Q4 2020 Phoenix New Media Ltd Earnings Call
[music].
Ladies and gentlemen.
Thank you for standing by and welcome to the Phoenix, New media fourth quarter at the mandates many earnings call. At this time all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask the question. During the session you will need the breasts are one of your telephone please be advised of.
Of the beef on France is being recorded I would now like the one of the contracts over the first speaker today.
MS. Kimberly. Thank you. Please go ahead.
Thank you operator would come to Phoenix, New media at force called her 'twenty 'twenty earnings Conference call I'm joined here by all of our Chief Executive Officer of Mr. Sha Lu.
And Chief Financial Officer, Mr. At all new on today's call My German workforce provide a review of the cadre of dog and then come back up to a <unk> session. The force called her tons of 'twenty financial result, and the vibe costs of this conference call are available on our website at IR of dogs.
New and all Com a replay of the call will be available on the website in a few hours before we continue I would like to refer you to our safe Harbor statement channel of our earnings press release, which apply to this call as we will make forward looking statements. Finally, please note that unless otherwise stated.
Stated all figures mentioned during the conference call are in RMB, we that I would like to turn the call over to Mr. Sean O'neill Our T O.
Yeah.
Thank you Qi mourning of the.
Good evening everyone.
We delivered encouraging results the fourth quarter.
Despite the ongoing impact.
I felt the Kobe Kobe.
COVID-19, all of the macro economy.
Of course, the only Eva on Chinese advertising industry.
Meanwhile, quarterly revenues were in line with our previously provided guidance range, reaching RMB $362 2 million for the period of.
Success.
Police of such uncertainty further demonstrated the capabilities of all sort of new news coverage and establish the brand new pools of consistent population of items called ecosystem on the success of our new business initiatives in.
The 'twenty 'twenty.
Escalation of the Covid.
The 19 pandemic significantly affected People's lives unabated one's the most challenging social events.
During this period of fear and confusion of professional journalism enable us to consistently deliver high quality news coverage inform the public about the effective virus prevention.
In the sort of message and display all of rumors through professional spectrum.
For example, during the fourth quarter tumor of intelligence agencies.
The only OTT module.
Which is one of our we media accounts shelf life of hot topics, such as the COVID-19 vaccine development.
Credential risk on the vaccine side effects.
That is low of timely index unscientific.
Analysis reports.
Those reports, let's not all of these strong followings from all users of <unk>.
So of frequent republished other social media platforms.
Elements the pain. Additionally, industry recognition from traditional media all of them.
In the meantime.
Debt on comprehensive coverage of 2020 U S presidential election, which originated from our platform and the permit it.
Of the Internet generally.
And the record breaking viewership.
So the official accounts.
For alone.
Really the constant.
Garnered over 6 million views during the <unk>.
Run up to the election, we leverage Phoenix Tv's exclusive live news reports probably north.
Generating station a launch of a platform.
The second to know real time feature update of <unk>.
Accounting for status.
As the accomplishing of viewership of over 10 million on the election day.
Also we provided our users with the insightful interpretations.
The American U S election results as well as the societal and political impact by hosting exclusive interviews with thought leaders such as the preferred.
Professor.
The junk young man.
The addition.
The media com such as the.
Tom pool.
So if we carry picked by take courage of the daily trips on terms through other presidential election.
The published original commentary of Vitals victory.
Both of which one of the viral on social media during the <unk>.
And kind of scared of the election.
To further.
The Mendez of revenue.
We produce the spirit of high profile events during the quarter. For example, we hosted the 'twenty 'twenty of iPhone fashion. The award December generated over 1 billion views in total.
So we organized the 'twenty 'twenty iPhone beauty, which helped the charity gala.
Net nuclear cooperation with the level of well known charities and reached more than RMB 10 million in donations from children need.
Is this the exceptions.
15 years ago, we have helped lease accumulative amount of all of RMB 227 of many of them.
The addition of 2020 iPhone quite as some of them at the end.
The plenty of country featured a stellar lineup of distinguished speakers reading from the leveled the near term.
Signatories to authority figures in the field of politics finance.
Academia.
Just a formal Hong Kong Chief Executive Mr. Leandro moving.
On the 2013 Nobel Prize winner Mr. Robert Shiller.
For all of my reading by integrating a handful of elaborate on the IP production appears with further explore several new and.
So the opportunities.
The short form video series in the quarter for our short form video series of duties of new each of TV two questions.
One of the China's top online short video platforms.
The show has accumulated more than 139 for all of them.
In the risk on the 42 million views on quite short by year end.
We were awarded the quite sure that's part of our of IP in 2020.
In addition for real.
The thing we leverage our established editorial capabilities at eight O AI algorithm to launch a new rule.
Fathers day to media type of it.
Hi.
Some of which we provide homebuyers and probably the developers with real time of industry information index industry reports of detailed data analysis. This platform has shown significant monetization potential to date generating.
You'll have a total contract value of more the.
The RMB sort of minute.
Now turning to our flagship new that iPhone.
<unk> implemented a number of initiatives recently to enhance our content ecosystem.
<unk> will serve as a core growth driver going forward.
First our editorial.
The foundation and based on the analysis directly for us to reach of platform coupled by extending the number we media cost.
To ensure that the cost remains high quality the.
Appreciate it at the appealing for users.
Secondly through a combination of.
For the reported recommendation on augurs of space user of segmentation, we continuously sharpen the quality of our premium kind of LIBOR.
For example, the allocating more exposure to the readers Digest G&P Chengdu module.
The increase users of payment of high quality information.
Certainly by combining our editors professional journalism with advanced software algorithms.
Team scar the entirety of internet to capture the hottest topic, optimizing the aggregation and distribute the related.
Through our trend of loans and the status.
Satisfy our users' needs of breaking news and cutting capex.
In addition, we continue to reinforce our exclusive access to Phoenix Tv's video content Library.
And our own resources of quality of media content.
Total other Fi our breath of influence and distribute.
Hi, I didn't sort of have the council of.
Of course of the Internet.
Moreover, we steadily improved our distribution strength for premium content.
Other social media platform to bolster our content exposure and channel additional use of traffic back to our own products.
<unk> by 2020, the number of all of my video users in China has reached new.
900 sort of a minute on the overall user time spend for online media has also ramp up significantly.
<unk> the massive market opportunities emerging from this visualization trends, we have been proactively developing.
Our video offerings with a three pronged strategy.
The first is leveraging Phoenix Tvs massive library of evergreen content to better satisfy all of core users' needs for these primarily the content and set our breath of apart from the competition.
The second is developing our unique.
And the original media programs in various verticals to further diversify our content productions.
The third is identify.
Having said that the.
We view the content creators.
Who are active in those areas that align with the overall kind of strategy.
<unk> and brand image.
By providing them with the necessary support under the systems with new improve the quantum of production efficiency on the generate more premium content on our platform.
But attracting these top content creators with clearly defined goals and the responsibilities.
We believe.
Strategy, our content ecosystem with harvest the fruit.
For results in the near future.
As we help content producers and short form video content flourish iPhone.
We have also steadily optimize our AI algorithm and audience segmentation.
The average user time spent by users.
Leave that for.
Grew by 30% year over year basis, well user retention rate grew by 10 of the circumstance in the quarter.
Now I would like to provide everyone with an update.
New business initiatives.
In November leveraging our massive base of users who tend.
<unk> tends to cause that advance education.
Classic tastes and strong purchasing power with upgraded online E Commerce brand officially launched Phoenix premium products long cash shopping to cater to the lifestyle needs.
We have formed a team of professional buyers to select.
The <unk> product in categories, such as bank culture, and creativity for the unwind on health and fitness.
By employing rigorous standards of collection of best selling products will not only achieve higher gross margins, but also satisfy the demand of China rising media path for better.
High end of life.
The combination of our massive user base of original content production capabilities and the sophisticated recommendation algorithm has enabled us to reduce our e-commerce customer acquisition costs.
Hence of course marketing because of its position and boost our user retention rates.
As well as transaction commercial vs.
As prime.
Some of Prime example is our best selling book product.
Brief history of the world maps, which overtook the sales of copper of a pump products as the e-commerce platforms and the key.
The action commercial.
And health of 43, 3%.
In 2021 we plan to utilize a light inventory model.
E Commerce initiatives.
Optimize our product selection.
The adjusted our supply chain management and improve our transaction conversion rates for a price.
First of all right with.
With the continuous improvement in our e-commerce initiatives operating efficiency, which is able to expand its partially margin of accordingly.
Moreover by them.
Reaching our unique integration of original content production on E. Commerce will continue to explore innovative E.
Credit scores, such as live broadcasting and short form video of.
The other social media platforms.
To few of the momentum of our E Commerce business.
In conclusion, as we uphold our professional standard of producing authentic authoritative untrustworthy content.
Commerce with made meaningful progress enhancing our content ecosystem.
Expanding our product offerings, and cardio meeting new growth initiatives.
While we recognize the current difficulty in forecasting for 2021.
As the economy gradually recovering in the post.
And the world.
We're well positioned to revitalize our growth engine.
And generating lasting shareholder value.
With that I will turn the court of Edwards.
Our CFO to go through the financial results.
Thank you Sean and thank.
And then for Tony Our conference call today.
The total revenues in the fourth quarter of 2020, or RMB 300 of 2.2 minute in line with our previous guidance range.
The.
Representing a decrease of nine 5% from RMB 400 upon for minute in the same.
All of last year.
This decrease was primarily due to the negative impact of the COVID-19 outbreak.
I will now provide some additional color on our revenues during the fourth quarter of 2020.
Advertising revenues in the first quarter of 2020 or RMB 300.
Period ex seven minute.
Representing a decrease of seven 3% from RMB $763 one minute the same period of last year net.
This decrease was primarily attributable to the previous state of the reason.
Okay.
Page of services revenues in the first quarter.
Search day 20 decreased by 31, 4% to RMB $25 5 million from RMB $37 three minute in the.
Same period of last year.
The revenues from pitched content in the first quarter of 2020 decreased by.
Of 26, 6% to RMB 11, two minutes.
From RMB 29 minutes in the same period of last year, which was mainly due to the tightening of the use and the regulations antigen of the reading in China and the in line with the broader market conditions you for.
<unk> the <unk>.
Towards.
For me reading for.
The loss from operations in the first quarter of 2020 of was RMB 28 eight minute improve.
The improving from RMB $108, one minute in the same period of last year.
Operating margin in the fourth quarter of 2020 of was negative 8%.
Free improving from negative 27% in the same period of last year.
Non-GAAP loss from operations in the first quarter of 2020 was RMB straight point strength minute, improving from RMB 100, and the $4 2 million same period of last year.
Non-GAAP operating margin in.
The quarter of 2020, it was negative <unk>, 9% improving from negative 26% in the same period of last year.
Net income from continuing operations attributable to iPhone in the fourth quarter of 2020 was RMB 440 50.
In the first line eight minutes.
Compared to RMB 900 on the $2 5 million in the same period of last year.
Non-GAAP net loss from continuing operations attributable to iPhone in the fourth quarter of 2020 was RMB $8 2 million improving from non-GAAP net loss.
For opening of operations attributable to iPhone.
RMB $99 2 million in the same period of last year.
Moving on to all of our balance sheet.
As of December 31, 2020, the company's cash and the cash equivalents term deposits short term investments and the.
Continued strictly the cash for.
RMB 167 billion of.
Approximately U S dollar $255 eight minutes.
Finally, I'd like to provide our business outlook for the first quarter of for 2021.
We are forecasting total revenues to be between RMB.
The $210 2 million and the RMB 200 of $30 2 million.
For the net advertising revenues, we are forecasting between RMB $192 million and the RMB 200, and the seven minute.
For paid service revenues, we are forecasting.
The RMB 18, two minute and the RMB $23 2 million.
Looking into 2021.
Actively implementing those measures, which can help us to overcome the current macro challenges and the recover all of our growth.
We will continue to invest in product offering upgrade.
The content of strategy refinement revenue stream diversification and the user base expansion.
All of our investments in these areas have already enabled us to develop a strong pipeline for new growth.
Initiatives, thereby unlocking more opportunities for us to.
For new and the effective monetization systems.
Going forward all of our unique combination of content leadership premium.
<unk> equity and the product innovation will continue to serve as key competitive differentiation.
As such.
We remain confident in our ability to navigate the current industry headwinds and the strengthening of our position at the forefront of China's new media industry.
This concludes the prepared portion of our call. We are now ready for questions.
Operator.
Please go ahead.
Yes.
Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask the question. Please press star one of your telephone kind of weak for need.
Good day.
If you wish to cancel the request please press the pound or cash gain.
Okay.
Yeah.
Later.
First question just the comes from the line of.
Brian Cheng from Macquarie. Please ask your question.
Yeah.
Yes.
Hey, good morning, Thank you for taking my question.
Actually I feel very interesting the.
For a good.
Good new business area.
Our prepared remarks.
You're going to grow organically.
Six of them sort of a.
Uh huh.
True to the extent personalize the.
So my question is what's your investment of threats.
And the message of 21 of the upcoming.
Should we expect thank you.
Okay.
Good morning, Frank latest other words speaking.
Okay.
I will answer your question of extra day, you know.
This year, we have invested of 19 million.
For the RMB cumulatively.
The three industry, leading the venture capital.
Such as we enter the debt.
These phones have extensive investment in the experience and proven track record.
Other verticals such as video platforms E Commerce.
Many of our interactive and tournament etcetera.
This investment should of not only <unk>.
Never a handsome return on all of our U.
All of our investment but to also expand all of our access to new innovation all the time more timely insights in the latest for the industry.
The trends.
And of.
Of course of <unk> to sales new product opportunities in this constantly changing internet of the market environment.
Actually you know in verticals, such as finance and the product reviews, we have made meaningful progress.
Industry developing some.
Innovative content debate for the product and the services to serve a wider range of users.
Going forward, we plan to ask for more opportunities in additional verticals.
Actually of our abundant.
Yeah actually the reserve.
Europe should enable us to upgrade of our <unk>.
Existing products and the construct our content ecosystem.
The.
Further to go.
Innovative internet of the products.
So that we can proactively cultivate.
<unk> opportunities for the future.
I. This is my answer I hope I have.
I'm sorry your question Frank.
Yeah, Yeah kind of thank you.
That's the word.
Thank you.
Gross our next question comes from the line of and true Zhang from 86 research. Please ask your question.
Good morning management. Thank you for taking my question.
I have a question about the ad industry.
Good to hear that management comment that the economy.
In the ethylene Corrine and why are your net income.
To elaborate a bit more about the macro outlook and the app.
From key Athletic House for two weeks of one thank you.
Okay.
It's a very good question.
Actually no.
On the 2021.
Definitely difficult a year because of the COVID-19.
For the advertising industry is.
We are challenging for sure.
Although during the second half of 2020.
So the economy in the.
And the placements starting of the to gradually improve.
The menu in the by the menu of industry still have not fully recovered two of your pre pandemic conditions.
When we look at all of our own other of our housing income reached in the pandemic Rick harvest in certain locations of China as I tried to Beijing.
Has affected all of our.
The execution of some important the offline advertising events.
Also the competitive dynamics in the Internet industry is constantly changing.
So it's more compacts for.
For the advertising business.
Sales of our brand.
He should.
Actually benefit from the.
Continued economic recovery during the first the quota of 2021.
We look deeper into various sectors of our brand or other of our housing.
The mainly concentrated in industries, such as auto finance legal.
And the receipt and the industry.
Sure the continuing to recover.
Take the auto industry for example, China's passenger Union Association reported that the auto production and the sales rose more than like for fold year over year.
The current February 2021.
Moreover, we plan to extend all of our market share.
The brand advertising for the.
The new consumption sector seems healthy.
Through cooperating with social media platforms and the short video.
Year of your firms such as.
Weibo wechat and the ability et cetera.
Our initiative is to show the leads to increase the.
The revenue.
Contribution from the.
F M C G sector as well.
Additionally.
Is China.
Patti news to bring COVID-19 under control of our offline events, such as the iPhone Food Festival.
Sure sure Yeah, well take place it will take place as planned.
The events should have very positive impact on the growth of our brand.
Current hygiene business.
Moreover, we will further enhance all of our content ecosystem and the increase of our collaboration with Phoenix TV. So that we can attract more high end users and the.
The.
Average user time spent.
<unk>.
Of all of our products will increase.
All of these efforts should it be very helpful to all of our sales growth and the we expect all of our brand advertising revenue to reach double digit growth in the first quarter of 2021.
And.
The other.
For all of our Pearl match advertising business overall.
All of our supply of inventory on the short video platforms.
Has squeezed as the market share of other platforms.
Still in the first quarter of 2020, we strengthened our.
And the marketing effort related to two.
The.
Many business partners apps, so that we were able to not only offset the.
The market competition pressure on all of our program Magic other housing but also.
Sales spend the of our opportunities to monetize traffic our odds are sort of party platforms.
We expect all of our revenue from this monetization channels to continue increasing in 2020 one.
At the same time we.
Allocated the more.
<unk> associates to innovating and optimizing features over the existing products.
<unk> created a better community environment increased user retention and the increased our investment in <unk>.
New product development.
The results of our.
The refresh shoe the materialized gradually need the true on an overall improvement.
In our advertising sales and the January the greater long term value over time.
This is my answer to question. Thank you.
Yeah, that's very helpful. Thank you.
Uh huh.
Our next question comes from the line.
Cash from first Shanghai free trade.
Please ask your question.
Hi management, Thanks for taking my question.
Okay.
Ex TV has come out with that range.
The management team.
I wonder what's.
On the phone.
Hi, Thank you Mr Shah of the answer to your question.
Our affinity Phoenix TV global reporting resource on the original content capabilities.
Have been well respected in the industry.
And we.
What's the I believe its potential is yet to be fully unleashed.
As you said recently Phoenix Tv's supporting new personnel to management team.
They have.
Extensive.
The international backlog of significant media management insight and experience.
<unk>.
Deep government on the visa contact of mainland China.
Uh huh.
We are very covenant the.
The two executives joined.
Uh huh.
We'll bring in vigor and more resources to Phoenix TV.
This will accelerate.
Evolution into a truly global multichannel media group.
And the further Alicia Phoenix Tv's brand potential.
Exemplify our Phoenix Tv's voice of the international media stage.
And.
Enable Phoenix TV.
Perform a greater role in China's data integration.
The world economy.
And we believe as Phoenix TV media influence the expense.
He's been a value.
Should enjoy.
Greater potentials.
I Hope this will answer your question.
Yes, that's very helpful. Thanks.
Thank you.
Okay.
Once again for those over the last last question. Please press star one of your telephone.
The amount.
Okay.
Yeah.
Yes.
Yeah.
Yeah.
Yeah.
Again for those who would like to ask a question. Please press star of women, the telephone and wait for any of the day announce.
[noise] again and start.
Time to ask the question there's no more question at this time I would now like the one of the conference bags at the base speakers. Please continue.
So to the operator, we have come to the end of our Q&A session of our conference call. Please feel free to contact us if you have any further questions.
Thank you for joining us on this call half of good day.
Okay.
Yeah.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
[music].
The.
Yeah.
Okay.
[music] for.
Okay.
[music].
Yeah.
[music].
[music].
Ladies and gentlemen, thank you for standing by and welcome to the Phoenix, New media fourth quarter.
Like many earnings calls at this time all participants are in listen only mode. After the speaker presentation. There will be a question and answer session to answer questions. During the session you will need the French SAR one of your telephone. Please be advised of the Beach conference is being recorded I would now like the one of the contracts over there for a speaker.
Good day Ms. Kimberly. Thank you. Please go ahead.
Thank you operator would come to of Phoenix, New media of force called her 'twenty 'twenty earnings Conference call I'm joined here by our Chief Executive Officer of Mr. Shaun O'neil and Chief Financial Officer of missed her at all on today's coal mines.
Mind, you of all work force provide a review of the cadre of dog and then come back up to a <unk> session. The force called her tongue, who 'twenty financial results and webcast of this conference call are available on our website at IR of dogs of iPhone Dot com a replay of the call will be available on the website.
A few hours before we continue I would like to refer you to our safe Harbor statement. The channel of our earnings press release, which apply to this call I spoke of will make forward looking statements. Finally, please note that unless otherwise stated all the figures mentioned during the conference call are in RMB.
With that I would like to turn the call over to Mr. Shortly all of our T O.
Yeah.
Thank you Chad good morning of the evening everyone.
We delivered encouraging results for the fourth quarter.
Despite the ongoing impact of Covid and Covid.
COVID-19, all of the macro economy.
Of course bombing Eva on China's advertising industry.
Quarterly revenues were in line with our previously provided guidance range, reaching RMB 362.2 minutes for the period.
The success in the face of such uncertainty further demonstrated the capabilities.
Oh for all sorts of new news coverage and establish the brand new pools of consistent.
Calculation of iPhone is called the <unk> ecosystem and the success of our new business initiatives.
The 'twenty 'twenty the escalation of the COVID-19 pandemic significantly affected People's lives unabated.
One of the most challenging social events.
During this period of fear and confusion of professional journalism enable us to consistently deliver high quality new coverage inform the public about the effective virus prevention message and the smell rumors through professional spectrum.
For example, during the fourth quarter humor of intelligence agency join the OTT module.
Which is one of our we media call shelf life of heart pump.
The <unk> such as the COVID-19 vaccine development progress on the vaccine side effects.
That is low.
Timely index unscientific.
Analysis reports.
For those reports.
Not all of the straw followings from our users, but also of frequent republished other social media platforms again. Additionally industry recognition from traditional media all of them.
In the meantime in the comprehensive coverage of 2020 U S presidential election.
The <unk> originated from our platform and the promoted.
So all of.
The internet generated record breaking the ocean.
So the official account of.
We bought alone.
Actually related content.
Over 6 billion views.
Given the run up to the election, we leverage Phoenix Tv's exclusive live news reports, Bobby North American station a launch of.
For a second to know real time feature.
Feature update of Val accounting status.
A couple of thing of viewership of over 10 million on the election day.
Also we provided our users with the insightful interpretations of the U S election results as well as the societal and political impact by hosting.
The exclusive interviews with thought leaders such as <unk>.
Professor.
Mr. Chuck Young man.
In addition.
We media accounts such as the <unk>.
Tom pool, we carry tick by tick coverage of the daily interest in terms of through other presses.
The that's relaxing and publish original commentary of vital victory both.
Of which when viral on social media during the most intense scared of the election.
For further the Mendez of revenue for US we produce the spirit of high profile events.
During the quarter for example.
Example, we're close to the 2020 of iPhone fashion The award in December and generated over 1 billion views in total.
So we organized the 'twenty 'twenty iPhone, the beauty, which helped the charity gala.
Sue accomplished with the number of well known charities and reached more than RMB.
$10 million in donations for children in need.
Okay.
The exception 15 years ago, we have helped with the accumulative amount of all of RMB 227, many of them.
The addition of 2020 iPhone finance some of them at the end of 2020.
Featured a stellar lineup of distinguished speakers reading from the state level the near.
Knitter.
Signatories to authority figures in the field of politics finance.
Academia.
Such as the formal Hong Kong, Chief Executive Mr. Liang Jun Liu on the 2013.
13 Nobel Prize winner Mr. Robert Shiller.
For online reading by integrating ample cash elaborate on the IP production appears with further explore several new and innovative opportunities.
Such as the short form video series in the quarter.
Water with more of short form video service of the lead the deal.
Each of <unk> two questions one of the China's top online short video platforms.
The show has accumulated more than 139000 followers on the 42 million views on quite a show by year end by the way.
Award.
What is the question that's part of IP in 2020.
In addition for real.
We leverage our established editorial capabilities at eight O AI algorithm to launch a new real estate media platform.
Total Tyson.
Some of which we provide.
Provide homebuyers and probably developers with real time of industry information in the industry reports of detailed data analysis.
This platform has shown significant monetization potential to date generating a total contract value of more than RMB sort of minute.
Now turning to our flagship new debt iPhone.
We implemented a number of initiatives recently to enhance our content ecosystem.
Which will serve as a core growth driver going forward for.
Our editorial recommendation and based on the analysis directly for us to reach.
All of the platform company by expanding the number of we media cost to ensure that the comps remained high quality the.
The branch aided at the appealing to users.
Secondly, through a combination of editorial recommendation on algorithm based user of segmentation we continuously.
Seniors Lee sharpen the quality of our premium kind of library.
For example by allocating more exposure to the readers Digest GMP Chengdu module with increased users of payment of eye for the information.
Certainly by combining our editors professional journalism.
With our advanced software algorithms are team scar the entirety of internet to capture the hottest topic optimizing the aggregation and distributed the related.
Through our trend line.
And the satisfy our users' needs of breaking news and kind of Capex.
In addition, we continue to reinforce our exclusive access to Phoenix Tvs video content Library.
Then all the resources of quality of media content.
The other by our breath of influence.
And the distributed highly sought after content of course.
The internet.
Moreover.
We steadily improved our distribution expense for premium content or other.
Social media platform to bolster our constant exposure and channel additional use of traffic back to our own products.
For 2020, the number of all of the video users in China has reached.
900 sort of a minute on the overall user time spend while all other media has also ramp up significantly.
Seizing the massive market opportunities emerging from this visualization trend we have been proactively developing our video offerings with a three pronged strategy.
The first.
First is leveraging Phoenix Tvs massive library of evergreen content to better satisfy our core users needs for these pressure of its content and set our breath of apart from the competition the <unk>.
Second is developing our unique and original media programs in various vertical to further diversify.
Our cost of production.
The third is identify.
Having said.
The view content creators who are active in those areas.
Aligned with our overall current strategy and brand image.
Providing them with the necessary support under.
And of the systems with new improve the current production efficiency on the generate more premium content all of platform.
Attracting these top content creators with clearly defined goals and responsibilities, we believe that across the.
Ecosystem with harvest the fruit for results in the near future.
As we help content producers on short form video flow.
Krish iPhone.
We are also steadily optimize our AI algorithm on audience segmentation.
The average user time spent by user of iPhone grew by 30% year over year basis.
User retention rate.
<unk> grew by 23 for that in the quarter.
Now I would like to provide everyone with an update of new business initiatives.
Leveraging our massive base of users who tend to cause that advanced education classic tastes and strong purchasing power with.
<unk> upgraded our online E Commerce brand officially launched Phoenix premium products, Guangzhou shopping to cater to the lifestyle needs.
We have formed a team of professional buyers to select high end product in categories, such as line culture and creativity food unwind.
Health.
Yes.
Employing rigorous standards you off collection of best selling products.
The only achieve higher gross margins, but also satisfy the demand what kind of rising media path for better unhealthy lifestyles.
The combination of our massive user base of original content production capable.
On the sophisticated recommendation algorithm has enabled us to reduce our e-commerce customer acquisition costs.
Hence the product marketing because of its position.
Boost our user retention rates as well as transaction commercial rates.
As prime.
Some of Prime example.
He is the best selling book product a brief history of the world all maps, which overtook the sales of comparable of pump products as the e-commerce platforms and the key.
The transaction conversion rate of 43, 3%.
In 2021 we plan.
Plan to utilize a light inventory model for e-commerce initiatives.
Optimize our product selection.
Our supply chain management and improve our transaction conversion rates for a price.
With the continuous improvement in our e-commerce initiatives operating efficiency, which.
He was able to expand the profit margin accordingly.
Moreover, by leveraging our unique integration of original content production and E. Commerce will continue to explore innovative E. Commerce calls such as live broadcasting and short form video of other.
Other social media.
Platform.
To few of the momentum of our E Commerce business.
In conclusion, as we uphold our professional standard of producing authentic authoritative untrustworthy content with made meaningful progress in enhancing our content ecosystem.
Pending our product offerings.
In the cardio meeting new growth initiatives.
While we recognize the current difficulty in forecasting for 2020 one.
With the economy gradually recovering in the post pandemic world.
Well positioned to revitalize our growth engine and.
And generating lasting shareholder value.
With that I will turn the course of Edwards.
Our CFO to go through the financial results.
Thank you Sean.
And thank you all for joining our conference call today.
Our total revenues in the first quarter of 2020 or RMB.
For 100 of $2 2 million in line with our previous guidance range.
The.
Representing a decrease of nine 5% from RMB 400 upon for a minute in the same period of last year.
This decrease was primarily due to the negative impact of the COVID-19 outbreak.
Break.
I will now provide some additional color on our revenues during the fourth quarter of 2020.
Advertising revenues in the first quarter of 2020 or RMB $336 seven minutes.
Presenting a decrease of seven 3% from RMB.
$763 one minute the same period of last year.
This decrease was primarily attributable to the previous state of the reason.
Pay for services revenues in the first quarter of 2020 decreased by 31, 4% to RMB 25.
One 5 million from RMB $37 three minute in the.
Same period of last year.
The revenues from <unk> content in the first quarter of 2020 decreased by 46, 6% to RMB 11 two minutes.
From RMB $20 9 million of industry.
In the same period of last year, which was mainly due to the tightening of the use and the regulations on teaching the reading in China and the in line with the broader market conditions, reflecting the true.
And towards the free online reading.
Loss from operations in the fourth quarter of 2020 of was RMB.
28.8 minute improves.
The improving from RMB $108, one minute in the same period of last year.
Operating margin in the fourth quarter of 2020 was negative 8% improving from negative 27% in the same period of last year.
Non-GAAP loss.
Cash from operations in the fourth quarter of 2020 was RMB straight stream minute improving from RMB 100, and the $4 2 million same period of last year.
Non-GAAP operating margin in the fourth quarter of 2020, it was negative <unk>, 9% improving from negative 20.
The 6% in the same period of last year.
Net income from continuing operations attributable to iPhone in the fourth quarter of 2020 was RMB 440, $54 eight minutes compared to RMB 900 on the $2 5 million in the same period of last.
The year non-GAAP net loss from continuing operations attributable to iPhone in the fourth quarter of 2020 was RMB eight two minute <unk>.
Moving from non-GAAP net loss from continuing operations attributable to iPhone of RMB $99 2 million in the same period of last year.
Moving on to all of our balance sheet.
As of December 31, 2020, the company's cash and the cash equivalents term deposits short term investments and the restricted cash for RMB 167 billion of.
Approximately U S dollar 255.
$5 8 million.
Finally, I'd like to provide of our business outlook for the first of quarter of 2021.
We are forecasting total revenues to be between RMB, $210 2 million and the RMB $232 million.
For net other hiding.
<unk> revenues, we are forecasting between RMB $192 million and the RMB 200 and of seven minutes.
For paid service revenues, we are forecasting between the RMB $18 2 million and the RMB $23 2 million.
Looking into 2021, we are actively implementing.
Implementing those measures, which can help us to overcome the current macro challenges and the recover all of our growth.
We will continue to invest in product offering upgrade.
And the strategy refinement revenue stream diversification and the user base expansion.
All of our investments.
<unk> in these areas have already enabled us to the off a strong pipeline for new growth initiatives.
By unlocking more opportunities for us to a full of new and the effective monetization systems.
Going forward, our unique combination of content.
The leadership premium brand equity and product innovation, while continuing to serve as key competitive differentiation.
As such we remain confident in our ability to navigate the current industry headwinds and the strengthening of our position.
Position at the forefront of China's new media industry.
Okay.
This concludes the prepared portion of all of our call were new.
Now ready for questions of.
Peter Please go ahead.
Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask the question.
Sean Please quest for one of your telephone kind of week for me.
Good day.
If you wish to cancel the request.
Press the pound key.
Okay.
Yeah.
Our first question comes from the line of.
Chen from Macquarie. Please ask your question.
Okay.
Yes.
Hey, good morning. Thank you for taking my question actually I feel very interesting that you're in the measure I feel good new business area in your prepared remarks.
Moving to grow organically.
Well use the <unk> some sort of a.
Uh huh.
True to the extent that's nice.
Yeah.
The so my question is what's your investment of threats to the 21 and the upcoming.
And then should we expect thank you.
Yeah.
Good morning, Frank <unk> other words speaking.
I will answer your question and actually you know this year, we have invested a 90 minute of RMB cumulatively.
In the three industry, leading the venture capital funds such as.
We ended two but.
This phone have extensive investment the experience and proven track record in verticals such as video platforms E Commerce.
The interactive and tournament, etc.
This investment should of not only deliver.
A handsome return of arguing.
All of our investment but to also expand all of our access to new innovation operating more timely insights in the latest the industry trends.
And the.
Of course, <unk> to say its new product opportunities in this.
Constantly changing internet of the market environment.
Actually you know in verticals, such as finance and the product reviews, we have made the meaningful progress in developing some new.
The innovative content debate for the product.
And the services to serve a wider.
For a range of users.
Going forward, we plan to ask for more opportunities in additional verticals.
Actually of all of our abundant cash reserve should enable us to upgrade of our existing products and the construct.
All of our content ecosystem.
The further develop our innovative internet of the products.
So that we can proactively cultivate growth opportunities for the future.
I. This is my answer I hope I have.
I'm sorry.
For your question Frank.
Yeah, Yeah kind of thank you.
Edward.
Thank you.
Our next question comes from the line of and Sugar of Zhang from 86 Research. Please ask your question.
Good morning management. Thank you for taking my question.
The question about the AD industry price guilty of year that management comment that the economy is gradually recovering, but I'm wondering if not improve elaborate at the board about the macro outlook.
Outside of some key out a bunch of calls on 14th of new one. Thank you.
Okay.
It's a very good question actually 2020 was definitely a difficult a year because of the COVID-19 for the advertising industry.
It's very challenging for sure.
Although during the second half of 2020.
So the economy in the AD placement starts to gradually improve.
Many of in the by the menu of industry still have not fully recovered two of your pre pandemic conditions.
When we look at all of our own other of our housing income reached in the pandemic recurrence in certain locations of China's I tried to Beijing.
It has affected all of our execution of some important the offline advertising events also the competitive dynamics.
Dynamics in the Internet industry is constantly changing.
So its more compact for.
For the advertising business.
Oh sales of of brand advertising should actually benefit from the cash.
Continue the economic recovery during the first the quota of 'twenty 'twenty.
When we look deeper into various sectors of our brand or other of our housing.
Mainly concentrated in industries, such as auto finance liquor and the receipt and the those are industries shoe the continued to recover.
Take the auto industry for example, China's passenger Union Association reported that the.
Auto production and the sales rose more than like for fold year over year in February of 2021.
Moreover, we plan to expand our market.
For the share in brand advertising for the new consumption sector seems healthy.
Through cooperating with social media platforms, and the short video platforms, such as Weibo, and wechat and the ability et cetera.
Our initiatives should.
The leads to increase the.
The revenue.
Contribution from the.
F M C G sector as well.
Additionally, as China continues to bring the COVID-19 under control all of our offline events such as the iPhone.
First of all.
Sure sure.
Well take place it will take place as planned.
The events should have very positive impact on the growth of our brands all of our hygiene business.
Over we will further enhance all of our content ecosystem and the increase of our carload.
<unk> with Phoenix TV, so that we can attract more high end users.
And the.
The.
Average user time spent of.
All of our product where we are.
The increase.
All of these efforts should it be very.
Help for 12 of our sales growth and we expect all of our brand advertising revenue to reach our double digit growth in the first quarter of 2021.
And the.
For all of our Pearl match advertising business.
All of our supply of inventory.
On the short video platforms.
Squeezed as the market share of other platforms still in the first quarter of 2020, we strengthened our sales and marketing effort related to.
Many business partners.
The apps so that way you are able to not only offsets the other.
The market competition pressure on all of our program Magic other housing, but also expand the of our opportunities to monetize traffic on the odds are sort of the party platforms.
We expect our revenue.
Revenue from this monetization channels to continue increasing in 2021.
The at the same time, we are.
Allocated more resources to innovating and optimizing features of <unk>.
All of our existing products.
The.
Created a better community environment increase user retention and the increased our investment in.
New product development.
The results of our efforts to the materialize gradually neither true on an overall improvement in.
Our.
The advertising south and the January the greater long term value over time.
This is my answer to your question. Thank you.
Yeah, that's very helpful. Thank you.
Yeah.
Our next question comes from the line.
Okay.
Question.
Please ask your question.
Hi, Matt.
Taking my question.
The next day.
Half of them now of spectrum.
Management team.
I wonder what's the impact on the phone.
Hi, Thanks.
This is Ralph the answer your question.
Our affinity Phoenix Tv's global reporting resource on the original content capabilities.
<unk> has been well respected in the industry.
And we believe its potential is.
Yet to be fully unleashed.
He says.
The recently Phoenix Tv's boarding new personnel for management team.
They have it.
Tens of.
The national background significant media management insight and experience.
The.
Deep government and it leaves the contact of mainland China.
Uh huh.
We are very covenant.
The two executives joined.
We'll bring in vigor and more resources to Phoenix TV.
This will accelerate.
Evolution into a truly global multi.
Of that channel media group.
And the further Alisch Phoenix Tv's brand potential.
Exemplify our finished Tv's voice of the international media stage.
And.
Enable Phoenix TV to perform a greater role in China's data integration into.
For the World economy.
And we believe as Phoenix TV media influence the expense.
It's been it's value should.
Should enjoy.
Greater potentials.
I hope this will as the pressure.
Yes, that's very helpful. Thanks.
Thank you.
Okay.
Yes.
Once again for those for other parts of the last question. Please press star one of your telephone.
Yeah.
Yeah.
Yes.
Hi, Dan.
For those who would like to ask a question. Please press star one of your telephone and wait for any day.
Okay.
Yeah.
[noise] again and star in the one to ask a question. There's no more question at this time as of now likelihood of the conference.
France back into the base speakers. Please continue.
Thank you operator, we have come to the end of all of our Q&A session and all of our conference call. Please feel free to contact US. If you have any further questions. Thank you for joining us on this call half of good day.
Okay.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.