Fangdd Network Group Ltd.

Ladies and gentlemen, thank you for standing by and welcome to FANGDD Network Group Limited's third quarter 2021 earnings 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 turn the conference over to your host speaker today, Ms. Linda Lee, the Company's Director of Capital Markets. Please go ahead, Linda.

Thank you, operator. Hello, everyone, and thank you all for joining us on today's call. The company has announced its third quarter 2021 financial result today, as earnings release is now available on our 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. Jiao Rongpan, will go over our financials before we open up the call for questions. Our management team will deliver their 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 release. which applies to this call, and we will be making looking forward statements. Please also note that we will discuss non-GAAP measures today, which are more thoroughly 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. Xi Zheng. Please go ahead, sir.

China's first-tier cities The sales of second-hand houses fell by 32%. Shenzhen fell by 81%. The market's pessimism has risen. Developers' credit risk has been exposed. In the short term, the launch of dual maintenance and acceleration of real estate at the same time shows that the stable market is expected to remain the focus of the short-term market. The control policy will not be obviously relaxed. Therefore, The real estate market will continue to go down, adding to the overseas debt that developers are about to receive. The risk of credit for developers will be further increased. The second point is that the digital investment of real estate companies is growing historically. The competitive pattern of the market has not yet been formed. The real estate industry relies on the end of the era of high leverage expansion to prevent In the face of a competitive industry environment, digital transformation is a long-term way for most companies to find a long-term solution. According to the data of the media, the digital investment of more than 90% in 2021 has been improved. of which 26% of the real estate income has increased by more than 30%. The digital transformation will still be a focus of real estate investment, but due to the impact of the transformation model, team genes, and talent in many aspects, the digital transformation of the real estate industry is still at an early stage, and the market is not competitive yet. Third, under the background of real estate investment, The new housing distribution market is over-exploited, competition is increasing, and the field of asset service will become a new wave. On July 2, the State Council Office issued an opinion on accelerating the development of protective leaseholds, and proposed non-residential storage houses such as commercial offices, factories, and warehouses that are low-efficiency. It is allowed to be changed to protective leaseholds, support professionalized and scaled-down leaseholds, lease companies, under these backgrounds, The demand of the government, developers and consumers will stimulate the product innovation services provided by real estate, professional operation services, political services, and many other types of service markets. It will form a South China Sea market of real estate services. Under the background of market change, in the third quarter of 2021, many have continued to follow the pace of the government in policy and rules. to actively adapt to the changes in the real estate market and the economic industry, and to properly adjust our strategic direction. We are actively reducing the scale and controlling the risks of new houses, focusing on strategic customers, and quickly exploring the business of asset services. Under the premise of maintaining the efficiency, by adjusting the scale and layout of the business, we can improve the company's stable management At the same time, we continue to explore opportunities for future growth. First of all, we, Vendor's business platform, have strengthened the compliance operation and focus on cost efficiency. On the platform compliance level, we respond to the demand of the country for data security and personal information security. In the third quarter, Vendor has moved all data to Huawei's cloud storage. to the existing products, and to complete the comprehensive management of users and business information. In terms of platform business service, through the comprehensive sorting of organizational structure and team, we strengthen the coordination and integration of cross-region, and meet the market and customer needs of the region, and improve the efficiency of operation. As a result of the decline in the overall scale of the entire industry, the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of managers and business owners in the third quarter of the year, the number of the scale of non-core cities and regional business service providers. At the same time, in cooperation with developers, by assessing the previous credit, focusing on reliable housing, away from high-end housing, the developers in the city have done a good job of controlling the bad debt collection. In the future, developers with existing credit risks, according to the legal process, and effectively control risks. From the development of strength, the profit of the project, the cycle of repayment, the proportion of the commission, and other angles, to establish a system of evaluation indicators for the project, and to select high-profit, high-profit high-profit high-profit high-profit high-profit high-profit high-profit high-profit high-profit high-profit high-profit high-profit high-profit high-profit high-profit high-profit The GMV of XinFang Bihuan is 92.9 billion yuan, and the number of XinFang projects serving the platform is 1,815. At the same time, we build up the business capability of asset services in the upgrade of XinFang business model, and gradually explore the feasibility of multi-product asset services, and continue to improve the ability of expansion, capital, sales, and customs personnel to promote the landing of high-quality projects. Once again, in the SaaS business, we focus on strategic customers to build a collaborative framework for the group. In the third quarter, VendorDuo will further upgrade the cooperation mode with the local group to complete the local internal marketing management system. VendorDuo's C-end and B-end apps are connected to each other. After the two systems are connected, VendorDuo's C-end app has already launched the official flagship store of the local group, which gathers the real-time sales information of all buildings in the suburb. and the internal system of the economy, and use the platform's big data to drive online financial marketing. At the same time, the economy can use the free system to achieve customer management, and reduce the conversion cost of cooperation with VendorSaaS. The third system, the economy has already launched 30 projects in VendorSaaS. In addition, SaaS has also launched functions such as IM, telephone, and consultation, and has achieved the ability to The third quarter, SaaS business achieved a revenue of 323.7 million yuan, with a growth rate of 38.8%. In the second-hand market, in the face of the fast movement of the second-hand market, on the one hand, the time-saving loss greatly reduced the cost of offline transactions, On the other hand, in the second-hand real estate business, continue to promote and help the second-hand real estate trading field to be a new service model for old and small houses. By accelerating the sales of second-hand houses, establish a better wind control mode and other methods to maintain the healthy development of business. Under the circumstances of industry environment impact, In the third quarter, the company's overall second-hand business will pay off 59.2 billion yuan in GMV. Finally, I would like to share with you the future prospects and expectations of Vendor. In the fourth quarter, Vendor will base its overall business on the basis of commercial platforms. In terms of large-scale business, it will further deepen the deep cooperation with strategic group developers to achieve a speedy marketing growth after system change. In the field of new house asset services, on the one hand, we want to reduce the credit risk of developers in the new house distribution business, and actively reduce the scale. On the other hand, we want to promote a multi-product product service model, asset service model, and promote the quality of services, and achieve the growth of revenue. In terms of second-hand business, in the face of market conditions, we will reasonably control the speed of second-hand business development to ensure the steady development of the second-hand old and small updated business model. Due to the decline in the market and industry environment, the company's Q4 performance has brought great uncertainty. We expect the overall revenue of the company to be between RMB1.3 billion and RMB1.5 billion. The forecast also reflects our initial view on the market and operating situation. These views may change in the future. My speech ends here. Next, I would like to invite our Chief Financial Officer, Ms. Pan Jianlong, to summarize the financial performance of this quarter.