Q4 2021 Ke Holdings Inc Earnings Call

Hello, Ladies and gentlemen, thank you for standing by for <unk> Holdings, Incorporations fourth quarter and fiscal year 2021 earnings conference call. At this time all participants are in listen only mode. Today's conference call is being recorded I would now turn the call over to your host Mr. Matthew Zhao IR director of the <unk>.

Please go ahead Matthew.

Thank you operator, good evening and good morning, everyone welcome to <unk> Holdings, <unk> fourth quarter and fiscal year 2021 earnings conference call.

<unk> financial and operating results were published in the press release earlier today and are posted on the company's IR website, Www Dot <unk> dot com.

On today's call, we help meter Stanley Youll don't hold our co founder Chairman and Chief Executive Officer, and Mr. Hulsey, Our executive director and the Chief Financial Officer.

Mr. Paul will provide an overview of our strategies and basically it environments at the <unk>, we will provide additional details on the company's financial results.

Before we continue I refer you to our Safe Harbor statement in our earnings press release, which applies to this call as we will make forward looking statements.

Please also know that they could earnings press release and this conference call include discussions of our all these GAAP financial information as well as all of these non-GAAP financial measures.

Please refer to the company's press release, which contains a reconciliation of all these non-GAAP measures to comparable GAAP measures.

Lastly, unless otherwise stated all figures mentioned during this conference call.

With that I'll now turn the call over to our chairman and CEO Mr. Sami. Please.

Please go ahead Sir.

Cynthia message.

Hello, everyone. Thank you for joining <unk> first quarter 2021 earnings conference call.

2021 was a year ago.

On past into Hudson.

With a lot of those patent the significant correction in the market and the new digital for the Internet based platform economy.

Massive changes took place both internally and externally.

With the many new tenders to our company.

However, this slow not uncharted territory for us.

Over the past 21 years difficulties and change have accomplished us and gotten us where we are today.

<unk> Foundation is not everyone is working together toward our common future go.

It's not how ship when the organization proactively resolve a problem encountered and it gets better and a stronger funding bill is each time.

This is the one harsha become embracing.

Rising to changes.

Bromine through changes in.

And deriving more with <unk> and the process.

Is embedded within our DNA.

This is also our stance and solution to address the current hardships.

Market fluctuations have their logic.

And with the ability.

The many changes happening right now.

That will happen in the future.

Hey, there six so a long time ago from.

From a long term perspective, the market will revert to its Amit.

In the short term the market will gradually recover.

Although underlying belief about the housing related industry has never changed.

There are certain data digitalization catalyses industry transformation.

Others are indispensable.

And our service quality customer trust and the transfer center market market cycles.

It's also certain that our business model our industry is characterized by slow early stage development, which means it will take time to establish a virtuous cycle yes.

We move past the inflection point business will take off very quickly all the devices. We are doing now we are surely sow the seeds for a better future. Therefore, we have a deep peace of mind.

On disturbed by external fluctuations and.

<unk>.

Our sales to looking forward for answers.

B the enterprise of the era.

Our answer at Endo 2021, we officially launched bakers when body two ways.

Yes.

Strategy strategic upgrade when.

<unk> body refers to our call, which our existing and new home transaction services business.

<unk> refers to a home renovation and <unk> offerings, and our inclusive housing services.

Our upgraded strategic focus we aim to fully energized our wins as we accelerate our core business progress towards its goals.

Building, our increasing presence in Hawaii housing related services industry.

Reaching consumer more broadly and the enduring through our diverse array of associates and our product innovations.

And if the economy of new leaving services provider that it make home a better place.

We are responding to the higher requirements put forward to us.

Our country and our society in this era.

<unk> to consumers, possibly evolving demand from fighting a place to leave to a place of.

We enjoyed leaving us.

As housing price.

Stabilize.

And at the same time meeting organizations need from continuous iteration and the progress. It provides long term vision for our talent and to drive the organization to thrive.

Can we do this.

If something is relevant to our mission and our vision.

And there is some something we have a strong desire and adequate ability to accomplish we can.

What kind of do this over the past 21 years.

<unk> is.

A single city presence in Beijing, two nationwide and a baker grow from a pilot in dental and a several cities per platform operating in over 100 cities across China. During this time, we iterate it a comprehensive set of methodologies to grow from zero to one.

For the industry industrial Internet we.

Accumulated rich <unk>, the learnings such as cardioversion key capabilities, each stage and fighting the right place for the team.

Sometimes you can go too fast.

If you want a tree to grow taller you Kent Rajeev two Lancer bear.

Bear fruits the eight Mrs.

<unk> to be higher on the Pfizer.

The times, you must be on and keep running forward with all the Australians to achieve to achieve faster iteration.

Team gives it gives trembley adept at a reflection in Australia, syncing, which enables us to constantly learn from the oranges accumulate and improve.

<unk> set of zero to one methodologies most give us full covenants.

<unk> into a new business areas.

Next moving to our fourth quarter of 2021, our progress implementing the wind body two wings strategy and our future plans.

Same store policy support.

Market has shown signs of bottoming out since the fourth quarter of last year. However, it will be.

Tanker ton for transaction volume to fully recover.

And the industry supply side to future further contracts in Q1. According to data from home by Research Institute combating Julia as of the end of last year. The industrial number of engine has contracted by at least 30% to 40%.

Here's why.

Duration across cities.

In comparison on the <unk> platform, we have 415, when southern Connecticut stores by the end of the fourth quarter.

Up eight 7% year over year and done.

Five 4% quarter over quarter, the number of actual stores exceeding 45000 up four 4% year over year and to them at one 3% quarter over quarter.

The quarter over quarter store reduction was mainly due to a few newly added stores during the market down cycle as well as door merch to stay competitive.

At the end of the fourth quarter, we had a wrong.

455000 agents on our platform.

Decline of seven 8% year over year, and 11, 8% quarter over quarter.

To agents who are wrong.

470000.

Eight 7% year over year.

Pretty simple, 1% quarter over quarter and <unk>.

$18, 6% lower from its peak second quarter in 2021.

Which was in line with our <unk>.

<unk>.

Our.

Resilience compare with the broader market was largely owned to our AC mechanic and agency specific specialization, which brought our agent more opportunities to a tech park in transactions and a more stable income.

This together with the base compensation guarantee to high quality agents provided by a solid store nurse empowered outperform with stronger agent retention capability.

Resilience.

Meanwhile, given the lower housing transaction, while the fourth quarter, we temporarily cut back our online advertising budget.

Appearance of decrease.

In platform traffic in the fourth quarter, we have 37, four meeting EMEA use on the Becker and.

An immediate program down 13, 2% year over year. Nevertheless at the market recovers, we expect our online traffic to resume growth in 2022.

Moving on to existing and new homes.

Regarding existing home transactions doses. According to data from Baker Research Institute GTA V of existing home sales market dropped 43% year over year fourth quarter, and a <unk> of existing home transaction on Baker's platform was RMB.

354 six.

Thanks Billy.

Down 39% year over year, all of which is hitting home sale declined 41% slightly better than the overall market existing home transaction volume in some key cities have started to bottom out.

We believe the key to a successful brokerage business operation.

Collaboration and focus.

In 2021, we established rules such as agents special specialization and agent in store ranking system refine our existing home sales lease location that kind of them and I read it.

<unk> in our stores to focus on our homeowners retention sort of platform sources deployment, all of which enable us to lead agent to focus and to collaborate strengthening the superior and exclude the inferior.

We are also firmly committed to investing in industrial <unk> infrastructure.

The end of last year, we started to operate 298 contract service Center.

In certain cities.

The key cities and over 90% of the existing home transaction signing process was completed in this centers as part of our infrastructure. This centers not only improve customer's tiny differences ensure.

Phones 30, but it will also become one of the best scenarios to direct traffic to our emerging businesses segments.

Turning to new home transaction services.

New home market declined 20% year over year fourth quarter, and a D TV or new home transaction Bakers platform dropped 24% slightly underperforming the market. Many as we cut back our new home transaction business due to the liquidity liquid liquidity risks.

Developers to ensure the long term house all of our business from short term patio.

You take more time.

For the for the overall, new home market to recover we have prioritized new home risk measurement to ensure staff.

To buy independent collection.

Thanks.

With with the premise we also hope to.

Developers.

Our sales through efficiency are key to improving sell through is to provide a work environment.

Our sense of security with the knowledge that they will receive their commission on time.

That transaction, we will not be broken by any misconduct such as client information linkage that has prevailed in the industry.

<unk> when we continue to promote new home business conduct improvement plan, establishing infrastructure and a comprehensive procedures to prevent intervene trash and penalize must be missed behaviors.

We investigated and deal with over three solid compliance cases throughout the year agents, we're feeling safe suffer two a new home sales business.

We further develop our systems and tools to enhance agent capabilities, our sharpie training camp.

<unk>.

<unk> agents for immediate familiarity familiarity with new home projects and has the ability to introduce them to customers.

98% or <unk> agents in the pilot program, our self pay assistant at night to answer questions on their behalf and a pick up there.

The conversation the next day.

Entity, reducing the loss of a.

Customers at night.

Looking forward regarding our blend body.

The housing transaction services business, we have a committed goal in mind and a clear path to get to get there. Our goal is to offer a better customer Perez and gather more capital and.

<unk> agents.

While managers and the brands and the path leading to this long term target is simple take care of our customer and helping service providers take care of the customers empower agents and they are raising their professional ethics.

Improved store quality and it become France with the communities.

In 2020 to the fourth hockey for our core business second is tuned to a neutral capable.

Call ended.

And it's taken you find service providers at event at <unk> via our professionalism second we will pay more attention to improve the platform operation efficiency of our home transaction business will be.

We'll continue to improve organizational flexibility to quickly respond to any changes and chicken measures. According to either increase our rig dependent expenses served.

Stress our body will facilitate the development of our tool wins as we build our higher efficiency customer referral model to our new business.

Next.

Moving to our progress and plans for our two wins new business development.

We defined 2021 and 2022 at the year Euro which.

Our home renovation.

The <unk> services business.

Group tax.

Texts routes.

We believe that a customer demand for home renovation and the foundation, we continue to gross at how on the housing prices.

Price step stabilize.

In this market have been service providers is a key.

Yes.

<unk> standardization and utilization along with renovation.

Renovation product upgrades.

The core of improved service provider's capability and delivery quality in developing our reservation and finishing offering we started with the hardest part in the home renovation innovation process.

During a high quality interior construction finish over the past few years, we have laid the groundwork for this business. This part of our business some slow but once we nail it it will take off quickly we have already advanced from zero to learn in the homebuilding.

<unk> business via get term.

The tinman determined our team is confident and are motivated by the positive feedback from customers and we help you.

Replicable original model shouldn't do is the most significant piece of the pie. So we have funds.

Which allow us to replicate our model more rapidly at a scale to go from one to 100.

In 2020, when we built up our capabilities to support expansion in our standout standardized manner at a life scale in.

In beauty, our underlying capabilities, we institute a scientific measurement approach with that respect to schedule ring transaction orders and cooperation mechanism.

We officially rolled out the homelessness Russian one system covering the entire home renovation business with multiple modules that liquidity enable process standardization and enhanced process productivity for example.

Been pushing one system has become the industry first products covering design design win rendering detailing on the module addition into our bill of materials.

Both her bolstered by our strong capabilities Bakers self operated home revenue renovation business.

<unk> has become an industry leader in terminal construction standards in the construction cycle as well as process measurement and control in.

In 2021.

We deliver our tender offer to ship to home home renovation renovation, China's leading home renovation and the finishing so this brand and the transaction has been approved by the <unk>.

Maher.

The annual 2021 shampoo has more than 110 stores. So they weren't cities nationwide, we kicked off the preliminary integration between Shouldnt do it in a big club shall do has absolute leadership position in the industry going to come to signs of an additional management.

Internal cost control and our supply chain management.

Thanks for having a unique capability in digital digital.

Digitalization standardization of complex industrial process.

And our customer acquisition home renovation and the footage not to mention a sizable talent pool of industrial Internet professionals. Our combined companies are leveraging our value adventures to generate substantial.

Senators and build China's number one home renovation on the finishing brands to empower the entire industry looks.

Looking forward to 2022, we hope to accelerate the expansion of our home renovation in our finishing business as well as the development of our underlying capabilities.

With respect to building our capabilities first we've really improved.

Ability to provide high quality services through its tabulation of Middle office capabilities guarantees and training second we will focus on improved capabilities of construction delivered from both online and offline.

We're really establish stand or extend us operations to construction delivery process services provider certification and so on.

We will also continue to iterate, our home SaaS version to rush into a system and invest in our talent pool.

So part of it.

Radio underlying capabilities, we are actually expanding our home renovation in our furniture business and nice cities, where be bakers housing transaction services.

The villagers.

The housing transaction services for a customer to our tubing business in the pilot cities, our home transaction services already contributes over 30% of the new business customer list in the fourth quarter. We are optimistic we can achieve further breakthroughs in 2022 after integration costs.

A remarkable growth for our overall home renovation in our finishing business. So that large scale connection with high quality service providers cloud customized home foundation product production and the sale so on the on the.

Back again.

The second win is our ability to win strategy is inclusive housing services.

It carries out affection and devotion to our country and our responsibility to society.

Covers home rentals Plaza, a wide range of value added at home services.

The how the housing supply gap is that.

Prominent program for new urban residents.

Low income groups, who are in the most urgent need or improving their living conditions.

The National policy special, especially acuity encourage those home purchase and renting.

We are deeply perceived paucity paid in this industry in the future the increased high quality rental housing supply and elevate the quality of the industry. So diverse solutions and the broader external collaborations providing real solutions to delivery horse power.

Problems on the improving living environment.

<unk>.

Our inclusive business housing business <unk>.

It's divided into three categories General home run to our brokerage services.

Light rental property management services and the centralized service apartments possible value added at home services in 2021, or two quantify millions general home rental transactions that were completed on our platform up 41% year over year.

Second half of 2021, we launched our rental commission fee reduction campaign for fresh University graduates cities, such as Beijing and offer our support to more than one 700 600 University students in fighting their first home after graduation, the large rent.

Property management services manager more then.

11, 11000 units in 2020 on average up over 51% year over year.

As to your first transfer we have promoted post rental housekeeping services by providing a comprehensive variety of convenient home services for tenants and the realized penetration of over 80% in the pilot program.

In 2022.

We will deepen our exploration of diversified solutions for it closely we're leaving from both the supply side and the user and we will make efforts in diversified model to address over.

100000 rental units for new urban residents young people and the low income groups under.

On the consumer side, we plan to provide a comprehensive guarantee system for all types of tenants.

Coupled with diversified home services offer will provide tenants with ourselves and the high quality rental experiences.

Lastly.

It's a great honor for us.

To do business in China's housing related services Secretary.

Fertile ground follow promise.

No matter, what the weather come to our way.

We will get back to this land to our society and our people throughout the inclusive housing initiatives and more diverse solutions in the future.

We as an organization will forever drive to go ahead and scalable.

With that I would like to turn the call over to our CFO should call for a close to review, our fourth quarter and full year financials.

So it gives a stunning and essentially all of our thoughts on Earth reported costs in more details about our fourth quarter and the fiscal year of 2021 financial results I would like to provide a brief overview of the housing market in 2021.

Beginning in the second half of 2020 overall housing prices began to rise sharply we able to buy at any company could recovery at the oval Taylor's expectation in the copper market.

The order to quote a red hot market.

The apartment or introduce a variety of policies.

All presented at the frequency and intensity.

Notably tightens up quality measures.

Just a measure of precipitate a steep declines or volume of the new home sales declining 47% in September compared to June .

Certainly into next year, the impact of new home market shares approximately 40 per ourself, when you're home transaction rollout the funds from the existing home sales.

The financial health of many rolling 50 Viper wasn't.

Triggered type default problems some high profile large scale give us.

Just broader significant abroad, the tight market.

Making it even more difficulty for millennia vipers to issue a new debt to replace older ones.

With concern for replaying that scenario, mainly local banks.

The router funds withdrawal from <unk> com.

Some of your efforts.

Cash started to position.

So combined the negative consequences.

All of these factors were mainly.

Firstly, multi viperous faith that default rate in the second half of last year.

Secondly, cash dropped the vipers stop payment to both upstream and downstream suppliers.

Subtle it <unk> start to liquidate our valuable assets, including Sundar, who sold the bakers share in order to strengthen their cash reserve.

Their efforts also offered a hefty discounts to promote quake protect cells.

Our inventories.

Firstly.

Land sales lapped through efforts to date on the sidelines.

We think that pipe with <unk>.

In Q3 last year, there, China housing market to frozen across the nation.

<unk> deteriorating conditions.

Policy makers to fine tune some recreation started in Q3 last year prior to promote in house, Gabon itself, the housing market and a better maintenance reasonable demand for homebuyers.

Since then.

Marsden relaxation in quite measures, how proud and some signs of salt <unk>.

The volume of those seeing home confection has to pick up slightly while new home construction are still pending evaporates Charlton liquidity status.

What are your spot market sentiment will gradually recover in the first half of 2022.

<unk> marketing recovery was due based on the fragmented in Q4 with immune to the overall conduct of volume we are able to utilize this opportunity to optimize our execution at the laser quantum work to better position for the photo market recovery.

What a great product and all the operational and the financial result in Q4.

Turning to our financial details in Q4.

Net revenues were RMB 17, 8 billion in Q4 compared to $22 7 billion in the same period of 2020 exceeding both the high end of our guidance on the street consensus.

The decrease was primarily attributable to the decline of the total <unk> of 34, 6% to RMB $732 4 billion in Q4 from RMB <unk> 120 billion in the same period of 2020 due to the market downturn.

In particular.

Revenue from existing home transaction services <unk>.

<unk> 6.0 billing in Q4 compared to RMB nine 2 billion in the same period 2020.

Our mine rate due to a 39, 4% decreasing CTV of existing home transaction to RMB $354 6 billion in Q4 from RMB $584 7 billion the same period of 2020.

Our net revenue from new home construction services decreased by 12, 2% to RMB 11, 3 billion in Q4 from RMB 12, 5 billion in the same period for 2020.

Primarily due to a 24% decrease in Ptv of new home constructions to RMB $356 8 billion in Q4 from RMB $469 2 billion in the same period 2021.

Which was partially offset by a moderate increase of new home transaction Commission rates.

Net revenue from <unk> merchandise author services.

RMB <unk> 5 billion in Q4 compared to RMB <unk> 6 billion in the same period of 2020.

Primarily attributable to the decrease of net revenue from the financial services.

Also cost of revenues was <unk>.

The $14 5 billion in Q4 compared to RMB 17, 2 billion in the same period 2020.

Gross profit was RMB, two 9 billion in Q4 compared to RMB five 4 billion in existing payroll for 2020.

Gross margin was 15, 4% in Q4 compared to 23, 9% in the same period of 2020.

The decrease in gross margin was mainly due to one a continuing shift of revenue mix towards new home construction services with a lower contribution margin.

A lower contribution margin of this new home transaction led by a rescue of a higher percentage of competition cost 40 anti aging.

And three a relatively higher financial cost related to stall net revenue in the fourth quarter of 2021 as a result of incremental rising rental piece of contract service Center opened in 2021 under the increased depreciation on the occupation cost.

Operating expenses were RMB four 1 billion in Q4 compared to RMB four 2 billion in the same period of 2020 general and administrative expenses were RMB $2200 2 million in Q4 compared to RMB.

884 million in the same period of 2020, mainly due to the increase of provision for credit losses.

Sales and marketing expenses.

<unk> hundred <unk> in Q4 compared to RMB salt in the 323 million in the same care opportunity Trinity mainly due to the decrease of brand advertising and the promotional marketing activities.

Research and development expenses were RMB 738 million in Q4 compared to RMB 714 million for same period of 2020, mainly due to the increase of HEICO experienced R&D personnel, which was partially offset by the decrease of the sharp based compensation expenses.

Loss from operation was RMB south into 184 million in Q4 compared to income from operations of RMB $267 million into same period for 2020.

Operating market was 96, 7% in Q4 compared to five 6% in the same period of 2020, primarily due to one relatively lower gross profit margin in the fourth quarter of 2021 compared to the same period of 2020 under to increase.

As a percentage of total operating expenses that's off net revenue in fourth quarter of 2021, primarily due to decreased revenue along with the relatively flat operating expenses in the fourth quarter of 2021 compared to the same period of 2020.

Excluding non-GAAP items.

Our loss from operation was.

RMB 398 million in Q4 compared to adjusted income from the accretion of RMB 2230, $1 million is a same period of 2020.

We can market.

Nike with two 2% in Q4 compared to nine 8% the same purion <unk>.

Adjusted EBITDA was RMB 484 million in Q4 compared to RMB 202890, $7 million and just take care of 2020.

Net loss was RMB 933 million in Q4 compared to net income of RMB south of that to 96 million distinct Bureau.

2020.

Excluding non-GAAP items.

Net income was RMB 42 million in Q4 compared to RMB 2001 meeting with the same period of 2020.

Net loss attributable to <unk> holding Inc. Ordinary shareholders was RMB 913 million in Q4, compared with net income attributable to occur <unk> holding inc. Ordinary shareholders of RMB <unk> $95 million same parallel to <unk> 'twenty.

Net income attributable to <unk> Holdings, Inc.

RMB $45 million in Q4.

Care to RMB 2000, many interesting careful 2020.

For the fourth quarter of 2020 diluted net loss per ads.

<unk> holding Inc. <unk> shareholders was RMB 078, compared to diluted net income per I guess attributable to <unk> Holdings, Inc. Ordinary shareholder of RB zero Nice III in the same period of 2020.

Diluted net income per ads attributable.

Attributable to <unk> Holdings, Inc. Ordinary shareholders was RMB zero point, therefore, compared to RMB, one seven widened the same share of 2020.

Even during the market downturn, we were still able to remains strong cash position and again to positive cash flow generated from operations operating activities in Q4 as of December 30, <unk> 2021, So a combined balance of company's cash cash equivalents restrict cash under shelter in your <unk>.

<unk> amounted to RMB, $56 1 billion or USD eight 8 billion.

Additionally, as of December 31, 2021, the balance of our long term cash items, mainly including to long term investment amounted to RMB 14, 9 billion or USD.

USD two 3 billion.

Turning to our financial details in fiscal year 2021, although we experienced a sharp downturn in the second half of last year.

Baked in the impact overall operating and financial results.

We're still achieve what we've seen in a year over year goes off while our top line in 2021.

For the fiscal year opportunity 21, net revenue increased by 14, 6% to RMB eight 8 billion from RMB 75 billion in 2020.

Memory attributable to a 10, 1% year over year increase of our CTV to RMB $3853 5 billion in 2021 from RMB $3499 1 billion in 2020.

Our gross profit decreased by 2% to RMB 15, 8 billion in 2021 from RMB 16, 8 billion in 2020.

Our gross margin was 19, 6% in 2021 compared to 23, 9% in 2020.

The decrease in gross margin was mainly due to one.

A continued shift in revenue mix towards new home production services with the <unk>.

Lower contribution margin.

A lower contribution margin opex and comp transactions as a result of the higher percentage of the fixed compensation cost for the entire Eaton.

Compensation cost for the transactions the postbox.

And the street, although lower contribution margin of new home transactions later by the increased proportion of new home sale transaction.

Baidu connect agents and other sales channels.

Incremental rise into fixed compensation cost for its function of dedicated sales team with expertise of the new home transaction services in 2021.

Our loss from operations was RMB, one 4 billion in 2021 compared to income from operations of RMB, two 8 billion in 2020.

Operating margin was 91, 7% in 2021 compared to 4% in 2020, primarily due to one a relatively lower gross margin profit in 2002, one compared to 2022.

<unk> percentage of total operating expenses. That's also net revenue in 2021, primarily due to the increased staff related expenses provision.

Provision for credit losses, and the impairment of goodwill incurred of intrinsic to into one compared to 2020.

Excluding non-GAAP items after tax income from operation was RMB, one 4 billion in 2021 compared to RMB five 9 billion in 2020.

Net loss was.

Was RMB 525 million and 22, new one compared to net income of RMB 2770, 8 million in 2020, excluding.

Excluding non cash items, our net income was RMB 2290, 4 million in 2021 compared to RMB 5000 $720 million in 2020.

Do you mean to December well pass the phone to the funds of southwest gas quality its allocation Lubbock published a short seller report towards health company.

Upon receipt of the reports so Augie committee quicker launch internal review process.

With the assistance of third party professional advisors, including natural local the frantic accounting experts from Big four accounting fault not conference argued.

In late January before Chinese new year, we announced the other onshore completion.

It would be virtually close to instant funding, that's all Arctic agents, who were not substantiated.

It clearly shows that I have been so while were highest standards the iPhone in data and <unk>.

Corporate governance and internal control.

Sincerely appreciate you essentially upon the trough will resume following busters during this period and I want to take this opportunity to publicly we reiterate our commitment to maintaining the highest standards transparency highlighted culturally and compliance was up Q4 rooms.

To sum up.

Charlie mentioned.

'twenty, one was undoubtedly a challenging year for us yet despite that the formidable tonnage remains a further so solid pulp price in fulfilling our commitment to support our service provider on the Permian I think the most service centers July four leading to all of our customers.

One body choice, while guide our strategy function into the housing related complementary services in 2022.

For a meaningful financial impact in fiscal year, 'twenty two need to be up.

I will now speak about <unk> in Europe and focus on the plants.

Firstly for housing protection services, weighing well focus on the profitability and the cash generation capability by photo holding efficiency in all of our measurements on the operating initiatives along with continuing to invest into the industry infrastructure and our agent training.

The steps we took in Q4 to try to optimize our organization have made there is more possible in parking all of our new one body to win strategy either will flow through to drive all of our operating leverage.

We will also continue to focus on the prudent cash management and account receivable risk control considering the ongoing uncertainties from developers operation in the first half of this year.

But in the 50 to farm out ready to fight and measurement, obviously receivables our DSO for the new home transaction services photo reduce too.

97 days in 2021 from 103 days in 2020.

According to pay for Research Institute.

Overall market that CTV of both leasing hall at the new home transaction, despite to trend down year over year in 2022 as a result.

Despite our CTV of the housing traffic of services, we're off the similar trend.

Secondly for our two wings home renovation and furnishing services inclusive of housing services.

While welcoming big way well move forward with <unk>, Inc.

Thank you Rod in both strategy business plus the investments will be required as well have an impact to overall group profitability in 2022.

We have formed rapid excess investment will yield long term economy benefits and positions us well to capture burgeoning new demand in complementary sectors.

Turning now guidance for the first quarter of 'twenty, two new to us.

As stated in our Q2, earning call.

Obviously, it's a market where likelihood potent in Q1 of 'twenty two new tool in the world gradually with time gain transaction in recovery from this point.

Considering the housing market is still at early stage of recovery on the items of high base effect of the same period in 2021, we expect overall market. The GTP operating home sells for about 50% year over year in Q1, the overall market the GDP of the new home confection to decrease.

Over 40% year over year in Q1, according to pay for Research Institute.

Based on our bulk considerations looking forward to the fourth quarter of 2022 waves, but the total net revenue to be between RMB 11, 5 billion and RMB 12 5 billion.

Representing a decrease of approximately 39, 6% to 44, 4% from the same quarter of 2021.

This forecast considering the potential impact of the recent erosion related policy measures.

Constant current and preliminary view of the business situation and market conditions, which is subject to change.

All in all that's the way more forward so 2022.

Topics winter, it's gradually fading away.

<unk> for the better living that's coming to forecast with a tremendous opportunity around the <unk> upfront.

In case of winter, we proved again within growth does the invincible sub.

We continue to pursue our mission and the capture of adjacent opportunities where well stayed resilient.

Strengthened vertical capabilities. The most importantly, keeping open met.

Our decades of experience with the housing transaction services has prepared us well to level off to prequalify for robust expanding the industrials so better DB.

We will continue to help service provider dibaba operate with professional ethics.

Repeat.

The Windsor respect from their high quality services with.

Were formulated today, while we're continuing to bring our customer service and experience and our proven track record of overcoming difficulties well.

Inventory at either us to a better tomorrow.

That concludes our prepared remarks, we will now open the call for questions. Operator. Please go ahead.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session to ask questions you will need to press star one on your telephone to withdraw your question. Please press the pound whole hash key for the benefit of all participants on today's call. Please limit yourself to one question and if you have any questions you can reenter the queue.

If you are going to ask question in Chinese please follow we've increased transformations.

Our first question comes from the line of Piyush Mumbai from Goldman Sachs. Please go ahead.

Yes.

Hi, Stanley. Thank you for taking my question and congratulations on the unveiling of the one body two weeks strategy.

My first question is about the following the decline that we've seen in GTA V in fourth quarter and the guidance you've given for the first quarter could you take us through half the market conditions have been since.

And if I can slip in a second question with the recent policy loosening, how should we set our reset expectations for housing recovery trends in 2022.

And if you could take us through that.

Through that quarter by quarter both.

Both in terms of price and volume that would be great. Thank you again.

Central periods this issue regarding.

Regarding your first question, so the housing market conditions and so forth.

<unk> last year, or let's say since the fourth quarter the trends carbon the highest signaling stabilization plus a macro.

Mark you said the housing policies aiming to rectify itself.

Our tightened policy onto the same moment housing <unk> northwest of accretion.

The improving project environment to also have lots of pent up demand.

The policy implementation label responsible partly make to the central government's policies for it.

Treating measures or certain cities introduces the party policies focusing on less restriction on the mortgage home buying unto itself as well as to Vipers presale proceeds.

For price environment that is a key factor for the housing market has been improving recently.

With a significant approximate in the mortgage rates in the approval process.

That's all for generation continue to so first home in the second home interest rate fell by <unk>, 6%.

0.18%, but this is the peak season of last September respectively.

The mortgage origination cycle shortened to 50 days in <unk> history to.

Generate 2022.

There's also a normalized level similar to March 2021 'twenty.

<unk> III data license of peak season in last October the.

The improving pricing environment consumer site darkly contributes some market recovery our impacts for the both agent and the home owners' expectation on the sentiment boats involved since November last year.

For existing home sales are improving Heidi environment interacted equity to facilitate recovery.

According to Baker Research Institute to try night in home market in Q4 last year shrunk around 43% year over year and 21% quarter over quarter.

The bakery sitting home transaction <unk> dropped by 39% year over year, among which to us.

Home self CTV dropped by 41% year over year, and 4% quarter over quarter.

Mercury was driven by the improving project environment existing home transaction that are interdependent fulfilled under performance and so it's an upper tier cities potent mountain monthly transaction volume in 20 out of 32 cities in modified vehicle so sequential growth for three consecutive.

Two months, so quarter over quarter decrease in Q4, plus Q3 was mainly due to the high base in last drop in August .

It's being home transaction on Baker platform also boats involved in last Q4, which needs to buy a month over month <unk> growth of 11%, 7% of the 90% respectively for October November December .

New home sales.

New home sales market, TTP dropped 20% year over year, but the posted 9% growth quarter over quarter to new home sales could you be on peco dropped 24%, you'll be under 13% quarter over quarter to a broader new home sales market. Despite a slight rebound in Q4, it's a 9% quarter over quarter growth.

March slower versus the average 18% growth in the fourth quarter.

Plus five years lower tier cities performance weaker.

OPEC to waste a policy easing it will still take time for the homebuyers to restore confidence with respect to shorten downside pressure to continue in new home market with divergent performance across different cities.

And for Baker, New home sales in Q4, and we continue to prioritize the stability.

Opt for prudent strategy for new home sales with a focus on strengthening risk management and Mccann isn't reducing the receivable collection groups Gunther seeking incremental opportunities.

We proactively suspense cooperation with a high risk projects.

For sell through revenue recognition policy at the timely prudently with a provision for potential accounts receivable risks.

Regarding your second question fourth expectation on the housing recovery trends this year by quarter.

And also to voting on the price.

With the recent policy lose loosening.

Looking ahead to 2022.

There are three things to weigh out very sure.

The first is.

Rectification of over tightened the policy the.

Secondly, <unk> is a strong consumer demand and at the right amount for the drop in evening.

The third thing while market transactions, while returned to the steady volume based.

Based on this abuse overall market the <unk> for a home transaction.

To decrease around 6% to 14% year over year operate it's being home down by low teens year over year under new hometown by 5% to 10% year over year.

Satisfied when spots the decline in transaction volume to narrow down from two <unk> at the Marquis to receive a positive read across into second half.

At a macro level.

Chinese Carmen Hudson's reiterated this other sites on the stabilized gross for the monthly economy in 2022.

The Chinese carbon is calling for proactively introducing to policy positive to the Congress stability under cautiously taken to policy with the tightened satisfaction.

Our goal for stabilized growth that's necessary.

The first page the ROE of the housing at a pillar industry Baker.

Baker Institute.

Recently reported a neutral to a comp that you monitor policy steps to continue with one RR cotton to risk cost this year.

In 2022 estimates the Holocene royalty investment to remain price versus 2021 on the opinions of stable performance across hosting sales done the entire industrial body, who turns throughout the year.

We also estimated that this year, where we'll see a steady recovery of the housing market driven by private environment.

Trade payables tier ones.

On the pricing side.

Estimated by the Baker resurgence acute quarter mortgage interest rate cards.

Quite an supply well paced the monkey demand such.

Well led to a higher gross mortgage supply versus the euro opportunity to what rich walk through why two unlocked Rajiv and upgrade the demand.

The catalyst for the housing Consumptions.

Onto administrative measures, we are aspiring to more local garment to relax demand side metrics, including two new tools, such as easier criteria first home recognition for your home portray center sales restrictions.

Demand for housing remains monthly Andy to wall Recross pond to unmatched based.

Based on our estimation on a competitive policy environment under secular stable.

The amount of growth trajectory wingspan backloaded process of gradual market recovery in 2022 in general.

Turning to our new home sales market CTV.

Jimmy Choo runs RMB 15 trading downward around 5% to 10% year over year factoring in or around the 10% year over year decline in the gross flow area. According to Baker Research Institute.

<unk> seen some market to CTV because that means the drama RMB six to some trading down by low teens year over year factoring into low teens year over year declines gross flow area.

Combined basis of existing and new home market the Ptv.

Total market <unk> to RMB, 22, 22 trading down around 6% to 14% year over year.

Regarding culture Q1 should see a sequential decline both existing and new home sales market to TV versus <unk> 2021, due to the seasonality like the Chinese new year and the impact of COVID-19.

The ritual trough in this cycle as we break during Q2, earning calls we've recently foresees a year over year decline of the 50% for the existing home sales market <unk> are the most of the 40% decline for the new home market. The GDP in Q1, despite that it's in home transaction to staples.

Post Chinese new year.

Leading to a gradual recovery both in the existing home sales new home sales in Q2 with the narrow year over year decline Q1.

Starting from Q3, according to Baker Hughes, we despite the year over year CTV growth for both existing and new home sales to trend positive into second half of 2022 waste part of existing and new home sales market GTP to achieve overall 25 under 15% yes.

Over a year ago, respectively.

Sure.

Thank you for the questions next question is from the line of Ashley <unk> of Credit Suisse. Please go ahead.

Thank you management for taking my question I think you heard Jeff.

Scott the market outlook.

Also go through.

Outlook.

Yeah. Thank you too.

And also would you give us some color on the company.

Kathy I mean last Monday.

Both corporate needs and that to me. Thank you.

Thank you Ashley and I will answer it.

Because based outlook into the two under well you back to our Chairman Delhi to answer the follow up question.

All of our new strategy, one body wins.

Based on our outlook.

Our sponsor to peers, so very wealthy Pal we're effort onto the one body to win strategy on CTV and agent stores size, where a reasonable going forward sees a bakery existing home transaction GDP, while the aperture outperformed the broader market in the recovery cycle.

New homes settlements, where we're closely monitoring to Viper grades in the first half of 2020, Baxalta transaction <unk> and major accounts receivable rates are.

Our new home sales performance despite to be inline with market.

An ancient install sites, we foresee a bulk team.

Sure.

<unk> malt in Q1, two new two new two fault platform stores as well as the agent count compared to Q1, 'twenty two new two waves, but the number of active store in Egypt, our platform to grow but low single digit exciting year of 2022.

<unk> monetization on the profitability, we will lean more emphasize on our operational efficiency for playful and that's next door refi buy staple monetization rate on the platform take rate for all of our core business, including <unk>, our new hometown of services.

Well continue our strict cost control starting from <unk> 2021 .

<unk> measures. The contribution margin is also expected to increase both for the sitting either new home sales.

And this year marks a new chapter for our new emphasis departments over home renovation for any team Baker well draw upon customer acquisition advantage under leverage construction delivery and execution capability of <unk> due to respond.

Especially in nine key cities shown two despite to be consolidated in our financial.

Statement generate different revenue contribution of pumps a completion in the second half of this year are inclusive of housing service business.

One marketplace.

In a longer horizon, so tooling business, well effectively mitigate and offset in part the market downturn.

Core business.

Coal and capture additional revenues from stable environment.

When I to you Macroeconomists Danny to give some color for our restrictive tweaks.

They even want chunking down two to three minutes.

Can you do it forever.

Sometimes you go to the tenure.

What's under your telephone.

Yeah, David on that yourself.

So when they go on my cell phone the whole Dol critical.

Wholesale in sarcoma.

The other four.

Critical to.

Cause you to either side of that demand.

Yeah, I'll, let them on tourism, David It sounds it with you.

We don't want to you know doors regional showing your digital intelligence.

The country certainly counter syndrome.

I'm wondering if you could.

The turnkey.

They don't know what kind of a continuation what basically you don't you.

That means you wait on them.

Tenner da Vinci.

So you always have a moment, where somebody telling Jim David.

Our whole mission, if you don't see it.

Well you didn't pay for this initiative.

Roger.

Two.

John we don't have.

17, yeah.

The only challenge in the Gulf War industrial women insertion Museum.

She she xiang potential beyond the general and legal noninterest oil.

Uh huh.

Again, the Samsung and see how that easier to adopt under Glenn do you do it in the Belgium clients.

You'll note in Utah, you sounded like you in diesel.

Do you mean, the downtown and the different tender.

Yeah.

You need to compete.

On the continent.

That doesn't rule out in the literature.

Jamie sure.

So you've taken a sort of a stand alone.

So in the winter.

Magnus I don't know I was yeah.

Yeah.

Yes.

This is Tony let me quickly address your question in terms of the one by screening to win strategies right. I think in terms of the <unk> strategy that actually related to a couple of questions. First question is why we actually has been announced and launched the one body and to win.

Started at current stage.

I think the fundamental reason behind that is we actually monitor the two of the fundamental changes from the market as well as a society. Firstly in terms of the consumers' attitude is and their value actually has been significant change from buying into half two leaving batter right. So that's actually bring up.

Very good opportunities to bring the changes and the second change is coming from the union devaluation as well the proposition for all of the enterprise.

Now more and more of the enterprise.

It has been baidu both of the commercial value as well as the social ladder at the same stage. So we do believe followed by those two of the changes is the right time to launch of our new strategies in a second.

So.

So a question related to one body and two wings.

Is how we can execute that and think that there are couple of distress I want to address their so firstly is our mission of the company, which is a.

<unk>.

Our <unk> services.

And the service provider with the dignitaries.

Then brings the July four leaving so within our industry, we do rather than the agents.

We do another thing is for other service providers such as format Walker's I saw it. The other you know the housing services related all the home services.

There are.

All of the different types of service providers, which is eager to improve their professionalism as well as bringing the banking services to the customers and secondly is we actually have the capability to do that in the in the past two decades, we actually has been accumulating a lot of different capabilities.

In terms of standardization in terms of the unknown.

And offline execution as well as the other part so that actually gave us more confidence to doing those part of business and the third thing is we have the willingness to do those kind of the.

Our business so that's.

So first two question I want to address two one more than twofold strategy.

The whole Nic is all about eating and we usually opens authenticity linear.

Okay.

Jordan Sandler <unk> GT.

Even though strictly more you're under shipping true.

Simon this yourself.

Under the Sungard Sungard brochure, well I'm doing for a semi Sidoti I should say.

I'm thinking that any man.

You always have to go to India. The ETE casino, just keep joon huh.

This is Luke when they will come out in June . So you can kind of elaborate a food bulk.

All quotes that he was on the kind of Armstrong, you'll do that.

You will do the usual <unk> she said those sure.

Sure thing.

So there are plenty of the Leda study.

Requirements evolve in the future.

A portion of that Saudi shop on Zama.

Well don't believe coupons and you mentioned that is wrong.

All right.

The assignments you yourself you Patricia to ETE.

You know if you can just give us a picture of the article anymore.

Sure Tony.

The first one.

Sure, it's definitely in dental but went down drawn.

Well, it's not only you know for sure.

These not only Tom and Joe is there anything in there for now.

There you go.

Either you got to be sure and yeah, it's real meal Eva.

Joining me in noncore either.

<unk> shown here more shouldn't touch them.

And you know you'll see examples from dual interface.

Young children at home.

You Gotta do at home.

Got it.

You got to be honest, so as you go mobile.

And in Western Canada engine without going into China that can go.

Do you like sort of on a cleaner Shannon.

Tons year, saying, Julien Blah, blah blah talking to Hong Kong.

Yeah, China should continue.

Continue.

A binding a bulk hogan homes will surely now.

G C.

<unk> ammonia and <unk>.

Countries that you hold them in Santa.

Yeah, the only buttress yeah.

The Golar tundra.

And on the go.

Most of them.

Got it.

In town.

And pneumonia.

It isn't a clean.

They know about it.

We don't know what could.

Hum.

Oklahoma shortly.

And Josh and what's coming up into the kind of.

In terms of <unk> strategies are there a couple of the multi important factors, which as we have been mentioned many times before <unk>.

Including the scalability quality as well as the efficiency, but when we do buy a business no doubt.

We cannot promote all the three part simultaneously. So at every stage and we have a focus in terms of one body business, which we believe at current stage wish you to continually improve by improve the service quality to further improve the efficiency.

We will continue to find out malls are different.

Excellent of the service providers in the one body business for example, like the good brand whose stores good developers as well as the other part and Meanwhile, we also will make a balance between the investment as well as the efficiency like our SAP with how that has been mentioned before so we will further improve.

Our cash use efficiency harder to bring the further changes into our one body business on.

On the other hand in terms of the tooling business. We do believe the current focus will be using the power to further service quality improvement to bring the Patrick's got abilities.

So for example in terms of our home decoration and furnishing business I think for that part of the industry. There still has a question is whether one company can bring.

<unk> 10 billion of RMB, so revenue per year.

So far we didn't see that but hopefully alterra we coverage.

Shouldnt do it together and we can bring more breakthrough in terms of the business model into the home decoration and the renovation furnishing business and I think this year will continue to promote what we call. The five one stratus wishes means why organization wide standard one process in <unk> and <unk>.

Most important thing it's one go right. So in order to further bring the batteries scalability business followed upon declaration of furnishing and Meanwhile for the other only other being where it is called the inclusive health home services.

We do believe we should continue to United the different types of the supply.

In the.

The index of therapy, including the light model as well as others.

The supplies in the cell therapy market are made to the younger generation are given to the.

Blue collar workers are issaquah right, so by consolidating all those kind of.

The high quality of the supply of the industry. We do believe we can using our capability to further empower them in the different parts I got talent infrastructure in order to bring a better balance between our companies.

Companys commercial value as well as a social value.

Thank you so thats my answer to your question back to you operator.

Your next question comes from Thomas Chong of Jefferies. Please go ahead.

So I think the money.

Jason I wanted to you and well go.

<unk> got quite a few women.

In Montana, So Santander.

<unk> done the UAE one in Italy.

So you saw it yesterday.

Sure Glenn.

So John John J.

Hey, Jay.

Yeah.

Todd could you.

Couple of your question yes.

Yes.

Sure.

Thanks management for taking my questions. My question is about the decline in terms of the small numbers can management comment about the reason behind and then my second question is about.

The accounts receivable in Q4 can management comment about the <unk>.

That situation. Thank you.

Okay. So Thomas District, Tal, Let me answer your first question regarding the decline for the number of salt in the fourth quarter.

So a number of focused on bigger platform reduce approximately $2900 sequentially in Q4 down around <unk> five point.

4% quarter over quarter.

Around the four thousands and hundreds of cannot install just connects to prompt a platform you called for under increase so 400 versus in Q3, while approximately <unk> into 200, Craig Nunez joins our platform in Q4, and two sultans 300 less in Q3.

Therefore, it's a decreasing the total number of storms of platforms, mainly driven by the slowdown of the newly cannot his thoughts in Q4.

At market costs platforms, slowdowns or pace of 19, new store to a focus on improving operational efficiency.

Same time, so a number of stores meeting all reflection quite sure, but not yet 19, there has been decline during a market downturn as well.

For this chronic stores, so quarterly numbers increased by 400 quarter over quarter of which 310 stores.

It's not due to a storm water aimed to enhancing our competitiveness during a market downturn.

<unk>.

Disconnection due to serve our nation that's off the total discount store was only 7% lowered what was 7% lower than that in Q1 2021, showing case already governance of the platform ecosystem throughout the year.

In Q1, some marquee form the bottom during the Chinese new year, the common practices such as a margin the shut in barrels still are likely to occur.

Some store.

Also choose not to renew their leases expiring.

Despairing of runs and you're adding them all before Chinese new year, resulting a quarter declines in number of store platform.

However, the number of store onto the platform.

<unk> two inputs gradually after market stabilized in Q2.

Regarding your second question part of <unk> and the wiser way.

<unk>.

Risk towards the collection I would like to say that the first Melbourne, Tox, sorry, no maturities for Bakers new home business.

If you look at all we're just earning release of DSO reduced from 103 days in 2020 297 days in 2021.

Also during 2000 and knew what the total commission revenue from New home sales was RMB 46, 5 billion, while our collection was $51 7 billion each year.

Our company had approximately RMB 11, 5 billion of accounts receivable for Q4, including approximately RMB 11 billion plus a new home construction services worst cash collection for the new home consultant services.

<unk> RMB 12 6 billion in Q4.

The provision for accounts receivable and other receivables in Q4 total RMB $620 million, representing cultural overhaul that you Christophe RMB $250 million.

Okay closer strategic late increased bad debt provision in Q4 due to several reasons.

First on one hand due to the continuous downturn of the new home market <unk> liquidity and rate increases significantly.

So increased scope on the percentage of bad debt provision reflect bakers principle adopting most prudent.

It is the accounting treatment.

So I mean, it's tough banking market risks the second news.

So clarification of more protests are higher rates.

The increase in bad debt provision will encourage our frontline teams.

Explore more business opportunities.

The low risk.

<unk> reduced the proportion of the high risk project in the future.

Also Sarah do sounds you referenced on the liquidity pressures to repeat styles. We have recently seen a series of policy easing for developers such as acquisition loans no longer counting towards the <unk> rollout.

Relaxation of the control over pre sell prestige.

<unk> believes that these measures Martin Rowley.

Give us liquidity risk, but will take time for the policy to be fully back to.

The rebound of sales ended the subsequent recycling of cash while ultimately solve the challenges <unk> faced at this moment, whilst improving themselves through exactly where bakers dress slide.

For our internal risk control well continue to initiative, we will be taking over the past two improve our dynamic of risk into module for monitoring so relative to the Viper side, that's our new home projects.

<unk> advanced assessment that based on our risk rating Mccann isn't working well or wide cooperation on the high risk projects.

The seafood Cobra Corporation after risk sites post and the folks on the repayments.

All in all I would like to say so bankers by the provision for the new home transaction services was proactive cost made by <unk> based on all of our prudent accounting policy.

We do not believe so.

New homes, such as well based on mature risk because of Baker enjoying so high degree of independence and use the new home business since our business are now to relaunch.

Relationship but.

Is consumed out of the sales and channels.

High quality of service recognition by our customers and our reputation.

We closely monitor risk under implement countermeasures selectively pursue person we believe the industry work in a better shape in the future. Despite the short term.

Sure.

Thank you for all the questions. We are now approaching the end of the conference call I'll now turn the call over to your speaker host today, Mr. Matthew Zhao for closing remarks.

Thank you operator, thank you once again for all of you joining us today. If you have any further questions. Please feel free to contact bakers and restoration team through the contact information provided on our website. This concludes today's call and we look forward to speaking with you again next quarter take care, Thank you and goodbye.

Okay.

[music].

Okay.

[music].

[music].

[music].

[music].

Hello, Ladies and gentlemen, thank you for standing by for <unk> Holdings, Incorporations fourth quarter and fiscal year 2021 earnings conference call. At this time all participants are in listen only mode. Today's conference call is being recorded I will now turn the call over to your host Mr. Matthew Zhao IR director of the <unk>.

Please go ahead Matthew.

Thank you operator.

Good evening and good morning, everyone welcome to <unk> Holdings, <unk> fourth quarter and fiscal year 2021 earnings conference call.

The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website www dot to your western del <unk> Dot com.

On today's call, we help me Sir Stanley you'll adult Palmer, our co founder Chairman and Chief Executive Officer, and Mr. Hulsey, Our executive director and the Chief Financial Officer.

Mr. Paul will provide an overview of our strategies and the basically the vitamins and the <unk> will provide additional details on the company's financial results.

Before we continue I refer you to our Safe Harbor statement in our earnings press release, which applies to this call as we will make forward looking statements.

Please also know that they could earnings press release and in this conference call include discussions of all of these GAAP financial information as well as all of these non-GAAP financial measures.

Please refer to the company's press release, which contains a reconciliation of the audited non-GAAP measures to comparable GAAP measures.

Lastly, unless otherwise stated all figures mentioned during this conference call.

Yes.

With that I will now turn the call over to our chairman and CEO . Mr. Paul. Please go ahead Sir.

Cynthia message.

Hello, everyone. Thank you for joining Baker's first quarter 2020 earnings conference call.

2021 with a year on past into Hudson.

With the logo is putting a significant correction in the real estate market and then youll have a digit for the internet based a playful and the economy.

Massive changes took place both internally and externally.

For the many new tenders to our company.

However, this snow not uncharted territory for us.

Over the past 21 years difficulties and change have accomplished us and it got us where we are today.

<unk> is not <unk>.

Within <unk> it is a working together toward our common future go.

It is not hardship when the organization gravity really resolved problem encountered and again better and a stronger funding buildings each time.

This is the one hudson become embracing.

Rising to tenders.

Bombing through changes in.

And deriving more of a <unk> and the process.

Is embedded within our DNA.

It is also our stance and solution to address the current hardships.

Market fluctuations have their logic.

And with the ability.

The many changes happening right now that it will happen in the future.

Hey, there six so a long time ago.

From a long term perspective, the market will revert to way to me and in the short term the market will gradually recover.

Although underlying belief about the housing related industry has never changed.

As certain data digitalization catalyses industry in transformation services providers are indispensable.

And the service quality customer trust and entrance tens sentence market market cycles.

It's also certain that our business model our industry is characterized by slow early stage development, which means <unk> to establish a virtuous cycle yet.

Yes, once we move past the inflection point.

We will check off very quickly all the license. We are doing now we are surely so the stage for a better future. Therefore, we have a deep peace of mind, we are disturbed by external fluctuations.

And we are preparing ourselves to looking forward for answers.

B the enterprise of the era.

That's our answer at Endo 2021, we officially launched bakers when body two ways.

E T E.

Steady strategic upgrade.

One body.

<unk> to our call, which our existing and new home transaction services business <unk> refers to a home renovation and are furnishing offerings and our inclusive housing services.

Through our upgraded strategic focus we aim to fully energized our wins as we accelerate our core business progress towards its goals.

Building a increase in passengers in Hawaii housing related services industry, reaching consumer more broadly and enduring through our diverse array of associates and our product innovations.

And it becomes a new leaving services provider that it made home a better place.

We are responding to the higher requirements put forward to us by our country and our society in this era.

Kathryn to consumers faster evolving demand from fighting a place to live to a place of enjoyed leaving.

As housing price.

Stabilize.

And at the same time meeting organizations need for continuous iteration and the progress. It provides long term vision for our talent and to drive the organization to thrive.

Can we do this.

If something is relevant to our mission and our vision.

And there is some something we have a strong desire and adequate ability to accomplish we can.

What kind of do this over the past 21 years, India is a single city presence in Beijing, two nationwide and a baker grow from a pilot in dental and several cities per platform operating in over 100 cities across China. During this time we.

Iterate it a comprehensive set of methodologies to grow from zero to one for the industry industrial Internet, we accumulated rich <unk> the learnings such as cardio rating key capabilities, each stage and fighting the right pace for the team.

Sometimes you can't go too fast.

If you want a tree to grow taller you Kent Rajeev to Blossom bear fruits the aim.

He has to be higher and the Pfizer either.

Times, Youll must be done and a key branding forward with all the Australians to achieve to achieve faster iteration. Our team gives it gives trembley on depth.

Collection, and abstract thinking which enables us to constantly learn from the oranges accumulate and improve.

<unk> set of zero to one methodologies most give us full covenants in our expansion into a new business areas.

Next moving to our fourth quarter of 2021, our progress implementing the wind body two wings strategy and our future plans.

Same store policy supports the market has shown signs of bottoming out since the fourth quarter of last year. However.

<unk> tons for transaction volume to fully recover.

And the industry supply side to future to further contract in Q1.

According to data from home by Research Institute comeback and Julia as of the end of last year. The industrial number of engine has contracted by at least 30% to 40% with wireless.

Aviation across cities.

In comparison on the pay cross platform we have.

51, Southern Connecticut stores by the end of the fourth quarter up eight 7% year over year and down 554% quarter over quarter. The number of actual stores you can see it.

45000 up.

<unk>, 4% year over year, and down eight 3% quarter over quarter.

The quarter over quarter store reduction was mainly due to a few newly added stores during the market down cycle as well as door merch to stay competitive.

The end of the fourth quarter, we had a wrong.

455000 agents on our platform a decline of seven 8% year over year, and 11, 8% quarter over quarter.

Our two agents who are wrong.

470000.

Eight 7% year over year.

City center in Poland, 1% quarter over quarter and <unk>.

$18, 6% lower from its peak second quarter in 2021.

Which was in line with our <unk>.

Our.

Resilience compare with the broader market was largely owned to our AC Mccann Ism and agency space.

Our specialization, which brought our agent more opportunities to a tech part in transactions and a more stable income.

This together with the base compensation guarantee to high quality agents provided by historic store nurse empowered our payer form with stronger agent retention capability.

Resilience.

Meanwhile, given the lower housing transaction volume in the fourth quarter, we temporarily cut back our online advertising budget and they experience a decrease in.

In platform traffic in the fourth quarter, we have sorry, seven four meeting EMEA use on the Baker.

An immediate program down 13, 2% year over year. Nevertheless at the market recovers, we expect our online traffic to resume growth in 2022.

Moving on to existing and new homes.

Regarding existing home transaction services. According to data from Baker Research Institute CTV of existing home sales market dropped 43% year over year fourth quarter, and a <unk> of existing home transaction on Baker's platform was RMB.

354.6.

Thanks Neely.

Down 39% year over year, all of which is hitting home sales declined 41% slightly better than the overall market existing home transaction volume in some key cities have started to bottom out.

We believe the key to a successful brokerage business operation is collaboration and focus.

In 2021 re established rules such as agents special specialization and agent in store ranking system refine our existing home sales leads a location that Canada and directed agents in our stores to focus on our homeowners retention through our platform.

Resources deployment, all of which enable us to lead agent to focus and collaborate strengthening the superior and exclude the inferior.

We are also firmly committed to investing in industrial infrastructure as of the end of last year. We started to operate 298 contract service Center.

In Saudi City City key cities and over 90% of the existing home transaction signing process was completed in this centers as part of our infrastructure the centers not only improve customer's tiny differences.

<unk> phone and <unk>, but it will also become brand over the past scenarios to direct traffic to our emerging businesses segments.

Turning to new home transaction services.

New home market declined 20% year over year in the fourth quarter, and a D TV or new home transaction Bakers platform dropped 24%.

Natalie underperforming the market.

As we cut back our new home transaction business due to the liquidity liquid liquidity risks of developers to ensure the long term house of our business from short term patio.

We will take more time.

For the for the overall, new home market to recover we have prioritized new home risk management to ensure staff.

To buyer and apparent collection.

Renters.

With the premise we also hope to.

Developers.

Here sales through efficiency are key to improving sell through is to provide a walk.

That agent a sense of security with the knowledge that they will receive their commission on time and the air transaction, we will not be broken by any misconduct such as client information linkage that has prevailed in the industry.

2021, we continue to promote new home business conduct improvement plan, establishing infrastructure and a comprehensive procedures to prevent intervene trap and penalize must be missed behaviors, we investigate it and deal with over three solid income.

Clients cases throughout the year agents, we're feeling safe suffer two a new home sales business.

We further develop our systems and tools to enhance agent capabilities, our sharpie training camp.

Also hedged.

<unk> agents familiar familiar familiarity with new home projects and is there ability to introduce them to customers.

98% or <unk> agents in the pilot program use our self pay assistant at night to answer questions on their behalf and pick up the conversation the next day.

Significantly reducing the loss of customers.

Customers at night.

Looking forward regarding our blend body the housing transaction services business, we have a committed goal in mind and a clear path to get to get there. Our goal is to offer a better customer in Paris, and gather more capital and the.

<unk> agents.

While our managers and our brands and the path leading to this long term target is simple take care of our customer and a heightened service providers take care of the customers empower agents and they are raising their professional as ethics.

Improved store quality and it become friends with the commodities.

In 2022, the fourth hockey for our core business segment is tuned to a neutral capital as call ended.

And digging you find service providers at around advanced via our professionalism second where they'll pay more attention to improve the platform operation efficiency of our home transaction business.

We will continue to improve organizational flexibility to quickly respond to any changes and chicken measures according to either increase or.

A ring.

Expenses Sir.

The stress our body will facilitate the development of our tool wins as we build our higher efficiency customer referral model to our new business next.

Moving to our progress and plans for our two wins new business development.

Defined 2021, and 2022 and the year Euro which.

Our home renovation and the <unk> services business.

Group tax tax routes.

We believe that a customer demand for home renovation and affiliation we're continue to growth at how on the housing price it prior.

Price step stabilize.

In this market have been service providers is a key.

Yes.

<unk> standardization and utilization along with renovation renovation product upgrades at the core of improved service provider's capability and delivery quality in developing our reservation and finishing offering.

We started with the hardest part in the home renovation innovation process.

During a high quality interior construction finished over the past few years, we have laid the groundwork for this business. This part of our business some slow but once we nail it it have your tech off quickly we have already advanced from zero to land in the homebuilder.

<unk> business via get term.

The tinman determined our team is confident and are motivated by the positive feedback from customers and we help you.

Applicable original model shouldn't do is the most significant piece of the puzzle we have fund.

Which allow us to replicate our model more rapidly at a scale to go from one to 100.

In 2020, when we build up our capabilities to support expansion in our stand on that standardized manner at our lifestyle in.

In beauty, our underlying capabilities, we answer to yield a scientific measurement approach with that respect to shattering transaction orders and our cooperation mechanism.

We are officially rolled out the homelessness version one system covering the entire home renovation business is margin modules that liquidity enable process standardization and enhanced process productivity for example.

Been pushing one system has become the industry first products covering design designing rendering detailing and modernization into appeal of our materials.

Both term bolstered by our strong capabilities Bakers self operated home revenue renovation business.

<unk> has become an industry leader in terminal construction standards in the construction cycle as well as process measurement and control in.

In 2021.

We deliver our tender offer to ship to home home renovate renovation, China's leading home renovation and the furniture. So this brand and the transaction has been approved.

Hey, Sam.

As of the end of 2021 shampoo has more than one 110 stores.

Cities nationwide, we kicked off the preliminary integration between Shouldnt do on the vehicular shall do has absolute leadership position in the industry range come to signs of an additional management internal cost control and our supply chain management.

<unk> unique capability in diesel.

Digitalization standardization of compliance industrial process.

And our customer acquisition home renovation and the foolish not to mention a sizable talent pool of industrial Internet professionals, our combined companies allow reaching out with value at adventures to generate substantial.

Senators and appeal China's number one home renovation on the finishing brands to empower the entire industry.

Looking forward to 2022, we hope to accelerate the expansion of our home renovation in our finishing business as well as the development of our underlying capabilities.

With respect to building our capabilities first we will improve.

Ability to provide high quality services through its tabulation of middle office capabilities guarantees and a training second we will focus on improved capabilities of construction delivery from both online and offline.

We will establish stand or extend us operations to construction delivery process service provider certification and so on we will also continue to iterate our home SaaS conversion to rush into a system and to invest in our talent pool.

Supported by our upgraded underlying capabilities, we are actually expanding our home renovation in our finishing business and nice cities, where be bakers housing transaction services.

The villagers our housing transaction services, we refer customers to our <unk> business in a pilot cities, our home transaction services already contributes over 30% of the new business customer list in the fourth quarter. We are optimistic we can achieve further breakthroughs in 2022.

After integration Foster a remarkable growth for our overall home renovation in our finishing business. So that large scale connection with high quality services providers, plus customized home solution product production and the sale so on the on the backend.

Back in the.

The second win is our web 42 win strategy is inclusive housing services.

It carries out affection and devotion to our country and our responsibility to society and remaining covers home rentals Plaza a wide range of value added at home services.

The housing the housing supply gap is a pro pro prominent program for new urban residents young payouts low income groups, who are in the most urgent need or improving their living conditions.

The initial policy special special <unk> encourage both home purchase and renting.

We are deeply perceive capacity paid in this industry in the future the increased high quality rental housing supply.

<unk> the quality of the industry, so diverse solutions and a broader external collaborations providing real solutions to delivery horse power.

Problems on the improving living environment.

<unk>.

Our inclusive business housing business <unk>.

Is divided into three categories General home rental brokerage services.

Light rental property management services and the centralized service apartments, plus value added at home services in 2021, or two quantify millions general home rental transactions that were completed on our platform up 41% year over year.

Second half of 2021, we launched our rental commission fee reduction campaign for fresh University, our graduates cities, such as Beijing and to offer our support to more than 1100, 600 University students and fighting their first hole after graduation the.

The large rental property management services manager more there.

Yeah.

11, 11000 units in 2020 on average up over 51% year over year as to your first transfer we have promoted posts rental housekeeping services by providing a comprehensive a variety of convenient home services for tenants and the realized.

And attrition of over 80% in the pilot program.

In 2022, we will deepen our exploration of diversified solutions for closely levy from both the supply side and the user and we.

We will make efforts in diversified model to address over.

100000 rental units for new urban residents young people and the low income groups.

On the consumer side, we plan to provide a comprehensive guarantee system for all types of tenants.

Coupled with diversified home services offer will provide tenants with ourselves and the high quality rental experiences.

Lastly.

It's a great owner for us.

To do business in China's housing related services Center.

Fertile ground follow promise.

No matter, what the weather come to our way.

To go back to this land to our society and our people throughout we include new housing initiatives and more diverse solutions in the future.

We as an organization before ever drive to grow ahead of sales.

With that I would like to turn the call over to our CFO should call for a close to review, our fourth quarter and full year financials.

So I guess, Tony and thank you everybody for joining us reported cost of more details about our fourth quarter and fiscal year 2021 financial results I would like to provide a brief overview of the housing market in 2021.

Beginning in the second half of 2020 overall housing prices began to rise sharply we able to buy at any company could recovery at the oval tailored expectation in the copper market.

In order to accrue the Red Hot hotter markets.

The apartment or introduce a variety of policies.

All presented at the frequency and intensity.

Not fully tightens up private measures.

This measure precipitate a steep declines or volume of the new home sales declining 47% in September compared to June .

This in turn negatively impacts the new home market share is approximately <unk> 40 per ourselves new home transaction to announce a funds from the existing home sales.

The financial health of many rolling 30 Viper wasn't.

Triggered by default from some high profile large scale developments.

This brought the significant abroad that market.

And even more difficulty for malaria Vipers, two issued a new debt to replace older ones.

With concern for replaying Thats narrow many local banks.

Devote the funds withdrawal from Tuscarora com, leaving some give offers.

<unk> cash started to position.

The combined the negative consequence of all of these factors will mainly.

Firstly multi referenced.

The default rate in the second half of last year.

Secondly.

Drop the vipers stopped payment to both upstream and downstream suppliers.

Suddenly <unk> start to liquidate our valuable assets.

<unk> Sundar, who sold the Baker its share in order to strengthen their cash reserve.

You referenced also offered a hefty discounts to promote creek protect cells on nuclear inventories.

Firstly.

Land sales slumped efforts stayed on the sidelines.

We think that <unk> taken.

In Q3 last year, so China housing market, a frozen across the nation.

<unk> deteriorating conditions.

<unk> policy makers to fine tune. Some recreation started in Q3 last year prior to promote how good violence of the housing market and a better maintenance reasonable demand for homebuyers.

Since then.

Marsden relaxation in product measures, how proud and some signs of salt the.

The volume of those being home confection has to pick up slightly while new home construction is still pending goodbye for the short term liquidity status.

Waste spot market sentiment will gradually recover in the first half of 2022.

<unk> modern marketing recovery was due Nathan on the fragmented in Q4 with immune to the overall conduct of volume we are able to utilize this opportunity to optimize our execution at the laser quantum work to better position for the photo market recovery.

What a great product in all the operational and financial result in Q4.

Turning to our financial details in Q4.

Net revenues were RMB 17, 8 billion in Q4 compared to $22 7 billion in the same period opportunity 20 exceeding both the high end of our guidance on the Australia facilities.

The decrease was primarily attributable to the decline of the total <unk> of 34, 6% to RMB $732 4 billion in Q4 from RMB thousands of 120 billion in the same period of 2020 due to the market downturn.

In particular.

Net revenue from existing home transaction services <unk> six zero bearing in Q4 compared to RMB nine 2 billion in the same payroll for 2020.

Our mine rate due to a 39, 4% decrease in CTV of existing home transaction to RMB $354 6 billion in Q4 from RMB 584, 7% during the same period of 2020.

Our net revenue from new home Protector services decreased by 12, 2% to RMB 11, 3 billion in Q4 from RMB $12 5 billion in the same period for 2020.

Primarily due to a 24% decrease in Ptv of new home constructions to RMB $356 8 billion in Q4 from RMB $469 2 billion in the same period 2020.

Which was partially off site by a moderate increase of new home transaction Commission rates.

Net revenue from <unk> merchandise offer services.

RMB <unk> 5 billion in Q4 compared to RMB <unk> 6 billion in December of 2020.

Primarily attributable to the decrease of net revenue from the financial services.

Also cost.

<unk> revenue was RMB 14, 9 billion in Q4 compared to RMB 17, 2 billion in the same period of 2020.

Gross profit was RMB, two 9 billion in Q4 compared to RMB five 4 billion in the same payroll for 2020.

Gross margin was 16, 4% in Q4 compared to 23, 9% in the same period of 2020.

The decrease in gross margin was mainly due to one a continuing shift of revenue mix towards new home construction and services with a lower contribution margin.

A lower contribution margin of error going home transaction led by a relatively higher percentage of fixed compensation cost for the anti aging.

And three a relatively higher percentage of cost relates to install of net revenue in the fourth quarter of 2021 as a result of incremental rising rental piece of concrete service Center opened in 2021 under the increased depreciation on the arbitration cost.

Operating expenses were RMB four 1 billion in Q4 compared to RMB four 2 billion in the same period of 2020 general and administrative expenses were RMB $2200 2 million in Q4 compared to RMB.

$884 million in the same period of 2020, mainly due to the increase of provision for credit losses.

Sales and marketing expenses were RMB.

809 million in Q4 compared to RMB salt in the $323 million in the same corruption utility mainly due to the decrease of brand advertising and promotional marketing activities.

Research and development expenses were RMB 738 million in Q4 compared to RMB 714 million in the same period of 2020, mainly due to the increase of hydro in experienced R&D personnel, which was partially offset by the decrease of the sharp based compensation expenses.

Loss from Operation was RMB 184 million in Q4 compared to income from operations of RMB 267 million the same period for 2020.

Operating market was 96, 7% in Q4 compared to five 6% in the same period of 2020, primarily due to one relatively lower gross profit margin in the fourth quarter of 2021 compared to the same period for 2020 under two <unk>.

The increase of percentage of total operating expenses as off net revenue in fourth quarter of 2021, primarily due to decreased net revenue along with the relatively flat operating expenses in the fourth quarter of 2021 compared to the same period of 2020.

Yeah.

According noncash items.

Our loss from operations was RMB 398 million in Q4 compared to adjusted income from the accretion of RMB 2230 $1 million interest in pure of 2020.

Adjusted operating margin was 19, 2% in Q4.

<unk> of nine 8% in the same period of 2020.

Adjusted EBITDA was RMB 484 million in Q4 compared to RMB 202890 $7 million in the same period for 2020.

Net loss was RMB 933 million in Q4 compared to a net income of RMB south of that 96 million in the same period of 2020.

Excluding non-GAAP items.

Net income was RMB 42 million in Q4 compared to RMB 2000, 1 million the same period of 2020.

Net loss attributable to <unk> holding Inc. Ordinary shareholders was RMB 913 million in Q4, compared with net income attributable to <unk> holding Inc. Ordinary shareholders of RMB, <unk> 95 million, 8% <unk> 2020.

Net income attributable to <unk>, holding Inc, or <unk>.

45 million in Q4 compared to RMB 2000 million into same period of 2020.

For the fourth quarter of 2020 diluted net loss per ads.

<unk> holding Inc. Aten shareholders was RMB <unk> 78 <unk>.

Impair two diluted net income per I guess attributable to <unk> Holdings, Inc. Ordinary shareholder of RB 093 in the same period of 2020.

Adjusted diluted net income attributable.

Attributable to <unk> Holdings, Inc. Ordinary shareholders was RMB 0.04, compared to RMB, 171% of 2020.

Even during the market downturn, we were still able to remains strong cash position and again the past cash flow generate bumped the operation of operating activities in Q4 as of December 31, 2021, So a combined balance of the company's cash cash equivalents restrict cash under shelter in your <unk>.

<unk> amounted to RMB, $56 1 billion or USD eight 8 billion.

Additionally, as of December 31, 2021, the balance of our long term cash items, mainly including to long term investment amounted to RMB 14, 9 billion or.

USD two 3 billion.

Turning to our financial details in fiscal year 2021, although we experienced a sharp downturn in the second half of last year.

That's the case and the impact overall operating and financial results.

We are still achievable synergy year over year growth of our top line in 2021.

For the fiscal year opportunity to into what our net revenue increased by 14, 6% to RMB eight 8 billion from RMB 75 billion in 2020.

Primary attributable to a 10, 1% year over year increase of our CTV to RMB $3853 5 billion in 2021 from RMB $3499 1 billion in 2020.

Our gross profit decreased by 2% to RMB 15, 8 billion in 2021 from RMB 16, 9 billion in 2020.

Our gross margin was 19, 6% in 2021 compared to 23, 9% in 2020.

The decrease in gross margin was mainly due to what.

A continued shift in revenue mix towards new home production services with a lower contribution margin to a lower contribution margin opex and comp transactions as a result of the higher percentage of the fixed compensation costs for the entire region.

Compensation cost for the transactions to postpone.

And our story, although lower contribution margin of new home transactions later by the increased proportion of new home sale transaction completed Baidu connect agents and other sales channels under the incremental rise into fixed compensation cost for its function of dedicated sales team with expertise.

The new home transaction services in 2021.

Our loss from operations was RMB, one 4 billion in 2021 compares to income from operations of RMB, two 8 billion in 2020.

Operating margin was 91, 7% in 2021 compared to 4% in 2020, primarily due to one a relatively lower gross margin profit in 'twenty, two one compared to 2022 and <unk>.

<unk> percentage of total operating expenses adjusted net revenue in 2021, primarily due to the increased staff related expenses provision.

Provision for credit losses, and the impairment of goodwill incurred and transition to one compared to 2020.

Excluding non-GAAP items after tax income from operation was RMB, one 4 billion in 2021 compared to RMB five 9 billion in 2020.

Our net loss was.

Was RMB 525 million in 2002, new one compared with net income of RMB 2770, 8 million in 2020, excluding.

Excluding noncash items, our GAAP net income was RMB 2290, 4 million in 2021 compared to RMB 5000 $720 million in 2020.

Do you mean December we'll pass the phone to define Gulf South of Gaza quantity its allocation leveraged by our published a short seller report cortisol company.

Upon receipt of the reports to our audit committee quickly launching turnover to bill process.

With the assistance of third party professional advisors, including natural local at the frantic accounting experts from Big four accounting for that is not comp argued.

In late January before Chinese new year, we announced the onshore completion.

It would be virtually across at least the funding that's all attic agents were not substantiated.

It clearly shows that <unk> been so while were high standards, the iPhone in data and <unk> coffee.

Corporate governance and internal control.

Sincerely appreciate the incentives upon the crop will resume following busters during this period and I want to take this opportunity to publicly we reiterate our commitment to maintaining the highest spenders transparency highlighted culturally and compliance was up Q4 rooms.

To sum up.

Sallie mentioned 2021 was undoubtedly a challenging year for us yet despite that the formidable tonnage remains a further so solid pulp price in fulfilling our commitment to support our service provider on the Permian at the most service centers Joy for leaving all of our customers.

One body choice well guide our strategy function into the housing related complementary services in 2022.

For a meaningful financial impact in fiscal year 2022 and beyond.

I will now speak about our near term focus on the plants.

Firstly for housing transaction services weighing well focus on the profitability and the cash generation capability by photo holding efficiency in all of our measurements on the operating initiatives along with continuing to invest into the industry infrastructure and our agent training.

The steps we took in Q4 to try to optimize our organization have made there is more visible in embarking our new wide body to waste strategy, either well floater drive all of our operating leverage.

We will also continue to focus on the prudent cash management and account receivable risk control considering the ongoing uncertainties from developers operation in the first half of this year.

Benefited from outright fighting mentioned with obviously receivables our DSO for the new home transaction services photo reduced to 97 days in 2021 from 103 days in 2020.

According to Baker Research Institute.

Overall market the TTP of both leasing hole or the new home transaction despite to trend down year over year in 2022 as a result, we expect our CTV of the housing trucking services, while off the similar trend.

Secondly for our two wings home renovation and furnishing services inclusive of housing services.

While welcoming big wave well move forward with calico steps.

Integrating both strategy business further investments will be required analysis, well have an impact to overall group profitability in 2022 with.

We have formulated FCC vitamins will yield long term economy benefits and positions us well to capture burgeoning new demand in complementary sectors.

Turning now guidance for the first quarter of 'twenty, two new tube.

As stated in our Q2, earning call we foresee the market will likely hit bottom in Q1 of 'twenty two new tool on the world gradually with time gain transaction in recovery pumped as point.

Considering the housing market is still at early stage of recovery on the items of high base effect of the same period in 2021, we expect overall market. The GCB operating home sells for about 50% year over year in Q1.

The overall market the GDP of the new home confection to decrease over 40% year over year in Q1, According to pay for Research Institute.

Based on our bulk considerations looking forward to the fourth quarter of 2022 waves, but the total net revenue to be between RMB 11, 5 billion and RMB 12 5 billion.

Representing a decrease of approximately 39, 6% to 44, 4% from the same quarter of 2021.

This forecast considering the potential impact of the recent the royalty related policy measures.

The Companys current and preliminary view of the business situation and market conditions, which is subject to change.

All in all that's the way more forward so 2022.

Topics winter is gradually fading away.

<unk> for the <unk>, that's coming to forecast with a tremendous opportunity around the DVA on all fronts.

In terms of winter, we proved again wishing growth does the invincible summer.

Although we continue to pursue our mission and the capture of adjacent opportunities wherever else stayed resilient.

<unk> vertical capabilities. The most importantly, keep an open mind.

Our decades of experience with the housing transaction services has prepared us well to level off the paper onto for the boss expanding the industrials so better DB.

We will continue to help service provider device operate with professional asics that expertise on.

The wind to respect from their high quality services with.

Were formulated today, while we're continuing to iPhone to bringing our customer service and experience and our proven track record of overcoming difficulties, while inventory either us to a better tomorrow.

That concludes our prepared remarks, we will now open the call for questions. Operator. Please go ahead.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session to ask questions you will need to press star one on your telephone to withdraw your question. Please press the pound or hash key for the benefit of all participants on today's call. Please limit yourself to one question and if you have any questions you can reenter the queue.

If you are going to ask question in Chinese please follow we've increased transformations.

Our first question comes from the line of Piyush <unk> from Goldman Sachs. Please go ahead.

Yes.

Hi, Stanley. Thank you for taking my question and congratulations on the unveiling of the one body to wing strategy.

My first question is about the following the decline that we've seen in GTA V in fourth quarter and the guidance you've given for the first quarter could you take us through half the market conditions have been since.

And if I can slip in a second question with the recent policy loosening, how should we set our reset expectations for housing recovery trends in 2022.

And if you could take us through that.

Through that period quarter by quarter both.

Both in terms of price and volume that would be great. Thank you again.

<unk>. This is Utah regarding your first question.

So it's a market condition since <unk> last year.

Since the fourth quarter the trends carbon the highest signaling stabilization for the macro.

Market the housing policies aiming to rectify some previous already tightened policy onto the same months housing polygon northwest of emulation.

Improving project environment to also have unlocked some pent up demand.

At the policy implementation liable responsible partly make to the central government's policies.

Ms <unk> measures.

<unk> six introduces supportive policies focusing on less restriction on them.

Mortgage home buying unto itself as well as developers presale proceeds.

While pricing environment that is a key factor for the housing market has been improving recently.

The significant approximately in the mortgage rates and the approval process.

Adult for generation <unk>, two so first homeland second home interest rate fell by <unk>, 6%.

0.18% what is the peak season of last September respectively.

Mortgage orientation cycle shortened to 50 days in 100 industry stages in January 2022.

There's also a normalized level similar to March 2021 'twenty.

<unk> III data license peak season in last October the.

The improving pricing environment, either consumer site directly contributes to market recovery, our impacts for the both agent and the home owners' expectation on the sentiment boats involved since November last year.

For existing home sales are improving Heidi environment interested equity to facility to recovery.

According to Baker Research Institute to China. It in home market in Q4 last year shrink around 43% year over year and 21% quarter over quarter.

The bakery existing home transaction TTP dropped by 39% year over year, among which to us.

Home, South dtb dropped by 41% year over year, and 4% quarter over quarter.

Mark <unk> driven by the improving price environment exiting home transaction that are interdependent fulfilled underperformance in certain upper tier cities Boston Mountain monthly transaction volume stringent October 32 cities in modified vehicle, so sequential growth for three <unk>.

Two months, so quarter over quarter decrease in Q4 versus Q3 was mainly due to the high base in last drop in August .

Existing home transaction on Baker platform also boats involved in last Q4 witnessed by the month over month CTV growth of 11%, 7% of the 90% respectively for October November December .

For new home sales.

China, and new home sales market, GTP dropped 20% year over year, but the posted 9% growth quarter over quarter to new home sales could you be on peco dropped 24% youll be under 13% quarter over quarter to a broader new home sales market. Despite a slight rebound in Q4, it's a 9% quarter on quarter growth.

March slower versus the average 18% growth in the fourth quarter.

Plus five years lower tier cities performance weaker.

Auber towards the policy easing it will still take time for the homebuyers to restore confidence with respect to shorten downside pressure to continue in new home market with divergent performance across different cities.

And for Baker, New home sales in Q4, and we continue to prioritize the stability.

Opt for a prudent strategy for new home sales with a focus on strengthening risk management and Mccann in reducing the receivable collection rigs Gunther seeking incremental opportunities.

<unk> proactively suspense cooperation with our high return projects.

For sell through revenue recognition policy at the timely prudently with a provision for potential accounts receivable risks.

Regarding your second question.

The petition on the housing recovery trends this year by quarter.

And also to voting on the price.

With the recent policy Luiz.

Loosening.

Looking ahead to 2022.

There are three things the way are very strong so far.

Yes.

Rectification of over tightened the policy.

The wealth is a strong consumer demand at the right amount for the drop in evening.

The third thing while market transactions, while returned to the steady volume.

Based on this abuse overall market <unk> for a home transaction.

To decrease around 6% to 14% year over year of which is in home down by low teens year over year under new hometown by 5% to 10% year over year.

That said, we expect the decline in transaction volume to narrow down from two <unk> at the Marquis to receive a positive year over year growth in the second half.

At a macro level.

Chinese Carmen has reiterated its advertised loans stabilized grows both a monthly column in 2022.

The Chinese Carmen is calling for proactively introducing to policy positive to the Congress stability on the cautiously taken to policy with the Titans artifact.

Trickle of stabilized growth.

Necessitated the ROE of the housing at a pillar industry Baker Richard Institute.

<unk> reported a neutral to a competitor a monetary policy steps to continue with one RR cards and the two risk cost this year.

In 2022 estimates the Holocene royalty investment to remain price versus 2021 on the opinions of stable performance across holding sales done in <unk>.

Everybody who trends throughout the year.

We also estimated that this year, where we'll see a steady recovery of the housing market driven by private environment under administrative tailwind.

On the pricing side.

Estimated by the Baker resurgence skew the quarter mortgage interest rate cards.

Crichton supply well paced marquee demand.

That's well led to a higher gross mortgage supply versus the year of 2021, which will derive unlocked rajiv and upgrade the demand.

The catalyst for the housing Consumptions.

On the administrative measures, we are aspiring to more local garment to relax demand side metrics, including two new tools, such as easier criteria first home recognition for your home for Chase Center sales restrictions.

Demand for housing remains must've, Andy to wall Recross pond to unmatched based.

Based on our estimation.

Compared to the policy environment under circular stable.

The amount of growth trajectory wingspan backloaded process of gradual market recovery in 2022 in general.

20% to new home sales market CTV.

As Mitch who runs the RMB 15 trading downward around 5% to 10% year over year factoring in or around the 10% year over year decline in the gross flow area. According to Baker Research Institute.

The existing <unk> market, particularly if that means that wrong RMB six to seven trading down by low teens year over year factoring into low teens year over year declined close for iron via on combined basis of existing and new home market. The CTV.

Total market <unk> to RMB, 22, 22 trading downward round, 6% to 14% year over year.

Regarding culture Q1 should see a sequential decline both the existing and new home sales market to TV versus <unk>.

<unk> 2021, due to the seasonality like the Chinese new year, and the impact of COVID-19.

The ritual trough in this cycle as we break during Q2, earning calls we have.

<unk> <unk> year over year decline of the 50% quota.

Home sales market CTV are the most of the 40% decline for the new home market with GDP in Q1, we despite that it's in home transaction to stabilize post Chinese new year.

Leading to a gradual recovery both in the existing home sales new home sales in Q2 with a narrow year over year decline post Q1.

Starting from Q3 according to <unk>.

Despite the year over year CTV growth for both existing and new home sales to trend positive into second half of 2022 waste part of existing and new home sales market GTP to achieve overall generally five under 15% year over year, respectively.

Sure.

Thank you for the questions next question is from the line of Ashley <unk> of Credit Suisse. Please go ahead.

Thank you Amit. Thank you. My question is do you have Jeff discussed the market outlook.

Also go through.

Outlook.

Yeah Tiger two.

And also would you give us some color on the company.

Jackie I mean, rachman, yes in both corporate needs and truly thank you.

Thank you Ashley and I will answer it.

Because based outlook into the two under well in back to our chairman daily to answer a follow up question.

All of our new strategy, one body two wins.

Based on our outlook just to I just answer to peers. So very wealthy Pal we're effort onto the one body to win strategy on CTV and agent stores. Five we reached about a forward sees a bakery existing home transaction GDP, while the aperture outperformed the broader market in the recovery cycle for new.

New homes settlements, where we're closely monitoring developer grades in the first half of 2020 folks onto transaction <unk> and major accounts receivable rates are.

Our new home sales performance and dispatch will be even language market.

On agent install sites, we foresee of voting.

Sure.

<unk> malt in Q1, two new two new two fault platform stores as well as the agent count compared to Q1, 'twenty two new two waves, but number of Ikea store in Egypt, our platform to grow but low single digit win exciting year of 2022.

<unk> monetization on the profitability, we will lean more emphasize on our operational efficiency for our platform and our connect store refi by stable monetization rate on the platform take rate for all of our core business, including assessing our new hometown and services.

Well continue our strict cost control starting from <unk> 2021 .

<unk> measures. The contribution margin is also expected to increase both for the sitting either new home sales.

And this year marks a new chapter for our new business development, our home renovation for any team Baker well draw. Upon this customer acquisition advantage and leverage construction delivery and execution capability of Bay, one issue due to respond you start, especially in nine key cities.

Despite to be consolidated in our financial.

Statement on the generally difficult to revenue contribution of pumps to completion in the second half of this year, our inclusive of housing service business.

In a ramp up phase so in a longer horizon, so tooling business, while effectively mitigate and offset in part the market downturn.

Core business on the coal and capture additional revenues from stable environment.

I would like to you why no impairments Danny to give some color for our restrictive tweaks.

Chunking.

Yes.

Thank you Lindsay.

Can you do it forever.

Turning now to go to the tenure.

Uh huh.

David on that yourself.

So when they go on my cell phone Holland are critical.

Boto in Senegal.

Now the floor.

Critical to.

<unk> associated with Yamaha.

The Alabama, Georgia, David It sounds like.

Wait until June .

To your doors regional showing your digital intelligence.

Shanghai countries shortly to entrepreneurial journey of BMO maternity apparel turnkey.

There are no lasalle continuation, let's say.

That means you wait on.

As you know we've attended event.

So you always have the nomads was semitone Jim David.

Our whole mission, if you don't see it.

Paperless initiatives, you'll clean affordable energy.

Two.

Yeah, we don't have.

The end of 17.

Yeah.

Jonathan Sisto.

As a woman insertion zone.

She she xiang potential beyond the general and legal noninterest oil.

Local quality issue in the Samsung <unk> and easier to get down to under <unk> do you do it from the government clients.

We will now known as Utah desalination will ameliorate Gisela.

David the downtown in the jewelry and agenda.

It jumped up.

<unk>.

Saint honor to continental need knowledge on how to get there.

In the peninsula.

Financial times, taking the share from.

So you've taken initiatives Sandra.

So when we win.

Tom We don't really make us I don't know I was yeah.

Yes.

This is Tony let me quickly address your question in terms of the one <unk> to win strategies right I think in terms of the one <unk> strategy.

Relating to a couple of questions. First question is why and we actually has been announced and launched the one body and to win.

Started at current stage.

I think the fundamental reason behind that is we actually monitor the two of the fundamental changes from the market as well as a society. Firstly in terms of the consumers' attitude is and their value actually has been significant change from buying the half two leaving better right. So that's actually.

Bring us very good opportunities to bring the changes and the second change is coming problems Union devaluation as well the proposition for all of the enterprise.

Now more and more of the enterprise.

<unk> has been baidu both of the commercial our value as well as the social ladder at the same stage. So we do believe followed by those two of the changes is the right time to our launch of our new strategies in a second.

Sure.

So question related to one body and two wings.

Is how we can execute that and think that there are couple of distress I want to a drive there. So firstly is our mission of the company which is.

Yes.

Our <unk> services.

In the service provider with the dignitaries Zen.

<unk> brings the July four leaving so within our industry, we do rather than the agents. We do another thing is for other service providers such as format work hard as far as the other housing services related all the home services.

There are.

All of the different types of service providers, which is eager to improve their professionalism as well as bringing the best services to the customers and secondly is we actually have the capability to do that in the in the past two decades, we actually has been accumulating a lot of different capabilities in.

In terms of standardization in terms of the online.

And offline execution as well as the other part so that actually gave us more confidence to doing those part of business and the third thing is we have the very nice at two of those kind of.

As a business so that's a so.

So first two question I want to address two one more than twofold strategy.

To achieve our ETR eating and we usually opens we'll continue to win here.

Okay.

Jordan Sandler <unk> GT, because I mean.

Even though strictly more yeah ownership in June .

Simon This is Tony.

Under the Sandler Sundiata Johan Gaucher, while I'm doing for a semi sidoti beyond manner.

Thank you not meeting in June .

Selling them to go to India. The ETE Casino just for June .

Got it.

This is wilco neocon in June so it will again kind of neutral to food bulk.

All core silicon Emmanuel to the kind of Armstrong neutral you will do the usual <unk>. She said those sure.

Sure.

And there are plenty of the Leda study requirements evolve in the future.

Congrats on the year to a room.

A portion of that solid channel on a couple of things number will definitely achieve Owen you mentioned that is wrong.

All right.

The aforementioned Italia Tricia to ETE.

Can you just give us a picture of the ongoing more unique to you.

Sure Tony.

Total knee luxury definitely on dental and went down drawn.

It's our own immuno <unk>.

These are long term.

You can either equal to this year on year.

Neil.

Joining me in noncore, either Johnny Glove shown here in Washington.

<unk> samplers do wonderfully well.

Over to.

<unk> at home.

You go to town.

Gotcha.

Hey, guys.

To be honest with you the mobile <unk> and Western Canada engine without going into China that Hugo North equally Julian sort of on a continuous manner.

10 year say, Julien Buffalo bolt ons into Hong Kong, and so you can talk about.

Sure Keith.

Yeah.

Binding bulk will gain more share there.

<unk> ammonia unit <unk>.

Continental <unk> and Santa <unk>.

Yeah and on the budget here.

Yeah and on the Golar tundra portion on the go.

Due to the Fujairah, multiple known Samsung and higher volatility and pneumonia towards it in a clean.

I know about.

We don't have one sort of.

Buckhorn shortly.

In elektron up into the kind of.

In terms of <unk> strategies, there are a couple of the multi important factors, which as we have been mentioned many times before including the scalability quality as well as the efficiency, but when we develop a business no doubt.

We cannot promote all the three part simultaneously. So at every stage and we have a focus in terms of one body business, which really BDO at current stage issued continually improve by improve service quality to further improve the efficiency.

We will continue to find out malls are different.

Excellent of the service providers in the one body business for example, like the good brand whose stores good developers as well as the other part and Meanwhile, we also will make a balance between the investment as well as efficiency like ourself with how that has been mentioned before so we will further improve our.

Our cash use efficiency harder to bring the further changes into our one body business.

On the other hand in terms of the tooling business. We do believe the current focus will be using the further service quality improvement to bring the Pascal abilities.

So for example in terms of our home decoration and furniture business I think for that part of the industry. There still has a question is whether one company can bring.

<unk> 10 billion of RMB surrounding new per year.

While we didn't see that but hopefully after we coverage we shouldnt do it together and we can bring more breakthrough in terms of the business model into the home decoration and the renovation furnishing business.

And I think this year will continue to promote what we call. The five one strategy, which is means why organization less standard one process in <unk> and most importantly, it's <unk> right. So in order to further bring the battered scalability business for the home decoration of furnishing and Meanwhile for the.

On the other being where it is called the inclusive housing authorities we.

We do believe we.

To continue to United the different types of the supply.

In the <unk>.

<unk> therapy, including the light model as well as others.

The supplies in the cell therapy market are made to the young generation or even to the.

Blue collar workers are issaquah right, so by consolidating all those kind of.

The high quality of the supply of the industry. We do believe we can using our capability to further empower them in the different parts I got talent infrastructure in order to bring a better balance between our companies.

Companys commercial value as well as a social value.

Thank you so thats my answer to your question back to you operator.

Next question comes from Thomas Chong of Jefferies. Please go ahead.

Yes.

<unk>.

<unk> got quite a few women and.

So.

Thank you Amy.

So you saw it yesterday.

Sure Glenn.

So Jonathan Hi, Jonathan J.

Hey, Jay.

Yeah.

Could you.

Couple of your personal auto indeed, yes.

Sure. Thanks, Mike.

Amanda for taking my questions. My question is about the decline in terms of the store numbers can management comment about the reason behind and then my second question is about.

E.

Accounts receivable in Q4 can management comment about the.

That situation. Thank you.

Okay, Cinco Tomo district, Tal, let marcio fronts question regarding the decline for the number of salt in the fourth quarter.

So a number of focused on bigger platform reduce approximately $2900 sequentially in Q4 down around five.

4% quarter over quarter.

Around the four thousands and hundreds of cannot install disconnects that bumped the platform in Q4 and increased 400 buses in Q3, while approximately <unk> 200, Craig Nunez joins our platform in Q4 and to sell 300 less in Q3.

Therefore, it's a decreasing the total number of storms of platforms, mainly driven by the slowdown of the newly cannot hit stores in Q4.

At market cost platforms slowdowns of peso for 19, new store to a focus on improving to are pushing efficiency.

Same time, so a number of stall meeting all reflection quite sure, but not yet 19, there has been decline during a market downturn as well.

For our discount stores.

Quarterly number increased by 400 quarter over quarter of which 310 stores.

Due to the storm water aimed to enhancing our competitiveness during a market downturn.

Patient the disconnection due to serve our nation. That's also the total discount store was only 7% lowered was 7% lower than that in Q1 2021 show in case, our effective governance of the platform ecosystem throughout the year.

In Q1.

Marquee phone often joins a trans new year, the common practices such as a margin the shut in barrels still are likely to occur in the songs store may also choose not to renew their leases expiring.

Aspiring Ah Robinson, yonder or before Chinese new year, resulting a quarter declines in number of store platform.

However.

Number of store onto platform spiking to increase gradually after market stabilized in Q2.

Regarding your second question for <unk> and <unk>.

<unk>.

Risk towards a collection I would like to say that the first Albert talks sorry is known maturity for bakers new home business.

If you look at all we're just earning release of DSO reduced from 103 days in 2022 seven days in 2021.

Also during 2020, what the total commission revenue from New home sales was RMB $46 5 billion, while our collection was $51 7 billion each year.

Our company had approximately RMB 11, 5 billion of accounts receivable for Q4, including approximately RMB 11 billion for the new home construction services worst cash collection for the new home consultants services.

<unk> today, RMB 12, 6 billion in Q4.

The provision for accounts receivable and other receivables in Q4 total RMB $620 million, representing cultural overhaul that you Chris of RMB 250 million.

Pay close to strategically increase our bad debt provision in Q4 due to several reasons.

On one hand due to the continuous downturn of the new home market <unk> liquidity and rate increases significantly.

So increase in scope on the percentage of bad debt provision reflects bakers principle, adopting most prudent and Australia as the accounting treatment.

So I mean, it's just banking market risks.

The second is.

So clarification of more protests are higher risk under the increase of bad debt provision will encourage our frontline teams to explore more business opportunities.

The low risk <unk>.

<unk> reduced the proportion of the high risk projects in the future.

Also is there a skew sounds a reference on the liquidity pressures to repeat status. We have recently seen a series of policy easing floated vipers, such as acquisition loans no longer counting towards the <unk> rollout.

Relaxation of control over pre sell prestige.

<unk> believes that this measure is marginally.

Give us liquidity risk, but will take time for the policy to be fully <unk>. The.

The rebound of sales ended the subsequent the recycling of cash while ultimately solve the challenges <unk> faced at this moment, whilst improving ourselves through exactly where baker stress slide.

For our internal risk control well continue the initiative, we have been taking over the past two improve our dynamic of risk into module for monitoring the royalty to <unk> on that new home projects.

<unk> advanced an assessment that based on our risk rating Mccann isn't very well or wide cooperation on the higher risk projects.

The C suite Cobra cooperation after risk sites post and the folks on the repayments.

All in all I would like to see bankers by the provision for the new home transaction services was proactive clubs made by <unk> based on all of our prudent accounting policy.

We do not believe backhaul, so new homes, such as well based on mature risk because of Baker enjoying so high degree of independence in use of new home business since our business are not reliant on.

Relationship but.

It consumed our August sales and channels.

High quality of service recognition by our customers and our reputation.

We closely monitor risk under implement countermeasures selectively pursue person we've been able to industry walk in a better shape in the future. Despite the short term.

Sure.

Thank you for all the questions. We are now approaching the end of the conference call I'll now turn the call over to your speaker host today, Mr. Matthew Zhao for closing remarks.

Thank you operator, thank you once again for all of you joining us today. If you have any further questions. Please feel free to contact bakers in restoration team through the contact information provided on our website. This concludes today's call and we look forward to speaking with you again next quarter take care, Thank you and goodbye.