Q3 2019 Earnings Call

November 19, 2019

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Welcome to chorus call. Please hold for a conference specialist.

Is the operator, which often said you like.

What like feature for PDH Dot com.

Your name please.

First name David.

Last thing Brown.

Company.

Our euro.

Over to Christian are now please go ahead.

Thank you Hello, everyone and thank you for joining us this evening.

Turning through these was distributed earlier today and is available on the IR website at <unk> Dot 58, dot com as well through PR Newswire services.

On the call today from 58 are Mr., Michael, Yes, Chairman and Chief Executive Officer, Mr. way, you Chief Financial Officer.

Michael Review business operations in company highlights followed by way, who will discuss financials and guidance they'll both be available to answer your question during the Q and a session that follow.

Before we begin I would like to remind you that this call may contain forward looking statements made under the Safe Harbor provisions are the private Securities Litigation Reform Act of 1995, such statements are based on managements current expectations and current market regulatory and operating condition and relate to events that involve known or unknown risk on.

Certainties and other factors all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results performance or achievements to differ materially from those in the forward looking statements.

Further information regarding these and other risks uncertainties and factors is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward looking statement as the result of new information future events or otherwise except as required under law.

Now my pleasure to introduce Michael. Please go ahead, so thats, creating an assumption for joining our call.

The maclay column remains on schedule and the such uncertainties.

Hi, created a challenging business environment. Despite its if he'd like wind well, we preach to full report solely the financial and operational results for the third quarter.

So to that.

On the for putting 26 billion.

An all time high and the exceeded the high end.

Oh.

Yes cadence.

Now I'll, let Paul will enable us to commence.

Deal flow online marketing services grow Saudi pretty.

Greason can be person then compare with the same quarter last year.

Cordless service and other services due to a combined generated outstanding grow gross woman.

And the increased 150 line pressing Gil again.

non-GAAP basis, our operating income grew by 21.

0.3 lets them Gil yet, let's say can still showing just because of our operational abrasion leverage.

It could component of our business model I think enable us positivity anca all their strategic investment in new business study drug and that will bottom.

Our unique opinion business you will this was 3.6 million. This quarter is 3% increase from this includes of course on.

Our traffic weakness, we wish you will see this mobile App was this grow faster then globally on a year over year, but these which reflects how we are able to provide a better return on investment.

For all their customers.

Our total comp outcome that was about 22 solid students to quote.

Purposes, Nowhere then yes.

We continue to accelerate the pace of our structural shift towards supporting innovation and again, Paul internal efficiency.

Resulting in a 10% increase in production and the technology.

Yes staff and they'd be crystal for passing your sales in the market in personal relationships for the same period at the last year.

We have all of US Germany, Good Eve in our business model.

What I dental classified that marketplace combined the waste issue with cool that flows.

Hi, there a quiet.

Oh, you cannot even 10 already incorporated.

Well, what I didn't know marketplace open office diversified content categories.

Okay, and the service, which are more resilient doing that challenging particularly care period.

Your pool is scale network effect and the risk.

File its overseas.

For the business model show outwards Cody integrated players.

What do you go marketplace offer more in depth divesture specifics switches in the service.

As it beginning with this year you anticipate sure.

Certainty macroeconomic environment.

You touched on.

It's a was.

You pay rates last week.

So like ours.

Any opportunity for Saudi definitely already Tim Macphee, MACT physician, yeah, well I'll, let cool categories. Despite this junk that headwind that then than originally expected. We are we were pretty stuff with the exclusion of all they did issue initiatives and the great.

Progress we have made again in housing all that ecosystem, we also scale to bike advertising.

<unk> expense in the second half in the I'll, Oh, Princeton and the let margin remains plc.

With lifting all the housing critically transaction voting remains low.

Just comment at the low kit is that the government policies, they'll loosen and Oh sentiment.

In the property Lux to continue to be Rick.

This is expected.

So be it a little more for the foreseeable which.

Let's say.

Oh, let's take a 30 in the rental housing business. So it should tremendous resuming the steel will lead the bucket by a wide margin.

And as I said, Tom I'll, let primary housing business juice and its leading position by extended routines.

<unk> penetration.

And the expanding its buckets yet.

You can see metal absolute nice Paul I'll add to the launches at <unk> at a bunch of by further enhancing the user experience into improving thief. If activities of all we locked in for example, I'll, let ultimate team we are seat stitching technology allow significantly.

Gross.

At this time and accordingly, we are production in doing so he has become an integral role part or all the agent customers. So Keith.

We also we also lunch at all at one click utilization broker it at the end of period of time, but they're playing a similar technology will allow you assess so simulate their own dilution piece then.

Online and applied to towards their through it so worried.

Look at it is can.

Just a mock owning the start of all that depending footprint in the evolution pedigree.

Wow, often mostly input and it gets and hosting pedigree.

If you can always jump category.

Employing this continual topia Wally questions they were going to kind of four high Atlas more and the more.

Okay, and we tend to see approach it.

In response, we have increasingly offered to more.

For example products to allow all the customer taught pilot Daddy.

Well, we could pay your business, you'll just given that your category continued to grow both year over year and there's a question.

You're starting to defy I'll gladly timok.

Position, well kind of costs tend to your solution.

Yes, both product and their solutions that better so with all the customer in the same way.

Not that we deal with all the Oh property database.

We are also up where 18 Oh regular enterprise in the I picked can participate within.

I focus on used to dictate.

For better profile, there can you assess.

And that deploying a high for more breadth Princess and you 15 nature.

In August we launch it should put joke season, they co branding campaign in partnership with Mcdonald's J.D. Dotcom, you mean and it's something.

Lets touch the children categories, such as Laetus customer service Shopian assistance and logistics.

Just a computer was hugely.

Except for in the resulting in significant fortune wallet putinist.

This is to start the over the ramp.

I'll, let you become the strategy.

It should be able trends from more us from D.A. information provider into a solution provider.

This will allow us to provide the differing sheds human resource solutions to cooperate trends.

All have peaked in the lasting demand for blue collar <unk> inch entry level positions.

The yellow pages in the other.

Local sales categories.

Nobody.

Is probably lease this.

Packed by the ongoing macro challenges and the continued to show.

It's good that equals since the launch of without Judge Asia, What's the big teacher Homesales <unk>.

We have been focus on population.

With high quality service provider for Standalone.

Yes, It is college.

And the integrated service.

So its action plan.

Which is fabrication close loop 'cause next year, so a platform.

Yes in customer service, we'll post consumer because the vision and the choice.

He will continue to expand it to coverage over city could concepts to more categories. We also studied a pro like.

Additional why do I need to enterprise solutions that include operational promotional campaign and the trailing off reach so it pretty impressive.

Operational efficiency.

We are very pretty stuff, we struck drugs.

Progress during the course, they used was mark bucket of steel has huge potential drug that has been narrowing you slow this year well exploring various upcharge for monetization.

Yes, if it ends up trying to drive separate secured your stood at 300 amid the lets say must be financings with a group of investors both concerned and the 58 dotcom participate as they see because existing investor.

Demonstrating all that confidence.

The business and there is huge.

I used that could either you are not your cell phone transaction and the has established a symbol model which include either.

Connie quality, yes, Petchem most Boston.

Station and the other value added service.

We will continue to replicate yes, this more than two other certainly spend that and the high like your schools categories.

Regarding I'll Oh, the accordion investment.

If there is a tough buttons that they'll continue to be Bose.

As stated and I encourage you to say that good great potential in the put all the Chinese Louis T.S. seats you provide.

Well monetization you say a low priority focus this year fault, but Paul Nipigon, Gena religion enormous amount of data.

Potentially hundreds of media. So would you also and then expand out all the unique over the organizational capabilities.

Just yeah, we focus on expanding coverage improving relationship with local partners and that tied into traffic to I'll.

Centralized you up.

This has created sickle synergies between 50, Oh calm and up to date main app, which kind of late Saudi to foundation for monetization you're the future.

Meanwhile, 50 at Cod together was 58 college.

Also played there.

And increasing.

Great.

Ratio to walk you know setting all the Apple invasive rose this respect for social you're supposed finish.

Just about a look at least I would like pool, the it did lead to it.

The cost side that.

More than consumer Tobey, I really relevant and that the principal business model globally, China alone.

For a massive market opportunity for this model I can't emphasize this enough.

Despite the unlock the other systems. This journey belief in the another 10 fundamental trends that to support our team is in the these email way be wary of testing messaging they bought to future growth prospects.

Our strategy remain unchanged, the real solid defy and expensed at all that leading buckets.

Position. So your investment you know vision and the boasts second origin and over that over there as you launch solutions.

And the <unk> trial.

The improvement in the USA just been although plentiful.

We are focusing.

On creating not gotten ideal for all the customers shareholders employees.

Well, let me take all that Paul let.

With me.

Thanks, Michael and thank you everyone again for joining our call Tonight.

I will now walk you through our third quarter financials.

Total revenues for RMB four point 26 billion.

A 17.4% increase from the same quarter of last year.

Membership revenues will be a 1.2 billion.

Once down year over year.

I like marketing services revenues.

Maybe 2.8 billion.

Up 20.1% year over year.

In the third quarter of 29 thing.

The total number of paying down the users was approximately 3.6 net it.

Oh, Threep say increase from the same quarter of 2018.

The uncertain macroeconomic environment in fact, the membership growth.

But we were able to partially offset the impact.

Hi, offering more flexible and customize the product and services there are payloads to suit the needs of our customers.

There is a bad or return on investment for them and attract more new paint business users.

I'm, all the 3.7 and paying users.

Approximately 1.3 million are in their housing category.

Representing the majority of market share.

Approximately a 1.6 million argument job category.

Uptravi both year over year end sequentially.

He's paying user numbers in both of their housing and job category.

How far larger than that of any other pure vertical players based on publicly available data.

Outside of revenue from membership and online marketing services.

Revenue from ecommerce services and other services together.

Resulting in a growth rate of 120, nice 10 year over year.

Joining very strong momentum.

Gross margin was 88.2%.

Compared with 89.5, then in the same quarter of 2018, you Judy above mentioned a minor changes in our product mix.

Operating expenses War RMB 2.9 billion.

An increase of 12.4 Sen.

From the thing caught up on the 18.

Sales and marketing expenses in the third quarter of 2019, RMB 2.2 billion.

An increase up 13.4% year over year.

We think sales and marketing expenses.

Advertising expenses in the federal water.

For approximately RMB one getting.

Which will generate stable compared with the same quarter of logic.

No I think in sales and marketing expenses in the order of 29 team.

Or approximately RMB, one point to get it.

Up 26.4 10 year over year.

Research and development expenses in the third quarter. It was approximately RMB half a billion.

11.17 year over year.

Yeah.

The Ministry of expenses in the third quarter or approximately RMB 197 minutes.

Only five on trips and you know.

We scaled back advertising expenses in the second half our best here.

As we used to alternative marketing activities.

For you and more effective customer acquisition channels.

Overall, all major operating expenses grew at a slower rate than that all total revenue.

A clear reflection of our diligent execution and successful efforts around improving internal efficiency.

The total number of employees at the end of the third quarter.

I was approximately 22000.

Approximately 2% decrease from the same quarter last year.

As Michael pointed out in his remarks.

We continue hours structural shifts.

Converting sales and marketing staff into product development and technical staff.

This strategic shift will continue to be about our top initiatives.

non-GAAP income from operations.

Well, it's approximately RMB one beginning in the third quarter.

Up 21.37 year over year.

non-GAAP operating margin was 24.4 then.

Compared with 23.6, then in the same quarter of 2018.

Net other income in the third quarter of 29 thing with approximately RMB 80 minutes.

Bad or was that a net other income of RMB.

103.7, David and the thing order of last year.

non-GAAP net income attribute it to 58 dot com inc. ordinary shareholders.

Approximately RMB 1 billion in the third order of 29 team up 20.7% year over year.

[noise] non-GAAP net margin was 23.9 stand in the third quarter of 29 thing.

Compared with 23 important trip sat in the same quarter of last year.

Now, let's turn to guidance.

Based on companies current operations.

Total revenues for the fourth quarter of 2019, Oh, I expect it to be between RMB 4.05 fit in and I leave 4.15 that it.

That's rather than a year over year increase of 20 top 10% to 15% in terms of army.

These estimates reflect the company's current and preliminary review.

Which is subject to change.

On that note like now to begin to coordinate session.

Andrew Please begin.

We will now begin question and answer session.

Ask a question you May press Star then one on your Touchtone phone.

If you are using a speakerphone please pick up your handset before passing the key.

She withdraw your question. Please press Star then too.

At this time, we will pause momentarily to assemble our roster.

And our first question comes from Thomas Chong of Jefferies. Please go ahead.

Hi, good evening banks, many of you might not picking my question.

I have two question. My first question you about a Mac Oh I'm modeling.

Given the maximum.

Not that certain I can management comment about how we can add value.

I'll have some oh and also.

Improve our monetization.

Capabilities on this front and my second question about competition I can management talk about the competition, how competitive landscape in poverty drops.

I used to good and.

Thank you.

Oh, sorry, Thomas I will answer the first question. This is Michael Yeah.

So one now they are doing fine so well get that I didn't know if I knew you commented on some cool pool, but didn't know if I didn't hear man cut on woman I cannot enrollment accrual would could not.

Well then Jim trade up a couple foundation Miss you on bundled cool and go what's that number five downhill.

Women they taught out yes, indeed, yes, its young woman she long Doc when will that please.

Bob Hunton and this should it's something that it will do so don't cooled down because I felt a little.

Well, then said it wasn't even tell since he is a woman you play caught out when the time a girls category that is Oh can go to jail. So just CE Gen. Two days, we'll hold true on the Guy who's going to hold show your they will no doubt that agenda, sometimes you'll you'll hunter. This is you know you're one of language. So.

Sure.

They're going to current macro environment, it's difficult for everybody.

It's difficult for us, but actually it's probably more different codes for our customers.

So oh, we will always stand together with our customers.

And through.

Continue improvement of our offerings a in value added products and services.

We not only a help our customers to get a better return on investment.

But also a expansion our inflows and markedly leading market position.

So you can yes. This is over and then everybody on the doctor to them. The coolest detected a shovel that's enough to go each is on the silver that did not produce or soil the cool Genzyme <unk>.

And your cool that don't want that kind of bottoming, even jet show She's got hold have will be there was it the channel how they will make some caution.

Adding a junior audio I didn't answer on the we come to the probably obviously well then dances on behalf of so woman. She Linda you called out that there are no damage and a couple kicking off the shelf.

Yeah, so actually Yao our traffic, especially in mobile traffic has been growing.

Faster than our revenue growth.

Hi, so a in another way our customer has been getting.

Bad effects or with the same amount of money and or even a less compared to the past Oh literary much better return on investment.

So this this will be about continued a average and a strategy are going through those difficult periods.

Uh Huh, let's anyway, if I mean did a woman Ah, yes that you didn't that's when you go all well missiles homes as a single <unk>. They are they go and I'm asking so it's almost impossible to God cigar because dome and you get your family you comments and then they go out of service.

Food that sunny and talk with would she gollum she walked away from a kind all of them up well my bundle Cohu puts us look at a shovel I'm happy enough from below that South Africa, Josh on big or I know full of now bulk or shut in your food.

The global Nobody told all Coors, one country Belgian cripple the Columbia now dealing with its usual deal on the disease or Tony that the way. We Cook would you didn't do that solutions and puts us in order to the <unk>.

Considering it with that kind of Washington, the girl in that cannot be good then pneumonia.

No.

So.

We are also a as his day job transforming ourselves from pure Ah traffic provider into a more service and solution provider jamul customers.

As you can see there's a strong momentum in e-commerce and other services category, where we actually a.

Right or more in depth services.

China customers I think that's kind of <unk> service not only how best to understand what exactly all across the many but also a in a long term were opened up on a more opportunities was.

To grow our praful.

Oh, well mentioned guys all gone and she didn't do them elements assumption, we like that you mentioned, we'll see you see it includes a topic with jobs to go and shut ins and what the way that when they shut ins, which only though a units is all you that I will get angles, we at least double eagle him answer that say significant downturn in political issues that touches on home Jimmy.

Well, the undetermined swap with young fathers without a thought about this.

I don't want to use sheet audio gardenia on my hands with GE should jadhav that you're involved a chance you're kind of rule looking into the city that should not be bushel woman.

The only that chicken now they went out at home. So how do you feel you and she will I'm pretty sure that horizon.

Oh, they did this woman Neil.

Ill jump out that way like that touches on it but we want to be a goodwill in the audio hadn't yet centers that you called that didn't have gotten she's.

Yep, Okay. So yeah.

As I emphasized a in my remarks, and again I cannot emphasize it's a enough.

China is a a massive massive markets. It was 1.4 billion people.

All right and or the alone represents a huge a affinity and potential.

So this was well continue to invest in innovation and a user experience. This year, we had about temps in a increase research and development headcount.

And this trend will continue.

We believe.

In the long run right Oh, we point out to the the structural shift in our total headcount.

Well not.

Just a sacrificing today's Oh, you know short term expenses, although we know the tradeoff between Ah R&D or people and the those people bugs, we are actually investing for our long term success.

Yes.

Okay, I guess or the sensor.

Thomas The first question right the second questions about the competition.

I can give it a things first so in.

Our major categories, a if you look at housing.

Again or the.

We don't see any clear sign of a government policy.

Loosening.

And the current.

Market sentiment.

We might have to accept the that's that's the norm for foreseeable future.

Right and if you look at a the.

Paying business users on our behalf long hours down 1.3 million in housing category.

That represents a a considerable major market share.

And we have been.

Oh holding that market share under.

No I'm pretty intense competition since.

Hyperoxaluria right.

So.

Well, let's say Oh, we are not a free of any competition actually a competition always make on stronger.

It's Michael Oh internally [noise].

Talk about dengue, sometimes the a strong enemy actually you will actually make you even stronger okay.

So.

I I think a housing or situation as.

That we do have the ER crasher membership growth you guys are pretty much Oh, we are already having a fair big market share there, but what we are going forwards are you focusing on is continue to provide more.

Value add edge and debt service strike, including Sars.

And ER.

Other technologies like the VR Marco Michael mentioned, a in his remarks onto a you know, adding more tools into our Asian customers toolbox.

And help them to improve their efficiency. So by now but they are they will be able to get a better return.

Oh investment from you know partnering with us.

Well, what I was wondering about buying new competition take a junior and chenier digital Amanda most yeah tributes them in the alliance United States or that there are a short hills element that's used to fall Dol Junior Adient will change in agenda fundamentally shouldn't don't play general your minimum and she'd been telling that took an example.

That's a long time Celgene sophos hurting you well mystery I'll give me those are called <unk> license for that pseudo partisans. They go no doubt winding down there.

Just a problem that you'll just ahead of what the who couldn't didn't tell them go to will see well know for larger than usual you go through them funding.

Go sell woman country doll line doesn't whole she's a woman there's your meal meal call. Your needs. This I'm wondering called someone says hi, John This is and that's going to diesel cannot be on the non that sort of go through and then you see all hot in cardiac issues. Just some quick one increase to go so I'm looking at your ideal.

Oh, yeah in the past couple of years right. We do we get had a lot of Ah challenges are from different verticals are now housing, but also a place like a used car and ER, our jobs to but a much.

During the off those.

Rising competitors.

Unlike us they live on financing their private companies and no of them.

Really showing a profits as of today, so under a difficult markets.

Those competitors that are living on financing a will have a lot more difficulty.

Who continued.

Due to find more funding.

Uh Huh at the same time, we are under our proven business model, we have very positive cash flow and Uh huh.

Very robust a business model to support a sustainable.

And profitable growth so our expectation is being 2020 or the the competition situation.

My favorites more.

Oh Civil woman a junior since you've been somebody who recently joined in the thing that tight Guy deal woman that you at all.

I Didnt issue and Dunkley been Jada they've got several she can now will go up diesel Chris is here and.

And then go beach, which is a lot when you kind of with how did your his first of all the <unk> indefinitely.

Yeah. So so basically if you look at a or no passes this year, we didn't really or make a lot of change from our original plan a we had on our own pays.

But oh, we look forward to next year or.

As always see if the favorable or competitive situation.

We might in specific markets.

We become more aggressive just you know as we sit and solidify and enhancing our leading my vision.

[noise].

Next question. Please thank you.

Our next question Thomas from T. on how of T.H. capital. Please go ahead.

Oh.

Yeah, I couldn't even in management congratulations on a good color on even that you 60 FICO environment.

The question actually teacher that wrapping your mix can I do see the increase in that e-commerce and other things [laughter] and yeah, I can follow what Michael a and check and see you.

How much do you expect [laughter] pack of was asking you [laughter] tends to the total revenue, let's say and does that 2020 cheap.

First question second question is relate to catch up my team and other upstream operating expenses and so I don't see a lot to increase [laughter], Angie I guess stacie sneaking thinking feature that accompanies internal control and check going forward.

Into next year, and how do you plan to manage Youre thinking.

<unk> expenses. Thank you.

Okay, well what else was asking about the young davinci.

Oh.

Yeah.

A woman named a tough Kupol man woman doesn't mean, you go to chase the kidney, but those things pop.

Big Whip out how many multinational cohorts at all.

For now so sales fell slightly.

Oh, well the human Bob Pagano shovel, yet trends and people food wholly owned you, there's a hongyanhe Elgin kudos to them down there you go either totally seafood diet or you're not only did she can which she talks in its on a woman I don't know lending.

I guess it before that you though for you.

You know what she's all well meal time. She does he walked you nailed down yet they are done nothing like what got us sometimes a long long time actual oh, so yesterday Janine cool. Please civil woman met somebody tells you bundle.

So today more than anything are.

Okay got it.

Although quintiles all Oh.

One of them up and certainly to the so let me she won't sugar beet pick up you didn't look Chanel.

Huh.

Yeah, actually Ah Ah internally I, even at the beginning of the year, we have the a initiative.

<unk> from sales to service.

'cause a internally ourselves.

So it onto the ask grades but at the same time stands will serve as true right. So we want more into more of our sales personnel to become a service providers to our customers are they are.

Right you have a deep understanding of our customers' needs and become more like a.

Ah consultant type of ROE target customers and provides solutions.

Oh, I think I'm a across all our Oh core categories. There's a great good opportunity to increase the ER <unk> type of service revenues.

We don't have a concrete plan or to say, how he what exactly a they ratio will be but a you know I do it's bad or in.

A couple of years or the revenues from those type of services they become a second even apart how about total revenue.

Say, maybe even out.

Well, that's a michael's comments on the sign out a nice or take is also a are you.

Yeah and was that if that kind of change materializes or we want them to you consider or how to a reports our revenue mix in a more meaningful way to help.

Investors to understand our business.

Well that was only gotten the Oh man or woman, who choose that Sundar three also called <unk> <unk>. We just didn't know cool Quintiles. Some man to go I think though you know didn't job and into the convertible with into kind of went I wasn't couldn't do it at least you call when really cool, we'd see the key account.

She got big Brian disruption banker, who.

Turning to golf courses that woman she launches the children Big though total solution so she's side.

Mobility has seemed to anybody who for the future. She will publish himself, but what's changed since you did you do want to fool. There's a wish you luck queued time on July how did they go on Sun how to do though are popping up you don't get a nickel is a sharp drop the true should o'neil.

Okay.

Yeah.

In the past Oh revenue grows with mainly what I on the or the total memberships grows and also the a oh online marketing Oh Edifying high Bofa revenues gross.

What was the a current market or the environment with M. A C or the pressure on membership grows and Oh, well, Devon GE revamping, our key account strategies.

Ah well will.

You working was.

As Michael mentioned during his prepared remarks, but to me like he used. The example in the jobs category right are we had this ER super Super job season.

Branding campaign or that Joe we be part of this was a big copper edge kinds like a Mcdonald's JD dot com leaning and Trimble, that's a great start that we're trying to provide total solutions.

Our copper times and with them to will no.

I tried to divide the more anymore or copper ridge.

Times a indifferent.

Categories, and and well see the.

But then a job such type of revenue a girl in the future.

The second question so.

Oh.

[noise].

Okay I'll take 'em that second question on operating expenses right. So I think.

So what gives you look at a the big buckets of our operating expenses.

Oh, sorry on the Oh, very Oh, gosh, as a a way of scaling back advertising and you look at a convention, though online traffic acquisition channels and probably ever won't realize a nowadays the the marginal return.

On a additional traffic or new user 70 economy.

Right. So we are exploring different kind of Ah Ah marketing activities, so even offline or type of a activities as a more effective channels to acquire new customers.

50 town being one of the ER Dumbo and also we replicate that model into a county and steady suburban areas. We cards the city partner programs and also showing very nice momentum this year.

So overall for the sales marketing part Oh, we we will have.

A very cautious.

View on what we're going to spend on advertising or in other marketing expenses will view them as a integral part and are looking for the a batch a marginal return.

And on the Oh sales and marketing personnel parts as we just mentioned well why are converting them into.

Service lines at the same time, we also shows the steadily reducing the pure a number of pure salesperson and adding those oh heck on back into our research and development Ah Ah.

Staff and in in terms of general and administrative expenses I think we're already.

Sure a very clear records that we have very good untrue and average over that Gen airline.

So I think Oh, that's that's four core businesses and are those damages on the core businesses a will enable wise you know two to self fund.

Other news of your new initiatives like the trend drying and should be town.

[laughter].

Okay. That's helpful. Thank you.

Thank you Paul.

Our next question comes from Hillman Chan of Citi Group. Please go ahead.

Hello, and good evening, Michael how it's working their way Tony Thank you for taking my passion.

I've two questions, especially it's also to follow the competition or not.

Asked me why has made a high pull Cox engine into recruitment leveraging on the user traffic and they go on Monday merchants restaurants, and local surfaces and what about perspective, how do we see the competition to meet on police and my second question is articulate how could you Oh PPI people on de <unk>.

His operating metrics all 50, a town initiative do we think about the life of fashion.

The pace of monetization in 2020 piece. Thank you very much.

Oh, I thought that you're going to take when you take a chintan take I'm talking that children will then give mail five chan throughout the three so youre sciammas someone's all in and she doesn't leave that Tom. This is sold as a company will tell them what was your hurdle.

They are well just talking to see door to door. The Jim you called the tons. She that you laid up wasn't Jewish everybody else influence you can you know wastrel hood common that to L. does it go a movie Altrincham <unk> deal.

Well you woman has phase on the though.

Bundle them up at Cincinnati that assumption now are we on the to the all doing for them I mean do that he's a not getting more.

Hi, Dr., though they don't wish them all one little got yeah.

All right regarding the jobs the initiatives that are generates a rapidly huge PR a couple months ago from each one we really are you didn't see any concrete action.

From their site.

Actually I do not paired they didnt, even they came to us the odd says a potential.

Oh cooperations, because you know they do oh through their agencies actually a recouped a fair amount of up you know that they're really crews are on our platform.

So.

I think we we continue to focus on our own or user experience improvement and.

Scaling our Ah Pat home.

I think the.

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