Q4 2022 Jianpu Technology Inc Earnings Call
Speaker 2: 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone.
Speaker 2: To withdraw from the question queue, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Mr. Colin Chun, Head of Corporate Development and IR. Please go ahead.
Speaker 3: Thank you operator.
Speaker 3: Hello everyone and thank you for joining us today. Our fourth quarter and fiscal year 2022 earnings release were distributed earlier today and is available on our IR website at ir.jempu.ai as well as on PL News Watch Services.
Speaker 3: On the call today from Gemplo Technology, we have here Mr. David Yeh, Co-Founder, Chairman and Chief Executive Officer, and Mr. Oscar Chen, Chief Financial Officer. Mr. Yeh will talk about our operations and company highlights, followed by Mr. Chen, who will discuss the financials and guidance.
Speaker 3: They will be available to answer your questions during the Q&A session that follows.
Speaker 3: Before we begin, I'd like to remind you that this conference call contains forward-looking statements as defined in Section 21e of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and current market and operating conditions.
Speaker 3: and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control. These risks may cause the company's actual results or performance to differ materially. For further information regarding these and other risks, uncertainties or factors, please visit www.cpe.rutgers.com
Speaker 3: is included in company filings with the US SEC.
Speaker 3: The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law.
Speaker 3: Finally, please note that unless otherwise stated, all figures mentioned during the conference call are in Rembrandt B.
Speaker 3: It is now my pleasure to introduce our co-founder, chairman, and chief executive officer, Mr. David Yeh. David, please go ahead. David Yeh, Chief Executive Officer, Mr. David Yeh It is now my pleasure to introduce our co-founder, chairman, and chief executive officer, Mr. David Yeh.
Speaker 4: Thank you Colin, hello everyone and thank you all for joining us today.
Speaker 4: Looking back on the year of 2022, despite the challenging economic environment,
Speaker 4: We weathered the storm and achieved sound business growth overall. The stringent pandemic control measures and the subsequent outbreak in Q4 was one of the toughest periods we dealt with in the last few years.
Speaker 4: Our growth was hindered in the fourth quarter as revenue did not follow our historical seasonal trends.
Speaker 4: The total revenue of both our loan and credit card recommendation services
Speaker 4: recorded the subsequent show
Speaker 4: quarterly declines of 23.4% and 16.3% in the fourth quarter.
Speaker 4: The progress of our new business initiatives also slowed.
Speaker 4: Despite these difficulties, we successfully maintained cost control measures and enhanced operating efficiency.
Speaker 4: resulting in a quarter over quarter net loss reduction of 20.0% in the fourth quarter and a slight net loss margin improvement from 9.3% to 8.1%.
Speaker 4: Again, such a testing backdrop throughout the year, we took several preemptive measures to show up our businesses.
Speaker 4: We have depreciated ourselves by leveraging our unique AssetLite platform model in the marketplace.
Speaker 4: and consequently achieved both growth and efficiency gain on a four-year basis.
Speaker 4: Overall, we delivered a set of resilient results with a steady recovery across multiple business lines during the year.
Speaker 4: on a year-over-year basis.
Speaker 4: we recorded solid revenue growth of 22.9%.
Speaker 4: and achieved a significant margin improvement of net loss margin to 13.6%
Speaker 4: from 25.4% in 2021.
Speaker 4: These defined results were primarily driven by our relentless efforts to enhance our market in the leading position, maintain a balanced and diversified revenue structure.
Speaker 4: improve operating efficiency, and execute disciplined cost optimization measures.
Speaker 4: We remain committed to our vision of becoming everyone's financial partner and empowering the digital transformation of the financial industry.
Speaker 4: as well as other adjacent categories.
Speaker 4: Let me now go through the key measures we took in 2022, which we will continue to deploy in 2023.
Speaker 4: First, we continue to empower the digital transformation of financial service providers through our enhanced technological and operating capabilities.
Speaker 4: In 2022, our recommendation business to revenue growth of 27.2% year over year reflecting our proven ability to support the financial institutions in the areas of digital marketing, user acquisition, customer retention, and risk management.
Speaker 4: Throughout 2022, we continue to expand our geographic coverage in less affluent cities and less developed regions.
Speaker 4: Further growing our user base.
Speaker 4: to encompass more diversified
Speaker 4: more diversified demographic spectrum.
Speaker 4: Moreover, for our credit card recommendation services, we incorporated with 56...
Speaker 4: Banks compared to 51 last year reached account for more than 80% of online credit card issuing banks in China.
Speaker 4: Apart from large banks, we further expanded our network to regional banks as well as provincial branches of national banks.
Speaker 4: further diversify our client base. Together with our robust regulatory and compliance measures and unique omnichannel marketing capabilities,
Speaker 4: diversify our client base. Together with our robust regulatory and compliance measures and unique omnichannel marketing capabilities, these initiatives increased...
Speaker 4: The full year revenue of our loan recommendation and the credit card recommendation
Speaker 4: by 54.1
Speaker 4: and 16.2% year-over-year respectively.
Speaker 4: With innovation as our driving force, the solutions we provide to financial institutions
Speaker 4: based on our deep technological capabilities in artificial intelligence and machine learning.
Speaker 4: In November 2022, we were honored with the Innovation and Entrepreneurship Practice Award at Harvard Business Review Ryan Sheran Management Practice Award.
Speaker 4: In recognition of our renowned track record of empowering the digital transformation of financial institutions,
Speaker 4: Furthermore, we received the Data Security Compliance Best Practices Award by the China Academy of Information and Communication Technology under the Minister of Industrial Information Technology.
Speaker 4: demonstrating our sophisticated and innovative capabilities in data security and compliance.
Speaker 4: Second, we achieved promise and breakthroughs.
Speaker 4: In expansion to adjacent categories.
Speaker 4: Building on our leading position in serving financial service industries.
Speaker 4: Our resources and expertise in social media and partner progress. We embarked on new strategic initiatives with non-financial sector partners throughout 2022.
Speaker 4: By establishing partnerships with sector leaders from telecommunications, e-commerce, and lifestyle companies,
Speaker 4: By establishing partnerships with sector leaders from telecommunications, e-commerce, and lifestyle companies, we explored ways to enhance the
Speaker 4: digital transformation from user acquisition and retention.
Speaker 4: operation capabilities.
Speaker 4: These new business efforts helped boost our four-year revenue for marketing and other services by 62.0% year-over-year.
Speaker 4: with a revenue contribution of such services increasing steadily from 12.3% in 2021 to 16.3% in 2022.
Speaker 4: Third, our operating efficiency enhancement and cost optimization measures led to steady margin improvement. As Disaster Vanderbilt
Speaker 4: Despite the challenging environment of our overall ROI, which is revenue from recommendation services, marketing and other services divided by the corresponding cost of acquisition and the promotion, we did not implement the
Speaker 4: improved year-over-year by 14 percentage points in the fourth quarter and 9 percentage points in the full year of 2022.
Speaker 4: During the fourth quarter, we saw a year-over-year ROI improvement of 13 percentage points for documentation services and 12 percentage points for marketing and other services.
Speaker 4: Our total operating expenses, including sales and marketing, R&D and G&A, decreased by 15% over year in 2022.
Speaker 4: This was driven in part by ongoing fixed cost reductions which particularly impacted rental, back office and HR costs.
Speaker 4: As a result, we achieved further margin improvement and a decline in net loss during the year.
Speaker 4: Specifically, our operating loss and net loss reduced by 41% and 34% year-over-year in 2022, respectively.transfer Cher Within the Cork County Ron Frank
Speaker 4: Our operating loss margin and net loss margin improved by 17 and 12 percentage points in 2022 respectively.
Speaker 4: Finally, I now take a few minutes to share our observations of the macro and regulatory environment that would potentially impact our businesses.
Speaker 4: Regarding the macro environment, the government began easing COVID-19 control measures in early December . As a result, the government began easing COVID-19 control measures in early December .
Speaker 4: An unprecedented wave of infection spread through the country rapidly, which has stabilized since January of this year.
Speaker 4: We believe the relaxation of COVID-19 related policies
Speaker 4: could help remove constraints on consumptions.
Speaker 4: and restore consumer confidence.
Speaker 4: but likely at a moderate pace. Besides, we expect the government and regulators to maintain a steadfast physical and monetary policy aimed at stimulating the economy in 2023.
Speaker 4: More recently, the government work report from the 13th National People's Congress Is now status quo
Speaker 4: set a real GDP growth target of around 5% for 2023.
Speaker 4: gave priority to the goal of reviving and expanding private consumptions.
Speaker 4: Meanwhile, the National People's Congress in March approved the establishment of a national financial regulatory administration.
Speaker 4: to replace China Bank and Insurance Regular Commission.
Speaker 4: and showed us super visionary responsibilities across the financial industry except the security factor.
Speaker 4: We believe the new administration
Speaker 4: We'll further streamline the regulatory framework of the financial industry and prevent the emergence of systemic risk.
Speaker 4: Overall, significant uncertainties remain at early stage of the country's reopening.
Speaker 4: We anticipate a more stable
Speaker 4: We anticipate a more stable recovery.
Speaker 4: in the economy and our businesses in the second half of the year.
Speaker 4: We believe the government will emphasize the quality growth of the economy in the near future
Speaker 4: which strengthens our confidence in the median to long-term outlook for the economy and the development prospects of the private enterprises.
Speaker 4: Besides, as artificial intelligence continues to reshape the digital economy,
Speaker 4: We are committed to strengthening our technology and innovation capabilities.
Speaker 4: We will play a leading role in applying cutting edge technology across the entire world.
Speaker 4: the FinTech industry and adjacent sectors.
Speaker 4: improving the efficiency and accuracy of our services while reducing cost.
Speaker 4: These competencies will enable us to optimize the user experience and explore new value creation opportunities in areas including product development, marketing operation, and risk management. This is the beginning of our successful asset-aligned business model.
Speaker 4: diversified business structure, expanded adjacent business categories, continued efficiency gains, and disciplined cost control measures, we are more optimistic about our performance in the longer term.
Speaker 4: So improving economic conditions alongside the disruptive trends in artificial intelligence such as Charlie GPT should open up new opportunities to facilitate the digital transformation of the economy and benefit inclusive finance for small and macro enterprises.
Speaker 4: We will keep exploring and capturing new opportunities to expand our businesses. We believe our industry-leading position, advanced technology and sound execution should generate sustainable value creation for our shareholders.
Speaker 4: I now hand over to our CFO , Oscar Chen, to run through our financials. Thank you.
Speaker 5: Thank you, David. And hello everyone. As David mentioned earlier, the pandemic hindered our business growth in the fourth quarter of 2022.
Our total revenue for the quarter decreased by...
0.2% to RMB, 248.3 minutes.
But thanks to our efforts to maintain a balanced and diversified revenue structure, our total revenues for the full year increased by 22.9% to RMB 989.7 million from RMB 805 million in the prior year. It has been amongst our analyses.
We enhance our market-leading tradition in the recommendation business.
With total revenues from recommendation services increasing by 8.5% to RMB $171.3 million in the fourth quarter. With total revenues from recommendation services increasing by 8.5% to RMB $171.3 million in the fourth quarter.
from RMB 157.9 million in the same period of 2021.
This improvement came on the back of 37.9% year-over-year increase in loan recommendation services.
Revenues from credit card recommendations meanwhile decreased by 3.5% year over year in the fourth quarter.
For the full year 2022, total revenues from recommendation services increase.
by 27.2% to RMB 731.7 million with revenue from credit card and loan recommendation services increasing by 16.2% and 54.1% year over year respectively.
The average fee for credit card and domestic loan applications increased by 3.4% and 37.8% to RMB 113.6% and RMB 14.6% respectively.
revenues from big data and system-based risk management services decreased by 20.8% to RMB 28.9% in the fourth quarter from RMB
36.5 million in the same period of 2021 as COVID continued to impact our cooperation with customers and we adjusted our product lineup.
On a full year basis, revenue from big data and system-based risk management services decreased by 25.7% year-over-year to RMB $96.9 million in 2022. Nonetheless, we maintained our close relationship with financial institutions.
state backed credit bureaus and other eco-system partners and are working on several new long-termening partnerships.
revenues from marketing and other services decreased by 11.5%.
9% to RMB48.
in the fourth quarter of 2022 from IMD.
54.5 million in the same period of 2021, primarily because certain new business initiatives were negatively impacted during the COVID outbreak.
For the full year, however, revenues from other marketing and other services increased by 62%.
year-over-year to RMB 161 million due to growth in our insurance brokerage services and other new business initiatives.
Moving on to the cost and expenses. Cost of promotion and acquisition decreased.
Moving on to the cost and expenses, cost of promotion and acquisition decreased by
8.2% to RMB 171.8 million in the fourth quarter of 2022 from RMB 117.8 million to RMB 17.8
$87.2 million in the same period of 2021. On a full year basis, cost of promotion and acquisition increased by 23.3% year over year to RMB 693.3% increase was inclined with the revenue growth from recommendation service and marketing and other services.
The trend of efficiency improvement continued in the fourth quarter of 2022.
The ally of recommendation services and marketing and other services have both demonstrated encouraging progress, recording year-over-year increases of 13 percentage points and 12 percentage points respectively, reflecting our continued effort to balance growth and efficiency.
The overall ROI in the fourth quarter improved by 14 percentage points year over year.
On a full year basis, the overall ROI in 2022 improved by 90 percent points compared with 2021. Cost of operation decreased by 4 percent to RMB 24.1 million in the fourth quarter of 2022.
from RMB 25.1 million in the same period of 2021. Cost of operation also decreased by 4.5% year over year.
to RMB84 million for the full year.
As we continue to execute our cost optimization initiatives, our sales and marketing R&D and G&A expenses decreased by 6%.
12.9% and 29.9% year over year in the fourth quarter respectively.
For the full year, our sales and marketing, R&D and GMA expenses decreased by 6.4%, 13.9% and 25.2% year over year respectively.
Matured as a percentage of total revenue, our total sales and marketing and R&D and the G&A expenses stood at 33% in the fourth quarter and 35.5% for the full year 2022 compared with 39.3% and 51.4% in the same period of 2020.
was RMB 29.6 million and RMB 152 million in the fourth quarter and the full year of 2022 compared with RMB 61.2 million and RMB 258.5 million in the same period.
of 2021 respectively. Our breeding loss margin was 11.9% and 15.4% in fourth quarter and full year of 2022 compared with 24.6% and 32.1% in the same period of 2021.
On net loss and non-gap adjusted net loss
with respect to the RMB 20.2 million and RMB 27.9 million in the fourth quarter of 2022.
compared with RMB 48.3 million and RMB 45.9 million in the same period of 2021. On a full year basis, our net loss and non-gab adjustment loss also decreased.
to RMB $134.3 million and RMB $120.2 million in 2022, compared with RMB $204.1 million and RMB $186.7 million in the prior year, respectively.
Given our growing scale and improving efficiency, our net loss margin and non-gap adjusted net loss margin improved by 11 and 7 percentage points in the fourth quarter of 2022 respectively, compared with the same period of 2021. Our net loss margin and non-gap adjusted net loss margin.
also improved by 12 and 11 percentage points in the full year 2022 respectively.
As of December 31, 2022, we maintain a strong balance sheet with cash and cash equivalents and the restricted cash and time deposits of RMB 684.2 million.
With that, I will conclude our prepared remarks. We will now open the call to questions. Operator, please go ahead. We will now begin the question and answer session. If you ask a question, you may press star 1 on your touchstone phone.
If you are using a speakerphone, please pick up the handset before pressing the key. To withdraw from the question queue, please press star and then 2.
The first question is from Calvin Wong of CITA Capital. Please go ahead. Hello.
Thank you for taking my question. I have a question.
Thank you for taking my question. I have a question about the business strategy.
You mentioned that your diversification strategy has helped to sustain your revenue growth in 2022. And also the company's initial success in terms of category expansion really impressed me. So could you give us more color about this diversification and category expansion strategy?
Thank you for questioning our answer to that.
Yes, so it's a very good question. So from the mind of the management team, I think how to build on our leading position in serving financial services industries, leveraging our strong...
technological product and the recommendation capabilities. And so really, for the growth, right, and how to improve our operating efficiency as well as how to reduce the cost of manufacturing.
the overall risk of our businesses in this ever-changing environment. I guess that was the top thing in our mind last year, Q4, last year and of course going forward. So what we did in...
In 2021, we embarked our new initiative. We started testing, test and learn testing with no financial sectors through our partnership program. So basically we established a...
strategic partnership with the sector leaders from telecommunication, from e-commerce and in the lifestyle industries. We helped those industry leaders transforming their businesses digitally.
what we did. But of course, we studied small, test and learn, learn and grow. And we believe last year, a whole year overall, we believe it was truly a breakthrough. We leveraged our technical...
product and also recommendation keeping video. That's our core product strategies.
So in the meantime, that's the first category expansion. The second part of expansion we also expanded the product side within the financial sectors. Basically we worked with a number of financial institutions to promote financial products such as credit card and...
and banks to acquire, identify and engage with a different segment of user base. This product expansion is also related to our geographical and demographic...
So, really, by expanding to adjacent categories, expanded products and geographic inspection, it helped us to enhance our overall business efficiency, helped improve our return on investment, enhanced our business efficiency.
our business resilience and of course we believe definitely helped us to reduce the overall risk of our overall businesses. So of course we definitely see potential new growth, expanded growth for this new...
Jason, the category product and the geographic demographic.
the category product and the geographic demographic. Thank you.
Thanks. Again, if you have a question, please press star then 1. There are no other questions. This concludes our question and answer session. Thank you for your attention.
attention and we hope you have a wonderful day. Goodbye.