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spk04: Ladies and gentlemen, thank you for standing by and welcome to the Conjon Limited Third Quarter 2023 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.
spk02: Thank you, operator. Good evening and good morning, everyone. Welcome to our third quarter 2023 earnings conference call. Joining me today are our founder, chairman, and the CEO, Mr. Jonathan Peng Zhao, and our director and CFO, Mr. Phil Yu Zhang. 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 cautions 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-debt financial measures for comparison purpose only. For a definition of non-debt financial measures and the reconciliation of debt to non-debt 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 ir.gping.com. With that, I will now turn the call to Jonathan, our founder, chairman, and the CEO.
spk10: Hello, everyone.
spk09: Welcome to our company's 3D performance launch in 2023. Hello everyone, welcome to our third quarter 2023 earnings conference call.
spk02: On behalf of the company and our employees, management team and board of directors, I would like to express our sincere gratitude to our users and investors who trust and support us.
spk09: First, let me introduce the performance of the third quarter. The income of the third quarter company GAAP is 16.1 billion yuan, which increased by 36.3% in total. The income of the third quarter company GAAP is 16.4 billion yuan, which increased by 32.1% in total. The net profit after adjustment, which is the net profit after deducting the interest rate,
spk10: First, I would like to share with you our performance for the third quarter of 2023.
spk02: We recorded gas revenue of RMB 1.61 billion for this quarter, up 36.3% year-on-year. We booked RMB 1.64 billion in calculated cash billings. up 32.1% year-on-year. Our adjusted net income, which excluded share-based compensation expenses, increased by 89.6% year-on-year to RMB 710 million.
spk09: If we do not consider other benefits such as finance, the company's adjusted operating profit is 5.5 billion yuan. Since the establishment of the company,
spk02: Our adjusted operating income, which excludes other incomes such as financing returns, was RMB 550 million, hitting a quarterly record high in terms of both absolute amount and margin.
spk09: Our total paid enterprise customers in the 12 months ended this quarter, reached 4.9 million.
spk02: at 32.4% year-on-year and 8.4% quarter-on-quarter. Both the total paid enterprise customer number and active user-paying ratio continue to improve.
spk09: In the past quarter, the company's average MAU at the end of the APP reached 44.6 million people, which increased by 37.7%. In the past quarter, the average number of monthly verified active users on the BossGP app reached 44.6 million, up by 37.7% year-on-year, with approximately 12 million newly added Wi-Fi users.
spk02: Our total accumulated newly verified users for the past three quarters of this year exceeded 40 million.
spk09: Last November, we predicted that within the next three years, our company will have 100 million new users. At present, this prediction is promising. During our third quarter 2022 earnings call in late November last year,
spk02: we forecasted that the company will add 100 million newly verified users in the next three years, which seems to be expected at this moment. At the same time, our user activities, which is average DAU as percentage of average MAU, remain stable at a relatively high level. In the third quarter, there are more than 135 million monthly average number of mutual achievements on the platform,
spk09: The third quarter is a traditional recruitment period. We can see that the recruitment demand has been increasing in the third quarter. While the number of recruiters has remained stable, the number of recruiters and companies have increased significantly. The growth of the number of recruiters has exceeded 5% and has reached a historical high.
spk02: Third quarter is the traditional peak season for job seeking and recruitment. We witnessed a continuous increase in recruitment demand. While the number of average monthly active job seekers remains stable, the average number of monthly active enterprise users and monthly active enterprise increased significantly by more than 5% sequentially, both reaching record highs.
spk09: In terms of industry breakdown, the blue-collar industry delivers the most outstanding performance, especially the blue-collar urban service sector.
spk02: which was the largest segment contributor in the increments of both number of job postings and revenue for this quarter. The average daily active job posting for urban service sector exceeded one million.
spk09: Let's take a look at the blue-collar industry, where two young people have more jobs. The supply and logistics industry Let's take a look at other blue-collar sectors which involve more young job seekers.
spk02: The supply chain logistics and manufacturing industries, especially sub-job categories such as transportation, warehousing, and workers, also boosted overall increase.
spk10: 整体看蓝领的收入占比, 进一步提升至接近35%。 These drivers raised the blue collar industry revenue contribution to nearly 35%.
spk09: and the raw materials related to mechanical manufacturing have increased significantly. The Internet industry as a whole has also increased significantly.
spk02: Other industries such as consumer goods, automobile aftermarket, new energy, Internet lifestyle service, and raw materials related to machinery manufacturing fields also grew very good on a quarter-on-quarter basis. While the overall Internet industry maintained growth momentum
spk10: In contrast to the first half of the year,
spk02: The recovery of demand from larger enterprises increased relatively more quickly in this quarter in terms of the number of newly added and active job positions.
spk09: Enterprises with more than 10,000 employees grew the fastest. both in terms of the number of jobs and income.
spk02: From the city level perspective, second-tier and lower-tier cities continue to outperform, with increase in both the number of job positions and income.
spk09: In terms of the social responsibility of the enterprises, this quarter, we focused on a group of people with difficulties, namely the disabled.
spk02: In terms of corporate social responsibilities, this quarter we focused on and dedicated in helping the employment of a difficult group of people, which is disabled workers.
spk09: BOSS has held a total of 33 public recruitment events. Nearly 5,000 companies have provided more than 11,000 jobs to disabled people and workers. The number of disabled people involved is 42.2 million.
spk02: BuzzJapan provided live broadcasting for 33 public recruitment activities. Nearly 5,000 enterprises provided more than 11,000 positions for disabled jobseekers and covered more than 422,000 participants.
spk09: Another thing is, after approval from the board, the company will send out special cash shares for the first time. This is the first time One more thing to add.
spk02: With the company's board approval, we declared a special cash dividend for the first time. This is a return to our shareholders and friends for their firm support as our profitability continues to be stable and improved.
spk09: The dividend amount is US dollar 0.09 per ordinary share, which is US dollar 0.18 per ABNES.
spk02: for an aggregated dividend amount of approximately US dollar 18 million. This is expected to be distributed in the mid to late December this year.
spk09: That's all for my part of the call. I will now turn it over to our CFO Phil for the review of our financials. Thank you.
spk07: Thanks, Jonathan. Hello, everyone. Now, let me walk you through the details of our financial results of the third quarter of 2023. We achieved a solid financial performance in the past quarter with all key figures meeting our expectations. Our revenues exceeded the high end of our guidance to RMB 1.61 billion in this quarter, representing a solid 36% year-on-year growth and 8% quarter-on-quarter. Our calculated cash billions reached RMB 1.64 billion, up 32% year-on-year and 1% quarter-on-quarter. The good results were mainly due to strong user growth plus healthy user engagement as well as recovering recruitment demand in the quarter. The number of paid enterprise customers for the 12th month ended September 30th, reached another new high to 4.9 million, indicating an improved paying ratio level among active enterprise users. Despite the slight declining of overall ARPPU ARPPU stands for Average Revenue Per Paying User which was mainly dragged down by the increased revenue contribution from small-sized accounts We are happy to see that the ARPPU of key accounts showed sequential growth trend a sign that equipment demand is improving among large enterprises Moving to the cost side, total operating costs and expenses for this quarter were RMB 1.36 billion, up 30% year-on-year. Excluding share-based compensation, our adjusted operating costs and expenses were RMB 1.07 billion. relatively stable with the last quarter and up 22% year-on-year. The quarterly adjusted operating margin hit a record high, improved from 25.7% in the same period last year to 34.2% this quarter, up by 8.5 percentage points year-on-year. This strong profitability once again proved our effective monetization model and the powerful operating leverage. Our cost of revenues increased by 33% year-on-year to RMB 268 in this quarter, representing a gross margin of 83.3%, up by 1.5 percentage points quarter-on-quarter. Our gross margin bottomed out from the first quarter this year and achieved a sequential improvement in the past two quarters, mainly due to the recovery of revenue growth momentum on top of an effective cost control. Our sales and marketing expenses were only 457 million, up 15% year-on-year. adjusted sales and marketing expenses was RMB 389 million, up 10% year-on-year. And this increase was primarily due to increased sales employee-related expenses and enhanced advertising activity. Notably, ratio of selling and marketing expenses continue to decline, while our training 12-month paid enterprise customers and MAU continue to grow, once again showcase our enhanced marketing efficiency and our superior economy of scale. Our R&D expenses in this quarter increased by 43% year-on-year to R&D $414 million. And our adjusted R&D expenses was R&D 306 million, up 39% year-on-year, primarily due to our further investment in talent and technology development, especially in areas related to AI technology. Our G&A expenses increased by 41% year-on-year to R&D 219 million, in this quarter and adjusted G&A expenses remained relatively stable with the same period last year. Our net income was RMB $426 million this quarter, more than double that in the same quarter last year. and our adjusted net income set a new record and reached RMB 740 million, translating to an adjusted net margin of 44%, up 12 percentage points year-on-year. Net cash provided by operating activities grew by 122% year-on-year to RMB $813 million for this quarter, mainly contributed by increased cash collection from operations. As of September 30, 2023, our cash, cash equivalents, time deposits, and short-term investments were RMB $12.8 billion, and long-term investments in wealth management products were RMB $2.3 billion which totaled as RMB 15.1 billion. Supported by our ample cash reserve and outstanding cash generation capability, we will try our best to deliver sustainable returns to our shareholders. And now for our business outlook. For the fourth quarter of 2023, we expect our total revenues to be between RMB 1.51 billion and RMB 1.55 billion, a year-on-year increase of 40% to 43%. Based on our current progress, we expect the cash billions in Q4 to continue to grow sequentially, mainly due to key accounts contributions. With that, that concludes our prepared remarks. Now we would like to answer questions. Operator, please go ahead.
spk04: Thank you. If you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then 2. If you are on a speakerphone, please pick up the handset to ask your question. Your first question will come from Eddie Wong of Morgan Stanley. Please go ahead.
spk08: Hi, Mr. Zhao. Good evening. Thank you very much for accepting my question. First of all, I would like to congratulate you on your very strong three-level performance. I have two questions for you. The first one is that, as Mr. Zhao mentioned before, the employment market in the third quarter is actually not bad. I would like to ask, if we look at October and November, what is the trend of the entire employment market? In addition, is the relationship between the employer and the recruiter continuing to improve? And as you mentioned before, Thank you, management, for taking my question. My first question is regarding the job market trend in the third quarter and in the fourth quarter so far. Have you seen any, you know, continued improving in terms of the supply-demand dynamic between the job seekers and the employers and what have you seen of the recovery of the KA employers in the third quarter and so far? And the second question is the special dividend we have just announced. What have you considered to announce this special dividend plan at this time? And is there any further plan to increase the shareholder return in the future?
spk10: Thank you. Okay, thank you for your question.
spk09: The first question is, in November and November, we saw that the recovery of the recruitment demand is still continuing. This is a certain observation. But there is a difference. Because every year, 3Q is still relatively forgotten. We know that gold, silver, silver, silver, gold, wine, silver, stone. But in fact, this year we see that the third quarter is a quarter that is relatively forgotten. After entering the fourth quarter, it is the same as every year. Traditionally, there is a little decline. There was a little decline in November. But in general, this trend is okay.
spk02: Thank you for your question. Regarding your first question, the recruitment market trend in October and November, we observed that the recruitment demand is still continuing to recover. And that's a very good observation. A little bit different is that for the third quarter, it's traditionally the high season. for recruitment. That's what we call golden September and the silver October. This year, the third quarter is especially good. So for the fourth quarter, traditionally, scenario-wise, there will be some fallback for the recruitment demand. But the overall trend, if you take into the consideration of scenario-team, is still quite good.
spk09: And then, you are concerned about the recovery of the recruitment demand of large enterprises. Let me give you a brief introduction. In fact, there are two sides to this. On the one hand, in the second half of the year, the motivation of big companies to hire people is getting stronger. Their motivation to get jobs is getting stronger. This is a process. It's like this in the process. But it takes time because they wake up relatively late. And regarding the recovery of larger companies,
spk02: We observed that their job postings, their motivation to post more jobs has been increasing, but this is only a progress. They need to take some time to fully recover. As we introduced before, smaller companies, especially very tiny companies, they recovered much earlier, faster, and still maintained a very good trend even at this stage. For the larger companies, they are on the recovery trade recurring paths, but we need to give them some time.
spk09: To add to that, with the recovery of the number of recruiters and the recovery of the position released by major enterprises, in fact, it will provide greater support to the consumer market, because it is easy to understand that a recruiter of a major enterprise will have a greater number of positions and varieties. And one more point to add, with the recovery of the number of recruiters and job postings from the larger companies, the support to the job market will be even bigger because
spk02: for one single recruiters in larger companies, they can bring more numbers of job postings and more categories of jobs, which also means they can recruit more headcounts for one single job posting. And that's something we are expecting.
spk09: Then I will introduce the situation in October and November that you are concerned about. And we also want to emphasize that for the third quarter, average monthly active recruiters, number of average month active recruiters reached a historical high.
spk02: which is a very clear sign that the overall demand is recovering.
spk09: The second question is about the decision we made this time. This decision is actually very simple. The company's development has always been supported by shareholders. The company's development should be shared with our shareholders. Taixi is one of them. This is something that many companies have been doing in the past. So now that we've looked at our actual situation, I think this is a good time to share some of the profits from the company's development with our shareholders, especially the shareholders who have been with the company for a long time. We are very happy about this.
spk02: And for your second question, regarding our considerations of this dividend payment, we, alongside with our development history, we always received very strong support from our shareholders, and we would like to share our results with our shareholders, and one of that is dividend payment. We have saw that from many other companies, and we decided to take that take the talent activity and to share our results with our long-term shareholders, and we are very happy to do that.
spk09: Of course, one of the advantages is that the company now has a very good cash flow. At the same time, from the whole company's point of view, there are more than 1.5 billion cash flows and finances. So this is also something we can
spk02: And also this is under the premises that we have very good and strong operating cash flows and the company now holds over more than RMB 15 billion of cash and related cash management products. And that's why we are very confident to do the dividend payment.
spk09: announced a two-stage stock repurchase plan. Under certain conditions, a large number of stocks were repurchased. We think this is also a way for shareholders and the market to run the company in a broader perspective. We will continue this.
spk02: And also I want to add that we have already announced the two terms of share repurchase program, and we repurchased a very sound amount of shares under certain conditions, and this is a very good method to continue to share our results and return to our shareholders on a broader view, and we will continue to do that.
spk10: That's my answer to your questions. Operator, please proceed to the next one.
spk04: The next question comes from Timothy Dow of Goldman Sachs. Please go ahead.
spk01: In addition, in the B section, what are the special trends in different industries and enterprises in this position release? What can you share with us? And what is our outlook on this aspect? The second question is, I have seen that since this year, including the third quarter, the company has made great progress in the position and the corresponding income. Including what you just mentioned, our income in the third quarter of Lanling has reached a nearly 35% ratio. Thank you, Benjamin, for taking my question and congrats on the very strong result as well as the strong outlook. I have two questions. First, could you imagine share more detailed color regarding the requirement demand for different type of individual users, including blue-collar, white-collar, college students in the third quarter and fourth quarter so far? Besides, on the enterprise side, how did the job posting and paying behavior perform in the third quarter, and what is our outlook for fourth quarter? And my second question is regarding blue collar, because I note that the company has made multiple progress in the blue collar job postings and revenue year to date, including, as you mentioned, third quarter blue collar contributed close to 35% of the revenue. Could management share or elaborate your strategies in further penetrating the blue-collar sector, and what are the potential business models ahead. Thank you.
spk09: Okay, thank you. Thank you, Timothy. In fact, recently, Qube has a relatively high level of security in some industries. For example, in the service industry. The service industry has been recovering very well. It has also brought us a lot of blue-collar also led to the increase in the number of new recruits. I would like to briefly talk about the reasons for this. It's easy to understand. First of all, this kind of face-to-face industry will recover this year and have better conditions compared to last year. The second point is that this kind of service industry has a lot of people who can actually do it. So whether it's in the process of recovering this year, it's a new enterprise, to start a business, or to recover from the previous situation, to add capital and employees. The difficulty is relatively small, but it can bring people the same hope and feeling. Another thing is that this kind of service industry is relatively easy to get consumers. In this year's situation, the situation of the entire service industry is good. In addition, we also see the recovery of transportation, transport, logistics, the car industry, and the energy, chemical, and environmental industries. This is from the recovery of the energy. And we can also look at some numbers. For example, from the activity of the third quarter, Thank you for your question.
spk02: Regarding the first one, yes, we have witnessed some industry has performed relatively good in the third quarter, especially the urban service industry, which brings the increased growth of both enterprise users and revenue for blue collars. The reason behind that is quite easy to understand, because the industries which involve face-to-face communications, has better recovery condition compared to last year. And also, it is quite easy to start a new company or recover from the original hibernate situation. And very few people can provide service in the urban service industries. And so their recovery, the difficulty to recover is relatively low. feelings, the trend, the recovery trend that brought to people has been very good. And also it was very easy to acquire customers and consumers for other service industry, so this industry is the best one. And other industries performed relatively better are transportation, logistics, automobile, new energy, environment protection, and And also, we'd like to share some numbers. For third quarter, active online job postings, which is a very strict metric, which means the boss needs to be very active in recruiting. So the urban service industry's active online job postings for this quarter grew by more than 13% sequentially, among which the restaurant and the retailing grew more than 20% sequentially.
spk09: Another convincing number is that among the logistics industries, transportation and warehousing in terms of active online job postings grew more than 25% quarter over quarter. In terms of the white-collar industries, one thing a lot of people have already noticed is that
spk02: the new energy and the automobile aftermarket, these two industries will recover relatively very fast.
spk09: Another interesting observation is that it is easy to think that the demand for artificial intelligence will rise significantly at this time. At the same time, we see that relatively common positions in the entire IT industry Another interesting observation is that people might guess jobs related to artificial technology might increase, which is definitely the case.
spk02: And also, more general job positions, such as from development of internet technology also showed significant increase in this quarter.
spk09: I have a number to share with you. If we look at the daily increase of companies with less than 100 employees, that is, the daily new jobs, the three-week and two-week increase is about 3%. But for companies with more than 10,000 employees, the increase is more than 8%. So this shows the difference in this quarter.
spk02: Another interesting number is enterprise with less than 100 employees. The daily average newly posted jobs in the third quarter compared to last quarter increased by around 3%. While in an enterprise with more than 10,000 people, their average daily newly added jobs increase more than 8%, which also shows the difference in this quarter.
spk09: This is the answer to our first question. Your second question is about the strategy and business model that we have further infiltrated into the Lanling market. Actually, we are quite satisfied with the services provided by our company in terms of the penetration and speed of the entire Lanling market, as well as the MPS of the users. We are not aggressive enough to strengthen the penetration in the Lanling field.
spk02: Regarding your second question for our further penetration strategy and the monetization model in blue-collar market, the answer is that in terms of our current penetration coverage in blue-collar users and the user satisfaction rate, which is MPS scores, we are quite satisfied with current situation. And we doesn't have any more aggressive plans to accelerate this process?
spk09: Actually, we have a plan to improve our user service level in the Lanling field. For example, we want to further explore the way we can improve the service capability of our customers in Lanling for more manufacturers and recruiters.
spk02: But also, we are continuously exploring the service capability to the blue-collar users. For example, in the manufacturing sector, we are exploring the closed-loop service to provide for the manufacturing sector users. And that's my answer to your question.
spk10: And operator, let's proceed to next question.
spk04: The next question comes from Wei Zong of UBS. Please go ahead.
spk03: The old recruitment platform is actually growing slowly, and the new recruiters are actually progressing relatively slowly. In contrast, our dragon's head effect can be more prominent. So looking forward to next year, what are our further judgments about this competitive pattern? The second question I would like to ask is, in the past few months, what is the trend of the overall payback rate and ARPU on our platform? Especially for large enterprises, as we mentioned earlier, the recruitment demand has recently recovered relatively significantly. I would like to ask what the ARPU growth of large enterprises is like. Thank you, management, for taking my question. My first question is regarding the competition landscape. So given the uncertain macro situation and the market conditions, is it the case that the existing recruiting platforms lack the growth potential while the new entrance seems to make slow progress, which makes our market leadership even more stronger? Looking into next year, how do we expect the competitive landscape to change in the online recruiting market? And second, could management share more color on the paying ratio as well as ARPU trend on our platform, especially on the KA side, how is the ARPU growth trending recently? Thank you.
spk09: OK. In terms of competition, in general, the existing players are players recruited by the domestic network. Our judgment is that the competition is basically in a stable state. There are no obvious changes in the 3D degree. In the past two years, everyone has been facing some difficulties and pressure in the business. So, I think that the advantages of each company have been clearly demonstrated in recent seasons. For example, one company has always had the advantage of having more foreign-based services and large-scale group-based services. In fact, this has been clearly demonstrated. Another company Thank you for your question.
spk02: And for the first one about competitive landscape, the overall situation is relatively stable. No clear change in the third quarter. However, in the past two years, due to all kinds of pressure internally or externally, I believe actually every company has quite showed their distinctive advantages. For example, one company, it has very strong advantages state-owned SOE companies and good strategic clients. And we have been seeing increased competitiveness in that front. And for another company, they are good at providing service to mutual high-end talents. And that perspective is also recognized by the market. And I think every enterprise has its unique characteristics and will continue to further enhance that. And that's my answer for the competitive landscape.
spk07: Okay, so regarding you, second question of the R pool trend. So I'd like to comment a little bit. So we announced that in the quarter, we reported 4.9 million for 12 months. paid enterprise customers. So as you probably remember that in second quarter, the trading 12 months paid customers, that number was 4.4 million. So we roughly increased 0.5 million paid enterprise customers. So this growth of paid enterprise customers, I think the main reason is that the overall user growth At this moment, it's still fast. So when a new user comes to our platform, when they want to pay to use our service, most of them, they prefer to purchase or try our service through the self-serve online portal to do the online purchase. So that increases our overall paid enterprise customer number. In terms of the pain ratio we see improved trend for the small size purchase. And we believe that when they are familiar with our service and they love our service, they definitely will use more and we definitely will try to convert them into heavy usage and by the service through our offline contract sales. And so we believe the online and the The active users, the paid active users definitely will continue to grow, and the paying ratio definitely will also be improving. The ARPPU from small-medium-sized enterprises kept at a relatively stable situation in the quarter. the same trend happened with the key accounts. So basically large corporates, their ARTPU also increased, driven by the increasing recruitment demand. But the contribution to our revenue, small size enterprises, they contribute higher, larger revenue to the overall of our business. So basically their smaller R pool blended with a higher R pool, let the overall blended R pool decline a little bit. So basically small size, they maintained a good R pool and the large accounts, their R pool increased. Overall, blended R pool, you know, increased a little bit. This is, you know, the current situation with the powerful mean quarter three.
spk10: And that's all for our answer to your question. Preacher, let's proceed to next question.
spk04: The next question comes from Robin Zhu of Bernstein. Please go ahead.
spk06: Thank you, Mr. Guan. I have two questions. One is, if we look at 2024, I don't know if I can look forward to it, how does Mr. Guan think about the company's plan to increase its investment? Can we discuss the idea of investment? How can we balance the company's growth and profit rate from the target? The second question is, if we look at the current situation of the company and large customers, So how does management think about the magnitude and nature of growth investments for 2024? How does the company plan to balance growth versus margin expansion as we go forward? Second question, thoughts on the state of the hiring market going into 2024, the state of renewal discussions with key accounts going into the next year, and to the extent that possible, if management can share any outlook on 2024 growth and ARPBU growth and retention and so on. Thank you.
spk07: Okay, so I'll answer the first question. So we previously announced that we will achieve 100 million new users in next three years. So basically, according to this year's progress, we are on track. So by the end of October, we achieved 40 million verified new users. So basically, this year, we we would like to have a very good result in terms of the new users' growth. Definitely next year, we will continue our growth for the new users. And when we talk about the user growth, You have witnessed that in the third quarter, we achieved the historical high of our operating margin. Basically, we managed to grow users without spending too much market expenses. Previously, we communicated with our strategy. putting more resources on brand advertisement over traffic acquisition costs. So basically this strategy works well. And so next year, we will further increase new users and we will continue to follow this strategy and we will try our best to find the best balance point between the growth and the profitability. So what I mean is that the roles is a part priority for the company and all the roles come from the, you know, it began from the new user roles and we will, you know, do it, you know, carefully and spend our market expenses carefully.
spk09: In terms of next year's situation, I would say that in November 2022, we expect to get 100 million new users in the next three years. Although we have already made tens of millions by the end of September this year, we will not adjust the plan to increase the number of users. The reason is that It depends on the recovery speed and quality of the entire B-end next year. This way, we can adjust the acquisition and growth of C-end users to achieve a relative balance.
spk02: I will take your second question for the outlook to the next year. I will go back to our forecast by end of November 2022 with 100 million newly verified users. By end of September, we have already achieved 40 million, but we are not planning to change our target at this moment because the reason is that we will based on the recovery trend of the enterprise side of users on its quality and recovery speed to adjust our acquisition for job secret side to achieve a relatively better to better balance the supply and demand.
spk09: So what will happen with B3? I think we are now And in terms of how, in the end, the enterprise side will perform, we don't have the exact forecast at this moment.
spk02: But based on what we have observed this year, that the requirement amount covered every quarter. And we, so we believe, and we sincerely hope that the enterprise side will perform, continue to perform very good next year.
spk09: Recently, the third-party data shows that in the entire Internet recruitment, as well as in the various platforms of online recruitment, According to third-party numbers,
spk02: So you can see that our monthly active users in October has been quite close to number one, and we are already the largest in terms of daily active users. And the usual activities, which is the U.S. percentage of MEIU, we maintain the highest among our peers. And we believe this trend, this growing trend, will continue to maintain.
spk09: At the end of the year, some of the big clients sign a year-end contract. What I see now is that the big clients have a plan for how much they want to make next year, and they have a budget for how much they want to spend. This includes how much they want to spend on the hiring budget. I think this is
spk02: In terms of the large companies renewing their contract by the end of this year, yes, we are expecting the larger companies to spend their budget for next year and sign the contract in the coming months. But still, the fully cover of the common demand for larger companies still need to take some time. And that's our answer to the question. And considering the time constraint, we will take one last question. Operator.
spk04: The next question comes from Yang Bai of CICD. Please go ahead.
spk05: Thank you, Mr. Guan. I have two simple questions. First, we see that the company's profit margin has risen in the past two seasons. What is the expectation of the company's future profit change? Second, I would like to ask about the company's new products and business plans. For example, the development progress on the AI代表模型, internationalization, and other new business. The first is we have seen the company's growth margin has rebounded in the two quarters. What are the company's expectations for future growth margin change? And the second one is could the company give more color on the plans for new products and business, such as the progress of a large language model, globalization, and other new initiatives?
spk07: I'd like to answer the gross margin question. Basically, you said our gross margin bottom out for conservative two quarters. Basically, this gross margin improvement is the result of a faster revenue growth and relatively controlled and stable cost of the business. So in the fourth quarter, so next quarter, we expect due to the seasonality reason Q4 is revenue low quarter. So the gross margin is, you know, would be affected by the lower revenue. So temporarily, the gross margin will contract in Q4. But for 2024, for the next year, because of revenue growth, we expect that the gross margin will return to recovery trajectory. Because of our cost, we will maintain a mild growth, but we probably will have a So that will secure our cross-model to recover, further recover based on this year's base. So this is a cross-model trend.
spk09: In our new business, we have a clear idea that About new initiatives, the first one is we believe that
spk02: And then...
spk09: The investors are very concerned about the field of large-scale models. Since the beginning of this year, we have been continuously investing and paying attention to it. Recently, one of our laboratories is called Nanbei Ge. Nanbei Ge's large-scale model laboratory is one of our laboratories.
spk02: In terms of large-language models, which is a question the investors are concerned a lot, actually, since the beginning of this year, we have made some substantial investment into this area, and we continue to focus on it. One thing worth mentioning is that one of our lab laboratory, Nanbei Ge, recently opened this model, and we have seen a very good result for that.
spk09: This is a 16-bit chart model. It's in the same size. In the model, we looked at the top 10 players in China. That's a system by chat model. Among the same size of open source models, we believe we are among the top 10 players domestically.
spk02: Our strategy is not to roll a bigger, more powerful user-friendly model with others. We still roll this more on the application level.
spk09: That concludes today's question and answer session and today's conference. Thank you for attending today's presentation and you may now disconnect.
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