Q2 2021 Kanzhun Ltd Earnings Call

[music].

Ladies and gentlemen, thank you for standing by and welcome to the Camden Limited second quarter 2021 financial results conference call. At this time all participants are in a listen only mode. After the speaker's presentation.

There will be a Q&A session today's conference is being recorded.

At this time I would like to turn the conference over to MS. Wendy Huang head of capital market and IR. Please go ahead ma'am.

Thank you operator.

Good evening, everyone welcome to our second.

Patient I talk Saga earnings Conference call joining me today, our founder Chairman and CEO, Mr. Jonathan pumped out and our director and the CFO Mr Field junk before we start we would like to remind you that today's discussion may contain forward looking statements, which are based on management's current expectations and observations.

Quite well known or unknown risks uncertainties and other factors both under the company's control, which may cause actual results performance at schuh missile to company to be materially different.

So come and cultural you'll not to place undue reliance on forward looking statements and do not undertake any obligation to update this forward looking information.

Stepped as required by law during.

During today's call management will also discuss certain non-GAAP financial measures for comparison purpose only for a definition of non-GAAP financial measures and a reconsolidation of GAAP to non-GAAP financial results. Please see the earnings release issued earlier today.

In addition, a webcast.

He felt this conference call will be available on our website at IR tripping Dot com.

We said I will now turn the call to join Us on our founder Chairman and CEO.

Yeah.

Hello.

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Steve.

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Hello, everyone welcome to our first earnings call as a public company.

I'd like to take the opportunity to express our sincere thanks to our users employees and investors. Thank you for your trust.

And support we can.

We'll continue to focus on our main business improve the efficiency of connecting tenants two drugs utilizing the power of technology to deliver a user satisfaction by optimizing efficiency quality and choice.

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I can tell you for the accumulative thought all younger siblings.

Yes.

We are pleased to report that we have achieved.

We had strong results in the second quarter. This year, we recorded total revenue of RMB 117 billion, an increase of 173, 9% year over year, our calculated cash billings reached RMB 144 billion, we say year on year increase of 475 plus 3%.

Well, we maintained our rapid revenue growth. We also achieved positive non-GAAP profitability. This year I mean, this quarter I'm sorry.

Adjusted net income, which excluding share based compensation expenses were RMB $248.5 million.

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And the other PD somebody with you.

Thanks Sheila.

But before you do.

We believe our quality girls is a result of our efficient business model continuous enhancement of technology and the superior commercial products, which lead to the expansion.

Spansion of our user base and improve the service capabilities in the past quarter. The average and May you have bus tripping up App reached $13.4 million a year on year gross 44, 5% the ratio of D. A.

Relatively stable indicates that we have maintained high user growth and.

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We will keep this kind of I'll call. It a transition you know who the onset continent, you assume some from Europe taller Yolanda Hu with children, who you want.

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So you got to show kind of does that Sharon talking too hot.

Now, let's take a closer look at our progress.

I'm all over in the second quarter, we continue to follow the path to be a platform that covers all industries.

And dropped category.

From the perspective of job seekers, we further improved our service capabilities and the penetration rate among the white collar workers and the higher tier cities by continuing to some it started by our competitive advantages.

Sometimes we were aiming to expand our coverage in lower tier cities and the <unk>.

Traditional industries.

Being the largest group of job seekers blue collar workers, our important target users presently and the main driver of our user growth.

Total number of the blue collar users on our platform keeps increasing steadily.

Due to the low online penetration rate of blue collar recruitment and the different.

Hey, real preference from the white collar users, we have maintained our adjustments and optimizations in aspects such as matching algorithms drop authenticity user safety and product visibility.

And to better serve our golf collar users, we actively cooperated with headhunters and have made positive progress.

We have also noticed that in the second quarter, which is typically the beginning of graduation season for college students a large number of college students joined our platform through our in house and if I were surveys such as online publicity and life campus recruitment activities, we have become the most preferred preferred online recruitment platform.

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So for the hierarchy.

Finally to put us at whatever could be challenged for the full year.

The Ocean <unk>, Sean go ahead trying to let you know which is all you had some higher product.

On the enterprise side, we have noticed that more and more enterprises, starting to attach great importance to the efficiency and then kind of investment.

As a result of various factors.

Factors, including the country. They released recruitment demand brought that brought about by the sustained post pandemic economy economic recovery the increased cost of human resources, and the inverted as supply and demand in the talent recruitment market.

Thanks to our efficient and cost effective business model numbers of our.

Our enterprise users maintained its rapid growth trend.

So June starting 2021, the accumulative number of verified enterprise users reached $14.85 million with a year on year growth of 78, 5%.

The accumulative number of verified enterprises reached $7.2 million.

With a year on year growth of 76, 1% for the enterprise user composition, our boss population accounted for 65.

8% of the whole enterprise users in the second quarter, which remained stable.

It's worth mentioning that the propulsion of small and medium sized enterprises has increased.

283, 6%, which is closer to the China's overall enterprises face ratio.

This is further proof that for the massive number of small and medium sized enterprises in China direct chat between enterprise managers and job seekers is inconsistent with their demands.

We will provide even better.

With greater scale small and medium sized enterprises by further studying their recruitment needs and characteristics.

We also aim to actively expand into traditional industries, such as manufacturing and finance, while maintaining and strengthening our advantages in the industries, we already work Howard that Internet technology.

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In terms of our R&D capability.

Continue to reiterate our Manhattan by every two to three weeks to optimize functions such.

Such as recruitment and job seeking information display and management bulk messaging and media interviews Amy.

Aiming to improve our user experience and encouraging their engagement.

As a technology driven company technology capabilities are core to our competitiveness and then we have been continuing to invest heavy.

Heavily in acquiring talent.

The June 30, we had the R&D team with more than 1000 employees.

In terms of algorithms on top of continuous pursuant of improving matching accuracy. We also pay a great deal of attention to delivering customized and fair recommendation results to enable more long tailed.

Her job seekers, and SME enterprise users to become in Dade County, and that is both.

And to facilitate as many users as possible to engage and fulfill their demand on our platform ultimately improving user interaction and satisfaction.

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As for our operation, we continued to improve and refine our operational capabilities in detailed category.

We're also conducting in depth research and optimization for provisional classification of job categories in specific.

Industries.

In time, we have made significant investment in platform security.

All flying security and renewed teams have colorful K cities in China and each covered.

Our team is able to arrive at the recruitment locations within two hours after receiving uses complaints and the.

We plan to further expand our city coverage in the future.

Security help job seekers is the cornerstone of our platform's operation.

I have one security and authenticity of drop information has always been a crucial obstacle hindering the online penetration of blue collar recruitment and job seeking in the past.

Coordination with expansion of our Blue collar business, we have made a series of security upgrades to further consolidate the infrastructure of our platform.

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Volumes in the future.

We are continuing to improve the sales capability and expanded geographic coverage of our direct sales team in the second quarter, we established a new branches in Washington, and I'm glad, bringing our total number of branches to 'twenty five.

Sometime we focused on the strengthening.

The professional competency training for our sales force and improving the efficiency of individual sales personnel.

As for marketing, we are continuing to implement dedicated marketing strategies user acquisition through both brand advertising and online traffic.

We were honored to have been appointed as the official humongous.

We saw supplier for the Beijing Winter Olympics.

A result, underpinned by our spins and economies of scale, we continue to see a significant improvement in the marketing promotion efficiency, which feel our CFO will discuss this later in more details.

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Some tend to talk about the cyber security revealed that airlines carrying about.

As we previously announced the company is currently actively cooperating with the Cyberspace administration of China, and that's had both a country with yields at the same time. The company is conducting its own self examination and certification program focusing.

Focusing on the security and the user privacy protection in accordance with the latest national laws and regulations, such as the data security law and personal information protection law income.

In compliance with regulatory requirements. When you use a registration remain suspended our bus dripping app, which will to some extent.

It impacts the company's user growth and revenue.

However, we firmly believe that the regulation unnecessary to regulate the industry and protect their users and will ensure the long term and sustainable growth of the industry and the company.

Given the kind of circumstances, we make more efforts to better serve.

There are already extinct he uses meanwhile, with fully cooperate with review teams who work in the hope of completing the process earlier.

The company does not yet have a clear timetable for either the completion of redoing or when shall we be able to read the news you Reggie.

Registrations.

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Finally to summarize Chinas online cumin market market still have ample room.

Ste.

You can deal with.

Considerable number of trucks that have not started to use online recruitment services.

Hey, good service offering and the value provided to customers have yet to be fully explored.

As a new generation of online recruitment, we are adapting and innovating model by combining the recommendation direct.

And the morbidity with our dedication to the concept of user satisfaction first.

We will continue to invest in technology, and enrich our product offering and enhance our service capability penetrate into more industries and regions.

Although there are some fluctuations in the short term externally.

Chairman fundamentally our business model remains effective and it will be a further demonstrating.

We are full of confidence in the future growth potential and I believe that we can continue to provide fair valuable in a more efficient service to nearly 600 million workers and 14 media enterprises, especially small.

Medium sized enterprises, and those long tail workers.

In China.

Whether it's just helpful for them to actually allow you I'm. The CFO consistent sure feel we thought that you sold in the town drunk on tissue.

With that I'll now turn to our CFO and director Phil for their review of our financials.

Martin Thank you.

Thanks, Jonathan.

Hello, everyone. Thank you for joining our earnings call today, I would like to give a brief overview of our second quarter 2021.

Financial results and then I will discuss our outlook for the third quarter before I begin. Please note that all amounts.

Those are all in RMB and all comparisons are on a year over year basis, unless otherwise stated.

We continued to achieve robust operational and financial growth in the second quarter of this year.

All recalculated cash billings increased by 175.

<unk>, 3% to RMB 144 billion and our total revenues increased by 173, 9% to RMB 1.1 dollars 7 billion in the quarter, beating our target.

This rapid revenue growth was mainly due to the increase of our revenue.

Point from our online recruitment services, which increased by 174, 7% to RMB 1.1 dollars 6 billion contributing to over 99% of.

Our total revenues.

The inquiries over revenue from online recruitment service was driven.

Revenue strong growth of our pay to enterprise customers. Following the expansion of our user base and enhance our service capabilities.

As Jordan said, just mentioned with the recovery of recruitment demand and increasing penetration of online recruitment service, especially for.

By those enterprises together with our integrated model, we have seen rapid growth of our accumulated enterprise users which grew.

By over 78, 5%.

To $14.9 million by the end of June 32021.

With more enterprise users posting drops on our platform.

More positions became commercially mature enough to be identified.

Hard position, which we can charge a fee for job posting.

Which leads to a higher paying ratio.

These two <unk>.

For combined contributing to our strong enterprise customers growth.

Which.

Increased by 135.9% to <unk>.

<unk> 3.61 million in the trailing 12 months ended June 30.

'twenty two.

Actors.

Compared to a 1.53 million in the same period ended June 32020.

Furthermore.

A number of our key accounts.

Group, but 146, 6% in the trailing 12.

<unk> ended June 32021, and are leading to a 229, 3% growth in revenue from key accounts in this quarter.

Demonstrating the enhanced ability of serving large enterprises converting more users to long term customers.

On the cross selling more services to existing customers.

Now turning to our cost of site.

Total operating cost and expenses were RMB 259 billion for the.

Quarter.

If we exclude.

Share based compensation expenses, which was RMB 166 billion, including RMB 1.51 billion reward to our core management.

Our adjusted total operating costs and expenses were RMB 900.

The share of $33.7 million, an increase of 63, 1% compared to $572.3 million in the same quarter last year, resulting to a positive adjusted operating income of RMB 200.

30.

Hundred an $8 million.

Our gross margin remained stable at <unk>.

87, 7% with cost of revenue increased by.

164, 2% to RMB.

$143.2 million.

Nice quarter.

Primarily driven by higher third party payment processing cost operational employee related cost silver and bandwidth cost.

<unk> from increased user base and the transaction volume.

Sales and marketing expense.

Expenses increased by 45, 8% to RMB.

Four $534.2 million in this quarter.

Primarily due to our increased sales and marketing employee related expenses and enhance the brand advertiser.

Indeed on a customer acquisition activities.

Noteworthy.

Our sales and marketing expenses represented $4.40.

<unk> 45, 7% of our revenue in this quarter.

By 40 percentage points from 85, 9% in the same.

<unk> there last year.

This decline in sales and marketing percentage demonstrated a higher efficiency of our marketing initiatives and it is us.

Proof of our strong economy of scale.

During this quarter, our R&D expense increased by.

Same quarter, 113, 13, 7% to RMB $215 million pre.

Primarily as a result of increased R&D personnel payroll other employee related costs and share based compensation.

We will continue to invest.

R&D talent.

That was one of our core growth strategy, allowing us to maintain our leading technology capabilities, which is the essential of our competitiveness.

General and administrative expenses were RMB 167 billion for this quarter.

Mainly resulting from a one time issuance of class B ordinary shares to tack Wolf limited, which is a company controlled by our founder as a reward or approved by the board before the IPO.

Excluding share based compensation, our G&A expense grew.

My <unk>.

68, <unk>, 2% to RMP.

83 million this quarter, which was mainly due to the expansion of our J E T.

As a result of the foregoing our net loss was RMB one point.

Group 1 billion in the second quarter, excluding share based compensation, we achieved profit profitability under the non-GAAP measure our adjusted net income in this quarter. This year was RMB $246.5 million compared with adjusted net loss of.

RMB $143.4 million in the same quarter last year.

Translating to adjusted a net margin of 21, 1% for this quarter, representing a 54 percentage point improvement.

This operating.

The average was driven by the economy of scale and our compete continued efforts and increasing efficiency and also is a proof of our strong network effect.

Supported by the strength of our profitability, we recorded the net cash generated from.

Operating letting activities of RMB $671.2 million in this quarter.

Compared to net cash used in operating activities of RMB 14, 2 million in the same period of 2020.

Moving to the balance sheet.

Operate June 32021, our cash and cash equivalents and short term investments were RMB.

11, <unk> 7 billion compared.

Compared to RMB four 5 billion at December 31st 2020.

The increase was pre.

As attributable to net proceeds from our successful listing as well as well as our growth in operating cash flow in the quarter.

Now turning to our business outlook for the next quarter for the third quarter over 2021, we expect our net revenue to be between RMB.

118 billion and RMB 1.21 billion.

Representing a year on year growth rate of approximately a 100% to 105%.

We've just discussed there are still uncertainties regarding the ongoing cyber security.

Maryland review and timing to resume new users registration the impact on our revenue was reflected in the outlook, but still subject to change this.

This estimate was based on the assumption that the reveal will last till the.

The end of September.

Europe rent clothing.

We delivered a strong result for our first quarter as a public company and I would like to thank again to our team our esteemed users and shareholders.

In spite of the uncertainty of the cyber Security review, we are still in a fast growing stage with.

With healthy financial status.

Improving leverage our long term competence.

Stays unchanged and as our business model remains effective.

I'm excited about the coming quarter and looking forward to share our progress progress with you again.

This concludes my prepared remarks, no way, we'd like to answer your questions. Operator. Please go ahead.

Thank you.

We will now begin the question and answer session. If you wish to ask a question. Please press star one on your telephone keypad.

Keypad and wait for your name to be announced if you wish to cancel your request. Please press the pound or high speed.

Note that there may be a short pause, while we collect the questions.

Your first question comes from the line of Ken who of T. H capital. Please ask.

To your question.

Hi, Good evening management.

Hi, just a couple of questions. The first one is you know.

We Ah lisanti.

China economy, so under this kind of circumstances.

You know from your.

<unk>.

Where do you see different industry.

They are.

Employers.

In terms of hiring people.

So that's number one.

<unk>.

Yes.

So can you give me your status.

Yes.

In place.

In the month, and we don't know when.

Every deal is going to be less.

So let's say if the government is going to last for a while and doing this at this point.

We can't really changing customer online.

What's the company's Jacqui E Q2 deal with it to cope with it.

To get new customer so that's the two questions. Thank you.

Okay. So I can answer you second first question.

First our CEO kind of comment on your second question.

So our vendors are you know.

We have.

Diversified.

Industry contribution for our business so.

Sure.

New economy in those risks.

As a whole.

Account for a large portion of that.

Single industry and a single company contribution is slow so I think overall, though although the macro is not very strong.

It might be the situation, but we havent see such kind of.

The <unk>.

Strong signal on our platform.

Our business growth is mainly driven by paying users growth, we're still in a stage of seeing structural user increase at this moment. So we haven't seen a direct impact from macro but we will closely monitor.

No.

Recently, there are some like a.

Some some industries.

I think probably the.

Some investors you would like to ask a question. So I can comment on this.

At this time, so some industries for example, like education industry.

No.

As just one of the new economy industries just account for.

Small percentage in our total revenue so education industry.

This industry accounted for only mid single digits for our total revenue now so we think any.

One industries impact to our business is limited so regarding the company wise. So some companies maybe they might bought sunlight.

Impact from either macro or either unlike regulation related to.

Things, we think that because we serve.

A large number of small and medium sized companies. So we have a relative.

Relatively low contribution from top customers top 20 customers only account for less than 4% of total revenue so changes.

In.

Any single company or.

Or like as I, just mentioned the single industry two hour.

Business would be only limited has a limited impact on our growth trend.

So that's my answer to your question.

Thank you.

Okay.

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Okay.

So.

We are under this February for country review and since July the fifth Gen.

Our registration with a funded and it did have impact on our business.

This this is special abuser Richard's ratio has impact on our EMEA you empty you, but since our large base of existing users.

Can use our abnormally so the menu for July remained relatively stable and over to you to EMEA you issue a ratio.

Also remains stable.

Which means that we continue to keep our use of kidneys.

In the meantime, we are focusing to better serve our existing oh, our existing customers, which we may make a lot of efforts.

And on the revenue side.

We are also impacted because the suspension was not only for job seekers, but.

Also for enterprise users, our sales team and customer service teams focusing on serving the existing customers and on the on the on the professional and in that service capability. We conducted some captain training for our teams and the extent of the impact depends on the on how long the yoga left you can.

I see that we have good guidance for our for our next quarter revenue, but this is an assumption that just this user nutrition suspension will last till the end of September.

In fact as I.

As our enterprise, we cannot and we should not to predict on the timing of this suspension.

But since we need to give this revenue guidance, we just make assumption that this will last till the end of September which is a we think is appropriate and reasonable.

It has nothing to do with our estimate on when this will resume.

And this is not something we should do.

Uh huh.

As your question on what we can do to try to increase all the news says we cannot do anything about that because we are not allowed to vote on user registration and we are focusing on our existing users.

But I believe that this this.

Suspension.

The impact to our business is.

And all we're effecting the effectiveness of our business.

This model is not affected in the long run and and lastly, I'd like to emphasize that our whole company is fully cooperating with the review team on their work.

Yes.

And that's all for my questions.

Temporal. Thank you. Thank you. Thank you for that answer.

Your next question comes from Eddy Wang from Morgan Stanley. Please ask your question.

So don't go up.

Gotcha.

Oh no.

Okay.

How much.

Well, what you're calling them a.

So out of a hole.

Finally, when she.

Kind of how she's going to take a thank you to the chi and someone.

Just wanted to show a Jacobs.

Oh sure Jim good to shields temperature tool she anthology Augusta, Georgia.

No.

So just kind of took all occurred.

Well I wish you.

What percentage of gross Georgetown challenging.

Okay.

Oh, no you don't have much of a downturn.

So the focus for Drillships agenda to shallow water.

The opera House.

For a woman to them.

Yeah.

Rachel to teach them, Okay got you.

And then go on French Orange trauma, Ohio.

Thank you Joseph.

Hum.

Joshua woman.

Dr Tolar not quarter in Belgium.

Sure.

So far with what I thought it was also due to central Europe.

I just want to go Clinton someone paying ratio.

You too.

You shouldn't think of she got Black Thunder, you've got you've got tortured artisanal legal win.

So I hope you are going to just see how shontayne George I'm talking just about even with Oh My brother <unk>.

Uh huh.

Just as she had credential xiaomi 10th among them now in the Gulf of 10 ton that you should see somewhat all of who they are.

I would say even shocks.

She told me she has put me in the financial called Dubai Festival sure what's wrong, what's wrong. She Johnny Central told me and talk about what kind of can body shop just yet.

She had downtown or your uncle Tawai mantle and she had to talk to other women, how you're doing with pinkeye check the Antoni or you said you'll need it if I'm up it was all contract C Congress something that's somewhat toward the Gulf coast.

She had had a young Guangzhou show as it was when he talked him for switching gohan, Yeah I'd have to go to the tungsten.

I can't quote you wish it to go to grow households that J P. I couldn't you don't go into who bought the whole thing. So thank you for taking my question I actually have two questions. Firstly regarding to your third quarter guidance also.

As Jonathan mentioned that to you know does the guidance already effecting.

The suspension of the new user registration till the end of the third quarter, but actually in my view the guidance is still quite strong so.

Just you mentioned that you know if you.

You have I'll focus on the you know the extent of users.

Services and the user experience so basically.

Okay.

I just want to ask this is well reflected in the Apple users all Oh well.

Yeah, you know the paying ratio improvements off the overall enterprise users outside the number one question and number two question you got that.

Given the.

More stringent regulatory.

Trading environment for the.

Internet audience, a fast growing industry like a medication, so we will see more and more stuff.

Stuff's all employees to fund this industry actually is looking for the new jobs. So in the short term I mean, maybe it has to have some headwinds in terms of.

Yeah, you know our hiring demand I'll ask.

Ask Wayne company, but how do you think in the longer term. This is.

Patricia will benefit the overall.

Online recruitment industry. Thank you.

So Eddie I will have to add a little bit of color to the our pool.

Both the second quarter, so second quarter of our enterprises are.

Like our pool on our platform.

Relatively stable so it's a the revenue growth of our business, mainly driven by the number of enterprises users growth.

So this is the situation of the second quarter. So Jonathan can comment to you. Your next two questions.

Yeah.

Uh huh.

Petroleum side, you'll see a woman.

Shuttle 10 days or so full.

Full time day.

I actually got harder for.

And so now the cool.

You should see how the ship will.

We'll go to shop and go you know Saddam dual gentlemen on niche and are you a man Jim Hall.

Yes, it was down to the policy that you need to get Athena shot to showcase it you don't want them in Cheshire Clay you come down to each other is against it you can shop.

She had a 10 day that enable me adoption GTR to dance sitting in their ownership.

Tissue between chocolate and you want that I should say or you got a sense you believed you flush if someone either.

Italian.

Yeah.

And our young all each year.

Sure.

This should tell you that each year.

Yeah, So I'm going to eat all Sharon's home annuity Pasha.

And then.

No.

Kelly your patient Hong yet.

The children or Joel cashier to torture you.

Oh, yeah yeah.

John that you could put it.

No I wish somebody yeah.

Milton John.

Tables are yet not sufficient points you can call it.

It's usually gone away.

Bureau went out and triangulate all that beautiful and sure they call. It you need to earn income.

I'll, let you all she can they call it people getting laid up all that.

<unk> Dot com a T kearney it we didn't well actually that they didn't have the appointments.

And as you can tell so John Latasha. She says you'll play you don't rule it out.

You can do the charger Arundel Chi Tung.

Highly blurry and not touch users.

Charlie patient later, she had to change or tissue she'll clearly, telling you the juncture to job Punisher someday be job training.

And I call it the more challenged ones, Yeah, Youll Rocaille challenge function.

Paci said youll cashed attached to Ekati Shandong downtown all the numbers at all.

How does that tissue trauma was you couldn't even tell you that's not sure sure John that you've got to choose you until you go through it I often Dorian had yoplait Europe idea and you got a change what's your rate of Sunshine.

She don't worry you'll choose who eat off what she J down yes, it yet you'll your challenge.

Currently quote quote all those sort of acquire Telemundo cleanly isn't that so it really made a ton of them. These are.

Tuna or not.

You can get some sort of English you down here and there.

What we eat our comments he said that enjoy your casino Queen Ghansham.

Should it be done in quarter, but I wish it could be a virtual machine. So if somebody what's your thoughts on what kind of common does something John how quickly.

So Michelle I don't know what kind of a change of ownership.

Good evening in Europe, you divulge, who did you sell them.

Julio you bought your on the Charger common Chichi June.

Jim Good children, Jonathan Taylor juncture, Shunyata Sagitta Villa ensue once you're done.

Charter fishing and yet the Esher Concerta cool, yeah, and glean more Seo will mentioned good our children are equivalent to them that can be keisha ship without us. So he will come without huh.

Okay.

Yeah Jim.

Cindy will materially.

I mean, Canada in China will come to that what kind of as you go along Poplar dome rule to transact, especially women, who don't Jay Olson Joy patient in Utah.

A church that had to acquire to so called shooter.

<unk> got plenty of downhole shirt.

He called out just sort of whether you are kind of fun.

Okay, well, firstly I don't make something on to Phil's comments on your first question.

Oh, Wow wholesales team and our customer service team.

Okay.

We are continuing.

To improve our renewal and repurchase rate and.

It does not help our current state how Pos from Apple.

Currently we can be more focused on this matter and also from a group that works. So we can make this strengthening our southern cone.

And regarding your second.

Question for the educational industry, we do have noticed a lot of our employees who need their companies.

And we have seen in our existing users.

The adoption of course from the educational industry has been much more attuned to looking for jobs and that there are two kind of done a job seekers.

In this industry first why is this a standard jobs like technology products.

Our human resource.

Again, our G&A and operations, which it has some relation to the industry, but not so much. So they are they are more common for every industry. So that much either have to find.

Finding a new job and the second type is for the okay to tell our teachers and coaches and for them that two ways.

The first one they can't go to the.

Institutions, while they're opening four teachers like the school of college and they come on and they can change their I dropped a career.

Actions are with me have noticed because these are these are companies in the education industry. They had been recruiting heavily with new years. So there are a lot of junior workers like a fresh graduates all annuity graduated for one to two years in recent years. So they are more flexible in job seeking a bit.

So my observation is that they can emerging quite well and still even them out so that the situation of our platform. These are there that you are sort of a number of job seekers that bad they are.

Emerging into the overall job seeker group quite well.

And looking for the future and has the overall educational sector.

I'll get it for a quite small number of our overall user base. So we didn't observe any.

Barry are obvious impact to our all of our industry. So it's just a melting an emerging situation and but that.

That they had to increasing their activities. That's my answer to your second question.

<unk>.

She thought though.

Sure.

Fisher.

Your next question comes from Piyush <unk> of Goldman Sachs. Please ask your.

Question.

Thank you Jonathan.

If I can just go through the business as it's been performing your guidance of $1.2 billion for the third quarter.

A strong despite the CSC with you I Wonder if you could take us through the drivers that you're observing.

And what the risk reward around that.

That number is I can it's laid out for you.

If COVID-19 was to pick up or any other events going to happen or would it accelerate as you go through potentially a slowdown in the economy based on what you've observed through the early parts of 2020. My second question is on your deferred revenue.

276.

To change it.

It points to this to a slowdown the first slowdown we are observing after three quarters of an acceleration in that number could.

Could you just help us understand what's going on there.

Third question centers around how well you manage costs in the second quarter.

Wanted to given the outlook for the third quarter would you be.

Will you be running our sales and marketing.

Fence line that is tightly managed as you were running at in the second quarter.

So that the focus remains on what is necessary in the quarter thereafter from a cash perspective. Thank you.

Okay. Thank you for your question so.

I'm sure.

To answer your second question first so regarding the.

Sorry.

What's your second question.

On the deferred sorry, the second one is on <unk>.

The deferred revenue, yes, sorry, the deferred revenue.

You know the.

Changes of deferred revenue was mainly.

Seasonality issue, so normally our second quarter in terms of the cash revenue cash collected from business is low so.

So the.

Lower.

Our conversion rate.

Lower percentages as you know.

<unk>.

GAAP revenue too.

Uh huh.

Calculated castillians that ratio basically as you.

You know.

Related to the seasonality.

So we are still seeing healthy.

At least for the second quarter, we are still seeing healthy.

Cash revenue growth and we didn't see any like a slowdown with our cash revenue.

No changes.

So this is a second.

Second question. So your first question regarding sort for the for the.

Overall the guidance.

So I think you know it's now it's already by the end of August and we believe that Oh, we have a certain level of visibility of.

That's.

August is a whole month and we have already completed the July so basically we only have one month.

As a head of our growth and so basically we have certain level of confidence of our business growth in third third quarter no matter what happens.

In.

In in in the third month of this quarter. So this is our.

Russia now to do the forecast and we think that the.

We try to be conservative with our numbers, but.

All of the numbers up steel base.

Based on our own sunlight hour, probably like extrapolate it.

Government for the for the September. So so this is all of our initial thought and it's subject to change. So we hope that you can understand.

In normal situations.

Asia, what we can get for the third quarter. So we can give you some.

Some kind of like a sense to the numbers that we can have in the third quarter is better than we don't mention anything about our third quarter under the cyber security review by the regulator. So this is our intention so I share it with.

With you and the third question regarding.

Third quarter.

Cost expenses.

We think that.

Because we are not allowed us to grow our users and our enterprise customers. So our top line.

Or in some extent got impacted but the way we would like to ask Jonathan just mentioned would have to.

He has our service to it.

<unk>.

Enterprise customers existing job seekers, and by serving them well and we.

We can.

Try our best to.

To have I think.

The best that we can have with the revenue. So this is a revenue.

Regarding for the.

For the expenses.

In Italy, we will have to have a very stringent.

The measures for our various cost items and.

So for us the largest cost item is marketing and.

Traffic related item and.

Because we're not allowed to.

Grow our users so.

We reduced our user.

Acquisition related marketing activities, so that it will balance.

On the.

Because the way we cannot.

Generate might not generate enough revenue.

Revenue, but we spend less in third quarter. So generally speaking we think that way.

We can we hope that we can control the third quarter margin and we can you know.

Deliver a solid.

Third quarter results.

Let's see.

Thank you and congratulations again.

Thank you.

Your next question comes from away Shah of UBS. Please ask your question.

Eight trials won't drums on what bezel, Aha youre going to hear a shocking to me that people will say downtown.

Gotcha, why do you want to go with it.

Oh wait don't change I'm glad you called out 11 to you do you go through quantum mutual sure someone's eating juncture, Oklahoma with a drag of course, you see ball, who Fabulous I'm in New York Youngstown, two beautiful, we'll never Should've Hershey all toys intelligible Guangxi Simon do you Yahoo. Since you show to you that you go out and do her labia no matter, who will show the why do it.

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Richard do you want him.

Thiago ways answering that you always have them and do it in a satellite link Dawkins. Your if I mean, I think that gagan I'm glad you're selling your teeth out of your lending dropping assortment. So as you know you go you know what they're trying to get a number which would all Europe meals from my opinion, there should you hold as high order food UK financial report.

What kind of shop, I know, what I'm Union Wow.

First of all it has them theyre letting of dropping down the year with a movie alcohol you hit you teed up for the.

Nowhere I'm quite a thing I'm, saying is that thank you management for taking my questions are first.

The first question I wanted to ask about the potential impact on our personal data protection law would that potentially impact our operation.

Or is there any adjustment that we need to make that it could impact the effectiveness of our matching and recommendation algorithm.

And secondly, just wanted to follow up on the latest progress in the Blue collar second my recruitment business, if theres any operating data or financial data that management can share it would be very helpful.

Full and if we look at the second half of this year and next year, what are your strategies and some of the operational goals that you can share. Thank you.

Exactly.

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Sure.

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Clearly your father.

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How do you got yourself, Jim with that.

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Consumer Oh, My goodness, you bought who you know what I'm, saying.

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Colin I'm going to shoot to do Covid.

Just a guy that used to pilot the tissue wash out a questioning of the algae oil and you know with or in your guidance at all to go to a gentle somehow.

Somehow they eat yet.

Sure.

All the builders from Buffalo.

Judy is telling me Oh, well eventually the Yugo children look are you talking joke dual Derrick sung Jong functionality issue, it's usually a lot of chatter pinch it Sean Zhang tangible just you know I used to tell me tired calling them.

Partially it's the earphone neither trendy.

She is a true woman.

She now.

How do you love a woman who used to drive change and she says it can be all so you're teaching where you go.

Our country and your content as you go along.

Cash flows are going to change about the hot the suit.

So to your wins are available should you, let's see here.

And you seem to go deep clinical should preach in.

Well then she should enable this just thrown out to really enjoy that oh.

Sure one of them can deal ethos you showed.

Hershey.

And this will be mailed to you.

Thank you Michelle.

Christian Gonzalez.

So you mean, Ghana, Egypt, so should you.

Don't put us all your claims that come in contact with the children, who are talking to them.

Sometimes you go meet with all of you what you should do with traditional classroom without so he's a hotmail.

And you go up and just human yourself.

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So she did a pretty popular.

Women don't have that you're going to see those fishing tool shoot easier because you're finding women showed up come harder ball whole children. So that we don't want to use that Chilean car Ts.

Yes, Jana Honda Shahar.

The woman she allowed general manager that cautiously.

Got you got Lucky that played out.

Okay, Oh, no I'll take your first question regarding kind of personal information protection.

And Oh.

Actually it's not a new regulation and our understanding.

This is constructed based on their network security law.

So this law.

Oh.

And along the.

Along the process we have been following.

Both of them off.

And we have been adjusting our boundaries.

According to our understanding.

Before this.

No information protection came out with me. We also have noticed though that I guess the economy and.

Find me with all the work we are talking about our personal information toward the Casper mattress cause something such as product.

Creation and data cookie and continuing to updating Wednesday, once again, improving our systems and procedures to be more income planes.

At least it's rod.

And Uh huh.

It looks like about what we want to highlight that Oh.

Our Uh Huh I've have been Oh, I talked a lot of great importance to the privacy protection since day one.

Uh huh.

Doing well doing well communication between Jobseekers and enterprises. So the sneaking a resume kind of transformation has to be a high point.

I tried to address that.

Our party click to yes, and they can do they can share the information we have been insisting on this one for many many years.

And this impact although accommodation algorithms and we have a lot of work and the studies on that and Oh, okay.

Okay.

We have since we are tracking user data. According to the law. We don't think this will have too much impact on low income measure right now because the most sensitive data I'm not using the algorithms and the.

No fundamental impact to our business.

So we have been doing our studies and getting on with kidneys, and they're continuing to improving the user privacy protection and we do believe this regulation more scrutiny equations.

All good things to the to the overall industry and you use their predictions.

Without.

That's too big.

The income planes with a regulation that's all for my question.

My first question.

Yeah.

Got it.

Hum.

No.

So regarding the blue.

Color.

Isn't it.

Yes.

Yes.

So in the quarter, we are seeing faster user growth from both blue collar and white collar segments.

The Blue collar segment continues to outgrow our white collar.

Our business so our MAU all sub sector related to Blue collar urban service sector grew nicely with verified enterprise users up by more than 120% year over year.

So so we see good momentum good.

The progress.

Our blue collar business and in the second half.

That we will continue to focus on building foundations of our blue collar recruitment service.

We will further optimize our products and service improve blue collar jobseekers user experience.

<unk>.

With our callers job seekers, they have different user preference. So we are providing more you know.

User friendly products to them like Oh.

Many resume simplified and many resume templates.

And algorithms are well also.

Blue Blue collar related to customization alike in terms of the recommendation we provide them with.

Business areas related to recommendation.

And also to protect our blue collar job seekers, where I'd like to implement.

Implemented stricter platform room.

Making all restrict.

False inflammation and illegal recruitment activities on Baas, Japan.

In the second quarter as Jonathan just a part of.

It has a hour.

Our own platform security on a verification team so that it will.

Oh about Nash or we think that we will make sure of blue color or people that they kind of have a satisfying user experience and that will also increase their user stickiness and increase their platform loyalty.

And then in terms of the Blue collar business the revenue contribution of our platform.

<unk> continues to grow so in second quarter, the revenue from Blue color.

And this accounts for roughly like.

Mid twenties.

Of our total revenue. So this is a steal in.

Uptrend, So we will have to see.

Form in future.

A growing percentage from blue collar contribution to our business.

Hey, guys. Thank you management.

Your next question comes from Collyn view of China Renaissance.

Ask your question.

It doesn't mean, you don't want them right now based on launch it sounds like you have that J E T.

Thanks, Hal Lindsey Tcs closet niche you're talking about.

<unk> sure.

When we are done with seasonality with allergies.

<unk> six is coming down.

Based on the first time this year.

Okay.

Sure Jacob pools or whatever.

Triangle he's found out excuse me.

I need to know.

Sometimes all of them in guidance.

How about your quarterly cash again.

G box it actually sounds like guidance here.

I don't like to negotiate a ton known as guidance.

Unfortunately.

We don't I wouldn't Michelle can we brought up the idea that's all I know that I did a hook what backlog with that tradition.

Yeah, I don't see Oh translate by myself.

So as you mentioned that there is a metric with Jamie growth from Blue collar market and I just want him.

Yeah.

Say in India urban urban Blue collar segment.

Apart from that there is a skew of our large portion of the market while will be core traditional blue collar workers from manufacturing's, all from construction industries I wonder going into the second half and the rest of this year.

Do we have.

Could you describe teach you updates on that part how can we accelerate growth, particularly towards that that part of the business and then the second question from me is why.

While we deepen our penetration across new time, Marty I sort of either Apple or a bad economy. It's been at a work with a number of partners and it was just.

And atg.

<unk> are working with a different kinds of partners. Thank you.

Okay. Thank you for your question, so I would like to briefly answer your question.

Jonathan will give you a more color about the.

Our strategy or <unk>.

Our cooperation.

Scrap the agencies.

For the full of Blue collar business. So regarding you just mentioned the manufacturing related to Blue collar and also maybe construction related to blue collar I think they are.

Part of our blue collar market, but we see that urban service sector.

With the largest and the fastest.

SaaS the fastest growing segment among all of the Blue collar segments on our platform, we think that the.

Because if there is.

Structural.

Trend.

Letting more people coming to urban area or finding a drop.

Sure.

Sure.

Because of our.

Model is very friendly to jobseekers and employers we serve such kind of a group.

Groups of people very well, so we see that.

Yeah.

Our urban service sector Blue collar people.

So our near term focus and.

We also believe that manufacturing.

Logistic related and also on our construction related real estate related colors. They are they are also very important but.

They are not <unk>.

Imminent.

Our focus.

We can serve them and.

But we think thats the largest proportion of growth my steel come from the urban service area.

Regarding the.

The cooperation pattern between the urban service Blue collar and.

Manufacturing related color blue color, a little bit different because of most of the other service.

Enterprises users they come to platform to higher job seekers directly but for manufacturing.

Enterprises that tend to.

<unk> used agencies to higher blue collar people from online platforms. So that's why we need to cooperate with third party.

Agencies.

Cannot do it by only ourself, so Jonathan can comment a little bit with our cooperations.

With the agencies.

Contact at <unk> this year.

Okay.

Easier to consume a little slow to Ashford students at all yet.

The new to guidance.

<unk>.

A woman's.

Sure Julien.

The shifts.

Qdoba <unk> hiring.

<unk> tolerant.

Children.

She is somewhat <unk>.

No more women.

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So.

John the <unk> console adoption.

<unk> global adoption.

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It also tied to auto.

While many challenges.

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Asia tied in Sudan jewelry agenda.

<unk> only adding to the entire twinjets Hugo Hongkong Shanghai, you got some on Angola, Youll Dupont, which are smaller in number of shares you bought 14 titled shortage or shouldn't that tolerance hadn't loaded onto his wound usage and loyalty and has had a shortfall that China the function.

Let me show.

It should yes.

And then also this should be dealt with when the title.

Sure sure.

Eagle Canada.

And to answer your questions.

Jeff mentioned that one pod sir.

Because we are measuring panel.

We're referring to those talent.

As in the manufacturing area.

Is that in the massive huge manufacturing industry in China.

A lot of agencies that Tyler.

Recruiting people for the enterprises.

And if but.

Yeah.

Yes.

I didn't know workers come to your platform, but other than that those agencies come to our platform.

Do you find that the tenants together for the enterprise and that's the challenge.

How to calibrate with those agencies and to find an answer.

They find a way so we can.

Uh huh.

For people, which is job seekers enterprises agencies and platform to 3%.

That means we will stand together with strong firmly with job seekers. So we will find a way to negotiate with those agencies to find a more clear the gaming rooms. So do.

We.

We have done a lot work to two.

To standardize this industry two to protect our users to protect our ecosystem. So we can achieved a manner. So we are doing a lot of work on this we will need some time, but our whole team.

Quite positive on this week.

Sure.

In fact, two way too to cooperate and to tap further into this manufacturing industries.

My answer to your question.

Okay.

Boundary.

Yeah.

Okay Judy.

Time constraint that concludes today's question and answer session. At this time I will turn the conference back to when me for any additional or closing remarks.

Thank you once again for joining us today, if you have any further questions. Please contact our IR team GAAP play.

TPG Investor relations. Thank you.

Okay.

Yeah.

Yeah.

Thank you, ladies and gentlemen that does conclude our conference for today. Thank you for participating you may now all disconnect.

Okay.

[music].

Yeah.

[music].

[music].

Ladies and gentlemen, thank you for standing by and welcome to the Camden Limited second quarter 2021 financial results conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a Q&A session. Today's conference is being recorded.

At this time I would like to turn the conference over to MS. Wendy Huang head of capital market and IR. Please go ahead ma'am.

Thank you operator.

Good evening, everyone welcome to our second quarter saw them 10-Q, one earnings conference call. Joining me today are our founder chairman.

C O Mr. Jonathan.

And our director and the CFO, Mr. Feeling junk before we start we would like to remind you that today's discussion may contain forward looking statements, which are based on management's current expectations and observations day, well known or unknown risks uncertainties and other factors are all under the company's control.

Hum.

Which may cause actual results performance or achievements of the company to be materially different.

The company cautions you not to place undue reliance on forward looking statements and do not undertake any obligation to update this forward looking information except as required by law.

During today's call management will also discuss certain.

Control got financial measures for comparison purpose only for a definition of non-GAAP financial measures and the Reconsolidation of GAAP to non-GAAP financial results. Please see the earnings release issued earlier today.

Yeah.

Cause the replay of this conference call will be available on our website at IR of blood dripping Dot com.

Now he said I will now turn the call to join us on our founder Chairman and CEO.

Sure Krishna.

Hello.

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<unk>.

Hello, everyone and welcome to our first earnings call as a public company.

To take the opportunity to express express our sincere thanks to our users employees and the metrics. Thank you for your trust and support we will continue to focus on our main business improve the efficiency of connecting.

Tennant's two drugs you realizing the power of technology to deliver a user satisfaction by optimizing efficiency quality and choice.

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We are pleased to report that we have achieved strong results in the second quarter. This year, we recorded total revenue of RMB at one point.

It can be then an increase of 173, 9% year over year.

Our calculated billings reached RMB 144 billion, we say year on year increase of 175, 3%.

Well, we maintained our rapid revenue growth, we also achieved positive non-GAAP profitability.

From here I mean, this quarter I'm sorry.

Adjusted net income, which excluding share based compensation expenses were RMB $248.5 million.

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We believe our quality growth is a result of our efficient business model continuous enhancement of technology and the superior commercial products, which leads to the expansion of our user base and improve the service capabilities in the past called trucks the average.

Hey, you above shaping up App reached $13.4 million yeah on your gross 44, 5% the ratio of D. A U two I may use relatively stable indicates that we have maintained high user growth and activities.

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Soldiers Oh, you guys shortly.

So Sharon jogging Shanghai.

Now, let's take a closer look at our progress at the user level overall in the second quarter. We continue to follow the path to be a platform that covers all industries user groups and job categories from the perspective of job seekers, we further improved our service capabilities.

Okay on the penetration rate among the white collar workers and the higher tier cities by continuing to Salt Lake starting to fly our competitive advantages.

At the same time, we were aiming to expand our coverage in lower tier cities and the traditional industries.

Being the largest group of Jobseekers blue collar workers, our important target users.

And I believe and the main driver of our user growth. The total number of the blue collar users on our platform keeps increasing Saturday.

Due to the low online penetration rate of blue collar recruitment and the different behavioral preference from the white collar users, we have maintained our adjustments and optimization team aspects such.

Matching algorithms drove authenticity.

Safety and product visibility.

And to better serve our golf collar users, we actively cooperated with headhunters and have made positive progress we.

We have also noticed that in the second quarter, which is typically the beginning of graduation season well call.

A large number of college students joined our platform through our in house and diverse surveys such as online publicity and lives campus recruitment activities. We have become the most preferred preferred online recruitment platform for college graduates.

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Sure.

Oh, the enterprise users site, we have noticed that more and more enterprises, starting to attach great importance to the efficiency and the jobs investment up there just on platform as a result of various factors, including the contrary released recruitment demand brought that brought about by the sustained post pandemic.

They cannot economic I'm covering the increased cost of human resources, and the inverted a supply and demand in the talent recruitment market.

Thanks to our efficient and cost effective business model numbers of our enterprise users maintained its rapid growth trend as of June 32021 now.

<unk> number of verified enterprise users reached $14.85 million, we say yellow and Europe growth of 78, 5%.

The accumulative number of verified enterprise, it's reached the 7.2 meter with a year on year growth of 76, 1% for the enterprise use a composition.

Our boss population accounted for 65 eight.

8% of the whole enterprise users in the second quarter, which remained stable.

It's worth mentioning that the propulsion of small and medium sized enterprises has increased to 83, 6%, which is closer to their China's overall enterprises face ratio.

This is further proof that for the massive number of small and medium sized enterprises in China direct chat between enterprise managers and Europe secrets is in countries tend to researching mountains, where they'll provide even better service for our greater scale small and medium sized enterprises by further studying their equipment needs and characteristics.

Yeah.

We also aim to actively expand into traditional industries, such as manufacturing and finance, while maintaining and strengthening our advantages in the industry typically already well covered that internet technology and urban services.

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Remember that Shanghai, Sean Youll Darshan Youll show.

Hello.

Yehuda weird for Matador.

In terms of our R&D capability, well, we continue to reiterate our Manhattan by every two to three weeks to optimize functions such as recruitment and job seeking information display and management bulk messaging and media interview.

Interviews.

To improve our user experience and encouraging data and.

As a technology driven company technology capabilities are core to our competitiveness and we have been continuing to invest heavily in our current tenants.

As of June 30, we had the R&D team with more than 1000 employees.

Please.

In terms of algorithms on top of continuous pursuant to open fully matching accuracy. We also pay a great deal of attention to delivering customized and fair recommendation results to enable more long tail dropsy credit and SME enterprise users to be able to come in Dade County, and then your spouse.

And to facilitate as many users as possible to engage and fulfill their demand on our platform ultimately improving user interaction and satisfaction.

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Pick a woman learning you know with our product for men women and children taller issued aerial transmission.

My childhood women had a toothbrush egencia.

Asphalt.

Our operation, we continued to improve and refine our operational capabilities in detailed the categories. We are also conducting in depth research and optimization for position classification of job categories in specific industries.

Sometimes we have made significant investment in platform security.

Our team our offline security and review teams have colorful tier cities in China.

<unk> covered a CPM.

Our team is able to arrive at the recruitment locations within two hours after receiving users complaints and we plan to further expand our city coverage in the future.

Security a top secret.

Is the cornerstone of our platform's operation.

I have one security and authenticity of dropping formation has always been a crucial obstacle hindering the online penetration of blue collar recruitment and dropped seeking in the past.

In coordination with the expansion of our Blue collar business, we have made a series of security upgrades.

Chris to further consolidate the infrastructure of our platform.

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We are continuing to improve the sales capability and expanded.

The geographic coverage of our direct sales team.

In the second quarter.

We established a new branch offices in Florsheim anthem, one, bringing our total number of countries to 'twenty five.

At the same time, we focused on strengthening the professional competency training for our sales force and improving the efficiency of individual salesperson.

Personnel.

As for marketing, we are continuing to implement dedicated marketing strategies user acquisition through both brand advertising and online traffic.

We were honored to have been appointed as the official human resource supplier for the Beijing Winter Olympics.

As a result underpinned by.

Our sins and economies of scale, we continue to see a significant improvement in the marketing promotion efficiency, which feel our CFO will discuss this later in more details.

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Yeah.

Now, let me spend some time to talk about the cyber security revealed that everyone's carrying about.

As we previously.

Let's see amongst the companies currently actively cooperating with the Cyberspace administration of China on that side, but it's a country with you at the same time. The companies is conducting its own self examination and certification program focusing on the security and the user privacy protection in accordance with the latest national laws and.

And then regulation such as the data security law and personal information protection law.

In compliance with regulatory requirements. When you use a registration remain suspended our bus shipping app, which will to some extent impact the companys user growth and revenue.

However, we firmly believe that.

The regulations are necessary to regulate the industry and protect their users and then will ensure the long term sustainable growth of the industry and the company.

Given the kind of circumstances, we make more efforts to serve better serve already extinct. He uses meanwhile, with fully cooperate with review teams who work in the home.

Hope of completing the process earlier, however, the company does not yet have a clear timetable for either the completion of reviewing when shall we be able to read the news you.

Registrations.

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Finally to summarize kind of online recruitment market market and still have ample room.

Sustainable development and a considerable number of job seekers and recruiters have not.

Started to just online recruitment services.

Existing service offerings and the value provided to customers have yet to be fully is Florida.

As a new generation of online recruitment, we are adopting a email later model by combining the recommendation direct checks and the morbidity with our dedication to the concept of user satisfaction.

Spectrum first.

We will continue to invest in technology, and enrich our product offering and enhance our service capability penetrate into more industries and regions.

Although there are some fluctuations in the short term external environment fundamentally our business model remain effective and it will be.

Further demonstrated we are full of confidence in the future growth potential and believe that we can continue to provide fair valuable in a more efficient service to nearly 600 million workers in 14 media enterprises, especially small and medium sized enterprises and those long tail workers.

China.

Well, the just hubbell's until Dr. Julie Susana you I'm, the CFO consistent should feel without yourself, but I will draw competition.

We sat and I'll turn to our CFO and director Phil for their review of our financials. Thank you.

Thanks, Jonathan under Windows Hello, everyone. Thank you for joining.

Our earnings call today, I would like to give a brief overview of our second quarter 2021.

Financial results and then I will discuss our outlook for the third quarter before I begin. Please note that all amounts are all in RMB and all comparisons are on a year over year.

Our basis, unless otherwise stated.

We continued to achieve robust operational and financial growth in the second quarter of this year.

All recalculated cash billings increased by 175.3% to RMB 144 billion and our total.

Revenue.

<unk> increased by 173, 9% to RMB 1.17 billion in the quarter, beating our target.

This rapid revenue growth was mainly due to the increase of revenue from our online recruitment services, which increased by 170.

Four 7% to RMB 1.1 dollars 6 billion contributing to over 99% of our total revenues.

The increase over revenue from online recruitment services was driven by the strong growth of our pay to enterprise customers. Following the expansion of our.

Our user base and enhance our service capabilities.

As Jordan said, just mentioned with the recovery of recruitment demand and increasing penetration of online recruitment service, especially for enterprises together with our innovative model, we have seen rapid growth.

Of our accumulated enterprise users, which grew.

By over 78, 5%.

$2014.9 million by the end of June 32021.

With more enterprise users posting drops on our platform.

More positions.

<unk> became commercially mature enough to be identified as hard position, which we can charge a fee for a job posting.

Which leads to a higher paying ratio.

These two factors combined are contributing to our strong enterprise customers growth.

Which.

Increased by 135.9% too.

3.61 million in the trailing 12 months ended June 30.

2021.

Compared to a one.

1.5 dollars 3 million in.

The same period ended June 32020.

Furthermore, <unk>.

A number of our key accounts.

Grew by.

146, 6% in the trailing 12 months ended June 32021.

And then leading to a 220.

Nine 3% growth in revenue from key accounts in this quarter.

<unk> trailing the enhanced ability of serving large enterprises.

<unk> more users to long term customers on the cross selling more services to existing paid customers.

Now turning to our cost of site.

Total operating cost and expenses.

Our RMB 259 billion for the.

Quarter.

If we exclude share based compensation expenses, which was RMB 166.

Including RMB 151 billion reward to our core management.

Our adjusted total operating costs and expenses.

RMB $940.0 million, an increase of 63 point.

6% compare to two $572.3 million in the same quarter last year.

<unk> to a positive adjusted operating income of RMB 200.

39.8 million.

Our gross margin remained stable at.

187, 7% with cost of revenue increased by.

164, 2% to RMB.

$145.0 million in this quarter.

Primarily driven by higher third party payment processing costs.

Operational employee related cost silver in bandwidth cost, resulting from increased user base and the transaction volume.

Sales and marketing expenses increased by 45, 8% to RMB.

<unk>.

Cost $536.0 million in this quarter.

Primarily due to our increased sales and marketing employee related expenses and enhance the brand advertising on our customer acquisition activities.

Noteworthy.

Our sales and marketing expenses.

This represented a 445, 7% of our revenue in this quarter.

By 40 percentage points from 85, 9% in the same quarter last year.

This declining sales and marketing percentage demonstrated a higher efficiency.

Spencer, our marketing initiatives and it is us.

Proof of our strong economy of scale.

During this quarter, our R&D expense increased by 113, 13.7% to RMB 215.

A million pro.

Primarily as a result of increased R&D personnel payroll.

Other employee related costs and share based compensation.

We will continue to invest in R&D talent.

That's one of our core growth strategy, allowing us to maintain our.

<unk> technology capabilities, which is the essential of our competitiveness.

General and administrative expenses were RMB 167 billion for this quarter, mainly resulting from a one time issuance of class B ordinary shares to tack Wolf limited.

Meeting, which is a company controlled by our founder as a reward or approved by the board before the IPO.

Excluding share based compensation, our G&A expense grew by 68.2% to RMB eight.

83 million this.

This quarter, which was mainly due to the expansion of our J E T.

As a result of the foregoing our net loss was RMB 1.41 billion in the second quarter, excluding share based compensation, we achieved a profit.

<unk> ability under the non-GAAP measure our adjusted net income in this quarter. This year was RMB $251.0 million compared with adjusted net loss of RMB $147.0 million in the same quarter last year.

Letting too.

Profit adjusted a net margin of 21, 1% for this quarter, representing a 54 percentage point improvement.

This operating leverage was driven by the economy of scale and our compete continued efforts and increasing.

Efficiency and also is a proof of our strong network effect.

Supported by the strength of our profitability, we recorded the net cash generated from operating activities of RMB $673.0 million in this quarter.

Compare the.

<unk> net cash used in operating activities of RMB 14.2 million in the same period of 2020.

Moving to the balance sheet as of June 32021, our cash and cash equivalents and short term investments were RMB.

To $18.0 billion.

Compared to RMB, four 5 billion as the December 31st 2020.

The increase was primarily attributable to net proceeds from our successful listing as well as our growth in operating.

Cash flow in the quarter.

Now turning to our business outlook for the next quarter for the third quarter over 'twenty 'twenty. One we expect our net revenue to be between RMB 118 billion and RMB 1.21 billion representing a year.

Operating income a year a growth rate of approximately a 100% to 105%.

As we just discussed there are still uncertainties regarding the ongoing cyber security review and timing to resume new user registration the impact on our revenue was reflected.

And the outlook, but still subject to change.

This estimate was based on an assumption that the reveal will last till the end of September.

In closing.

We delivered a strong result for our first quarter as a public company and <unk>.

Into tanker again to our team our esteemed users and.

Holders.

In spite of the uncertainty of the cyber Security review, we are still in a fast growing stage with healthy financial status.

And improving leverage our long term competence.

Stays unchanged.

<unk> ended the business model remains effective.

I'm excited about the coming quarter and looking forward to share our progress progress with you again.

This concludes my our prepared remarks, no way, we would like to answer your questions operator.

<unk>. Please go ahead.

Thank you.

We'll now begin the question and answer session.

You wish to ask a question please press.

On your <unk>.

Telephone keypad and wait for your name to be announced.

You wish to cancel your request please press the pound or husky.

Parade or may be a short pause, while we collect the questions.

Your first question comes from the line of Ken who of T. H capital. Please ask your question.

Okay.

Right.

Hi, just a couple of questions.

The first one.

We saw some.

Uh huh.

The weakness of China economy.

Andre.

I know the circumstances.

Your.

Frontline employment.

Where do you see different.

Sure.

You know what they are.

People.

Number one.

Q.

No.

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Months.

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Netflix.

So, let's say if the government.

Wow and even disappear at.

At this point, we can't really changing your customer online.

Jackie.

To deal.

To cope with it.

As you get new customers.

The two questions. Thank you.

Okay. So I can answer you second first question first.

Our CEO kind of comment on your second question.

So all of this you know.

We have.

Diversified.

Industry contribution for our business so.

<unk>.

New economy industries as a whole account for a large portion.

A single industry and a single company contribution is slow.

So I think overall, though.

So the macro is not very strong.

It might be the situations, but a way havent see such kind of a store.

Strong signal on our platform.

Our business growth is mainly driven by paying users.

Well, we are still in the stage of seeing structural user increase at this moment. So we haven't seen a direct impact from macro but we will closely monitor so.

Recently, there are some like.

Some some industries.

I think probably.

Sure.

And the investors you would like to ask a question. So I can comment on this.

At this time.

Some industries for example, like fabrication industry.

As just one of the new economy industries just account for.

<unk>.

Some more percentage in our total revenue so education industry.

This industry accounting for only mid single digits for our total revenue now so we think any one industries impact to our business is limited.

So regarding the company wise.

So some companies they might bought sunlight.

Impact from either macro or either unlike regulation related to.

Things, we think that because we serve a large number of small and medium sized companies.

We have a.

Relatively low <unk>.

This trend from top customers top 20 customers only account for less than 4% of total revenue so changes.

In.

Any single company.

Or like.

As I just mentioned the single industry two hour.

Business would be only.

<unk> limited has a limited impact on our growth trend.

So that's my answer to your question.

Thank you Phil.

Okay.

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Okay.

Under this February for country review and since July the fifth Gen.

Our registration with SEC and do you have impact on reliability.

This expansion of user registration has impact on our <unk>.

But since our large base of existing users.

Our app nominee.

May you for July.

You may stable and already.

Asia ratio also.

Those are really stable, which means that we continue to keep our use of tiffany's.

In.

And Tim we are focusing to better serve our existing.

Our existing customers, which we may make a lot of effort.

And on the revenue side.

Also impacted because this expansion with not only for job seekers I was hopeful until pricing sorry, our sales team and customer service teams are focusing.

Okay.

Customer.

On the professional and in that service capability, we conducted some capital returning to our teams.

The extent of the impact depends on that.

On the how long the review there are left you can see that we have gave guidance for our full hour next quarter revenue, but.

And our assumption that this is Peter.

The news.

In anticipation the last key.

Till the end of September.

In fact.

Enterprise, we cannot and we should not to predict the timing of this.

I see.

We need to give revenue guidance, we do make assumptions.

This is till the end of September which is we think is appropriate.

Bob.

This has nothing to do with our estimate.

This is Jim.

And this is not something we should do.

But I see a question on what we can do to increase that.

We cannot do anything about that because we have not had a loved one.

Jason.

We are focusing on our existing users.

But I believe that is it.

Suspension.

The impact to our business is temporary and Oliver if I can see.

It absolutely is.

It is model.

Perfect.

The long run and and.

And lastly, I would like to emphasize that our whole company is fully cooperating with SEC review team on their work.

And that's all for my question.

Thank you. Thank you. Thank you for that okay.

Your next question comes from Eddy Wang from Morgan Stanley. Please ask your question.

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But you can't you don't go into the whole.

And then finally Asia. Thank you for taking my question I actually have two questions firstly regarding to your third quarter guidance.

Also.

As Jonathan mentioned that to you know.

This.

Guidance already factoring.

The suspension of the new user registration acuity end of the third quarter.

Actually in my view to their guidance is quite strong. So just mentioned that you know if you.

You have I'll focus on the you know the extent of users.

Services and the user experience so basically.

I just want to ask this is well reflected in the Apple.

But 50 users or Oh.

Reflecting the paying ratio improvements off the overall enterprise users outside the number one question and number two question is yes.

Given the a.

More stringent regulatory environment for the year.

That's all it all is a fast growing industry.

Yeah. It medication. So we one let's see you know more and the more you know the stuff's all employees to fund this industry actually is looking for the new jobs in the short term.

Maybe it's to have sudden.

In terms of Yeah, you know a higher demand in the fast growing.

Wayne company, but.

How.

In the longer term this institution will benefit the overall.

Online recruitment industry. Thank you.

So Eddie I would like to add a little bit of color to the our pool of our second quarter, So second quarter of our enterprises.

Like our.

Our platform was.

Relatively stable so it's a the revenue growth of our business, mainly driven by the number of enterprises users growth not.

So this is the situation of the second quarter, So Jonathan can comment to you.

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A woman does not equal.

Steve Wilson Joy patient in Utah children, a church that had to acquire do so core.

Core to the Eagle tenure downhole shirt.

Just wonder whether you've kind of thought.

Okay, well, firstly I don't make something on to Phil's comments on your first question.

Currently all our wholesales team and our customer service team.

Okay.

We are continuing to improve our renewal annually.

That's right and.

That's not get help.

Our current state this will help us.

Our country, we can be more focused on this matter.

Our group together, so we can make this strengthening our southern community.

Regarding your second question for the educational industry, we do have a lot of employees.

Yes.

And we have seen them.

Our existing users.

The adoption of course from the education and the industry has been much more active.

Looking for jobs and there are two kind of I don't know Doug secrets in this industry first why is this a standard jobs like technology products.

Uh huh.

Again, Dan an operation, which has some relation to the industry and not so much. So they are they are more common.

For every industry so that.

But you'd have to find a new job and that disciplined tied to east, Florida, Okay K T.

Teachers and cold.

And for them back to life.

The first one they can't go to the.

Wow Theyre opening for teachers like the school of College and it took a long time I dropped.

Korea direction with May have noticed that because these are these companies in the education industry.

She has had been recruiting heavily with new year's so they had a lot of junior all workers like a fresh graduates.

Newly graduated for one to two years.

So they are more flexible in job seeking a bit.

So my observation is that they can imagine quite well and sterling.

So that the penetration of our platform. These are there that are suffering.

Number of Jobseekers.

Uh huh.

Emerging into the other autopsy Cao group quite well I'm looking for the future and has the overall education sector.

Our country.

Well a number of our all of our users.

So we didn't.

Uh huh.

Larry.

The impact to our all of our industry. So if guests are melting an emerging situation and but that that they are increasing their activities. That's my answer to you a different question.

Quite just.

Just how do you go to them baked tissue.

Yeah.

Sure.

Your next question comes from Pes, Mumbai of Goldman Sachs. Please ask your question.

Thank you Jonathan filled Wednesday, if I can.

Through the business as it's been performing your guidance of $3.0 billion for the third quarter.

Strong despite the CIC with you I Wonder if you could take us through the drivers that you're observing.

And what the risk reward around that number is I kind of slowdown for Europe.

Covid was to pick up or any.

Just go to revert towards its happen or would it accelerate as you go through potentially a slowdown in the economy based on what you could step through the early parts of 2020. My second question is on your deferred revenue.

We took 276 is in terms of the change.

It points to a slowdown in the first to go down and we were observing off the tree.

Any Alberta open acceleration then that number could.

Could you just help us understand what's going on there and the third question incentives around how well you manage cost in the second quarter.

Wanted to given the outlook for the third quarter would you be would you be running our sales and marketing expense line that is tightly managed since you were run.

<unk> second quarter.

So that the focus remains on what is necessary in the quarter thereafter from a cash perspective. Thank you.

Okay. Thank you for your question so.

I'm sure. The answer you second question first and so regarding the.

Got it.

Sorry.

What's your second question.

Yes.

On the deferred I'm sorry, the second one is on the book.

So the deferred revenue sorry, the deferred revenue.

The you know the changes of deferred revenue was mainly a.

Seasonality issue.

Normally our second quarter in terms of the cash revenue cash collected from business is a low so.

So the.

Lower conversion rate.

You know lower percentages.

Uh huh.

No.

GAAP revenue too.

Uh huh.

Calculated cash billions that ratio basically is a you know.

Related to the seasonality. So we are still seeing healthy.

At least.

So the second quarter, we are still seeing healthy revenue growth and we didn't see any like a slowdown with all of our cash revenue.

You know.

Changes.

So this is the second.

Second question. So your first question regarding sort for the.

Overall.

The guidance. So I think you know it's now it's already by the end of August and we believe that Oh, we have a certain level of visibility of.

Well you know.

All of those to the whole month, and we have already completed the July.

So basically we only have one month.

As a head of our growth and so basically we have certain level of confidence of our business growth in the third third quarter no matter what happens.

And.

In in the third month of this quarter. So this is.

Hi.

Our you know, Russia now to do the forecast.

We think that the.

We try to be conservative with our numbers, but.

All of the numbers up steel based on some like Oh, we're probably like a extrapolate it.

For the full for the September so.

So this is all of our initial thought and it's subject to change. So we hope that you can understand.

In normal situation, what we can get for the third quarter. So we can give you some.

Kind of like.

Choppiness to the numbers that we can have either a corner, it's better than we don't mention anything about our third quarter under the cyber security a review by the regulator. So this is our intention so I've shared with you and the third question regarding.

Our third quarter.

Sin Costa expenses.

We think that.

Because we are not allowed us to grow our users and our enterprise customers. So our top line or in some extent got impacted but the way we would like to ask.

And then just mentioned the way would have to you know yeah.

He has all of our service to existing.

Enterprise customers existing job seekers, and by serving them well and we can.

You know try our best to.

To have.

John I think.

The faster we can have with the revenue. So this is a revenue and regarding for the for the expenses.

In Italy, we will have to have a very stringent measures for our various cost items and.

So for the largest cost item is marketing and Oh, you know traffic related item and.

Because we are not a lot of too.

Grow our users so we reduced our user.

Acquisition really.

And the marketing activities, so that it will balance.

The.

Because of the way we cannot.

You know John.

Generate might not generate enough revenue, but we spend less in third quarter. So generally speaking.

I think that the.

We can we hope that we can control the third quarter margin and we can deliver a solid.

Third quarter results.

Let's see.

Thank you and congratulations again.

Thank you.

With your next question comes from <unk> Shah of UBS. Please ask your question.

Charles Johnson, what they don't like.

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Thank you Glenn.

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Sure.

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At this time.

Hopefully you'll be familiar with COVID-19.

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Hey, gentlemen.

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Sure.

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Gung Ho on Gladstonian paedology dropping them shortly.

No matter, what you're doing on the ocean.

Sure.

Yeah.

Okay.

Uh huh.

Joel P shonda.

Well you hit it.

Yeah.

So we have quite a journey.

Thank you management for taking my questions first.

The first question I wanted to ask about the potential impact on our personal data protection law would that potentially impact our operation or is there any adjustment that we need to make a data cut impact defect.

Off our matching and recommendation algorithm.

Secondly, just wanted to follow up on the latest progress in the Blue collar secondary recruitment business.

If theres any operating data or financial data that management can share it will be very helpful. And if we look at the second half of this year and next year what are you.

And there are strategies and some of the operational goals that you can share. Thank you.

Where should I put it is how quickly.

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You are truly the acquaintanceship, often patchy should for sure.

If you could conclude Eagle salad. She says his home town to the launch of our two downtown Thunder Barclays. Yeah look we don't usually shop Sunglass hut Chief Jeep was that he got last shot cause Sheila let me since you bought it.

Sanctioned.

Okay, so truly the appraisal.

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It's a tight so that is like $40.

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Yeah.

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Uh huh.

Okay.

Take your first question regarding their personal information protection.

And Oh.

Great.

And our understanding that this is constructed based on them now.

Welcome.

So.

Uh huh.

Hum.

Uh huh.

On the process, we have been following.

Vermont.

And we have been adapting our boundaries.

According to our understanding.

And before this.

Personally.

Just looking at you know came out.

Also of note.

GAAP.

And combined it with our work.

Our personal information.

<unk> from Merrill Lynch.

Accretion from data Cookie and continue to update you want.

Wednesday win for game to improving.

Permission from the procedures to be more income print.

Thanks Rod.

And Uh huh.

Mhm mhm flavor about what we want to highlight that our Uh huh.

Uh huh.

Patrick a lot of great importance.

Timothy protection things that they want for example.

Doing well doing well communication between Jobseekers and enterprises, so the snips rather than me.

Hum to be happening.

I tried.

Third party click to yes.

Sure they inform.

We have been in <unk>.

On this one for many many years.

And Oh impact although accommodation.

And we have a lot to work on that.

Uh huh.

Since we are talking user data according with the launch.

Well I don't have too much impact on our commission.

Now because the most sensitive data.

The algorithms.

Hum.

No fundamental impact to our babies.

So we have been doing our studies.

And they're continuing to improve.

We don't think it was her privacy protection and we do believe this regulation smolinski inflation.

Good thing to that to the overall industry.

Our predictions.

Without having too big.

In compliance with the regulation.

Christian.

Question.

Improved.

Right.

Hum.

So.

So regarding the.

Blue color.

Isn't it.

So in the quarter, we are seeing faster user growth from both blue collar and white collar segments.

On Blue color segment continues to outgrow our white collar business, so amount all sub sector related to blue color urban.

So this sector grew nicely.

Just to verify the enterprise users up by more than 120% year over year.

So we see good momentum good.

Progress with our blue collar business and in the second half, we think that we will continue.

So to focus on building foundations of our blue collar recruitment service.

We will further optimize our products and service improve blue collar jobseekers user experience.

Cause of a blue collar job.

Job seekers, they have different user preference so we are providing.

More oh.

User friendly products to them like a mini resume simplified many resume templates.

And algorithms, we are also making blue collar related to customization.

In terms of the recommendation we provide.

Riding with a you know.

Business areas related to recommendation.

And also to protect our blue collar job seekers, where wed like to.

Implemented stricter platform Rus to restrict.

False information on illegal recruitment activities.

The amount of Japan.

In the second quarter as Jonathan just to pop.

We enhanced the hour.

Our own platform security on a verification team so that will Oh.

Oh about measures, we think that we will make sure of blue collar or people there.

Although satisfy the user experience and that will also increase their user stickiness and increase their platform loyalty.

And then in terms of the Blue collar business there.

The revenue contribution of our platform continues to grow so in second quarter.

They got out of revenue from Blue collar.

And this accounts for roughly like mid twenties.

Our total revenue.

This is a steal in the app.

Trend, so we will have to see in future.

Growing percentage from Blue collar.

Contribution to our business.

Hey, guys. Thank you management.

Yeah.

Your next question comes from Collyn, you of China Renaissance. Please ask your question.

It doesn't mean, you don't want them right now.

I'm going.

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You're talking about a.

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Okay.

Sure Jacob pool.

Sometimes well he's found out excuse me.

And I think you know, sometimes how long does that sound revenue quilici shut down that's really chubachi it actually sounds like guidance here.

Yeah.

It could have known that.

It was just something that we don't I wouldn't Michelle cool someone brought up but.

That's all I know that I did a hook.

Uh huh.

Traditional mail dailies yeah.

I'll translate for myself so.

As you mentioned that.

As a matter of Virginia, and the growth from Loopnet business market and I, just want them and particularly in the India urban urban Blue collar segment.

Apart from that.

Do you have a large portion of the market well will be called traditional blue collar workers from manufacturing's, Oh from construction industries, I wonder going into the second half and the rest of this year do we have any strategic updates on that part how can we accelerate growth.

Particularly towards.

So that part of the business and then the second question from me is one we deepened our penetration across new time, Marty I spoke of in Apple really bad they're telling me it's been at.

With a number of partners and it was just strategy of choosing a working with different kinds of partners. Thank you.

Okay. Thank you for your question, so I would like to briefly answer your question.

Jonathan will.

Give you a more color about the.

You know our strategy or Paul.

Our cooperation with the agencies.

For the for the Blue collar business. So regarding you just mentioned the manufacturer.

What's that related to blue collar and also maybe construction related to blue collar I think they are.

Part of our Blue collar market, but we see that the urban service sector is the largest and the fastest the fastest growing segment among all.

<unk> with the Blue collar segments on our platform, we think that the.

Because if there is a.

Structural.

Trend.

Letting more people coming to urban area or finding a drop so our app because of our.

Our model is very friendly to.

All else equal and employers we can serve such kind of.

Groups of people very well, so we see that.

Yeah.

Our urban service sector Blue collar people, our near term focus and.

We also believe that manufacturing.

To judge logistic related.

And also like construction related real estate related the blue color.

They are also very important but they.

They are not imminent.

You know our focus we can serve them and but we think thats the largest proportion of.

Gross my steel come from the urban service area.

Uh huh.

Regarding the.

The corporation pattern between the urban service Blue collar and.

Manufacturing related color blue color, a little bit different because of the most.

The other service.

Enterprises users they come to platform to higher job seekers directly but for manufacturing.

Enterprises that tend to use agencies to higher blue collar people from online platforms.

So that's why we need to cooperate with third party.

Agencies, you know we cannot do it by only ourself, so Jonathan can comment a little bit with our cooperation with the agencies.

Sometimes it doesn't you don't she thought it should.

So you.

Okay.

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Okay.

And to answer your questions.

Yeah, Jeff mentioned that one partner.

Thank you because when you mentioned in Panama, we are yes.

Referring to those patents.

In the manufacturing area.

Is that are you in.

Let's say, it's a huge manufacturing industry in China that there are a lot of our agents is that the time recruiting people for the enterprises.

And if not when they are not what Chris Oh didn't know workers come to our platform.

That those agencies come to our platform.

To find that the tenants together.

The map with enterprises, and that's I think the challenge on how to calibrate at least with agency and to find and understand where they find a way. So we can.

I saw this this this guidance for.

For people with job seekers enterprises agencies and platform to three person.

That means we will have them together strong firmly with job seekers. So we will find a way to negotiate with those agencies to find Oh, I'm more clear, but Kansas So.

We have done a lot of work to.

To standardize they seem that shapes to two <unk>.

All right.

First to protect Halloween ecosystem. So we achieved a manner. So we are doing a lot of work on this without need sometimes.

How teams are quite positive.

I'll find out you've got to wait to corporate and to tap further into this manufacturing.

That's my answer to your question.

But anytime you have a bunch of them.

Okay.

I am constrained that concludes today's question and answers.

And this session at this time I will turn the conference back to <unk> for any additional or closing remarks.

Thank you once again for joining us today, if you have any further questions. Please contact our IR team GAAP play other cubic investor relations. Thank you.

Thank you.

Sure sure.

Okay.

Thank you, ladies and gentlemen that does conclude your conference for today. Thank you for participating you may now all disconnect.