Q4 2020 iClick Interactive Asia Group Ltd Earnings Call

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Hello, Ladies and gentlemen, thank you for standing by for I Click Interactive Asia Group Limited's fourth quarter, and full year, 2020 financial results Conference call. At this time all participants are in listen only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded I will now turn the call.

Over to your host MS. Lisa Li Investor Relations Director Lisa. Please go ahead.

Hello, everyone and welcome to you on creeks fourth quarter and for year 2020 financial results Conference call. The company's results were issued earlier today and are posted online you can download the earnings press release and sign up for our distribution list by visiting the IR.

Section on our website and I are debt I hyphen C. L E K dot com.

Yeah, and Tom T J, Chief Executive Officer, and co founder of I Click will first provide a high level review of the fourth quarter and fiscal year, 2020 results and share his thoughts on our execution strategy ahead, and Chief Financial Officer currently will follow and gave.

As for additional insights on the financial results for the fourth quarter and fiscal year 2020, and provide guidance for first quarter and for year of 2021, He will land and turn the call back over to TJ for closing remarks before the code is open for Q&A.

Before we continue please note that today's discussion will contain forward looking statements made on dirt of safe Harbor provisions of the U S. Private Securities legislation Reform Act of $19 95.

Forward looking statements involve inherent risks and uncertainties.

Such the company's results may be materially different from the views expressed today further information regarding these and other risks and uncertainties is included in the company's 20-F a spa.

Filled with the U S Securities and Exchange Commission and the company does not assume any obligation to update any forward looking statements, except as required under applicable law.

Please go that I place earnings press release, and this conference call include discussions of unaudited GAAP financial information.

As well as unaudited non-GAAP financial measures.

<unk> press release contains a reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures.

I'll now turn the call over to our Chief Executive Officer, and co founder Chin Tung T. J. Please go ahead.

Thank you Lisa.

On the welcome to the call everyone.

On the global challenges faced in 2020 brought a bulge, primarily by as the COVID-19 pandemic.

I'm extremely gratified to share with you our strong financial results for 2020.

And I believe.

Testament to the credit strategy, we have implemented under the strong execution on the dedication of all of the <unk> the <unk>.

Employees at our company.

Our customers continue to find the tremendous value in our integrated data driven solutions.

And we embrace digital transformation opportunities in China.

Meanwhile, we have formed the close partnerships with many of the industry, leading technology players, including but not limited to Tencent on net.

And.

These factors lead us to believe that our very broad future lies ahead, especially as the global economy continues to recover from the pandemic impact and as China's digital Revolution continues to involve.

Despite.

The <unk> impact.

COVID-19 pandemic has helped educate correct current.

On the potential brand the customers about the importance of digital transformation online to offline data integration on the day.

Analytics and efforts to successfully device personalized marketing campaigns and how.

And as the operating efficiency and ultimately boost sales revenue.

Thanks to our key account customers.

Focus strategy on a market leading position our enterprise SaaS solutions segment saw its revenue nearly tripled year over year in 2022.

H pumped.

<unk> 9 million U S dollars.

This was of course, one of the significant growth drivers of our financial performance in 2020 on.

And we expect continued growth in these segments to play a major role in our future financial growth.

2020 was another record setting year for us as we seed historical highs across all our key financial and operating metrics, including gross billings and revenue gross profit adjusted EBITDA and adjusted net income.

It is especially exciting to US is that 2020 was the first time, we realize the full year positive adjusted net income.

It is a true milestone for our company.

And indicates that we have successfully reached sufficient economies of scale with marketing solutions.

On the underscores the <unk> strategy and execution within our enterprise solutions segment.

As I mentioned in the past and.

Reiterated in the shareholder letter issued in January and key to our strategic and the financial goal of course is improved profitability and marketing solutions for.

Further growth in the higher margin enterprise solutions business and <unk>.

Additional partnerships with other global technology players and the leaders to further complement our product offerings reach and penetration, especially in the enterprise solutions segment.

To this and.

We started 2021 off strong with.

Our strategic partnership with Baldwin, a leading brand E. Commerce service partner that helps brands executed e-commerce strategies in China. Additionally, Baldwin has become important strategic and shareholder of iconic which underscores the importance.

Of this partnership for both iconic and the Bolton and.

His partnership.

Dick will provide front and the SaaS based solutions as well as a data analytics platform. While Barton is responsible for the online operation services on this.

The bike and the infrastructure services to brands.

Together, we will establish our industry, leading private dominant and traffic e-commerce solution based on the Tencent ecosystem.

This strategic partnership will provide lots of Senate just take benefits for iconic for.

First we will benefit from cross selling opportunities to over 200 on the safety of all <unk> branded partners.

Immediate access to such new potential key accounts is quite significant plus and <unk>.

We will work diligently to gain business from such new opportunities.

Second.

We can accelerate the conversion rate of our existing clients in our marketing solutions to enterprise SaaS solutions.

Comprehensive <unk> solutions, we provide to customers.

These joint efforts will save our branded partners from having to develop and maintain the infrastructure to conduct e-commerce business on wechat.

Recall that we serve more than 3000 and marketing solution clients on being able to convert many of these customers to higher margin enterprise solutions customers will certainly fit our longer term strategy.

We are confident we can become the first choice for key accounts customers through this partnership with Baldwin.

Expert on <unk>, the market share gain and.

Among the key account customers and in turn enjoy significant upside here.

Lastly, this strategic partnership will allow us to concentrate our resources on developing the standard of SaaS products, and we will use to penetrate the mid tier clients segment.

Which will become another growth driver for enterprise SaaS solutions business, we have focused on the key accounts customers over the past two years.

Since we launched enterprise solutions in 2019, and hive accumulated deep expertise for selective industry verticals and we.

Able to now leverage and replicate the standard modules used successfully with those early customers to tap into a wider.

Clientele.

In view of the huge market potential we anticipate committing more resources to enhance not only our research and development efforts, but also marketing initiatives. We have already established on the centers in Xi'an and hopefully.

Where we are aggressively building up a stronger on the labor force.

To devote to the customized solutions and developing the standard products.

Moreover, we want to further penetrate.

The mid tier clients market on that.

<unk> and we also introduced and the work with a number of potential distributors to help us drive additional revenue from the less penetrated.

Customer segment.

Looking ahead, we see 2021 as a year full of opportunities on the investments.

As always we remain very open to M&A opportunities that can complement our correct our current product offerings for enhance.

Our market leading capabilities in data analytics, and the omni channel management.

As for example.

Our announced acquisition of polygon.

We enhanced our marketing automation and <unk>.

Chris reached expertise and wechat based on CRM.

E Commerce.

On the marketing SaaS solutions in China.

And the LP are appropriate and product for both mid tier clients on the key account customers.

Beyond the continuous product offerings and enhancements. We are also keen to explore pockets or partnerships that have already built a significant number of specific industry verticals and clients, which we are able to cross sell our products to.

With this we are confident we can see synergistic benefits from both product integration and has a price.

<unk> of new clients through cross selling opportunities.

In the meantime, we will continue to execute on our international expansion strategy, which will be primarily driven by the partnerships. We have formed in 2020.

Due to travel restrictions, resulting from the pandemic.

We also see greater urgency for the international brands to execute at the China expansion strategy and <unk>.

Fact, this dynamic to offer us additional gross profit abilities.

This concludes my opening remarks, and I would now like to turn the call over to our CFO and <unk> to discuss the fourth quarter and for.

For year 2020 financials Teresa.

Yes.

Thank you for T J, and hi, everyone on where it is.

He is to share with you our record setting performance for 2020.

As T. J mentioned previously despite the challenging macro environment and bumped by COVID-19, we still managed to record highs in gross billing revenue gross profit adjusted EBITDA in 2020 as well as full year positive adjusted net income for the first time.

I would like to begin my comments with a few key highlights from the full year and the fourth quarter of 2000 and trendy.

We reported revenues of $234 7 million for China, and chunky and increase of 28% year over year.

Revenue for the fourth quarter of 2020 were $78 7 million.

And increase of 39% year on year.

The increase was driven by healthy growth and marketing solutions and a strong trajectory from enterprise solutions.

Looking at each business separately marketing solutions reported a record high 200, <unk> for a $225 9 million and revenue for 2020.

20% year over year growth.

For the fourth quarter of 2020 revenue from this business segment grew 28% to $68 1 million compared with the same period of last year, primarily due to growth and market demand on specific action marketing campaigns on.

I'm also very excited to share the result of the enterprise solutions business.

Which nearly tripled its revenue from 2019 and reached $28 9 million in 2020.

In the fourth quarter of 2020 enterprise solutions hit another record quarterly highs with revenues of $10 6 million.

The robust growth indicates the strong demand we see from our key accounts.

<unk> across selected industry verticals.

It is also worth noting that enterprise solutions accounted for more than 10% of total revenues just two years from launching this new standard.

Gross profit grew by 36% year over year, and the fourth quarter to $20 3 million.

And by 28% for the full year of 2020 to 70 feet on fee at.

$273 3 million mainly.

Mainly due to continued growth and marketing solutions and rising contribution from higher margin enterprise solutions.

As you May recall Chinese channel was not only a retro stacking gear in terms of financial performances.

Also a year in which we received tremendous support from the capital market.

We can paint a pathway paceman and a follow on offering in June and September respectively and <unk>.

And 'twenty and welcomed and number of prestigious international investors and solid long term shareholders.

As a result, we have a healthy cash balance, including cash cash equivalents can deposit and restricted cash of $94 5 million as of December 31st two.

<unk>.

Compared with $61 1 million as of December 31, 2019.

For the rest of my discussion I will focus on our long GAAP results.

You can find reconciliations of these non-GAAP results in the press release, we post earlier today, and which can be assessed at our Investor Relations website.

Adjusted EBITDA for the fourth quarter and full year of 'twenty, and 'twenty was $5 1 million and.

And $17 3 million respectively.

Both matches.

A strong increase compared with the same respective peer risks last year.

Indicating operating leverage debt the company has achieved.

As mentioned earlier on the call. We also recognized the first ever full year adjusted net income in 2020.

And it reached $7 6 million.

Adjusted net income for the fourth quarter was $2 1 million, making the fifth consecutive quarter of positive adjusted net income.

Gross billing and China, <unk> grew 6% year over year.

$276 million to $678 million.

Primarily as a result of increased demand from our key e-commerce.

On my Entertainment and media and online education, and training verticals and partially offset by the witness on that hotel and hospitality industry, resulting from the pandemic.

Meanwhile, in view of the high uncertainty associated with COVID-19, we and.

Strategically shift our focus for a high quality clients and business to manage our risk.

All in on the fourth quarter of 2020 was extremely strong and we believe it was a good way to finish the year debt was challenging and very many ways for.

For further information I'd see the detailed recap of other financial metrics and the press release, we issued a two day.

On January 15 2020.

And share repurchase program in which we could penetrate up.

Up to $10 million of our own ads for December 2009, and.

And in 'twenty.

On December 10 2020.

And lastly, another share repurchase program.

And wish we could purchase up to $15 million of our own.

On December 32020 to December 31st 2020 for Us.

And as of December 31st 2020, the equity values of ABS for Chase, what's the path for many $5 7 million.

I would like to conclude my remarks, with our outlook for the first quarter of 2021.

And for the full year trend in China for Us.

He has looked at our outlook for revenue is based on current market conditions and reflect our current gauge of the COVID-19 pandemic impact.

These assumptions are subject to change.

We now project, our 2021st revenue guidance to be between 315 minute.

<unk> $350 million and $535 million.

Revenue from enterprise solutions for the year is estimated to be between 60 million and $65 million.

We estimate our first quarter, 2021st revenue to be between 60 million and.

And $65 million.

Revenue from enterprise solutions for the first quarter is estimated to be between $10 5 million and $11 5 million.

Looking ahead of 2000, <unk> first and T. J mentioned, it will be a year of investment and for us opportunity for us.

We continue to be cautiously optimistic for the recovery of the marketing solutions as diverse and grow our booth for us on a global scale.

In the meantime, we remain very excited about the rapid growth on the enterprise solutions and the enormous total addressable market.

A few of these opportunities.

Okay Ah resources more strategically to house the profit growth on both business segments. Additionally, we will keep exploring more M&A and capital market opportunities that could help the company stay on track to easily into the integrated enterprise and marketing how platform.

The benefits on the rapidly growing on online to offline digital transformation and SaaS market in China.

With that and now turn the call back over to T. J for closing remarks.

Okay.

Thank you Terence.

Our strong financial results in 2020.

<unk> indicated that our integrated enterprise and marketing solutions are well received by customers, we will see incredibly significant market opportunities ahead.

On the online to offline digital transformation initiatives for many current and prospective customers.

The underlying consumer transactions such key accounts on the.

Enterprise customers are looking to penetrate literally amount to trillions of dollars and we believe our solutions can help such enterprises more efficiently on the.

Profit fully capture such spending for.

And our marketing solutions, we expect another year of healthy organic growth given the continued growth in the digital advertising market in China and.

Rising online advertising mix and programmatic advertising penetration, which is our key business focus and.

Necessary Foundation for the company as a whole.

We also expect the enterprise solutions segment to continue its rapid growth given the large blue ocean opportunities, we see as the digital transformation unfolds in China.

And we definitely see a higher.

Proportion of total revenue in 2021 from enterprise solutions than it was in 'twenty.

<unk> as.

As we've formed a very clear strategy to continue gaining market share with key account customers as well as tapping into the newly developed mid tier clientele.

And we will work.

Thanks Pete.

Pete digitally to grow our customers base in this higher gross margin segment of ours, given our outlook for both marketing solutions and.

And <unk> solutions.

And again, certainly optimistic in the company's resilient topline growth outlook, both in 2021 on and beyond.

I would like.

Once again to take this opportunity to thank all our customers and shareholders for their support over the past 12 months. It was a very challenging year, yet we believe our performance shows our ability to overcome tangles and deliver lead.

And <unk>.

Edge data solutions.

And generate shareholders value.

And so I want to thank all actually occurs for.

For the execution during very challenging times.

And dedication to the company.

Our people truly are the most important asset.

For the company.

This concludes.

Our prepared remarks, thank you for joining us on today's call. We will now open the call to questions. Operator. Please go ahead.

Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.

If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two please.

Please limit yourself to one question. If you have further questions you may reenter the question queue.

And for the benefit of all participants on today's call. If you wish to ask your question and Chinese. Please immediately repeat your question in English.

The first question is from Nelson.

Chang from C. I T. I. Please go ahead.

Hi, TJ and Terry and thanks for taking on my questions and congratulations on the strong quarter and stuff.

Actually I have a few questions.

And the company.

On my first question is related and strong guidance on enterprise.

And 2001 and.

And this year it right and you have incorporated and furniture.

And in Pittsburgh, and voucher and partnership and if so what would be debt.

Impact on on.

And on the partnership and also I would like to know what would be and that's how I get revenue mix for standard and stuff.

And soft product.

And 2021.

And my second question is related to eat and policy and.

And can management share the latest Cougar and.

And partnership and.

For example, how many times have been referred for budgeting right now and what is the progress on that.

And how much submissions and the Permian and network and finally, just a quick question on <unk>.

On enterprise solutions, and looking back into FY, 'twenty, what would be the tickets and message that measurement and extending and the transmission business and going for it and due to I think anyone has it nice and then overtime.

In terms of client acquisition product development and and and.

And.

And the whole thing and you kind of.

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And just.

Kind of any person who said that.

And nowadays.

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No. It's a good time.

And what that.

And that this is so I think that that's what causes that.

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You bet.

Target for the time.

And when she says.

Uh huh.

And Peter.

And you can't you seem to think that day.

Simple even when she does he said.

Debt could you.

And then exactly and Leslie.

Okay.

And aggressively.

Thank you.

Thank you allowed to and this is Darren let.

Let me take your first question is about the budgets on the Biogen deal.

And for the budget deal yet because it just takes off in the first quarter and so we probably have the other steps before we probably would.

And with the lives more income and solid cases going into the second half of the year. So the current budget doesn't really fully taking into account that property and 20% of debt was a budget right now, but we believe that there are more potential to come and that's for your first part of the questions on my quick answer.

T J code.

And your concern or the low.

Your question was about.

Execution pop out about and business T J P.

Okay.

And what's answer we'd always on either Doug or and you are just so you can model no flow through our mature sugars and bulgur and novel, Doug I'm sure you do you're closer to go deal with a number that's closer to a deal just hold on to show them Julien and feed on each other.

And on Yahoo, likelihood for Baldwin for me I'll be on though.

Jenny.

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Three is holiday Asia Chunky and could you go on.

I mean, the food for thought.

And long haul day, you go under and that you have you found any mix change and you go hold off on Oh cohort are you go beyond how big are fine, but there are no immediate debt Portuguese and the tunnel.

The gender issues legal and coaching to key in Changsha, just for the column and you go fine. So for sure you issue a harder question and sheet.

Oh, sorry.

And when do you see Google and she said those genes.

Jim John and Bangalore.

Okay, Let me try to answer the second part of sales.

And about cooperation with Hudson actually and the Boston deal was closed at the end of January and since then I click and boats and have established and and implementation team, which directly reported two Ceos for size and the teams meet on a weekly basis to talk about.

And the cooperation and our cooperation currently focuses on two areas first is we combine our best product and operation services into a complete solution to provide to our customers.

And second we are exploring the feasibility of these solutions on some client base.

Yeah.

For the whole quarter and neither do some movement you are with low Lydia so for sure.

For sure Womens.

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Cal Derma as usual.

Two good woman.

She has all the Asia $3 Lindsay hazards and meal.

And so the cycle time for.

No question.

I'm not sure and I understand correctly is that about the biggest challenges other lessons, we've learned in 2020.

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And where should we go for it on bother you go long and short haul so either Bosch and women shouldn't geological and <unk> co who are totally.

Woman and logical chivu coaching to the Doom and gloom. So there's either a gene you should finish on pay them all three to one and Janine and shallow well know arena and we watch issue, Yeah, Jimmy and love GE debt.

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English law.

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Because for which either coaching and Sean Oh Gee to choose.

True price, where the total is usually and Moshe freedom on woman and she says Jim Maloney and you'll be able to show that each year when Mr. Wuxi those challenges on leaving the gel and there you go cold drinks and shop.

Well in 2020 and.

We still think that the.

Digital operation or the sauce business on.

For the Blue Ocean market in China. Therefore, we have started to sell <unk> products to our key accounts, which is also our teams and after over and yourself print operation. The performance has confirmed our decision and also with low cost at the very beginning on for <unk>.

For their clientele.

And rapidly explore the business models, something so and the first two years and we.

And so on consumables.

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And we keep cool SASSA decided all Jewish woman and logical enterprise solution that you go you.

Are there and you'll see each Hong Kong, one and they'll just go on to normal Colombia.

So the bulk on me Dewey gene tree.

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And the bulk pool, a woman she's the chair Mayo and tie it showed the water issues going on with the corporate team.

And so either Martina and what makes you should we tie you only used years ago and she and the tundra.

Well, there's the enterprise solutions on me and show channel and tunable Commvault for dual fuel income quite suitable for children to cheer or.

Okay and you go coaching them on.

Tuition on women towards your on the hurdle for your partners, who didn't do other tier two Joel day to go cobalt and booking holidays. It goes and how this loss assumption there on what you want to hear beyond on how to solve for time being true to the accounts easy growth can you all who their to go on courtroom, arguing with LG General English and the law.

So next up in 2021 our enterprise solutions.

And we still have great potential for us to tap into not only in terms of day to a customer base, where we have great advantages over but also in terms of Mi and customers. This year, we will adopt and new strategy.

Yes.

And we cooperate with pelton in terms of enterprise it solutions.

On rapidly and efficiently on acquiring key accounts customers at the same time, the cooperation with banks and will allow us to channel more resources and developing more and better and.

Standard products to acquire and customers are in a fast manner.

Our pumps and a woman can go or do you go on that.

The highway jobs probably towards on your.

And the article on Jimmy Choo, either John that you should total for when they go and she she said you should xiaomi all of them and the enterprise solution you can imply that it goes to $3 and highlight our core changes and held true.

Tuition.

And a woman.

And Todd I just showed that women.

For Shanghai would choose to go.

For junior and would you go to and we all will quickly and those people go to non room for monthly Pongolle.

Sure go on January total Oh, sorry on the English all done quite as for the toward on window coating on genuine and clinician, former junior and who called the functional.

And.

At the same time and it comes to overseas expansion, we are working with Oracle to Takeda our overseas customers. We used the enterprise solution and we think there is.

Another big opportunity facing us is that we will leverage and strategic investments and acquisitions to rapidly acquire and customers.

Particularly interested as John and this year with other sushi and so this wraps up my answer to your question.

I think you mentioned and that's very helpful. Thank you.

The next question is from Brian <unk> from Alliance Global Partners. Please go ahead.

Great. Thanks, so much and can you highlight any changes and the end markets for marketing solutions for example.

And I will return at all E Commerce remains strong and any other vertical and it's worth mentioning and then secondly, you talked about a lot of different aspect.

Aspects of investing in R&D and sales and marketing.

Yeah and in relationship, obviously and as well as your enterprise business, maybe talk about the impact to or what what is the size of those and vaccines maybe from a dollar perspective on an annual basis.

From an expense basis. Thanks, so much.

Okay.

Okay.

Pardon me is your line on mute.

Hello.

I think I think T J and honest says for.

On my hand on actually the changes in terms of demand on the marketing solution and size and you do it.

And is still the e-commerce, the on like entertain them on and the education and sector basically.

<unk> sector, and a year and also taken off quite well going into 2020 for us and we see some of the travel and hospitality sector on brand and customer a lower rate and some of the projects and in the first quarter I think this trial and remain.

The same on comparing to the PPS and the.

The fourth quarter.

And then in terms of the investments and expenses and league.

Day, driving stronger growth for us.

And the enterprise side can you kind of touch on right you know the impact on on the expenses.

In the trend and chunky, we basically and on certain new engineers and R&D team in the enterprise solutions and particular, we add on more like a 200 engineers and the team. So probably we add on at least like 5 million during the year in terms of Opex.

Although the R&D in terms of the enterprise solutions. We also add on some marketing expenses as well and flow to the extra like 10 million for a year and 2020 and we believe the debt will still be going on to invest more going into 2020 first and we still project around 400 more engineers to be recorded.

During the year and also we are building up some channel partners right now and there will be some new projects and models in terms of E. Resell and models that we are going into when we work with these new channel partners and again I think our finished ready for US we would see some uptick in terms of fees on marketing and R&D.

But I should have a positive impact overall in terms of the growth and EBITDA and speed up offered us to growth in the enterprise solutions.

Great. Thanks, so much.

The next question is from Colin Lu from China Renaissance. Please go ahead.

Sorry, future terrorists a sense for the chance for the question I just have one actually.

As for regarding the partnership overseas, particularly with the oratory and the other you know overseas partners and the TJ also mentioned just now that you know we saw a lot of opportunities from foreign brands, you know trying to tap into Chinese market with the travel constraint, which we do.

Don't really know why and spend the knit top.

How should we see the partnership with overseas partners and how should we see the overseas Tommy for China will starve the business opportunities over there and it's going to be and it's sort of upsides to our.

Two our revenue growth.

And in this year and perhaps even assets.

[noise].

This is Terence I think the deal with Oracle was one typically San Carlos how we may work with some overseas Palace and I think already closed our solutions and they obviously, where we build solutions globally, but.

Probably in China, there will be some other you know adaptation and localization that they need to try to cater for and I guess our team with the local expertise for this some of the you know breakthrough.

Great Good partners for them when they tried to localize the solutions and also execute locally in China, We do have the domain and the knowledge and we'll be able to help them and to resolve distribution and also integrate that with our existing enterprise solutions and to provide more choices and values for the <unk>.

Customers internationally, I think going forward the <unk>.

International market particular, after the Covid when and travel would be permitted I think we would see even more these type of opportunities going around and no debt.

My income.

On that we will see if you get any comment to add on.

Okay.

Our growth what are you.

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And what about LNG and quieter two on could you. Please.

Please go tenants are going to do and you saw that would be all 10 of them.

Well as to our international business this year our strategy is.

To sell our standard products and sorting.

Acquired SaaS products.

Our sales channel our own sales channel as well as their strategic partner channels for example articles.

Okay.

Oh, sorry, how do I say that.

T J.

The next question is from Thomas Chong from Jefferies. Please go ahead.

Okay.

Hello, Thomas is your line on mute.

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In general usual.

Well, let me try to answer your question as to the enterprise solutions market and on China, I think we need to reported from different client segments in China, We think that enterprise solutions market can be divided into key accounts segments and.

Segments, and small and medium sized enterprises, so and maybe to adaptive and strategy to tackle with or to serve different client segments and if all these years, we have been focusing on key accounts, who not only need standard products, but also customers customized services.

And they need to match or income standard products with their own and such.

Yes, and activity at key accounts customers and debt.

And have been growing our ecommerce platform in China and need of suppliers to help them use the tools and the products and get daily operation.

After two years of operation and practices in China. We now have established quite advantage over key account customers and in particular the early this year, we have established a cooperation weighs about Sweden, which will further consolidated our leading position and our key accounts segment.

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And again.

So as to the Mi and customer segments, and small and medium sized customer segments standard products will be a better choice and.

And the second half for last year, we've already launched and standard SaaS product to cater to the needs of these two market segments and this year, we're going to formally.

Enter the competitive landscape of debt may and customer market segments and to the U S.

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On market segments, and some mid and customer segment.

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And specific segment, but I think that me and customer segment is a huge one and we have found our execution pathway.

Key areas of the.

Yeah.

Explore exploration. So later this year, we are going to disclose our operational data and we have already developed our products and try them on some.

Other customers suddenly and so I believe that this year, we're going to gain enough growth in this market.

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And with Asia and.

Enterprise solutions sales, particularly on the on the easier cheaper and they use your comfort zone.

This is my view about the and practice solutions business in China.

The next question.

Sorry. Please go ahead.

And this is my view about enterprise solutions on China.

The next question is from Carson low from HSBC. Please go ahead.

And I T J and he said.

Thanks for taking my questions and congratulations on balance and strong quoting yourself.

And I have people can do you really need to do and so.

And so that's where you can do for them.

Thomas and about the competitive landscape.

Landscape. So so in terms of the and employment.

And all that stuff going to tap into the nuclear life and new market. So from the customer perspective and that is one thing.

In terms of the.

And so what is the differentiator and bought back.

Well, that's just like what do you do have measured channel Nemo and then and then in terms of the margin. So because we are going to adopt that'd be kind of a model.

And how it's been margin holds out for.

And then you signed up for that.

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Okay.

For the enterprise security and so so how many customers.

And then and people and then and what's the.

And the number and abide by and kind of shrinking and and and also all of the customers acquired in 2019, so I'm coming up and a cycle.

And should we be new contract with us.

Pretty crazy.

Hi, Catherine.

I'm not sure for the questions and let me first take the questions about firstly, our customer number for 2020 and the fourth quarter and then about some and.

<unk> about the margin profile would be.

In terms of the new standardized products.

We are going to launch, especially on <unk>.

And the fourth quarter of <unk> on the key accounts.

Tie ins on the enterprise solutions, we got pretty much again, and another $50 60 clients. So all together for years is actually.

Two 200 already for the enterprise as a solution tire and.

And our retention rate right now is pretty well over 95% plus we pump and the views of some release more guidance, but not significant one.

And in terms of the you know.

Our margin profile about the new standardized solutions that we're launching I think comparing to some other peers you can see some of the standardized product pretty much would enjoy relatively high gross margin.

70, 80% plus I guess, there would be some.

Accounting models that will lead to further.

Study, but basically debt would be the time off on modules that were also looking for for the standardized product and they would be substantial on a much more marketing dollars in <unk>.

Terms of some revenue sharing and speak to some other channel partners and that probably would be like 50% in terms of the.

Dollar general weighted have to be share with these other disagree with us debt.

That would be the fact that in the operating expenses as part of their you know.

Sales and marketing dollars as you guys probably for me.

And that's a typical models and we are also looking forward towards a similar profile at the moment, but that happens and so we didn't really run into debt in 2020, we just kicked off debt part of business in 2021st and non we need significant at the moment and I think thats.

Hi.

And this was some of your questions and I will leave the for the differentiation.

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Wow, Okay and.

To answer your question about the difference between our standard product and competitor products first we have a very clear positioning for our client base, we target change.

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And third and fourth tier cities in China, and I believe they on a lot of them and the Chinese market and the second.

And we not only provide me apps to them. We also have the social CRM.

Based on our Wechat work product sales.

And these products.

These enterprises to improve their operating capabilities and better serve offline customers and can also help and channel offline traffic to online platform.

So our different day lie too.

Areas first is the.

Offline to online and integrated solution based on Wechat work and the second is we have accumulated a great operational experiences with key accounts customers. So we can replicate these and operational methodology and practices to serve me and customers and.

Conclusion.

And what differentiates what differentiate us from others.

Not only for a product we also help customers to understand how to use our credit.

And there are no further questions and I would like to turn the call back over to the company.

To Lisa Li for closing remarks. Please go ahead.

Thank you everyone. Once again for joining US today. If you have any further questions. Please feel free to contact <unk> Investor Relations Department through the contact information provided on our website. Thank you.

This concludes this conference call you May now disconnect. Your line. Thank you.

Okay.

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