KANZHUN LIMITED

The conference will begin shortly. To raise your hand during Q&A, you can dial star 1 1. Ladies and gentlemen, thank you for standing by and welcome to the CanSum Limited Second Quarter 2022 Financial Results Conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Wenbei Wang, Head of Investor Relations. Please go ahead, ma'am. Ms.

Wenbei Wang Thank you, operator. Good evening and good morning, everyone. Welcome to our second quarter 2022 earnings conference call. Joining me today are our founder, chairman and CEO, Mr. Jonathan Peng Zhao, and our director and CFO, Mr. Phil Yu Chang. Before we start, we would like to remind you that today's discussion may contain forward-looking statements, which are based on management's current expectations and observations that involve known and unknown risks. uncertainties and other factors not under the company's control, which may cause actual results, performance, or achievements of the company to be materially different. The company caution you not to place undue reliance on forward-looking statements and do not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purpose only. For definition of non-GAAP financial matters and the reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. In addition, a webcast replay of this conference call will be available on our website at irsbudgetping.com. With that, I will now turn the call to Jonathan, our founder, chairman, and the CEO. Hello everyone, welcome to our second quarter 2022 earnings conference call. On behalf of the company and our employees, I would like to express our sincere gratitude to our users and investors for your ongoing trust and support.

First, I would like to share with you our performance for the second quarter. In this quarter, we recorded GAAP revenue of RMB 1.11 billion.

Our average MAU reached 26.5 million, representing a sequential increase of 5%, and this was achieved solely based on existing users.

In the second quarter, some major cities had serious outbreaks of the pandemic, and we stopped adding new users for nearly four quarters. Due to these two factors, the company's income growth and user growth were greatly affected.

Major cities in China experienced a severe COVID-19 outbreak during the past quarter, and we have been under new user registration suspension for almost four quarters. These two factors have, to a certain extent, unfairly affected both our users and revenue growth.

Although this is the case, we insist on improving the ability of users to serve users, and we will further see the results. The proportion of DAU, JAN, and MAU

以及单个用户在平台上的平均收获,在二季度都保持稳中有声。 However, our persistent efforts in improving our service capabilities have proved effective despite the high winds, as evidenced by the increasing user activity ratio DAU to MAU and average achievements per MAU. 从利润角度来看,公司扣除股权基地费用的

After adjustment, the net profit reached 2.57 billion yuan, which continues to prove our good profitability.

In terms of profitability, its growth share-based compensation expenses, our adjusted net income reached RMB 257 million in the second quarter, continuously demonstrating our enhanced operating efficiency.

Next, I will introduce the situation of new users that everyone is concerned about. Now I would like to share some updates on our new users.

which many of you may care about. On June 29, we reopened the new user registration. From that date to August 15, that is, within one and a half months, our platform recorded more than 10 million new user registrations. The MAU and average DAU in July 2020 both reached record highs, with MAU in July increasing by 16% compared with June. 具体看一下人群和区域的情况。

Let's look into the user type and region distribution.

At the end of June and beginning of July, the proportion of newly registered students users are higher since fresh graduates left the school during that period. Starting end of July, blue collar user numbers have gradually picked up and the white collar users grow steadily. From the perspective of the city tiers, the first and second tier cities continue to contribute to majority of the user growth for this quarter.

In terms of the scale of enterprise, the number of SMEs quickly proliferating following the COVID outbreak recovery.

The average daily active users of blue-collar intermediaries in manufacturing industries and headhunting consultants serving high-end professionals increased by more than double digits in July on a sequential basis.

Looking at these data, on the one hand, we feel a huge potential for market growth. On the other hand, it also proves that the new model of job recruitment that we have created has established a strong influence and reputation among users.

With these metrics, on one hand, we see massive market growth potential. Moreover, on the other hand, they also prove that our innovative job-seeking and recruitment model has established a compelling influence and brand reputation among users.

We also saw an obvious improvement in commercialization. The scale of corporate daily users continues to grow steadily. The number of new jobs in July is 15% higher than that in June. We have also seen clear improvements in monetization with a continuous growth in daily active enterprise users.

In July, the number of newly posted jobs on our platform increased 15% on a sequential basis. In August, the overall recruitment environment has revived further, with better growth momentum in industries such as new energy, high-end manufacturing, real estate, media, medical, and health, as well as positions including sales and marketing that yearly implicates business expansion.

Among all the industries, the blue-collar sector has showed a relatively more robust growth trend, especially in the urban service sector.

The number of job posting in the urban service industry during the first two weeks of August increased more than 20% on a sequential basis. As for the recent job hunting needs of a large number of fresh graduates, we made a great effort to create more job opportunities for them, including holding various online job fairs through cooperating with our enterprise customers and participating in the live broadcast Job4U initiated by CCTV News Channel. 同时对一些学生的暑期临时就业,兼职等的需求, Furthermore, for those college students looking for summer internship and part-time jobs, we explored more potential opportunities on our platform that may accept short-term employment by utilizing our optimized recommendation algorithm. to improve their experience and achievements.

In 2022, the earth we live on, whether in the natural environment or in human life, will face some serious challenges. There are extreme high temperatures in many regions of the world. The Donau River in Serbia and the Boyang Lake in Jiangxi, China, have all appeared to have a rare low water level. The two-and-a-half-year-long epidemic still brings uncertainty.

In 2022, the Earth we inhabit has faced severe challenges, afflicting both the natural environment and the lives of human beings. Extreme high temperatures have swept many parts of the world, with water levels dipping to rare and historical lows in the Danube River in Serbia, Europe, and the Poyang Lake in Jiangxi, China. The COVID-19 impact, which has persisted for two and a half years, is still creating uncertainties for all of us.

However, by considering the present in the context of the longer river of history, we may be able to more fully understand the periodicity of these changes

as well as the laws of evolution. The more difficult times are, the more deeply we should believe in the strength of ordinary people and the greater the opportunity to test and prove the value of what we do.

There is a number that I would like to tell you about. In July, the applicants and recruiters reached their initial expectations on our platform. After one-to-one communication, they exchanged resumes

There is one number I would like to share with you. In July, job seekers and recruiters on our platform complete more than 100 million times of resume exchanges following their one-on-one confirmation of initial intentions. Many of these people have since then been able to find jobs support their families and fulfill their dreams.

这个数字让我跟全公司的5000多人非常坚定地相信, 我们所做的努力一定是有价值的。 在7月份,我们5000多人工作了10万多个人天, 平均每个人每天帮助了将近1000人次。 This achievement has convinced me and more than 5000 employees

that our efforts must be worthwhile. In July, our team of over 5,000 employees worked 100,000 days in aggregate, which means that each of us helped 100 times people each day on average. Some ordinary people helping other ordinary people along life's journey. By leveraging the power of technology and the market, we, the few, can do such important things for so many others. This eases our minds, lifts up our spirits, and makes us incredibly proud of the work we do.

We said I will turn to our CFO Phil for the review of our financials.

Thank you.

Thanks, Jonathan. Hello, everyone. Thank you for joining our earnings calls today. Before I begin, please note that all amounts are in RMB and all comparisons are on a year-on-year basis unless otherwise stated. Despite the macro uncertainties and the resurgence of COVID-19, our total revenues for the quarter decreased slightly by 5% to RMB $1.11 billion year-on-year, mainly due to the revenue decrease from small-sized accounts partially offset by revenue increases from key accounts and mid-sized accounts, respectively. Calculated cash billions decreased by 32% to RMB $979 million in the quarter, primarily due to the negative impact of COVID-19 outbreak in several top tier cities, which also are main revenue contributor to our business. Total paid enterprise customers in the past 12 months increased by 5.6% to 3.8 million, while decreased by 7% quarter over quarter due to the same reason. However, we believe the decline will be just temporary and expect it to bottom up starting second half this year. Moving on to the cost side. Total operating costs and expenses for the second quarter decreased by 60% year-over-year to RMB 1.04 billion. Excluding share-based compensation, total operating costs and expenses decreased by 4% year-over-year to RMB 892 million in the quarter. Cost of revenues increased by 22% to RMB 174 million mainly driven by the headcount increase in second half last year, especially for security-related staff, as well as higher server and bandwidth costs. Our gross margin remains stable at 84%, same as last quarter. Sales and marketing expenses decreased by 25% year-over-year to RMB 400 million in the quarter. due to the decline in customer acquisition costs resulting from the reduced marketing activities. But meanwhile, our quarterly MAU held up at a healthy level, quarter over quarter up by 5%. R&D expenses increased by 23% year over year to RMB $308 million as we continue to invest in hiring R&D-related talents, G&A expenses decreased by 90% to RMB 160 million, which was mainly attributable to the one-off share-based compensation expenses related to the issuance of Class B ordinary shares to TechWolf Limited. Recorded in the second quarter of 2021, Excluding share-based compensation expenses, our G&A expenses increased by 34% year-over-year, resulting from the increased headcount. Looking ahead for our overall headcount budget, with the reopen of user registration and gradual recovery of recruiting industry, we are confident on our future business growth and will continue to invest in critical areas like algorithm engineers and high-profile product managers, with other personnel-related costs showing more operating leverage. Having said above, at the same time, we will pay attention to our overall HR efficiency. Despite the decrease in revenue, we achieved a net income for RMB $107 million. compared with a net loss of RMB 1.41 billion for the same period last year. Excluding share based compensation, our adjusted net income for the quarter was RMB 257 million, representing an adjusted net margin of 23%. Once again, proved the resilience of our business model. The net cash generated from operating activities was RMB 187 million for this quarter. As of June 30, 2022, our cash, cash equivalents and short-term investments increased to RMB 13 billion, 1.3 billion, which will support our sustainable growth in the long term. Before we go into the outlook For the next quarter, I would like to take some time to discuss the difference between our cash revenue and GAAP revenue. Being a SaaS-like enterprise service, our business nature is to receive cash payment before starting our service, while GAAP revenue will be recognized later on a crew basis. As a result, management view cash collections as a main operating metrics and reflect company's growth momentum in a timely manner following our user growth. So for the third quarter, we expect our total cash collections to be around RMB 1.3 billion, or 1.22 billion as calculated cash billions, which is after business tax. We expect this cash This cash collection and calculated cash billions with a 25% sequential quarter over quarter growth and back to the same level with the third quarter last year. Our gap revenue affected by the lower cash collection from previous four quarters is estimated to be between RMB 1.15 billion to RMB 1.8 billion. A slight year-on-year decrease of 5.9% to 4.3%. Lastly, we are pleased to be back on track with our user growth being as key business driver. We expect the good trends we witnessed recently to continue in following quarters this year. No matter how the external environment changes, we believe that our superior user experience and efficient business model will drive the continued growth of our user scale and further strengthen our monetization capabilities. We are confident in our long-term development. With that concludes our prepared remarks. Now we would like to answer questions. Operator, please go ahead.

Thank you. As a reminder, to ask a question, you will need to press star 1 1 on your telephone and wait for your name to be announced. Once again, if you wish to ask a question, please slowly press star 1 1. Just one moment while we compile the Q&A queue. We will now take the next question, the first question. Please stand by. And it comes from the line of Timothy from Goldman Sachs. Please go ahead. Your line is open.

Okay, thank you for accepting my question. I have two questions for the management team. The first question is, please share with the management team our focus for the next half of the year on corporate goods and sales strategy, as well as the trend of sales cost and goods speed. The second is, I would like to ask how to see the future of live recruitment in the early stage and early stage. Thank you, Benjamin, for taking my question. I have two questions. First question will be on sales marketing expenses in the second half this year. Benjamin shared our strategy in how to acquire and acquire customers and what is our strategic focus in customer acquisition. And how should we look at the social market expenses versus the pace of customer acquisition in the second half? And secondly, it's about live streaming recruitment. Could Madeline share some outlook or some thoughts about how live streaming can play a role in the recruitment industry, especially in the entry-level white collar and blue collar? And how is our live streaming different from other platforms in terms of the format or monetization? Thank you.

Thank you for your question. In the second half of the year, I don't think we will spend too much money on customers. Because we have new users since the end of June this year. So we have about 25 million complete users in the second half of the year. We should be able to achieve this pursuit under normal market spending. In terms of income, I think it is also a gradual process of recovery. Because there are no new customers for a year, so some new customers come in in July and August. I think this also requires a recovery process, so we also feel that we can achieve the market expectations. We should still be able to achieve it, but I don't think we will do anything particularly expensive. Buying income, buying users, this kind of thing will not be done. This is a question. Another one is that you are concerned about the view of the first-tier white-collar and blue-collar live recruitment. I have never said my opinion in public before. Then I will talk about it today. I think it is essentially a one-to-many mode. This one is the recruitment method. This one is the recruitment method. This essence is in the position release. That's how it is in the WEB era. It is a position. But it is a progress. Why? Because it can show more features of the brand. And there are some selective interactions. Customers can also ask some questions. But in general, I think it is a one-to-many model. Then from a specific position and a specific brand. The position is that it may be user-friendly. There are more talents in the supply chain. A specific brand means that this company's brand appeal is still good. So everyone is willing to submit a resume. I think it is effective. However, from the future, I have a bold prediction. I think a recruiter should be more in line with the needs of the recruiter for this kind of communication. It is also more in line with the communication between the recruiter and the recruiter through the recommendation-based technology. It is also more in line with the mutual understanding of each other's wishes. Okay, thank you for your question. Regarding your first question on marketing fences,

First of all, on July, we haven't spent too much or more than June compared with June on marketing expenses. But overall, we are expecting more than 25 million newly verified users in the later half of this year, and we are expecting to achieve that under a normal marketing expense or input. In terms of our revenue, we are seeing gradual recovery. From July and August, we are seeing a better recovery trend. And we are confident that we can meet the market expectation, what we promised in our earnings and what we just discussed. But we will achieve that on very reasonable expenses. we won't spend extra money to buy users or to buy our revenue. And regarding your second question for live streaming on recruitment, on recruiting industry, I have not discussed the matter in detail in the past, but I would like to take your questions now. Because it's actually one person with multiple person pattern, and this pattern has been existing since the web age, and now it increased in the form of live streaming. And on the one versus multiple pattern, the one means the recruiter, and the multiple person means the job seeker. And I believe that will be effective for certain jobs which has a common requirement for people and certain brand which has a very high branding reputation. But I will give you my prediction that in the future, one-on-one communication will be more suitable according to the recruitment industry trend which is the job seeker will be more and more precious and rare in future. And technology based on recommendation will be more used and preferred under that circumstances, which the recruiters and the job seekers need to have a mutual consent and they need to agree on both each other to have a successful hiring. And that's my opinion regarding the live streaming.

OK. So I'll add one point regarding the marketing expenses. Since the resumption of the user registration, most of the time in July, we did not spend extra money, marketing dollars in July, but we achieved very healthy new user registration numbers in July and early August. When we talk most of the time in July, we did not spend actual money, marketing dollars, to spend our money. So we would like to consider the overall efficiency as an important criteria. So our key message is that we would like to spend money wisely, and we won't overspend money in the second half.

Thank you. That's very clear.

Thank you. Once again, as a reminder, if you wish to ask a question, please slowly press star 1 and 1.

We will now take the next question. Please stand by.

And it comes from the line of Wei Sheng from UBS. Please go ahead. Your line is open.

Thank you. Good evening, Mr. Zhao. Thank you for accepting my question. I also have two questions. The first is about the trend after we restart the user growth. Because I think that due to the influence of the current red line, when we restart the user growth, the number of job seekers may be faster than the number of users at the end of the enterprise. Then I would like to ask whether we can see this trend continuing until August. If the red-light environment continues to maintain the softness of the current situation, do we have any strategies to accelerate the growth of corporate users and their paid conversion? Thank you management for taking my questions My first question is around the user growth trends post the resumption of user registration. So it seems like when we first started to resume user growth, the job seeker growth is faster than the enterprise user growth. So have we seen similar trends when we enter into the August month, and what's our strategy to accelerate the growth of enterprise users as well as the conversion of paying users? And second, just on the blue-collar recruitment, What's our near-term and long-term strategy and goals for this business? If we want to achieve a rapid growth in the business for the next few years, what's the contribution from Blue Collar in terms of users and revenue could be? Thank you.

Thank you for your question.

Yes, I think you have analyzed very clearly that after we restore users and register them, it should be faster for C-end users to come back. Your analysis is very accurate. And this phenomenon is indeed as you talked about. In this current situation, there may be fewer people who come out to recruit. I think your analysis is also very accurate. Then based on this question, I will talk about two things. One is that we actually started from July According to the situation in August, the situation of recruiters has recovered. For example, in July, the increase in new positions increased by 15%, and the number of recruiters who issued new positions increased by 23%. That is, people came back first to take a look, and then issued one position, issued two positions. This is a sign of recovery. The other thing is that when there is a problem with the BC ratio on the platform, after all, there is a level of 30-40 million people per month, so we still have room to make some ecological adjustments. Find here and there, try to make more people either satisfied with the income or feel better in the short term. Don't be too anxious. So we can still see that it's not that bad. This is about this question.

Okay. Thank you for your question. About your first question that you are quite smart and sensitive to have noticed that at current state or at the beginning of our user registration opens, the job seekers will coming back sooner. And under current macro environment, there will be relatively less people who want to hire people. But actually, from the trend of July and early August, we have witnessed that the recovery of our enterprise users are quite decent. As we just discussed, the newly posted jobs in July have increased by 15% compared to June, and the enterprise users number who have posted those jobs increased by 23%, which is a clear recovery trend and indicator. And in terms of the relatively higher ratio of job seekers to enterprise users, because we already have a quite large user pool, we are capable to adjust our ecosystem through our technology to make people feel better in terms of both their user experience and their achievements. And that's for your first question.

Then your second question is about if you want to pursue a rapid growth in the year after next year, what proportion should Lanling be in this period? This is a very detailed one. A plan, then I want to answer you, it may be from this perspective. First of all, our current total user size is more than 100 million people. And then in the past 12 months, the number of paid recruiters is about 4 million people. And in this Among the 4 million people, the recruiters of Bailin and the recruiters of Bailin among more than 100 million users are still the majority. So, especially from the point of view of the recruiters who pay about 4 million yuan, the penetration rate of the market in Bailin is very low. It is not a very high penetration rate. So, in fact, we haven't reached the point where we have to rely on Bailin users and the growth of the Bailin industry OK.

For your second question regarding how can we achieve a quick growth recovery for next year and the year after that, and what's the contribution of our blue-collar revenue, that's a quite detailed plan you're asking. I can answer you for this. Currently, we have accumulated users of around 100 million, and our last 12 months paid enterprise customer number is around 10 million. And which is a relatively small portion. And which means that even the white collar users, our paid user penetration rate is still quite low. And we are far from relying on the blue collar revenue to support our growth. So that's not our view on our strategic point. We can see that we still have quite a huge growth potential in terms of white collar users. either more lower tier cities and further penetrate into more diversified industries, and that's my first half answer to your question.

It is still our first priority to be able to purify and manage an ecological environment with the power of the platform. If we over-pursue the number of users before we can optimize, purify and manage an ecological environment, even if we want to make money early, we will inevitably step into a mud pit. In other words, in fact, The users' trust in the Internet platform of Lanling is relatively low. The transparency of the transaction is relatively low. The friction of the transaction is relatively high. We still need to purify the environment first, which is what we will talk about every time. On this basis, let's think about the future.

And about our strategy for the blue-collar growth, first of all, currently we are still focusing on to make our ecosystem better, which is to continue as priority, which is continue to regulate all those blue-collar intermediary agencies before we can pursue a meaningful revenue growth. If we do our monetization too early, we will step into a potential trick, which has been existing in the blue collar industry for quite a long time, where the users have low traps with the platform, and there are a lot of fractions for each transaction. So we need to clear the environment first, and that's what we have been talking for Contra project for so many times. And on the basis of that, we will then grow our revenue. That's my answer. Thank you.

Thank you. We will now take the next question.

And the next question comes from the line of Natalie Wu. Please go ahead. Your line is open.

Good evening. Thank you, Mr. Zhao, Yuzhe, and Wenbei for accepting my question. Congratulations on the performance of our document and the recovery of the evidence. I hope everything will recover as soon as possible. I have two main questions. The first one is to ask about the number of our shareholders. In fact, in the Q2 financial report, we saw that there were 12 months of This is the end of the payment. The 4.1 million in the first quarter has dropped to 3.6 million. I would like to ask how much this drop has to do with the epidemic and how much it has to do with the macroeconomic relationship besides the lockdown in the epidemic. How is the recovery trend of the number of paid recruits? How is the recovery trend of the number of paid recruits? How is the recovery trend of the number of paid recruits? How is the recovery trend of the number of paid recruits? Let me chat with myself briefly. Thank you, Benjamin, for taking my question, and congratulations on the early results and resumption of the user registration. Hope all come back to normal soon. I have two questions. The first one is regarding the 12-month total paid enterprise customer decline, which is the number declined to 3.6 million from 4.1 million in the first quarter. We're just wondering how much of the decline could be attributable to pandemic lockdowns and how much is related with the non-lockdown macro issues, including real estate, religious stuff. Could you also share with us the trend of this metric in June, July, and August so that we can get a better sense? You've mentioned the 15% new position month-over-month growth in July. Just wondering if that's the similar growth for the paid enterprise customer number as well. And my second question is related with the industry mix regarding the current paying enterprise customers. Just wondering which industries you've witnessed with the highest growth recently and the related contribution and also the internet and real estate related paying enterprises customers contribution with the latest number. Thank you.

Okay, so thank you, Natalie, for the question. So I'll answer your first question regarding the paid enterprise users decline. So if you look at the paid enterprise users versus the overall, verified enterprise users, the paying ratio in second quarter showed a little bit decrease. Maybe you understand a little bit as our paying ratio dropped in the quarter, but the real situation was not like that. Basically, our paying ratio with the online I mean the active business users, online enterprise users, that paying ratio was quite stable in the past most of the time. The drop of the second quarter paid enterprise users mainly because of the total online or active business users in second quarter dropped. that the overall paid enterprise customers dropped, that number dropped. In the second quarter, because of the COVID outbreak, some enterprise users, they didn't show up on platform, but meanwhile, Because we were under cybersecurity review and we could not grow our new users, that means no business users can be added onto our platform. So because of that, online business users on our platform dropped. But the paying ratio was relatively stable. That caused the overall paid customers in the second quarter dropped. So I think the main reason should be the COVID outbreak and partially impacted with the new user registration. So that's our situation for the second quarter paid enterprise users drop. After second quarter, starting from June 29th, we were able to grow new users. Around that time, the total active online business users was at the lowest level because in the past nearly four quarters, we could not grow new users. So that means at the beginning of July, online business users, the overall number was at lowest level. So starting from that point, day by day, week by week, we witnessed the business user growth. So especially after middle of July, we see acceleration of business users. And in the first two weeks of August, we see further accelerated growth. So that means, as base of our paid enterprise users, as I just mentioned, the overall paying ratio is quite stable. And along with the increase of online or active business users' growth, So our paid enterprise users, starting from July and August, grow as well. And that trend was quite healthy recently. So we are very confident that in next quarter, and even in the following quarter, we would like to see the trends to continue. And that can help to let us

Achieve a better revenue growth in the in probably like a third quarter and even fourth quarter So that's the the situation of the business side of growth recently Hi Natalie, well, what we're done is the other one is just a song you will pay for the King Kong kind of a short beat on the King Kong dropping down the King Kong the highest on the you go you go drunk on children you live up to The recovery growth in the field of Internet technology is consistent with the growth of the entire market. The recovery of the blue-collar industry is very rapid, including the city service industry, production, manufacturing, logistics, etc. The key word for recovery is rapid. The city service industry is also worth paying attention to. I will answer your second question regarding the recovery trend in different industries.

First of all, for the whole internet sector, the recovery trend is in line with our overall growth. And we have witnessed much faster recovery pace for the blue-collar users, like manufacturing sector, like logistics, and especially for urban service sector, which is worth focusing on. because we have a certainly large portion of blue-collar users in the urban service sector. And we saw that the momentum has accumulated in this sub-sector is quite healthy and will continue to help our ecosystem to expand. 然后一些新兴的行业,像新能源,包括新能源汽车,然后像医疗健康, And some other emerging industries, like new energy, like electronic vehicle, like health care, and high-end electronic manufacturing, we have witnessed better growth. And for a traditional industry, we can use the word recovery, like real estate and the consumer. So that's our view in the industry trend of the enterprise customer side.

And that's all.

Thank you. Please go ahead. We'll now take the next question. One moment, please. And it comes from the line of Tian Hou from TH Capital. Please go ahead. Your line is open.

Hi, Phil. Hello. I would like to ask a question about the red line. I see that the recruitment industry is closely related to the overall red line. There are B-end and C-end on our platform. Payment is at B-end, but the subject of payment should be two-sided service. Now there is this imbalance between C-end and B-end. So it's a Much more a bigger picture question. You know, when we look at the market, so the job market is much more related to the cycle of the economy. And if we look at today, it's economies in the downturn. And we have this business-to-consumer ratio is imbalanced. So at this point, beyond finding a job for the job seeker and give them comfort, I wonder what else company can do to add value to those job seekers' life. And does the company have any plan for some kind of a business expansion? Thank you. That's the question.

Thank you for your question. I would like to talk about one thing that our company believes in. We use the power of scientific technology to serve human development. Now we focus on human professional development. This is what thousands of people believe in. This is also our focus.

Thank you for your question. I would like to expand to you for something we have firm belief in, which is to utilize the power of technology to solve the development of human beings. And currently, we are focusing on the career development of people, and that's what 5,000 employees of people are doing.

Although the technical strength and technical investment is relatively large, it is still limited. We are still willing to concentrate our time, energy, and attention to help those who need it to solve their needs. In fact, we still have a lot of things to do. For example, the 1076 million new graduates this year are the same as all the new graduates who have just graduated. Many people actually don't know or have no reason to know what kind of industry they want to do, what kind of role they want to take. This is a reality. What should we do about this? I think we should use our technical strength to adjust, for example, their profession, their demand, their region, and the relationship between the recruiters. In this process, And at current stage, even though we have a very large team and heavily invested,

technology, but we still need to focus our capabilities. And that is to help the job seekers to resolve the most critical things of their job seeking. And we still have a lot of things to do on that front. For the graduate, 10.76 million fresh graduates this year, majority of them doesn't know what they do or what they can do, what industry they need to try for. and that's the reality. So we are utilizing all of our technology power to better match their potential sectors, potential personal skills, and in terms of their area, in terms of their social relationships, and et cetera. Within where they are viewing all of those potential opportunities on our platform, we will help them to figure out the best kind kind of drugs that are suitable for them. And that's the most urgent things we need to fix at present.

Then we will find a way to encourage the recruiter to apply for the job that they are willing to apply for. We also find a way to encourage the recruiter to apply for, for example, some secondary level, some particularly serious areas like Beijing, Shanghai, Jilin, And we have tried to encourage the recruiters to

posting jobs which are available for fresh graduates and encouraging recruiters to post jobs in those areas with severe COVID-19 outbreak like Beijing, Shanghai, and Jilin. And how we achieve that is we try to turn many of the job postings into free jobs for those areas to increase the job supply and that can substantially help the job seekers.

We also try to subsidize through our operating through our products.

For example, we find some volunteering experienced professionals to guide those fresh graduates to find out what they can do.

So you are talking about increasing the value of the user, and we will work in this direction, but we should not think about how to increase their income in a short time. This may be a clue. Until one day, if we find that And that's how we can improve our value to job seekers. But currently, we're still on an operating basis.

cannot substantially increase our revenue, but we are continuing exploring that. Maybe until some day, with more capability and more certainty, we can help job seekers to secure a job. And by that time, we might be able to achieve some revenue from the job seekers. But that's not at the current stage. We are still exploring.

At this time, I will turn the conference back to Wenbei for any additional or closing remarks.

That does conclude the conference for today.

Thank you for participating. You may all disconnect.

That does conclude the conference for today.

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