Q4 2021 iClick Interactive Asia Group Ltd Earnings Call
Hello, Ladies and gentlemen, thank you for standing by for Ice Lake Interactive Asia Group limited fourth quarter and the full year of 2021 financial results Conference call well at this time all participants are in a listen only mode. After management's prepared remarks, there will be a question and answer session today.
Conference call is being recorded.
Like to turn the call over to your host MS. Lisa Li Investor Relations Director Lisa. Please go ahead.
Hello, everyone and welcome to <unk> fourth quarter, and full year 2021 financial results Conference call.
The company's results were issued earlier today and are posted online you can download the earnings press release and sign up for our distribution list by visiting the IR section of our website at I R.
But I hyphen E L I C K dotcom.
In addition, during the call management will keep theater prepared remarks in English.
During the Q&A session, we will take questions in both English and in migraine and a third party translator will provide consecutive translation.
Translators Oh translations are for convenience purposes, only in case of any translation discrepancy management statement in the original language show pre bill.
Chi Tung T J Sherman Chief Executive Officer, and co founder of likely will first provide a high level.
The fourth quarter and full year, 2021, feedstocks and share his thoughts on our execution strategy going forward.
Chief Financial Officer, David Chung will follow and give us additional insights on the financial results for the <unk> 2021 fourth quarter and full year and provide guidance for first quarter and full year of 2022 .
He will then turn to pull back over to TJ for closing remarks before the code is open for Q&A.
Before we continue please new debt to be discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995.
Forward looking statements involve inherent risks and uncertainties.
The company's results may be materially different from the views expressed today.
Information regarding these and other risks and uncertainties is included in the company's 20-F as filed with the U S.
Securities and Exchange Commission.
The company does not assume any obligation to update any forward looking statements, except as required under applicable law.
Please also note that I Quakes earnings press release, and this conference call include discussions of an all because GAAP financial information as well as unaudited non-GAAP financial measures.
<unk> press release contains a reconciliation of the opposite non-GAAP measures to the most directly comparable.
GAAP measures.
I will now turn the call over to our chairman and Chief Executive Officer, and cofounder Chin Tung T. J <unk>. Please go ahead.
Uh huh.
Thank you Lisa.
Welcome to the call everyone.
<unk> you want what's another year of exceptional growth for I click.
Marked by very close in gross billings total revenues revenues in enterprise solutions on the marketing solutions respectively.
On the gross profit.
Encourage.
Our enterprise solutions business grew by 100 under 25% year over year to 65 million.
Year of Triple digit growth since we launched our digital transformation strategy in 2019.
While our marketing solutions business manage it to grow by 7% year over year to 200.
$43 million in 'twenty to 'twenty, one despite multiple headwinds.
Overall, our total revenues increased by 21% year over year to 308 million well.
While gross profit grew by 22% to 89 million.
Our strong 2021 performance.
Demonstrate the company's clear vision on the solid execution capability.
Shifting regulatory landscape couple of ways.
And then.
Macro economy.
Certainties and Geo political tensions translated into a slowdown in China's economic growth, which started in the second half of <unk> do you want.
These events have led to a contraction in China's overall advertising sector.
They'll continue to impact our marketing solutions segment in the fourth quarter of 2021 .
It may extend to several quarters ahead.
Having said this we remain confident in the long term growth potential of China's digital advertising industry, an aim to maintain our core advertising client base, which enjoys wage synergies with our enterprise solutions business.
We are also excited about.
<unk> financial brought by the digital transformation.
Trend seen in China, which we believe will be a trillion dollar market as mentioned earlier, our enterprise solutions business has already reached 65 million in 2021, compared with almost zero revenues contribution.
In 2018.
Which proves the company is all of the right track.
As we have repeatedly mentioned in our previous conference calls.
Your source may not be the most appropriate business model in China with our successful client collaborations over the past few years, we also learned a great deal.
<unk> shipped the vision behind our sauce plus business model.
Our robust growth in enterprise solutions reflect the strengths of our approach on that gave us confidence we will continue to generate impressive momentum throughout 2022 on the beyond.
Currently we are extremely well positioned with our <unk> plus approach to provide solutions that.
To meet the needs of our clients both today on the for the coming years.
To frame our solutions approach.
Define the terms.
Our philosophy of combining technology with services and our methodology is highly valuable in the in delivering digitally.
Digitization solutions, which are Pugh sauce model X.
As reflected in our <unk> plus 2022 white paper on digital operation by I click <unk> collect.
Not only provides customers with basic online training on the Q E services, but also offers more value added services around this dose in arrow's colored by these tools such as project execution.
Agency operation hosting.
We actively solving the shortage of digital operation manpower.
I click offers.
Losses Tech knowledge and training for brands.
<unk>.
Drags on the refines the personalized needs of brands based on all of our standardized the digital operation product matrix.
I click coordinate internal.
10 or resources for brands provides execution teams and the continuously reviews and optimizes the execution.
As it spreads at every step of the marketing and operation process and I clearly can even provide hosting services fully cover in branch digital operations.
Only one cognition on the MRSA go hand in hand.
We find a path to sustainable development of the business.
The results are clear and extremely compelling.
We are incredibly incredibly proud of what are we what we have accomplished thus far on this journey.
Yeah, furthering our depths and capabilities in providing the highest value so it's plus offering to clients.
Very pleased to share with you that we earlier announced the acquisition of the remaining equity interest in chunky.
A leading independent software vendor in China, which provides intelligence retail on the CRM solutions.
After the completion of the acquisition, telling me eat well become a wholly owned subsidiary of I click this will allow us to accelerate the expansion of our enterprise solutions business.
Spearheaded by our growing SaaS plus business model, we aim to provide.
Clients with a consumer for sidecar solution that addresses every aspect of the difficulties facing the rapidly changing market dynamics in China.
Including effective key opinion leader recommendations.
<unk> targeted marketing and e-commerce partnerships.
Integrating data sets and.
Solidifying branded profiles.
We believe our solution will help brand clients screens and the productivity on the in the <unk>.
Private demand to embrace success.
And made it to the digital transformation.
As excited as we are about our future potential. We are also mindful of the challenges that we and the whole Chinese ADR sector are facing such as.
Hi tend to regulatory.
Rob Penni over V I E structure.
The least importation of all potential risks, resulting from holding foreign company accountable Act.
These all have driven negative sentiment for all Chinese ADR companies I click included and.
Placed isolated in a challenging position in the capital market.
Diminished our ability to raise capital and caused us to realize Saudi on cash on hand, and access to our credit facility in operating our business.
Given these developments.
Starting in the fourth quarter of 2021, we have strategically reduced the lower margin higher risk clients on a business of our more capital intensive marketing solutions business.
Order to devote more investment towards a higher margin on the higher growth potential of enterprise solutions.
We are kept.
Got it.
Lies in all of our strengths.
As we weather the impacts of these economics on the policies shifts as we look to 2022 on the beyond we recognize.
Our needs to remain adaptive to shifting conditions through strategic allocation of resources.
We believe that leveraging cross selling.
Opportunities across our three.
3000, plus clients well leverage synergies between all our marketing solutions and enterprise solutions and further drive extensive value for accurate.
We have undertaken.
Cause sun paid adaptive strategic commercials designed to provide a sustainable long term growth and ensure stable stay mobility under sufficient investment for long term growth. They also look to us our key differentiators.
Confirm plating strategist to buffer I click from the forces of economic headwinds.
Our strong base of key account clients are a significant differentiator for <unk> and our integrated partnerships with these clients well provide are relatively solid and stable financial foundation to study I believe.
Against the ongoing uncertainty macro environment and provide opportunities to support our growth this year and beyond.
This concludes my opening remarks, and I would now like to turn the call over to our new CFO David John .
To discuss the fourth quarter 2021 full year financial results, David was appointed CFO and director in late January this year.
It brings over 25 years of experience in financial management investment on the business operations. We are delighted to welcome him to our management team.
David Please go ahead.
Thank you Qi Hello, everyone.
Im pleased to share with you our financial performance for full year 2021 .
Oh challenging Michael environment.
We still reached record highs in a number of key metrics.
<unk> revenue and gross profit I would like to begin my comments.
A few key highlights from the full year and fourth quarter of 2021 compared to the same period with only 20.
Neither party revenues of.
307, 7 million for 2021 increases by 31% year over year, driven by the significant increase in enterprise solutions.
Revenue for the fourth quarter 2801 was $56 3 million U S dollar increased by 3% year over year due to our strategic scale down marketing solutions.
Looking at each business separately.
242, 6 million for 2021 up 7% year over year, primarily as a result of growing Rocky mountain from specified action marketing piece.
The film culture over 2021 revenue from our marketing solutions was $56 six minute just all those.
Decreased by 17% year over year.
Primarily as we have star hate to strategically reduce lower margin on the higher risk business within marketing solutions you're at.
Those who focus on the high potential of the enterprise solutions.
I'm very excited to share the results, you'll see enterprise solutions business, which achieved record level for two consecutive years to $65 1 million U S. Dollar by 2021.
100.
25% year over year, primarily due to the increasing needs for online and offline.
Consumer behavior data integration and digital transformation.
For the first quarter 2021 revenue from Enterprise solutions was 19 7 million up 87% year over.
A year plus.
Gross profit increased by 2022.
Oh year over year to 89 $2 billion in 2021, mainly as a result contribution from higher margin enterprise solutions gross profit as a false cause or alternatively, what was $23 6 million up.
1% year over year.
As of December 31, 2021.
Time deposit and restricted cash.
A T H.
<unk> cell lung meeting guys dollar compared with 94 5 million as of December 31, 2020.
For the rest of my discussion I will focus on our non-GAAP results.
You'll hear from the calculations of these non-GAAP results in our press release, we posted earlier today and this can be assessed at our Investor Relations website.
Adjusted EBITDA for 2020, what was 35 4 million U S dollar.
Comparable is 17 3 million U S dollar volatility.
Adjusted EBITDA for the fourth.
Yes.
Cultural fall 2021 was 65.
U S dollar compare this income fell 5.1 minutes, that's all of it.
For the first quarter of 210 day.
The decrease.
So you'd be done.
I'll take primarily from additional operating expenses for new business development and R&D.
Adjusted net income fell 2021 was $1.4 million compared with adjusted net income.
Seven $6 million of 2020.
Adjusted net loss for the first quarter of 2021 was to sell them in the U S. Dollar and pair was adjusted net income of $2 1 million in the fourth hospital seven to 10 days.
While stealing grew by 18% year over year to 796 9 million U S dollar in 2020 , one and reach.
207, 3 million U S dollar, while the forecast for <unk> hundred one.
For further information please see the detailed recap.
Their financial metrics in the press release.
Today.
Okay timber since Sunday times at our company announced.
Sure.
Repurchase program.
Page eight made purchases on a b S.
Aggregate value.
215 million U S dollar from December 30 <unk>.
Suddenly 22 December .
31, 2021 .
In addition, our board of directors authorized the company to upsize the share repurchase program from 15 15.
15 minutes.
Yes, all of our 225, mainly U S. Dollar on August 25, <unk> hundred one.
The aggregate value purchase shares.
Probably.
10, 9 million U S dollar.
In December 2021, our board of Directors has approved a new share repurchase repurchase program.
The company May purchase its own Pds.
Value of up to date.
8 million U S. Dollar from January one 2022 to December 31 2022.
Now I would like to conclude my remarks with our outlook.
Enterprise solutions for the first of culture, and our full year 2022.
Because we are in the process of strategically adjusting our marketing solutions business.
In the face of current uncertainties of the macro environment.
We don't provide outlook, while marketing solutions revenue at this stage.
Please know that our look is based on current market conditions and they reflect our current stage of the COVID-19 pandemic impact.
These assumptions are subject to change based.
It's the only information available as of what the state of this press release isolate for wise the outlook.
For the first of all culture totaling 22.
Is that revenue from enterprise solutions.
<unk> sales team.
And the 17 million U S dollar.
For the full year 2022, they is that revenue from enterprise solutions <unk> mandate.
And 106 million that's down.
Our top cloud service model empower our clients' digital transformation looking out to 'twenty to 'twenty two they are living up to snake uptick.
Optimistic about further expansion of our enterprise solution business.
With that I'll now turn the call back over to TJ for closing remarks.
Thank you David.
We are more convinced than ever that's the mega trends driving digitization across China is a long term transformation that I critical used at <unk>.
Paul front, all in helping clients to involve on the pep to capitalize on new capabilities.
<unk> a trillion dollar opportunity.
It's deeply.
In trends in the evolving need to open markets.
Service customers' needs better and transformed the week companies interact with and retain loyal consumers. After offense studies, what I believe he is focused on delivering in it services and <unk>.
Responsibility, we as all I could hurt.
To take extra ordinary we seriously we recognize that our success is.
Contingent on our continued ability to adapt our product appropriately too.
Tien tsin market dynamics, and the economic forces, we meet that chat.
Challenge through a duty to three men.
Vigilant and modify all of our cost as development dictate.
We have succeeded broadly in that type of capacity as.
Evidenced by our continued strong growth.
Even in the face of adversity and uncertainty.
Which are two forces that markets revive revolve.
We foresee continued growth and are optimistic that our valuation will recover to levels that are more reflective to our true value as we continue to execute on our strategy, we are devoted to innovating and.
To deliver it holds a promise of everything we have built.
All right.
<unk> to water continuing to improve the overall profitability of the company.
I wish to acknowledge and thank you clients all thank all our clients partners and a key.
Stakeholders for their continued support.
We faced some material challenges in both the macro environment on the capital markets, where everyone has suffered including our dedicated icarly cars shareholders on the clients, but we have deep belief in our business under the strategy.
We are implement maintain no bill.
The factors outside of our control, we will continue to do our best to deliver on the promise I click represents.
In bringing the optimal solutions makes that enables clients to <unk>.
Capitalized owns a digitalized.
Digitalization overtaken China.
Thank you all for participating in today's conference call on the fall. Your continued support. This concludes our prepared remarks. Thank you for joining us on today's call. We will now open the call to.
Two questions.
Operator, Please go ahead.
Thank you ladies and gentlemen, we will now begin the question and answer session.
If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced if you wish to withdraw your request. Please press the pound husky. Please standby, while we compile the question and answer roster.
For the benefit of all participants on today's call. If you are a Mandarin speaker. Please raise your questions in Mandarin and then I'll translate it will repeat your questions in English immediately.
Limit your questions. The only one each time once again its star one if you wish to ask a question.
Our first question comes from the line of Nelson Cheung from C. T. Please ask your question.
Yeah. So look if you work with.
When you Oh, yeah with at the end of the.
Money isn't great.
Oh God you have it's not one.
Oh, sorry.
Uh huh.
But anyway, the one piece of Guangxi enterprise solutions, so as he says.
Okay. That's it.
Hey, Betsy to sync up with it.
This is a woman to co who.
Some contacts.
Oh, that's right management for taking my question my.
My question is for advertising is about management expectation on.
Oh look this year and well what we can expect a possible recovery going forward and my question for enterprise solutions would be about your new number of new customer Edison and good retention situation. Thank you.
Yeah.
She said you don't want to Oh, what's sort of the T J O, which I'm sure you're all well.
Oh, yeah, well the diesel and the whole Jim woman those F O David logical if we'd all you saw knee does eat the Guangzhou woman enterprise solution that <unk> co who fully on the Lynch.
Oh the moat do you go into you know just a Guangdong Hong here the two kilo tons of Allah Oh, well, then you should oh.
Junior English football on Chi like Carnival, Oh man, she didn't rely upon la Jolla I should show it all eating the twins either.
Sure you'll should slow torture the language and she did you go <unk>.
It turns out in the water.
Oh and deemed Oh.
Oh cordial and wonder if you could change your funding Oh core tunable born either Google or Gen. One the funding how you wish in the third Sushi ball father did go Eugene C. J.
They can go home and she said that I love. So you don't bother to go tell them Oh sure Yeah, sure tuna and Siobhan Yunji goes live on last year, but an ideal should be obviously, you're under generally you could draw a.
So are you woman theater, the Jewish holidays that you said, you're the only man Oh, well need to do a whole yeah yeah.
Sure well there is a yellow team either you could fall apart.
Did you get a T.
Do you still wish on canola hungry man Johan door.
During the holidays.
Coming you know who you are usually city Chicago.
Blue woman.
Oh did you don't want them all so that you could point out you will know a woman genius Cannoli thing George L. G.
Beach, all wishing that you see as you go.
Yeah wish him yet, although we are told don't tie you ship beautiful Molly <unk> come cheap Ghansham Panjabi Yoko the dishes.
Cold you can email them hopefully.
Sure.
So I told you the G. The Xiaomi out we took our accomplishing that you were telling me a way to go Palio Shiga synergy.
Yep.
Okay.
Well. Thank you for your question. This is P. J I will take your question about the outlook.
Yeah.
David John to answer your second question about the customer addition to existing customer retention of enterprises solutions. So that's.
About the AD business outlook.
Outlook, and we think that this year, we at the sneezing, China suffered short term shocks and the reasons.
Very well.
Because there are a lot of uncertainty can we economy, including the shifting policy environment and the regulatory landscape.
Resurgence of Covid, 19 cases, which constitute to just be a challenge to the market and the second half of last year in that business in China has been experiencing is very weak.
And I think that this will continue in the following quarters and I believe a lot of companies in this industry share similar views as to other company well this year for AD business, we will focus on some core businesses.
We will take initiatives to scale back on those lower margin high these are businesses, where we see the core businesses that may generate synergies with the other businesses. Thank you.
Okay.
Yeah.
So I know how to do it without doubt it wouldn't hit so hard in our union histology to come here, Yes showed a cultural moves that I should back up.
Uh huh.
Did.
He he do R&R and pega tool than selling.
Selling as you said you don't lose when do you wish you now have you already booked.
Of course, you can do with you on that yet.
In total on a mountain of Ha moment that it was only towards that back from digital she was William.
Sure Yes.
This is David let me take your second question in Q4, 2021 they were 500 customers contributing to the revenue of our enterprise solution business.
And that's huge.
Customer retention between Q4 last year in Q1 this year I don't have a specific number yet.
Can tell you from past experience that their retention rates will be around 19%.
Thank you.
Great. Thank you. Our next question comes from Colin Live from China Renaissance. Please ask your question.
And you can see.
T. J. This is David agenda humans do you quit a weird on the win T data Lindsay you should use from a house you're going to go out and tell you with that womankind J, you're doing genworth belongs whether you'd like Georgetown she thinks I'm beautiful mankind.
They'll send him that she didn't know class a J J, Jill who did a chunk gloves, you don't Miss or the how did the marketing and how quick a shot on that advertising anyhow.
I heard you say something and see if it was something that you can tell Mike.
A deed of N T.
The outer limit usually it's usually what might yet a tunnel under the accordion that shouldn't have any intention to become channel.
And that's one woman.
J B Hunt came there you go.
Attendance challenges better compensation, a child, well I don't know Oh, well mail millets have some lumpy go Clinton on that two more times on bone for woman that did go up.
With that though you go tell them it doesn't tell the Jeremy go telling you that's why I'm juggling anything different here. He said Halloween Oh, you should get on when he and I, we cannot change that.
Thanks, TJ anything before that and a chance to read the questions I have two questions.
First one is about the medium term and the long term impacts on advertising industry from the regulatory changes over the last several months I Wonder you know in two three years' time, how will this round of Iraq. They trade changes, we have shaped the industry and.
What's the industry landscape and they'd be like you know.
And the second question is actually about our sauce business.
Enterprise solutions, you know, we have seen very obvious macro weaknesses seen second half last year.
And over the last several months or several quarters.
Assam solution actually helping out with customers.
Improve their operating efficiency and generating new revenue opportunities and Amy and it's kind of a macro weakness and intolerance that can be shared with that and that'll be really helpful. So you had one in his home.
Yeah.
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The Corona pandemic.
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The number of test on Chile, and it's usually a woman condo Bureau to finish up on your indulgent niche ammonia functional.
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Oh, Yeah, we shouldn't talk to use almost Muslim women to the funding almost unusual.
I don't think you're calling for your question. This is P. J, let me take your two questions. First question is about the implications of our regulatory policies all the advertising industry.
Next to complete this well in the previous conference calls we have mentioned that.
And all these regulations.
Regarding <unk>.
Our personal privacy.
The impact was in the mid to long term because in the past all the policies about data security all personal previously required to relax that it seems that directly to have started two tightened them.
I shot 18 for example from the second half of last year to the first half of this year.
<unk> seen some panic in the industry.
People are worried about is connected.
However, we think is that Oh, two in the mid to long term, we will meet our Florida.
Florida and mid to long term to see any real indications to chicken because.
Because we see that the claims from regulatory policies about Sidney.
Total security and personal privacy, we're talking paid as both of them.
Those are businesses that operate.
In the non compliant manner.
We will comply with that.
The regulations and data usage as long as your product.
Mrs help customers to improve efficiency I believe.
We enjoy long term benefits aside from some short term shock.
Okay.
Oh, Dr. Joan lesion or did you go to Jim Goss pusher Oh, what do you do have to come off some you shonda.
Oh sure sure Dave you can go into this year, how niche in the to the Jim what are the usual Dan as you know, Sean Jell O U G a Polish it yoshi.
Junior and she says it's Asia Hong you just don't hold all of Gen. One as you go out and shop.
And I'll tell Ya Li the gentleman I'm, pushing the woman Korea, they'll do go home and get it done chine contention treat on top of that.
And you'll see that usual I'm interested until you can handle.
Bulger condo demand the Taronga shall show.
How has your life no women through the tea leaves or Jim want to push it too.
She she should be going off on any of the economy.
Patrick we'd bulge in loop unlawful near the did go vertical Chongqing she part.
Sure.
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And they go through a whole tweaking pilot Youll continue.
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Hello.
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Especially with chicken.
Second I think the second source outside regulatory measures that may have a long term impact on advertising industry are targeting.
Are the industries, where our brands are located for example last year education showrooms and gaming industries were subject to give yourself Ron jump on regulation and to control and show to taking these measures has produced very profound impact on <unk>.
Advertising you can see we've just seen with our eye for example, with the demand from some industries just disappear on all of the second speaking I don't think they will be very substantial impact on the advertising industry, because there's been some industry verticals.
And.
That's neat they advertising business will be reshuffled in after the reshuffling and the brands from these industries will still needed to place participants and the number of advertisement they place actually I'll probably take the two economic sentiment is that also the interesting where they belong.
This is my answer to your first question.
So the argument is oh, well aegis, just a woman the sauce enterprise solution. As you found do you shouldn't add a TCE of coal a common theme com when she LNG to be Attardo from one funding.
A bundle.
Not to the dance I don't know, which are the two that you actually your bundled English and you only do the Bureau.
Hmm, a handle Shan Shan business showed all of them.
Oh, no no enterprise solution in a minute to go you'll you'll handle the fund me historically bundled alopecia, she yet be wishful, Oh, well me, you'll mundane shows all the drilling that you define a bundle you already see in Charlotte pin pad, they shouldn't Charlotte human being bundled him at our Boston and Charlotte just you've quoted a client she has something to do.
Shelton.
I'm going to go do go easy on the shelf and you can put in a bundled humming green Sheila.
G go hungry and she knows she wishes Boswell G. She is.
Yeah.
Shanghai was saying just what are you I know you don't need a whole bunch of Shan Shan the operation our opinion on the go dishes are Ghanaian childhood tissue equivalent. So you wouldn't do the tailing ponds you should.
Do you think PV Haiphong D C. As you call. It shows her what she likes she should also fish Honeywell bundled it.
Oh Jesus would eat it.
Well as to the second question I believe it's about how our songs so products.
Our services.
Well help customers hopefully.
Macroeconomic headwinds.
I do think that to all products and services are very helpful. In particular during the COVID-19 pandemic a lot of offline businesses were hard hit and Miss.
Many of our enterprise.
Enterprise solutions products and services.
Can help.
Enterprises for example, we provide them with that digital outlet solutions, which can oh.
It includes the offline inventories in the online.
E program.
Then we help them to upgrade their online business and there'll be time ecosystem.
We can talk merchant.
To maintain my operation by absorbing the offline inventories I think they.
Are very helpful for both spend okay.
Sounds panels.
Oh, the envelope for me and it won't be don't bother formula like kind of a woman Tricia you cull window and door. The cool <unk> Pi comment that you don't see what you thought when you bought a huge issue.
Sure I'll Eugenia <unk>, but.
But you don't you only got tissue toll free chunky either.
Show Me all mutual would you go. Please I said, it's only been coming to you all which is particularly with all the childhood icon Oh why don't you go Gee. This was a hot tea yeah. There. She was a heart team either she was a hot yeah doshi the feed hung Chung Cheetah you go nutrition, Oh Gee it sure tunable Theres, just little courtyard trying to either your boyfriend.
Oh sweet warm in the enterprise solution you can actually watch them Hall cheerful are telling me you go Tricia <unk>.
No I didn't miss the phone call to help him hi, al Shaheen shear and showing to be up with the other schinder meet he shouldn't that Paul cool Shang, reaching a thumbnail on shelf.
Does he go who don't achieve all coming to handle the only a bold call John G. G.
T O L. A or did you want English after meals in Shelby to go on holiday or a tunable done shipping Ah.
Do you think she knows she said she.
Hum in the child with all people either to go a whole home in the yard.
Oh, I don't know what all of them.
And Doyle phenol, London that Hugo Chavez, Jeff.
So you don't you don't know so well here the woman the jugular champion Gulf War <expletive> , Cleveland, how the bundle a TCE of coal all day, but then you thought when you bought it can only shop, they don't bother with Hamlin Shan Shan.
<unk>.
Let's see this is Glenn and government.
And Oh, so doing the.
Macroeconomic situation many brands.
I actually have a proactively pursued online pursuit their online businesses.
In addition.
China's economic digitalization, that's why I'm.
I'm, so impressed digitization and Brian just utilization or long term trends for China, and we're just a part of the 14th back your plan.
Posted by the Chinese government and I think that our enterprise solutions business actually will respond to these trying to quite well.
He helped our Oh, we have to.
The aptitude increasingly complicated yeah media ecosystem for example.
We technical system, we run into like increased interaction with customers, therefore, enhancing their loyalty and NGO in the P O L ecosystem.
Brent did you short video and other new media to interact with the consumers and attract consumers to their media campaigns marketing campaigns actually the house already put in place a complete suite of products and services to serve a brown and <unk>.
All in all we think that.
Our products and services.
Actually well help customers to cope with it.
A weak macroeconomic situation.
Yeah.
Yeah.
Great. Thank you. Our next question comes from Thomas Chong from Jefferies. Please go ahead.
110th in traditional what that's what what's it Daniel Yeah Glenn.
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Well if I yeah. Thanks.
Thanks management for taking my question. So I have two questions. The first the question about M&A. So are there any future M&A plans and what are the M&A considerations and then my second question is or do you have any goals for K clients and mid tier clients in 2022.
Keith.
Yeah.
Okay.
Yep.
Negotiation is jeffrey than they do.
Lindsay Hall.
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[noise]. Okay. Thank you for question I will take two questions from me. My first question is about the end of my plan.
Not too long ago, we fully acquired the tongue you have you have been following.
You'll know about this company quite well and her parents to be acquisition is to consolidate our enterprise solutions capabilities.
Because tongue arm is a very.
Integrated parts of our enterprise solutions.
<unk> product sales and service capabilities.
So.
And as to the other and M&A opportunities, while we have been looking out for opportunities all along but just think the market condition is not very good right now so we will be more cautious.
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Disciplined people.
Well. Your second question is about our customer strategy well is two O K a client our strategy is very clear that just we will.
Survive.
Sorry.
And the value added services to medium to larger sized okay. A clayton to help these clients well and give a long complicated media ecosystem in China, and we believe that this strategy has great long term potential in the past, we pull closer to mainly on wechat ecosystem.
Now, we've all been gradually penetrating into the kill our ecosystem and our aim.
As Jeff mentioned just to help a K a.
Two okay.
Thompson operation.
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Well as to mid tier customers or SMB customers, well Dudley number think about U T. A K a column that is are we still use the centered it sounds products to serve our kitten client of course were different.
Uh Huh Keith clients, they may have a different customer customization.
And as to the SMB client base well since the first half off of 10 children to wildly from started to promote a standard product to them and.
But due to the weak economic performance.
Lives, including China since the second half of last year early this year, we haven't seen him very much program.
We can say that program actually is much slower than we expected and they tell you know these are still well keep an eye on the SMB business and we will continue to may cause some effort to develop this business.
Great. Thank you. Our next question comes from Bryan Keane Slinger from Alliance Global. Please go ahead.
Great. Thanks for taking my questions with the uncertainty in marketing solutions, coupled with the challenging capital markets for a D r's.
Do you plan on managing the expense side of the business to limit your losses and can you quantify the bad debt.
We recognized during the fourth quarter and then my second question is how much of your marketing solutions revenue is low margin and non strategic to the enterprise segment. Thanks.
Yeah.
Hello, Michelle Brian would you then go back to the da Vinci XI and it seems that women are taking Michelle case, you'll find sometimes you shouldn't you actually mentioned that potentially at home do you jump out with the consumer yes, sometimes it you can't go from you know.
A woman jumping penetration.
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Okay.
Sure, Yeah, Brian I wouldn't yet well within a lovely thought.
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Sanction for each other.
Well this is David Brian . Thank you for your question as to the bad debt provisions well locked in a LIBOR provided what does that that's off of two companies totally fascinating very strongly you know last year. The central government has come up in the mountains.
And I assume yourself regulatory measures, which has achieved some industry hard. So these two companies wanted to get your Commerce company and the other is a gaming company.
And as to cost control I think that we have done a pretty good job.
Loss control all the spaces.
Now it's difficult to time, so actually.
Actually we will try our best to do better in terms of cost control and currently we have sufficient cash and Oh.
Can you kind of got our receivables.
Cashcall two and currently we have $18 million of our cash.
Davis with deal what you don't know what Theyre, telling you. These oh, that's what every one of your answers you should.
We find that quite honestly you got to go.
This will play out with that.
Oh, Here's what trend will play out for me the fruits.
I also.
I also like to clarify that did this by submitting your stance is a special provision for bad debts, it's not be overall bad debt provisions.
Okay.
Yeah sure.
Unless the cool pool.
He'd be job email neither.
Doug I sure well does that kind of a challenge to say, Colorado.
Southern Utah.
I'm actually a year or so.
Thought I'd love him, yet, which is why you choose them to all doors that can you kind of Chicago site, you know Oh I'm sorry.
That charge off take a sugar.
And your second question, it's about that those are low margin business from marketing solutions well currently they accounted for a third of our marketing solutions revenues, but you know we will take into account the market responds.
Adjusting and then scale down the scale.
Alright, thank you.
There are no further questions I'd like to turn the call back to the company for closing remarks.
Thank you once again for joining us today, if you have any further questions. Please feel free to contact Investor Relations Department through the contact information provided on our website. Thank you and see you next time bye bye.
Thank you. This concludes the conference call you May now disconnect. Your line. Thank you.
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Yes.
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