Q2 2022 LIZHI INC. Earnings Call
Yeah.
Hello, Ladies and gentlemen, thank you for standing by for <unk>, Inc. Second quarter 2022 earnings Conference call.
At this time all participants are in a listen only mode.
After management's 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 House Effie Kang head of capital markets for the company. Please go ahead.
Thank you very much Hello, everyone and welcome to the Inc. Second quarter 2022 earnings Conference call, We released our financial and operating results. We are newswire services earlier today and they are available online.
But he spends on today's call will include our founder and CEO , Mr. Michael <unk>, Our CEO , Mr. Zhao long Beach, and our acting CFO Ms Cheung followed Mister.
Mr. D will begin with prepared remarks on business development I will deliver our prepared remarks, all financial results on behalf of Ms. Lu.
And the call will conclude with a Q&A session.
As a reminder, this conference is being recorded in addition, I must highlight presentation and a webcast a replay of this conference call will be available on the IR section of our website at IR dot need to adopt at that.
Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995.
These statements type can do contain words, such as May we all expect target asking me in pattern, but live potential.
<unk> or other similar expressions.
We're looking statements involved with Harrison risks and uncertainties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated many of which factors are beyond our control.
The company is a fit advisor representatives and underwriters do not undertake any obligation to update these forward looking information, except as required under the applicable law.
Please also note that would be just on your press release and this conference call include discussions of unaudited GAAP financial measures as well as an audited non-GAAP financial measures.
He used to be for it to be just unused press release for reconciliation of unaudited non-GAAP measures to unaudited GAAP measures.
I'll now turn the call over to our CEO Mr. Tao Li Please go ahead.
Stop.
Got it I'll jump on the audience of the economy.
Yeah.
Lee.
Hello, everyone and thank you for joining our second quarter century Center two earnings conference call.
Sorry.
Tito.
Well, then tissue, so lee laid out well done and good luck.
Saying, he said adult sensors with Nevada.
You'll start pushing gengel half Julian Tompkins sheets in Charlotte.
Yes.
Junkie, you don't die changing for you you're almost sure way so the chance to go back to swap.
Yes.
So until that you don't want to talk on that.
So this is a bargain.
She's doing so.
With that you know E E.
Pete.
Well my uncle, he central to Sally Joshua So yeah, so the photon.
Hey, you will show that.
Yeah, So elyse.
Cable T cell.
She's only.
It won't be if he doesn't look like a T J.
He said I'm not going to give you.
500, it sounds at least citizens.
Got it.
So now, let's see I'm going to need to go to Linda Li Jamie.
Do you need to be.
He's done five in this suite.
You can't buy back faster.
Sure.
Tony.
Quickly just China.
Hey, Jonathan.
You know if I got that.
Okay.
In the second quarter of 2022 we remain focused on Europe, Hello approach of Interactive Entertainment talk audio based on social networking business development and effectively executing global like the diversified product matrix strategy in the second quarter, all total average mobile app.
I use a market you are $49 7 million average monthly paying users totaled 485000 and revenue reached RMB 516 million.
We also took steps during the quarter to elevate our organizational efficiency and advanced the development of our in house, where you felt the technologies, while continuing to execute an effective operational strategies.
As a result, we further improved profitability and achieved a new route to the high gross margin of 34%, representing an increase of 600 basis points year over year, and 200 basis points quarter over quarter. Moreover, we achieved our third consecutive quarter.
Now you can come on a GAAP basis wishing to equate the two RMB 18 quantity 18 5 million in the second quarter up 15% sequentially and recording a profit versus a net loss in the same period of last year.
Next I'd like to share more details regarding our business development in the second quarter.
Tom can enjoy life.
Oh from Samsung.
Many children, Jon Inking, who don't even know it until.
So we are the sort of thing.
Sorry, Dan told you.
Well thanks, Jonathan.
You saw that you signed up.
Surely that's in Kita elite elite.
I think Sheila.
Well know Heidi.
We don't even have to sometime.
So in places, where Sundar why don't you let them Tony.
Sure Jamie.
J, Paul from Fuller, who don't you love the Tumblr.
Thank you Doug.
He's got a leader coming gingerly.
Sure.
From a hard time ago go to tornado, sometimes the quality and cost.
Chung from far away, sometimes are the chances that Charlie.
Well, if we don't you know yoda tenancies and candela diesel.
At the beginning of this year, we identified interactive all joined the Cayman business as.
Our operational focus and directed our resources and marketing tactics accordingly.
Strategy has significantly improved our operating efficiency and overall profitability.
[noise] Amanda all existing interactive entertainment ecosystem, we risen incubated and launched a new interactive entertainment products, such as shocking for reaching our interactive entertainment product matrix.
In addition by building a unified content creates operational path on unlocking.
Lock it in.
Additional value and a greater creative to you from our high quality content creators laying the foundation for the long term growth of our interactive entertainment business.
Yeah.
Well my father, who don't.
You'll show syndrome, and I'm trying to trying to do.
Being able with Houston, who don't.
Leland leap.
Uh huh.
Well then she bought a schottky Johnnie Walker Super Deluxe right.
Dongola Chongqing, the Pudong science to it.
Do you sell to both of you to being.
Being downtown Yahoo, Youtube agenda.
Well, the hard tissue or in tandem.
So what's the payout change I'm sorry, the two books.
So in terms of the types, but I need a turnkey program.
So all of them.
Hi instantly amount soil.
Okay.
Giovanni.
Yes.
Fantastic.
Julio who I'm going to try to finish off those.
So some who don't.
So Amanda you havent gotten the conduct.
Sorry 32.
England, who don't you love.
You'll have a centrally.
He said, sometimes you got to do.
This is the body.
Changing gears here.
Sure.
Nobody says you are.
We need from you.
Well Michael.
You know like what's it done.
She said look.
Sometimes they don't talk about that Oh, you do.
During April you'll watch and Linda Jojo, you said nothing really disciplined.
So I'm sorry did I.
Well John D. G. So you don't see attitude towards them, who don't even know that.
Uh huh.
I'll tell you how to Inking, who don't really love coming down she said.
Forgot.
Condor sourcing your older changing Jonathan who don't even know yet with us.
You almost totally switching frobisher Alida Houston.
In the second quarter, we also eat factories grandson, a content creator and engagement through a diverse operational activities, whereas you further boosted the profitability of our interactive entertainment business.
One example, we hosted Osama Carnival crater you bat, improving content greater productivity and it's what you find there a connection with users through innovative interactive competition.
Also launched the novel events, such as the hall fan and to cultivate and supports new generation creatures boosting their longtime development on the path for.
Furthermore, we partner with our gaming brand neither of legends, while the rest to foster our brand of connectivity and organize the cover song contest why self shiny heroes wished.
Wish encourage users to interact in real time by creating and sharing relevant content.
We were pleased to see that our user penetration rate of our interactive audio entertainment business increased to 350 basis points year over year to 18, 5% and the average mobile and they use which is a nice 117 million in the second quarter. In addition.
When you have that the activity of me too long tail content creators.
FX and other strategies, which have further optimized our cost structure and the overall gross margin as we approach. Our next stage of growth. We will continue to concentrate our resources on expanding our interactive entertainment business incubating and creating a diversified interval.
For audio entertainment product.
That covers more key user groups seem shoefie user penetration rate and further elevate the paying conversion rates.
Sorry, changeover PA Fuckoff opinion.
Well, one thing Eagle Centinela changes, so does somebody Thiago Huntington.
Some folks who don't change in the winds up nasal cannula, especially hard on motion.
So give it wouldnt seem to go on them.
You know young who died she was on Cajun Pogo Northern Nevada gossip.
It seems like we'll do so.
Sure.
Suddenly chaiwallah Thiago so Dawson James.
Well, Michelle I'm hungry with them.
So some who don't.
Okay.
Adult engender shows up so jumping in.
Well, you don't know what you're gonna Chongqing the Citadel concept.
So I didn't hear you don't go to China, do gunslinger shaping that enable cheap diesel.
So you know the Hollywood, who don't meet each other and she wants to talk about.
So the Samsung that she says.
Sorry did you do.
The older than me just Tony just on this soon.
Sure.
Yeah, she nurturing suddenly don't meet them you don't pay.
Yes.
No you did.
Young with Hollywood, one Chilean peso Chaouchi nantong cheese in the U S.
So be it.
Well on that.
Well the giant tissue G Ninja Dorian product C. J I hope you total sample to answer.
Tom all of them at the time being.
Sure Yahoo, gosh, it a trend yet.
Oh goodness neither.
So you're seeing them Shutterstock search engine.
With respect to our global development in the second quarter. We further upgraded the product feature itself our global social product here are you, reaching the interactive format. After real time Interactive group space.
As a sample we added innovative functions such as choose out there and audio Chi from images to guide users online interactions and social activities and veterans wave reinforcing she has social attributes.
Through the integration of real time interaction and lines of tenants, we have to create a life cultural space for young people and for wide innovative social fab format to users.
P S user engagement and activity grew so did the Apple watch and user interaction rates and average time spent per user in the second quarter. The average daily time spent per user increased by 44% year over year and the average Masti group penetration rate was up.
115% year over year.
At the end of June the number of pairs of breath connections increased by 140% compare them with the same periods of last year.
Going forward, we will continue to optimize all pro docs based on users' diverse interests and hobbies as web young people, it's chunky lifestyles.
User engagement and build a mall Kofi conducted online social space.
Sure.
Charge and you'll have the Thunder zone.
As I put on the corridor single shot.
Tongo what's in it.
Then in late.
Ne pool for apartments, and what she Pseudomonas Tommy.
Women's young GH in the Sudan.
Did you put on the Sudan towards him.
All countries and going to the time between junior.
Yes.
Hunting excuse me and can do it with the transition.
Sorry, do you have I mean, she doesn't tell you I don't know.
Sure Yes.
With regard to Sudan and Egypt.
Yeah. So if I can do the sorry your father chimney.
King able to your phone to doi on hard times.
In line with our globalization strategy, we have been consistently exploring new markets and in incubating new products for international market throughout and in house development capabilities.
Based on potential market opportunities in the market differences, we will leverage our well established they experienced and pulled out of operation and I'll Mohit that national localized innovation capabilities.
To expand the market boundaries of our business within our diversified product matrix that strategy.
Well unleashing more commercialization potential and in reaching our diversified product portfolio.
Yeah.
Is that answer.
Yeah, Dara D Superman Dawn in Chile, the junior and yours.
Women, who Don the Georgia plant.
Jensen.
Thanks Jenna.
Well Jonathan.
C N T shirts on hurricane card sales.
Okay.
Silly tongo, what's in her I.
G fast sometimes you got most of them.
And as usual I'm going to chime into that you've done.
Where did you go she don't call. It sounds like you just saw.
Yes.
She don't.
Saying Gee two sister G.
Jacob I love.
[noise] co Gen tongue, either total quality yard.
I suggest doing either yoshito.
You go lingual I'm sure it.
Well the kingdom.
Cancel.
Pass it on E C and D.
D C.
She's looking Guy told me.
T.
Hum.
Sure.
But actually we talked about.
G teaser, saying charging so doesn't usually.
So you can't quite astute Anshan co Thunder Inking G shall she's trying to outlaw.
Toyota Honda hunting.
You're gonna conducting two hot Ghana central.
Hospitals on the east side, so stripping that we talked about.
Yeah.
Suzanne Tango, so don't walk in Chicago, So that's what you're going to see.
Johan who due to something that's in the money.
And so that you don't give away father.
Saying.
A lot sooner and poll voting cards than she got you so I'm going to fool.
So since our hunting and follow the.
Sudan and social.
In Raleigh salaries.
Chairman that Houston.
So I'm, saying.
So you end up decently suleman, you'll find on the issue.
Sorry, we like women's Jonathan E boots on her.
And you saw the.
Natalie Hustle.
Kind of how the Lodi, saying, sorry cause the yields on the young children.
So when are you trying to change a lot of talk on the Sarnia.
Meanwhile, leveraging our years of experience and the vantages of our self development technology, we have been strengthening the development of all it was a tall technology platform.
Recently, we unveiled was called and in House hybrid cloud computing platform, we developed to meet the group's business demands.
By integrating the three called computing models, Natalie ice Pos and Sop, we created a falling technology matrix to provide a one stop comprehensive solution for our business there.
They're calling for a structure off what's called its based on their Iraq hybrid cloud architecture, empowering our unified platform through which to need your group can't operate multiple called tools security and the reliability on the power side, what's called featured Dr. Amy Ah self developed.
RPC real time audio and video streaming technology platform and the border at our Houston the messaging platform.
Two our innovative real time.
Audio and social networking technologies, together, Dara and me and voter acts provide a fast secure high quality audio and messaging transmission network and support a more tailor the futures and services followed whereas product.
In addition, what's called soft sacrament as represented by the juice business intelligence platform, which ends to upgrade in channel data management and efficiency through the automated intelligent data analysis and optimize their groups and smart asset management database driving.
Business development is through the data analysis.
What's called also integrates our intelligent marketing power plant and other business related services, which help to advance pro Doc R&D marketing and operational efficiency, we believe our proprietary technology and in house development.
Kids are the cornerstone of our business development.
We plan to further integrate self developed the technology and services and the rollout was called across all businesses ultimately empowering business innovation and our global business expansion.
The only area.
Humans are dirty little cheaper that's Angie.
As a junior.
Are you at a time she brought up.
We'll go to Jimmy Choo.
Yes, John Wheeler.
Women's young guns, Dark I'll show the Lodi is Huntington.
He chenzhou harder salary tortured chancellor.
Total Dar who don't you look EG, so answered yada yada.
He then suddenly hurting diesel than the leap.
You'll have to pay to Jimmy.
Cable Suva, sorry about the charity.
Please don't change all year with a father.
In summary, our accomplishments in the second quarter have laid a solid foundation for the long term sustainable development of our business going forward, we will continue to refine and execute our product matrix strategy globalization initiatives and optimize always also location.
By devoting key resources towards advancing our interactive entertainment and audio based on social networking business.
Ali waking hour car technology capabilities, we will further unleash commercialization potential and accelerate our global business development.
Oh, So you said the job.
Some of them are you changing to the better so that's where then you become adults.
I mean, the Darling CFO Lootens Armani suit women's yourself Tayo the UGG.
Thank you our next I will turn the call over to our head of capital market I think Carl Hu on behalf of our acting CFO Ms. Ching final will provide more details of our financial results.
Thank you Don and Hello, everyone. Today, I will give you where the following remarks on behalf of Ms. Lu.
We are pleased to report improving profitability in the second quarter of 2022 with our diligent efforts to enhance operational efficiency all gross margin hit a record high at 34% in the second quarter.
600 basis points year over year.
Why excites me, we have achieved a profit on a GAAP basis for the third consecutive quarter.
With net income growing 15% sequentially to RMB 18 point to 85 million moving forward, we will remain dedicated to executing our diversified product matrix strategy and enhancing car technology development to progress product innovation and commercialization.
Now I would like to provide a brief overview of our financial results for the second quarter of 'twenty two.
In the second quarter. Our total net revenues were RMB $515 7 million compared to RMB $559 3 million in the second quarter of 'twenty one.
Primarily due to the decrease in the number of paying users and the average amount of user spending on our audio entertainment product.
Cost of revenues was RMB 341 million in the second quarter of 2022 compared to RMB 401, 5 million in the second quarter of 221.
Primarily due to a decrease in the revenue sharing fees because of the decrease in net revenues and the revenue share in percentage to content creators.
Gross profit was RMB $175 6 million in the second quarter of 2022 representing an increase of 11% year over year.
non-GAAP gross profit was RMB $176 8 million in the second quarter of 2022 representing an increase of 9% year over year.
Gross margin for the second quarter of 292 increased 34% from 28% in the second quarter of 2021 not.
non-GAAP gross margin for the second quarter of 'twenty tended to go to 34% from 29% in the.
Second quarter opportunities 91.
Operating expenses were RMB 161, 6 million in the second quarter of 2022.
Compared to RMB 193 million in the second quarter of 'twenty or 'twenty one.
Research and development expenses were RMB 70 points to a million in the second quarter of 2022 representing a year over year increase of 50, 15%.
The increase was primarily due to a higher salary and welfare benefits expenses and a rental expenses.
Selling and marketing expenses were RMB 60 points to 8 million in the second quarter opportunity to meet you.
Compared to RMB $106 3 million in the second quarter of 291.
Primarily due to the decrease in the promotion and marketing expenses.
Partially offset by the increase the salary and welfare benefits expenses.
We will evaluate and adjust our marketing strategy and the budget based on the business performance operational needs and the market condition.
General and administrative expenses were RMB 31, 6 million in the second quarter of changes any two representing a year over year increase of 32%. The increase was mainly due to the increased the salary and welfare benefits expenses estimated litigation commences.
<unk> related to copyright matters and other professional services.
Operating income was RMB $14 1 million in the second quarter, Australia Tonight, you compared to a loss loss of RMB 31, 6 million in the second quarter after depending what.
non-GAAP operating income was RMB 21, 2 million in the second quarter of 2022.
Compared to a loss of RMB 21, 7 million in the southern part of 'twenty or 'twenty one.
Net income was RMB 18 points and 9 million in the second quarter of 232 compared to a net loss of RMB 29 million in the second quarter of 'twenty or 'twenty one.
And the non-GAAP net income was RMB $26 million compared to a non-GAAP net loss of RMB 19, one to two minutes in the second quarter of 291.
Basic and diluted net income per ads were RMB 37 cents and the 36, respectively in the second quarter of 'twenty to 'twenty two.
Compared to a basic and diluted net loss per ads of RMB 58 stance in the second quarter of 2021.
non-GAAP basic and diluted net income per avs, well RMB, 50%.
In the second quarter of 222 compared to a non-GAAP basic and diluted net loss per.
Yes of RMB 38, seven in the second quarter of 'twenty or 'twenty one.
As of June 30th changes any of June we had cash and cash equivalents and restricted cash of RMB $588 1 million.
Okay. This concludes all of our prepared remarks today I will now open the call to questions.
Operator, Please go ahead.
Thank you to ask a question. Please press star one one on your telephone keypad.
The benefit of all participants on today's call. If you wish to ask your question to management in Chinese. Please immediately repeat your answer your question in English.
For the sake of clarity and order. Please ask one question at a time management will respond and then feel free to follow up with your next question.
So once again, if you wish to ask a question.
Please press star one one on your telephone keypad.
Our first question comes from the line of Vicky Wei from Citi. Please go ahead.
Ghanaian turns alcohol.
Right, well, yeah, Michelle Linn T D. It gunshot ghansham right Glen I'm glad you brought that sounds great things for sure home Oh My God. He comes that match up on me I'm sure you don't want to adopt <unk>.
Not sure I can put a great deal of woman show, you'll get them on.
The whole of the deal gets all and he said well maybe it.
Oh Wow.
So many.
So I'm sure some of them the whole number lunch and blending it sounds that John you up on me on Hudson.
So that definitely John John though just yet.
Okay.
Wednesday or funny.
Okay.
Okay.
Uh huh.
Okay. So good morning management. Thanks for taking my question I have two questions. The first one is which adds up to a management focus more in terms of March German chipping regulations.
Meditation and more regulation should be aware of and my second question is what is the biggest challenge for Egypt loan global or Chinese companies to go global in terms of strategy and completion. Thank you.
Thank you all right.
Generic Olympia.
Vicky.
The Jaguar if I'm in a moment.
Hum.
Young Kwon the Parkway.
Two parts of your free time, each year to Guangzhou.
Since you all need to get all our tier one woman.
<unk> tier one.
And if we find the iOS would you quantify excuse me if I'm gonna be onshore.
We'll miss you.
She says you ought to see congrats you see Sheila.
Her passing them go great fun.
Switching from the hunger the tons you're the father.
We all Gung Ho.
Among other financing.
Thank you we can't I would translate for Michael in terms of the regulations, we have been paying close attention to the relevant policies and the regulations of the industry.
And we have also noticed that the regulatory authorities have redefined the sand requirements on product functions and operational specifications and data management and the other aspect.
We believe the clear and more detailed regulations can help promote the industry's long term development and help create a bachelor and networking environment.
A woman.
Those who can choose to its unit themselves.
Uh huh.
Sure Beaumont.
Jim Butler yard Shaw Humana woman, yes.
It's just you don't highlight Jim runs into the P&L.
It's like Google farm in three months.
Our children to.
So your ballroom and the user.
Jennifer.
We have been carrying out a timely yourself examinations. According to the latest policies to ensure that we comply with the latest regulatory requirements.
And in the future we will continue to follow up on the different changes in regulatory policies and meet the compliance requirement, Inc. S back and ensure that the sustainable and Saudi the development of our business.
Yeah.
Central PA.
Okay.
So I knew her jeans in the toilet.
Thank you Audrey.
Sawyer rice on what's yet.
Two highlights or trends you Harlan.
With that I'll, let Susan.
We also two zones F&B Waqar younis from.
Yeah.
Torrential between local adapted shoot over time.
Hi, Bob.
Uh huh.
I assume a good daughter.
Have you been abuses hummer, usually entire the shoes.
Sure, Jim, but the hot ones.
Ones yet.
Yeah, Sheila sure Tycho that sometime ago.
Goodbye.
So you wouldn't say.
<unk> will be also top cellular Bermuda bounds.
P J well Murphy town.
Yeah, that's all more time, but theater.
But do you have a young children.
The RCM, but be harder time doing life.
If you go onto highlights just how about you enjoy that autonomy.
Are you in a minute.
The second question is about the our biggest challenge is for me to know going global or any other Chinese companies to go global in terms of the strategy and the competition. So I would have there for Michael.
I think for all of the Chinese companies looking to expand overseas are the challenges and the competition, meaning concern on the localization and talent development.
Sure varies between different countries and regions worldwide, so absorbing more excellent talents, who understand the local market and the key to achieving product and operational localization. This is also fundamental for companies to lay a solid foundation in various markets.
So we have set top local offices in key targeted markets around the world.
And actively recruiting local talent and builds localize the genes and enhanced our market research and product design operational.
Capabilities in the international market.
So suddenly with Humana.
Sounds good and then tertiary woman's answers and we are the highest salary that being lead gen being done.
It's a huge angio Halle Thunder.
Cars are at the heart of <unk> beyond.
What do you Harlan I T.
So and you were to choose one soccer Susana finance.
I mean sure Google Dearborn father, Zambia.
Zelma jewelry or do you think what do you with Hans to Sheila tool.
Yeah.
On the strategy front, we think the most important thing is to be determined and they remain committed to firmly executing our global strategy.
And conduct the localized operations and cultivate and international talent pool develop into absolute insights into the market opportunities.
And identified developed and on the priorities at each different stage may help us achieve breakthroughs in the international business.
Well without a doubt.
Yes.
Okay.
This concludes muscles answers.
Thank you.
Here. Our next question comes from the line of E. Joe Chang from T. F Securities. Please go ahead.
E tail. Your line is open. Please go ahead.
Okay.
Is.
You can hear me.
Yes, we can yes.
Okay.
So I'm going to go on its own okay. Those are the two minutes you quit osha someone's isn't going to change all.
It wasn't you won't rule and she's held when he has just said.
Oh, well Jennie O Douglas Elliman, a deal then sure sure.
Oh demand quantities.
Angela you mean.
Sure Ali.
Arnie in the tenure and I'm also I'm juggling two been punishable wheels in Abuja.
Easy at the Army and the Arizona I'm doing real work on Portugal wheel couldn't go Wow, you women said, well, we'll Massachusetts school. She chooses to go home and just that you don't panic when will you have cut under the Davinci. Diablo then you sure did go the damages or two that you can do on he made she said she is trading.
Yes, I don't know.
Sure.
We will do it for that you can go and what kind of things that work.
The whole well woman without even digital.
Yeah, well it just wasn't I wouldn't know what phase.
So I translate my passion to the English the first craft that is intended to me too.
Does the company how are new pants for audio entertainment.
And what's the outlook for the and you end up who intended to in the two and the tier two tier three.
And how can we increase our penetration rates and the spending level per user. That's the first question. The second question is is there an update in our in car audio business and the work forms of cooperation will be adult.
And what is the growth potential in the field.
Okay.
Thank you Jeff cities Citibank.
Three women <unk> general merchandise is transferred.
A lot of you.
A woman I'm sure you're doing it.
By the time he took a biopsy.
Two machine.
Gcs you counsel Susanne.
Yeah.
A woman can answer from one nipple forehock until the time came.
From four one.
You can lower the time into them.
I see.
<unk> caught up something.
70 year old agreement can you bought <unk> you with us.
Thank you Yeah, I would say for Marco <unk> for the first of all questions.
So like our fundamental business currently we focus on audio entertainment business, we continue to focus on our diversified product matrix strategy to explore more market opportunities.
By incubating more products internally and in reaching the proton matrix, we kind of have to call user groups expand the overall business scale and the further ensure they use a penetration rate of the audio entertainment business.
Whichever woman.
Some of them where phones are using your loved ones on your Shanghai and the media.
It could change.
Q2.
Two on the tolerance teaching children the Hawkeye G.
So why not.
Who was having gone on new hot oil hardly hear you.
She pennsauken below the ore tonnage.
Thank you sung Yong Jota, your daughter, Thomasville, a switching for who you can put it to acquire.
Tucson, Reopener, Fuchs, <unk> logic, and daughter Saia Hologic.
Yeah.
Our current focus on mute and we'll be on user groups with higher commercialization capabilities.
The audio entertainment sector, and we will continue to optimize our marketing strategy and execute our precise user acquisition strategy.
In addition to optimizing the product functions and are launching diversified operational activities.
I think more user scenarios can be explored to promote the paying user conversion, while also improving the user engagement and ultimately enhancing the user spending level and exploring more commercialization opportunities.
You are going to do it's hard for.
So to that you can blend in Fujian a woman.
So we all your Italian nursing homes to be removed.
San Diego onto more for work in order to achieve Tony.
Tony along the highway.
One time majority of our controller.
<unk> two.
<unk>, yes.
Yeah sure My mother, she wants to you Glenn.
Now since your woman.
Well Huawei.
Hum.
Tell me so do card union between that.
So now looking ahead, often based on seller Sherwin tier pacifico.
The second question is about our in car audio business in terms of our in car audio strategy. We are mostly EMEA as a long term market opportunities. So currently we are more focused on partnering with more auto companies and I don't mean tap arms.
To deploy the new car applications in more vehicle models.
The other to reach a wider range of user groups and acculturate user habits, graduating.
Recently issue always harmony, Oh, as smart car system, and the Xiaomi Quik App platform, we have launched the in car audio problem docks in Idaho and meet motto smart vehicles, respectively.
Oh, My goodness Hershey is a physical tcs <unk> switch that blend of union that <unk> neutral to the Haynesville.
Hmm.
Tony Hawk, and hydrocodone see neon in Bihar, Haryana functionally to our Missy thoughtfulness use.
Our nitrogen cordial.
The Ah <unk>.
The <unk> trial following it for them.
So the Iot it useful genome.
That can either Crestwood a father.
Union Joey quadrant gone through how the meat.
Women's challenging realign Memorial father James.
Our cooperation with those auto companies currently in many focused on developing the in car applications and other audio technology capabilities for the entire operating system.
On the I'll be papillon front, all collaborations with them.
Many in Congress on content and capabilities and quicker access a vacation.
Talking multiple approaches to fulfill their diversified needs. We may empower a full spectrum of in car audio entertainment scenarios.
And with the rapid development of Iot technology, and the small car platforms and the audio is one of the basketball Cross terminal.
We believe there will be a greater growth potential in the future.
Our two sisters, who work with us Thank you Joe.
Thank you this concludes Marcos answer.
As a reminder to ask question. Please press star one one on your telephone keypad.
Okay.
Okay.
Okay.
Yeah.
Once again the star one one so questions.
Yeah.
Okay.
U S. There are no further questions I'll now turn the call back to the company for closing remarks.
Thank you once again for joining US today. If you have further questions. Please feel free to contact me inches Investor relations through the contact information provided on our website at IR dot niche adult at that or the Piacente group Investor Relations. Thank you.
Thank you. This concludes the conference call you May now disconnect. Your line. Thank you.
Thank you. Thank you.
Yeah.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Yes.
Hum.
Yes.
[music].
Hum.