Q2 2019 Earnings Call
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I would now like to turn the conference over to Christian Arnell. Please go ahead.
Thank you Hello, everyone and thank you for joining us today, the company's results and its Investor Relations presentation were released earlier today and are available on the Companys IR website.
At 50 Dot Investor <unk> Dot com.
On the call today.
On the call today from 58, it's Mr., Michael Yeah, Chairman and Chief Executive Officer.
Mr., Joe Powell, Chief Financial Officer, Mr., yet way, Deputy CFO , and Ms. Ali Wong IR director.
Mystery I'll give a brief overview of the Companys business operations and highlights followed by Mr., Joe who will go through the financials and guidance. They will all be available to take your question during the Q and a session that follows.
I'd like to remind you that this call may contain forward looking statements made under the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
These forward looking statements can be identified by Terminologies, such as will expect anticipate future intends plans believes estimates confident and similar statements any statements that are not historical facts, including statements about 50, dotcoms beliefs and expectations are forward looking statements that involve risks that involve factors risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements further information regarding these and other risks uncertainties or factors is included in the Companys filings with the U.S. Securities and Exchange Commission.
All information provided on the call is current as of today.
58, Dot com does not undertake any obligation to update such information, except as required under applicable law.
I'd now like to pass the call over to Mr., Yeah. Michael. Please go ahead.
That's correct Christine So total Lovejoy I'll look quite good yeah, we're pretty is that with all the second quarter results and a big improvement.
Oh I see because why was there a school I like doing.
The thing that the quota all while there were no growth, 21% non-GAAP operating profit increased 20, like I said, Oh with yellow yet.
Operating expenses grew at a slower rate than anybody else.
I'll, let her comment what's a boat trinity towards selling during the quarter <unk> said that he dropped from a year ago. The brilliant mix continues to shift.
<unk> core product and the type.
Which grow like I said, well still sit in the Mckesson as a mill decreased by 3%.
Topic, particularly on our mobile apps continue to grow when you look at it.
The market economic environment remained lower tier cities.
Those are going to market remains stable the government the continual toll money and the control wholesome price very tightly.
Witchcraft create a rate we did she really stay stable market.
The macroeconomic environment has impacted all that equipment and a wholesale business and of course be when it goes well slow somewhat.
We remain confident <unk> always been it's tormenting, oh, well, but they didn't position and at least the tone sounds good can host a bushel of our pencil.
In total.
Yes.
And probably the largest.
Right right the credit Crunch, but.
That's all.
They say come inside the group, we have a quiet on the <unk> side falls over the last several years such as Andres <unk> housing and then you would kill paid.
Such as drought will give us good.
Well, it's a nickel paid and Oh.
The <unk> fed funds such as subjects in a car with respect to how to watch.
And the whole thing.
Freight, but it was oh job tickets and the more appropriate for that for <unk>.
The way the fact, we skip.
Well a foul weather compare.
With all that that's cool yes.
That's the way, we can put into it, especially given this market environment.
When you leave.
I guess basically cutting metric is.
So most of all I called incredibly competitive.
The property seed or whatever they are pure play medical.
The Oh, we comfortably meet didn't pencil the traffic video and the customer numbers.
So despite the impact although the only old friends or my colleague, Colombia still don't.
<unk> main living confident they bought our market leadership position.
Yeah, well hookup it and in the <unk>.
That's all what you think your business and I think you meant it's improving it's all a full time and a technology play an increasingly big gulp.
We continue to integrate a big state Huh, it's just an amazing job we feel like we are in the payment technology into other practical.
Yes, I lost you noticed I guess more and Oh, Hi, Hi, I quoted you know when they shouldn't the we are happy to see progress.
We have made in this area.
We are also making progress can be rid of things.
That's great relationships with the parties will hopeful it's Joel sequel system.
They're really benefit from.
Oh example.
One example is the G., we pointed it out.
Well the union.
Sit at home and the talks right.
So what do you give a primary homes broken China puts your you're pretty impressive all they're probably not be a home revenue home transaction business.
Hi, Mary.
Brokers typically do you feel.
You would have us on project concept design and the lunch Oh offline services.
Yeah, the biggest holistic, you'll somebody's and become mobilized.
More than 1 million secondary really state I guess, well see all new homes.
Although <unk> put operation.
We all get late <unk> or <unk> to streamline and begin propped up well why do a challenge from that so used to searching online for hosting.
Oh viewing the host <unk> I'm I'm preaching the final transaction.
Another example is all a first quarter 2000, and I'm sure you Miss you wish him.
That trip date.
All night traffic that you wish is offline.
Cost, we can all transaction Kevin did it.
Phil.
Contribute to a more streamlined and integrated all night.
Applied pre owned the car trials I guess that they do every process.
Well of course, we've got people to sit both to hold <unk> plot, Israel, which it or is it different.
It's treated.
And the pricing model for you for free on the call.
But she is also billion where we will.
This is because I'm sure. That's all that's our model is kind of constantly evolving from a pure online, but pricing model quite proud to partner with a more comprehensive set though we'll see me pull it apart they tightened, particularly.
I said getting cut at the company, you're not only will our <unk> tool bet on the spend all your time also work closely with all the customer, albeit it was <unk> compared to sell all that customer and they didn't Chris Oh industry conditions.
And that goes inside it.
But it's fiction tomorrow.
They feel excited about the enormous market opportunity.
And Oh what potential.
Well, we continue promoting to.
Hopefully you couldn't make those trends.
I also want to emphasize again, that's a nice MISO hunch, this illness, which bridges that haven't yet Toby penetrate.
The Best example of all that penetrated her.
Oh Faiza, it's a 50 m. tall, well buttons that you, usually which continues to go well, but Tony I personally feel like.
Well 50 car owning 20 years older demand from lower tier cities.
Oh for localized and easily accessible information you know will be much and 70.
D. so.
The money because it's Jim potential for hospital.
All kinda like incremental housing and auto advertiser toward this yours is huge.
Just put a pause on the 19th our focus remained on the list aren't Musa and Benjamin gross.
How do you go towards although mobile app.
Yeah. The only increased I'll, let you must have been in the gun to gradually monetization William for what.
Last but not the low thirtys.
Let me also mention that drive all the online your support.
<unk>.
It's also been great yes.
It's from this loss.
It kinda they focused so we're going to see can hop over to pull it off.
Hey, Tim it's making encouraging progress.
It began child charging ambitious from online see Toby WSE transactions, and then used to sell sell for pedigree and Uh huh.
So don't have slowed even.
Do you believe that this thing because other clinical.
They had of course.
We are happy to see that.
Your sub base and the secret stickiness.
Well somebody told again so we.
So cody.
Increased monetization.
I'm pleased with all the old wall progress this quarter, it's hard to put on driving both and they didn't wish what type of technology and the business model. You have also began embracing operational you purchase so traffic acquisition and the sales and service.
Yes, you can see both either with housing and a lot of other what has no sales.
And the Mafia independence.
Growing but at a slower rate then millennial.
Operating profit margin over the last say were yes, I have improved a lot and the well at all and all time high so into <unk>.
Let's say most I'll, let cool.
Cost tied up in these foreign dry and the robot Oh platform.
But for modeling.
I believe that the margin <unk> cool.
How to classify the business, we only improve as we continue to streamline.
So and the same is progressing.
Increased what's the specialty and the drug <unk> huh.
Gradually become profitable in the coming yes.
Hi, good although total group.
Margins they'll also be much right.
In summary, while the <unk>.
There's no shortage of money for test various proven business model in kind of our market leadership position remains solid.
Did you all a strategy is clear the consistent.
I'll, let Jim it's Kevin.
Reputable and what's your rate and all that.
That's kinda provenance and the U.S.D. compass.
I'll get you don't get the increasing number.
Yeah, Manny I guess I didn't broke chicken I didn't that pipeline and every day, we are making tangible progress.
We are building the business for the number 10, and Oh investor can see so that took 10 cycle.
But that doesn't mean, it's a hot cocoa so that parents.
[noise]. Thanks, Michael Thank you again for joining our call I'll now walk you through our second quarter.
I think financially.
Total revenues were RMB 4.1 billion up 20.5% year over year membership revenues were RMB 1.2 billion up 1.5% year over year online marketing services revenue.
Were RMB 2.7 billion up 23.8% year over year.
In the second quarter of 2019, the total number of paying visits users.
Was approximately 3.6 million a 2% increase from the same quarter of 2018 Tropic continued its healthy growth.
And was driven by our expanding user base and increased user engagement.
We have been widening and improving the various types of online marketing services, we offer across different content categories. As a result, we believe that our customers. The ROI on our platform remained healthy.
Gross margin was 89.5% compared with 19% during the same quarter of 2018.
Due to minor changes you know probably the mix.
Operating expenses were RMB 2.7 billion up 16.5.
Your <unk> percent year over year.
Sales and marketing expenses in the second quarter of 2019 were RMB 2.1 billion up 15.3% year over year within sales and marketing expenses.
Advertising expenses in the second quarter of 2019 were RMB 1 billion.
14.8% year over year.
No advertising sales and marketing expenses in the second quarter of 2019 were approximately RMB 1.1 billion up 15.8% year over year.
Research and development expenses in the second quarter of 2019 were approximately RMB half a billion.
22.3% year over year.
Increase was.
Mostly on headcount headcount related.
General and administrative expenses in the second quarter of 2019 were approximately RMB 194 million up 14.7% year over year.
As you can see if we exclude R&D expenses all our other operating expenses are growing at a slower rate than revenues.
We are strategically expanding our teams to develop products and technologies for platform. While at the same time carefully controlling expenses and making significant progress in improving operational efficiency. The total number of employees at the end of second quarter 2019 remained.
Below 22000, largely stable when compared to last year and last quarter.
non-GAAP income from operations was approximately RMB 1.1 billion in the second quarter of 2019 up 28.9% year over year non-GAAP operating margin was 27.7%.
In the second quarter, no 19, compared with 20, 326% excuse me in the same quarter of 2018.
Other income in the second quarter of 2019 was 3.7 billion RMB compared with RMB 94 million in the same quarter to an 18 largely due to a 3.4 million noncash Oh, we are light so bad and gain in our investment into the outdoor group, formerly known as well.
As well as in the RMB 642 million realized gain as a result of the cash received from the sale of certain equity interest into all don't let me clarify that according to the latest GAAP accounting principles.
Account for our investment into outdoor using the measurement alternative method the sale of certain equity stake is seen as an observable price change event.
We have to revalue the remainder of our shares into outdoor as you can see to outdoor has done very well over the last several years and many investors have participated in various financing loans at increasing valuations, which has increased the value of our holdings.
Other items in investment gains and losses in crude in RMB 493 million fair value losses in our investment in five <unk> five day due to a decrease in the share price.
On the Asian markets in China during the second quarter of 2019, alongside with other minor immaterial gains and losses non-GAAP net income attributable to 50 Dot com Inc. ordinary shareholders was approximately RMB 1.4 billion in the same quarter of 2019 up 101.4% year over year non-GAAP net margin was 39.8% in the second quarter of 2019 compared with 23.9%.
In the same quarter of 2018.
Onto the guidance based on the company's current operation total revenue for the third quarter of 2019 are expected to be between RMB 4.1 billion and RMB 4.2 billion. This represents 18 year over year increase of 13% to 16% in RMB amounts. These estimates reflect the company's current and preliminary view, which is subject to change.
With that we'd like to open the acuity session. Operator, please begin the county.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
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At this time, we will pause momentarily to assemble our roster.
The first question comes from Herman Chan of Citigroup. Please go ahead.
[noise] Oh I was all yeah, we don't.
It's all that's the one.
[noise] [noise].
Yes, Mr. Mr. Chen are you still there sir.
[noise] why do you know why.
Hello can you hear me.
Oh, Yeah, Yeah go ahead.
Okay. His line is disconnected to I've got a feeling he was in a bad del Sol area. So we'll go to the next questioner who is Thomas Chong of Jefferies. Please go ahead.
Oh fans management for taking my questions I would like to ask about our strategy or for John John SBC revenue starts to ramp up in the second quarter or any comments about competition and when should we expect that to watch its profitability and how should we think about our long term margin poll, Bob. Thank you Oh, what I find it you stop <unk> I said why don't you just don't want it to you in a well they wouldn't you say why don't you try and try and Oh someone you saw that Josh.
A woman I believe that strategy.
Oh, Hi, Ben sand logistics die or monetize fish and I will Miss I bike high season, I know me well my kind of bowed out she wants more to just pick up so you didn't miss it types you've ramped yet.
Yes, and are currently we started to sort of distinguish and users are between consumers and business were starting take condition from a business who are vital to sell a used stuff on a platform or we started or is it mainly in the ER you self and categories, but we're also testing the potential categories as well so yes, it looks good within a pretty short period and.
And we'll get it wrong, you know potentially as we said you know we we can expand to other categories and are associated with it. It did it did speak to the value created in a in the first three years of drugs, because even though we start monetization that recently, but you know in the last three years, we have accumulated a huge amount of users.
And he that we'd get some branding not sure. The team worked very hard in the kind of making sure that crosses all run smoothly and ER and we also.
You know I pretty innovative he chooses to smoke in the you know similar to that of that services that we believe can further reduce the friction of use good transactions on our platforms for instance inspection of the cellphone or among others. You know so we're doing a lot of things not only to create an online platform that really is to remove the friction of Ah online used goods transactions and so you know in the first two years and have we basically focus on user experience right. So we didnt really try to monetize tour and but now when we start to.
[noise] ramp up monetization. It was you know it's based on a pretty a very vibrant and or a platform already so the rapid <unk> ramp up will seem pretty fast, which which I think is the results of the value. We created all long and you you asked about it long term and property. They show no I think it's obviously, it's doing the lossmaking its a stage today because we are we have a we have a you know we have a team that really focus and user experiences and we started into a lot of that has been recently, but we believe you know if you think about the model itself right. Its very platform based lot as Michael mentioned in his prepared remarks, it's online transaction. It's a you know the costs half base is a bit of a no does that will be R&D costs that will be a you know some cutting service cost and in terms of awareness Insignificantly nagging you know.
At the same time, we see that a you know the infrastructure or the online payment each contributing to your logistic et cetera.
It's very it's a very good already in China, you know so so anyways it, especially most recent years right. So in theory, if he works when your goods you know largely works when used goods as well you know in terms of buying and selling online. So I think it's all under served but it has a massive.
Massive or a market you know so I think that the major focus for the business skills. When do we start to ramp up revenue major because due to the growing the platform you know, making sure. It's a good superior user experience and from you know ultimately we will we have Q GMB is running through the platform was commissioned Ray was even marketing centers, you know and and.
Yeah, we should be more than enough to cover and the R&D and customer service cost and the amount that the problem needs a ongoing basis. So I believe it's a pretty nice model, but we'll see you know is and you know I'll probably be like what you mentioned about strategy and the competition Parlous U shape, Oh, well then has a sue on Todd angle can they saw children had I guess a job as we can do that we couldn't that doesn't mean that there's I don't know that we should lead you call.
They go up and brought a gun, which didn't yeltsin's yassine, which in some had a general so you got to other should bear in mind that she than usual.
A woman who can you go to production that we don't necessarily here in the <unk>, which again see a tick or should they be done BODYGUARDS, what still needs are going to you know they are equally well almost you know so that's one thing and second thing is we are conservative I mentioned that a bit.
Before but you know on inspection on cellphone you know when you when you need it and it's it's a challenge as wallet opportunity at the same time for use good track because it it does have a it count go up not being at the very standardized like the new goods, but if it goes through category by category. There are areas, where when you introduce certain services he significantly reduce the friction you know whether it's whether it's some somebody.
Service is really due to a pre owned or speakers you know or a books you know, whether it's training or packaging or anything you also may be different services, what different categories, but we try to do these smart thing ER and find these pain points and introduce servicers that will unlock the demand for online transactions have used goods. You know so on that I think different companies have different viewpoints and a and then I'd be a lot of different areas people can focus on so so it's a.
So it calls natural differentiation among players you know so it's not it's not like all the U.S. Good trading platforms are exactly the same so it naturally takes on different.
Different Ah Ah different characters, that's about that's the second thing to differentiate.
And I think you don't do it so yeah. It's promising category is the potentially it's a massive pool.
Platform for users and GMB. Thank you Thomas.
And we have a question from Herman Chan of Citigroup.
Please go ahead Mr. Ken.
[noise] Ah Hello.
Oh, John L. added about how she just told you about your contact center.
No. It's actually tell you talk about your second one that you got when she does.
Teaching enough insight that's all you want but there's a couple of it. So that is another topic I saw that into your comments entitled So you'd my don't call out how it sounds like a lockout at home in the next Oh, there's a lot of hot <unk> I didn't know how all that the Democratic as it got then I forgot.
Not a whole lot you thought when you die at all but that doesn't tell us how much you Tiger I'll tell you that I just talked with you guys you take a woman you'll you'll see that they got shouldn't oh, yeah. It should that be shooter kinda knew that you can do the job because that's all being monetized thought how long. It takes I will not cut that you had some good ones that I think if I'm a job so far I've got all the houses on better than finding something as it helps you went down the middle kind dog is a botched rule from yesterday, but didn't into why are you going to try to get to enjoy.
I mean, when you look specifically was it did not do well then.
Yes, but I'll, let you you'll call them that Oh, yeah, we're clearly seeing a drop in the ER and good demand for a hiring you know which are directly and we see that across the board you know, we see that either recruitment platforms in China as well the veteran you know, but we still have very good market share you know in terms of the especially in the bucardo side, but but a it's not a it's not it's not a it's not as good as a kind of overall market hiring demand wise or like a like a couple years ago. However, we do notice that the.
Supply demand equation, you know by sector and all by industry is different you know so I think what we are doing is we're trying to be selective or be more focused in areas. You know industries, where there is still relatively strong demand and trying to you know.
Continuing to meet our customers' requests there are <unk> and <unk> along with some other.
You know product or feature innovation.
On jobs, Oh housing, yes. It is true that we have good years do you see in 16, starting from I think late part of 16 it'd be slow you know a lot of the restrictive measures have been put into place by the government and so the volume took a hit and it has been and pretty low but quite stable you know given the continuity of these policies you know.
Yeah I'd been here. So it's not it's not it's not like you know if we fall aegis aegis pretty low level, but stable you know so it's a new norm almost.
As long as its volume and price so it's a fairly stable market, but it's a big market. You know so we're talking about potentially 67 trillion secondary GMB than where you were talking about 15 trillion. You homes. You have you ever said these are huge markets, but just stable not not very heated as previous years. So there's still a lot of things. We can do we're going to focus on different sub segments. Now we we used to be very big on well. We started was rental you know and we might move into secondary we're now more focused on you know also are starting to focus more on commercial real estate. Some primary homes and on the on the short term rental platforms I'm apartment rental platforms et cetera.
And also from a.
Todd from point of view, we are evolving as Michael alluded to in his speech earlier that we all model is evolving from pure traffic direction model right went to war or probably in one example, you you know we started to form a JV with somebody brokers. So that we jointly you know certain developers better you know we got more streamlined link end to end process will find new homes and you know we we provide a secondary agents for instance, chances seven new homes as well you know and so we're trying to utilize all these resources or that we have as well as our partners have been trying to trying to increase the efficiency of the industry.
I think on the on the online side. We you know if you download the and you could have you know all 58, you will see changes that are happening very quickly you know in terms of a user experience in terms of data in terms of Ah you deal in terms of he shortened service. It seems is all the all the user experience improvement, though we have been choosy. So I I think ultimately if it's a stable market. It's fine, but it's huge you know if the industry is there's a lot of inefficiency in it you know we have got good market share with thought leaders your market share in traffic in businesses BOE, we can serve our consumers and business a lot better I think you know you will monetize these one way or another but as long as he adds value will.
So well be able to grow our revenue yes.
I mean, how do you know what I'll tell you in jail tick up now to go well then you Formula and then your interest is up here I'm, just saying that the young yet there's all buttons.
And then another you know Wellington Oh, yeah, that'll be more intelligent, usually I would say that he it geography expansion right, but if you think about our product road map or business model Road map, it's very similar.
Or two where we have gone through in big cities with 50 Dot Com. So were replicating our success story or probability in different locations or distributed a smaller locations individually right, but but the countryside or rural area at up to huge amount of users. We're talking about four or 500 million people. So almost equivalent to our current users that we have accumulated in the last.
You know 14 years.
In 50 Dot com, so why we replicate our success in smaller lower care places, we believe that over time, you will you all contribute to the revenue so hopefully 1 billion.
No you in the next year or are those future years to come on and at the same time there is.
Lot tougher you know 58, you know, it's not only about housing and jobs right. It has it has a you know a huge big list of different content categories. You know so as we continue to.
Keep an eye on services, you know Kohl category, you know housing and jobs aren't used cars. There. What can we you know we will be looking to or other you know categories as well, we're trying to understand better the differences no one from the yellow pages. It's a combination of a lot of good English categories, as we dig deeper and ER, we hope to.
Great that's a user experiences and create new revenue streams, you know as we kind of a you know to improve our business model you in the it differently in different categories. So that provides another angle as well.
Hi in terms of expense control, maybe let me comment Tom you know if you look at.
<unk> expense profile right and it's very high gross margin model you know so it's really the operating expenses is advertising, which is mainly user acquisition or people or people is largely salespeople.
He is a big chunk of our employee base, which is a really ultimately they are trying to acquire paying users and a a choir old RAIT retaining paying users. So in terms of traffic condition.
No we're doing pre installs in that we're seeing pretty good all right you know and ER.
So so I think that's a that's sitting back then that we need for the mid to longer term value platform, because and that will affect platform. The bigger you get the more leverage we have you know on on the on the Euro Youre. Your expenses. So we believe that longer term as we become bigger and stronger versus other smaller peers. He will you will you would you would naturally be a smaller percentage of the revenue.
And we will compare to your eyes will attract the data are rigorously. He opened 30 hours of a tradition and we can we do have the control Oh, well, we cut back on certain channels and says you know depending our assessment of the overall balance between gross and a short term profitability and on the people side. As you can see Michael mentioned also is we have actually been reducing our total employee size largely from the sales marketing team.
Because the you know the self serve initiative the online payment infrastructure as well as our internal teams our tools are getting better so even though we serve 3.6 million. After me you know, but we ought be able we are serving them with few amount of people. You know was a by introducing a better tools to them. So that they can be more self served and Oh. We got all these initiatives are going on and we believe that a there is huge potential for us to be a much more efficient in a in the years to come.
Thanks very much.
The next day.
Michael.
The next question comes from Natalie Wu of see I see see please go ahead.
Okay, Great and just deal with it you're right no. We're just now James Yeah, I take seem Choppier Genkey peak or how you handle the job.
Especially till I am I see I see the cool pool semi eloquently about senior infringe on that because it sounded like I knew I also need to adapt to the many jobs tension Cody and then go to John Kibosh on the 10 do Oh, we must have crossed that offline and does she normally would not have such an impact and Ah online [laughter]. So just one that he also mentioned that the opinions on that and what do you see as the largest issues that team does that the online penetration.
Gross.
Comments that at current stage. Thank you.
Thank you a lot about it they go well, let me Oh, we don't go Hima true, though that it did one in London there on the dry yeah.
What will come without doing across all five of them. She said that the two of them and that I mean, something that doesn't quite didn't have the Canadian dollar has a pool. There that is of course on she had should watch engine Jay the timeline stringent or just realized that cools off some of the T Y well. There's also there's a kids adult didn't doesn't know how much I can see the Darren can you push a little bit of go does it does that will that is all she can put out.
No. So so there are differences. So that's why we think you know we can.
You can you know also China, all resorts differently. So the tour to get a get a kind of course as high as possible now in terms of hiring online penetration, yes, we do agree that it's a it's not a high penetration at all you know there's still a lot of consumers jobseekers as want businesses that have not really raised oh hiring as much as they have embraced and maybe some other online applications.
So there is a there is dupilumab wants to grow I mean, we we think currently that you know out of the slow down in our.
Jobs revenue is largely macro related you know because we've seen that across all the haven't come from different companies and ER and it's not a secret right. So its a quite it's quite understandable that the confidence level, given the macro situation or the.
You know, we're seeing globally and domestically has ER you know very naturally called the business owners to be very cautious not to expand owning all your size or add to say the least and in some cases cutting back on the current employee size. You know so you can imagine how much or how much money. They wanted to spend on hiring if they're reducing the.
Our team size you know so this won't what we're facing externally.
But as I said, you know as we've said before there's a lot more we can do in terms of our ability.
ER to grow and to improve user experience improve matching and improve data and we believe that economic cycles come and go and so once or maybe the government is talking about almost a minute right. So if those things kicking in.
At some point a confidence level.
It's back up again, I think Harry activities will be back again, and as long as our leadership position in the online hiring is there we will meet the majority of the benefit when when the time come so well continue to improve our product I mean tell bunkers, yes.
Got it.
Quickly can they needed us we actually have a good chance also go through a copy of the job segment next year.
And I think it's probably too early to 0.21 way or another in terms of how the market will go because we are in pretty unusual times as you know and.
So to comment on next year, we'll probably need and is in the quarter to be to be more confident on giving you more color on that.
Got it thank you.
Thanks.
And the last question today due to time constraints will be from Jamie Shanda Bank of China International. Please go ahead.
Thank you, Sir ladies and gentlemen, it's you that generally today and they sell into English is going also into dollar tree go bad homes, you know Armenian quail English sheehy, the eco shows route.
Hello, Jason Casa Noble younger Wilmington shall you Sachi go Giuliano should always hone I see a hung it that the cash it is a multination Michelle.
She's osha to issue a sense our men take all that alternative revenue take a shot on goal should be dollars Nemo I say women since she algae.
Teen Bullshit Codell woman digital social during that quarter, Hi, sure makes sense at the JV will come down to what you think leashes to TV English hour.
I will quickly translate myself. So I think you also just talk about the 1 billion revenue target for 58 town next year.
Can you talk about the key contributing factors to start with is it similar to the current revenue next next 68, our comps recruiting efforts. Thank you very much.
Okay decision in there.
Or would there would be an ideal within an overhaul what did you say that you put on chips or the kind of business of the Sonia little buttons and should ever so crowded tread. There's it assumes that have good which I didn't quite as you silently here Bill Walljasper, how to complete it and door to go do a cool thing.
But the bottom I know, especially on the 100 gig will be able to wonder whether under the who don't settlements have been sounds a non does it fall to not do that your year end up from there.
Which often times includes all buttons and 20 on the dilution when you would agree more I just thought that we moderate and without getting into the weapons in the lower tier city. Two of these are the ones that are going to be a challenge on data for them there with regards to all buttons and there might be telephones.
Closer to then she focuses on Gabon, whether that I could you just want to summarize some of the buttons until recently soil deals happening.
Sensors are themselves and certainly the product family, which I do.
On the uncoated free sheet about envision that resulted in the EU.
Most of the women that.
She runs a ton so sundar because I see the Titans are highly part yeah, you got that Tom just on your part as you see Virtusa almost abandoned you know patient get Saddam Guantanamo too, but on the other side is the way to judge that I Didnt see that email me at Whistler here. So so how does your guidance and this leads to that it would have been the attributable to our mature about here's what we're going to go back to the two tickets, which would that typically but we didnt commit to.
To deliver value next year, maybe next year, maybe the year. After what demand is really you can reach you can reach to a pretty significant.
Revenue scale.
So so so we'll see how that ramps up and.
You mentioned about the go to market strategy right monetization strategy. It has.
He has some aspects which are similar to 58, but.
But maybe not exactly maybe or exactly the same for instance in some cases.
The revenue will be generated.
You know with our current customers for instance of Hometouch home developers right that we are that its existing customer.
Our.
Of our teams, but if they wanted to build a project in a in a remote area.
And we can help.
Then to mobilize people into smaller towns maybe in the neighboring smaller towns series.
Slowdowns in the area to come to the project.
Two.
Three potentially customers for for our housing customer and similarly for.
Auto manufacturers right. So if there is a certain.
Model, that's more tailor made for small.
Lower tier you know users and we have 50.
50 town it will be a very suitable channel for us too.
To advertise on their behalf will probably be one of the best channels.
And because we're talking about are distributed.
Network people so.
And you mentioned about the top partners, Yes, Tom partners are the local guys, who can act and as the agent.
To help to monetize more of the local.
Businesses, where they can meet the person in person then we'll we'll provide the tools and training to them. So that they can help us to moderate so it'll be a combination of.
The matters that will will.
We will experiment in terms of monetization, but it but the commercial potential for 50 tonnage very obvious we are linking hundreds of billions of people, which is I'm sure you will be very interested.
It will be very interesting assets for a lot of customers, including some existing customer of ours and maybe some other new customers.
So were very excited and the positive about about the business, even though today you know it's very early we're losing will lose will make his losses because the initial statement but.
It's a great it's a great business.
And it's doing very well.
[noise].
Was there any follow up Mr son.
And that's very helpful and very looking forward to more.
Hi, Hi, Yeah. Thank you. Thank you Howard Thank you, Michael and looking forward to hear more appetite from you in the future.
Thank you. This concludes our question and answer session I would like to turn the conference back over to Christian Arnell for any closing remarks.
Thank you everyone for joining our call today, if you have any further questions or comments. Please don't hesitate to reach out to any of US. This concludes the call today have a good night.
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