Fangdd Network Group Ltd.

Ladies and gentlemen, thank you for standing by and welcome to FANGDT Network Group Limited's second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, we will have a question and answer session. Please note that this event is being recorded. I'd now like to hand the conference over to your speaker host today, Ms. Linda Lee, the company's Director of Capital Markets. Please go ahead, Linda.

Thank you, operator. Hello, everyone, and thank you for all joining us on today's call. The company has announced its second quarter 2021 financial results today. An earnings release is now available on the company's IR website. Today, you will hear from our co-CEO, Mr. Xi Zheng, who will start the call with an overview of the current industry dynamics and the details of our development strategies in the quarter. Afterwards, our CFO, Mr. will go over our financials before we open up the call for questions. Our management team will deliver your remarks in Chinese and I will provide English translations. Before we continue, I would like to refer you to our safe harbor statement in our earnings price which applies to this call, and we will be making forward-looking statements. Please also note that we will discuss non-GAAP measures today, which are more closely explained and reconciled to the most comparable measures reported under the generally accepted accounting principles in our earnings release and the filings with the SEC. With that, I will now turn the call over to our co-CEO, Mr. Cesar. Please go ahead, sir.

Hello, everyone. Welcome to the second quarter of 2021. First of all, let's talk about the changes and opportunities of the industry in the second quarter of 2021. First, real estate sales are gradually weakening, plus the tightening of financing, and the housing market is actively seeking refunds. According to statistics, in 2021, China's real estate sales in the second quarter of 2021 were 5.4 trillion yuan, with a growth of 17.2 billion yuan. Under the influence of the regulation policy and the tightening of the mortgage, the rate of the second quarter dropped by 70% in the first quarter. After the launch of the real estate loan centering system, the banks tightened the real estate loan. Under the pressure of the sale gradually turning into financing tightening and debt centering down, the real estate needs to speed up sales. The second aspect is that the real estate market is waiting for the long-term development of real estate to be digitized. Digital marketing is a major focus. The current competition between real estate companies has led to a decline in profits. Real estate companies are gradually paying attention to digital transformation to increase efficiency. However, due to the rapid growth of digitalization, The transformation is large, the chain is long, and there are many scenarios. The digital transformation needs to be found in the short term to see the results. So from the sales performance, many companies will use marketing as a very important factor in the digital transformation. According to the data from Columbia, the defense of the 50 wall has now been invested in of the digital marketing platform. In 2018, only 24% of real estate companies made such a mistake. Thirdly, the age when real estate trading service platforms compete with each other will gradually pass, and the efficiency competition between platforms will become a trend. Trading platforms in the past, through low-cost competitive strategies, will gradually fail due to the control of developers. We estimate that the market will enter a stable period of development. The technology capability and operational efficiency of the trading platform will become the key to competitiveness. Since then, VendorDuo has actively responded to the policy of national rent-free. It has always adhered to neutral market views and promoted the development of good health in the industry. The change in the policy of real estate industry in the second quarter of 2021 is a new trend in digitalization. The company has also launched a second start-up competition to upgrade the company's mission to make asset trading more efficient, and to make the user experience more beautiful. The company's vision is to serve 100,000 buildings, millions of businesses, and tens of thousands of families, and to become a multi-billion-dollar digital trading platform that customers trust. In the second quarter, the company will continue to surround a platform and three core business strategic layout to develop and manage. In terms of business platform, The second quarter, the platform recruited 250,000 managers, In terms of the three businesses, the first point is to look at the new housing distribution business. In the new housing distribution business, we have strengthened the control over housing resources and continued to optimize the profitability. In the second quarter, on the one hand, we pay attention to the scale of the business, and on the other hand, we strive for growth in the quality of collaboration and cooperation. to improve the depth of cooperation with developers, as well as the effective growth of the net profit of the project. On the other hand, through the cooperation of the key business partners for the key project, we achieved the accurate matching of the supply chain finance and the commission with the bank. In the second quarter, We have 18.9 billion RMB in new houses, 16.4 billion RMB growth per quarter, and 15.7% growth. We have 1,930 new house services, 3.6 billion RMB in sales, and 32.1% growth per quarter. Our second business, our cloud-based SaaS business, has built up a operating system and continuously optimized products. The four-point effect of NVP is initially presented. In terms of product optimization,防云SaaS helps developers to strengthen the resource activation ability of free channels through the construction of economic malls through the construction of economic malls through the construction of economic malls through the construction of economic malls through the construction of economic malls through the construction of economic malls through the construction of economic malls through the construction of economic malls and distribute the efficiency of the agent. At the same time, it enriches the data dimension of the management board, and the automatic Q&A of IAM is online, and the implementation of the smart reply, which improves the efficiency and experience of the developer's use of the self-reporting large-scale products. In terms of the four points of NVP, we have implemented the strategy of project benchmarking, and selected the benchmarking as a model for projects such as construction and launch of heavy metal. For example, in June of a certain project of heavy metal, It has delivered 54 projects. The first launch of the project has delivered 78 projects. It has realized the effect of the project's digitalized marketing. At the end of the second quarter, the defense and SaaS business has achieved a revenue of 233 million yuan. Third, in the second-hand defense business, the second-hand defense business is stable and developing. Although affected by the market control of the second-hand house, the second-hand house still plays the advantage of model innovation, achieving a continuous growth in income and profit. In the second quarter, the second-hand house returned 10.6 billion yuan to JNV, achieving a revenue of 40.32 million yuan, a growth of 14.4%. Finally, I would like to share the future prospects and expectations of the second-hand house. In the third quarter, Fangduoduo's new distribution business will insist on playing the advantage of platform efficiency, not making subsidies for scale to promote business development. And we are in the SaaS business, through Fangduoduo's city system, agent system, group of developers, and cooperation, to establish a standard project, hoping to achieve business growth quickly. In terms of second-hand business, we will maintain a stable growth trend, deepening the model of our second-hand platform, and strengthening the business model that we are good at. Due to the current COVID-19 pandemic, business in core cities has had a major impact, and it is expected that the performance of company Q3 will also bring certain uncertainty. I will do the translation.