Q1 2021 36kr Holdings Inc Earnings Call

[music].

Hello, Ladies and gentlemen, thank you for standing by for 36 Square Holdings Incorporations first quarter 'twenty 'twenty, 1 and earnings conference call.

At this time, all participants on 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 Jingly IR manager of the company. Please go ahead Jean Thank you.

Thank you very much and Hello, everyone.

How do you express.

Earnings Conference call, the coffee and financial and operational results.

Already today and have been made available online you can also view the earnings press release and a bad thing.

Our section of our website.

And our job searches and dot com.

On today's call will include our co chairman and CEO, Mr talk on the phone and our vice President of Finance and kept on market is starting day, Mr. Phone will start the call by providing an overview of the economy and performance highlights of the call her and Chinese followed by English interpretation.

And then provide details of the comedy and financial results before opening the call for your questions. Before we continue. Please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995 from them.

Looking statements involve inherent risks and uncertainties as 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 prospectus and other public filings as filed.

I'll start with the U S. SEC the company does not assume any obligation to update any forward looking statements, except as required under applicable law. Please note that such interest per earnings press release and this conference call include discussions of that.

And I'll, let it get financial measures as well and all that.

The non-GAAP and Tomatoes.

He says Caris <unk> press release contains a reconciliation of the ollie's and.

Non-GAAP measures.

GAAP measure.

And though that Oh amongst members on beef.

Now I'll turn the call over a couple of co chairman and CEO. Mr attack on phone calls. Please go ahead.

Yeah.

That's it out and yes.

Thank you Hello, everyone. Thank you for joining us today.

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As we've been true or further into 'twenty 'twenty, 1 China's economy is gearing up for a new normal after steadily emerges from the COVID-19 pandemic and this contest, we are studying and regaining growth momentum and Brooks and our coal competitive at the leading platform for new economy growth book, a specific content and service offerings and Chi.

Anna with continuous long term investments and our content products and technologies. We believe we are well positioned to.

The seats are immersed commercialization opportunities in the digital transformation of traditional enterprises.

Rice of enterprise and service market.

The integration of private equity and public equity market and.

And the shift towards short from video across digital and content industry.

On looking for the unlocking value and public customers users and investors.

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During the first quarter events again delivered record setting performance and total user traffic with average monthly P vs jumping to a new high of $829.3 million, representing a 75% year over year increase and a 32%. So crucial claim this from matrix represents.

Pulp and secretary of culture of PV growth underscoring, our exceptional ability to generate new economy content operating to our brother and growing audience space.

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Actually the growth and our traffic and user engagement demand from advertisers continue to demonstrate growth momentum and the first quarter, where do you like it.

To achieve a 55% year over year jump and advertising revenue increased in both the number of advertising customers and average revenue per advertiser and cutlery compared with essentially write off 2020.

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Our existing and emerging advertising Sackman force recovered at a faster pace propelling us towards a more comprehensive marketing service model.

This is true multinational corporations.

Domestic brands and Internet Giants or our cash.

Zinc quintile have covered more verticals, such as health care artificial intelligence and social networking the pleasant to see certainly fits KR is increasingly become the go to partner for faster and new economy companies as well as any brands.

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During the first quarter, we continue to refine our content platform and product offerings, which are the foundation of our commercialization.

Got it and platform strategy remains intact as we are dedicated to further strengthening our content quality.

And diversity through growth P. D C and UDC, our professional produce our content continues to enjoy high popularity and the parent like word of mouth effect, we published our numbers insightful analysis report heavily market updates as well.

Thought provoking editorial and commentary every single day.

As a content platform, we also endeavor to attract and cultivate more quality content creators and continuously expand our content generally.

To cover more each market and the size and broader user demographics.

And what other people can have as well.

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In addition to our proprietary platform, we continue to leverage external resources to expand our user reach and we know what with almost all major third party platform, including Wechat LIBOR DAU in partial PV BV and most recently cellphone true in the first quarter there.

We're over 160 pieces of conscience published on such as its Caribbean official accounts that have gained readership of over 100 fold and Tam speech.

In addition, our newly launched Wechat accounts.

Customized for the younger generation and their lifestyle and business strength is well received by the audience with a fast growing and never a fuller.

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Yeah.

Furthermore.

And stay on what capabilities and video and audio content and want to broaden our offer and matrix and resonate with a wider user base, especially the younger generation during the first quarter on a lot of screaming and short form video content initiatives continue to fuel additional user traffic growth.

Specifically, our self produced video content and flip.

They're true gained further traction with our 4.

And for meaningful or on the third party traffic the platforms at the end of first quarter.

53% sequentially.

Attracted more than 647 installed and fillers and <unk> with our video content garnered over 616.

16 million total views also in our KR finance accounts attracted around 3.6 meaningful spurt by our high performance.

Trendsetting video contents.

Recently, we also created a content distribution accounts also holds true and we are excited to have witnessed fast follower growth on this new channel.

Our short form video content continues to gain popularity.

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In terms of commercialization of video content, we have entered into collaborations with the variety of elite brands, including elite, Yeah, Bobby and HP for video margin services. Moreover, we are expanding our audio based content integrating multiple forms including tax image.

Thank you all day and life screening of beach, and aim to providing customers with a comprehensive area of content and solutions.

Yeah.

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On the product front and the first color. We continue to operate our 36 care app and effort to copyright on organic and prepared for user growth.

Edited and your eyes desktop visits features to be 36 here app, providing users with a more accessible and easy to use way to discover and broth content. We also enabled and you'd have function. Our statistics here app for users to access live streaming content.

Our own mobile app to deliver a smoother content viewing experience across our platform for the first quarter 2021, the average content consumption for personal ollie's 35th per App increased by nearly 40% on.

Year over year basis.

What kind of children's and always held and since you've hit without you and hinder our decision on <unk>.

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Last but not the least we recently launched a brand new product.

Margin product over the years 36, KR has accumulated reached experience and expertise in serving new economy companies and private equity market participants.

It's a natural extension to provide services for the professional public equity market sector and beauty.

And then accomplishment.

We believe we can replicate this success with relevant public aftermarket content and graft new opportunities and this tremendous market, our content and service offerings across pre and post IPO companies. It was there.

With its rapid growth with positive market feedback and then.

This strong performance with both its confidence and our ability to drive growth and there is promising and field.

And I always tell me that and I think I would tell them and says yeah floating rate debt.

I would like to share some color on progress we have made with new initiatives across the enterprise services is a space.

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Very excited to have made meaningful strides and enterprise services review puzzle beta launch last year and distribute additional destination to discover and select enterprise services in China. The reveal portal has showcased over 3000 enterprise applications as of March.

31st 2021, more specifically the reveal platform launched the rankings and.

Telegent stuff, where on a going basis and spring 'twenty 'twenty, 1 featuring leading companies and industrial experts and DPI space and prompting common on various spi products from hundreds of enterprise customers.

And also range exclusive meetings for <unk> software and software brands and enterprise customers to facilitate potential procurement transaction.

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Yeah. So the hydrogen unless you talked about and view excuse me and I'll put on your toilet, Michigan and CF will equivalent hot rolled out and the Yo Yo shops with you don't hear you Jamie do you want on for her and the law.

And so digital momentum gains went on Hunan and Shandong industrial sales.

And you talk to each of which he had a zone without major.

Handled within Tendu, Guangzhou and Shanghai Channel share came in at Aveo conjecture on some bullish on Ventura and Youtube. According to your name and what Youll share ETF voyage on them.

And it also includes share 42.

Yeah addition, now working diligently to extend our value added enterprise and service offerings to more cities and villages in China ride the wave of digital transformation.

They are confident that our graphic expansion initiative will bolster our ability to scale our enterprise services.

Especially in partnership with local governments and value chain resources and this fee rates during the first quarter, they pivoted to develop the coop.

Collaborative opportunities.

Enterprises, and the local governments and her.

And Shandong and who not to date, we have expanded our footprint into tough cities, including virtually Mac cities like Hangzhou consume Chengdu and Guangzhou.

And we plan to expand to more about all provinces overtime.

This effort supported our capabilities to build up a modest visits and and dynamic enterprise services ecosystem and.

It's very new economy, driven governments across the nation through our engaging and valuable content as well as our comprehensive service offerings.

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Q2 reported on July 8.2 times equally tentative essentially maintain gimbals ya.

The development on the Internet and China had been fueling changes.

Islamic system average core technologies have been refining redefining more and more economic activity.

This included this information digital merchandise and digital finance access and increasing share of this.

Business activities going digital.

COVID-19 crisis has especially accelerated digital transformation across the bedroom range of business activities.

And believe that within the next 20 years all economic activities.

First of all it go digital.

Internet companies and the traditional companies do in virtually involved new economy companies.

And we see huge opportunities emerging in the digital transformation journey across the board and keeping this in mind, we are poised to set up our strategic efforts to grasp the growth potential.

We have a theater and then you find out from work from home.

And also by his actuarial and so those Eagle bulk will you can somewhat indulgent Wichita Hangzhou Zhengzhou attorney on the co Gen and cause us to June.

And 1 way, though to television our Youtube channel largest channel syndrome E zone, with a shower or go to China, and Japan and led by Saudi are being R E and put it that way.

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On May 11th we hosted a China from partner future summit, and Shenzhen, attracting hundreds of mainstream investment institutions, which included first tier ERP into.

And the national investment bankers and globally, well known ft pump.

And its flagship summit featured a key nodes on the dynamic opportunities and challenges facing venture capital and equity markets, bringing insight to our customers and users and.

On May 11th May talk also in Shenzhen, we hosted the 'twenty 'twenty, 1 wide innovation leader conference.

And of industry, Kols, leading companies and analysts attending that event.

And the Onstream surrounding new technology, new consumer and new health care sectors.

Financial and then.

And they usually based on growth.

And you can see that it assets and sometimes even flow from the thinnest.

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Moving on to our subscription and services with a firm commitment to serving the 6 major communities of China's new economy, our subscription services.

Successfully engaged enterprises governmental agencies and capital across the country.

For example.

Ah Connie membership product and at Speedway stock class.

And direct results with support from the government for stop.

This type of support was put in practice during the quarter in changing during the first quarter in Kingdom, and Fujian and Guangdong.

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And Matt on the Jonathan Hughes with you on the champion and hopefully they'll play out and.

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And we like to hear your thoughts.

And as you financially as you've heard on Schneider.

Yeah.

In summary, Luke you had 2 'twenty 'twenty 1 day.

Believe demand for statistics hair and diverse service offerings from.

Our growing based on new economy participants and you'll continue to thrive in the fast evolving digital this is content.

Go to content and service platform and the Chinese new economy space and these will continue to diversify our product and service offerings as well as boost our community and user base.

While exploring new growth avenues.

<unk> and multi body margin monetizing.

Monetization and we are confident that our long term fundamentals position us well for the hat and new business development.

Coming on with several of them and does how does it make you confident that really.

That's helpful and so thats, how I mean, those are all gotcha gotcha.

Is that I will now turn the call over our VP of finance capital markets and easily and they will discuss our key financial results fiscal happening. Thank.

Thank you Paul and Hello, everyone. Our first quarter results got the year off to a solid start as Paul mentioned earlier, the rebound and market demand underpinning, our strong such and 8% year over year growth in our <unk>.

Advertising revenues in the fourth quarter also and we continued to shift our resources and focus towards higher margin businesses, we saw substantial year over year increase and both growth profit and growth profit margin innovation net loss narrowed substantially and this quarter compared to the same period of last year going forward.

We remain dedicated to building on our content strength and growing monetization channels to seize and mass new economy opportunities.

Now I'd like to walk you through more details on our first quarter 2021 financial results on.

Online advertising services revenue increased by 58% to RMB $33.2 million and our first quarter of 2021 compared to RMB $21 million and the same period of last year.

The increase was primarily attributable to the strong recovery and growth of market demand in the first quarter of 2021.

Enterprise value added services revenue were RMB $6.9 million in the first quarter of 2021 compared to RMB $42.8 million and a same period of last year.

The decrease was primarily because we continuously shifted our focus towards higher margin businesses and starting from this quarter with <unk> to act as a principle and certain low gross margin businesses and the only active and thought agent.

As a result revenue of such businesses were recognized on that basis from this quarter onward.

And to increase comparability of operating results and help investors better understand our business performance and operating trends, we introduced the gross transaction value as a supplemental metric to describe our business.

Gross transaction value of enterprise value added services was RMB $32.5 million in the fourth quarter of 2021 compared to RMB 42.8.

And 8 million in the same period last year.

Subscription and services revenue increased by 140, 154% year over year to RMB $3.4 million. The increase was primarily attributable to the growth and institutional investor and enterprise subscription and services.

Total revenues were RMB $43.5 million in the first quarter of 2021 compared to RMB $65.2 million and the same period of last year.

This is mainly due to the aforementioned on the change of revenue recognition for our enterprise value added services were RMB $25.6 million variance between net revenues and gross transaction value if.

If you do the math you will see actually our overall business strength is upward and and demonstrated solid year over year growth.

Cost of revenues decreased by 6% to 6% year over year to RMB $20.2 million in the first quarter of 2021. The decrease was primarily because we continuously shifted our focus toward higher growth margin businesses. As we mentioned earlier in the enterprise value added services section.

Gross profit was RMB $23.4 million and the fourth quarter of 2021, representing a 329% increase year over year.

Gross profit margin was $33.7 in the first quarter present in the first quarter of 2021 compared to 8.4% and the same period last year.

Operating expenses were RMB $64.8 million and the first quarter of 2021, representing a 37% decrease year over year.

This was mainly due to the decrease in G&A expenses in the first quarter of 2021.

Sales and marketing expenses were RMB $35.7 million and the first quarter of 2021 compared to RMB $34.9 million and the same period of last year.

G&A expenses were RMB $20.2 million in the first quarter on 2021 compared to RMB $59.3 million and the same period last year. The decrease was primarily attributable to the decrease in the allowance for doubtful accounts and share based compensation expenses.

Research and development expenses were RMB $9 million and the first quarter of 2021 compared to RMB 8.5 million and the same period of last year.

The increase was primarily attributable to the increase in payroll related expenses, partially offset by the decrease in share based compensation expenses.

Share based expense share based compensation expenses recognized in cost of revenues sales and marketing expenses research and development expenses at La and G&A expenses totaled RMB, $2.7 million and the first quarter of 2021 compared to RMB 13 million and the same period of last year.

Net loss was RMB $45 million in the first quarter of 2021 compared to RMB $95.9 million and the same period last year non-GAAP. Adjusted net loss was RMB $37.8 million and the first quarter of 2021 compared to RMB $82.9 million and the same period last year.

Net loss attributable to Soliris, they pay our holdings ordinary shareholders was RMB $39.5 million in the first quarter of 2021 compared to RMB $95.4 million and the same period last year.

Basic and diluted net loss per share were both RMB 3.8 and the first quarter on 2021 compared to RMB 9 <unk> and the same period of last year.

As of March 31, 2021, the company had cash cash equivalents and short term investments of RMB $174.1 million compared to RMB $209.2 million as of December 31, 2020.

The decrease was mainly attributable to an equity investment we made in the first quarter of 'twenty 'twenty, 1 with a total cash consideration of approximately RMB 30 million.

This concludes our prepared remarks today, we will now open the call to questions. Operator. Please go ahead.

Thank you.

Participants who wish to ask a question. Please press star 1 on your telephone keypad and wait to see name to be announced if you wish to cancel your request. Please press the pound or hash key for.

For the benefit of all participants on today's call and if you wish to ask a question to management and Chinese. Please immediately repeat your question in English and thank you once again at Star 1 on your telephone and ask your question.

Yeah.

Okay.

Yeah.

Okay.

We have the first question from the line of Winston Puke from need have income.

Got it.

Yeah.

Vincent Your line is open you can ask your question now.

Yeah.

Yeah.

Okay.

Yeah.

Yeah.

Once again Vincent from Needham and company. Your line is open and you can ask your question now thank you.

Thank you management and also taking my question.

I have question I have.

2 questions first question is on.

And can management share of debt.

I'll comment on the overall market recovery and the first quarter 'twenty, 1 and how we see and.

Chance that we can share from the rest of the year.

And the second 1.

The question is.

Oh can I should comment on the claims expense.

We saw 6 KR.

Oh.

It was mentioned there from international clients have reduced day were finished.

They're spending.

Have they have returned and the how would you or spending.

And engagement by client this quarter.

Yes, that's right.

Okay.

So again deal and as you're going into the.

Could you just hold and therefore, the Ohio to walk on hold off on your horse you show here with us and well answered here from.

And from the $3 is are you signaling and countless English here when we cut off on 1 of these again and that you want you can go on hardware.

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Based on core and shell and.

And we want to know what's actually going on here.

I'll switch it up on Washington.

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You put on CAGR behind on the cohort.

And the whole shorten the time here and there.

And my question here and that kind of tobacco hoteliers share, Oklahoma with Oklahoma.

And you're close on them.

Okay.

The worst of the pandemic appears to be had out there.

We are seeing solid economic recovery and rather improvements across various industries.

More specifically a few new economy companies spearheaded the growth in the aftermath of the pandemic.

And as such our advertising business gathered from momentum in the first quarter.

This year over year revenue growth.

58%.

And at high <unk> services, our new economy customers continue to grow both in terms of number of advertising customers and average revenue per advertising customer.

And we achieved on more than 100% growth each and advertising services for several verticals, such as consumer and lifestyle ecommerce artificial intelligence and healthcare.

In particular advertising services for health care customers delivered explosive growth.

We are actively managing to tap into <unk> opportunities in the artificial intelligence and health care.

And at Pratt and new customers.

And looking forward to 2021, we expect our advertisement demand from branded customers, especially and multinational brands to increase compared with last.

Last year.

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Although our hotels and they try and Oklahoma.

And with the cultures and knock on wood on the EBIT loss was on both the country and as you. All you can range up to the columns, Nicole and she said I'll get started and tell the whole of inquiries on <unk>, calling from cities and countries.

And congrats on a on cold weather, Colombia, catching on to what you're going on on the sheet.

And we use it or share repurchase will depend on the take up on 1 other thing.

And as usual with Canada, and Mexico to try and nickel will cut into.

However, try it out on these undrawn.

And I'll hold off a little sooner.

And I should have reopened over here and you're going to be where she tells me and I want to remote learning.

And we don't have to do on the phone for part IV and again.

And I'm sure people sitting on the long haul you're hearing from vertical on cohort.

And that entire KOL day shipping.

So you're going back from here on from Los Angeles, and shifting now to the auction and that type of engine and you'll hear from smoking medical Q on someone with US I know you called profile shifting on call went on people that you have a day okay.

Overall and.

And the candle and of course yours I know in Pakistan.

Can you talk once your children and the trial has a whole lot.

Yeah, I'll do a quick translation.

Categories, our advertising customers into traditional customers and new customers.

And the multinational companies accounted for the majority of traditional caspers and first cutter leased on average revenue traditional capillary increased 11% year over year.

The first quarter is traditionally a slow season for advertising demand.

We expect the average revenue per traditional customer to see substantial year over year growth in the following quarters.

And along this global recovery from the pandemic.

So advertising demand from multinational customers Bradley rebounded well.

We also saw a stronger growth and advertising needs from domestic new economy companies, such as growth and new customer and as sections.

Meanwhile, we are making progress in improving our advertising products such as video advertisements to attract more customers.

On consumer brands have her interest and this cannot predict as they lead to reached to more new customers with exposure to 36 Harris video conscience.

In addition customers who are rebuilding their brands and expect to complete.

Transformation of Brent at and and keep our leverage statistics Harris video advertising products.

In this regard but is it power has become incurred and patent partner for our traditional brands that are in their transition to worse nearly come and company.

Yeah.

Thank you. Thank you.

Thank you.

Well, we have our next question.

From the line of.

John <unk> from Credit Suisse. Please go ahead.

Thank you.

And the management I have a question on behalf of coming from.

Can you come on to and his scorecard.

Pumping margin in relation to the change.

Change nature and what have you.

The outlook for the G P and in 2020.1.

On the phone.

Circumstances that have changed the accounting recognition because net basis and also the business flow.

Okay.

And so.

She came from day 1 of coupon.

And any change from Q.

Management.

Hi, John This is Lynn and I will take your questions. Yes, you can see that our Q1 gross margin actually was a substantial increase compared to the same share of last year on gross margin climbed to 54%.

And this quarter on compared to 8.4% last year I think they are on a couple of reasons here and first of all obviously, we have been shifting our focus towards higher margin businesses that was said earlier and also we implementing some cost control measures. So altogether. This helped our gross profit and a gross profit margin.

And to increase and secondly, you also mentioned that starting from this quarter. We are starting to recognize net revenue for our enterprise value added services. So this will not affect of growth profit, but it will definitely help increase our gross profit margin to some extent and.

I also want to highlight that as you mentioned, yes, we changed the revenue recognition for our enterprise value added services revenue from this quarter onward, and actually if you.

Take that into consideration and if you do the math you will see that our overall business trend is upward compared to the same period last year and have demonstrated solid growth and.

And the reason that we explained in our earnings release as well as in our prepared remarks is because we are.

Shifted our focus and resources to higher margin business. So as a result for some lower margin businesses. We only act as an agent and where previously we act as a principal and in the slot businesses. That's why we started to recognize and that revenue for those businesses.

And also for your question on the outlook of growth margin and <unk>.

And for the remaining remainder of the year 2021, I can assure you that our gross margin will be on a continuous improvement trend for.

And for the rest of the year.

I Hope this answer your question. Thank you.

Sure. Thank you that 2 and half from.

Thank you.

We have our next question.

And from the line of share has dropped from <unk>. Please go ahead.

And that's a hard against you guys now on my Guang in Kentucky.

No.

But we feel like that and see if you can do on the dashboard.

And whether you could tell us how bad can you go and things out and now I would translate myself quickly cause the management management and share more color on the details and future strategy of the new Kodak such as enterprise and Rich review portal. Thank you.

Obviously, you touched on how did we get typically.

Every day, and Haynesville and in Shanghai substitutes, whether you're going to hinder on what's on what's your.

And yeah lifecycle here for the channel.

Oh sure.

Sure.

And accordingly.

And now that you've got us looking internationally.

All of your emails and handle the large losses on that.

Thanks, Tom Mahoney, you did all technical Tiffany and you don't hear Saturday and Kevin.

And if any of these instruments.

And while you're pulling guidance you measure.

And you can also of course you Aman.

And do you need from that from them.

So what you're hearing from you.

And well gosh, if at all and the way Aqua Virginia.

With me on your phone and you can't necessarily on the holiday.

Hum.

Sure John Romano Chief bundle from them.

Cohorts Chicago.

And finally, the cash over to Jonathan and Tom Yeah, you're going on.

And all of them doesn't gotcha.

Okay, I'll do a quick translation.

Our Enterprise Service review hotel has been and our latest attempt and appeal of enterprise value added services.

We launched 8 last year, a bit to build additional destination to discover and select enterprise services and China.

The reveal product have showcased at more than 3 father and enterprise service applications, mainly in the field.

And I see I am on the collaborative posts.

And this year.

We expect a more enterprise service suppliers too.

Our platform.

By addressing enterprises digital transformation and demand be.

We aim to further leverage our stellar brands high quality content offerings and data insights to provide enterprise service providers with a platform to acquire customers.

Thank you.

Okay. Thank you very much.

Thank you can we move to the next question.

Yes. Please.

We have the next question from the line of Jay Dong from Th capital. Please go ahead.

Yes, Jeff.

And then question hold on question queue.

And so probably you could they be Barclays hold on.

Okay.

Oh, and then didn't see and hit a little on the artist.

Sure.

The accounts are going through Covid.

And you go teach and on behalf on Shanghai and Israel.

All of them and the minimum cash.

And I have a hook kindle and and all things you hanging and Nabokov Minneapolis on follow on on time and helpful.

So you can control and put all of them on Andrew parking and we had no charge and shop and you can put out and Ali.

On the Huntington Shanghai.

And in some ways.

And depending on how Fortinet there you go.

Okay.

We're counting on.

And what kind of on.

And on People's what album, and County home and Shanghai to hand on it and get.

Hi, Sean and Tony.

And.

And we recently launched a brand new public equity market per day, providing stopped.

Provoking adequately and countries insightful analysis report and premium offline activities to participants and the public equity market, including pre IPO companies listed companies.

And securities companies.

Our public equity markets product has gained popularity since its launch reached cruise and our ability to drive.

Job growth in this province, and food and.

And we are confident and this new product will become a classic product and content and our survey.

Offering suite.

We strengthened our current content and service offerings and private vaccine.

Private.

Private markets and.

And extend to our broad and field.

We believe in the great potential in the public equity market.

<unk>.

Okay.

Yes.

Thank you.

Can we move to the next question.

Yeah.

Yes. Please.

Thank you we have the next question from the line of <unk> <unk> from <unk> Securities. Please go ahead.

And can come on from Paul Cheng from 1 well on quantum.

And would you go on won't be the huge on coupon.

From a mogul Mcdonald's on Cowboy Central bump if you want to move on global controller, and Washington and she.

And I'm sure are gone.

Paul Why don't you worked on with the vote for the motion.

So all on transform our caution among demand on hopper cars from Obama and shop visit weakness could you explore more all day.

Monetization from watchful Bombay Oh.

Okay.

Is it on promotion more almost home on.

On the call.

Thank you.

And so the only thing.

And that's okay. If I'm on the initial view carcinoma and oxygen.

And as you will have volume and Michigan.

Thank you.

And also the killer of women and men.

Hello, Hello, Hello, Hello, and handle that 1.

Data from organic.

Sure.

On a dollar to go 3 years and hold me.

Come on can have on potential Dol proposal on for passenger about.

And I have and Georgetown.

Hello, and thank you Sir.

Oh, and then talk with initial HCR real share.

On 1 side of elephant.

After the White House is holiday title.

And though because I think the hockey and on capital and somebody who's RASM to closer to him that exactly.

Exactly when and cash without having any on that I'll hop on here. So how should we also buy and so anyway, It's Ashley Hall on Wednesday.

And as you can.

The whole shoot caution on it.

And Youre talking about what you do if you have probably a cohort for them getting on.

Looking back.

And if you go out to go forward and how should you got them all.

Yeah, Okay, and how should you go from harmful top yeah sure I'll put you on is that when you use a day.

Kahala for pneumonia that Howard I'll share that data.

Do you have any and Chicago on the other share for <unk>.

Okay.

She's here to go try and give you Saturday.

Jonathan and the Navy.

Particularly on the share.

Florida.

Sure.

I'll do a quick translation.

And we launched our self from video initiatives within a year and we are happy to see that we are getting a good.

A growing number of followers on out.

Sure.

And <unk>, Oh, yes, and recently and suffering through a.

Share some.

Numbers are.

Sure.

All of our.

Current shelf on videos a day.

And the first quarter.

Our self operated video content.

And over $404 million on the third party traffic platform at the end of <unk>.

For the first quarter up 53% sequentially, we attracted more than 647 and falls and fillers and <unk> with our video content, garnering over 60 meetings and total views on though in our care financing accounts attracted around 3.6 meaning.

<unk> spread up our high performing training video contents and recently, we also created a.

Our content.

Distribution accounts and so on.

And currently are we.

House calculated based on elite brands.

For example, like.

Elite peer Huawei, and HP and our current monetization model, where our shelf from a video is many advertising, but we will expand our current services to a more comprehensive services, including <unk> and.

And contest.

Our customers too.

They serve their need.

And in this new economy content space.

Thank you.

And thank you Kieran can removed.

Thank you.

Our next question comes from the line of.

Brian Lee from Citi. Please go ahead.

Yes.

Hello, and thanks.

And thanks for taking my question.

I also know all about.

And how the progress of your offline activities and industrial will be the most.

On a package or the popular this year. Thanks.

On the flavor, but again, I think Andy and I will Miss guidance.

Oh for sure that come on board.

And then searching and until won't give on la Jolla.

And we hope after the $100 on the yard.

And with all those issues, how long would you say that.

Hoping you can get out on planning and you got to hidden behind tissue became on chemical and pull the trigger for follow on those hiring relative to your account payable hopping.

And what you don't see anything at all of them and kind of the HOKA Chrysler for samples.

And he was a harsh on your channel.

And for this little hard and if you don't want to go off.

And then there's hope and I.

And they can have on food.

And obviously you know you're going through.

And can come up with your base.

And because I'm sure Kevin on Wassa, you opened on April 2 months of the Holocaust Ultra Hall with cash.

And you will see a true.

And so much on downhole crystals and <unk>.

And if you don't have.

Hey, without and so you don't get hundreds and thousands you can finish and Santa Clara.

Please proceed.

Yeah, Hi.

How are you and he's off and she was talking to tune all debt.

Uh huh.

200, and they got it okay.

Yeah.

And fifth households, and uncontrolled higher.

Okay.

And he got opinions on how quickly you can warm day.

And you've got a hold on the thermal cool.

Speaking on your tonnage on chemo combo and the catcher tissue.

Okay, I'll do a quick translation.

And our offline are recovering gradually Richard and in May we successfully hosted China from Pandora's future summit and the 'twenty 'twenty..1 was innovation leader conference in Shenzhen there'll be this cash investments and financing trends in the private and public equity matters.

The latest industry trends and sort of major fields, including theft GE technology.

And the new consumer and health care.

We also made the and then Seth will be our last Scream and received a positive feedback and recognition from any event attendees.

These are various sectors and take out this whole transformation, including digital information.

Asian digital merchandise digital service and digital Bennett.

This is within the next 20 years.

Most of the.

This is activity after it it will E versus Bali go digital as a broader business and that lens growth digital and it will generate tremendous opportunity.

Moving to the whole industry, we think our new customer is the most are a hot industry and has gained.

Great.

Sure.

Attract a lot of potential from attention from the capital and also <unk> technology and.

Health care and you are.

And it's a new.

Health care and Nu and <unk>.

Infrastructure.

Our health care, adding back that attention across capital markets.

36, <unk> stands out from a frontier of new economy focus inflammation and remains committed to providing more value to new economic uncertainty with high quality content offerings.

And but added services and we think we can provide better services to.

And our clients our customers in the new economy business space. Thank you.

Thank you I guess I'm on.

Thank you.

As there are no further questions now I would like to turn the call back to company for any closing remarks. Thank you.

Thank you again for joining us today. If you have further questions. Please feel free to contact <unk> Investor relations for the contact information provided on our website.

Thank you this.

This concludes today's conference call and you May now disconnect. Your line. Thank you.

Yeah.

Yeah.

[music].

[music].

[music].

[music].

Hello, Ladies and gentlemen, thank you for standing by for 36, GAAP Holdings Incorporations first quarter 'twenty 'twenty, 1 earnings conference call.

At this time, all participants on 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 Jingly IR manager of the company. Please go ahead Shane Thank you.

Thank you very much and Hello, everyone and they'll come to statistics cash holdings first call docs and if anybody on this conference call the company's financial and operational results were released earlier today and have been made available online you can also view the earnings press release that Betsy and you asked actually off on my side and our adult statistics KR Dot com.

All participants on today's call will include our co chairman and CEO, Mr. Doug on the phone and our vice President of Finance and kept on market is starting to day, let me.

The phone will start the call by providing an overview of the conflicts and performance highlights of the collar and Chinese followed by English interpretation and it's way beyond this provides details of the economy and so I never results before opening the call for your questions. Before we continue. Please note that today's discussion will contain forward looking statements.

Made under the Safe Harbor provisions of the U S. Private Security Litigation Reform Act of 1995 from a looking statements involve inherent risks and uncertainties.

Such the Companys 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 prospectus and other public filings as well as.

I'll start with the U S. SEC the company does not assume any obligation to update any forward looking statements, except as required under applicable law. Please know that such as the Paris earnings Press release and this conference call include discussions of that.

I'll, let the GAAP financial measures as well and all of the non-GAAP and Tomatoes. So she's just tariffs press release contains a reconciliation of the aldi and non-GAAP measures.

And although you GAAP measures are placed and though that's all my numbers on B L.

And now I'll turn the call over a couple of co chairman and CEO. Mr attack on phone calls. Please go ahead.

Yeah I'll hit on.

Yes.

Thank you Hello, everyone. Thank you for joining us today.

Yeah.

And they don't like.

And the at home you can count on.

So well and then we'll have some hospital and you can't book and well if there are no call. So its on boarding agenda, and you're going to only for true, hoping and higher though what do you think and I will share what many people would ask all the time, they're on time here I'll kick it off on me and that's hanging on rule when we got here and trying to do huh.

And so you'll have that Kim CFO Jackie.

Yeah, I just don't know.

And they don't have any accounts of inventing the politicians that.

Does that guidance, you don't do that and trying to do quite tricky that cohort.

I gotcha.

Have you been true further into 2020, 1 China's economy is gearing up for a new normal I'll just steadily emerges from the COVID-19 pandemic and this contest we have that'd be regaining growth momentum and Brooks and our coal competitive at the leading platform for new economy growth book of business content and service offerings and China.

This continuous long term investments and our content products and technology.

We are well positioned to seize the inverse commercialization opportunities in the digital transformation of traditional enterprises the growth of enterprise service and market. The further integration of private equity and public equity markets and the shift at the workshop from video across digital and content industry.

And looking further unlocking value from our customers users and investors.

And that's easy to order and that's how long it will catch on Capitol Hill.

Top either idled and he is.

Cash holidays, or cingal and can be used and all that material and not I understand you got to go and I didn't give you a chart with you don't sit here and so on and go down and somehow told me 10 years old.

Are they on the toilet and Yodlee.

During the first quarter events again delivered record setting performance and total user traffic with average monthly P vs jumping to a new high of 829.3 million, representing 75% year over year increase and a 32% so crucial client this drum matrix represents.

Top how secretary of culture of PV growth underscoring, our exceptional ability to generate new economy content operating to our brother and growing audience base.

And they go down and you don't want to hit on that you get on the alcohol CTO and toiletries and on the trolley.

And gotten a handle on auto road holdings in Alabama, and Georgia about autonomy and zombie all coastal downhole cause on social channels on that.

Actually the growth and our traffic and user engagement demand from advertisers continue to demonstrate growth momentum and the first quarter that you're likely to achieve a 55% year over year job advertising revenue increase and both the number of advertising Cosmos and average revenue per advertising.

Cutler compared with essentially a rate of 2020.

Well, then T O and Oh, she's here on the wall or on par with you until all casual foolish at all and you kind of a simple you can sell for more strategic.

And.

And in parallel what else is I'll open the call.

And with other tissue didn't you do it on your income and want to know well if it doesn't you although I'm guessing.

And that kind of standard.

The other TV and getting into your and your plans were trying out and also the fluctuating based on shown here on.

All of that.

Our existing and emerging advertising segments, both recovered at a faster pace propelling us towards a more comprehensive marketing service model. This is true multinational corporations.

Domestic brands and Internet Giants, Oh advertising clientele have covered more verticals, such as health care artificial intelligence and social networking.

The funds and to see 36, KR is increasingly become the go to partner for faster and new economy companies as well as any brands.

So and he said digital well then so Steve I tell them and then they all have war, Okay. Sure and then kind of how do tool uses and wonder why because you can't hold and then they don't even know how to put it P. D day, if I heard you say teed up and good people without telling me and I'm not sure GAAP schindel, local and do well and doesn't happen.

So as usual I'll actually opened up on Halloween well maintained up onboard on the oil attendees about though it's usually the Apache and Chinook humility and pension.

And so even the only thing that we're going to see Oh, yeah, I'm from biotech and they don't talk about youre being pulled out and put out and they only have here you've kind of come and go that you Didnt say it I'll talk on call and find out you always indeed.

During the first called her and we continue to refine our content platform and all of them.

Our debt offerings, which are the foundation of our commercialization our content platform strategy remains intact. As we are dedicated to further strengthening our content quality and.

And diversity through growth PDC and UGC on.

On a professional produce the content continues to enjoy high popularity and the parent like word of mouth effect, we published our numbers insightful analysis report heavily market update.

Thought provoking editorial and commentary every single day.

As a content platform, we also endeavor to attract and cultivate more quality content creators and continuously expand our content generally.

To cover more each market and the size and broader users demographics.

Total sales and how about when did you read and we're working there and you put out and well find out and watch indeed once you. Once you all have thought what else did you have on the okay.

Oh vision LIBOR flow enquire. So maybe he said he didn't put out and there's also so it's easy to kind of basically equivalent to half hobbled on their own.

And they'll show up and down at all.

Well machines, each with a bottleneck and attendees and tangible book, what kind of it's usually the vision and they'll hold on and he was on stuff.

And I would play out and so.

In addition to our proprietary platform, we continue to leverage external resources to expand our user reach and we know what this almost all major third party platforms, including Wechat LIBOR, though in partial PV BV and most recently sell from Shaw.

And the first quarter there were over 160 pieces of conscience published on such a <unk> official accounts that have gained readership of over 100 fold and Pam speech.

And our newly launched beachhead accounts.

Customized for the younger generation and their lifestyle and business strength is well received by the audience with a fast growing number of colors.

So that should be in volume.

People put out and that they want you to put off on wall and fines coming on until they almost and be easy though from that.

Both of the doctors and their own and told you to do that and I shouldn't have gone from about 2 here yeah. Well then so it hasn't actually been there on table for the Osha and Allergan Cool kids with easy, though more from that you'd have on servicing that often and there's 1 out and you Tomas and I suppose youre Huntington and I'm having.

And what was that.

And I look at on Hot Tea, and I'll talk about lives and students you have means and to shut ins on from contango and how do I really care about well.

Well total Utah.

Well you didn't have it was actually the needle from the Canadian dollar.

I'll see you know you have somebody.

And I also want to see.

And when and how does have offered on coming on at all and initiative taxes and nail.

And that will weigh in and your questions.

Yeah.

Yeah, and you see on what capability and video and audio content and wants to broaden our offer and matrix and resonate with a wider user base, especially the younger generation. During the first called her on a lot of screaming and short form video content initiatives continue to feel additional user traffic growth.

Specifically, our self produced video content gains slip further KRYSTEXXA gained further traction with our 1 for.

4 million followers on the third party traffic the platforms at the end of first quarter.

53% sequentially.

Attracted more than 647 installed and fillers and <unk> with our video content garnered over 616.

16 million total views and though in our KR finance accounts attracted around 3.6 meaningful earth spurred by our high performance true.

And studying video contents.

We also created a content distribution accounts also hold true and we are excited to have witnessed fast follower growth on this new channel.

As our short form video content continues to gain popularity.

And why that should be nail and town home Yeah Helane.

And if you know all day.

And boy yogurt and back to actually be and Tao Fu well maintain a wholesale so that will naturally you told that he and his narrow beams on call and then push on Indian shipping and what you bought on board on here should I say scenario where coal.

And what do you won't shut and on their own and Kelly could you file.

In terms of commercialization of video content, we have enter into collaborations with a variety of elite brands, including elite Yeah, Bobby at HP for video marketing suite for it as well.

Over the expanding our argue best content integrating multiple forms including tax image and video audio and live streaming of beach and aim to providing customers with a comprehensive area of content back on solutions.

Hi, Tony from yet.

And then just signed up.

And he can go to somebody and you took it on materials and how they almost on a job well meet that standard.

Congrats on the scene.

I don't know if they told me and capitals yet.

And he won't compete on here. The fact here so I'll do that and even when the final share from how's that scenario quite true.

She was on what you were getting on the Yahoo. He told me that sales in that country, they fallen to vornado.

And they won't here on your argument.

And do you see those tend to do quite as if you've done the junior and tell me, it's truly a homebase and I don't see mounted tissue on.

On the product front and the first color. We continue to operate our 66 care App, yeah effort to copyright on organic and per pad have on user growth.

And your eyes desktop visits features to be 36, her app, providing users with a more accessible and easy to use way to discover and broth content. We also enabled and you'd have function almost 36 her app for users to access last room and contents.

And our own mobile app to deliver a small set of content viewing experience across our platform for the first quarter of 'twenty 'twenty, 1 and the average content consumption per person and all these searches with per app increased by nearly 40% on year over year basis.

What kind of children's and always how old and since you've hit without your hinder our dessert shop can be and putting in la and San Jose and force them to use yeah. You should also have yourself on mute yeah. That's what we're looking at a hotel and interest you chose it.

And before we put on and just you are just shout and you show a man of course is that you'll need on her time and time and are you on those range.

When we got here and when people want to join US and do these young coaches I shouldn't use either from go put it the hardest hit on it.

On the day, you transfer T G I sort of on.

Do you want me on whole foods and yet.

And unless you most of them down so relative to the shelf on quake to receivables and how old the artesian and put out and the season.

Last but not the least we recently launched a Brett Nu.

March's product over the years 36, KR has accumulated reached experience and expertise in serving new economy companies and private equity market participants.

It's a natural extension to provide services for the professional public equity market sector and beauty.

And accomplishment.

We believe we can replicate this success with relevant public aftermarket conscience and breast new opportunities in this tremendous market, our content and service offerings across pre and post IPO companies exhibited rapid growth with positive market feedback net.

Strong performance reported competence.

<unk> to drive growth and this promising field.

And I always tell you how many times, how old and says yeah affording you the aegis and there's interest.

I would like to share some color on progress we have made with new initiatives across the and the rest of it is a space.

So again and got him well means that CFO Damien here was on too dangerous and that ciena elements, such as usual I'll try and to see if we didnt moving their bundles and what you find here and Hello, James O T afford us as Johan suggesting that you do more CFO and how you.

And how about 10 Kimco CAGR, you anyway, and you mentioned.

Okay.

And $2 triage and on site.

And so that probably Los Angeles here, you don't have on debt. So you know well and at the edge at all.

Cobalt on Shanghai and on how they will do but I'm doing and she can see and that's the way. That's yeah, you want whole day cause API and team.

Yeah, you're on Vinci, which notes vehicle on how those are normally and you sort of on site.

Very excited to have made meaningful strides and enterprise service review partial better launched last year, and we attribute our DSO destination to discover and select enterprise services in China. The reveal portal has showcased over 3 fold and enterprise applications as of March.

31st 2021, more specifically the reveal platform launched the ranking is intelligent software a rolling basis and spring 'twenty 'twenty, 1 featuring leading companies and industrial experts and DPI space and prompting comment on <unk>. So on.

<unk> of.

Enterprise customers.

And also range exclusive meetings for <unk> software and software brands and enterprise customers to facilitate potential procurement transactions.

Oh man moving.

<unk> taken on the autonomous vehicle or the total sales.

Yeah, so the harder and so unless you have had and viewed excuse me and I'll put it on your toilet, Michigan and see if we will have put out and the Yo Yo accounts with you don't you can't even do you want on for her and you didn't see and their muscles on digital momentum and gains and went on who and understanding what those on the phone cut out.

And Tom do you don't forget also without major.

Net Hondo 2 children do go on in total and Chicago to I'm sure kidney that's on video conjecture.

And some of those I'll jump on Tau that well then you're told to go against you and anyone way Osha EGF voyage on them on the total includes share 42.

Yeah addition, now working diligently to extend our value added and depressed service offerings to more cities and villages in China ride the wave of digital transformation.

They are confident that our graphic expansion initiative.

Foster our ability to scale, our enterprise services, especially in partnership with local governments and value chain resources and this fee rates during the first quarter pivoted to develop the.

Collaborative opportunities.

Enterprises and the local governments.

And Shandong and Hunan and to date, we have expanded our footprint into tough cities, including Virginia, and Mac cities like Hangzhou consume Chengdu and Guangzhou.

And we plan to expand to more about all provinces overtime.

These efforts supported our capabilities to build out our multi visit and and dynamic enterprise services ecosystem.

It's very new economy, driven development across the nation through our engaging and valuable content after the us our comprehensive.

<unk> service offerings.

And they're doing well if I didn't just yet and you went to all of US. He says you know sometimes you know how do you know what's going on.

And how you put them and they're trying to always hit on what cause issue people would ask for the Chinese to only those who I mentioned and Ohio.

Yeah, So the channel can weigh somewhat behind.

Behind me that she since you're Gonna channel.

So on the hotel and what's the trend on Wassa. So it all day and have seen here and at Wassa.

Obviously 2 of course on the telling you about 2 times and turn it over essentially the geography and guarantee in Bulgaria.

The development of the Internet in China has been fueling changes.

Economic system average core technologies have been refining redefining more and more economic activity.

This included digital information dish from merchandise and digital finance after that and increasing share of business activities going digital.

And we 19 practice has especially accelerated digital transformation across our bedroom range of business activities.

We believe that within the next 20 years.

And I'll make activities.

Russell Eco digital all internet companies and the traditional companies do in virtually involved new economy companies we.

And we see huge opportunities emerging in the digital transformation journey across the board and keeping this in mind, we are poised to set up our strategic efforts to grasp the growth potential.

Well the theater concession and then as you found out and what you do know Hillary and iPhone.

And also by is actually on all those Eagle bulk will you hit on someone's using told you and what do you know, how search and Chilean and co Gen and cause a teacher and tutor.

Hopefully, though to TV all users on the largest channel syndrome Gee, we wish her well and as you go to search and didn't you found out by Saudi and are being R E and put it that way.

And when here and you're getting sales coupled with the whole thing issue 10, and Alex as a way to go.

And they always think usual seems healthy cahill townhouse and hotel.

On May 11th we hosted a China from partner or future summit, and Shenzhen, attracting hundreds of mainstream investment institutions, which included first tier LP.

International investment bankers and globally, well known active box.

And its flagship summit featured a key nodes on the dynamic opportunities and the challenges facing venture capital and equity markets, bringing insight to our customers and users and.

On may 11th.

May Tav also and you shouldn't do we hosted the 'twenty 'twenty, 1 whilst innovation leader conference.

And as of industrial Kols, leading companies and analysts attending that event.

Balancing surrounding new technology, new consumer and new health care sectors.

Having assortments and I think if we are managing debt.

And they usually based on what we can use either cash or sometimes even flow well nothing is always on walnuts channel you can work with you. This year from what you call you took on the hurdle you will notice hemophilia and tend to have you said on moving ban it sounds from their trucks here that trajectory and just ship and.

Thank you Joe and just shows that you have on noteworthy and until he can body.

Moving on to our subscription and services.

It's a firm commitment to serving the 6 major communities of China's new economy, our subscription services.

That's fully engaged and the process governmental agencies and capital across our country.

For example.

And Connie membership product on and Speedway stock class brings direct with software and support from the government flow stops. This type of support was put in practice during the quarter in changing during the first quarter and kingdom and Fujian and Guangdong.

So what's wrong Tomorrow are you in omni channel here, especially with large and deep and we'll fight on the baby and child. So if I can get anytime you do on excuse me that but then somehow they're trying to do hotel and a half where she's already accounts for a few questions on day, 1 so they don't want community and they only 4 and that.

Well on the Jonathan Hughes with you on that.

And hopefully with that way on huh.

And so the interest you know youll be moving closer.

And what's your time zone here was an on year.

And you shouldn't be an elite channel.

And he called how did you find and the city to Chicago.

In summary look you had to 'twenty 'twenty, 1 we believe demand for statistics hair and diverse service offerings from a growing based on appeal economy participants will continue to thrive in the fast evolving digital this is content.

And as the go to content and service platform and the Chinese new economy space.

We continue to diversify our product and service offerings as well as boost our community and user base.

While exploring new growth avenues.

And hence multi by day.

Monetization now are confident that our long term fundamentals position us well to forge ahead, and new business development.

Somebody and we got them on so you didn't have them and does how awesome. It yourself I don't have it in parallel.

And so that's how I mean, those are all got yet to ship.

Is that I will now turn the call over our VP of finance and capital markets, Ms. Lindsey, who will discuss our key financial results fiscal happening. Thank.

Thank you, Paul and Hello, everyone. Our first quarter results call the year off to a solid start as Paul mentioned earlier, the rebound in market demand underpinning a strong 58% year over year growth in our advertising revenues in the first quarter also as we continue to shift our resources and focus towards higher margin businesses, we saw substantial yet.

And you increase and both gross profit and growth profit margin innovation net loss narrowed substantially and this quarter compared to the same period of last year going forward, we remain dedicated to building on our content strength and growing monetization channels to seize and mass new economy opportunities.

Now I'd like to walk you through more details on our first quarter 'twenty 'twenty 1 financial results on.

Online advertising services revenue increased by 58% to RMB $33.2 million and a first quarter of 2021 compared to RMB 21 million and the same period of last year.

The increase was primarily attributable to the strong recovery and growth of market demand and the first quarter of 2021 and.

And the price value added services revenue were RMB $6.9 million and the first quarter of 2021 compared to RMB $42.8 million in a same period of last year.

Growth was primarily because we continuously shifted our focus towards higher margin businesses and starting from this quarter with <unk> to act as a principle and certain low gross margin businesses and the only active I've got agent.

As a result revenue of such businesses were recognized on that basis from this quarter on award.

To increase comparability of operating results and help investors better understand our business performance and operating trends, we introduced the graph transaction value as a supplemental metric to describe our business.

Ralph transaction value of enterprise value added services was RMB $32.5 million in the first quarter of 2021 compared to RMB 42.8.

8 million and the same period last year.

Subscription and services revenue increased by 140, <unk> hundred 54 per day year over year to RMB, 3.4 million. The increase was primarily attributable to the growth and institutional investor and enterprise subscription and services.

Total revenues were RMB $43.5 million in the first quarter of 2021 compared to RMB $65.2 million and the same period of last year.

This is mainly due to the aforementioned on the change of revenue recognition for our enterprise value added services were RMB $25.6 million variance between net revenues and gross transaction value. If you do the math you will see actually our overall business trend is upward and and demonstrated solid year over year growth.

And <unk>.

Cost of revenues decreased by 6% to 6% and year over year to RMB $20.2 million in the first quarter of 2021. The decrease was primarily because we continuously shifted our focus toward higher growth margin businesses. As we mentioned earlier in the enterprise value added services section.

Gross profit was RMB 23, plus $4 million and the fourth quarter of 2021, representing a 329% increase year over year gross profit margin was $53.7 and the first present in the first quarter of 2021 compared to 8.4% and a same period of last year.

Operating expenses were RMB $64.8 million and the first quarter of 2021, representing a 37% decrease year over year.

This was mainly due to the decrease in G&A expenses in the first quarter of 2021.

Sales and marketing expenses were RMB, $35.7 million and the first quarter of 2021 compared to RMB $34.9 million and a same period of last year G&A.

G&A expenses were RMB 22 million in the first quarter of 2021 compared to RMB $59.3 million and the same period last year. The decrease was primarily attributable to the decrease in the allowance for doubtful accounts and share based compensation expenses.

Research and development expenses were RMB 9 million and the first quarter of 2021 compared to RMB 8.5 million and the same period of last year.

The increase was primarily attributable to the increase in payroll related expenses, partially offset by the decrease in share based compensation expenses.

Share based expense share based compensation and expenses recognized in cost of revenues sales and marketing expenses research and development expenses at La and G&A expenses totaled RMB, 2.7 million in the first quarter of 2021 compared to RMB 13 million in the same period of last year.

Net loss was RMB 45 million in the first quarter of 2021 compared to RMB $95.9 million in the same period last year non-GAAP. Adjusted net loss was RMB $37.8 million and the first quarter of 2021 compared to RMB $82.9 million and the same period of last year.

Net loss attributable to Soliris, they pay our holdings ordinary shareholders was RMB $39.5 million and the first quarter of 2021 compared to RMB $95.4 million and the same period last year.

Basic and diluted net loss per share were both RMB 3.8% and the first call on 2020, 1 compared to RMB 9.3 and the same period of last year.

As of March 31, 2021, the company had cash cash equivalents and short term and last months of RMB $174.1 million compared to RMB $209.2 million as of December 31, 2020 and.

The decrease was mainly attributable to an equity investment we made in the first quarter of 'twenty 'twenty, 1 with a total cash consideration of approximately RMB 30 million.

This concludes our prepared remarks today, we will now open the call to questions. Operator. Please go ahead.

Thank you.

Participants who wish to ask a question. Please press star 1 on your telephone keypad and wait for your name to be announced if you wish to cancel your request. Please press the pound or cash key for.

For the benefit of all participants on today's call and if you wish to ask a question to management and Chinese Please and you did to repeat your question in English and thank you once again at Star 1 on your telephone and ask your question.

And <unk>.

Okay.

Yeah.

We have the first question from the line of wins and Pute from need Havent.

Got it.

Yeah.

Vincent Your line is open you can ask your question now.

Okay.

Yeah.

Yeah.

Once again Winston from Needham and company. Your line is open and you can ask your question now thank you.

Thank you management and off we're taking my question.

I have question I have 2 questions first question is on.

And this is what should the.

I'll comment on the overall market recovery and the first quarter 'twenty, 1 and how we see and.

Chance that we can share for the rest of the year.

And the second 1.

The question is.

Oh can I should come on on the claims expense.

We still have 6 KR.

Oh.

It was mentioned there from international clients have reduced.

And the spending.

They have returned and the how would you or spending.

And engagement by declines this quarter.

Yes, that's right.

Okay.

Uh huh.

As you wanted me to carry this opens up on the Ohio, a little while ago hold off on you at Horseshoe show with us and while it's right.

Yeah, well I'm and $3.

English and all but 1 day.

And you come in and cause a high and if you want and you've got a little harder.

And you hear caution these are true.

Incident and technical.

And how you can share that accounting and international holdings and I'm on Jewish box are a cultural fit and catalyst.

Okay sure.

And then see if he's got you don't have the highest use alcohol and you buy your chances on that okay.

From a teach out and want to know who they are on here. He was here yesterday.

She got up on 1 of those on time.

Well, then it's easy to follow it and see if her and she is willing and want to know who you know what day.

And so yeah, you're behind on a cohort.

We'll shortly from here and there also on the Chicago.

And when I talk to him and I call tobacco with reassure you called on before the Oklahoma and.

California, what goes on from that.

Okay.

Worth of a pandemic appears to be head on.

We are seeing solid economic recovery and a gradual improvement across various industries.

More specifically a few new economy companies Sprague headache, and the growth in the aftermath of the pandemic.

Our advertising business gathered from momentum in the first quarter.

This year over year revenue growth.

58%.

Advertising and services for our new economy customers continue to grow both in terms of number of advertising customers and average revenue per advertising customer.

And we achieved on more than 100% growth each and advertising services for several verticals such as consumer and lifestyle.

Commerce artificial intelligence and healthcare.

In particular advertising services for health care cap growth delivered.

Explosive growth.

We are actively managing to pep integrating opportunities in the artificial intelligence and health care space and a crowd and new customers.

And looking forward to 2021, we expect our advertisement demand from branded customers, especially and multinational brands to increase compared with last.

Last year.

And I'll turn it off and I can't go into.

And we'll know a whole jobs and they try and all cohorts and here you go home and with a kohls Sears and knock on wood on the EBIT loss was on both Apache and as you. All you can reach out to the Coca Cola and she said all of your families and kill the holdings.

And you called them cities and countries.

On a little while can go doesn't go away because on death touching and he's not on the sheet.

Digital share of course will depend on the take up on other transit or easy Schwartz and yeah.

Yeah, the sending people to try and nickel with.

Hollywood got out on lease and drop.

And I'll hold off on those or not I should have you been told US you know you've also the Bureau, she told me and I want to hang on to that.

Well just like we did on a phone calls on having a younger people sit and they won't all be seeing from political on coal.

So we ended up and political whole day excuse me net.

And if you give them back time, and see you want from Los Angeles, and shifting now with actually and that happened on June <unk>.

And the medical Xi'an and someone says I know you've called the hope on shipping won't call and don't feel like you have a day.

And what's your view on Gogo.

And of course, there's no impact.

And so you don't mind share and the trial has a whole day.

Yeah, I'll do a quick translation.

The categories, our advertising customers into traditional customers and new economy customers the.

And the multinational companies accounted for the majority of traditional caspers and the first cutter leased on average revenue traditional customer increased 11%.

Over here.

With the first quarter is traditionally a slow season for advertising demand.

The average revenue per traditional customer to see substantial year over year growth and the flooring counters.

And along this global recovery from the pandemic.

So advertising demand from multinational customers rapidly rebounded well.

We also saw a stronger growth advertising ease from domestic new economy companies such as growth in the new consumer and <unk> sections.

Meanwhile, we are making progress in improving our advertising products such as video advertisements to attract more customers.

On consumer brands have her interest and this cannot predict as they would like to reach to more new customers. This exposure to 36 Harris video conscience.

In addition customers who are rebuilding their brands and expect to complete.

Transformation of Brent at and and keep our leverage statistics Harris video advertising products.

In this regard our strategic power has become impaired and passing a partner for our traditional brands that are in their transition to versus new economy companies.

Yeah.

Thank you. Thank you.

Thank you.

Well, we have our next question.

From the line of.

John <unk> from Credit Suisse. Please go ahead.

Thank you.

And the management I have a question here on behalf of came and phone.

Can you come on to this call.

Pumping margin in relation to the change.

Change nature and what have you.

And the outlook for the GP and in 2020, 1 because I understand that.

Circumstances that have changed the accounting recognition because net basis and also the business flow.

Okay.

And he says.

Shifting from the Corona poetry day and change Thank you management.

Hi, John This is Lynn and I will take your questions. Yes, you can see that our Q1 gross margin actually was a substantial increase compared to the same period of last year on gross margin climbed to 54%.

This call on compared to 8.4% last year I think if theyre on a couple of reasons here and first of our obviously, we have been shifting our focus towards higher margin businesses. I was sad earlier and also we are implementing some cost control measures. So altogether. This helped our gross profit and a gross profit margin.

And to increase and secondly, you also mentioned that starting from this quarter. We are starting shoe racks of Nast net revenue for our enterprise value added services. So this will not affect on gross profit, but it will definitely help us increase our gross profit margin to some extent and.

I also want to highlight that as you mentioned, yes, we changed the revenue recognition for our enterprise and added.

Services revenue from this quarter onward, and actually if you.

We take that into consideration and if you do the math you will see that our overall business trend is upward compared to the same period last year and have demonstrated solid growth and.

And the reason that we explained in our earnings release as well as in our prepared remarks is because we are.

And shifted our focus our resources to higher margin business. So as a result for some lower margin businesses.

Only act as an agent and where previously we act as a principle and the small businesses. That's why we started to recognize on that revenue for those businesses.

And also for your question on the outlook of growth margin trend for the remaining remainder of the year 2021, I can assure you that our gross margin will be on a continuous improvement trend for.

For the rest of the year.

This also for your question. Thank you.

Sure. Thank you that soon and capsule.

Thank you.

We have a next question.

And from the line of share has jumped from <unk>. Please go ahead.

That's a hard against you guys al Maguire from Tempe.

And do you think that people usually balance if you didn't do on the Doctor about Galaxy Z, whether you could tell us how about pinnacle and things out and Oh.

And I will translate myself quickly to the measurement management and share more color on the details and the future strategy of the nuclear that such as enterprise and rich reveal portal. Thank you.

Obviously, you touched on on Hollywood yet.

So we didn't hinge on makena and higher exposure to it whether you have seen the followed on with your.

And I have heiko tier for the channel and you go to accounts.

And she was talking about children's and sheer Sunshine and accordingly, and that's for sure.

And now that you've got us looking internationally.

So on all of your emails and handle the Doctor office and ones that I saw them.

And you did also have legal accounting and you don't see the Saturday and even tableau like if any and you say tissue on internet.

And while you're pulling and Glenn on your Fisher.

You can also of course, you Aman claims you need pumps as well.

Sure.

And Mark Yeah that was actually on the way.

We will diligently signing on.

And you can't and that's really a whole new huh.

And with all of them.

I will share shortly.

And our chief bundle from enough cohorts you Holdco.

Quite a hangover from the javelin and getting told even on that.

And from him all of them, but he and gotcha.

Perhaps I'll do a quick translation.

And our Enterprise service review portal has been and our latest attempt and the field of enterprise value added services.

We launched <unk> last year and a bit to build these flow destination to discover and select enterprise services in China.

The reveal puzzle have showcased it at more than 3 father and enterprise service applications, mainly in the field.

And I see I am on the collaborative posts.

And this year.

We expect more and pressed service suppliers too.

<unk> our platform.

By addressing enterprises digital transformation demands.

And we aim to further leverage our stellar brands high quality content offerings and data insights to provide enterprise service providers with a platform to acquire customers.

Thank you.

Thank you. Thank you very much.

Thank you gave me move to the next question.

Yes. Please.

We have the next question from the line of Jay Dong from Th capital. Please go ahead.

Yes, Jeff.

And then question hold on.

Thank you Holly as opposed to answer and I would probably day.

Could they be spot rates hold on.

And.

And then and didn't see and digital on the artist shopping.

And how she wants to.

And these accounts are going through those vehicles and you can count on behalf on Shanghai and Israel.

All of them and then they don't.

And Rob a hook, Schindler, with Tennessee, Honey, and and Gabor I'll hold on travel.

And on time and helpful.

And you can schedule you can put all the code, Oklahoma, and Georgia banking, and we had no charge and shop and you can put on them.

Yeah, I, just thought I mean, and John with Toyota and so on and they know how Fortinet and you go that route.

Okay.

With that I'll take a zone.

And what kind of what he or she alcohol on People's Hotel and the hobby homeless and I'll hop you hit on it. So you can get a hard and Shanghai Chengdu.

And the recently launched a brand new public equity markets product providing spot on.

Thought provoking editorial and countries insightful analysis report and premium offline activities.

<unk> participants and the public equity market, including pre IPO companies listed companies bonds and securities companies.

Our public equity market product Haskins popularity since his lunch reached proves our ability to.

Job growth in this promising field and.

And we are confident and this new product will become a classic product and content offerings.

Offering suite.

<unk> reached a stringent our carbon content and service offerings and private Maxine.

Right.

Private and market and extend to a broader field.

We believe in the great potential in the public equity markets. Thank you.

Thank you.

And.

Thank you.

Can we move to the next question.

Yes. Please.

Thank you we have the next question from the line of <unk> from <unk> Securities. Please go ahead.

And coming from Russia.

Paul Cheng from 1 well on corn.

And would you go on people.

You wont be booking them.

And I won't go Oh, My God, how does your small bump as you want people on call more control and Washington.

And she's going to go on call.

Well John on the so called them on.

Our transport and no question among demand off of consumable and Schwab weighted equally could you explore more on the monetization who watch football and boots.

Okay well.

On promotion more about home team on the call sales.

Okay.

And so the only thing I would tell them exactly.

And so they don't want guidance.

And she will have volume initiative.

That's true.

And also on the to go on my name and its really counted on hydro solar and hanging on without having data and.

And I will cancel.

Well talk to you at all.

3 years and all of my time on Covid.

And just what a football off message about now and I haven't heard what does that.

Chico's habitat.

And then talk with initial HL and <unk>.

And so all of them for the upstream oil and gas just how old are turned on title.

Because I think the hockey and on capital and somebody who's rebate true closer to him.

And what exactly.

Exactly and wants to ask you about having total which enabled them to hop on here. So how should we also are finding that the only way to actually haul me and when was that.

Depending on what you call your caution on seating and Shanghai and hopefully even if you have hobby and cohorts, 1 on Japan, and looking back and philosophy.

And go out to go forward and I have talked about now that you got from all kind of 4 hotel here and how should you go for harmful top yes.

Sure I'll put you on debt.

And when you view the day.

A couple of work and a lot yet and.

Howard how true that tiny tiny and Chicago on the water share for their dose appears well you share a passion.

What does she is here to try and get these gentlemen, and the needle, particularly and home the share Florida.

Natasha on the tissue.

I'll do a quick translation.

We launched our cellphone video initiatives, we've seen a year and we are happy to see that we are Guinea.

Growing number of Fuller's our accounts on beta BD.

And so yeah and recently in the shelf and true SaaS.

I'll share some numbers I'll call on.

Our.

Current shelf on video.

During the first cover.

Our self operated video content.

And all over 4.4 million followers on the third party traffic platform at the end of.

First quarter up.

53% sequentially, they attracted more than 647 and followed with pillars on.

And <unk> with our video content and garnering over 60 million total views on those in our care financing accounts attracted around 3.6 meaningful.

Burnt up our high performing training video contents and recently the alcohol crazy occur.

And this.

Distribution on accounts on selling through and currently.

And we house cooperated with some elite brings.

For example, like.

Elite PR, Huawei, and HP and our current monetization model Wawa shelf from a video is many advertising, but we will expand our current.

So it is to a more comprehensive services.

Building on 'twenty and contest.

Our customers to.

Better.

Serve their need.

And in this new economy content space.

Thank you.

And thank you Kieran can removed.

Thank you.

Our next question comes from the line of.

Brian Lee from.

Please go ahead.

Hey, Hello.

Thanks for taking my question.

Yes.

And I'll also know all about the enterprises.

And how the progress of the offline activities and which industry it will be the most.

Attacked and are the popular this year. Thanks.

Oh, okay.

And I will Miss guidance.

Although on a 4.2 that come.

Oh, and then testing and until won't you've Ala and <unk>.

Oh, absolutely 1 of the outlet channel.

And that's 1 of the tissue is how long will he was hoping you'd awesome. So funny.

And it's a hidden behind tissue and you won't get him up on Butcher block.

And the timing relative to your family and the hopping on counting and what you don't see the interest all of them and kind of.

Close loop on samples of Hawk.

People like and here's a harsh on your champions for.

All of this was Ohio.

And then as well.

And then and coordination of all true.

And so you didn't even want to come up with your peers can you put in cash as well I don't want for yoga.

And on Saturday April 2 most of the Holocaust Ultra Hall with caffeine and we'll see a true for the question on Dol questions as usual.

And if you don't have.

So you without and if you don't get how much and I was saying as you can see interest hydrocodone and Tom O'shea.

And I have to go to their higher which I hope you and she's on the.

And she was talking to all of the above.

Comparable to fund where they go there the whole time.

Hi.

Yeah, well you know.

And if it has also been quite a bit higher so you.

Technical today.

And opinion on all quite easy to warm day.

And you can kind of hold and that's on a call with unions, having done that you want going forward is that true tissue.

Okay, I'll do a quick translation.

And our offline and recovering gradually Richard and in May we successfully hosted China from Pandora's future summit and the 2021, whilst innovation leader conference in Shenzhen there'll be this cash investments and financing trends and the private and public equity market.

I have to ask the latest industry trends in 3 major fields, including theft GE technology.

And new consumer and health care.

We also made the and then set for the live stream and received a positive feedback and recognition from any event attendees.

Steve O various sectors are ticking up this whole transformation, including digital information digital merchandise digital service and digital than it is.

We think this and the next 20 years.

Most of the.

This is activity after it is bill <unk>.

First of all the go digital as a brother basis and that blend skills digital and it will generate tremendous opportunities.

Moving to the industries, we think a new customer is the most are a hot industry and Haskins a great.

Great.

Sure.

Attract a lot of potential from attention from the capital and also our <unk> technology and.

Health care and you.

Is.

New.

Health care and knew it.

Infrastructure.

Our health care, adding back that attention across capital markets.

36, <unk> stands out from the frontier of new economy focused information and it remains committed to providing more relative to new economy confidence with high quality content offerings and value added services and we think we can provide better services a 2 hour.

Clients are customers in the new economy business space. Thank you.

Thank you so much.

Thank you.

As there are no further questions now I would like to turn the call back to company for any closing remarks. Thank you.

Thank you again for joining us today. If you have further questions. Please feel free to contact <unk> Investor relations through the contact information provided on our website.

Thank you.

This concludes today's conference call and you May now disconnect. Your line. Thank you.