Q4 2019 Earnings Call
[music].
For a bit autos fourth quarter in fiscal year 2019 earnings conference call.
It's time, all participants are in listen only mode. After managements prepared remarks, there will be a question and answer session. Today's conference is being recorded if you have any objections you may disconnect at this time.
Like depend to meeting over to your host conference.
Thank you welcome to bid autos fourth quarter fiscal year 2019 earnings conference call.
Speakers from the company today are Mr. John C.
Shopko, the old President Jimmy Choo CFO.
After managements prepared remarks, and he showed good being will be available to answer your question.
In addition, Nicole.
Financial controller position will be available to answer your questions related to you show.
Before we proceed. Please note that discussions today will contain forward looking statements made under the safe Harbor provisions.
Private securities.
Active 1995.
Statements are subject to risks and uncertainties, which may cause actual results to differ materially from our current expectations.
The risks and uncertainties.
Not limited to.
Wind in our public filings with the FCC, including registration statement on for for the auto does not undertake any obligations to update any forward looking statements, except as required under applicable law.
This call will include discussions of certain unaudited non-GAAP financial measures. Please refer to our earnings release, which was issued earlier today for reconciliations of these not unaudited non-GAAP measures to the most directly comparable audited GAAP measures.
As a reminder, this conference is being recorded in addition, a live and archived webcast of the conference will be available on our website.
I will now turn the call over to Andy John.
Oh.
[noise] Hello, everyone.
Thank you will join us for fourth quarter fiscal year 29, Ci earnings conference call.
Chinas automobile industry remains challenging in the fourth quarter of 29 team has new passenger vehicle sales continue to decline year over year.
Despite the substantial industry headwinds auto total revenue reached RMB 2.69 believed in the fourth quarter of 29 team exceeding the high end of our guidance.
2.55 billion.
We war.
You know advertising had a subscription business. We were pleased to make further progress you increase your mobile traffic as we improve the quality and the quality of our sales leads in terms of traffic. According to quest mobile in January 2020, do you daily active users of the bit auto media up increased by 256% compared to <unk>.
Total of 28 28, cheap when you roll out the upgraded version moral what the combined deal both be auto meter up and all our auto pricing have increased by approximately 40% year over year in January 2020.
Declining you'll passenger vehicle sales, we grow a number of cells leased by 8.8% year over year into fourth quarter of 29 team with the proportion of organic sales leads rising to nearly 70% of that.
We have also see improved quality of sale sleazy in terms of higher conversion rates as measured by the stores visits and a number of transactions that buddies solid operating metrics all revenue from advertising in a subscription business for the fourth quarter came in better than expected at RMB 1.07 billion a mix.
Core industry downturn, we continue to make.
Procedure spending to strengthen our Brenda Bitauto, Brett we feel brand building or the long term commitment, which will allow us to broaden our user base and the provided better value proposition flow automakers and dealers customers within achieving very encouraging progress from our ongoing strategic branding campaign based on online awareness.
Metrics such as by do index in third party offline consumer surveys.
I was recorded a significant improvement in brand recognition about automobile consumers or Saudi short period of time.
Now looking at our transaction services business, despite us on favorable industry environment in the fourth quarter. You further expanded its loan facilitation service business, which grew 3% year over year.
Lean contributed 82% of total finance transactions.
Full year 29, Ci maintained steady growth and the further solidified its industry, leading position by leveraging its leadership of encourages them to trackable credibility.
You should continue to tighten its risk control centers to better adopt adapts to the changing regulatory environment as many local governments began to implement stricter rules for collection of delinquent accounts.
Looking into 2020, the auto will remain committed to investing resources in key strategic initiatives that strengthened our long term competitiveness first well continuing has our content products and services to provide better value and experience to automobile consumers and the car owners will continue to roll out the optimized.
And optimize our AI based was all driven marketing solutions to more mainstream automakers will also increase our R&D you must improve divestments to improve functionalities.
And the user experience of our business to business B to b products for automakers and dealers customers.
Second to further broaden the autos user base and improve our value proposition to our business partners. We will continue working all increasing our mobile traffic as well as.
Quantity and quality of our leads.
Sorry, well continue investing L. brand building campaign to raise the autos brand recognition among automobile consumers. We're confident that all of these efforts will help form a solid foundation to boost our long term growth going forward.
Lastly, you show proactively adopted more conservative risk assessment my methodology, while partnering with dealers in the financial institution partners to identify opportunities within Chinas automobile market as we adapt to the industry uncertainties, we have been facing as well as the impact from that from the Corona virus epidemic.
Before I turn the call to men, let me share with you some of our thoughts about the recent outbreak of the Corona virus.
Epidemic has significantly affected the overall economy and the People's Daily lives in China seems late January.
While we see near term challenges, we also find some longer term opportunities for us to capture.
Corresponds to the toward a virus outbreak they ought to initiate the various measures to support our automation dealer customers to whether this difficult period together with our business partners.
For example, as the epidemic evolves, we're being offered free VR video live broadcasting services to help automakers and dealers promote their branding at a stability stability there automobile sales.
In terms of the impact of the auto why remains difficult to give you a quantitative comments at the moment, let me give you some of our qualitative observations.
Since late January many automakers and dealers business operations have been disrupted.
This has led to very weak sentiment about a <unk> automobile advertisers and the caused some delay over their marketing spending.
As a result, we expect some pressure on our advertising revenue in the near term.
Nonetheless, as the majority of automaker and dealer customers are delayed, but not canceling their marketing campaigns and the many of them shifting their off when budgets online channel, we see long term growth opportunities in new type of services such as on a lie auto show for automakers, New car launch together with VR video live broadcasts and other forms of all our marketing.
In summary, the auto will remain devoted to strengthening our brand recognition and the adding more value to our automobile customers consumers admit near term challenges from Dakota letters outbreak well continue to present, a protect all stuff the shore operational efficiency and explore ways to support.
Turning to grow together with our business partners.
We're confident strengthening autos value proposition and the building the auto into China's top online automobile media transaction services platform.
With that I'll try to coal, but to me to go over the financials.
Thank you Andy good evening, everyone they'd autos total revenue yeah revenue from advertising and suffocation stats for the fourth quarter of 219.
What both better than expected, thanks, though I suppose to enhance bid offer spread and increased traffic I slowed us a quality and quantity of healthy.
We continue to now strategic spending think branding into the coming yes, we expect assessing thus than to weigh on a profitability in the near term. However, we're confident that these investments will not only allow us to create value for automakers dealer customers, but also help us to lower use acquisition costs going forward, which will fit.
Definitely strengthened its long term competitiveness and profitability.
Now, let's say that let's look at our Q4 2019 and full year 2019 financial highlights before moving to kidney. Please note that our reference mainly to financial FICO seen RMB in the following discussion.
But on a reported revenue of RMB 2.69 billion in the fourth quarter of 2019, compared with RMB 3.12 billion in the corresponding period of two in 2018.
Revenue from the advertising and subscription business in the fourth caught up to us on the 19th.
RMB 1.07 billion compared to RMB 1.16 billion and corresponding period in 2018, mainly due to the decrease in marketing spending automakers and dealers caused by the continued decline new car sales.
Revenue from the transaction services business in the fourth quarter of 2019 was RMB 1.2 billion compared to RMB 1.56 billion and the corresponding period in 2018.
Eating continues to tighten this risk control standards I think has asset quality to adapt to the 10, new regulatory environment, which has impacted its transaction volume.
Revenue from digital marketing solution business in the fourth quarter 2019 was RMB 418.8 million, representing a 6.4% increase from RMB.
393.7 million in the corresponding period in 2018 cost of revenue in the fourth quarter of 2019 was RMB 1.1 billion compared to RMB 1.43 bid in the corresponding period in 2018 cost of revenue as a percentage of revenue during the fourth quarter 2019 was 14.
0.8% compared to 45.8, presenting the corresponding period in 2018.
Gross profit in the fourth quarter of 2019 was RMB 1.559 billion compared to RMB 1.69 billion and the corresponding period into the other night 18.
Selling and administrative expenses in the fourth quarter of 2019, well I'm be what.
2.39 billion, representing a 23% increase from the corresponding period 2018.
This increase was primarily due to the increasing marketing spending associated with the company's branding and marketing efforts and the increasing provision for credit losses.
Finance receivables, partially offset by the decrease in share based compensation product development expenses. During the fourth quarter of 2019 were RMB 157.8 million, representing 18.3% increase from the corresponding period in 2018, the increase was primarily due.
Due to an increase expense.
Related to product the vitamin personnel.
Share based compensation, which was allocated to related operating expense line items was RMB 18, 81.3 million in the fourth quarter. Two another 19 compared to RMB 421 point Sixmillion corresponding period in 2018, non cat loss from operations in the fourth quarter EPS with other night.
He was RMB 500.
23.5 million compared to a non-GAAP income from operations.
RMB 265.4 million in corresponding period in 2018 net loss in the fourth quarter 2019 was RMB 978.2 million compared to RMB 398.3 million and the corresponding period in 2018 net loss attributable to be it also in the fourth.
Although 2019 was RMB 922.4 million compared to RMB 416 play summit and the corresponding period in 2018 non-GAAP net loss in the fourth quarter 2019 was RMB 576.5 million compared to a non-GAAP net income off RMB one.
199 million corresponding period in 2018, non-GAAP net loss attributable to bid auto in the fourth quarter 2019 was RMB 573.5 million compared to non-GAAP net income attributable to be although of RMB 118.6, net and the corresponding period in 2018.
Basic and diluted net loss per Ats, each representing one audience share in the fourth quarter 2019 amounted to RMB 12 point 95, U.S. dollar one point 86, and RMB tough point 95.
I thought of one point 86, respectively, non-GAAP basic and diluted.
<unk>.
Net loss Prady S. In the fourth quarter of 2019 amounted to RMB 8.07, a U.S. dollar one point 60, and the RMB 8.07, U.S. dollar 1.6 think respectively.
As of December 21st what's on the 19th the company had cash cash equivalent unrestricted cash of RMB 7.51 billion cash provided by operating.
David This cash provided by investing operated activity and cash and using finance activities in fourth quarter 2819, well RMB 835.3 million RMB 3.56 billion in RMB 5.81 billion, respectively. I only goes through a few selected highlights for 2019 fleet.
Since we've covered the detailed in our neighbor lease revenue in 2019 was RMB 10 point 75 billion, representing a 1.6% increase from 2018 revenue from the advertising and subscription business. In 2019 was RMB 3.9 billion compared to RMB 4.07 billion into them.
Revenue from the transaction service business in 2019 was RMB 5.5, 5.75 billion, representing a 7.1% increase from RMB five points 37 billion in 2018, mainly attributable to the growth in the Companys no facilitation business, partially offset by the decreasing.
Revenue from self operated financing business revenue from the digital marketing solution business. In 2019 was RMB 1.1 billion compared to RMB 1.1 for me to get into London 18.
Gross profit into another 19 was RMB 6.51 did at representing a 2.7% increase from 2018 non-GAAP income fund approaching 2019.
Was RMB 127 million compared to RMB 1.1, Dawn built into about 18 non-GAAP net income himself in 2019 was RMB 33.6 million compared to RMB 934.7 million in 2018, non-GAAP net loss attributable to get auto in 2019 with.
RMB was 240 14.1 million compared to a non-GAAP net income actually the beautiful to bid auto of RMB 700.
Eight at 7.77 to 8.9 million in 2019, non-GAAP basic and diluted net loss Prady, asking 2019 amounted to RMB 3.05, and the RMB 3.15, respectively.
The number of employees.
<unk> 797935 as of December 31st with on the 19th encoding employees of EMV entity English bit auto has acquired and Whos controlling interest. This represented a 4.6% increase yogurt decreased year over year, primarily due to the decrease.
Accounting sales marketing and customer support as part of the strategic efforts to optimize operation efficiency.
In addition, kinda give a eating cisco and if its significance to that although I would also like to share with you sum up eating operation and operating and financial highlights for Q4 in full year 2019.
It all those controlled succeed we've seen a primary operator of the company's transaction service business continued to develop if not with an addition services and further tie that risk control extended to better just to China's generally weak economic conditions and changing regulatory environment.
In the fourth quarter 2019 eating facilitated approximately 109000 finance transactions, representing a year over year decrease of 24%.
The total aggregate financing amount.
Relative to the eating is not sufficient services and self operated financing business was approximately.
RMB 8.1 billion in the fourth quarter 2019 eating continue to develop if an office efficient services and further strengthen its partnership by working with top banks and financial institutions, including an auto Finance company well see losses ended December 31st 2019, you see facilitated approximately 89.
Thousand finance transactions, representing a year over year increase up 3% and the contribution to 82% of eating total finance transactions in fourth quarter of 2019 on the U.S. GAAP eating total revenue.
Reached RMB 1.21 billion, a new coal Nucor services revenue, which include revenue from low for the facilitation services and the new operate new self help with it financing lease.
Transactions eating facilitated during that year reached RMB 666.9 million for the year ended December 31st 2019 eating total financing transaction E increased by 8% year over year, so crop approximately 522000 the AG.
Going to get financing amount facilitated through if not for physician services and the self operated financing business was approximately RMB 40 billion, representing 5% year over year increase in 2019.
I think cooperated with top banks, and finishing a financial institutions and facilitates it approximately a 340 347000 financed transactions representing a 141%.
Year over year increase an aggregate contributed 66% of eating total financing transaction for the full year 2019.
At year end data to December 31st.
2019 on the U.S. GAAP eating total revenue RMB 5.79 billion gross profit reached RMB 2.76 spit. It net loss was RMB 2.3 billion and non-GAAP net income was RMB 402.6 million <unk> non-GAAP net income is calculated S net loss excluding shabby.
Compensation of RMB 233.1 million.
Monetization of intangible asset, resulting from asset and the business acquisition of RMB, 107, 73 million and offset by texting fact attack the effect of RMB There'll point 2 million in 2019 entered into from transaction with other features a bit auto which were eliminated a bit autos console.
Elevation of eating.
The revenue that even recorded for the revenue for the services provided to those subsidiaries a bit or amounted to RMB 18.1 at it.
At December 31st 2019, eating had cash and cash equivalent unrestricted cash of RMB 3.49 billion total financed the receivable of RMB 727.02 billion.
And the total borrowings, including bank borrowing and asset backed securities securitization that RMB 19.84 billion as of December 31st to 2000, 1990 day plus days past due ratio and Inc. The including 100 800, they've tough and 100 880, they plan to pass yours.
They show for all the financial finance the transaction.
Including for the third party, not facilitation, well, our Oh, well, 1.3% and a zero point, a 33% respectively on the U.S. GAAP <unk> provision for credit loss of finance receivable for the fourth quarter of 2019 was RMB 361.1 million and for the year ended December.
Today first with other Nike.
RMB 862 set point Sevenmillion balance how provision for credit loss of finance receivables was RMB 566.4 million as of December 31st 2019.
With that I'll now turn to the guidance for the fourth quarter up but for the for first quarter.
On the Twentytwenty.
A bit although currently expect to generate revenue in the range of RMB 1.7 billion to RMB 1.8 billion in the fourth quarter 2000, 2020, this forecast takes into consideration.
Seasonality forecast a seasonality factors thing, but all his business and they exclude any impact of foreign currency fluctuation.
Particular situation surrounding the card on virus outbreak in outbreak in China and globally continue to evolve business visibility remains limited.
So the above.
Extract management's current and put in that preliminary review, which is subject to change.
Let's now start the QNX session and the myself shopko and Nick.
Our available to take your questions. Operator. Please go ahead.
[noise] the question and answer session. If this conference call will start in a moment in order to be fair to all callers who is still ask question. We will take one question at a time from each caller.
You have more than one question lease request the joined a question for you again. After your first question has been the trend.
We will now begin to question and answer session. If you wish to ask your question. Please press star one on your telephone and Wafergen in TV I now if you wish to cancel your request.
Expressed about our tasking.
Your first question.
Comes from the line of Eddie Wang of Morgan Stanley. Please ask your question.
Hi, a and B cell combing. Thank you for taking my question.
My question just about the.
Auto markets, where do you expect to you know, we will witness a meaningful recovery.
Auto stuff I know, you know consummated the visibility or a little bit low given a lot more moving parts, especially even though the girl viruses and.
<unk>.
So any color will be helpful.
And a quick follow up will be that if you know if there's a recovery so whats what shall be up in if I mean.
But the tightening business and.
Transaction services is what's been this will recover no foster and which one will be a little bit.
Sure.
You know that recover thank you.
Well I'll take that question first of all show.
First of all I think we've already seen recovery from the market itself.
There are few indications first of all we do have stats of Ah Ah daily passenger car sales in China, I'm not that up today, but still at just about a week delay. So we've already seen though some of the volumes recover up to 40% of last years.
Compared to second quarter of second loves its compared to second most February where that we've only seen maybe 10% 15% in the market. So it's already a huge Ah leap in terms of Oh volume increase we do expect that a recovery can too will continue into the second quarter I think hopefully.
It will normalize sometime in the early third quarter or so.
Another indication is actually coming from our own.
Consumer interest as well as.
Reflected into our traffic and Ah leaves, that's a though we accumulate on a daily basis.
We've seen this ratio recovering lot faster than the actual auto sales. So other words that we are we're guessing that somebody a lot of the consumers are doing their initial research work getting ready to a two a purchase sometime in the next month or two.
Which will most likely take place in this in the second quarter.
So what we believe the module rebound sometime in second quarter after normalizing for the quarter.
There's only one concern or recently, that's a that's coming to our attention is that the.
Because of the entire world has been affected by this epidemic. So so lot of the spare parts company are also being affected them to stop back straightened out different parts for different models.
Chinas auto auto new without hundreds of thousands of different <unk> passenger car models, all having more or less imported parts wallets, it's making so therefore, we may drawing to a period of a.
Continued demand from consumers, but maybe a lack of Ah Ah inventory to deliver supplied to deliver to meet these demands instead of a rapidly most likely probably will happen in sometime but you know mid to late or the third quarter. That's our all estimation, that's our own inflammation.
You know just you know, we're using that for our own analysis purposes.
And then in terms of business, which one would be recover first I think you know obviously advertising will be the first wouldn't to sort of.
Feel fill it up because the traffics back to normal I'm legions back to normal. So law will continue to show that two out to the Oems and the because OEM due to two already witnessed that particular demand coming from online I think a there. They are also being restored in terms of confidence was to meet a too.
Like more sales in the in the second quarter.
So that will will definitely recovered the fastest also when the sales of vehicles actually takes place then you should benefit the transaction services business will benefit because a issue.
As a is a is selling of a byproduct. That's a that's supportive of the sale of the vehicles. So only one that they'll happens that you. She will benefit from so in terms of a pace wise that would be the advertising that the transactions like it.
Thank you are helpful.
Your next question comes from the line a that Binbin Ding of JP Morgan. Please ask your question.
Good evening management, Thanks for taking my question.
My question is on your marketing campaign. So you initiated a large scale promotion campaign since fourth quarter last year.
Can you shed some color and stuff. The initial results all pay off from the activities and also I know that because of the corner virus outbreak. Some internet companies has already become very stringent on spending and more focused on cost control. So given the current f. damage.
I would there be any changes to our marketing plans in anytime. Thank you.
[noise] Oh, no well, that's what I felt like.
Sure I love each other so if someone 70.
Ah Showself she yeah, that's a for adults in yen or couldn't get she a woman Chinchilla then she wrote not covered up some other shouldn't while.
So generally but I don't know tolls on Shi young woman that sit on the seems only you'll go dollar you got Buffalo Thunder.
Outside the Gulf on T. shirt woman, the junkie based shop.
[noise].
[noise] that's already there my business that's already there [laughter].
Oh.
Oh, well that's hotel is usually a well that union, let's hold true for Casher easier Darchinyan other twinjets yet.
Are you to issue the upside to commodity lot.
There are too much from what you harsher as home I'm not sure ever you fund all Oh, what one of a pressure a use your darwinius yet yeah sure one though she showed a lot of London look for that.
<unk>, Turkey, the shortly so what I tell my pleasure for money either that's what each other I shouldn't say.
She a warm and that's a lessons on thinking about like you paint shop. So you know trees or should I thought I'd try modalities, yeah. They sell.
Oh, Thanks, maybe if our customers and sorry for that that struck disruption because we are calling for multiple offices up. So basically we started our marketing campaign since Oh October 2018.
On 19.
And the we continue the that campaign until the Chinese new year of this year and see if you may see we actually Ah Ah deployed our advertisement on multiple channel, including elevators and also TV and online buses.
Et cetera, and so far we have seen a very encouraging.
Result from the from the from the initial stage of our pending camping for example, the organic downloads of our ops in there now comparing actually doubled from our previously.
Oh.
Hi, this is a little bit intellectual among kind of option either D E U yalea DAPL their social yes. Some dollar challenges you faced shop.
And the aside.
That we also see lots of the.
Consumer perception off our brand.
As measured by the by the mentioned right the first dimension rate.
And when we.
Do multiple surveys with consumers it actually shows that the the first measured rate of our name.
Our off our west side actually doubled up after before and after the campaign.
Oh sure latest Sue Woman's I can't hire that lets you by the water for weeks injury, Oh Chung salads, EBITDA, you, let them know natascha.
And also a in terms of income stuff online awareness matrix, such as Baidu impacts that we had index or our our job our or reading of gold indexes.
Both doubled or even tripled after the campaign.
Oh, so they had an option I live unload the each grew at a young quota.
Hi Motor show, a whole I should you cut and all the to go to the laterals loyal shortcomings yet.
So it's actually showing that are the the help.
They'll branding and actually helps to lift our brand and to to race to the consumer lending suffer Brent if it's there it has been showing the classic significant.
No I mean, she loved him I felt more door my philosophy, you got hunk she was here why.
Yeah, no on the highway Ocean shoe the cellular whether T y.
I think yeah, no doubt Gulf and she yet are you on the call usually I knew we callouts Union the Trisha with RG <unk> digital for Mischler, Oh Golden <unk>, Yeah, We'll show you a lot more the she's a paid out as shown in the model.
So we believe that.
Randy can <unk> branding campaign, so long term Mustang project, we have like a long term commitment to this sub project. So we will continue on campaign in 2020 and in terms of timing, we our and our you try to Academy, which has a a internal research body supporting our.
Supporting yourself into the Oems the research indicates that there could be a to peak season for ourselves. This year, one in Q2 and one in Q4, and we will also do a lunch hour to probably our our campaign accordingly.
Oh I mean, she wants to know I didn't hear lipson right from Woodrow each quarter.
Sure Hi, that's I mean door harsher that tourette syndrome, or selling available highway team without the Gulf.
So we believe after this year, saying campaign, our brand image brand awareness or the organic download off our apps well continue to improve.
A younger all the way that she's yet.
Okay. So that's my answer to your first question. So they mean could you repeat your second question I I, sorry, I missed it.
Okay. So I I think some of the into that companies, which have already reported or are they all mention there will be called most stringent no spending on focus more on cost controls and this year because of Dakota Lyra. So given the current situation, we would there be any changes through our marketing passing.
Yeah. Thanks for question were also adjusting our our branding campaign.
Well I see I see a the market situation and also the a academic situation evolves for example, during the Chinese new year. We originally we plan to spend a lot in Santa Maria Santa Maria Please preschool fiero ads.
But as you know the all the all the blockbusters for Chinese new year has been canceled so we oh, we change our oh, but our our plan very fast and we deploy redeploy those resources into Tvs to leverage the these things that race in the viewership.
During the Chinese he knew you and everyone have to stay at home so.
So this is a example of how we read out how we have to be reacting to the use of evolving situation I believe that in the twentytwenty as the market evolves, we will continue to make adjustments to that and also with the leave that to the current market environment. When I'm out of a startups are our Uh huh.
Something or slashing their marketing budget.
Even including some of the public companies due to a funding or aftermarket concerns actually gave us a very good bombing bargaining power when we negotiate with a with different media. So that's something we'll also take advantage off.
Oh, Thank you for the current thank you very much.
Your next question comes from the line now leaping Zhao of C. <unk> C. Please ask your question.
Good evening and each okay. Thanks for taking my question. So I'm wondering how you see a contract where you all these vicki.
Did you see any how do we.
Oh, Thanks sleeping for a question so yes.
I think for four they see this year will not be a silver lining up so it's a oh.
Very tough challenging environment is so far our sufficient business has been doing quite well actually we are seeing a bear a higher comp high renewal rates.
In in startup January or most of our existing customers in 2018 in southern 19 stayed with US and in addition to that we have been able to add a few housing for new customers. So therefore, I mean, the oh customer and I'm out the number of.
Our for free subscribers.
Doesn't decline or not.
That's a slight decline from on the night end of 2019, but actually very Oh, and also with being able to narrow the gap with our a competitor I know that people are in the market are talking about math socks off now.
Sort of the year, which costs.
I wish which may cause some decline in our.
Competitors or in some of the other industry industry participants that number office fibers.
Two I didn't really.
Parents to that most of the off quite subscribers last year. They stay alive. This year.
And then they continue to go with us.
But of course, there is a possibility that there are.
On the.
So the 3000.
Startup cost out accordingly in the market and a and B call.
Uh huh.
Oh, well start only subscribe.
The other backup market participants our product. So we don't really know about those and then they are the one that has been impacted but that also point to the risk only thing.
Two affecting thinking through what platform and also it shows that.
Our service and our product half being able to helping our customers.
So a lot of 19 through the very challenging market environment.
Which one reason there people are willing to stay with US I think allow me to add a little more comments on this particular situation where it that the we view this as one of the.
Positive turning points of the autos overall business in general.
We have we in the in the past history.
At times, we struggle with our.
Nick recognition, even within the industry, where it that we're faced different criticisms all the quality and quantity of ourselves leads on the.
On the overall inflows among the consumers actually started to from late 2018.
The company strategy has been specifically to improve that.
Turning that into a positive spring rather than the negative spread so amount of the investments will be made on the bread and rebuilding our the product we're building on the.
On the customer.
Satisfaction.
Outside of the of products and also work that's been the carrot out throughout the last 15 to 18 months, the highest ever renewal rates and on our front in terms of err on the dealership subscription business at the end of last year at the beginning this year its a perfect.
Indication of.
Do you change not only from consumers, but also from the industry players, which mainly the upstream upper strip for us, which are including the Oems and the dealers.
As well as being able to shorten a distance between us and to some of the other other players into industry. So we're continue to we will because it was to US is fairly effective. So I think we're very determined to put this positive spin.
Im pretty much every facet of our business is a businesses not only just listening to the dealership subscription.
So moving forward I think on you know.
Continually invest in the Brandings can you know turned this positive.
Effect.
I'm letting people witness that the traffic wise the quality of lead wise everything has been.
[noise] I really has been increasing drastically significantly we'd like to continue this particular change in 2020.
And all words.
So does not easy for us, but up at least at this moment.
We started to see.
Different feedbacks different positive feedbacks from different areas different facets.
Different partners that would work with in different businesses. So that's what we need a in terms of a carry us through this tough time through the virus time through the downturn of industry, but I think you had lot of confidence into the management team as well as our partners.
Okay. Thanks.
We are now approaching the end as their conference call I'll now turn the call over its a bit auto CFO min Chen for closing remarks.
[noise] Okay. Once again, thank you for joining US today, please don't hesitate to contact us if we have any further questions. Thank you for your continued support and we look forward to talking with you in the coming office.
[music].
Thank you for your participation in today's conference. This concludes the presentation you may now disconnect and good day everyone.
[music].