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spk03: Hello, ladies and gentlemen. Thank you for standing by for iClick Interactive Asia Group Limited fourth quarter and the full year 2021 financial results conference call. Well, at this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I'd now like to turn the call over to your host, Ms. Lisa Lee, Investor Relations Director. Lisa, please go ahead.
spk04: Hello, everyone, and welcome to ICLIC's fourth quarter and four-year 2021 Financial Results Conference Call. The company's results were issued earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting the IR section of our website at ir.i-click.com. In addition, during the call, management will give their prepared remarks in English. During the Q&A session, we will take questions in both English and in Mandarin, and the third-party translator will provide consecutive translation. All translations are for convenience purposes only. In case of any translation discrepancy, management's statement in the original language shall prevail. Jian Tang, T.J. Sherman, Chief Executive Officer and co-founder of iClick, will first provide a high-level review of the fourth quarter and four-year 2021 results and share his thoughts on our execution strategy going forward. Chief Financial Officer David Chung will follow and give us additional insights on the financial results for the 2021 fourth quarter and full year and provide guidance for first quarter and full year of 2022. He will then turn the call back over to TJ for closing remarks before the call is open for Q&A. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Security Certification Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's 20F. as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Please also note that ICWIC's earnings press release and this conference call include discussions of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. UDCLIC's press release contains a reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures. I will now turn the call over to our Chairman, Chief Executive Officer and Co-Founder Jian Tang. TJ, please go ahead.
spk00: Thank you, Lisa. And welcome to the call, everyone. 2021 was another year of exceptional growth for iClick, marked by records in gross billions, total revenues, revenues in enterprise solutions and marketing solutions, respectively, and gross profit. Encouragingly, our enterprise solutions business grew by 125% year-over-year 65 million, the second consecutive year of triple-digit growth since we launched our digital transformation strategy in 2019, while our marketing solutions business managed to grow by 7% year-over-year to 243 million in 2021 despite multiple headwinds. Overall, our total revenues increased by 21% year-over-year to $308 million, while gross profit grew by 22% to $89 million. Our strong 2021 performance demonstrates the company's clear vision and solid execution capability. A shifting regulatory landscape coupled with heightened macroeconomic uncertainties and geopolitical tensions translated into a slowdown in China's economic growth, which started in the second half of 2021. These events have led to a contraction in China's overall advertising sector. and continue to impact our marketing solutions segment in the fourth quarter of 2021 and may extend several quarters ahead. Having said this, we remain confident in the long-term growth potential of China's digital advertising industry and aim to maintain our core advertising client base, which enjoys great synergies with our enterprise solutions business. We are also excited about the enormous potential brought by the digital transformation megatrend seen in China, which we believe will be a trillion-dollar market. As mentioned earlier, our enterprise solutions business has already reached 65 million in 2021, compared with almost zero revenues contribution in 2018. which proves the company is on the right track. As we have repeatedly mentioned in our previous conference course, Pure SaaS may not be the most appropriate business model in China. With our success collaborations over the past few years, we also learned a great deal. that shaped the vision behind our SaaS Plus business model. Our robust growth in enterprise solutions reflects the strength of our approach and gives us confidence we will continue to generate impressive momentum throughout 2022 and beyond. Currently, we are extremely well positioned with our SaaS Plus approach. to provide solutions that meet the needs of our clients both today and for the coming years. To frame our solutions approach in defined terms, our philosophy of combining technology with services and the methodology is highly valuable in delivering digitization solutions which appeal SaaS model lacks. As reflected in our SaaS Plus 2022 white paper on digital operation by iClick, iClick not only provides customers with basic online training and the QA services, but also offers more value-added services around the scenarios covered by these tools. such as project execution and agency operation hosting, effectively solving the shortage of digital operation manpower and the capacity of some enterprises. iClick offers diagnosis, technology, and training for brands, and collects, abstracts, and refines the personalized needs of brands based on our standardized digital operation product metrics, then customizes the most suitable system solutions for brands. Within the scope of iCLICK coordinates internal and external resources for brands, provides execution teams, and continuously reviews and optimizes the execution. and assists brands at every step of the marketing and operation process. And iClick can even provide hosting services fully covering brands' digital operations. Only when cognition and the go hand in hand can we find a path to sustainable development of the business. The results are clear and extremely compelling. and we are incredibly proud of what we have accomplished thus far on this journey. In furthering our depths and capabilities in bringing the highest value SaaS Plus offering to clients, I'm very pleased to share with you that we earlier announced the acquisition of the remaining equity interest in Changi a leading independent software vendor in China, which provides intelligent retail and CRM solutions. After the completion of the acquisition, Changyi will become a wholly owned software of iClick. This will allow iClick to accelerate the expansion of our enterprise solutions business, spearheaded by our growing SaaS Plus business model. We aim to provide branded clients with a consumer full-cycle solution that addresses every aspect of the difficulties in facing the rapidly changing market dynamics in China, including effective key opinion leader recommendations, efficient targeted marketing, and e-commerce partnerships, integrating data assets, and solidifying brand profiles. We believe our solution will help brand clients strengthen their productivity and enhance the private domain to embrace success amidst the digital transformation. As excited as we are about our future potential, We are also mindful of the challenges that we and the whole Chinese ADR sector are facing, such as tightened regulatory scrutiny over VIE structure and the delisting potential risks resulting from holding foreign company accountable act. These all have driven negative sentiment for all Chinese ADR companies. iClick included and placed iClick in a challenging position in the capital market. This has likewise diminished our ability to raise capital and caused us to rely solely on cash on hand and access to our credit facility in operating our business. Given this development, Starting in the fourth quarter of 2021, we have strategically reduced the lower margin, higher risk clients and the business of our more capital intensive marketing solutions business in order to devote more investment to the higher margin and the higher growth potential of enterprise solutions. That said, we remain convinced that iCLIC's business fundamentals remain sound, with demand for our SaaS Plus solutions growing, and we are capitalizing on our strengths as we weather the impacts of these economic and policy shifts. As we look to 2022 and beyond, we recognize our needs to remain adaptive to shifting conditions through strategic allocation of resources. We believe that leveraging cross-selling opportunities across our 3,000 plus clients will leverage synergies between our marketing solutions and enterprise solutions and further drive extensive value for iClick. We have undertaken consented adaptive strategic measures designed to provide sustainable long-term growth and ensure stability and sufficient investment for long-term growth. We also look to enhance our key differentiators from our peers when contemplating strategies to buffer ICLEC from the forces of economic Our strong base of key account clients are a significant differentiator for iClick, and our integrated partnerships with these clients will provide a relatively solid and stable financial foundation to study iClick against the ongoing uncertainty microenvironment and provide opportunities to support our growth this year and beyond. This concludes my opening remarks, and I would now like to turn the call over to our new CFO, David Zhang, to discuss the fourth quarter and the 2021 full-year financial results. David was appointed CFO and Director in late January this year. He brings over 25 years of experience in financial management, investment, and the business operations. We are delighted to welcome him to our management team. David, please go ahead.
spk08: Thank you, DJ. Hello, everyone. I'm pleased to share with you our financial performance for the full year of 2021. Despite our challenging microenvironment, we still reached record highs in a number of key metrics, including revenue and gross profit. I would like to begin my comments with a few key highlights from the full year and fourth quarter of 2021 compared to the same period of 2020. We reported revenues of $307.7 million for 2021, increased by 21% year-over-year, driven by the significant increase of enterprise solutions. Revenue for the fourth quarter of 2021 was $66.3 million, increased by 3% year-over-year due to our strategic skill down of marketing solutions. Looking at each business separately, revenue from marketing solutions grew to $242.6 million for 2021, up 7% year-over-year, primarily as a result of growing market demand from specified action marketing campaigns. For the fourth quarter of 2021, revenue from marketing solutions was $56.6 million, decreased by 17% year-over-year, primarily as we have started to strategically reduce lower margin and higher risk business within marketing solutions. in order to focus on the higher growth potential of the enterprise solutions. I'm very excited to share the results of the enterprise solutions business, which achieved record level for two consecutive years to $65.1 million for 2021, up 125% over a year, primarily due to the increasing needs for online and offline consumer behavior, data integration, and digital transformation. For the first quarter of 2021, revenue from enterprise solutions was $19.7 million, up 87% year-over-year. First profit increased by 2022, year-over-year, to $89.2 billion in 2021, mainly as a result of contribution from higher-margin enterprise solutions. Gross profit for fourth quarter of 2021 was $23.6 million, up 1% year-over-year. As of December 31, 2021, the company had cash and cash equivalents, time deposit, and restricted cash of $88 million. $0.7 million, compared with $94.5 million as of December 31, 2020. For the rest of my discussion, I will focus on our non-GAAP results. You may find the cancellations of these non-GAAP results in a press release we posted earlier today and which can be accessed at our investor relations website. Adjusted EBITDA for 2021 was $13.4 million, compared with $17.3 million for 2020. Adjusted EBITDA for the fourth quarter for 2021 was $65,000, compared with an income of $5.1 million for the fourth quarter of 2020. The decrease of adjusted EBITDA resulted primarily from additional operating expenses for new business developments and R&D. Adjusted net income for 2021 was $1.4 million, compared with adjusted net income of $7.6 million for 2020. Adjusted net loss for the first quarter of 2021 was 2.7 million U.S. dollars, compared with the just-in-line income of 2.1 million in the fall quarter of 2020. Gross billing grew by 18 percent year-over-year to 796.9 million U.S. dollars in 2021, and reached 207.3 million U.S. dollars for the fall quarter of 2021. For further information, please see the detailed recap of other financial metrics in the press release issued today. On December 10, 2020, the company announced a share repurchase program in which it may purchase its own ADS with aggregate value of up to $15 million from December 30, 2020 to December 31, 2021. In addition, our board of directors authorized the company to outsize the share repurchase program from $15 million to $25 million on August 25, 2021. As of December 31, 2021, the aggregate value of purchase shares approximately 10.9 million U.S. dollars. In December 2021, our board of directors had approved a new share repurchase program in which the company may purchase its own EDS with aggregate value of up to 20 million U.S. dollars from January 1, 2022 to December 31, 2022. Now, I would like to conclude my remarks with our outlook of enterprise solutions for the first quarter and the full year of 2022. Because we are in the process of strategically adjusting our marketing solutions business in the face of current uncertainties of the macro environment, we don't provide outlook for marketing solutions revenue at this stage. Please note that Our look is based on current market conditions and reflect our current gauge of the COVID-19 pandemic impact. These assumptions are subject to change. Based on the information available as of the day of this press release, iClick provides the following outlook. For the first quarter 2022, they expect revenue from enterprise solutions between $16 and $17 million. For the full year 2022, they expect revenue from enterprise solutions between $90 and $106 million. Our subclass service model empower our clients in digital transformation. Looking ahead to 2022, they are very optimistic optimistic about further expansion of our enterprise solution business. With that, I now turn the call back over to T.J. for closing remarks.
spk00: Thank you. Thank you, David. We are more convinced than ever that the megatrend-driven digitalization across China is a long-term transformation that actually is at the forefront of helping clients to evolve and capitalize on new capabilities. We envision a trillion dollar opportunity that is deeply entrenched in the evolving need to open markets. Service customers needs better and transform the way companies interact with and retain loyal consumers of the offerings. That is what iClick is focused on delivering in its services and it is a responsibility we as all iClickers do take extraordinary seriously. We recognize that our success is contingent on our continued ability to adapt appropriately to changing market dynamics and economic forces. We meet that challenge through our duty to remain vigilant and modify our course as developments dictate. We have succeeded broadly in that capacity as evidenced by our continued strong growth. even in the face of adversity and uncertainty, which are two forces that markets revive, revolve. We foresee continued growth and are optimistic that our valuation will recover to levels that are more reflective to our true value as we continue to execute on our strategy. We are devoted to innovating and to delivering on the promise of everything we have built, all with an eye toward continuing to improve the overall profitability of the company. I wish to acknowledge and thank you clients. I thank our clients, partners, and key stakeholders for their continued support. We face some material challenges in both the micro environment and the capital markets where everyone has suffered, including our dedicated eye clickers, shareholders, and the clients. But we have deep belief in our business and the strategy we are implementing now. Beyond the factors outside of our control, we will continue to do our best to deliver on the promise iClick represents in bringing the optimal solutions mix that enables clients to capitalize on the digitalization of taking China. Thank you all for participating in today's conference call and for your continued support. This concludes our prepared remarks. Thank you for joining us on today's call. We will now open the call to questions. Operator, please go ahead.
spk03: Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to withdraw your request, please press the pound or hash key. Please stand by while we compile the question and answer roster. For the benefit of all participants on today's call, if you are a Mandarin speaker, please raise your questions in Mandarin, and then our translator will repeat your questions in English immediately. Please limit your questions to only one each time. Once again, it's star one if you wish to ask a question. Our first question comes from the line of Nelson from CT. Please ask your question.
spk02: Thank you for answering my question. My question is about the advertising industry. I would like to ask if the management has a forecast for the advertising industry in 2022, and if we have a look at the recovery situation in 2022. My other question is about Enterprise Solutions. I would like to know more about the new customers in this quarter, 我们就有的客户的流传情况大概是如何? Thanks, management, for taking my questions. My questions for advertising is about management expectation on the sector outlook this year, and when would you expect the path for recovery going forward? And my question for enterprise solutions would be about your number of new customer additions and retention situation. Thank you.
spk00: Thank you for your question. I am TJ. I would like to answer your first question about the advertising business. And then I would like to ask our CFO, David, to answer your question about the number of customers in Enterprise Solutions. The first question is the view of the advertising industry. We actually feel that in the short term this year, we actually feel that the advertising industry has still been affected. The reason is actually well known, because the overall macroeconomic situation has many unstable factors. including the political environment of Hong Kong, including the monitoring environment of China, and the ongoing outbreak of the epidemic. So this actually brought a very big challenge to the entire market. And the entire advertising industry continued last year and the second half of this year. It was originally a relatively remote state. So we feel that in the next few seasons, the domestic advertising business should still be in a relatively low state. In fact, I think there may be some companies in the industry that are in the same industry, and there may be some similar views. However, when it comes to the advertising business of our company, we may focus more on some of the core business this year.
spk07: Thank you for your question. This is TJ. I will take your question about the ad business outlook this year, and I will invite David Zhang to answer your second question about the customer addition and existing customer retention of enterprise solutions. First, about the ad business outlook. We think that this year, the ad business in China suffered short-term shocks, and the reasons are very well known. because there are a lot of uncertainties in the macroeconomy, including the shifting policy environment and the regulatory landscapes, as well as the resurgence of COVID-19 cases, which have constituted severe challenges to the market. And since the second half of last year, the access list in China has been experiencing very weak demand, and I think that this will continue in the following quarters. And I believe a lot of companies in this industry share similar views. As to our company, well, this year for ad business, we will focus on some core businesses. We will take initiatives to scale back on those lower margin, high risk businesses where retaining the core businesses that may generate synergies with other businesses. Thank you.
spk08: Hello everyone, I am David. I will answer the second question. In the fourth quarter of 2021, the number of customers contributing to ES revenue is about 500. In the first quarter of 2022, the first quarter and the last quarter of the fourth quarter, I am sorry, I do not have this number yet. But in the past, according to our previous experience, in dollar amount, our loss rate is about 90%.
spk07: Let me take your second question. In Q4 2021, there were 500 customers contributing to the revenue of our enterprise solution business. And as to the customer retention between Q4 last year and Q1 this year, I don't have a specific number yet, but I can tell you from past experience that the retention rate will be around 90%. Thank you.
spk03: All right, thank you. Our next question comes from Colin Liu from China Renaissance. Please ask your question.
spk05: Thank you, TJ and David for this question. I have two questions. The first question is actually about advertising. If we look at the long-term impact of this monitoring action, for example, we look at in the next two to three years, this will affect the entire targeted marketing or online advertising industry. This is the first question. The second question is that we have seen the difficulties of Hong Kong since the second half of last year. From the point of view of our SaaS product, Thanks, TJ and David, for the chance to raise your questions. I have two questions. The first one is about the medium and long-term impacts on advertising industry from the regulatory changes over the last several months. I wonder, you know, in two, three years' time, how will this round of regulatory changes will shape the industry? And what's the industry landscape going to be like, you know? And the second question is actually about our SaaS business and our enterprise solutions, you know. We have seen very obvious macro weaknesses since second half last year. And over the last several months or several quarters, is our SaaS solution actually helping our customers improve their operating efficiency and generating new revenue opportunities in this kind of macro weakness? Any comments that can be shared with us? That would be really helpful. Thank you, Guanlin Cheng.
spk00: Thank you, Colin, for this question. I'm TJ. Let me answer your two questions. Regarding your first question, I understand that the supervision of the advertising industry may have some impact in the long term. We understand this. I remember that in the past few conference calls, we have mentioned that In the short term, from the second half of last year to the first half of this year, we may be a little scared and think that this will have a big impact on the industry. But in fact, we, as entrepreneurs, think that this kind of impact will slowly be reflected in the long term. This data security and personal privacy protection, we understand that more of it is the kind of industry that is in the gray area in the data field. These industries will have some severe attacks. But for the legal use of data, this legal and reasonable help to customers to improve efficiency, such products and businesses 我们相信长期来说是有利的 当然这个短期可能也会有一些冲击 相反广告业务呢 要不先到这一段吧 麻烦我们帮忙翻译一下 Thank you, Colin, for your question. This is TJ. Let me take your two questions. First question is about the implication of regulatory policies on the advertising industry in the next two to three years.
spk07: Well, in the previous conference calls, we have mentioned that all these regulations regarding data security and personal privacy will have an impact in the long term. Because in the past, all the policies about data security or personal privacy were quite relaxed. But it seems that regulators have started to tighten them And shortly speaking, for example, from the second half of last year to the first half of this year, we've seen some panic in the industry, and people are worried about its negative impact on them. However, we think that in the mid to long term, we will wait for the mid to long term to see any real implications to kick in, because we think that the current regulatory Policies about the digital security and personal privacy were targeted at those businesses that operated in a non-compliant manner. As long as you comply with the regulations in data usage, as long as your products and businesses help customers to improve efficiency, I believe that you will enjoy long-term benefits in spite of some short-term shocks.
spk00: Then the second type of this, I understand that it may have an impact on the advertising industry, which is some of the industry-based supervision of advertisers. For example, typical like education, insurance, games. Last year, in fact, these industries have actually been affected by supervision. What about this type of supervision? We think it may have a very big impact on the advertising industry in the short term. We have already seen this before. Because it leads to a lot of demands that suddenly disappear. In the long term, we think this type of monitoring measures, in the long term, will not have such a big impact on the advertising industry. Because this will lead to the vertical of the entire advertising industry to restart. Which advertisers will compete for these advertising positions? There will be a process of reorganization. But in the long term, we think that no matter which industry it is, I think the second source of regulatory measures that may have
spk07: a long-term impact on advertising industry are targeting the industries where brands are located. For example, last year, education, insurance, and gaming industries were subject to a series of round of regulation and control. And short-term speaking, these measures have produced very profound impact on advertising industry We've seen this with our own eyes. For example, the demand from some industries just disappear all of a sudden. But long-term speaking, I don't think there will be very substantial impact on the advertising industry because those industry verticals that meet the advertising business will be reshuffled. And after the reshuffling, the brands from these industries will still need to place advertisements. And the number of advertisements they place actually are correlated to economic sentiment instead of the industries where they belong. This is my answer to your first question.
spk00: 然后关于第二个问题,我理解是我们的SaaS Enterprise Solution的一些方案 对于现在的这些客户,他们对抗目前这个比较差的宏观环境 will have some help. At this point, I think this is obviously helpful. Because now, because of this, for example, the impact of the epidemic, many offline businesses have been greatly affected. In our enterprise solution, there are many aspects that can help these companies. For example, we have a digital solution for door stores. to help some offline stores, to help them connect offline storage to online small programs, and to help them operate through the micro-programs ecosystem of WeChat. This is a typical way to help these merchants, when offline business is severely affected, to maintain online operations, and to be able to connect to offline storage in time. 所以我们觉得这样的方案其实对于这个品牌方, 对于一些这个销售渠道其实都是非常有帮助的。 这个是第一点。 Well, as to the second question, I believe it's about how our SaaS products and services will help customers cope with these macroeconomic happenings.
spk07: Well, I do think that our products and services are very helpful. In particular, during the COVID-19 pandemic, a lot of offline businesses were hard hit. And many of our enterprise solutions, products and services can help enterprises. For example, we provide them with digital outlet solutions, which can include their offline inventories, in the online mini programs and then we help them to operate the online businesses in the WeChat ecosystem. And in this way we can help merchants to maintain online operation by absorbing the offline inventories. I think these are very helpful for both brand owners as well as sales channels.
spk00: Right. And then the second aspect, from a relatively large perspective, we do see that many of our customers, many of our brands, are not doing well in this kind of economic environment, especially due to the serious impact of the epidemic. In this case, in fact, they are very active in seeking to operate their business online. And from a broader perspective, China's digitalization of the economy, the digitalization of enterprises, and the digitalization of brands is also a very long-term trend. This is also part of China's 14-5 national strategy. So our enterprise solution, it should be said, coincides with such a trend. Especially, we are helping these brands to adapt to the new media ecosystem that is particularly complex online, including how to interact better with consumers on WeChat to improve their loyalty. And then it also includes how to interact better with consumers on KOL, these internet celebrities, through short videos and some newer forms to attract them to join the brand. This is the second question.
spk07: And also, during the weak macroeconomic situation, many brands actually have proactively pursued their online businesses. And in addition, China's economic digitalization, as well as the enterprise digitalization and brand digitalization are long-term trends for China, which is part of the 14th five-year plan proposed by the Chinese government. And I think that our enterprise solutions business actually will respond to this trend quite well. And we help those brands to adapt to the increasingly complicated new media ecosystem. For example, in the WeChat ecosystem, we help brands to increase interaction with customers, therefore enhancing their loyalty. And in the KOL ecosystem, we help brands to use short video and other new media to interact with consumers and attract consumers to their media campaigns or marketing campaigns. Actually, we have already put in place a complete suite of products and services to serve our brands. And all in all, we think that our products and services actually will help customers to cope with these weak macroeconomic situations.
spk03: Great, thank you. Our next question comes from Thomas Chong from Jefferies. Please go ahead.
spk06: 我们对KA客户以及说我们的腰部客户有什么发展的目标? 我发言一下, thanks management for taking my question. So I have two questions. The first question is about M&A. So are there any future M&A plans and what are the M&A considerations? And then my second question is, are there any goals for KA clients and the mid-tier clients in 2022? Thank you.
spk00: Thank you, Jeffrey, for this question. Let me answer your question. The first question, I understand, is about this MA. We actually finished the acquisition of Chang'e a while ago. Regarding Chang'e, I believe that those investors and analysts who care about our company should also know about it. The main purpose of our full-fledged acquisition of Chang'e is to make our enterprise solution more solid. Because Chang'e has always been a very important part of our enterprise solution, including its products, its team, and its service capabilities. They are all a very important part of our enterprise solution that surrounds the micro-economic environment. Okay, thank you for the question. I will take two questions from you.
spk07: Our first question is about the M&A plan. Not long ago, we've fully acquired Changyu. And if you have been following us for some time, you'll know about this company quite well. And the purpose of this acquisition is to consolidate our enterprise solutions capabilities because Changyu is a very integrated part of our enterprise solutions including products, teams, and service capabilities. And so as to the other and M&A opportunities, well, we have been looking out for other opportunities all along. But since the market condition is not very good right now, so we will be more cautious.
spk00: And then about your second question, about the strategy of the customer group. So, in terms of the customer of KA, in fact, our current company development strategy is very clear. It is a strategy of our SaaS plus X, mainly serving some medium-sized, some KA customers. Our logic is actually through this SaaS tool, plus some additional service 然后来帮助这些KA客户 在中国复杂的媒体生态里面 更好的生长 我们觉得这个策略 是有非常长期的 可持续的增长空间的 这个我们前几年最多的 更多的是在微信生态 现在也越来越多的渗透到 KOL-based的这种网红生态 can actually help these KA customers to do better online sales and operations. This is about KA customers.
spk07: Well, your second question is about our customer strategy. Well, as to KA clients, our strategy is very clear. That is, we will provide SaaS tools and value-added services to medium to large-sized KA clients to help these clients grow and develop in the complicated media ecosystem in China. And we believe that this strategy has great long-term potential. In the past, we focused mainly on WeChat ecosystem, but now we've been gradually penetrating into the KOL ecosystem. And our aim, as I've mentioned, is to help KA clients to carry out online sales and operations.
spk00: 然后关于这个中央SMB的这个客户群体呢, 其实我首先想说的一点是, 我们现在即使在KA的客户群体里面, 也都是使用比较标准化的, 都是标准化的这种SaaS产品。 当然不同的KA客户还是会有一些定制化的一些需求。 Regarding SMB customers, in the first half of 2021, we tried to promote standardized products to SMB customers. However, during the entire promotion process, in the second half of last year, including the beginning of this year, due to the dramatic changes in the economic environment, So in this aspect, frankly speaking, the speed of expansion on SMB customers is lower than we expected. But we will still keep an eye on this track. We still have some attempts in this aspect. This is about SMB customers.
spk07: Well, as to mid-tier customers or SMB customers, well, by the way, another thing about the KA clients, that is we still use the standard SaaS products to serve our KA clients. Of course, for different KA clients, they may have different customization needs. And as to the SMB client base, Well, since the first half of 2021, we've started to promote standard products to them. But due to the weak economic performance global-wise, including China, since the second half of last year to early this year, we haven't seen very much progress. We can say that progress actually is much slower than we expected. But, you know, we've still... will keep an eye on the SMB business and we will continue to make some efforts to develop this business.
spk03: All right. Thank you. Our next question comes from Brian Kinslinger from Alliance Global. Please go ahead.
spk01: Great. Thanks for taking my questions. With the uncertainty in marketing solutions, coupled with the challenging capital markets for ADRs, how do you plan on managing the expense side of the business to limit your losses? And can you quantify the bad debt that was recognized during the fourth quarter? And then my second question is, how much of your marketing solutions revenue is low margin and not strategic to the enterprise segment? Thanks.
spk07: Hada, we'll show Brian. I have two questions here. The first question is, because now our online marketing solution has some uncertainty, and now the stock market also has some negative emotions for Chinese stocks. What kind of measures will we take? For example, what kind of measures will be taken in terms of cost to reduce some of our losses? At the same time, can you talk about some of the bad accounts that we have confirmed in the fourth quarter? Then the second question I would like to ask is how much of the revenue from our online marketing solution is in this kind of low interest rate, which is not able to generate strategic cohesion with our company's business solution? Thank you for the question, Brian. I'm David. Let me answer it. Our account preparation
spk08: In terms of cost control, iClick has done a good job in this regard. Especially in this difficult time, although our cash savings are still quite abundant. In fact, we can think of the English account as a cash pool. Our cash savings amount is also $80 million. But we will still try to do better in terms of cost control. Please translate it first.
spk07: Well, this is David. Brian, thank you for your question. As to the bad debt provisions, well, last year we were provided for the bad debts of two companies totaling $5 million. You know, last year the central government has come up with a series of regulatory measures which has hit some industries hard. So these two companies, one is an e-commerce company and the other is a gaming company. And as to cost control, I think that we have done a pretty good job in cost control all these years. And now it's a difficult time. So actually we will try our best to do better in terms of cost control. And currently we have sufficient cash and you can regard receivables as cash poor too. And currently we have $18 million of cash.
spk08: I also like to clarify that this $5 million is a special provision for bad debts. It's not the overall bad debts provisions. The second question is about MS customers. Some of them are relatively low-income. We are considering about one-third of the MS business income. Of course, we are not necessarily... We are all looking at the reaction of the market. We are gradually adjusting the degree of reduction.
spk07: Your second question is about those low margin business marketing solutions. Well, currently they account for a third of our marketing solution revenues. But, you know, we will take into account the market response in dynamically adjusting the scale down scale.
spk03: All right, thank you. As there are no further questions, I'd like to turn the call back to the company for closing remarks.
spk04: Thank you once again for joining us today. If you have any further questions, please feel free to contact ICLIC's Industrial Relations Department through the contact information provided on our website. Thank you and see you next time. Bye-bye.
spk03: Thank you. This concludes the conference call. You may now disconnect your line. Thank you.
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