Q4 2019 Earnings Call
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Ladies and gentlemen for these conference calls you could begin shortly until such time lines are still remain on mystical he's going to go to fund by the thank you for your patients. Once again. These conference calls used to begin for about three to five minutes on different finder Leinberger remain on Missy cold, which continue to Sun Bye.
Thank you for patients.
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Ladies and gentlemen, thank you for study by the welcome to the Joy Inc.'s fourth quarter, its who gets what do you 19 earnings call. At this time all participants are in listen only mode. I'll do the management's prepared remarks, you have the question answer session. You still these events being recorded another hundred the conference over to your host for today.
Mr. Matthew Zhao IR director of the company. Please go ahead.
Thank you operator, the morning, and good evening, everyone welcome to Joyce faults called her and a full year.
<unk> earnings conference call joining us today are you sort of TV shedding chairman and CEO of Joy sample Easter being June and the steel meeting.
Today's call. Many bunch will first Hawaii review of the culture and then we will conduct thank you I.
As opposed to talk on a full year 2019 financial results and what parts of these conference calls Oh, we double I know, that's why don't call I.
A replay of todays call will also be available our website in a few hours.
People, we continue I refer you to I would see public statement no earnings press release, which applies to these calls as we will make forward looking statements. Finally, please note that unless otherwise stated all figures mentioned during this conference call Oh, you're going to be.
Ill now turn the call work to our chairman and CEO user Babysitting. Please go ahead Sir.
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Okay. Thank you Matthew.
Everyone Welcome to <unk> earnings conference call today.
Hello, everyone, Stacy and south unhealthy just because we're not going to virus Peter it.
On December 20, 2019, all shareholders, who the name change of why why to join.
Which stands for choice and useful.
The main change that affects all commitment to being joy <unk> experiences not only to both inside China, but also people around the world as we continue our global expansion.
In line with our mission to conduct people around the world and English their lives through video we continue to make steady progress on both the domestic and international accounts in the fourth quarter, two up 19, expanding our user base.
Oh products and for the advancing our monetization capabilities.
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Notably all better than expected topline performance for the fourth quarter and full year 2019 has illustrated all of success in driving growth both at home and the block.
In addition to the strong financial performance, our video based product and services, including Nike Eagle Life, Pago, why life and who you have.
All become leaders in their respective markets.
Upsize people dissolved <unk>, you engine extension strategy, which enable us to pursue the simultaneous development of both all short form video machine business segment to construct a truly global video century, social media ecosystem.
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First let me share with you the progress we have made it difficult people the shelf won't be deal girls engine Nike as we continue to supercharge like equal to geographic expansion product updates on the monetization, but you know husbands.
During the quarter Nike maintains its robots user base extension momentum, which was largely driven by the growing user base throughout southeast Asia and developed world.
It's total mobile and they use swelled 215 corn fields.
Let me, sending an increase of 208.3% on a year over year basis, and 15.1% on a sequential basis.
In addition, Nike continue to make.
Waging cognitive markets, such as diminishment in Russia, capturing a substantial share open markets during the period to catch up with the leading player in both countries.
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The ongoing all shuffle video companies, who geographic expansion like keep the which features and content offerings, which enhances user stickiness.
Some people, who wrote off and face magic function during the fourth quarter, two walkman like each user experience and to see case.
Its magic was developed using all perpetually AI technology to provide uses with both face walking and image cropping features.
The addition of peace Magic and other similar features enable millions of like he uses around the world to create and she has helped form videos with their friends.
On the monetization from Nike continues to make progress can be areas of brand partnerships.
Advertisement campaign during the fourth quarter.
In December for example, like keep formed a partnership with the top Indian film studio to promote one of these most highly anticipated fields.
As part of this campaign like he utilized it's online distribution network to help them over the movie throughout India.
Economy over 275 million views across social media.
This initiative in a market with high gross potential he's very encouraging as it has not only enable us to establish a unique culture identity.
But also created a valuable manifestation case study, which we tend to promote going forward.
In the same thing we have completed initial development and testing for nikes advertising system.
We should we plan to launch into first quarter 2020.
We can be system like he will enable a set high says two plates ads within like he's Truphone video Pete.
Allow content creators to promote FTP content across the platform and ultimately on lease another stream of money hesitation. In addition to our life, She me, which will keep monetization.
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Next please allow me to share how we view overseas slaps you mean business. The second girls engine I spending the global food. So people lies in hospital in the fourth quarter.
In addition to successfully cellphone views. We also continued to expand our global I've seen the assistance to equalize all flagship internationally by streaming platform All said China.
He particular during the fourth quarter equalize maintained its remarkable growth trajectory in developed world around the world I thought resolves the revenue generated by the Eagle life in developed markets such as the U.S., Japan, Europe and other regions represented 31% of people I'd put it revenues in the fourth quarter.
Notably this revenue growth was driven by a 50% increase equalize paid user base because most countries in December 2019, that's compared to June 2019, resulting from I'll focus on the cultivation of the platforms operational efficiency look like station capabilities and culture sensitivity.
Regional markets during the fourth quarter Eagle life also focus on promoting social features to enhance user engagement in particular, our efforts to couple of people lives Aki produce encouraging results with 42% of users on people like you think that feature in the fourth quarter.
You don't show up on video and machine toggle all catching all we anticipate the media platform.
<unk> maintain its healthy growth trajectory through the introduction of new games and enhancement of social features.
During the fourth quarter Pago continue to enhance user stickiness and folks the new social interactions between uses honest classroom.
For example, how those interest based user groups have become a teacher, who uses to initiate social interactions on the platform.
The average daily penetration rate of how goes into school function improved by 22% on a sequential basis in the quarter.
Meanwhile, the highly social nature of the platform has enabled us to accelerate the development of out you know they did when he had station capabilities and see you know virtual keeping features for both voice chat rooms, and each has paid user groups.
As a result, obese monetization upgrades Pago recorded a 20% plus increasing revenues on a sequential basis in the fourth quarter.
Importantly, India has become popular second largest market to date.
Going forward, we expect that hospice monetization capabilities will continue to grow in 2020.
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Lastly, why we spent.
Well, we spend it's definitely overseas. We also maintained a leadership position in the domestic market as well in light continue to fortify its leadership in China's entertainment Lifesci industry.
As we closely monitor uses constantly evolving demands and preferences for legitimate environment.
We for the uncovered the growing use of purpose for variety shows we celebrities.
We all know punishing wheeze, walkie talkie talking weight, which we mentioned on the previous when he is cool.
<unk> posted 28 shows with other celebrities and up this quarter.
Additionally, we also posted 2019th why like any awards in Shanghai in generally this event collected more than 24.2 million views with an average user viewing time of 30 63.9 minutes and a total of 80 million 40 common sense throughout the event.
For the showcasing the stress and scale up all live streaming social media Atlas system.
Notably we utilize all experienced on the past seven years and replicate the success of <unk> why like any awards in overseas.
<unk> was 2020 in Singapore in January served as a Prime example.
This event featured the attendance of approximately 1000 or equalize top performers from around the world and have successfully attracting more than 1.6 million fans, who turned thing to watch the event online.
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In summary, we continue to focus on the growth and development of all short form video and machine product to fuel our do engine girls strategy during the fourth quarter and full year 2019.
Importantly, this expansion strategy has enabled us to transition from a leading by streaming platform in China for like OVO video based social media platform into domestic and international markets. Moreover, as we continue to cultivate synergies between the two seconds upgrade our products, who cutting edge technology, an intense all look like.
Station capabilities, we are supercharging, but not what affects I'll try to metrics.
As such our ability to attract create distribute on money highs content. Both at home kind of block will continue to philosophy.
Enabling us to deliver long term value for shareholders.
She said I want to him and let's see at food team you know sounds he just like element <unk> Army it'd be does yet.
With that I will now turn the call to became CFO to go through the details of all furniture themselves.
That concludes Debbie prepared remarks, now as choice CFO I would talk about the financial results.
We maintain our strong momentum and did the but I'll go bust financial and operating metrics during the fourth quarter of 2019.
Our total net revenues for the fourth quarter increased by 64.2% year over year to RMB 7.62 billion.
Exceeding both the high end of all previous guidance.
Beat consensus.
He particular, all I assume you've got the news for the fourth quarter increased by 62.7% year over year to Onvia 7.15 billion.
You've been pipeline be 5.51 billion unless you need revenues from both all while watching to see our segments and on the 1.6 Scorpion contribution from people.
Other revenues in the fourth quarter increased by 89% to RMB 471.6 million driven by higher advertising revenues on cooled off and Beagle.
Cost of revenues for the fourth quarter increased by 69.3% year over year to RMB 5.1 billion.
Let me show Wifi and content costs increased to RMB 3.7, creeping in in the fourth quarter from RMB 2.56 billion in that same period of 2018.
Which was in line with the increase in vice geographies.
And with cost increase to RMB 405 years from RMB 246.5 million in the same period of 2018, mainly reflecting the continued expansion of all global user base.
Gross profit for the fourth quarter increased by 54.6% year over year, RMB 2.52 billion.
Gross margin in the fourth quarter of 2019 decreased to 23% on pretty 5.1% to the same period of 2018.
The decrease in gross margin was primarily caused by the fact that who young people segments at lower gross margins, but constituted significantly greater portion, although net revenues in the fourth quarter of 2019 as compared to the corresponding period of 2018.
Operating expenses for the fourth quarter increase to RMB 2.2 billion from RMB 931.2 million in the same period up 2018, primarily due to the increase in sales marketing expenses, which reached RMB 1.3 billion units and picking up to it.
The increase in sales marketing expenses was primarily attributable to increase afterwards, I think sales marketing activities the overseas markets as well at the impact of depreciation and amortization related to the consolidation of Beagle.
R&D expenses for the fourth quarter increase to RMB eight how the 2.3 million from RMB 232.5 million in the same period of 2018.
Mostly due to the increase in salaries caused primarily by the consolidation of people.
All of Cat property income for the fourth quarter was on D.C. on 62.2 million compared to RMB 718.6 minutes in the same period of 2018.
Operating margin for the fourth quarter decreased 2.8% from 15.5% in the prior year period as a result on lower gross margin the impact of depreciation and amortization related to the beagles consolidation and other overseas expansion initiatives.
Our non-GAAP operating income for the fourth quarter, which excludes share based compensation expenses impairment of goodwill and the investments.
Hi station of intangible assets from business acquisitions, as well as team on deconsolidation and disposal of subsidiaries onetime be kind of on the 81.3 million compared to RMB 888.5 million in the same period of 2018.
Our non-GAAP operating margin for the fourth quarter was 10.3% compared to 19.1% in the same period Pops up from 18.
GAAP net income attributable to control inches of Joy, Inc.
Fourth quarter of 2019 was RMB 172.8 million compared to RMB 694.7 million in the same period of 2018.
Net margin was 2.2% in the fourth quarter of 2019 compared to 15% in the corresponding period of 2018.
Non-GAAP net income patch for the boat controlling interest of Joy Inc. was RMB 600, 600.8 million compared to RMB 846.9 name in the same kicked off 2018.
Non-GAAP net margin in the fourth quarter of 2019 was 7.9 <unk> percent compared to 18.2% in the thing period of 2018.
Diluted net income per Ats through the fourth quarter of 2019 was RMB 1.87, compared to RMB 10.5 cool in the same period up 2018.
Non-GAAP diluted net income per Ats was RMB 6.7, compared to RMB 13 point, both suite in the same period of 2018.
Now turning Twog results for the full year 2019, our total net revenues increased by 62.2% year over year to RMB 25.58 billion.
Two of them by the same practice that led to this quarterly increase.
Our net income attributable to continually inches Lovejoy inc. for the pool you approve of my team was RMB 3.45 billion.
Compared to RMB 2.21 billion in 2018.
Our non-GAAP net income attributable to controlling interest on joint Inc. for the full year 2019 was RMB 2.25 billion.
Compared to RMB 3.27 billion in 2018.
Non-GAAP net margin for the full year of 2019 was 8.8% compared to 20.8% in 2018.
Diluted net income per he has put a 40 I'll put up 19 increased by 69.5% year over year to RMB 43.21 from RMB 25.38 in 2018 and non-GAAP diluted net income per yes for the full year 2019 was RMB 27.
One one compared to RMB 50 points, both says it in 2018.
Looking forward to 2020.
We are faced with immediate challenges of Kogan, 19th that's the kind of.
In response to outbreak, we announced a cashable nation on V 22 million.
He'll medical supplies and equipment from all over the world for the hospitals in Koubei and bring them probably says that were involved in the treatment of corporate 19 patients.
I'll hop goes out to all those who have been impacted by this epidemic.
Especially in times like this.
We remain fully committed to our mission of connect with people and English in their lives to video.
Beyond the payment many of our users are utilizing all of my she services for regular casual and look they needed communication purpose doing this epidemic.
We are formulating a couple program to help our hopes and other performers to whether this challenging environments.
We plan to continuing back which is called video based social media platform to help mitigate the impact of the disease Valley charitable support uplifting people's through its tenders. This their lives.
At the current stage weeks that all net revenues for the first quarter of 20, pointing to be between RMB 6.75 billion and RMB 6.85 billion.
Representing a year over year increase between 41.2% to 42.2%.
We currently have limited visibility so long as this epidemics long term impacts on our business and the markets in which we operate.
Therefore, this full cost only reflects our current and preliminary views on the market and operational conditions, which are subject to change.
That concludes our prepared remarks.
Operator, we would now like to open up the coal clusters.
I think it so much for sensors, ladies and gentlemen, we will now begin the question answer session to ask a question. Please press star one of your telephone now Im pleased to wait for your name to be announced took out. So your request you May press. The founder has once again if star one to us I question.
Your first question comes from the line offer Thomas Chong from Jefferies. Your line is now up in Thomas.
Hi, Good morning, Ben management, taking my question and congratulate assays. They tell us what you just oh, sorry, because it has pace. So it can change I guess first phase and then translate into English center.
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Hi, so much your hopefully, Georgia, but even.
Friends management for taking my questions.
And congratulate the strong both a momentum.
Paul Eagle.
I have a question about the trends he kind of outlook of <unk> go a impact the color you bump in now and it was a train applause if buttons to Walker. Please.
And also any expat patients in comes off the timeline following the losses and achieving but even and how should we think about this spending Colby you go across different through all of these.
Doing that yes. Thank you.
Thanks, Thomas let me address those questions. So first on the Oh to trend for I'm Gonna have station on there are different markets.
Ah people has different components I think I, let me talk about that and people like first people that has enjoyed tremendous user growth I'm gonna say in 2019, I would expect a similar pattern continuing 2020 are the key driver coming from the good loan markets. As you can see from the fourth quarter number because the markets accounts for more than 31% of the total.
On the be go lives that compared with 26% in the third quarter and 22% in but second quarter, you can see up obviously a continuous.
Increasing trend.
We expect that trend to continue.
<unk> developed markets, including West Europe, Japan, Korea, and other parts of the World a one of the beauty for those capital markets that the are you paying they show an opposite tend to be very high.
And also if he has demonstrated that you're paying ratio locking that there's no board has increased by 50%.
<unk> in December 2019 competitors June 29 to offset that itself is very encouraging so we'd expect to equalize you'll continue to focus on developed world.
In 2020.
That some people like on the Nike business.
We have also achieved a balanced approach, meaning traditionally we are very strong in south Asia, particularly in India.
Starting from a loss here and also conveniently into 2020, we will be more balanced approach, meaning will focus more on their looking into other non Indian markets, including Russia.
Indonesia, where we are performing very well and not catch up very quickly with the leading player and also we all can really expanding other possible, including people will as though so that's on the user growth for like he's now on the monetization of lighting, we will also ramped up the lysine capability as because like Q.
Okay, so middle and capability that can be replicated in different parts of the apps, so likely will benefit from people like somebody physician efforts and background pop the lights unique capabilities on top of machine.
I also mentioned just now got a Nike has built up its own advertising network I system. So we expect to.
If you speak based advertising campaigns looking like he and hopefully I would actually will also gradually comes grew more and more to like he's echo system.
So I think that's a long answer to your question.
Himself the spending I think we have committed with a market before that this year 20 countries. We're looking at a net loss on the total people affected on the total because segment basis is Oh, if you can get a U.S. dollar a loss, but as a because he got a beagles total revenue is growing faster than expected.
Before we had having market that with people.
Grow because I think it will go 50% from 20 couldn't be now we are focusing more than 60% young in quotes and sort of itself the net loss, which it will be narrowing a compelling and communicated before.
But the breakeven point, we expect that sort of be goal will be breakeven on a single bond spaces.
By end of this year that remains to be saying.
But I also mentioned that we tend to be focusing on our light up the money spent and we tend to focus more on profitability because I think that's wonderful differentiator for our overseas business combined with some of the leading players because we know helping money has.
Just a new space across every possible. Thanks.
Thank you.
Once again to ask the question you May press Star one from your telephone keypad.
When you ask the question. Please state your question in Chinese first then immediately translate your question in English and next question comes from the line a fleet song from Bank of America Securities. Please go ahead, your let us know openly.
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How did for select a south we do a path where I'm, even kitchen and the only day all long to can you give us kind of update paid all commutation. Thank you.
Hi, Thanks, Toni let me address the question so on the global expansion strategy for Nike as mentioned we.
We will focus both on in terms of the use of growth and monetization. So I don't think they'll comments, it's right in the way that if we focus too much on monetization we will.
Focus less on the use of gross.
But as we focus our eyes, so as long as the user retention, we need liquidity basically uses attention day. There's good in some of the market, we look at who spend the money, but after we spend money. They all come through you make sure that they use will be a tracker and be converted to lashing users. So we also paid particular attention in terms of the conversion of machine within Vishal computer users.
In terms of the timeframe in terms of the 15th et cetera. So that's for sure.
As you were also excited about music or you expect similar pattern that we have seen in 2019, you track our quality performed or you can see that like he's adding 15 to 20 million users on a per quarter basis.
We expect similar pattern will continue what assets that we also which you can make sure that the ally makes sense and now we will generally be some profitability probably likely Christmas.
So that's the answer to the first question the answer to your second question domestic competition, it's not a new thing.
We have the operating under a highly competitive.
I've seen business in China for several years Highwoods, who continue to grow.
If you look at the prospect of 2020, all my life segment I would say definitely will continue to grow at a low single digits.
The reason why is low single digit because we cut down some of the.
Business, including the PC games business, which we sold and also we have scaled down the domestic small lending business given the uncertainty.
But if we're in the online lending business, so which those two business.
Back in scale down that while our lives or revenue will.
We also will be down a little bit as we tell people before you used to be 5% to 8% you're on your gross margin. We're looking at a low single digit growth, reflecting the close down almost because its but for the main domestic licenses I can discuss politics.
Sleep all my life, you can treat it.
As a traditional kind of keeping rather user base square CP and continued to come back.
I have seen very sticky time span and user behavior on a pass on both form but to clarify perspective and from the bokassa perspective, So I think domestic admit this domestic competition, while their life will continue to grow.
Okay. Thank you all can kinda, how about two follow up foxworth.
Hi goes side I'm, giving you said them O'connor in her prepared remarks.
Can you imagine.
We're in the hospital revenue booked a that's endo why why life right. If Oh, hi, It's all girls dropping 10-K Tron case, though to a that's me now why why like so nice take licensing absolutely odd Dom.
And I'll also on the has always said, what's the assumption conscientious and Oh, That's hop Oh, you are you there.
I'll tackle a second delay also on the domestic side, Oh, I know that E commerce like Jamie It quite popular right now and then even some of your competitors actually asking the whole said should do ecommerce to allocate our lives Jamie I know, we have E commerce to relate to that you know she case that's yeah.
Can you hear him Okada are way that on the E Commerce lights Feeney with that thank you.
Sure. It's only on the hobble it is booked on the wireline segment.
But given the absolute scale of toggles revenue see very small compared with the total for domestic machine. So.
I think absolute dollar as mark indicated that much yet.
So if you strip out household.
Now I'd like domestic markets I think that this is still stable I put it that way.
And then for economists, we have been two ecommerce likely meaningful while could again, how studies within some of the others.
Our E Commerce is more focused phone long stand of products, meaning julie's hutchcraft et cetera, how critical piece.
And then we focus on introducing high quality block hostage to help improve the productivity of the traditional last kind of product value chain and hopefully it will create a we use situations that both the seller and for the users. So that part of this is ramping up very quickly.
The right time, we would start just cloaking like match it could be absolutely, but at this point, there's two things that gets us relatively early.
Okay. Thank you all think yes, I'm actually that's clear.
Thank you.
Your next question comes from the line of for Brian Gong of Citigroup are once again.
Please ask your question in Chinese first let me just based on Saitek restaurant in English.
Yeah.
Yes.
Oh sure. According to Oh has always had elected to internally will show in surgery. So put homes just hung up on a just a woman someone can just like you can pick up or to go it seemed to go through there's just so I'm not sure two or three from Im thrilled when some of them little finish on Russia.
Oh, well put you Lucky earnings Junior anchor Mills from a unique solutions, which I wish our who are already Harding and.
Welcome to equal transformed with other unique ownership, okay, I will trusted and myself are so for like here wondering post the way says competitive dynamics with pick talking from a religious and I think looking probably made for limited from producing two vehicles from getting to some writing but.
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And for what's going to see.
How much stronger contribution from lucky to be cool for opinions concerns the 20th century.
Well, let me go we're actually feeling what athlete eyes on Zillow MTR, what's yours or do you likely lag on she's been a bushel draw you equals handling here well do a deal where most of the tongue in cheek halted she pieces outside auto there's really no one wants that core chiller lung in two months user sure sure you own days off.
We'll move Churchill, yeah could probably on the accretion by what's your around that.
No no tunable no not at all or there's a bunch of India's outside telecom im going to look at them and golf.
Sure I'll do a woman you do they thought they would she bush again why do people people do you like hot, thereby none of the back on a fairly young SDMA will not do a young Cleveland wells is off to.
Due to a good or do I actually don't do you know if you look on that it's really not only the goals the regulatory I'm, calling on I don't know what do you know one month seasonal or does it give us there's only about give a button, although not being who's at home. All this New York City. This is a like easily yeah. When things and then if you don't healthy there's a woman similar to the monetization there is a great.
Absolutely and then go.
Let me go is that you actually already only Union and then go to game Oh doesn't hold them doing that would you go if you're not getting Hong hou not look on that but there's not going has done or would you don't know creep Hulu Google Doug.
There's a marketing Fiona owner and I'm going to be cornered. The adult Bureau, the war Montreal Citibank, So yeah, no who put ourselves a woman nuclear market you know good cotwo, because it's actually getting there.
Yeah. So can you tell the monetization does it go pretty much going onto though because we felt like.
So you know down the block and good to hear those elements me about Google or is it all the numbers I didnt outside Doggies naval yesterday, and they're getting them at home. When you look to go do Gonsalez Young Siri, usually don't Bob.
Mhm.
It's funny.
Yeah.
Let me do the transmission consummated, probably just say theory ONEOK sensing.
I don't are likely to its names as well as a switch off all we do computation.
In the global life, so firstly as a complement and the founder.
Oh the amendment, we really looking for me we're off to shop, all we do its future right. So if you look at the past few years Oh guidance, we communicated to continue your watch the into the lack of this brings me so rather than the profitability, we've seen as the positioning as well as the market share for the shortfall, we do it's more important for us and in the past several.
Two years, although we continue to suffer the loss from the legacy business, but alter our.
Alcohol, we actually already guided the entry and kids for the shortfall, we do see especially in the outside that we're trying to.
At the beginning times you in terms of the you know the.
So technology as well as you know you Watzman <unk> scale, we are much less than our competitors, but after two years I've lost count to react I actually have to him it seemed like kind of level as our close competitors. So I I attribute a so likely business will enter into the second stage, we changed me once more.
Healthy animal patents that would be Bob hope that stage. So as we mentioned that in the prepared remarks. So this year Nike, we will focus on them to monetization Oh, so hopefully at the end of the yet this year, but the overall people with mix will achieve the single most break even.
[noise] Banco who achieved its moved into future we have become more economically to control over to you investment cycle, especially in terms of marketing all the user acquisition cost for the likely base needs. So that will help us.
Who feel about more healthy modem business model paired with our peers and that it can help us for the next five to 10 years long run competition for the telephone we don't think makes global like thank you.
HM Hollysys are working on for one, though too sure attrition, what's going to sell Winchester says I came before Arlington or southern Minnesota function, so they'll be equal woman, who choose known.
I've got a cuttino. Thanks.
Yeah, Let me, let me kind of the question Tom I think we askew observing the progress, but I think at this point.
Somewhere around 10% of Beagle total segment will be coming from like.
The bottom up have you started depending on the progress here.
Okay got it thank you very much.
Your next question comes from the line of the notion of JP Morgan. Your line is no up and Daniel.
Hey, it's I don't know, how Oh, granito ticket with our tier where or what we have a housekeeping one teacher grain woman neighborhood hinting that quite hit on it kinda element to have serviacero freight on 10 car her own as a central behaviour tones.
Hello, I'm already rolling in.
Since inquire needed to address the says to me on that.
We're trying to say myself. So I have a housekeeping question regarding cash. So we we have a very healthy balance sheet at a very rich net cash of over one theater in U.S. dollar and so what is our key strategy in cash management incentive penty. Thank you.
Let me address the kinds of thanks, Daniel in terms of cash offshore we have around $90 million.
Which would put into different tranche of.
Savings and an investment I think it generate a decent return.
And our Meanwhile, we're also while preserving the latest market turmoil.
And others asphalt originally was very undervalued and particularly in the meeting Tomorrow continues to go down so you seriously consider.
Share buyback.
Other methods returning some of this cash to the shareholders Yep.
Yes.
Once again, that's a question in the press Star one from your telephone Keypad. Your next question comes from the line up with each zone from Goldman Sachs. Your let us know up and Mr. Zhang.
I should have gone is unusual winter tissue. It yes, just <unk> philosophy to should be quota why they talked about.
Sure onto our systems I says anyway, she why you seem to highlight.
To finish part of which I issue quit trying to be done anyhow, which is always how well mail no kind of unusual tied to she user engagement from annual total they seem to talk when they Tony confusion now I'd like to shore and too soon.
You seem to use 100 times, but in Ohio to this you know to you put on adjusting with critical woman things don't count could or would it should have been Sim, what's your kind of seamlessly <unk> no.
Okay, and say myself. So thank you mentioned that for taking my question two questions regarding the impact of the Akovaz 19 being overseas market for Veeco. So the first question is have you observed any somewhat of a surgeon users time spent or engagement.
In the developed markets given the fast spread of the virus and the second question is on whether that will give us any refreshed.
It's on you know a user growth strategy or new monetization methods. Thank you very much.
Yeah, well actually filling out well quit island you know in here. These are the renewal.
So on a led by the year, we're going to like home run canola, there's a need to do a meal talks <unk>.
Over the coming so say Oh, no you could go to change although it wasn't here, who among and did a whole no monkton you're doing what you call. It would you not woman don't change or equalize attached to the year.
So dog food in the each up.
No no what sounds like that so we really thought there were sure no bigger I was 11, what's gonna Yeah, one or two dollar you go through nine or 10 confidently Dawn I know you channel when we come to others.
A big alive I'm not sure sure 20, so with all due there so its very own called you're going on which we don't usually goes in there you go a random or your thoughts you are.
I see the talking about what you thought can you talk more about your goal woman does it really cool, but still its utilization way my mind or give us and told you about your Gulf.
There's a clear, which I know youre not Oliver just to shop elements on whether you will know to a one cases. They go to dollar you've assumed the is overdone do not yet.
Sure sure what does put us it's important to go again centers and or does it go to danya fees on Cotwo. So you know what you're going to legalize it wasn't really a winner here you go through content onto not either here.
Okay, well I know bigger likes you know me or see on how to where you got you are likely going to do not because they don't quite similar we'll miss you on her side to try and leave the G.
So you know you're not going comment John are you looking on that so its own budget out in the year would go to another you. Good too soon so since you don't want to Eaglebine feedback wondering mergers or there's a sometime quicker than that you're going habits and ones out when you don't want to let me here would always that high returns off peak aren't getting Karnes County, New York suite arterial deemed going.
Neither yet.
This is David let me answer I'll close friends, who of course me in terms of Koby nine cents impact a fall for outside of China. So we can look has a you know the arcades in China for the last quarter. So for White space meeting, China, We don't see that significant <unk> of the negative impact from the.
Koby 19 to operate in China. So from the trying to our case, we actually Paul caused the overseas bricks and it's also a warm season.
Oh, no significant impact from the probably 19, which all time period or people live comfortably into very healthy pools fade, a U.S. I'm actually in the prepared remarks, rather than the monetization monetization actually people also focused on the social features especially each community operation has become.
Why most people because for the people live in the recently stage.
Probably 2% will be users have star to use a you know the beagles far although France most also functions.
Beginning of the powerful so going forward, it's up on the rapidly Ah Ah Romney gross so people have also we'll see the oh, so to continuously user gross in the future and Paul likely business, we I I mentioned before so it's tough wasn't very rapidly.
The user number goes we also will be a mall focused on the monetization for this year. If the two part of the can beat up on more Halsey back home phone as part of business definitely we will be more confident called overall oversee businesses on them to public future. Thank you.
Thank you very much.
Once again to ask a question you May proceed star one from a telephone keypad. It's star once asked the question.
I think you asked the question. Please state your question in Chinese first then intricacies of tons State your question in English.
Your next question concerns around if Thomas Chong from Jefferies. Your line is often Thomas.
They said why don't you know a day so what are you in.
Well, that's on a salad Joshi, a way like a woman side.
Domestic market Dolce <unk> Gabbana find that you may have come about and I would find man.
I need to the body sound when you sound agile shoe bomber and young males. Struan, that's I'd, probably see top NEDA MPP dine naked sensation seasons, and the sheer line side for all your questions hold up as management for taking my follow up question.
And my question is about that domestic market given I won't come up he is a entering into the lower tier cities and are happy watch all you end up being.
Other.
Medications.
To penetrate into T.F., we and here for the he's going into the future. Thank you.
[noise] Thomas Thanks, Let me just a question so youre right that on top of my life as a main app. We also good looking different caught us off was something we have audience base lighting products several of them that's focused on.
Tier cities and even to sit tier cities. All we also have as I said ecommerce licensed products, we also get lumpy or other social media product or a based around the when a host of debates because that's all for competence, but are we trying to penetrate into different demographics.
And you find attitude to concede some focus on local city talking for books on the first year city. So when a lot, but many of those products initial stage. So we haven't systematically this close to the asking investor of all the metrics that we will do so at the right time, but youre right. We got from your different parts.
And all by the way I also mentioned that we have continued to partner with other.
Big truck platforms, such as shown me and we have right now finally, as two and three additional big Tropic platform.
Export our core rushing incompetence I know that Michelle that goes truck platform. So when that will also hope that you can continue to enhance our monetization capabilities throughout different platforms.
Thank you.
Next question comes from the line off you Oh from the ice tea, let us know up and you know.
Uh huh.
She took Wang town, we want that down Mac and he would keep that sound on team can satellite t., though to block Sean thing in that sense that now family or however, you want your thumb Nansen daily now and.
Gallant Michelle Gladiator day I call coordinates you boil from in nine countries, we're kind of backing and knocking down.
Thanks management time on behalf of 91 May have to question asked the question is the first of all I is that could management share some color on the promotion on Nike or what sets cancel the thank you Matthew mentoring content and to use the activation this year and your second question.
His cousin could management share some color on the margin outlook for the domestic live broadcasting business of why that causes here thinking.
I think I mean, just those questions first in terms of the says people pushing for the Nike regarding content at this at before I like he focused on UGC user generated content. So by nature, we can cause the use of to voluntarily create an outflow of cash at Columbia content.
What we thought we don't tend to spend that much money to acquire the the PTC. Although we will do so in some of the key market to partner with some celebrities.
With the views, but I don't think that will cost that much money or we will also probably at least some of the a phone copyright holders to sign a kind of long term contracts, so that they're like blockbuster and a white box. The songs are et cetera, so that will cause some money.
Since of the Iraqis acquisition again, a which currently tracking the.
Yes, I mean, it usually touching base on and then typically in those market. They are much lower than in China income per user acquisition cost plus after using it.
Welcome to machine.
The license and he said many times to will happen because they should for machine, so that will create a and b.
Then you said.
<unk>.
On on light Ti on good for must take Monte.
Oh, you did exceed our operating margin for nothing and it wasn't like Oh actually this is 1.2, 20%.
2020 were looking at somewhere.
So people can there might be some so that decrease of ER market.
For or life, but again, it's not only about domestic but because while segment also showed in a good just wants to be hunkele and how they oversee session. So we will continue to go home and some of the search marketing.
Plus we will continue to recoup some of the high caliber expert technology to be at the end in revenue and so it's not pay that because anybody would increase a little bit resolving some.
Somewhere like 20 something percent.
With that margin operating model looking like a watch.
[noise], thanks, and thanks for sharing.
There are no further questions at this time, no I hand, the call over but to a matthews.
You May go ahead.
Thank you for joining our call. We look forward speaking with everyone next quarter. Thank you operator.
Ladies and gentlemen doesn't go todays conference call. Thank you for participating you may now disconnect.
Thank you.
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And.
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