China Index Holdings Limited

Good day and thank you for standing by. Welcome to the China Index Holdings Limited full year 2021 fourth fiscal quarter earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 on your telephone. please be advised that today's conference is being recorded Thursday, the 24th of March, 2022. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Jessie Yang. Please go ahead.

Thank you, Operator. Hello, everyone, and welcome to China Index Holdings' fourth quarter 2021 earnings conference call. Joining us today to discuss CIH's results are our CEO, Ms. Yu Huang, and Deputy CFO, Ms. Lily Chen. After the prepared remarks, our management will answer your questions. Before we get started, I would like to remind you that during the course of this conference call, we may make forward-looking statements, statements that are not historical facts, including statements about our beliefs and expectations. Forward-looking statements involve inherent risk and uncertainty. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. CIH assumes no obligation to update the forward-looking statements in this conference call and elsewhere. Potential risks and uncertainties include but are not limited to those outlined in our public filings with the SEC, including our Form F-1. Now, I would like to walk you through our fourth quarter 2021 results, after which Ms. Huang will answer your questions for the Q&A session. In the fourth quarter of 2021, CAH reported total revenues of RMB 173.8 million, a decrease of 4.5% from RMB 182 million in the corresponding period of 2020. Revenues from Information and Analytics Services, SAS, were RMB 88.3 million in the fourth quarter, an increase of 3.1% from RMB 85.6 million in the corresponding period of 2020. Revenues from Marketplace Services were RMB 85.5 million in the fourth quarter, a decrease of 11.2% from RMB 96.4 million in the corresponding period of 2020. primarily due to the broad macro environment challenges the industry is facing. Cost of revenues was RMB 28.7 million in the fourth quarter of 2021, a decrease of 13.8 percent from RMB 33.4 million in the corresponding period of 2020, primarily due to the cost-saving actions CIH has taken in response to the broad macro environment challenges. Operating expenses were RMB 49.2 million in the fourth quarter, a decrease of 91.8% from RMB 600.2 million in the corresponding period of 2020. Selling and marketplace expense and marketing expenses were RMB 24.9 million in the fourth quarter, a decrease of 4% from RMB 26 million in the corresponding period of 2020. General and administrative expenses were RMB 24.3% in the fourth quarter, a decrease of 95.8% from RMB 574.2 million in the corresponding period of 2020, primarily due to the bad debt expense of the amounts due from Fung Holdings Limited in 2020 associated with the repayment of the company to the holders of convertible notes on behalf of Fung. Operating income was RMB 95.8 million in the fourth quarter, compared to an operating loss of RMB 451.6 million in the corresponding period of 2020. Income tax expenses were RMB 16.3 million in the fourth quarter, a decrease of 78.5% from RMB 75.5 million in the corresponding period of 2020. Net income was RMB 82.5 million in the fourth quarter, compared to a net loss of 520.6 million in the corresponding period of 2020. For the fiscal year 2021, CAH reported total revenues of RMB 621 million, a decrease of 2.4% from RMB 635.9 million in 2020. Revenues from Information and Analytics Services, SAS, were RMB 311.9 million for 2021, an increase of 2.8% from RMB 303.4 million in 2020, primarily due to an increase in the number of customers. Revenues from marketplace services were RMB 309.1 million in 2021, a decrease of 7.1% from RMB 332.6 million in 2020, primarily due to the broad macro environment challenges the industry was facing. Cost of revenues was RMB 110.1 million for 2021, an increase of 4.3% from RMB 105.5 million in 2020. Operating expenses were RMB 204.1 million for 2021, a decrease of 73.1% from RMB 757.6 million in 2020. Selling and marketing expenses were RMB 113.6 million for 2021, an increase of 1.1% from RMB 112.4 million in 2020. General and administrative expenses were RMB 90.4 million in 2021, a decrease of 86% from RMB 645.1 million in 2020, primarily due to the bad debt expense of the amounts due from funds from FONT in 2020 associated with the repayment of the convertible notes on behalf of FONT. Operating income was RMB 306.8 million for 2021, compared to an operating loss of RMB 227.2 million in 2020. Income tax expenses were RMB 46.5 million in 2021, a decrease of 57.5% from RMB 109.5 million in 2020. Net income was RMB 279.2 million for 2021, compared to a net loss of RMB 318.4 million in 2020. Due to current unstable market conditions, management believes CIH's 2022 Q1 revenue will decrease within 15% from the same quarter last year, while annual revenue is expected to decrease approximately 10% year to year. These estimates represent management's current and preliminary views, which are subject to change. And I would like to thank you for joining us today, and we're now open for questions. Operator, please go ahead.

Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, please press the hash key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Gary Zhao from TL Capital. Please ask your question.