51Talk Online Education Group

Hello, ladies and gentlemen. Thank you for standing by for China Online Education Group's third 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'll now turn the call over to your host, Ms. Judy Piao, Investor Relations for the company. Please go ahead, Judy.

Thank you. Hello, everyone, and welcome to the third quarter 2020 earnings conference call of China Online Education Group, also known as 5.1 Talk. The company's results were issued by Newswire Services earlier today and are posted online. You can download the earnings press release and sign up for the company's distribution list by visiting the IR section of its website at ir.5.1talk.com. Mr. Jack Wong, our Chief Executive Officer, and Mr. Ming Xu, our CFO, will begin with some prepared remarks. Following the prepared remarks, Lingming Zhang, our COO, 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. Private Security Litigation Results Act of 1995. Forward-looking 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 20F and other public filings as filed with the U.S. Securities and Executions Commission. The company does not assume any obligation to update any forward-looking statements, except as required under the applicable law. Please also note that Taiwan has earnings press release, and this conference call includes discussions of an audited GAAP's financial information as well as unaudited non-GAAP financial matters. File and Talk's press release contains a recognition of the unaudited non-GAAP matters to the unaudited directly comparable GAAP matters. I will now turn the call over to our CEO, Jack Huang. Please go ahead.

Hello, everyone. Thank you very much for joining our earnings conference call. We are pleased to report another robust quarter of solid financial and operating results. Our third quarter performance proves the merits of our strategy focused on the K-12 one-on-one mass market offering in non-tier one cities and showcases our ability to execute our initiatives. Highlights of the quarter included net revenues, reaching RMB 538.5 million, up 31.8 percent year-over-year, surpassing the top end of our guidance, with contribution from our K-12 one-on-one mass market offering growing by 46 percent year-over-year to hit RMB 471.8 million. Moreover, The number of active students on our platform in the third quarter grew to 338,000 at 30.9% compared to the third quarter in 2019. In the third quarter, our gross billings reached 728.4 million RMB, growing 33.1% year over year, of which Our K-12 one-on-one mass market growth spilling grew 37.2% to 692.2 million RMB. Clearly, families across China are gaining greater familiarity and comfort with online learning channels and recognizing the strong value we provide. As they do, they are sharing their positive experiences with their friends and our high-quality brand reputation is spreading. In October, we were honored to be invited as the only online education enterprise to join the 2020 China Annual Conference for International Education and provide key inputs for future guidelines and requirements for online foreign teachers in China. At the conference, we signed a framework agreement with the China Education Association for international exchange to jointly create recruiting and training standards for online foreign teachers. These standards will become part of China Ministry of Education's policies regulating online foreign teachers. We are excited to be part of this national-level working group. We look forward to sharing our experience working with thousands of online foreign teachers and helping shape the future of the industry. Also in October, we hosted our 2020 Sino-Philippines Educational Exchanges Seminar attended by education and government leaders, including the ambassador from China and the Philippines. Through live streaming, we engaged over 5,000 people from China and the Philippines to celebrate 45th anniversary of the establishment diplomatic relations between the two countries, showing mutual cooperation in our positive role in cross-border relations. This video receives the Guinness World Records Award for the largest online video album of people waving. In conclusion, our K-Strop 101 mass market non-tier-one city strategy is working. Our teams are executing, and the groundwork we've laid is allowing us to take advantage of more and more market opportunities. With these pieces in place, we will continue to contribute to sustained long-term growth and maintain the balanced bottom-line achievements. With that, I will now turn the call to our CFO, Ximing.