Q1 2022 36Kr Holdings Inc Earnings Call
Hello, Ladies and gentlemen, thank you for standing.
Welcome to the 36 Holdings, Inc. First quarter 2022 earnings conference call.
At this time all participants are in a listen only mode. After.
After managements prepared remarks, there will be a question and answer session.
Today's conference call is being recorded.
I'll now turn the call over to your host Yang Li IR manager of the company. Please go ahead Yang.
Thank you very much Hello, everyone and welcome to your 66 pair off what he was first quarter 2022 earnings conference call, the company's financial and operational results.
Year to date and they haven't been made available online.
You can also view the earnings press release, but are we seeing the IR section of our website.
Are those 66, Colorado com participating.
On today's call will include our co chairman and the CEO , Mr. Doggone phone Intel what Chief Financial Officer, Ms. Lynn what Mr phone will start our call by providing an overview of the company and performance highlights of the quarter in Chinese followed by English interpretation.
In this way will then provide details on the company's financial results before opening the call for your questions.
Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Probably Securities Litigation Reform Act up 1995 forward looking statements involve inherent risks and uncertainties.
As such the company's results may be materially different from the views expressed today further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings that's always the U S. SEC The company does not assume any obligation to update any forward looking statements, except as required under applicable law.
No that's exclusive kiosk or in your press release and.
In this conference call include discussions of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures fifty-six chaos, earning press release contains the reconsolidation of the unaudited non-GAAP measures to the unaudited GAAP measures and please note that all amounts are in RMB I will now turn the call over to our co chairman and C E.
Oh, Mr. Doggone phone Paul Please go ahead.
But all right.
Or do you feel like you can holly thank.
Thank you Hello, everyone. Thank you for joining our fiscal 2022 earnings conference call.
Do you want me Jim Duffy.
Okay.
Absolutely.
So I'm sure that English will come down it can be tomorrow.
You can go to 100, so the gondola sure, Ohio Hooky.
Hito poultry like Huntington has announced it I'm sorry no.
So there's good morning agenda.
Uh huh.
Got it out in the voting to the Ohio.
It's all of them.
Just by the recent resurgence of the COVID-19, pandemic and ongoing macro headwinds we achieved solid top line performance in the first quarter with double digit revenue growth and the rigor of high quarterly net income since our IPO, notably our advertising business and the enterprise value of IV. So is this both recorded robust results with year over year.
As a prominent brands and apparently already platform dedicated to serving new economy participants in China, we remain committed to establishing a high call here. So its system to be able to fly their own self growth, we start with your fab business offerings.
Thank you.
Okay. Thanks, a lot.
There's no more to put it on hold and it wasn't that easy to what kind of sandler.
Just a couple of months.
So now you're a whole bunch of them.
How can you claim you tend to sometimes cause Evo you just have to introduce yourself to some conclusions about that.
Well then they went on nutrition.
Sure.
So horrible household see lot more Shanghai wise young children.
And now she's also that'll be golf, although you'll find out today, unless you're one of the things you're going to other ones Arnaud.
But you know you can always switch will go down a little.
There's no change.
I Wonder if you don't mind, who can play out.
So I don't know what usual.
I'd like to begin with the overview of our company initiatives in the first quarter, we continued to upgrade our content offerings and creating new programs for a master expand our service foundries. For example, we launched several official content accounts during the first quarter here all carbon leaf inquiry about college front of China's steel.
Investment institutions and create development audiences respect respectively.
These programs quickly engage users in house all enjoy high popularity, thus far our accounting team also explore new content formats and strengthened our collaboration with reach out video accounts and less premium projects the last reading audiences.
But our new programs and wisely.
Digital and <unk> going forward, we will rollout additional upstream because I'll hop niche market. This new leader allows premium projects fully mobilized statistics, trs content creation and editing capabilities as well as industry resources to deliver.
Our high quality.
Industrial Apis and expert opinions to our users.
So meeting their content needs of more there was if I use the roof, which is substantially browsing I wish spoke of it.
Sure.
All of them had a component.
Yeah, Peter Rendall.
They also suddenly.
Towards that long ago that you doing Jonathan.
Oh sure sure not going to let you go to the volume because of that we hope they will have a hard time hopefully like you don't you don't always wanted to kind of hold off.
<unk> continued to replace in July , but you do all of them in fact.
But you won't even see my life I don't have the it sounds like you went from tornado told you many times how can you just.
Talk to you I mean, the whole handle.
Furthermore, for our public equity market come inside our Warren buffet shareholder meetings. There is that we jointly created with Tiger Securities also gained traction building on our content production capabilities. We conducted an in depth analysis of the investment itself target as us and investments trap. These calls and meetings, we need a claim.
No institution users with our high quality content and innovative format.
Sure Dmitry theories the Omar how valid investment education and research centre reached at 266 care ought to explore future potential collaboration opportunities finally, alongside our first in short we do a lot of training. We also continue to make strides in audio content. During the quarter. For example, we establish a calibration we see my layout, we showcased T are fine.
This <unk> content in the audio scenarios, we keep absolutely expectedly alleyways user experience.
Well Shlomo.
Sure.
Well nutrition completely automate the only thing I was kind of a question about tissue.
Sharon Zackfia ours about Dallas, Houston go create almost logical hockey or the wrong kind of itchy violent really than Hollywood Russell.
T J here shortly.
I'm Joel with Oklahoma funding.
Yahoo.
Sometimes you don't measure well I'm sure, you'll often kill off into the showdown that's RTP rate.
I mean, they should go like Intel kind of call it by telling them about yeah.
As you point, you to kind of go to offence as rohit.
The what.
Not all that unusual.
Causing calls he is always a top priority for statistics as we remain committed to.
Executing our content platform strategy, we still focus on P. Do you see in New Jersey, we have consistently incorporating more high quality content for PC Stericycle system. The number of pieces all of which are official accounts with page views about what Henry's though didn't you.
Henry continuously increase during the quarter not really the topic Ultra man cars III in primary school students of pocket money. We initiated recently has sparked any might hit that discussion offline.
<unk> told me to Weibo's Hot fish.
Such as lists our focus on premium engaging content is being all leading to a remarkable 15th consecutive quarter of page view growth to better reflect <unk> called the influence and user coverage starting from this quarter. We will report the total number of our followers side of our page views this new matrix.
We will provide investors with a more comprehensive perspective from which to access.
That's the thesis chaos performance across the entire network.
As of the fourth quarter of 2022, the number of our followers exceeded 20 formula in a year over year increase of 25%.
Turning to Hawaii.
You bet I hope it sounded like.
Colorado, Utah.
So it'll end up being kind of a transitory version one of them though.
And digital but he didn't show up and therefore, you didn't see that level quite a lot in central Washington, Diners don't finish about my job.
So I'm talking about the thought in the opening into before.
John There was one question I was just hoping in government Hopkins U.
As the number of followers on <unk> in the beginning of 2022 66 KR throughout video also gained traction on other platforms, such as partial Enzo and demonstrated by the surge in member of our followers as of the end of the first quarter of 2022 hour. Shortly they will have a truck nearly 7 million followers and all.
And hopefully we can over 180000, new followers of our of our facial corporate accounts on slide show in just one day riding on the popularity of been dwindling the mouth caught up the Beijing Winter Olympics week for ATR short video reach what we viewed more than 30 million times right things your neighbor to Unquiet shows chart of tough Winter Olympics related searches.
But in here and that's why they can shop.
She told all of you for now.
You can give us your view being strategic to try and go through those little chief will conduct what onto your if I did know that children, who decide to enter this with you.
Sure.
These youngsters here it'll come to you so wish I knew the Paypal for them too.
We should see nickel.
So you'd be treat.
So when interest rates you don't want to send water. It seems you are bundled for this year.
Tanisha don't bullshit imagine now switching to <unk>.
<unk> was also a little bit.
Got you.
The incremental building our premium brands that request not only innovation content formats, but also I'm very and commitment to our mission of empowering new economy participants to achieve more we have consistently adhere to our philosophy of working closely we start off with them, helping them grow bigger and stronger.
A plug in for the year to progress our lent a helping hand in times of difficulty.
<unk>.
Company and enabler of industry, we hope to truly assist in factory and there. We're seeing these exceptionally challenging times to that end in early May we officially launched the seeking the lights program to help business potentially small and medium sized enterprises to maintain your brands share of voice is by the market downturn. This one yes.
Facilitate the seamless integration of information capsule talent and technology.
She says that even though if I'm reading it right up all your email format double voluntarily combo trial. So it's just going to need your Gulf War, where you can say, okay tell me, probably you won't get as little or just why is that all of a sudden local global to.
You bet, that's real high probability that you won't go down and therefore, that's why people have you have what you call because as you called him because you have actually got cut a deal with them.
Moving now to our ongoing business expansion efforts. This by the way from COVID-19 resurgence, we did no slowdown at all like fashion in the Greater Bay area in the overseas market, we conducted a virtual less premium fashion you. All what you have in south China for the first time during the quarter generating new ideas for product launches against the backdrop of we call it.
19 operates all of the international for 66, New York Global which specialized in overseas market continued to provide efficient collection. So that's helping with various Chinese friends operating overseas not working.
Agencies and investment institutions to explore business development opportunities in those markets.
Sure.
You know if it will be one.
Those who have OTC.
I can give you for example, getting towards your wishes on that I'd put out of India and China Moshe.
Which I think that that's just always out there trying to figure out your new products and Murdo will stop help us build a closed loop service framework diversified three dimensional ecosystem staying true to our vision of empowering new economy participants achieve more we consistently dropped to broaden our Nida service laundries, and refine our business model, which Oh.
Also reflected in our commercialization performance next lets look at our achievements on that wrong.
Ohio was all of them.
So D C. You've got him in particular.
But just to kind of it'll be sometime soon as I, usually do your homework.
Thank you John but you can tell her E rate what are the commercial roof.
Sure.
Children, who might do Palo Alto and you'll call Johan here.
And so our Cashcall business advertising business performed well in the first quarter, achieving an increase of 13% year over year.
The backdrop of COVID-19, resurgence and macroeconomic challenges our advertising revenue derived mainly from branch marketing has experienced growth far above industrial average thanks to our Rutland.
To create innovative service formats and improve customer satisfaction levels.
Sure.
I'm Heartened to tell me that you are talking single needle.
Alright.
Sure.
That's a turnkey everywhere you go.
He doesn't have a lot more cost you can put.
You can pay for the central.
So this is Ron.
It will be about it.
Sure, Okay, and B I D, probably tell you quite honestly the freedom to move the production out of China.
What I mean to long should be treated with a single hole you don't hold a difficult commercial.
Sure critical holiday, so that'd be a bedroom tanja syndrome team, which helps with each of them in Colombia, leveraging our sure for.
Short video format, we achieved a new high in terms of contract size for our advertising services during the quarter not only Intel continue to promote these new products through our short video formats with these contracts as continuing to Russ Morrow, where we launched a regional program here a tap to promote central stay for theories, resulting.
Do you have contracts larger than those of the traditional tax and image based marketing solutions. We also help various well known companies including.
Panasonic Tomorrow, I'll talk to Utah, BYD, Saudi education, and I price hike for a multi year brand concepts and create product.
The continuous stream.
Of new customer and repeat orders of existing hubs Tomorrow, a testament to the effectiveness of our short video format in brand marketing and targeting fee and consumers. While also further raising our average revenue per customer.
Well unless you don't always know what's relationship San Francisco Airport to live out here.
It was a soft tissue the totality yoyo.
Sure what they're going to do.
On the entrance into the bundle.
But if I'm quoting you probably have heard Andrea can go though to draw a COVID-19 on coal.
I thought it was a little sooner.
So this will help him three as usual.
Exactly.
You hit on tissue.
When we go home.
I will put on hold out a whole bunch will touch on commercial real Gaba.
Our consistent innovation in tax and graphics content also contributed to excellent commercialization performance for example, or use attracted increased attention from young user groups with surveys on young People's consumption trends, featuring well-founded, reasonings and Sun formats, and garner widespread acclaim by creating unique promotion mothers.
For customer, including thing talk Huawei, each L. A <unk> liberal Joe Hu and ITE.
Given O us advantages in the first quarter, we were able to raise is required to a level considerably higher than that of similar official accounts going forward. We believe this program will propel the expansion of our service presence and with our advertising revenue failing.
So I told him doing that and those here for you.
It's Andrew for all bunch of those leasing up I've decided what.
Tuesday.
When we talk about sort of how long these have oxygen for sure.
For those.
Total you answered that unusual going down.
Turning now to our enterprise value added services, which grew 35% year over year in the first quarter. Despite COVID-19 impacts then through our strategy adjustments and new service formats.
Because you have water.
How are you thinking their hotel finder, Chipotle inhaler that she knows how you Doin' home Meridian you name them for awhile.
Was it all there ginger help with you putting bundles how else you can kind of go holiday was a little higher because you don't have to do better if I didn't see you just what are you thinking what you can do.
And that has a whole lot on the corporate services side 60, 6K, our jointly hosted display of enterprise surveys for Rambus team talk and collaborating with them to planned events agenda and content leveraging our knowledge of enterprise zones in enterprise services, we not only helped the participation.
Enterprise service platforms, better understand the latest industry updates and future development opportunities, but also associating talking spending and potential partners along the value chain.
Because it sounded like you talked about him to Shanghai intermodal coastal is usually not that especially since a lot of confusion with him or her thoughts at all about your computer need I'm trying to get into your cable bundles here she will detail shortly.
Our strategy to take advantage of it in terms of institutional collaborations 60 6K, our partner it with a ranch securities to organize that EU carbon star sustainable innovation Comcast aimed at discovering innovative companies with potential in four major sectors, new energy, new materials, New technology, and new business models, we have.
Hope to help companies gain a deeper understanding of the few carbon policy, but with regard to market demands and connect with industrial capital.
When is that going into the full bundle will go down syndrome.
A lot harder to compete.
We just don't go towards Hugo.
Beyond that you can't you don't.
You have I didn't have to deal with each other HEICO chunkier than usual when you put out one of them I'm talking to you used to do for you and of course.
You don't switch a median.
Fourth of July when we have that shows you toward NT identical with you. If you don't call what I didn't play out.
It is easy to do.
<unk> lutetium vehicles with you James even though it can be tough with them, but I won't go into <unk> <unk>.
Don't get vehicle with you Tonight Tomorrow.
Yeah with US you have an idea.
Our regional expansion also achieved great results during the quarter, we entered into partnership with additional government agencies, including these requirements in Nanjing, China semi of information and communications technology affiliated with the Ministry of industry and information technology and the high School business School of Beijing overseas Tell Us Association.
So integrated resources and innovative features such as the amount of work and industrial Internet fault.
Slow connections between local farmers and enterprises in both the upstream and downstream of the industry change.
Our industrial upwards. In addition, we are also working to expand our enterprise base as a new growth Avenue in the first quarter. The proportion of our enterprise flying will substantially not believe both the number of enterprise clients and the value of contract execution increased significantly year over year moving forward we will.
So focus also being high quality.
Ziv local enterprises, who are becoming new catalyst to our regional business growth.
Switching on to the timeshare, especially here in patients.
So you can hold on those because as Jonathan here, we're trying to create at all so you're going to see a whole.
Somebody's going to have north sea.
Ziegler credential.
Argument to you should kind of amazing job she donut hole for kind of your thought I'd have to tissue.
Through our subscription. So is this we continue to test the waters with new variations in the subscription services, including launching innovations in business school training programs and other forms of institutional interactions sporophyte, our companions upwards and hernia. So it was positive in the fourth quarter revenue from institutional and corporate clients.
Increased.
57% year over year, the number of contracts signed by investment institutions, nearly double compared with the same period in 2021, among which the repeat orders from existing customers account for up to 70%.
So it was only like I forgot to activate immune modulation agenda. So when you answered your own like huh.
Okay.
Hey, Myles.
You also with companies on the other.
Although it isn't Joshua pardon me because I don't know if there is no change.
Hum.
Okay.
Hello.
Alright, you until somebody talking about nurses.
Telemundo without entering that he put out can hurt them into the digital channel.
Total tinder, which I'm going to do and you should do it.
Hi, Angie.
So it wouldn't be two shrunk even with about <unk> departure.
Okay.
We'll do that after one year.
Yes.
I'm going to ask what you thought she badger.
Did you give it to you talking as if there was some b plus the fact that can be.
Social phenomenon here.
Mostly I like to share with you the latest updates on our enterprise service radio platform in terms of operating data major relationships.
Substantially.
Our monthly active users rose more than 25 times year over year to nearly 100000 up 49% sequentially and the name of authentic reviews search almost 50 times to over 21000.
7%.
Well as we continue to establish our platform. So as system enters his reputation we showcase nearly 6000 pieces of mainstream stuff layer on the platform. Following the May Enterprise survey software of 16 industry and to Henry industry segments accounting for 80% of the entire market 66 carats enterprise.
It's really a platform that both complete coverage of leading brands as well as college of many many orange, France and other widely known SaaS apps available in the market.
Fortunate oriented features were launched in September 2021, a total of nearly 700 more chance have setup presence on our platform.
Compared with approximately 400 more chance a few months ago, nearly doubling our college of mainstream stuff for why the range is a short period of time.
Sure sure.
Sure.
The Golden Valley.
Oh, no sorry negative redemption.
Uh huh.
Peter I'm looking at something a little hot rolled out.
Sure Yeah, so Julien.
And I'll kick it off.
That was essentially yourself.
How do you does your nutrition <unk> health and all the other Samsung to the Holdco.
An awful lot of them in the trial I don't want to Bill I'd like to highlight that through the joint efforts of our online and offline bus as well as our newly launched feature at the 66 their enterprise service Arabia platform automatic reports, we have effectively enhance the platforms visibility and traffic the number of lease has grown significantly compared with the same period.
Up last year with steady conversion rate of 30% the significant improvement in the number of lease and your conversion rates are key indicators of our capability to efficiently empower SaaS provider to acquire customers properly well we're into your customer acquisition costs.
But as you know dividends English IHOP triangle for Philadelphia children, with you or you can do it basin Bodyweight Hong Kong.
One tender.
Just you've got a whole car.
He himself with them, helping them in the first quarter. Our enterprise survey for your platform performed well in terms of commercialization up to now we have signed contract with Cindy Basin Pahlavi had lesion and easy CRM will empower declines in customer acquisition, Brent management and marketing services.
Without a doubt he cannot have examples you tend to close it we didn't even know who says you shouldn't do you have a 42.
Don would you go so I suppose the hydrogen council, we can email to nail them down which is if you don't give any sort.
So the 103000 teu vessels or even more than what you see out here.
So you're going to actually having a cool you would have been cool.
As you recall is digital.
Answers you twofold.
This was all share it means that we didn't see that Youre short Ethan Caldwell, Michelle How's Injuncted and mutual.
They are kind of a hurdle.
So I'm interested in.
Sure.
And it's your sessions this year, if the Goldman stresses strategy importance of digitalization, we will continue to improve our enterprise video platform service system to come.
Tribute to the digital transformation of more enterprises.
<unk> to be more.
This year, we will remain focused on growing our platform.
Got it.
Devaluation stand up and creating our own magic quadrants for China's enterprise service industry seeking consistent breakthroughs in the areas of software product collaboration user review elaborates key person databases and knowledge graph elaborate. Meanwhile, we are also accumulating typical collaborative cases lay a solid foundation for <unk>.
Chalets Asian, and established strategy partnership in the upstream and downstream of the industry chain, we believe that with our at least our first our enterprise service review platform they'll have a promising future in commercialization.
Sure. They are they're not easy to do them in anything or anything but you know it's.
It's usually a cadre or what happens either shall hold on my either using tomorrow.
He was kind of what you would have even been a did you classify the COVID-19 logging in shortage condition, Muslim, though, particularly troubleshoot, which I am comfortable talking about it.
Forgetting anything better than that.
CASM Ultrashape.
Can you try to do one or two that you cut yourself jindal been penumbra seem to call for them.
Tomorrow they are on it I'm not sure he is listening.
As usual <unk> will close when we want or indeed, the lunch I blame her needle Fortunately.
Dave Ritchie.
For the highest haynesville two local natural deal.
In conclusion, I'm pleased to say that decided to call. It 19 resurgence and company communicated internal and external economic conditions, we still achieved solid first quarter results Napoli.
This initial <unk> 66 per enterprise, so it's really a platform.
Loan growth.
So generally with major a matrix improving substantially year over year Morris suddenly if commercialized this patient subtypes of during the quarter clearly demonstrates that the enterprise. So it's really a platform is becoming a 50 6K, our second growth engine, we will capitalize on the growth prospects in the new economy to scale. When you have as we start it back drop.
Of our departments going forward, we will continue to be a torch there for the new economy sector with expanding our user base and calculating the worst content and service ecosystem, but also shouldering, our corporate social responsibilities and then probably more industry participants to achieve greater success.
Turning to Washington, and several of them that I've already spoken with just all the time.
With that I will now turn the call over to our CFO Ms Lynn Lake, who will discuss our key financial results. Please go ahead.
Powell and Hello, everyone. Our first quarter results kicked off the year with a solid start despite multiple headwinds, including COVID-19 residences and macroeconomic challenges, we achieved growth of 14% year over year in our total revenues and a record high quarterly net income since our IPO of RMB 33 million market.
Our second consecutive quarter of profitability, notably not only beat our advertising business maintained its strong growth trajectory with a year over year increase of 13% our enterprise value added services also recorded remarkable growth of 35% year over year.
In addition, thanks to our disciplined cost control measures strengthened efforts in accounts receivable collection as well as our strategic refocus on core business and disposal of certain lingering assets our profitability improved significantly during the quarter. Looking ahead, we will continue to solidify our industry presence in China.
Economy space cultivating our diverse ecosystem, our business communities, along with our user base to empower more enterprises, while also expanding our monetization approaches to deliver sustainable growth.
Now I'd like to walk you through more details of our first quarter of 2022 financial results total revenues were RMB $49 6 million in the first quarter of 2022, an increase of 14% compared to RMB $43 5 million in the same period of last year online advertising services revenue increased 13%.
On a year over year to RMB $37 six meeting in the first quarter of 2022. The increase was primarily attributable to more innovative marketing solutions, we provided to our customers the number of advertising customer and the average revenue per advertising customer both increased in the first quarter of 2022.
Enterprise value added services revenue increased 35% to RMB $9 3 million in the first quarter of 2022 compared to RMB six 9 million in the same period of last year.
Subscription services revenue were RMB, two 7 million in the first quarter of 2022 compared to RMB three 4 million in the same period last year. The decrease was primarily attributable to the decrease in revenues from India video subscriptions at some of our off line twinning programs, what canceled or delayed due to the resurgence of COVID-19.
However on the institution side.
<unk> subscription revenue increased by 57% year over year, mainly driven by the growth in the number of institutional subscribers.
Cost of revenues was RMB $23 9 million in the first quarter of 2020 compared to RMB 22 million in the same period of last year. This increase was generally in line with the company's revenue growth.
Most profit increased 10% year over year to RMB $25 7 million in the first quarter of 2022 compared to RMB $23 4 million in the same period of last year.
Gross profit margin was 51, 8% in the first quarter of 2022 compared to 53, 7% in the same period of last year. The slight fluctuation of GP margin was because enterprise value added services accounted for a higher mix of total revenue this quarter than a year ago, while its margin was a bit lower than.
And that of our advertising business.
Operating expenses were RMB $33 4 million in the first quarter of 2022 compared to RMB $64 8 million in the same period of last year.
Sales and marketing expenses were RMB $29 7 million in our footprint.
2022, compared with RMB $35 7 million in the same period of last year. The decrease was primarily attributable to the decrease in payroll related expenses and marketing expenses GM.
G&A expenses were a magnitude RMB 10 million in the first quarter of 2022 compared to RMB $20 2 million in the same period of last year. The fluctuation was primarily attributable to the release of the allowance for credit losses of RMB $32 9 million, partially offset by the increase in the payroll related expenses.
The release of allowance for credit losses was mainly due to the collection of RMB $36 6 million of long aged accounts receivable during the quarter as we continuously increase our efforts in accounts receivable collection.
As such Antivitamin expenses were RMB $13 8 million in the first quarter of 2022 compared to RMB nine meaning in the same period of last year. The increase was primarily attributable to the increase in payroll and related expenses as we bolstered our research and development capabilities, especially for enterprise video platform.
Share based compensation expenses recognized in cost of revenue sales and marketing expenses research and development expenses as well as G&A expenses totaled RMB $4 1 million in the first quarter of 2020.
Compared to RMB, two 7 million in the same period of last year.
<unk> was primarily due to the growth of new share options.
Other income was RMB $40 3 million in the first quarter of 2022 compared to RMB 1 billion in the same period of last year.
As we previously announced through our 6K filing in March 2022, the company as one of the investors in the lumpy financing of Hangzhou dialing information technology Co Ltd. A quad is seven 3% equity interests that by transferring the 100% equity interest the company held in Beijing XI or Korea.
Interactive media culture Co Ltd to Hangzhou, selling which is a fresh produce supply chain solution provider in China.
The subscription price is the same for the company and other independent investors in this financing round the fair value of accurate interest. The company acquired is RMB 40 million. The company recognized approximately RMB 38 meeting of game, arriving from such investment and disposal in the first quarter of 2022.
Net income was RMB $32 6 million in the first quarter of 2022 compared to a net loss of RMB 45 million in the same period of last year non.
non-GAAP adjusted net income was RMB $36 7 million in the first quarter of 2022 compared to net loss of RMB $37 8 million in the same period of last year.
non-GAAP.
Net income attributable to <unk> holdings ordinary shareholders was RMB.
So there's three meeting in the first quarter of 2022 compared to a net loss of RMB $39 5 million in the same period of last year.
Basic and diluted net income per ads were both on the 0.8 in the first quarter of 2022 compared to basic and diluted net loss per share and net loss per ads of RMB <unk> nine in the same period of last year.
As of March 31st 2022, the company had cash cash equivalents and short term investments of RMB $171 1 million compared to RMB $216. One meeting as of December 31, 2021. This was mainly attributable to payment of year end employee bonuses and benefits as well.
Small sized long term investments we've made in several new economy startup companies during the first quarter of 2022.
This concludes all of our prepared remarks today, we will now open the call for questions. Operator. Please go ahead.
Thank you, ladies and gentlemen, I'd like to ask a question at this time you will need to press. The Star then the one key on you touched on the telephone.
For the benefit of all participants on today's call. If you wish to ask your question to management in Chinese. Please immediately repeat your question in English. Please standby, while we compile the Q&A roster.
And our first question coming from the lineup Cheng Cheng from C. ICC. Your line is open.
Or what's your dandruff shampoo M D.
Sure.
Okay.
Oh.
Yeah.
So if you go to Chicago.
I Hope you are as I'm sure Jordan.
And I would tell him at the hotel sure Javier compute that you could share.
And kind of all somebody on 15, yet that's used in the future.
Voting rights held or anything like that.
That's all for me and these are called news is it will move.
With that long hole student equal you mean elite.
Oh sure.
Uh huh.
Reservations on the first quarter of financial performance I have two sessions.
How is the impact of COVID-19 on the company's business in the second quarter.
Are there any corresponding adjustments to mitigate the negative impact and my second question is cost and expense control has become a key trend. This year in the company's net profit is also increasing and can you provide some guidance in terms of cost reduction in the year and how should we look attached to the profitability of the company.
Thank you.
Okay.
So one final question is on consolidation.
So we'll see how you can measure while we are in the basin.
You can call the next rotation going to carry this whole it tomorrow.
Sure sure.
So can the Uganda.
And thanks for your kind of your pool from your competitors now hold one example would be Oklahoma.
So I'm wondering what is your hope.
Oh man behind interesting data.
I wasn't even Intel film Nicole the quantum one year, which without too much also.
We have seen this change of things March in this year and April Windsor Pent demand kick started in Shanghai to me.
When Beijing also implemented strict control measures COVID-19 has impacted us in both Q1 and second quarter fourth quarter and second quarter. The delivery of our enterprise value added services, especially offline activities fourth intended resulting in project suspension is already leased.
Okay.
Advertising spend.
Pandemic related control measures pose challenges to the macroeconomic reducing customer willingness to pay and what happened.
Tom I don't really don't have that.
Do you think that that will open up the call.
What do they call with you won't forget them.
The usual to have walk I don't know for sure.
If you enjoyed on who should I can hear you.
Ohio Dominion to do coal.
Cohort.
Yeah.
So you won't go what exactly you have got that foundation here.
We have maintained our path.
Toward addressing these challenges.
Their offline delivery.
<unk> provided the other option such as online solutions like left screening short meeting.
The issue for our testing business, we launched the worst winter in Asia Asia to provide favorable press for our customers to help them.
Kind of Magic pill right.
Yes.
Hope it's relatively neutral.
Yeah, we can get up without on Kibali.
And we've had a horizontal.
Okay.
Proposal two bomber.
I mean, I will Miss you on them.
There's not much at all.
Sure.
The cultural I mean sort of what you would have even been hedged away.
And just what are you guys won't lend to you obviously don't have those right. So if I can answer that.
Tomorrow.
<unk>.
Okay.
So what we can say you will do it in a heartbeat.
Has the Lockdowns in Shanghai, and Beijing gradually lift we believe our business will finally Richard.
We will take steps to ensure smooth business operations and delivery this week and positive expectations for the second half of the year for the advertising business. We hope to continue the upward momentum and make breakthroughs in the form of our level of advertising.
And the number of customers that's an important component of enterprise value added. So is this we hope our enterprise with reveal platform to make a big Big Big breakthrough is commercialization. This year re pulp republished subscription products such as business School will also be gradually launch in the second half of the year.
<unk> you.
<unk> into the company's business.
Zero.
Comments on Intel.
Adding on glaucoma.
And then you'll have a human but here you are talking with you in may.
And as Johan the Germans Intel controllers as you don't have to deal with him and I know you can go back home.
<unk> contract vehicles have all the only issue Youll go to him. He was actual ROE language was around attorneys on commodity driven by production with your view.
So you want on catcher that wont be.
I Wonder if you go on and do that.
Although of course, as you know with easy to send Tyndall I'm familiar with.
Since the beginning of 2022, there has been a stream of news about employee optimizations in other companies. So.
So far 66, 66 does not have any plans to cut cycle, our cost reductions and efficiency enhancements like it's more on the strict control of business costs.
Right it reflect in the <unk>.
<unk> financial statements for example, while maintaining double digit revenue growth. We have achieved steady growth profit margin benefit came from that year over year decline in sales and marketing expenses and improve the account receivable collections.
Or 330 Neely.
Net income in Q1.
Well I'm not sure a whole bunch of an idea of what you're telling me. It was just a harder and harder.
Youll, who don't have <unk>.
And the reason I was little Tio Ian Kilgour.
Okay.
The younger children.
Sure.
When we put out hurdle.
<unk> business fundamentals remain positive as to Panama and take our business will return to normal we will work hard to increase revenue and improve operating efficiency.
From our perspective, good performance last three costing pest control are the right ways to cost reductions and efficiency improvements.
Can you hear me.
I'm just trying to you are they are they don't care.
Could you I mean, usually kind of younger curious what all you can eat NGL.
On Tuesday of hydro.
But we.
She gave me crazy to that policy.
You too.
And was wondering if you put all of them.
Thank you so that you won't do it.
<unk> elite.
Let me assure shouldn't hydro <unk> hydro somehow I sure hope so.
So you can put against that we won't find for.
Sure she doesn't want that.
Sure. So as you know go ahead.
Regarding profitability, we talked about the full year.
Profitability last quarter, and we achieved profitability this quarter given the impact of COVID-19, the second quarter, we are cautious, but still anticipate the overall profitability in the first half of the year as seen through the second half of the year. We are positive about the recovery of China macroeconomic and they throw in driving our business.
Meanwhile, as the third quarter and fourth quarter is the peak season for us profitability in the second half of year should also be achieved so in general as long I sell telematics does not recur on a large scale retail.
Our full year profitability cautiously optimistic.
Sure.
Okay. So do you have any other questions.
That's it.
Our next question coming from the line of Great. Thank you.
Industrial Securities Your line is open.
H Gladstone, Paul Cranking out of Shanghai.
Great.
Anyhow.
Bausch I always a hot and you're going to do.
You don't get they don't want to ask on things that you didn't change I'm going to win.
Dan do you want me James Bushnell, the yards announced you see I'm not kind of well not a genius Dai ichi range I'm talking to drink he the whole Guangdong Jim G. One June should be dealt with water and no. One wants to my colleagues, particularly showing you why that you've got.
I will translate my question.
So given the difficult macro economic environment, and how do you consider the commercialization pace of your Enterprise Service review.
The damn thing.
Thank you.
Okay.
Sure.
Sure.
Yes.
On the whole call it something like what happened there.
So we're going to ensure we can don't want to show you that you have on par.
The whole duty within even looking how the COVID-19.
Although the hazard to you on that.
Donald I mean, when we look at.
The item, which is completely integrated called out.
Before you do $10 million.
So that was without knowing there'll be initially back in one of the meaningful hit at the hiring on an ascending royalty.
You can have that real holdout unions, when the Ottawa Treaty.
But he didn't neutral probably isn't on the table.
You bet.
And you wouldn't want to prevent you from doing other things around between 25 with Honda.
How do you know what all of that because we're going to use to go together with our tissue Johan.
Pay pay so under the.
More sense of the.
<unk>. So we think the SaaS provider, we will have more difficulty in acquiring the customer from from online. So the 66 pay our enterprise release radio platform will benefit from this situation. So our kpis for the enterprise. So it's really a platform on SKU forecast on.
Developing the platform and we've refined our product.
Primarily following operating matrix, such as the number of authentic reviews.
And they use as well as product anymore on the platform.
I'd like to share with you some operating data so at the end of the March 2022, you use on our enterprise video platform.
25 times year over year to 900000 any number of reviews search almost 50 times, two or 'twenty 1000, opting out our enterprise <unk> platform has showcased nearly 6000 pieces of mainstream stuff. We are on the platform. So the number of leads our enterprise services radio platform has increased dramatically.
Okay.
So Eddie conversion rate.
Over 60, 30% these metrics will continue to improve.
Okay.
Total machines.
Some of them, they're talking to us about you.
You said the old without some NIM pressure dividends here, but for the time.
Yes.
No.
After all if you don't cancel Tommy how are you.
People don't think of ourselves.
This all of them what casual Shanghai was her.
Because what is the timing because we've gotten used to that.
I think it was helpful.
You put out here.
<unk> barcode can do it.
You say that.
When we went out to tender.
I always say cohort you can make money you can go forward on <unk> going forward.
So last quarter, we said, we will start our commercialization disclosure and our enterprise. So it's really a platform commercialization, we will focus on generating self leased product promotions and recent reports. So this year, we launched our commercialization palace featuring the simultaneous Lee brands marketing.
The lease related product.
Already see some results, we have which is.
Agreements with several enterprises, including signing contracts with can be hot <unk> and <unk>. We will continue to provide them with serious regarding customer acquisition and brand management and marketing services.
Okay.
Shanghai Times, all that's really gone past COVID-19.
Thanks, Paul.
Okay.
Please go ahead.
$10 higher due to the drag on Ultrashape.
I will tell them don't come down.
Okay.
Further to bolt on.
Hello.
Okay.
So we believe as we refine our product.
He wants to commercialization is mostly the enterprise. So it's really a platform role in boosting 60, 66, chaos or all fundamentals there'll be more significant and it will become the second growth of the company and we want that to become as early as possible and to materially change the market perception of <unk>.
Fair valuation logic, so maybe in the future of weathers the Porsche.
Question from.
<unk> 50, 6K, our enterprise service with your platform.
Revenue and there'll be increased significantly.
Okay. Thank you.
And she said going into it.
Sure.
I apologize you prepay.
Yes.
Our next question coming from the line of Lindsay.
Sure.
WNS research your line is open.
Yes.
Yes.
Hey, Glenn do you want any tangential with either no one wanted to live in <unk>.
10 minutes.
She sounds would you chalk well went through the diesel been T shirt.
Shanghai Tang quote Shingly Dupont pool number women because like you shouldn't.
Thank you.
One are you would you argue solutions.
Yung.
Yeah sure.
Sure Cleo.
Now the other this year kind of Donaldson yati actually pick up a bit now.
One official Brent Boucher Youll tissue.
There shouldn't be.
No.
Sure.
You can kind of show me, if I can do bulk war Eagle.
No.
Hum.
Uh huh.
That's totally result, and my first question is how is the recovery effort and each business progressing with the gradual easing of Covid and Shanghai and around the country, which business segments can recoup.
In the fully six months is the plan to be at break even go being revised.
And my second question is with the current downward pressure on the economy, what's that smell the same thing.
To maintain the resilience of the event.
Advertising business segments.
The question is.
What is the progress of the enterprise strategy review platform promote commit commercialization.
Does the company expand the user base and cultivate consumer mindset.
My question. Thank you.
Thank you Lee for your question. This is Lynn I'll answer your first question regarding the.
Pandemic impact on the business and our outlook.
This year's profit, but at the end up Mr. Huang will answer the other two questions for you, yes. It jumped up Mr. From just mentioned the COVID-19 under the macro challenges did have some impact on our late Q1 and first half of Q2's business.
Especially on some of our enterprise value added services, there's some offline events involved where we could see some impact however, we have taken.
Several measures to mitigate that impact for example, we hold online plus offline forums and we utilize the online.
Live streaming forum as well as the short video.
Format to host the forums and conferences for our customers that's for all enterprise value added services actually that.
Revenue segment.
Gross 35% year over year in Q1, even.
Outgrow the total revenue that is a very significant growth during Q1 and regarding the advertising business. Obviously, that's a major component of our total revenue that again also increased 13% to under <unk>.
You look at the industry average if you look at those companies who already reported their Q1 results and if you look into the online advertising I would say it is.
Is it to say that most of them have booked a negative year on year growth well, we have a double digit year on year.
Your growth and I think that's thanks to our associates at <unk>.
Content brands and brand image that the Smes as well as <unk> companies.
A fortune 500 companies all comes to us to.
Pursue brand image as well as poor fund performance based ads.
With that said, our advertising business less Ah <unk>.
Relying on the macro comment and more resilient through the cycles. So that's why we think we have a very good result in Q1 and looking into the Q2 and the rest of the year first of all.
The pandemic is the control is lift our offline events, our enterprise video as a services will come back and with the micro economy.
Gradually recover the advertising spending will also come back and we have a lot of you know initiative for example, the adjustment to our rate card and some more innovative marketing solutions, especially our short form video is picking up.
Really really very quickly so that gives us confidence that in the second half or in the remaining of the year. We can catch up what's left in the first half.
It's actually in Q2, so we are still.
Mr. Feng mentioned, we are still very cautiously optimistic about the full year and we maintained.
Maintain our.
Forecast for the full year basis, our profitability.
I hope that all sorts of questions.
Thank you.
Hello.
Hi, Paul I don't think Oklahoma was anything that was opened.
Thank you Holly.
Okay.
They kind of issue.
Sheldon negotiable commercial was up into the <unk>.
That's all.
Dr.
So I am understanding the culture around this review.
Do you have any guidance.
So for the resilience of their.
Advertising services, we think maintain our influential and maintains the quality is the most important things for <unk> and we will continue to reach content offerings and constant instantly provides high quality content, but also we will continue to diversify our distribution.
Finals.
So that you'll strengthened influence of 50 6K R.
So you have official now development, having a double trigger.
The shovel until the impact of intangible.
Within the San Jose competency Youll recall, what you want from the literature.
Cohort in Canada.
Sure.
So much.
Dr deliberate policy and advertising efforts, we will continue to optimize our product and provide customer more.
More options from tax images to short form video and left uranium. So this strategy will strengthen customer thickness to 66 here.
So hopefully you can get anything you've got to solve for it until you can could you cope with along the.
We cannot have Johan do you want to know who they are going with that group.
So you can use your home or excuse me that'd be hard even what I don't think thats harder.
So for this PRA measure, we launched a warm winter initiative to provide favorable press for customer in difficulty to help tide them over during the.
Pension magic the pandemic period.
COVID-19 is under control, we will adjust our pricing strategy flexible flexible according to the demand.
So you don't want that youre going to need to pay down debt.
If youre looking how does that impact how you're always.
Ginger.
So we can drive a harsher winter.
Yeah.
You got it.
Kunal over here on the gold.
With that I'll.
Hi, it won't be that agenda total household tissue, although hopefully tomorrow in the what do you feel like you hit on Bahar and in kind of.
So we'll give you a call.
So before you can choose what do you anticipate in the future as well.
Kind of what you would have even higher Palo Toyota motor vehicles.
Vehicles <unk>, Jason assuming there. So we think there are constant ability is all on one page four 6% to six their enterprise service radio platform and for user to expansion, we will remain focused.
Growing our platform influence of using a set of industry evaluation stand up and creating our own magic quadrant for China's enterprise industry <unk>.
Those seeking houses tests breakthroughs in the areas of Delaware product collaboration user with elaborate <unk> databases knowledge graph elaborate COVID-19 66, their enterprise video platform become Chinas largest most authorities.
Most convenient enterprise survey software a collection platform.
So a lot of things because we didn't have the enrollment challenges. It also can thank you.
Okay Daniele halfway through your initial view that Johan Chicago Ashford households.
Sure.
I'd like to know who you are going to continue a little bit here, the Republican Dia, who haul operation.
Most of the toilet Nicole.
So you definitely watching to assure assures us that much.
This is Josh.
So I.
I think even from home.
Yeah.
So for the commercialization process as we said in last quarter.
We will start the commercialized decision this quarter, but we still will improve our operating data and efficiencies. So for their commercialization part we will view.
Now the shift.
And we have variety cooperates with spacing candy and some famous brands. So in the future. We think this will be.
<unk> the second.
<unk> engine for the company and we will have much more potential in regarding to the commercialization.
Thank you.
And our next question coming from the line of John .
Zhang with T H capital your line is open.
Okay.
Oh Hello down.
Hello, Mike.
Uh huh.
Okay.
Yes.
Well, the one future sounds really good.
Not much ends up.
Operating loss.
Uh-huh donated human data.
George on key senior yard people don't show dollar each of them for 100 million from a central control.
Yeah.
So that at some juncture all should be Javier adult nutrition shahada once you don't you're preaching waddington.
Gotcha.
Yeah.
Hum.
Did you find it John but you only management congratulations on the strong results in a sense very much for taking my question. My question is regarding advertising business.
There's always the impact on the ongoing COVID-19 in China in the first and second quarter and weak macro environment recently.
Strong girl, Yeah, Oh, yeah advertising business, that's outpaced us.
And so.
So can management share what's the driver for this performance. Thank you.
Thank you Tom for your questions. This is lane I'll answer your question, Yes, our advertising performed quite well in Q1, I think is mostly driven by both our the number of advertising customers as well as a pool, our number of advertising customers increased 2%.
Compared to the same period of last year, while our <unk> increased 11% compared to the same period of last year and talking about the advertising pool I think there are several factors first of all.
Every.
Beginning of the year, we will adjust our red card based on the.
Supply and demand because our resources our advertising inventory, it's really are a highly sought after so we adjusted upwards our rate card that's number one and number two is.
We have.
<unk> launched several initiatives, including our short form video content as well.
Lot of content columns that are specifically targeting at a C and users for example.
You know the O us in Chinese a whole long haul long in Europe yeah.
And some KR test, which I'll cover in scoping and those columns are really expanding the customer base as well as increasing the contracts as we translate into the higher our pool philosophy and that's number one from the technical point the number wise, how we calculate the increase of our advertising revenue.
Secondly in terms of.
Analysis of our advertising is mostly brand advertising, that's it's less vulnerable to economic cycles, because you know.
Got it.
Uptime and downtime our company has always need to build their brand image that's why our.
Advertising is less real.
<unk>.
Macro economy and more resilient through the cycles that's number two.
I think.
Getting that site our advertising is a major component, but remember that the study is actually our enterprise reveal platform is picking up as well that's commercialization of that product will be much more performance based which is a very good and perfect supplemental.
Flavor to add into our overall products.
Offerings, because that is a chaos enterprise video platform that commercialization will be based on sales leads that's mostly performance based as well as some research reports and some marketing resources. That's a very good combination in the future. So I think that's.
Good violence between brand and performance.
<unk> business, that's very good for the future growth for the company.
Hope this answers your question down.
Hum.
Thank you.
Yeah.
Thank you as there are no further questions I would now like to turn the call back over to the company for closing remarks.
Okay.
Well. Thank you once again for joining US today. If you have further questions. Please feel free to call back $60 60, <unk> Investor relations through the contact information provided on our website.
Our offset.
Yeah.
Thank you.
Ladies and gentlemen. This concludes this conference call. Thank you for your participation you may now disconnect.
Okay.
[music].
Okay.
Yes.
Yeah.
<unk>.
[music].