third-party client recognized in the same period. Net loss attributable to ordinary shareholders of the company was RMB 106.3 million, non-GAAP net loss attributable to ordinary shareholders of company was RMB 101.6 million.
The difference between net loss and operations and the difference between net loss from operations and net loss in 2022 was mainly due to an increase in the valuation allowance of deferred tax assets provided, which caused an increase in income tax expenses. Our balance sheet remained healthy. As of December 31, 2022, the company had cash and cash equivalents of RMB 737.1 million, restricted cash of RMB 76.1 million, short-term deposits of RMB 171.5 million, and short-term investment of RMB 197.1 million. Let's briefly discuss some key financial results for full year 2022.
Net revenue were RMB 3,232.7 million compared to RMB 5,303.8 million for 2021. Revenues from IoT @ Home portfolio decreased by 52.4% to RMB 1,619.9 from RMB 3,401 million for 2021. Revenues from Home Water Solutions decreased by 8.3% to RMB 681.1 million from RMB 742.9 million for 2021. Revenues from consumables decreased by 2.4% to RMB 338.4 million from RMB 367 million for 2021.
Revenues from small appliance and others decreased by 27.7% to RMB 573.3 million from RMB 792.9 million for 2021. Gross profit was RMB 737.1 million compared to RMB 1,198.1 million for 2021. Gross margin improved to 22.8% from 22.6% for 2021. Total operating expenses decreased by 10.7% to RMB 1,136.5 million from RMB 1,160.5 million for 2021. In more details, research and development expenses decreased by 3.8% to RMB 300 million from RMB 311.8 million for 2021.
S&M expenses decreased by 18.1% to RMB 614.9 million from RMB 751 million for 2021. G&A expenses increased by 24.5% to RMB 121.7 million compared to RMB 97.97 million for 2021. Net loss attributable to ordinary shareholders of the company was RMB 275.5 million, and non-GAAP net loss attributable to co-ordinary shareholders of the company was RMB 256 million. This concludes our prepared remarks. We will now open the call for Q&A. Our founder and I will join this session and answer questions. Operator, please go ahead.
Thank you. To ask a question, please press star one on your touchtone phone. If you are using a speaker phone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star two. 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. Once again, ladies and gentlemen, that's star one if you have a question. Today's first question comes from Marcus Liang with Morgan Stanley. Please go ahead.
Hello. Thank you, management, for taking my question. I have three small questions. Firstly, can I ask how is the sales trending year-to-date for January and February 2023? My second question would be, with robot vacuum peers moderating their prices, so making the prices lower, how does Viomi see the market growth going forward and the market share as well going forward? That's my second question. The last question is, how do you see, you know, your overseas expansion and what are you focused on? How is the split between China and overseas revenue in 2022? Thank you so much.
Hi, Marcus. Can I recall your first question, second one? First and second one.
My apologies. The first question is, how is the company sales trending year-to-date in January and February 2023?
Okay.
Yes. The second question would be, as your robot vacuum competitors are lowering prices, how do you see market growth going forward and your market share in this segment as well? Thank you.
Okay, thank you. In the past 2 months of 2022, we have observed a certain degree of recovery of our offline channel, which is attributable to by the overall offline consumption rebound. However, in the past months, due to the repeated impact of epidemic and the number of our offline dealers, stores have decreased. Along with the repeated impact of . Along with the inventory backup of offline distributors lead to a decrease in the volume of shipment of our offline sales. On the other hand, we have more than 100 stores newly opened during 2022, and most of which are located in the pre-decoration marketplace with over 200 square meters store area. We are steadily proceeding our channels expanding strategy by larger store, better merchant.
Based on overall situation up to now, the offline scale has steadily increased month-over-month and the offline sales are expected to achieve a growth rate of over 30% compared to 2022. To your second question about robotic vacuum cleaners. The scale of the overseas sales decreased a lot under the negative impact, we all know, like the historically high price of natural gas, geopolitics and the overall subdued consumption atmosphere in European market in 2022. Well, in the domestic market, our sweeper robot mainly sold online, where with, while the leading brand in this sector account for a large market share. This sector is already under fierce competition. For our one-stop whole house intelligent solution, we will keep this product line and provide several models to meet customer diversified needs.
In the meantime, we will further optimize distribution channels, deepen our existing technology advantages in products like water purifiers and so on. I believe your last question is about overseas expectations. Yes, as I mentioned earlier, due to the impact, we mentioned, so our overall revenue proportion from overseas market decreased over 50% in 2022. Well, in the second half of last year, we went to participate in the IFA 2022 in Berlin in September for the first time, which is the world's most significant technology marketplace for the consumer and the electronic industries. We showcased a number of new products to the European customers and the franchisers and received many positive feedback.
Next to that, we accomplished the certification and sampling of air conditioners, washing machines, refrigerators in European countries and the water purifiers, smart door locks in Southeast Asia countries. We believe with the enriched product categories and expanded regions, hopefully our overseas sales would achieve recovery and mitigate the decrease in sale of smart cleaning products. In the past few months of 2022, the overseas sales of air conditioners and other home appliance products reached more than RMB 60 million. We are aiming for the overseas sales to be doubled in 2022 compared with 2021. Thank you.
Thank you. Our next question today comes from Wei He with CICC. Please go ahead.
Hello. Thanks, Madam. Thanks, Claire. I have three questions. The first one is: How was the overseas market perform in 2022? Was it better or worse than the Chinese market? What is the outlook for the overseas demand this year? Okay, thank you.
Okay. Your first question, we just discussed a little bit about the oversea market perform in 2022. Being stricken by the historically high price of natural gas and the geopolitics, the expectations in the consumption market in European countries remains subdued. As we used to focus on European markets with comparably simple product lines. The oversea sales in 2022 has been heavily stricken and decreased over 50%. As we mentioned earlier, We have enriched our product categories and expanded regions like Southeast Asia's countries, and hopefully, our oversea sales would achieve a recovery. About your question, I believe you ask about the domestic domestic market growth, right?
The domestic business in this quarter decreased about 30% on a year-over-year base. Both online and offline channels have been striking hard by the negative effect of rolling COVID policies. However, we see some optimizations in revenue proportion by product. With a larger percentage of revenue contributed by water purifiers, our overall growth margin improved more than 3% quarter-over-quarter. Looking forward, we will focus on our core product categories with technological advantages, especially water purifiers, and we'll re-double our efforts to optimize distribution channels both online and offline. In regards of the channels, due to the repeated impact of the epidemic, a number of our offline dealer store has decreased. Along with inventory backup of offline distributors lead to a decrease in the volume of shipment of our offline sales in the past year.
On the other hand, we have opened more than 100 stores newly in 2022, and most of which are located in the pre-decoration marketplace with over 200 square meters store area. We are steadily proceeding our channel expanding strategy. Based on the overall situation, our offline scale has barely increased month-over-month, and offline sales are expected to achieve a growth rate of over 30% compared to 2022. Thank you.
Thank you. Ladies and gentlemen, this concludes today's question and answer session. I'd like to turn the conference back over to management for any additional or closing comments.
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 The Piacente Group, the company's investor relations consultant. Thank you.
Thank you.
Thank you, everybody. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.