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spk07: And welcome to data fee third quarter fiscal year 2022 financial highlights and updates conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Annabelle Zhang, the Principal Investor Relations. Thank you, and over to you.
spk06: Thank you so much, Hamid. Good day, everyone, and welcome to DataCity's third quarter fiscal year 2022 financial results conference call. With us today are Fu Liu, founder and chairman of the Board of Directors of Shuhai Beijing, Kathy Sun, Chief Financial Officer, and Annabelle Zhang, the Principal I.O. contact in the U.S. This call is also being webcast from the website. A replay of the call will be available data today, so please refer to the press release for more details. And now allow me to go over the Safe Harbor Statement. Today's discussion may contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that may cause actual results to differ materially from our current expectations. For detailed discussion of these risks and uncertainties, please refer to our latest quarterly report on Form 10Q and other documents filed with the USSEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and we do not undertake any obligation to upgrade or update these statements, except as required under applicable law. In addition, during today's call, Mr. Fu Liu will give the prepared remarks in Chinese first, and a translator will provide conductive translation in English. Other management team members will give their prepared remarks in English. During the Q&A session, we will take questions in both English and Chinese, and the translator will provide conductive translation. All translations are for convenience purposes only in the case of any discrepancies. Management statements in the original language will prevail. With that, I now turn the call over to the Chairman of the Board of Directors of Shuhai Beijing, Mr. Fu Liu.
spk05: Mr. Liu, please go ahead.
spk01: Hello, everyone.
spk02: I am Liu Fu, the founder and director of Shuhai Beijing.
spk04: Good morning, ladies and gentlemen. My name is Bu Liu, and I'm the chairman and founder of DataCity Incorporated. Thank you for joining us for the 2022 Third Quarter Earnings Press Conference. DataCity was incorporated in Nevada in September 2014 and listed on NASDAQ in 2018. Our mission is to become a well-known multinational conglomerate with a mission to provide advanced artificial intelligence technology, including 5G messaging, acoustic intelligence, and digital smart city products and services to institutional and individual customers around the globe.
spk02: First, 5G applications are widely accepted in China, especially since 2022, China's three major suppliers have actively initiated the preparation work of 5G news application commercialization. 5G short-term news related services have been gradually increased in China's market.
spk04: For 5G messaging, with the wide acceptance of 5G adoption in China, especially as China's three major telecom companies have progressively launched preparations for the commercialization of 5G messaging applications since the beginning of 2022, the popularity of 5G messaging-related services in the Chinese market has increased cumulatively.
spk01: In 2021,
spk02: According to a news published by Dow Insights on October 4, 2021, the 5G messaging market size of China is projected to be 300 billion Chinese yuan over the next five to seven years.
spk04: The equivalent in the U.S.
spk05: dollars is 46.54 billion. 作为中国5G消息领域的领先服务提供商, B2C的商业模式建立在为机构客户与个人提供便捷快速, 成本低,质量高效的技术支持的基础上, 帮助他们接触中国市场,
spk02: As a leading service provider in the field of 5G messaging in China, DataSea's business model is based on convenient, fast,
spk04: low-cost, and high-quality technology support for corporate clients to access the terminal market, and we will continue to leverage the first-mover advantage of being in the industry to establish brand awareness and customer loyalty, thereby continuously increasing our market share.
spk02: technology and other industries to develop and provide technical knowledge to the number of business customers. In this season, the number has increased from about 100 to nearly 200. In addition, it is one of the important members of the Department of Industry and Information Technology, the Department of Industry and Information Technology, the Department of Information Technology, the Department of Information Technology, the Department of Information Technology, the Department of Information Technology, the Department of Information Technology,
spk04: The number of enterprise customers licensed to develop 5G messaging and provide technical support in express delivery, catering, tourism, e-commerce, finance, technology, and other industries increased from about 100 to nearly 200 in this quarter. In addition, as a member of 5G messaging working group at the Information and Communication Research Institute of the Ministry of Industry, as well as the leading enterprise in formulation of 5G messaging standards, our company continues to improve its technical prowess and to strengthen its market share and revenue capacity. 首先,
spk02: According to the new research center released by the Chinese Academy of Sciences, the 2021-2025 feasibility research report, by 2025, the Chinese Academy of Sciences equipment market is expected to increase by 15.6% year-on-year, reaching 4.6 billion yuan, combined with 72.3 billion US dollars.
spk04: For the acoustic intelligence business, first of all, according to the feasibility study report on China's acoustic device market 2021 to 2025, released by a new research center, China's acoustic device market is expected to grow at a compound annual growth rate of 15.6% and reach 46 billion Chinese yuan, approximately 7.23 billion US dollars by 2025.
spk02: In industrial planning, Shuhai has issued a joint release of China's first China Life Intellectual Industry Development and Technology Initiative.
spk04: In terms of industrial planning, DataC and the State Key Artificial Intelligence Laboratory at the Chinese Academy of Information and Communications Technology have jointly released China's first white paper on market development and technology application of acoustic intelligence in China. 从产业、技术、应用、趋势、前景等方面,
spk02: This shows that there is great potential and tremendous value in many perspectives.
spk04: Statistic intelligence-related products will become the global mainstream. For core technologies and flagship products, our Acoustic Intelligence COVID-19 Ultrasonic Sterilization product is already in production. Its disinfecting rate is at 99.99%.
spk02: This disinfection rate is the most advanced among the world. During pandemics, such products will bring huge value to our societies.
spk04: thereby allowing DataCity to rapidly improve its capacity in internationalization.
spk02: The development of smart technology products is very rapid, and the company is increasing its technical advantages in the field of overclocking to lead the company's market to acquire and maintain the position of leading high-tech companies.
spk04: In addition, the application fields of acoustic intelligence technology products are very wide, and the company's technical advantages in ultrasonic and infrasound will lead the company's market acquisition and positioning as a leading high-tech company. The company will continue to produce application products such as sound effect agriculture to expel insects and increase production, and sound effect beautification, sound effect refreshing, and other products. 更好利用声学智能,超声波,自身等关键技术,在健康,农业,
spk02: We will make better use of key technologies such as acoustic intelligence, ultrasound, and infrasound to resolve
spk04: market demand in different fields such as healthcare, agriculture, and environmental production, and continue to tap the commercial potential of acoustic intelligence technology, thereby increasing the company's greater revenue and enhance their stronger development of the company and to give greater benefits to shareholders and investors.
spk01: The most important thing is
spk02: In order to speed up the internationalization of brand construction and the internationalization of product sales in the market, the company's company's plan is to say that the company's listed companies in the United States to set up a business fund to realize the life and education of intelligent related superimposed殺菌殺毒產品和超聲波農業產品超聲波美容提神等產品在美國
spk04: More importantly, in order to speed up the building up of an international brand as well as the sale of products in the international market, my company plans to rely on the registered business subsidiary of DataC listed company in the United States to achieve a localized processing and production of acoustic intelligence-related ultrasonic sterilization and antivirus products. as well as ultra-salinate agricultural products and beautification products, as well as like mind-refreshing outer products. We will build a global business structure and fill pilots into the world's largest consumer group, which can change the currently single structure and single source of having our current business income from the Chinese market, thereby improving the ability of the single market to resist the risks brought by changes and impacts such as policies, epidemics, and inflation, and increasing the transparency of the company's market-oriented information.
spk02: In order to effectively achieve the strategic objectives of the company's top-level design, our management has the following plans. Number one.
spk04: strengthen the business operations of acoustic intelligence hardware products in terms of sales design, market management design, supply chain cooperation design, sales and capitalization of acoustic intelligence hardware products in the U.S. market, and to design the ability to enter the global market and reducing the business risk of being in a single Chinese market.
spk02: 积极推广,抢占5G市场 We also actively promote and seize the market share of 5G messaging, develop and upgrade
spk04: a wider range of technology product application layers, formulate and improve the partner market system and partner equity incentives, accelerating the development of market channels and increasing the market revenue by a large margin. We will also strengthen comparative advantage of ours, especially in differentiation strategies by fully matching internal resources and capabilities with external opportunities. We will continue to cooperate with key higher-level technological institutions at home and abroad, stimulate demand through supply-side innovation, and continue to adhere to the growth stage of the industrial lifecycle and expand global sales and localize core products to better meet customer needs.
spk02: Protocol integration will be done through the establishment of production lines to take advantage of the cost advantages of economic scale and scope,
spk04: And we will optimize capital structure and reduce financing costs by using different monetary policies of different countries around the world according to dynamic economic conditions. 与潜在合作伙伴建立战略联盟,以并购或合作的形式实现相互协同。 And establish strategic alliances with potential partners to achieve mutual synergy in the form of mergers and acquisitions or joint ventures.
spk02: And enhance brand awareness through marketing and obtain PCT international patents. and enhance the value of intangible assets.
spk04: We'll maintain customer loyalty by providing excellent customer service, unique service experience, and appropriate transparency and publicity.
spk02: The management has said that the Chinese market has provided a lot of policy support for the development of the action industry, including 5G. The 5G news of the first company and the life and education intelligence business are extremely powerful. At the same time, the global epidemic
spk04: Our management believes that the Chinese market has a lot of policy support for the continuous development of many industries, which are extremely beneficial to my company's 5G messaging and acoustic intelligence business. At the same time, the global pandemic has generated a large amount of global demand for novel coronavirus microbial disinfection and sterilization products. And these products can effectively disinfect and sterilize in ambient air. These are undoubtedly a very important force to promote for the domestic and international market demand for several areas, enhancing the driving force of my company's international market.
spk02: Shuhai Jiangyi. the supply chain drives the supply chain to solve global customer-related problems. Through real-life research and internationalization strategies, long-term preservation in the rapid growth period of industrial life cycle, continuously improve wealth for shareholders, create value for society, and provide convenience to the world, it has become a well-known century-old enterprise.
spk04: With a strong force for such a development of our international scale, DataSea Incorporated will drive the demand side for the supply side and strive to solve the relevant pain points of global customers, maintaining the rapid growth period of the industrial lifecycle for a long time through targeted R&D and internationalization strategies, continuously improve the wealth of shareholders, create value for our society, provide convenience for the world, and finally, become a well-known Thank you, everyone. Before I hand over the phone to my CFO, I would like to have our public relations head to give an overview on the company's important progress in 5G messaging, acoustic intelligence, and other business areas in the third quarter of fiscal year 2022. Thank you.
spk06: Thank you, Mr. Liu, and thank you, Zoe. So, Mr. Liu just discussed data-based business landscape and also long-term development strategies. So I'm going to dive deeper into the recent business developments in the third quarter and address questions investors may be interested under the current environment. So this quarter continues to demonstrate the robust growth in the 5G messaging business and marked a significant inflection point to scale and transform data safe. I'm exploring our continued diversification and also competitiveness building across 5G messaging, acoustic intelligence, and smart city businesses. Behind our recent developments in core business are three business initiatives DataSafe value a lot, which I will give a detailed discussion below. So the first initiative is our products are positioned to be widely applicable, and we use technology to form sustainable competitive advantage. DataSafe firmly believes in using the innovation to provide convenience and choice to customers and commit to staying ahead of the emerging market trends. We keep investing in the RMD and work with the best-in-class research institutes to match our innovative drive. These efforts have been taken into fruition, and you can find our new launches and also upgrades of products in all of the business areas, 5G messaging, acoustic intelligence, and also smart city. In 5G messaging, Tetacy provides solutions designed to meet the marketing needs of all types of companies, regardless of their size and industry. Though we do work with industry-leading companies, we also serve small to medium-sized companies, and that is what differentiates us with our peer competitors. In acoustic intelligence, DataC commits to tap acoustic intelligence for business potential and wield acoustic intelligence across industries in meaningful ways. And this technology can be applied in so many different scenarios, no matter it is health, security, environment, protection, something like that. But that's just the beginning. In this quarter, our cooperation with Campbell on disinfection cabinets and also Shanghai Drayphone on promoting the acoustic intelligence module products in vehicle application scenarios are all examples of wide applications of acoustic intelligence. Though our three business lines may seem convergent, but the synergies they create together can be very impressive. With integrating 5G messaging solutions with a smart city solution, we elevate our smart city solutions and bring in new customers successfully. The second business initiative we value a lot is bringing the fast market movers, but with great execution. So there is this strategic business expansion to 5G messaging and also acoustic intelligence all prove that we can identify great opportunities in the market and grasp them with execution. Till the recent quarter, DataC has been engaged by nearly 200 enterprises in terms of 5G messaging with more than 17.5 million worth of 5G messaging business contracts that have been signed. And it's also awarded as the top 10 enterprises of 5G messaging in 2021 in China. In acoustic intelligence, DataC forges relationships with new clients and partners. not only make progress in sales perspective, but also expand market distribution in domestic and also global markets, including South and also North America. The third business initiative we value a lot is diversified revenue sources and continuous business model improvements. Similar to the importance of diversification to investors, having a diversified product solution can be also used to offset risk and make the company more resilient. Tennessee type into three different business areas, but with great synergies among them and also the underlying technologies. Meanwhile, we provide a combination of software and also hardware solutions, which can have the flexibility to meet with clients of different needs, but also we can serve customers at scale. Tennessee also keeps improving our business model, which now includes not only an expansion of the sales team for direct sales, but also we build partner and broker modes like the joint marketing mode and also the enterprise key customer project cooperation mode so that we can leverage ore like resources to generate recurring revenues and improve the profit margin. Last, I'd like to address some questions that we have been asked a lot by the investors recently. So we understand that investors are very worried about the inflation raising costs and also economic growth. So data seems to focus on the improvements of our own business fundamentals. Our business is also not sensitive to the current waning factors. Investors may worry, but we do keep tracking of the macro economy and its influence on our business. As our business is mainly operated in China, the inflation problem is quite different. And we don't see it as a significant challenge to our business. China's factory gate inflation is to a one-year low in April as the state-driven production efforts supported by supply and also COVID-19 lockdowns giving policymakers more room for the stimulus to show up the economy. So in terms of the company's supply chain and also cost, So far, we haven't seen any significant challenge arising from these areas. But yeah, for example, like DataSys, a good intention business is operated in Shenzhen. So during COVID, Shenzhen adopted a daily COVID testing and a closed loop management model. So to ensure that company's production and also supply chain safety. As the Shenzhen has nearly zero case, we don't expect the delayed production of rise of cost anytime soon. So finally, the external environment may even feel the growth of our certain business. For example, our 5G messaging solutions provide clients with efficiency to convert their clients to in-detail and in-scale and also nurture buying relationships and attractive pricing. And also our ultrasonic sound sterilization and also antivirus equipment, which can also benefit from the COVID-spark sterilization equipment market world. So in a nutshell, the management team do believe that our business development is on track and is supported by a strong product portfolio. Moving forward, underpinned by momentum from increased customer wins, leadership expansion, great synergy effects among the business lines, and strong business resilience, Deficit is well positioned for future growth. So now I will turn the call to Casey, who will walk you through the details of the financial results. Casey, please go ahead.
spk03: Good morning, everyone. My name is Cassie Sun, and I am the CFO of DataCene. It's my pleasure to discuss the Q3 financial highlights. We had a revenue of $16.29 million for the nine months ended March 31, 2022, which shows a 10,555% increase by comparing with the same period of last fiscal year. The increase in revenues was mainly due to the expansion of the company's business towards 5G messaging in fiscal year 2021, especially 5G SMS integrated 5G IMMCP and the 5G multimedia video messaging technology system. On top of that, blue-chip customers are accumulated. Exponently, business model was well-proven. and a strong cash flow was generated. As a result, the net income turned positive first time ever in the most recent three months' period. At present, the company has completed the new strategic positioning and business layout by 2022, forming three main businesses and long-term development plans in 5G messaging, acoustic intelligence, and smart cities. According to the plane, in 2022, with the introduction of acoustic intelligent hardware products and solutions into the market, and the comprehensive commercialization of China's 5G messaging services in the Chinese market, The company has signed service agreements with mobile operators and the development of 5G messaging applications by leading companies in express delivery, catering, medical, and the tourism industries. More than $17.05 million worth of 5G messaging business contracts have been signed. DataSea established the leadership position in the acoustic intelligence industry globally by advanced innovation and resource allocation. Ever since the white paper was jointly released with the partnership of the top higher R&D institutions, new products on sterilization, agriculture, environmental protection, and sound security are successfully published to market for meeting clients' demands precisely. In order to diversify the portfolio while establishing a world-class branding, the international strategy is instituting which included design, innovation, supply chain management, marketing, sales, and capitalization in the United States. The total revenue of $16.29 million was generated for the nine months ended March 31, 2022, which shows a 10,555% increase by comparing with the same period of last fiscal year. The increase in revenue for the nine months ended March 31, 2022, was mainly due to the expansion of 5G messaging business. consisting of 5G message with amount of $15 million, including $11 million from 5G SMS, $3 million from 5G IMMCP mobile project on the cloud, $1.1 million from advertising service, and $36K from smart city project. the company's three major business lines have started a full operation. From July to March 2022, the overall growth profit margin was 5.51%, including 5.43% for 5G SMS. The company's smart city business continues to develop as the top three tech, James China Mobile and China Tally, called subsidiary. As the company proceeds into the later stage of the 5G messaging business, three factors will help equip the company with more flexibility in pricing and improving the growth margin. Costs will be reduced by economic scale over a large number of customers' basis and the increase of production. By adopting differentiation strategy, growing brand recognition and customer loyalty will strengthen the company's pricing power. After the commercialization of 5G messaging in the Chinese market expected in the second quarter of 2022, the target customers and the perfect forms will be expanded. For example, the company will provide the 5G IMMCP as SaaS, software, customization, and value-added service to improve profit margins. As of March 31, 2022, accounts receivable is $5.5 million and accounts payable is $4.8 million. The amount of accounts payable is approximately the same as accounts receivable, which means the rate average of cost of capital is the optimal level for financing current assets and the maturity matching of short-term debt is perfectly achieved. Going forward, the company will continue to improve the market expansion of its main business based on existing contracts including smart campers, carton systems, smart community systems, 5G messaging, and the market launch of acoustic smart hardware products. The company's objective is to expand our revenue streams and achieve annual profit in the new fiscal year. Okay, that's all. And Bella Zhang.
spk06: Okay, thank you, Kathy. And now we can start the Q&A session. And like investors, you are always welcome to submit your questions. And now I can see one question about the revenue. So I repeat the question from Robin. A question of revenue. So this quarter revenue is impressive year on year, but declined compared to the last quarter. So can you explain why? Feel free to answer the question directly, or Zoe can translate for you. You can answer in Chinese, whatever way you want.
spk03: The reason the revenue increased rapidly is because the investment on R&D for providing a wide range of products to solve the problems of the customer needs. Also, the high gross artificial intelligence adoption penetration rate creates a tremendous demand for 5G messaging. In addition, the company's market strategy is effectively and efficiently for reaching the target customers from different industries. Even more, the brand recognition with strong customer loyalty increases It is so helpful to retain all the customers meanwhile developing the new market across the country.
spk06: Okay, thank you, Cathy. I think the second part of the question is the revenue decline compared to the last quarter. So can you explain why?
spk03: Thank you. 我说中文吧,然后你给翻译一下。 这个应该就是一个季节性的,就是我们的Q3的时候比Q2的时候的这个可能短信收入可能稍微少了一些。 但是这就是一个季节性的,没有什么其他特殊的原因,因为总体上来说我们的客户还是在增加的。
spk04: So this is pretty much seasonal. For Q3, compared to Q2, Q3 has less short-term income, but there's like nothing, there's no special reason behind it. The number of our customers and clients are still increasing. So it's just seasonal.
spk06: Okay, thank you. So, Hemant, are we running out of time? Because I think we're approaching the end of the schedule, right?
spk07: So, should we announce for the questions?
spk06: Yeah, I think we're good for the Q&A session. And also, yeah, we can do the ending remarks.
spk07: Okay, great. Thank you. So ladies and gentlemen, since there are no questions as of now, I'm going to hand it over the call back to Annabel Zhang for closing remarks. Thank you.
spk06: Okay. Thank you all for joining the call and we really appreciate your time. And whenever you have questions, you can find at the end of the PPT, always listed with our contact details. Feel free to reach out. We're happy to address any questions you may have. And see you next caller. And thank you for tuning in today. Thank you. Have a nice day.
spk07: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
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