51Talk Online Education Group

Hello, ladies and gentlemen. Thank you for standing by for China Online Education Group's second quarter 2020 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Judy Payal, investor relations for the company. Please go ahead, Judy.

Hello, everyone, and welcome to the second quarter 2020 earnings conference call of China Online Education Group, also known as Fi1Talk. The company's results were issued by Newswire Services earlier today and are posted online. You can download the earnings price release and sign up for the company's distribution list by visiting the IR section of its website at ir.fi1talk.com. Mr. Jack Huang, our Chief Executive Officer, and Mr. Ming Xu, our CFO, will begin with some prepared remarks. Following the prepared remarks, Mr. Li Ming Zhang, our Chief Operating Officer, will also join the call for our Q&A session. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor Provision of the U.S. Privilege Securities Litigation Reform Act of 1995. Forward booking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's Form 20-F and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also know that by one talk, earnings press release and this conference call include discussion of and audited gaps financial information as well as an audited non-gap financial measure. So on talks, press release contains a reconciliation of the audited non-gap measure to the audited more directly comparable gap measures. I will now turn the call over to our CEO, Jack Fong. Please go ahead.

Hello, everyone. Thank you for joining our conference call today. We extended our outstanding performance by registering another quarter of robust across-the-board results in the second quarter. These results were fueled by the continued optimization of our K-12 one-on-one mass market strategy in non-tier-one cities, as well as the overall growing market awareness and acceptance of online education brought about by the effect of COVID-19 pandemic. Financial highlights of the second quarter include our net revenues increasing 40% year over year to reach 493.5 million RMB, a figure 5% above the high end of our guidance. Net revenues from our core business catatroph one-on-one mass market offerings increased 61% year-over-year to reach 417.9 million RMB. Furthermore, our growth billings reached 676.4 million RMB, growing about 35.7% year-over-year and recording the highest growth rate since the first quarter of 2018. Our K-12 one-on-one mass market growth spillings grew 46.4% year-over-year to 612.5 million RMB accounting for 90.6% of our total growth spillings. Operationally, our team continued to execute well and capture the market opportunities. We grew our number of active students by 27.8% year-over-year in the second quarter. To augment our K-12 offerings, we recently launched brand new Level K courses for kindergarten students aged from 3 years old to 5 years old, aiming to broaden our student base and build good study habits from a young age through our platform. We also held tournaments for our flagship China Youth Talk speech contest between April and August. This high-profile event attracted more than 500,000 K-12 age contestants from across the country and showcased the achievements among some of the most talented youth. In the second quarter, we embarked on a brand uplift efforts in the Philippines to further burnish our already strong appeal among existing and potential instructors. A highlight of this campaign is the appointment of Ms. Pia Wurtzbach as our brand ambassador in the Philippines. She is a former Miss Universe with strong popularity among our target instructor demographic. With her appointment and our continuous promotion efforts, we further strengthened our leadership position in online education and effectively promoted teaching careers at Five One Top for Filipinos with high English proficiency, passion for teaching, and familiarity with the Chinese culture. Additionally, on September the 2nd, At the K-12 Online Education Service and Evaluation Standard Conference, we presented the first enterprise standards for K-12 online education industry, which we believe is an important step forward in the maturity of our industry and the standardization of the service scope and requirements for K-12 online education enterprises. In summary, We are proud of our second quarter achievements, both financially and operationally. The firm's organizational foundation built over the years, coupled with our focus in the K-12 one-on-one mass market in non-tier one cities, has helped us emerge today in a stronger, better position. As we move into the second half of 2020, I look forward to continuing to execute on our mission, bringing our strong value proposition to the market and the long-term benefits to all our stakeholders. With that, I will now turn the call over to our CFO, Shimin.