Q3 2020 Phoenix New Media Ltd Earnings Call
Fundings that.
At this time.
Yes.
On the mode.
After the speaker's presentation, there will be a question and that's the session.
The question during the session Press Star one on the telephone most of us or that the this is being recorded net.
End of <unk>, what's your first the good today cheap debt.
Please go ahead.
Thank you over the Locums roofing new media.
The cost out of the time, you're talking <unk> earnings Conference call I'm joined here by all the Chief Executive Officer, Mr. Trump ill on Chief and later on.
So let me start at the other day coal like local force for why the review of the hockey resolved and then come back on <unk> session.
Called her 20 chunky financially GAAP of what caused the kind of cold on away all the website at <unk> dot type on Dot com.
The tail of the coal will be available on the website <unk>.
Before I continue I would like to the flow through to the safe Harbor statement of <unk>.
Price really major applied to the coal on will make forward looking statements.
Finally, please note that unless otherwise stated all figures mentioned during this conference call are you on the weighted.
I would like to turn the call are true any social media our T O.
Thank you chip good morning, good evening everyone.
Well the would be the complex situation as the result of the Cobi my team and the other but as of late.
Geopolitical concerns with the dealer governance in line with all the previous guidance sort of quarter, probably the one generally the RMB 303 million.
Total revenue in the period. Furthermore, we remain steadfast commitment to providing a superior to the upgrading of what it's like any other called the leadership argument the on monetization capabilities on setting the stage for returns the goals.
First.
In regards to a bunch of new that type of.
We continue to enhance the user experience on the.
Moving on the delivery of vision.
Some of the optimization of these costs.
<unk> people both of these.
In the quarter of for example, we read the quality of doing the absence of well users.
While also providing them.
This is the rational on call.
Moreover, the.
That's what we introduced the new probably certainly conscious of that.
Which helped to hopefully by both user engagement on user interaction, especially within the current major social events on the <unk>.
Yes.
The addition to the he bought a couple of weeks.
Oh, the Mcclain Oh.
Efforts, what acuity all constant recommendation engine.
Integrating all of these and other toward knowledge.
Areas of the copy optimization process.
People that are focused on the <unk>.
We.
Use of the five of them on the path you would appeal.
Such Oh, you're the Cygnus, whose especially during the quarter.
Average time spent per user on top of the increasing by 20 per cent deal all of you on all day.
User hazard rate goes why the 41% year over year.
Meanwhile, our total number of newly other users.
Who used by the 30% quarter on quarter of the continued to adopt the prudent approach you know use the acquisition.
On the focus on leveraging those acquisition travels.
One of the ROI.
Now turning to on a constant operations in the third quarter, we remain focused on strengthening our leadership zone called the verticals.
The long term strategic balance.
All the financial voting.
For example, we further expanded our audience size like movies of the such as the batch its oh the tuber on me.
The new series featuring exclusive ease of use was deeply answer of people, including the loan yield to former wise the minister of foreign trade acknowledge the corporations.
Miss My on box celebrity.
Celebrity model on mother of even though.
In fact on the cover what's the well HM.
But all users that he has reported more than 60 million total views on old media reported.
<unk> the average all starting the food article on.
And on the 20 Twond I think that's a one shot line haul Joel on Guangdong you on the pure.
Hi with efforts.
Interviewed a number of one of the restaurants into all go to the wounds Congrats on Guy do.
You don't contingent on.
Which help to better the Douglas the guide.
The go to source for premiums on choices.
The the missiles.
The other people who festival I'd go beyond the other commodity all users, which fruit really difficult.
Other treaty or the.
Hi of industry getting traction with famous shops the.
However, the restaurants on the call then who else on the food space.
Of the result events widespread the service.
Also continues to do well, but that's.
Once again demonstrate the monetization potential of all the.
So where did this.
Additionally, during the quarter, we remain committed to beauty of the growth momentum of our fashion vertical all going on.
The several I'll I reckon that the personal care on cosmetics.
Yes.
The success of these recchi balance was mostly driven by a significant buttons loans a lot of audiences. You were also due to our understanding of the new media that's been in China as we got the made it.
It was.
In the cosmetic industries to organize the effects of promotion of the campaign for the balance.
The combination of factors the laws to significantly expand the reach of the online banking events for the.
Other showcasing the power of our breath authority and influence on our target audience as well as the fashion industry. That's the whole.
[noise], Yeah, Oh progress.
Oh vertical couple of leadership, we also made meaningful strides in the development of original IP problems.
On the third quarter for example of a launch of the force. These Oh for sure the wisdom of people sure the Jublia jet.
The other way the encouraging results.
The first episode of the Cirrus immediately collecting more than 100 million total views to reach the top line of credit it was the different social media platforms.
Another successful show.
Uh huh.
We also continued to perform well see the here the.
Moving on to form strategic partnerships, the suppose Jones, who satellite TV agreed to extend the team to work at the show.
We believe that these type of deals all the other double a beautiful demonstrates the significant my position potential of our premium I'd be talking going forward.
Oh in the vision from would maintain of focus on the call. The vision about the losing the initiatives. While also carefully analyzing the member of the other potential business often [noise].
[noise] advertising for example, with further accelerating the development of all aspects of the.
That's part of the efforts.
To sum up leading goes on I tried to control of course, but the control functions capable of helping advertisers manage the acquisition cost the small physician.
In addition, we also concentrated on the Tennessee, but we think the either management revenue.
Talking about the external traffic other indications of of others advertisements distribution efficiencies.
And on the position performance.
Of the result of all efforts the total number of mobile applications. The phones. They have access to green definitely part of the telco business in the quarter.
With regards to on real estate vertical all week of Cold 19 has resulted in significant disruptions throughout the China's real estate market.
Well.
Moving developers to become increasingly line on both on the line, how the buildings and all and housing.
Yes.
To conduct the the.
The exact collision of the true we have the partner this rules the association's government agencies of the top developers the long live streaming of vessels.
Total property views.
Yeah on helping to the some of the property transactions more especially this work also highlights of loans of less to provide the religion market with a one stop relative to the marketing solution.
Looking ahead of the.
Epidemic continues to the gradually walk on the control in China.
Back on the integration of online and offline marketing channels to become the key for probably the developers to restore the dozens of roles.
In light of the growing NAV.
And we've had the continue leveraging both online and offline free sources to further use has on marketing solution for the rule of the vertical and the.
The batter tailored solutions.
Solutions to meet the needs of the industry players and the term.
Now please allow me to provide some additional color you.
In regards to our key strategic focus for the business development going forward.
In terms of future investments as we continue the EUV.
What kind of investment opportunities.
Also be sure to assess on existing capital structure.
More efficient of different ways of creating the that we have created with our shareholders.
Well the strategic investments will focus on.
Of forging partnerships with the top we keep on silver of different verticals.
Which not only has the potential to generally low teen returns, but we'll also keep us up to date of the rapidly evolving market dynamics of new business the Texas.
Again, the gross loans were maintaining our commitment to the continuous optimization of our public balance with our flagships new that.
On the meeting of the core of our service offerings.
Moreover, we're actively explore new opportunities sort of continuous support of innovation well most of their money with new monetization travels.
As such but both of the thing of leave the key strategic areas on executing as of.
Harpreet, we'll be able to capture market share on the larger scale at the.
Expenses at a faster pace the previously possible.
The enabling us to capitalize on more worthwhile opportunities over the loans.
[noise] in summary, we were sort of quarter, we maintain our strategic focus on optimizing all flash of new that extending our constant verticals on the beauty of the gross of all by the provisions of of others look.
Looking ahead.
The back the new media industry, the compute facing pressure throughout the remainder of the year other.
Resolve of the current macroeconomic on the geopolitical uncertainties.
Nevertheless, our deep technical expertise premium of new cousins on.
Holton, Brett inflows will enable us to remain at the forefront of trying to the new media industry.
Allowing us to capture those segments of the market was promising growth potential parts of world rebounds from the pull the 19th of that.
[noise], yeah with this I would like to pass on to of vehicle at.
Thank you Michelle and the thank you all for joining our conference call today.
The total revenue in the sort of course are all the Twentytwenty were RMB 303 minutes in line with all the previous guidance range and the other than the a decrease of the 10.9 per census on RMB 300 of certain 9.9 million in the same period of last year the.
The decrease was primarily the due.
Due to negative impact of the quality of 19 on great Hi, the heightened the industry competition.
I will now provide some additional color on the revenue was during the sort of quarter of 2020.
Now the other one housing revenues in the sort of the closure of 2020 or RMB 281.7 million, representing a decrease of 10.2 per cent from RMB 300, certain part of the one minute interest imperial throughout the year.
This decrease was primarily attributable to the previous 30 of the reason.
Hey, the services revenue in the sort of quarter of Twentytwenty decreased by 19% to RMB 21 point the seven minutes from RMB 26.8, the minute use the same period of lots of year.
Revenue was paid of content the sort of quarter of the Btwenty decrease the by 34 point.
On the 3% on the.
8.9 million of RMB certain parts of on the interest in people with the of last year.
Which was mainly due to the timing of the news on the regulations. What gives you the reading in China, and the new along with the broader market the conditions.
Loss from operations the search.
The quarter of 2020 was RMB 28.4 million compared to loss from operations of RMB 15.2 minutes in the same period of the Lucky here.
Operating margin in the third quarter of 2020 was negative nine point per cent compared to negative of 17 point, the 7% new the same period over the last the year.
Non-GAAP loss from operations in the third quarter of the Twentytwenty was RMB 26.7, the minute compared to non-GAAP loss from operations of RMB.
36.8 on the in the same period of last year non-GAAP operating margin in the third quarter of the Twentytwenty was negative 8.8 per cent compared the next few of 16.7% new the same period of last year.
Net loss from continuing operations attributable to iPhone you the sort of quarter of 2020 was RMB 0.9 million compared to net loss from continuing operations attributable to ISO of RMB 50.9 million. The in the same period of lots of the year.
Non-GAAP net income from continuing operation of attributable to ice flow into circled her of Twentytwenty was RMB, one place or a minute compared to non-GAAP net loss from continuing operations attributable to isolate of RMB 47.5 minutes in the same period of last year.
Moving on to all of our balance sheet as of September Thirtyth principles, the company's cash on the cash equivalent term deposit share.
In terms of investment on the restricted share of restricted the cash or RMB 2.7 billion or approximately U.S. dollar sort of 100 of 49.5 minutes.
Finally, I'd like to per wise, our business the ultra low for the fourth quarter of 2020.
We are forecasting total revenue to be true RMB 300 of 32.4 million on the RMB 300 of 62.4 million, representing a decrease of 17% to 9.5 percentage year over year.
For now the other half of the revenues we are forecasting between the RMB 309.6 million and the RMB 300 of 34.6 the minimum.
Representing a decrease of 14.7% to 7.9% the year over year.
Hey, the service revenue, we are forecasting can true RMB 22.8 million on the RMB 27.8, the minute represent the decrease of certain a the 0.8 per cents to 25 point the full percentage year over year.
Looking ahead, we plan to continue focusing on all the cost control measures well also remain prudent you already.
Investment selecting only those opportunities that the are you accordance with all the long term the goal standard.
On the cable the eroding afford the our line.
Well, we do expect that the new media industry, well continue to face the challenges over the short term weigh on.
Also believe that the industry's long term the girls potential remains robust and the that's.
Okay, well continue to improve as China's economy gradually recovered.
Moreover, we believe that the all of our established the Brent influence premium content offerings on the continent Hatch technology.
Well continue to position us at the forefront of China's new media industry going forward.
Moving on to please start.
The start of our growth engines.
The industry bounces back from the disruption caused the by calling the 19.
This concludes the prepared a portion of our call.
We are now ready for questions. Operator. Please go ahead.
Thank you.
Ladies and gentlemen, the will now begin the question and answer session.
Thanks, Jim.
The press star one on the telephone.
And they found them to the amount.
The councillor request please press the pound.
Your first question comes from Binbin Ding from JP Morgan. Please ask the question.
Oh, good morning management, Thanks for taking my question on.
My question is on the debt market. So can you give us an update on the housing market trend in the second half of.
It seems to GAAP.
The current widen the in the sort of quota and you do mention of coping I'd more steel one of the major reason so can you elaborate on that.
I'm also can management talk about the ethics.
On the buy industries, which are the key categories, you're seeing some recovery.
Industry. The industry is as to who is a lot of Chinese thank you.
Morning, the live.
This is the other worth speaking I will answer it is the question.
Ex really the into sort of quote her.
All are the right sizing the business was impacted the by the recurrence of of the epidemic in certain areas of China.
Well on the popularity of short form video and the live streaming ecommerce, which continued the two games on the share during the quarter.
Oh, the as you might know, although Brent arbitraging and the performance based the other what housing accounted for about 80% and the 20% of all the total how.
How did the hardly revenue respectively.
He actually new to treat all of brand advertising revenue.
The increase the on a sequential basis.
This steady girls was mainly due to the gradual recovery of all of our.
On slide on promotional campaigns and the original IP programs.
At the mall hopeful on activities continue to take place in the remainder of the current Eutwenty, we expect all of brand advertising revenues to achieve a day.
Double digit growth the.
The fourth quarter.
However.
Other hand.
Our performance based on the other.
On the word housing continues to face challenges during the sort of quarter.
They do too.
I think it's the falling to the sector.
First on some of our top line or subject to stricter industry regulations.
On the Earful they had to adopt a more conservative out of the placement of strategy.
And the.
Secondly, the overall the supply of either inventories in the market the Cds.
Mark is the mine.
With which made a using the new cpms of pro forma the space the average <unk> other of having a more difficult.
The sector.
The top five industry color to buy all our other advertising business Oh, the whole E commerce.
On the CG financial services on the Internet services.
Those are the industries, which have traditionally a county the slot a substantial portion of our.
Out of the hedging revenue.
Including all total and the.
Hi, Joel.
Or most of the early impact to the new in the first half of the year. However, as the pandemic gradually pulled on their control in the sort of the quarter of both.
Both industries have since recovered of significantly.
The <unk> in regards to the ultimate market or the industry continued to show strong signs of recovery.
During the period.
According to China passenger car Association, New September retail sales of passenger cars increased the by about seven.
On the 3% year over year wholesale sales of a new energy passenger cars increased the by more than 90% year over year.
As such we expect the the auto sector to continue on your recovery a use of cash.
First quarter.
The online advertising industry has been.
Under performing due to do the worst of the academic the in certain areas of China.
That's the well as the years the geopolitical issues.
Short form video and the E commerce or is the only sources of other Reprising goes in this quarter well the rest of the industry underperformed.
As you recall the initial.
The changing market dynamics, we have already.
Habitation the color preserved in both the short form video and the ecommerce spaces.
The majority of our original content is now to produce the in the short form video format and the more of the 80 per cent of our brand advertising project on now short form video per day, which we're able to monetize through a combination of counting on the production on the part of it having south.
Well come out of that.
That's despite the phasing per these.
Okay and the.
It would help out of of having market all of our competitive advantage will enable us to continue preparing the goals of all of our business line going forward.
Maybe I hope I have answered your question.
Oh, yes, it the secular and much at all.
Thank you.
Your next question comes from common John from first.
Please please ask the question.
Hi.
On <unk>.
Good day.
Sure.
Okay payment.
Yeah.
Cash on the company.
Uh huh.
Okay.
Hi, Kevin This is wrong, let the answer the question I suppose that's the of the September sort of these trends Wendy we had cash on the cash equivalents of U.S. dollar certain of its 50 minute.
The only maintain on cash strong cash flow during the pedantic.
He was driven by on effective cost control measures.
As well as the excellent returns.
Achieved you know you didn't investments.
It showcases of strategic investment the experience.
That's one of our existing habits of.
We plan to use these resources and sweet key areas.
First we'll continue to optimize our public market metrics.
So lots of news that type of.
The remaining but the key.
Core of our service offerings.
At the same time, we are also.
Aim to develop more platform based on.
Products.
Which is capable of moving the future needs of consumers.
We will also explore new business opportunities with both governments on other place business partners.
Secondly, we will actively explore more strategic investment opportunities.
Evaluating potential investments into those.
VC funds.
That's out of line, we saw business goals.
But the color with focus on the buttons with extensive experience in PMT.
Entertainment media luxury of consumer reports.
On the other verticals services.
He will help to keep us up to grade.
Up to date on.
The very rapidly evolving market dynamics of new business sectors.
The certainly.
We remain committed to creating shareholder value.
On the delivering returns to our shareholders you have a right of ways.
Having said that the dividends are certainly one of the form of giving back to our share voters.
We will consider going forward.
This year, we have observed the privatization of some of US the lives the companys.
As well as the.
The registration system the reforms in the domestic capital markets.
Well, it's certainly the batteries are towards its due course.
So on continuing focus on the shorting shareholder lights on maximizing their interest.
Right now we'll also be sure.
To takeover to take our own situation on market environment into account.
In addition, we'll continue to work towards refining all core business on the executing on new business initiatives.
We're now taking the steps to expand on ecommerce business by upgrading.
The conference products on building out our own supply chain tougher.
To further improve the monetization capabilities of our E Commerce business.
The hope to share our business progress on this front was everyone.
As soon as next quarter.
I Hope this answer your question coming on.
Good day.
Thank you.
Once again the Vishal.
Ask the question please press the pound.
Your next question comes from Frank Chan from Macquarie. Please ask the question.
Good morning, Thank you for the second question.
Sure true cost just this morning.
I remember the about you mentioned the.
True.
I rode the loss.
Some of the.
That's true.
Once the way directory of trips the you're going looking forward on.
The second question is on.
<unk>.
Oh, we're on the.
Implied price.
Brown bags.
Okay.
Oh.
He looks at large.
True true.
That's what direction.
Basically I'm aware of go you must future.
Thank you.
[music].
Okay. Aside the this the trial I will answer the first part of the question maybe I wasn't in the few more on the.
The other question.
[noise] Oh.
Operating loss for the first nine months of clinic Wendy was RMB.
Some of the 3.8 million, which is much lower the non operating loss of RMB 248 million the missing period of last year as such we are now on track to achieve our operating targets for the full year.
However, due to the impact of the pandemic Oh the top line performance. The plane told me, we do not the back.
Breakeven on.
Operating level of this year.
As a public company.
The fully understand the importance of profitability.
On the well well aware that the maintaining the healthy growth of our core business. He is the optimal path to long term public the book.
With the continued optimization of our current strategy on the vertical operations. We're confident that we can leverage existing business drove us to not only ensure the growth of our core business, but also develop additional growth drivers such as the new era.
The polymers product reviews.
On the.
Original IP problems.
Over the long term, we believe that our effective corporate governance structure.
In the goes to strike the fine balance of the team grows and the probably the better.
Yeah, I think just the mentioned the the the advertising trends going forward.
That's right so maybe.
Edwards and add a few more wars.
Hi, Frank a low.
This is the other speaking.
Actually I I previously mentioned the you billions question you know looking forward as the other her husband the industry is still true of challenge I think of like it's the first days of depends on the the.
The other than the of the epidemic worldwide, the especially in China you within the next the or it's getting better but the.
It's still a question right and the so in this kind of.
Michael.
Call me a environments, we seem to the other but unlike other organizing the industry the city of steel facing challenges, maybe even especially in the first half of the tons you turned on.
The the also lists are new the other online advertising industry is evolving and the other.
Users spend more on the more time on platforms like the.
The lean on the crucial let's kind of the short form video platforms. So.
Our other type of thing.
I still facing of pressure, especially for.
The the.
Oh, Hello to make all our other housing the more cost effective is a big challenge for us on the bus. So we are I also mentioned that before like true we have recognized the list kind of the changing market the dynamic.
We already put.
Put a lot of effort and the.
You mean like of the show up on review on the ecommerce spaces. So next year, no new well the challenge, but the way I also feel very excited on the confidence of.
We think we can handle it challenges and the mix on.
The progress in other of hasn't visit.
[noise] think of friends.
Great.
The cubic feet on the upward.
Thank you Frank.
[noise] once again.
The question Please press star one.
[noise] [noise] [noise] debt no further questions at this time of I'd like to hand, the conference back to the management. Please continue.
Thank you Okay. We have come to the end of Fovista essentially not a lot of conference call. Please feel free to contact us. If you have on you for the question sensing flow joining us on this call have a good day.
Thank you all thank you.
Ladies and gentlemen.
Thank you for participating you may.
Oh disconnect.
[noise] [noise].
[music].