Q4 2022 36Kr Holdings Inc Earnings Call
Speaker 2: for 36KR Holdings, Inc.'s fourth quarter and fiscal year 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.
Speaker 2: I will now turn the call over to your host, Jon-On Ding, IR representative for the company. Please go ahead, Jon-On.
Speaker 3: Thank you very much. Hello everyone and welcome to 36KR Holding Sports Quarter and Physical Year 2022 Earnings Conference Call. The company's financial and operational results were released earlier today and have been made available online. You can also view the earnings press release by visiting the IR section of our website at ir.36kr.com.
Speaker 3: Participants on today's call will include our co-chairman and CEO , Mr. Da Gongfeng, and our Chief Financial Officer, Ms. Ying Wei. Ms. Feng will start the call by providing an overview of the company and performance highlights of the corner in Chinese, followed by an English interpretation.
Speaker 3: This way, we will then provide details on the company's financial results before opening a call for your questions. Before we continue, please note that today's discussion will come down for the looking statement made under the three-pubber provisions of the US private sector tax rate that is stationary from Act of 1995.
Speaker 3: for the looking simmers involve inherent risks and uncertainties. As such, the company's results will be maturely different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's prospectors and other public filings as filed with the US SEC.
Speaker 3: The company does not assume any obligation to update any forward-looking statements, except as required on the average fall. We know that services pay off earnings per day, and this conference call includes discussions of our audit date FAFSA national information measures as well as on audit date non-GAFSA financial measures.
Speaker 3: So this KRS earnings pressure lease contains a reconciliation of the unaudited non- GAAP measures to the unaudited guide measures. And please note that all amount mentioned members are in R&B.
Speaker 3: I will now turn the call over to our co-chairman and CEO , Mr. Agung Fung. Call, please go ahead.
Speaker 4: Thank you. Hello, everyone. Thank you for joining our fourth quarter and physical year 2022 earnings conference call.
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Speaker 3: 2022 was a year full of challenges. Then the backdrop of uncertainty brought about the COVID-19 resurgence and the amount of high winds with delivered solid performance. Our full year revenue reach RMB322 million. So in 2000 year, with the profit of RMB22.64 billion.
Speaker 3: making our first full-year profit since our listing. Thanks to our fund operations and professional expertise, we have acquired over years of dedication to the new economy sector. Feathered by our Dealingers, Graduate of Field by Content and Products, we have developed a diversified business model and comprehensive content ecosystem focusing on business.
Speaker 3: technology and lifestyle do continue on information across our content product and services. Next, I'd like to share more detailed progress updates on each of our segments in 2022.
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Speaker 4: We hope to see you again soon. We hope to see you all in the next video. Thank you for your attention. Please subscribe to our channel. We hope to see you all again soon. Thank you for watching. See you in the next video. Thank you for watching.
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Speaker 3: I will begin with the enrichment of our content and resources. The continued to elevate our content and reaching to the living to meet users' diverse needs with high-compete content, finding a broad variety of topics.
Speaker 3: In 2022, we launched a series of sub-world media including digital KR, hair carbon, hardcore KR, and waves, providing deep insight across popular fields in the investment circles, such as digitalization, dual carbon and GFG, hot-port technology, and specialized and innovative enterprises.
Speaker 3: We also created U.S. entry content vertical based on topics related to younger generation's lifestyle, including OU, super review and career bonus, achieving differentiated user coverage. Meanwhile, we produced a varied slate of content programs including SUYOTIT, steel, presiding 2033, long China 50 and super factory.
Speaker 3: facilitating broad dissemination of new economic content. This effort enabled us to keep producing a considerable number of blockbuster articles throughout the year, with nearly 700 articles racking up page views exceeding 100,000. The launch of this sub-vertical media also brought us revenue upside amounting to tens of millions of dollars.
Speaker 3: and your seating by increasing our influence among financial institutions.
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Speaker 3: Furthermore, we made continuous efforts to launch content in diverse formats, including text, graphics, short form video, audio and live streaming through both our own platform and external channels. The working with new media platforms such as WayBore, Xiao Hongshu, Tau Tiao, Zhuhu, Billy Billy, Dou Ying and Quai Xiao and our others.
Speaker 3: We have built a multi-dimensional content dissemination system with comprehensive coverage and full access to users and newly-conmed players,
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Speaker 3: For entertainment talent, Australian shelves of trade and automation hedge as practicing the latest AIGC and shared GPT technologies have a constant echo system.
Speaker 3: Recently, we were invited as one of the first batch of companies to plan on which to do TGTP style early involved ecosystem. We believe this partnership will further elevate our content production efficiency and quality, thereby enhancing the other interaction and thickness.
Speaker 3: batch of companies to partner with by do TTTB style early involved ecosystem. We believe this partnership will further elevate our content production efficiency and quality thereby enhancing user interaction and thickness.
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Speaker 3: Second, new user extension. Our diversified content ecosystem has spurred continuous growth of our business base. In terms of user number, as of the end of 2022, the number of our followers exceeded 28 million years of 23% of which short radio followers accounted for 7.75 million. Right?
Speaker 3: the drain. For the more, we have effectively certified user loyalty and engagement above high quality professional content version.
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Speaker 3: So, the over-new IP incubation. Over the past years since our inception, we have continued the pioneered industrial benchmark IP in the new economy sector, along with other flagships. While in the U.S. Economic King conference in 2022, we created X.
Speaker 3: 360-zero, entrepreneurial, carnival, and China investment with the same maintaining the miracle. An innovative IT was efficient in power to start-up companies to connect with investment institutions moreover, the creation of our unspecited and marvelous series of IT.
Speaker 3: which in targeted consumption and entertainment dropped three and other girls and the customer acquisition for enterprises. Not going to the marvelous IP made a successful for a into-door tier market in 2022 with its exclusive the marvelous taste of facial event. Currently created without original offices in Sichuan, Chongqing.
Speaker 3: We worked with hundreds of CEOs, government representatives and investors throughout the course of this event to unlock opportunities in the local new consumer industry, which also helped our brand influence and service system to plan trade further into the region.
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Speaker 3: 4. Innovation on Digital Tools In November 2022, we launched this VR Venture Capital Platform, a tale from our commitment to extending media boundaries and making our further extension to digital tools services. The Integrating Information and Data will provide standardized solutions and precise financing exposure to facilitate the development.
Speaker 3: at this one round of financing, having attracted the attention of over-solving investors from hundreds of top-tier investment institutions, we completed up to a thousand venture capital matches per week on average. Currently, our venture capital platform is still in the product after the refinement stage.
Speaker 3: We do expect to begin commercialization in the second quarter of 2023 to give you a point of reference of pure of similar products. T data along with T data max have achieved the annual revenue exceeding RMB 16 million. Therefore, we believe the 36KR venture capital platform will its integrated functionality in the second quarter of 2020.
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Speaker 3: This productization was an important theme for us in 2022. And as such, we integrated and upgraded some of our relatively mature product series. For example, Statistics KR Research Institute continues to expand its industry coverage with a consistent focus on industry vertical development, capital trends and product orientation.
Speaker 3: We also enhance its research depth and level of professionalism, which helps other companies as a whole improve its customer acquisition and commercialization performance through its distinct product or portfolio, clear customer positioning and evidence advantages.
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Speaker 3: contributed to our commercialization revenue. We have observed that the thriving venture type of market is fueling increased demand for entrepreneurship training. In fact, some of our peers have reached RMB 100 million of annual revenues in this area. For statistics care, we plan to launch a wide variety of courses and spend sales channels in 2020 to realize greater growth.
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Speaker 3: I also want to specifically highlight that we continue to upgrade and iterate our platform product, the Services Care Enterprise Storage Review Platform in 2022. In addition to creating a potent encompassing product databases, user review libraries, pay industry person databases and knowledge, grab libraries.
Speaker 3: review platform a bit later.
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Speaker 3: In summary, we built on our enriched ecosystem, accumulated product advantages, and enhanced our operational capabilities throughout 2022, consistently strengthening our commercialization capabilities. This empowered us to steadily grow our revenue and realize our first full-year profits since the first listing. Next, I'd like to share the details of our commercialization progress.
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Speaker 3: of advertising revenue reached R&B 222 million, up to 8% year-over-year. The number of advertising customers grew to 532, with a pool of many relatively stable year-over-year.
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Speaker 4: It's a great honor to be here with you. We are very happy to have you here. We hope to see you all again in the next video. Thank you for your attention. Thank you for your attention. We are very happy to have you here. We are very happy to have you here. We hope you will continue to be here. We are very happy to have you here. We are very happy to have you here.
Speaker 3: We continue to leverage the advantages of our advertising business centered on branding and efficacy while also exploring new scenarios and solutions for content marketing and commercial integration along with graphics and text.
Speaker 3: We tapped into innovative advertising formats such as short-video, live streaming and V-logging, offering customers a diverse selection of media-raged products. In terms of industry expansion, the broadened advertising base in 2022 from our core industries such as TNT, consumer or mobile rail estate, advanced manufacturing and new energy, to include the medical industry, health and well-nate.
Speaker 3: and a WeChat video account in addition to our services and our web page, so this is our app, WeChat and Weibo.
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Speaker 3: Notebook Avershop Vito revenue in 2022 more than double year over year to reach tens of daily and R&B on a foodier basis, a counting for 17% of total advertising revenue. Avershop videos have rigged a massive user traffic with high quality original content, attracting the attention of numerous young users and advertisers. Many renowned companies have become repeat customers of Avershop Vito advertising services.
Speaker 3: such as Intel, iQiyi, Huawei, JG.com and Jihoo. In the fourth quarter, we customized a mini variety show video for the Honor 80 smartphone, entitled Tengbo Time to Study Vlog. The video featured a array of young opinion leaders, such as talk show actors, hosts and travel bloggers.
Speaker 4: explaining and demonstrating the product's functions and highlights in V-LOG form, boosting the customer's contract size to a new high.
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Speaker 3: With respect to enterprise value-added services, we hosted nearly 30 industry summits covering hot topics including new technology, new energy, and new consumption. During the COVID-19 outbreak, we adopted an integrated online and offline format, leveraging video and live streaming among other formats.
Speaker 3: to connect more new economy players through digital conferences. Snowball-A, our wide event, achieved a total exposure exceeding 4.5 billion, while X360 Enterprise-O, our new IP event, attracted 350 million views from a simultaneous live streaming on a total of 24 platforms.
Speaker 3: further demonstrating our strong influence and service capabilities in the new economy.
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Speaker 3: Regarding consulting services, our full year revenue grew by 70% year-over-year in 2022. 36 KR Research Institute published research reports in various formats serving many local government customers and established in-depth collaborations with all the local and local
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Speaker 3: At the same time, we continue to broaden the scope of our regional expansion. Thus far, we have built a regional operating network covering 12 state provinces and cities and established mutually beneficial relationships with both local governments and enterprises.
Speaker 3: This has enabled us to empower new economy players as they expand regionally and enter lower tier markets. In 2022, the number of original customers increased significantly, creating a more balanced mix of government and enterprise customers, laying a solid foundation for exploring the wider enterprise value-added services market in the future.
Speaker 3: As for our subscription services, our full year subscription revenue amounted to RMB28 made in 2022, rising by 1% year over year. The number of our institutions and enterprise subscribers as well as our pool both improved.
Speaker 3: While the approval of individual translation service also goes substantially, steps to the growing popularity of our suggested KR business school's new courses.
Speaker 3: subscription service also goes substantially, thanks to the growing popularity of our statistics in our business schools and new courses.
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Speaker 4: On negative terms, we are widespread???? petitioning and trample cost-efficient. the significant debt of iron industry can help to revive popular items and image motto and inclusiveness. Last but not least, I'd like to share our update on our second growth si?gin. The 36kr and the press service review platform.
Speaker 3: In 2022, we remain focused on growing our platform's influence and further optimizing its service system regarding product functions. We launched enterprise service review report to compare products and recommend models based on users' actual needs while generating independent objective data analysis, ranking reports and charts, efficiently optimizing users' decision-making scenarios, and
Speaker 3: We also refined the enterprise service review platform search function, adding search paths for product functions and articles, increasing the accuracy of users' searches. In addition, we improved our products charts algorithm and display methods to help users better understand product information, user views and industry ranking.
Speaker 3: elevating convenience and usability. In terms of customer acquisition formats, we built a variety of content products and IPs across graphics, live streaming, offline salons and other formats from user perspectives from system-based rich decision makers in every industry, which further enhanced the enterprise-service review platform's brand-swearing experience.
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Speaker 3: We achieved rapid growth in the enterprise service review platform's operating matrix across the board. As of the fourth quarter of 2022, the number of leads have grown 700% compared with the same period of last year, and the cumulative number of products on the platform exceeded 8,000, a year-over-year increase of 52% in 2019.
Speaker 3: Additionally, in terms of commercialization, as of now, the enterprise service review platform's contracted sales exceeded RMB 10 million, with orders from an extensive host of well-known suppliers such as Daozen, Tindy, Tencent TAPD, Google Cloud, and ZTE.
Speaker 3: We also published strategic marketing cooperation with the volcano engine under its brand as well as the SMB unit of Lenovo, a Fortune Global 500 company in 2022. Going forward, the enterprise service review platform will serve a growing cohort of enterprises in need of digital transformation upgrades.
Speaker 3: on reaching our platform's value and quality boosting our commercialization capability.
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Speaker 4: As we embark upon the post-pandemic era in 2023, what have we learned from the pandemic era in 2023?
Speaker 3: and build a richer portfolio of products and services. We expected to see continued revenue growth and deliver another four-year profit in 2023. With subnets giving away tonight as COVID-19 received, we believe we are well positioned to consistently unlock more growth potential and enterprise value, differentiating ourselves as we accompany others.
Speaker 3: I will discuss our financial results. Please go ahead.
Speaker 3: Thank you, Paul. Now I'd like to walk you through more details of our fourth quarter and fiscal year 2022 financial results. Total revenues for the fourth quarter of 2022 were on B$96.6 million, a sequential increase of 2%. Total revenues for the full year of 2022 were on B$322.5 million.
Speaker 3: a year-over-year increase of 2% compared to the full year of 2021. Online advertising services revenue will earn $62.2 million in the fourth quarter of 2022 compared to earn $76.4 million in the same period of last year. The decrease was primarily attributable to relatively weak advertising spending caused by the next year's increase in the last year.
Speaker 3: innovative marketing solutions we provided to our customers, as well as proactive sales strategies we adopted to navigate the challenging environment during the year. Enterprise value-added services revenue will be 25.4 million in the first quarter of 2022 compared to on the 30.3 million in the same period of 2021.
Speaker 3: For the full year of 2022, our enterprise value-added services were on the 72.6 million compared to RMB 74 million in the previous year. The 2% decrease was primarily because some of our offline events were delayed or downscaled due to disruptions from COVID-19. Subscription services revenue will be 8.9 million in the fourth quarter of 2022 compared to RMB 9.6 million in the last quarter of 2022.
Speaker 3: The increase was primarily attributable to our continuous efforts to offer high quality subscription products to our subscribers during 2022.
Speaker 3: Cost of revenues were RMB 47.6 million in the fourth quarter of 2022 compared to RMB 40.7 million in the third quarter of 2022. The increase was primarily attributable to higher content costs related to expansion of our commercial oriented content programs. For the full year of 2022, our cost of revenue was RMB 137.8 million.
Speaker 3: compared to RMB 128.8 million in the previous year. The increase was primarily attributable to the increase in content release costs, partially offset by decrease in cost of our offline events. Growth profit was RMB 48.9 million in the first quarter of 2022 compared to RMB 75.6 million in the same period of last year.
Speaker 3: For the four year of 2022, our growth profit was on the 184.6 million compared to on the 187.9 million in the previous year. Growth profit margin for the four year of 2022 was 57.3% compared to 59.3% in the previous year. Overling Census will be 69 million in the fourth quarter of 2022 compared to
Speaker 3: a decrease of 16.5% from the same period of last year, primarily attributable to the decrease in marketing-related expenses. For four-year 2022, sales and marketing expenses will be 122.1 million, a contraction of 15% compared to the previous year, primarily attributable to the decrease in payroll-related expenses.
Speaker 3: share-based extension expenses and marketing expenses. GNA expenses or R&B 21.7 million in the fourth quarter of 2021, compared to R&B 9.6 million in the same period of last year. The increase was primarily eligible to release of allowance for credit losses recognized in the fourth quarter of last year.
Speaker 3: For full year of 2022, G&A expenses were RMB $52.1 million compared to RMB $90.6 million in the previous year. The decrease was primarily attributable to the release of allowance for credit losses and the decrease in professional fees. The release of allowance for credit losses was mainly due to
Speaker 3: improved collection of accounts receivables. Research and development expenses were on the 14.5 million in the fourth quarter of 2022, compared to on the 12.6 million in the same period of 2021.
Speaker 3: For the full year of 2022, our research and development expenses were R&D $55 million compared to R&D $47.5 million in the previous year. The increase was primarily attributable to the increase in payroll related expenses as we bolstered our R&D capabilities for new products and services.
Speaker 3: Share-based compensation expenses recognized in cost of revenues, sales and market expenses, research and development expenses, as well as G&E expenses totaled RMB 4.6 million in the fourth quarter of 2022 compared to RMB 4.1 million in the same period of last year. For four-year 2022, the total amount of share-based compensation expenses for RMB 13.9 million compared to RMB 15 million in the second quarter of 2022.
Speaker 3: compared to RMB 15 million in the previous year. Other expenses were RMB 1.2 million in the fourth quarter of 2022 compared to other income of RMB 1.5 million in the same period of last year. For full year 2022, other income was RMB 67.5 million compared to other income of RMB 3.6 million in the previous year.
Speaker 3: The increase was primarily attributable to gain arising from disposal of a subsidiary and investment income arising from fair value changes of long-term investments, as well as income generated from write-offs of accounts payable. Net loss was on the 21.5 million for the quarter of 2022 compared to net income of on the 15.4 million.
Speaker 3: non-GAAP adjusted net income was on the $16.9 million in the fourth quarter of 2022, compared to non-GAAP adjusted net income of on the $19.6 million in the same period of last year. For full year 2022, non-GAAP adjusted net income was on the $36.5 million compared to non-GAAP adjusted net loss.
Speaker 3: of R&B 75.6 million in the previous year. Now, I lost at the bill to 36 KR's ordinary shareholders with R&B 28 million in the fourth quarter of 2022 compared to that income at the bill to 36 KR's ordinary shareholders of R&B 14.6 million in the same period of last year. For four year 2022, net income at the bill to 36 KR's ordinary shareholders of R&B
Speaker 3: of RMB 35.6 cents in the same period of last year. For full year 2022, basic and diluted net income per ADS of both RMB $0.53 compared to basic and diluted net loss for ADS of RMB $2.2 in previous year.
Speaker 3: As of December 31, 2022, the company had cash, cash equivalents, restricted cash and short-term investments of R&B 184.9 million compared to R&B 164 million as of September 30, 2022. The increase was mainly attributable to positive cash flow from operating activities.
Speaker 3: partially outside by the long-term investment in the new economy startup company were made in the fourth quarter of 2022.
Speaker 3: This concludes all of our prepared remarks today. We will now open the call to questions. Operator, please go ahead.
Speaker 2: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. For the benefit of all participants on today's call.
Speaker 2: If you wish to ask your questions to management in Chinese, please immediately repeat your questions in English. We will now pause momentarily to assemble our roster.
Speaker 2: questions to management in Chinese, please immediately repeat your questions in English. We will now pause momentarily to assemble our roster.
Speaker 2: The first question today comes from Jing Tang with CICC. Please go ahead. Thank you for your time.
Speaker 3: I will translate myself as basic improvements of the environment, what other companies predict priorities and plans for this year. Thank you.
Speaker 4: Thank you, everyone. Actually, we have talked a lot with you. We have been doing all the same things every time. We have been doing all the same things every time. We have been doing all the same things. So, first of all, I want to talk about it. In the next three years, we will be able to make a new test and continue to make our new new media. For example, our AI-related media.
Speaker 3: Okay, as we mentioned many years, many times before, we will continue to enrich our content ecosystem and tap into more vertical industries such as artificial intelligence, new electric vehicles and industry capital.
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Speaker 3: Apart from our existing advertising and enterprise value added services, we will also explore several new product initiatives. For example, Surface 6K, our enterprise service review platform, as our second growth engine, we will refine our platform and products and continue to pursue commercialization.
Speaker 3: So the 6KR Business School will enrich course designs to empower more small and medium-sized companies. This training product has been proven by our peers to be a market with R&D handle of millions of market size. Also, the 6KR Research Institute will enhance its professionalism and industry coverage in piecewise leading toiggins School of Business.
Speaker 4: Providing more depth reports to enterpre. So after ergy gener, how we coun. Strategy issue is now: keep all natural toigal governma entire, making you sume how you. You have a simpler what that they have.
Speaker 3: And of course, we will keep investing in AI-GZ technology. We will continue to advance the application of the AI-GZ technology in production and aggregation of high-quality content to further enhance the application of AI-GZ technology.
Speaker 2: The next question comes from Ling Li Dao with SWS Research. Please go ahead.
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Speaker 3: The advertising industry is a foresight of economy. What changes have taken place in the wilderness of advertisers to invest recently? Can you tell us about the degree of economy recovery?
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Speaker 3: the current situation, our ad business is already recovering steadily. However, it will take some time for advertising to return to a relatively high level.
Speaker 3: to a relatively high level.
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Speaker 3: Businesses in some popular industries such as automotive and e-commerce have been very active in brand promotions and marketing activities with relatively stable and placement budgets. In Q1 2023, when made further profiles in both commercialization channels and industry coverage, the market has been very active in the market.
Speaker 3: For instance, we completed JD.com's first commercialization order on Xiao Hong Shu and achieved our first breakthrough in a luxury goods sector. As such, we expect a fair level of growth, generally advertising in both Q1 and Fou Year 2023.
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Speaker 1: Thank you.
Speaker 2: Once again, if you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. The next question comes from Rui Yin with Sea-Land Securities. Please go ahead.
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Speaker 3: I have two questions. The first question is about the enterprise and the added business segment. The future growth come more from the increase in the number of paying companies. The future growth comes more from the increase in the number of paying companies.
Speaker 5: Thank you.
Speaker 4: Thank you.
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Speaker 3: Actually, during the past years, both of our number of clients and our pool has increased significantly and we believe it will grow this year as well. On our pool side, we will provide
Speaker 3: diversified underpressed federal added services including offline events, consulting services, and integrated agency operation services to both the growing segments. On the number of funds, we were tapping to broader voting concept and a penetrate to lower tier markets like...
Speaker 4: More regigal oper here. Some of who a famulating on as B, therefore who you ual donately local tper, that is Y of coun polity to local con of, kind of, don't hand you.
Speaker 3: In 2023, we will also leverage more products to develop our enterprise value-added services in addition to statistics care enterprise review platform. We also launched statistics care venture capital platform as well as statistics care research institute to further grow our business.
Speaker 3: In 2023, we will also leverage more products to develop our enterprise value-added services. In addition to the 36 KR enterprise review platform, we also launched the 36 KR venture capital platform as well as the 36 KR research institute to further grow our business.
Speaker 3: Hi, Minrui. I think this is your first time to join the NIS call for Statistics KR. We really give you a warmest welcome. And this is Lin. I will answer your second question regarding the expense ratio and the margin question.
Speaker 3: For the full year 2022, you can see from our results that our growth margin is at a relatively stable level of 57%. I think in 2023 we will be able to maintain that level or even have more further growth margin expansion because as...
Speaker 3: And secondly, I think I will highlight that I think for 2023 the margin expansion as well as operating margin and gross margin will come more from the revenue rebound or revenue growth. Although in 2022 we are proud that we have been growing our revenue given the very challenging environment in 2022.
Speaker 3: means we will have a lot of leverage. So give you some quantitative implication. Now if we say that in 2023 our gross margin can be stabilized at around 60% level, then our expense, the OPAC ratio will be, I mean let's say around 50%.
Speaker 6: Then we'll give you an operating margin of around 10%. I think that will even have some upsides if our top line or revenue can grow at a much higher growth rate than in 2022. Hope that answered the question in great.
Speaker 7: Q. What is the business connection between the company and the AIGC or GPP large model?
Speaker 4: And what is the plan for actthankyou obviously here tragity I was F I'm going to go her face on the phomal cohow when you re actually only going to the EM lo PO your acitivity a PO bdology which are put to the year we have to see the B people so.
Speaker 4: Actually, content production quality and efficiency have always been our priority and we have been adopting IJSA for quite a while.
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Speaker 3: On the product watch, viewing the statistics PR under press review platform as an example, AIGC technology will assist the users to better obtain detailed information such as press and usage evaluation of products.
Speaker 3: more efficiently so as to understand products more accurately and make better purchasing decisions. Also, AIGC helps us provide better customer services through more effective user interaction and communication. According to our initial analysis, AIGC has helped improve our user interaction by 90% and improve our current production efficiency by three times.
Speaker 4: Recently, we became one of the first batch of companies to join Baidu's team.
Speaker 3: Thanks for your questions.
Speaker 2: Once again, if you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. Press star then 1 to enter the question queue.
Speaker 2: As there are no further questions, I would like to turn the call back over to the company for closing remarks. Thank you.
Speaker 3: Thank you once again for joining us today. If you have any further questions, please feel free to contact Statistics Chair Investor Relations through the contact information provided on our website.
Speaker 6: Thank you and see you next time. Thank you, operator. Thank you, everyone.
Speaker 6: Thank you and see you next time. Thank you, operator. Thank you, everyone.
That those things would our conference for today. Thank you for participating. You may now just connect.
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Hello ladies and gentlemen, thank you for standing by for 36 kr holding in fourth quarter and fiscal year 2022 earning confidence call. At this time all participants are in a listen only mode. After management from Mark there will be a question and profession.
Today's conference call is being recorded. I will now turn the call over to your host, Jon-On Ding, IR representative for the company. Please go ahead, Jon-On.
Thank you very much. Hello everyone and welcome to 36 KR Holdings fourth quarter and fiscal year 2022 earnings conference call. The company's financial and operational results were released earlier today and have been made available online. You can also view the earnings press release by visiting the IR section of our website at IR.36KR.com. Participants on today's call will include our co-chairman and CEO , Mr. Dao Gongfeng. Now our chair is Dr. Dao Gongfeng.
provisions of the US private sector rate legislation reform act of 1995. For overlooking statements involve inherent risks and uncertainties. As such, the company's results will be maturely different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company.
through discussions of our audited GAAP financial information measures as well as unaudited non- GAAP financial measures. Such as this KRS earnings press release contains a reconciliation of the unaudited non- GAAP measures to the unaudited GAAP measures . And please note that all amount mentioned members are in RMB.
I will now turn the call over to our co-chairman and CEO , Mr. Gangfeng. Paul, please go ahead. Thank you. Hello everyone. Thank you for joining our fourth quarter and fiscal year 2022 earnings conference call.
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2022 was a year full of challenges. Against the backdrop of uncertainties brought about by COVID-19 researchers and the Markov headwinds, we delivered solid performance. Our full year revenue reached RMB 322 million, growing 2% year over year, with a profit of RMB 22.64 billion.
Making our first full year profit since our listing. Thanks to our refined operations and the professional expertise we have acquired over our years of dedication to the new economy sector. Driven by our dual-engine strategy fueled by content and products, we have developed a diversified business model and a comprehensive content ecosystem focusing on business.
technology and lifestyle to continue innovation across our content, products and services. Next, I'd like to share more detailed progress update on each of our segments in 2022.
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I will begin with an enrichment of our content ecosystem. It continues to elevate our content generation capabilities to meet users' diverse needs with high-quality content spanning a broad variety of topics. In 2022, we launched a series of sub-vertical media, including digital KR, fair carbon, hardcore KR, and waves, providing deep insight across popular fields in the investment circles, such as digitalization, dual carbon MDSG, hardcore technology, and specialized...
dissemination of new economic content. This effort enabled us to keep producing a considerable number of blockbuster articles throughout the year, with nearly 700 articles racking up page views exceeding 100,000. The launch of this sub-vertical media also brought us revenue upside amounting to tens of millions of R&D. For instance, by venturing deeper into the enterprise digitalization field with digital KR, we would spend...
Furthermore, we made continuous efforts to launch content in diverse formats, including text, graphics, short-form video, audio and live streaming through both our own
players, elevating our content influence.
On a related note, CFS-CR has always prioritized application of office-based intelligence.
quality, thereby enhancing user interaction and thickness.
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Second, new user expansion. Our diversified content ecosystem has spurred continuous growth of our user base. In terms of user number, as of the end of 2022, the number of our followers exceeded 28 million up to 23% year-over-year, of which short radio followers accounted for 7.75 million, rising by 43% year-over-year. User quality also remained robust without ever broadening our real focus.
Valley investment guru and we relate to several official key employees in large enterprises, workplace models, and young people chasing their dreams. Furthermore, we have effectively certified user loyalty and engagement of our high quality professional content virtual.
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IT was efficiently empowered startup companies to connect with investment institutions. Moreover, the creation of our unexpected and marvelous series of IPs, which integrated consumption and entertainment drove sea and user growth and customer acquisition for enterprises.
North Bode, the marvelous IP, made a successful foreraising to lower tier markets in 2022 with its exclusive The Marvelous Taste of Bashi event. Jointly created with our original offices in Sichuan, Chongqing, we worked with hundreds of CEOs, government representatives, and investors throughout the course of this event to unlock opportunities in the local new consumer industry.
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Fourth, innovation on digital tools. In November 2022, we launched the services to our venture capital platform, reaffirming our commitment to extending media's boundaries and making our further extension to digital tools services. By integrating information and data, we provide standardized solutions and precise financing exposure to facilitate the discovery of high-quality early-stage projects, while offering our managing services to connect projects with potential...
to begin commercialization in the second quarter of 2023 to give you a point of reference. A pair of similar products, P.E. Data along with P.E. Data Max have achieved the annual revenue exceeding RMB 60 million. Therefore, we believe the 36 KR venture capital platform with its integrated functionality spanning resources connection, services analysis is close.
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Last but not least, product upgrades. This productization was an important theme for us in 2022. And as such, we integrated and upgraded some of our relatively mature product series. For example, Statistics Care Research Institute continues expanding its industry coverage with a consistent focus on industry vertical development.
capital trends and policy orientations. We also enhance its research depth and level of professionalism, which helps other companies as a whole improve its customer acquisition and commercialization performance through its distinct product portfolio, clear customer positioning and evident advantages.
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So this is KI Business School as a business training product will be revamped in 2022. The design is venture capital class and related training programs provide in-kind for small and medium sized enterprises in varying stages of development and connect them with capital and other resources contributing to their sustainable development during the COVID-19 outbreaks in the second half of 2022. So this is KI Business School in 2022.
of annual revenues in this area. For statistics here, we plan to launch a wide variety of courses and send sales channels in 2020 through into real-life greater growth. me go here say bye
I also want to specifically highlight that we continue to upgrade and iterate our platform product, the 36K enterprise service review platform in 2022. In addition to creating a quadrant in compacting product databases, user review libraries, K-Industry person databases, and Knowledge Graph libraries.
We have fully refined its industry product evaluation system and standards. The platform fosters deep connections between sellers and buyers, helping enterprises acquire customers with precision and enhance their brand influence. I will elaborate on the development of the enterprise service review platform a bit later.
In summary, we build on our enriched echo system, accumulated product advantages and enhanced operational capabilities throughout 2022 consistently...
We achieved solid results across all of our business segments in 2022. Not only our advertising revenue reached RMB 222 million, up 3% year-over-year. The number of our advertising customers grew to 532, with a poor and relatively stable year-over-year.
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We continue to leverage the advantages of our advertising business centered on branding and efficacy, while also exploring new scenarios and solutions for content marketing and commercial integration. Along with graphics and text, we tapped into innovative advertising formats such as short video, live streaming and vlogging, offering customers a diverse selection of media rich products.
In terms of industry expansion, we broadened our advertiser base in 2022 from our core industries such as TMT, consumer, automobile, real estate, advanced manufacturing and new energy to include the medical industry, health and wellness, banks and other financial institutions. We also formed a partnership with leading industry players including Johnson & Johnson <expletive> ...
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accounting for 17% of total advertising revenue. Our short videos have raked in massive user traffic with high-quality original content, attracting the attention of numerous young users and advertisers. Many renowned companies have become repeat customers of our short video advertising services, such as Intel, iQiyi, Huawei, JG.com, and Jihoo. In the fourth quarter, we customized a mini variety show video for the Honor 80 smartphone entitled...
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With respect to enterprise value-added services, we hosted nearly 30 industry summits covering hot topics including new technology, new energy and new consumption. During the COVID-19 outbreak, we adopted an integrated online and offline format, leveraging video and live streaming, among other formats, to connect more new economy players through digital conferences. For more information, visit www.cpe.rutgers.com
Snowball-A, our wise event achieved a total exposure exceeding 4.5 billion, while X360 Enterprise-O, our new IP event attracted 350 million views from a simultaneous live streaming on a total of 24 platforms, further demonstrating our strong influence and service capabilities in the new economy.
Regarding consulting services, after full year revenue go by 70% year over year in 2022.
The 36K Research Institute published research reports in various formats serving many local government customers and is published in-depth collaborations with a wide range of well-known enterprises including WebWagon, Group China, Suning.com, Ctrip, JD.com, NetEase, Drendras, FedDense, Higher Capital, Hongtai A+, and Beijing Shogang Fund. Thundering widespread acclaim from industry professionals.
The CXKR Research Institute published research reports in various formats serving many local government customers and is published in-depth collaborations with a wide range of well-known enterprises, including WebWagon, Group China, Suning.com, Ctrip, JD.com, NetEase, Drendras, Backdance, Higher Capital, Hongtai A+, and Beijing Shogang Fund. Wondering what spread came from industry professionals.
At the same time, we continue to broaden the scope of our original expansion and our new At the same time, we continue to broaden the scope of our regional expansion. Thus far, we have built a regional operating network covering 12 regions.
and its published mutually beneficial relationships with both local governments and enterprises. This has enabled us to empower new economy players as they expand regionally and enter lower tier markets. In 2022, the number of original customers increased significantly, creating a more balanced mix of government and enterprise customers, laying a solid foundation for exploring the wider enterprise value-added services market in the future. Thank you for your attention.
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Last but not least, I'd like to share an update on our second growth engine, the 36K JC4N barely
In 2022, we remain focused on growing our platform's influence and further optimizing its service system regarding product functions. We launched enterprise service review reports to compare products and recommend models based on users' actual needs while generating independent, objective data analysis, ranking reports and charts, efficiently optimizing users' decision-making scenarios. We also refined enterprise service review platform's search function, adding search parts, while...
product functions and articles, increasing the accuracy of users' researches. In addition, we improved our product charts, algorithm, and display methods to help users better understand product information, user views, and industry ranking, elevating convenience and usability. In terms of customer acquisition formats, we built a variety of content products and IPs across graphics, live streaming, and web-based products.
Offline salons and other formats from user perspectives consistently reach decision-makers in every industry, which further enhance the enterprise service review platform's brand awareness and influence.
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The number of leads have grown 700% compared with the same period of last year, and the cumulative number of products on the platform exceeded 8,000 a year-over-year increase of 52%, with the total number of reviews surpassing 60,000 cumulated at 264,000 year-over-year. The number of merchants on the platform exceeded 6,000 a year-over-year increase of 52,000 cumulated at 6,000 a year-over-year.
1200, double the number in the same period of 2021. Additionally, in terms of commercialization, as of now, the enterprise service review platform's contracted sales exceeded RMB 10 million, with orders from an extensive host of well-known suppliers such as Balsam, Cundie, Tencent TAPD, Google Cloud, and ZTE. We also published strategic marketing cooperation with Volcano Engine under its Batsan brand, as well as the SMB unit of Lenovo, a Fortune Global 500 company in 2022.
Going forward, the enterprise service review platform will serve a growing cohort of enterprises in need of digital transformation upgrades, unleashing our platform's value and greatly boosting our commercialization capabilities. Thank you for your attention.
As we embark upon the post-pandemic era in 2023, we have observed many positive market signals emerge. And because an investor's confidence continues to threaten accordingly, leading to increasing business vitality throughout the new economy sector, we will see the commercialization opportunities afforded by the economic recovery to keep exploring media's boundaries and
Thank you, Paul. Now I'd like to walk you through more details of our fourth quarter and fiscal year 2022 financial results. Total revenues for the fourth quarter of 2022 were on B$96.6 million, a sequential increase of 2%. Total revenues for the full year of 2022 were on B$322.5 million, a year-over-year increase of 2%.
compared to the full year of 2021. Online advertising services revenue will be 62.2 million in the fourth quarter of 2022, compared to RMB 76.4 million in the same period of last year. The decrease was primarily attributable to relatively weak advertising spending caused by the negative impact of COVID-19 control measures and infections across China during the quarter. For the full year of 2022, our online advertising services grew by 3% year over year.
of 2022, our enterprise value-added services were on the 72.6 million compared to RMB 74 million in the previous year. The 2% decrease was primarily because some of our offline events were delayed or downscaled due to disruptions from COVID-19. Subscription services revenue on the 8.9 million in the fourth quarter of 2022 compared to RMB 9.6 million in the same period of 2021.
The decrease was primarily attributable to the negative impact of COVID-19. For the full year of 2022, our subscription services revenue will be $28.2 million, representing an increase of 1% compared to RMB $28 million in the previous year. The increase was primarily attributable to our continuous efforts to offer high-quality subscription products to our subscribers during 2022. Cost of revenues will be $47.6 million in the fourth quarter of 2022 compared to RMB.
40.7 million in the first year. The increase was primarily attributable to higher cost, higher content cost related to expansion of our commercial oriented content program. For the full year of 2022, our cost of revenue was RMB 137.8 million compared to RMB 128.8 million in the previous year. The increase was primarily attributable to the increase in content related costs partially offset by decrease in cost of our offline events. Growth profit was RMB 48.9 million in the first quarter of 2022 compared to RMB 75.6 million in the same period of last year. For the full year of 2022, our growth profit was RMB 184.6 million compared to RMB.
in marketing related expenses. For four year 2022, sales and marketing expenses will be $122.1 million, a contraction of 15% compared to the previous year, primarily attributable to the decrease in payroll related expenses, share based expansion expenses, and marketing expenses. GNA expenses will be $21.7 million in the fourth quarter.
The decrease was primarily attributable to the release of loans for credit losses and the decrease in professional fees. The release of loans for credit losses was mainly due to improved collection of accounts receivables. Research and development expenses will earn the 14.5 million in the fourth quarter of 2022 compared to earn the 12.6 million in the same period of 2021.
For the full year of 2022, our research and development expenses were RMB $55 million compared to RMB $47.5 million in the previous year. The increase was primarily attributable to the increase in payroll related expenses as we bolstered our RMB capabilities for new products and services. Share-based compensation expenses recognized in cost of revenues, sales and market expenses, research and development expenses, as well as G&E expenses, totaled RMB $4.6 million in the fourth quarter of 2022 compared to RMB $4.1 million in the same period of last year.
For full year 2022, the total amount of share-based compensation expenses were RMB 13.9 million compared to RMB 15 million in the previous year. Other expenses were RMB 1.2 million in the fourth quarter of 2022 compared to other income of RMB 1.5 million in the same period of last year. For full year 2022, other income was RMB 67.5 million compared to other income of RMB 3.6 million.
in the previous year. The increase was primarily attributable to gain arising from disposal of a subsidiary and investment income arising from fair value changes of long-term investments as well as income generated from write-offs of accounts payable. Net loss was RMB $21.5 million in the first quarter of 2022 compared to net income of RMB $15.4 million in the same period of 2021. For four-year 2022, our net income was RMB $22.6 million compared to net loss of RMB $90.6 million in the previous year.
This is the first time we achieved four-year profitability since our IPO in 2019. non-GAAP adjusted net income was RMB $16.9 million in the fourth quarter of 2022, compared to non-GAAP adjusted net income of RMB $19.6 million in the same period of last year. For four-year 2022, non-GAAP adjusted net income was RMB $36.5 million in the second quarter of 2022.
compared to non-GAAP adjusted net loss of RMB 75.6 million in the previous year. Net loss attributable to certificate KR's ordinary shareholders was RMB 20.8 million in the fourth quarter of 2022 compared to net income attributable to certificate KR's ordinary shareholders of RMB 14.6 million in the same period of last year. For full year 2022, net income attributable to certificate KR's ordinary shareholders on the 21.9 million compared to net loss attributable to certificate KR's ordinary shareholders.
of RMB 89.6 million in the previous year. Basic and diluted net loss per ADS of both RMB 49.8 cents in the fourth quarter of 2022 compared to net income per ADS of RMB 35.6 cents in the same period of last year. For full year 2022, basic and diluted net income per ADS of both RMB 53 cents compared to basic and diluted net loss per ADS of RMB 2.2 in the previous year.
As of December 31, 2022, the company had cash, cash equivalents, restricted cash, and short-term investments of RMB $184.9 million compared to RMB $164 million as of September 30, 2022. The increase was mainly attributable to positive cash flow from operating activities partially offset by the long-term investment in the new economy startup company we made in the fourth quarter of 2022. This concludes all of our prepared remarks today.
We will now open the call to questions. Operator, please go ahead. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. 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. We will now pause momentarily to assemble our roster. The first question today comes from Jing Tang with CIBC. Please go ahead. I will translate myself.
As we see improvements of the environment, what are the companies' priorities and plans for this year? Thank you.
electric vehicles and industry capital.
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And also on our product front, apart from our existing advertising and enterprise value-added services, we will also explore several new product initiatives. For example, 36K Enterprise Service Review Platform as our second growth engine, we will refine our platform and products and continue to pursue commercialization. 36K Enterprise School will enrich course designs to empower more small and medium-sized companies.
And of course, we will keep investing in AI-GZ technology. We will continue to advance the application of the AI-GZ technology in production and...
The next question comes from Ling Li Dao with SWS Research. Please go ahead. windauldron.
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What changes have taken place in the wilderness of advertisers to invest recently? Can you tell us about the degree of economy recovery and prospects based on the advertising business?
Okay, based on the Q1 2023 current situation, our ad business is already recovering steadily. However, it will take some time for advertising to return to a relatively high level while market confidence continue to recover. And we have witnessed that lots of our clients have rebound their confidence in ad placement, but still they still have a limited budget for their advertising position.
Okay, based on market feedback and actual business performance so far, the entire advertising industry has been recovering at a steady pace.
Businesses in some popular industries such as automotive and e-commerce have been very active in brand promotions and marketing activities with relatively stable and placement budgets. In Q1 2023, we made further profiles in both commercialization channels and industry coverage. For instance, we completed JB.com's first commercialization order on Xiaohongshu and achieved our first breakthrough in the luxury goods sector.
As such, we expect a fair level of growth generally in advertising in both Q1 and full year 2023. Looking ahead at the full year 2023, we remain optimistic. As business activities and people's daily lives come back to normal within the post-pandemic era, we will see a significantly broader economy.
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in companies or their input in the level of corporate payment? What new actions will the company take for enterprise standard additive service segment this year? And my second question is about margin ratios. How should we expect the company's expense ratio and profit margin this year? Thank you.
or their input in the level of corporate payments? What new actions will the company take for enterprise standard additive service segment this year? And my second question is about margin ratios. How should we expect the company to expand crucial and profit margin this year? Thank you. Oh, she's here.
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and we believe it will grow this year as well. On our poolside, we will provide diversified underpriced value-added services, including offline events, consulting services, and integrated agency operation services to boost growth in this segment. On the number of clients, we will tap into broader vertical steps.
and penetrate to lower tier markets like storing more funds and spending on the Intel or more regional offices.
In 2023, we will also leverage more products to develop our enterprise value-added services in addition to statistics care enterprise review platform. We also launched statistics care venture capital platform as well as statistics care research institute to further grow our business. Hi, Minh-Re. I think this is your first time to join the earnings call for statistics care. We really give your warmest welcome.
mentioned given the AIGC and you know the more AI-related technology application we will be able to have you know higher efficiency of operation and have some cost-saving effect in our business. And secondly I think I will highlight that I think for 23 the margin expansion as well as operating margin end.
growth margin will come more from the revenue rebound or revenue growth. Although in 2022, we are proud that we have been growing our revenue given the very challenging environment in 2022, but we achieved a positive 2% growth. But that ratio will be much higher in 2023.
I think. And also we mentioned several times that our cost structure and expense structure has been very stable given that it will not be a linear growth pattern as the revenue growth. That means we will have a lot of leverage. So to give you some quantitative implication, now if we say that in 23 our gross margin can be stabilized at around 60% level, then our expense, the OPAC.
ratio will be let's say around 50%. Then we will give you an operating margin of around 10%. I think that will even have some upset if our top line revenue can grow at a much higher growth rate than in 2022. Hope that answers the question. Q. What is the business connection between the company and the AIGC or GPT large model? And what is the plan for AI? Thank you.
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articles to facilitate users' deficient understanding while also improving the user experience.
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On the product front, using the statistics PR enterprise review platform as an example, AIGC technology will assist the users to better obtain detailed information, such as price and usage evaluation of products, more efficiently so as to understand products more accurately and make better purchasing decisions. Also, AIGC helps us provide better customer services through more effective user interaction.
Recently, we became one of the first batch of companies to join Baidu's chat GPT-style earning board ecosystem. We have achieved the code for internal testing and are launching the first run of our internal test.
With no doubt that strategic care will be the first move in applying AIJZ technology in our content production and business expansion. Thanks for your question. Once again, if you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. Press star then one to enter the question queue.
As there are no further questions, I would like to turn the call back over to the company for closing remarks. Thank you once again for joining us today. If you have any further questions, please feel free to contact me.
Please feel free to contact the certificate shares investor relations through the contact information provided on our website. Thank you and see you next time. Thank you, operator. Thank you. Everyone.
That does conclude our conference for today. Thank you for participating. You may now disconnect.