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spk05: Hello, ladies and gentlemen. Thank you for standing by for 36KR Holdings Incorporated's fourth quarter and fiscal year of 2020 earnings conference call. At this time, all participants are in listen-only mode, and after management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded. I will now turn the call over to your host, Yolanda Liu, IR Manager of the company. Please go ahead, Yolanda.
spk02: Thank you very much. Hello, everyone, and welcome to 36KR Holdings fourth quarter and the fiscal year 2020 earnings conference call. The company's financial and operational results were released earlier today and have been made available online. You can also view the earnings press release by visiting the IR section of our website at ir.36kr.com. Participants on today's call will include our co-chairman and the CEO, Mr. Da Gongfeng, and our Acting CFO, Mr. Xiang Li. Mr. Feng will start the call by providing an overview of the company and performance highlights of the quarter in Chinese, followed by English integration. Mr. Li will then provide details on the company's financial results before opening the call for your questions. 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 Securities Legation 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. Full information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please note that 36KR's earnings press release in this conference call include discussions on audited GAAP financial measures as well as on audited non-GAAP financial measures. 36KR's press release contains reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. And please know that all amount numbers are in RMB. I will now turn the call over to our co-chairman and CEO, Mr. Feng. Paul, please go ahead.
spk01: Thank you. Thank you, everyone. Thank you for attending our 2020 fourth quarter and full-year conference.
spk02: Thank you, and hello, everyone. Thank you for joining us today.
spk01: Thank you, and hello, everyone. Thank you for joining us today. Before we begin, I would like to extend my sincere gratitude to all of our stakeholders for your continued support over the past year. 2020 was an extremely unusual year for the whole world and also for our business. As with many companies,
spk02: we encountered varying degrees of challenges and economic uncertainties stemming from the widespread impact of the COVID-19 pandemic. Thanks to proactive responses from our supporters and our exceptional employees and their timely adaptation to changing market dynamics, we believe we have weathered a storm. Having seamlessly overcome these short-term obstacles, our fundamentals are evolving to be stronger, and we are entering 2021 from a position of strength as we return to more normal business activities.
spk01: Our full-network monthly traffic has reached 6.3 billion times by the end of 2020, which is a historic increase. The same rate increased by 48.1%, and the same rate increased by 11.3%. This positive performance marks our 11 consecutive seasons of peak growth, and further verifies the excellent content of our daily promotion of PTC and UGC, and the continuous expansion of the user size. In addition to our continuous interoperability with free product platforms, improving the user's reading experience and viewing experience, we have also effectively used third-party platforms such as Douyin and Bilibili to promote the growth of traffic users.
spk02: First of all, we are proud to have concluded 2020 with strong traffic momentum in the fourth quarter across our core platforms and the major third-party platforms. Thanks to consistent delivery of high-quality content and diverse distribution channels, our total average monthly page views reached a new record high of 630.2 million for the full year 2020, increasing 48.1% from the prior year and 11.3% sequentially. This stellar performance marks our 11th consecutive quarter of PV growth and further validates that our ever-growing and engaging PGC and UGC content are resonating well with our expanding audience. In addition to upgrading our own platforms to effectively improve the reading and viewing experience of our users. Our efficient use of third-party traffic platforms, such as Douyin and Bilibili, simultaneously depends on our business mode by driving additional healthy traffic growth.
spk01: Our content production capacity is continuously improving. Among them, the production capacity of UTC content and commercialization potential are increasingly improving. In the whole year of 2020, we produced 10.8 million content, which increased by 16% in 2019. In addition to high-quality content production, we also raised the quality and output of UGC content to a higher level, and built a high-quality UGC content array. By using our observation of user data, we actively help creators of UGC content on the platform to devise more appropriate themes, so that they can create more attractive and high-quality content. In the fourth quarter, our free platform UGC content accounted for 67% of all content, Our content creation and production capabilities have gained momentum, as have our UGC production and distribution capabilities, as well as our monetization abilities. For the 2020 full year, we produced 108,000 pieces of content,
spk02: an increase of 16% year-over-year. Besides our superior quality content creation and production, we have also strategically created a compelling library of insightful user-generated content. Leveraging our in-depth data insights into user demographics, we proactively help institutional UGC creators determine appropriate topics around which they can create compelling content. In the fourth quarter, our UDC offerings accounted for 67% of our total content offerings, up from 48% in the prior year period and 68% in the prior quarter. The increase indicates that we are well on track to strengthen our content platform capabilities.
spk01: Our business analysis and research has covered a wider range of companies and industries, extending to various markets, especially in the secondary market, and has begun to receive widespread praise. For all types of market participants, the 36Q's information is of unique value. By using our new economy community as the center of the resource network, we are passing on the first-time in-depth analysis related to listed companies from the stage of listing before listing to the stage of listing. For example, we have established the first public launch from the company that was listed in 2021, such as Wuxing Technology and Quaishou, Our insightful business research spanning a broader range of companies and industries continues to gain popularity in various markets.
spk02: In particular, it is widely praised among security market participants. To some, our information is invaluable. Leveraging our new economy community-centric resource networks, we are spearheading the transformation of timely and in-depth analysis of public companies by covering their pre- and post-IPO phases. For instance, we publish exclusive and thoughtful business overviews on an array of newly listed Chinese companies, such as Rex Technology and Kuaishou. Inception to their IPOs, the deeper we go into our research expertise and experience, the more we are able to extend our services across a wide spectrum of industries.
spk01: Thanks to the original video content, we have become one of the most popular corporate accounts on Bilibili and other top video platforms. In Bilibili, we have more than 600,000 fans. We will continue to cooperate with other top platforms to expand our commercialization opportunities. In Douyin, our account has more than 3.6 million fans. It is in the top 30 of the financial channel and has more than 10 million paid videos. These top platforms have achieved high participation and rapid growth so that we can rely on
spk02: The information we curated is available in a variety of digital forms. Clear trends in video have quickly emerged as a top choice. With our considerable capability in this arena, the rapidly growing video market presents a huge growth opportunity for us, and we significantly increase our engagement across a broad demographic in the fourth quarter. Our self-produced video content has spurred us to become one of the most sought-after organization accounts on leading video platforms such as Bilibili, where we host more than 600,000 followers. In addition to Bilibili, we continue to work with other highly trafficked platforms to enhance our monetization channels. On Douyin, Our KR Finance account has more than 3.6 million followers, and we are ranked among the top 30 video creators in the finance segment. We have also distributed multiple trend-setting short-form videos on Douyin, each gaining over 10 million playbacks. The high engagement level and rapid growth we are experiencing on these influential social platforms are excellent barometers of our success in successfully accusating our growth strategy with captivating content.
spk01: As video content continues to be heavily sought after by individual users, companies from various industries and governments,
spk02: We have further deepened our strategic cooperation with prestigious partners on the content production side, both domestically and overseas, and including our strategic shareholders.
spk01: For example, in September of this year, we announced strategic cooperation with Youku. In December of that year, we, as Youku's exclusive technology media partner, helped Youku to create the first technology fast-forwarding conference with the theme of FIT. Following last September's announcement of our strategic collaboration with Youku in December 2020, we became the
spk02: exclusive tech media partner for Youku's first production of the tech-focused New Year's Eve Gala, Future Imagination Technology. Building on our industry-leading content and resource capabilities, we featured our insights into futuristic technology trends under the impact of the pandemic, as well as helped screen and identify new economic companies who showcased their innovative products and future technology at the event. Going forward, we plan to co-produce more high-quality content covering a wide spectrum of business topics and explore the possibility of multi-channel network MCN business.
spk01: In March this year, we and XinhuaWang established strategic cooperation in the field of video content production and new economy services. We have promoted new economy development, helping national brands accelerate digital transformation as a common mission, This March, we entered into a strategic partnership on business-centric video content production and new economy-focused services with China's major media outlet, XinhuaNet.
spk02: With a shared mission to embrace the evolving new economy environment across multiple Chinese consumer brands that are adopting digital transformation, we kick off the program production and sponsorship promotion for our first joint proprietary program, The Great Chinese Companies. As part of the partnership, we also have future plans to work together to discover and retain talent talented content creators in producing business-wise content that fosters a vibrant content ecosystem, and at the same time, to explore monetization opportunities.
spk01: In terms of commercialization, in the overall market environment of 2020, we are exploring our own more anti-China-like and scale-based structural infrastructure. At the same time, we are actively using the new market demand in the future to use high-quality content as a basic ability
spk02: turning to our monetization efforts in the light of the intricate market environment during 2020, we were responsive to seek opportunities to transform our core businesses into a more counter-critical and a scalable model. At the same time, we have been actively working on tapping into emerging markets' minds in the aftermath of the pandemic. By leveraging our premium content capability and consistently optimizing technology and data insights across segments, we've increased our ability to capture new opportunities.
spk01: Thank you, Zeng Zhifu. In December of 2020, we held a year-round conference in Beijing. This conference is based on the theme of rise and return, and it has been held offline and online at the same time. The theme of the event covers a wider range of industry topics, and it has invited more heavyweight actors and actresses. Our offline participation rate and number of live broadcasts exceeded expectations. In the three-day event, more than 2.2 million audiences participated in the event. Through our free and third-party platforms, we attracted 3.9 billion views and exposure to the whole network. This wide-ranging impact of this active event has not only played an active role in our business, but also showed that we are constantly improving brand awareness
spk02: In terms of our value-added enterprise service segment, we successfully hosted our highly influential New Economy Annual Summit in Beijing in December 2020, including both offline and online activities. Our WISE 2020 event with the theme of Rise and Return featured a broader spectrum of industry-wide subjects and the keynote speakers. Attendance at our offline venues and the live streaming sessions were better than expected. Over the course of the three-day event, more than 22,000 visitors joined us on site, and our live streaming sessions attracted 390 million visitors across our core and third-party platforms. The broad reach of these prestigious events not only had a positive impact on our monetization, but highlights our ability to continually enhance our brand recognition and expand our customer base, not just domestically, but also abroad as a number of overseas new economy participants access our live broadcasting sessions. 随着国内现在活动逐渐恢复,
spk01: We are also working hard to build a diversified learning community in different industries, to connect entrepreneurs and executives in the same industry, so that they can effectively share and learn from each other's business experience to better deal with industry challenges. These measures are also to help us attract potential customers for our subscription service. For example, we help traditional industries and new economy customers explore and discover new business opportunities through the CEO meeting and industry meeting hall, and also help them achieve effective customers and establish cooperation connections to gain more resources and increase opportunities.
spk02: As normalcy returns to most of the country's offline activities, we remain committed to cultivating diverse learning communities for different industries and sectors. By connecting entrepreneurs and executives in the same industry, they can more effectively share and learn best practices to better tackle shared industry challenges. These initiatives are also designed to help us generate leads for our subscription services, For example, our exclusive seminar on strategy, and the industry interview have helped clients in both traditional industries and new economy sectors to explore and discover new opportunities in areas they were not previously familiar with. While achieving efficient customer acquisition and building collaborative business connections to access more resources, and growth opportunities.
spk01: Due to the video-based trend and the huge market opportunity brought by this, we also began to actively explore the commercialization of video content. This is the natural evolution of our content ability. In the fourth quarter, we adopted a video-based form with more than 30% of the service solutions and received active feedback. With the rapid growth of video content and user volume on our private platform and third-party platforms, more and more traditional brands hope to establish cooperation with us. For example, we have recently established a partnership Given the ubiquitous format and the massive market in China, we began actively exploring commercialization opportunities in video content.
spk02: This is a natural evolution of our capabilities. And in the fourth quarter, more than 30% of our service solutions adopted video formats and received positive feedback. As video content and followers rapidly grow across our core and third-party platforms, more traditional brands increasingly want to work with us to capitalize on these trendsetting market strategy. For example, We recently signed a contract with Ely, one of Times' leading diary companies, to create digital marketing plans by our self-produced videos to make its Uyghur product resonate with young consumers. As we further expand and diversify our product and service offerings, including our robust video content, we will continue to explore strategic collaborations with more prestigious partners.
spk01: This Tuesday, we just announced a strategic cooperation with Chinese state media CCTV's program
spk02: the growing of the great brand. Supported by multiple online and offline activities, we will use our diverse services and strong resource networks to help a large number of Chinese new economy enterprises to enhance their brands and propel more coordinated business development along their supply chains.
spk01: In terms of subscription services, we have already launched a brand-new 36-gigabit Jifu dotcom network. in order to build China's most professional enterprise-based application and service selection platform. This new comprehensive service website, through the use and evaluation of real-life users' enterprise applications and services, helps buyers to break down the gap between the new and the old. The providers of enterprise services can also use the dynamic feedback of users and potential users, and add targeted replacement products to discover the needs and sales clues of potential users. We launched a new starting point for Dianping. The goal is to form a positive business cycle driven by high-quality content In terms of subscription services, in the fourth quarter, we launched a new and upgraded version of our enterprise service review website, dianping.36kr.com,
spk02: in order to build China's most professional platform for enterprise-level application and services selection. This comprehensive new offering enables potential buyers to fill the information gap by providing the rankings and feedback for application and services from real users on the platform. Enterprise service providers can simultaneously upgrade their products to specifically address the dynamic feedback of users, as well as capture potential customer needs and sales leads. Our goal with this innovative service is to form a virtuous business cycle driven by powerful content offerings. This is a natural procession and extension of our own enterprise service material, while also potentially helping us evolve into a more scalable subscription model with higher customer thickness. We plan to utilize our large-scale enterprise network community to boost traffic for our new platform. Building an enterprise services alliance community focused on our enterprise services review business.
spk01: In the fourth quarter, our innovative unique services have improved the attraction of the government and business institutions. For example, in December 2020, We support the local municipal government in Hangzhou to hold an aviation and aerospace information summit. This is one of the most important industry consultations in the area. We are also helping local governments to plan and develop smart cities, which plays an important role. We cooperate with local governments in different regions to hold a series of smart city projects as the focus of the entrepreneurship competition. This strategy of cooperation with local governments and business units not only continues to improve our brand reputation in various regions,
spk02: Our innovative and creative services gain further traction with new government collaborations during the fourth quarter. For example, in December 2020, we supported a local municipality to host an air and aerospace information summit in Hangzhou, a significant local industry seminar. We also aided local governments in planning and developing smart city concepts. We held a series of entrepreneurial contests focused on smart city projects across different regions in partnership with local governments. Our strategic focus on governmental collaborations not only raises awareness of our brand, but also places us at the forefront of opportunities in cross-regional economic growth within the new economy space.
spk01: In the face of the challenges of 2020 and the rapidly changing market environment, we have strengthened our core advantages. At the same time, we have shown a rapid adjustment of business to adapt to the ability of different market changes and the long-term development strength. With the end of the epidemic, we will further expand and enrich our products and services, strengthen the construction of new economic community networks, continuously expand our user base, expand the diversified growth path, In summary, facing the challenging 2020 and the fuss involving market dynamics, we continue to build out our core strength. At the same time, we demonstrated our ability to swiftly adjust our cooperation and operations to align with the changing market
spk02: and reach our sustainable growth goals over the long term. With the pandemic largely behind us, we will work to strategically enrich our product and service offerings, enhance our networks maybe, increase our user base, and diversify our growth avenues to strengthen our monetization capabilities. As the go-to content and service platform in China's new economy space, we retain committed to capturing additional opportunities in the growing market and delivering long-term value to our shareholders. With that, I will now turn the call over to our Acting CFO, Mr. Xiang Li, who will discuss on our key financial results. Please go ahead, Niu.
spk00: Thank you, Yolanda. Thank you, Paul. Hello, everyone. As Paul indicated, The lingering impact from the COVID-19 pandemic extended into our fourth quarter top five performance. However, revenue from our online advertising services and subscription services delivered sequentially growth, which we see as a good sign of a gradual demand recovery. Given the challenging environment and the license they learned, we have been actively adjusting our business operations in order to achieve long-lasting efficiency. Notably, our gross margin increased by 400 base points to 42% in the first quarter of 2020 from the third quarter. We also realized the positive operating cash flow for the third continuing quarter, exemplifying the resilience and agility of our business model. Additionally, we continue to see quarter-over-quarter improvements in our business model. accounts receivable after we made our prepayment policy adjustments and the TISON requirements for the strict selection of quality clients. As we enhance our core strengths in industry leading content production capabilities and monetization channel, they believe they are well positioned to serve new economy participants and grow alongside them. Now I will go through more detail on our fourth quarter of 2020 financial results. Our total revenue were $121 million in the fourth quarter of 2020. compared to 323 million in the same period of 2019. Online advertising services revenue decreased by 54% to 69 million in the fourth quarter of 2020, from 150 million in the same period of 2019. The decrease was mainly caused by the big demand from certain advertisers and adoption of a stricter credit policy for customer selection. Enterprise value-added services revenue were 41 million in the fourth quarter of 2020. compared to $154 million in the same period of 2019. The decrease was mainly caused by the decrease in revenue from integrity marketing services. As a strategy, the company decreased the input in certain business. Subscription services revenue were 11 million in the fourth quarter of 2020, compared to 18 million in the same period of 2019. The decrease were mainly caused by the decrease in revenue from individual subscription, as some of the offline training courses were canceled due to the negative impact of COVID-19. Cost of revenue was $71 million in the fourth quarter of 2020, compared to $166 million in the same period of 2019. The decrease was mainly caused by the decrease in revenue. Gross profit was $51 million in the fourth quarter of 2020, compared to $156 million in the same period of 2019. Operating expenses were 127 million in the fourth quarter of 2020, compared to 107 million in the same period of last year. The decrease was mainly due to the increase in GMA expenses in the fourth quarter of 2020. Sales marketing expenses were 35 million in the fourth quarter of 2020, Compared to 15 million in the same period of 2019, the decrease was mainly caused by the decrease in payroll related expenses and the share-based compensation expenses. G and A expenses were 82 million in the fourth quarter of 2020, compared to 47 million in the same period of 2019. Increase was mainly caused by the increase in allowance for thoughtful accounts partially off-site by the decrease in the share-based compensation expenses. RMD expenses decreased by 12% to $9 million in the fourth quarter of 2020. Compared to 10 million in the same period of 2019, the decrease was mainly caused by the decrease in share-based compensation expenses. Share-based compensation expenses recognize in cost of revenue, sales marketing, R&D expenses, and general admin expenses in total. were $9 million in the fourth quarter of 2020 and $36 million in the same period of 2019. Other expenses were $10 million in the fourth quarter of 2020, which includes a loss of $16 million from equity method investment and an income of $5 million from government grants Compared to other income, two million in the same period of 2019. Income tax expenses were four million in the fourth quarter of 2020. Compared to 20 million in the same period of 2019, the increase was mainly caused by the increase in the allowance for deferred tax assets. Net loss was 19 million in the fourth quarter of 2020, compared to an income of 32 million in the same period of 2019. Non-GAAP adjusted net loss was 81 million in the fourth quarter of 2020, compared to an income of 68 million in the same period of 2019. Net loss attributable to 36 KR holding inks, ordinary shareholders was 91 million in the fourth quarter of 2020, compared to income of 99 million in the same period of 2019, which includes the accruation of redeemable non-controlling interest accretion and redesignation effect of convertible, redeemable preferred share. Basic and diluted net loss per share was 0.09 in the first quarter of 2020 compared to the base and diluted net loss per share of 2020. 0.1 and 0.03 in the same period of 2019. As of December 31, 2020, the company has cash and cash equivalent restricted cash and short-term investment of $209 million. compared to $264 million at the same time in the last year. To be mindful of the length of our earning call for the fiscal year of 2020 financial results, I will encourage listeners to refer to our earning price release for further details. This concludes all of our prepared remarks today. We will now open the call to questions. Operator, please go ahead.
spk05: Thank you. As a reminder, to ask a question, you need to press star 1 on your telephone. To withdraw your question, press the pound or hash key. And please stand by while we compile the Q&A roster. Once again, for your questions, please press star 1. And for the benefit of all participants on today's call, if you wish to ask your questions to management in Chinese, please immediately repeat your question in English. Once again, for your questions, please press star 1 on your telephones. Our first question comes from the line of IBG of Credit Suisse. Your line is open. Please go ahead.
spk06: 我就有一個很快的問題,就是想問一下我們那個四季度,這個如果就是按行業來看的話,我們廣告這個需求恢復的情況大概是怎麼樣呢? I'll translate myself. Good evening, management. Thanks for taking my question. I just have a quick one. I just wanted to ask our ad demand by vertical, how does it trend in the fourth quarter? Thank you.
spk01: Advertisement has been delayed, but since the third quarter, some customers have begun to recover. For example, in the first half of the year, the biggest impact was on the car and hardware industry. At the same time, since the second half of the year, customers of local brands have begun to actively expand, and they have also begun to show a demand for daily growth of 36g. From the other side of the demand, the growth and development of new economy customers with their own body weight has shown a very strong resilience during the epidemic and post-epidemic. The number of customers and the price of goods have shown a trend of growth throughout the year. especially the leading big companies, new companies, and upcoming companies, have shown a very strong demand for advertising. From the industry branch point of view, all five major industries of all-year advertising customers are consumer life, culture, media, corporate services, hardware, and e-commerce. In addition, advertising from the artificial intelligence and education industries has increased significantly. So our four-level advertising business, compared to Q3, has increased by 35.7%. So Q3 has actually increased by 63% compared to Q2.
spk02: Okay, thank you for your question, Abby. And I think directly on the customer demand side, our multinational customers have been affected the most, leading to delayed budgets for advertising. However, since Q3, advertising needs from some customers began to recover, like what's been in automobile and 3C. At the same time, quite a few Chinese consumer brands, which we actively reached out in the second half of 2020, show their growing demand for our platform. And another characteristic for our new economy customers, they show their resilience during and post-COVID-19, and their own businesses keep growing. And does this contributed to the increases in the number of customers and average customer price in this year, especially when it comes to those TMT giants and super unicorns. And we can share some more color on the industry distribution. The top five in 2020 are consumer, entertainment, enterprise services, 3C, and e-commerce. Besides, we also saw strong demand growth for our advertising services in the AI and online education industries. So to sum up, we can see that we achieved nearly 36% sequential, just to correct a little mistake. And if we see in the last quarter, we can see this sequential growth have already achieved as 63% in the Q3. So we can see these consecutive recovery from our advertisement segment. I think this is for your question. Thanks.
spk05: Thank you. Our next question is from the line of Vincent Yee of Needham and Company. Your line is open. Please go ahead.
spk03: Thank you, Ms. Guan. I have two questions. The first one is about our vision for 2021. What do we think is the most important point in terms of revenue? Where do we think we will invest more? The second question is about the income structure of the fourth quarter, and there are some changes in the structure. I would like to ask what the reason for this change is, and do we think that the current income structure is a new norm? Thank you, Manager, for taking my question. The first question is about the fiscal 2021 outlook. Can management share some insights on the fiscal year 2021 outlook and where do we see the most potential in terms of revenue growth and where are we investing the most? The second question is can management share some insights on the shifts in revenue mix in fourth quarter And it was pretty drastic. So what drove the shift? And is it going to be the new normal going forward? Thank you.
spk01: Okay, thank you, Vincent. It's like this. We should say that for us in 2020, of course, for many companies, it's the same. It's a year of challenge. But because of the epidemic, there are various market environments. It gives us the opportunity to look at the company's operating strategy from a longer-term perspective. And of course, we also tried many short-term strategies. And then, I believe 2021 will be a better year than 2021. I think the two questions you mentioned are relevant. First of all, in the short term, the exploration of new customer groups and new customer groups in the video industry and the second-tier market will be our driving force for growth. In the long term, I think it is still a major direction for our development. We estimate that because of some changes in our model, our starting income in 2021 may have a short-term decline, and then our advertising income will be higher. But I believe that such a adjustment has a very important meaning for the long-term development of 36G. In the new year, I think advertising business will continue to recover compared to 2020, just as we did in Q3 and Q4. It will have a more obvious trend of recovery, and then our offline business will continue to grow with the elimination of restrictions in the future. The company will continue to invest in both technology and data, in order to improve the promotion and promotion of our products and new products. As mentioned, in the fourth quarter, advertising business has exceeded the starting income. I would like to clarify that if we look at the whole year from 2020, the corporate income is still the first major source of income for the company, which accounts for about 50% of our income. If we look at the advertising from the previous year, it accounts for about 44.7%. Of course, when we were in Q1 in 2020, we shared with you this point of view, that is, the pandemic may give us structural changes that we will experience in the startup business. So, after such a pandemic impact, in fact, we have made a quick adjustment and transformation in the recent few seasons. For example, you can see in the fourth quarter, we took the initiative to do a part of the original low-power integrated marketing business. This is an important part of the original corporate service business. So, we have turned the business into a more large-scale economy and anti-contradictory Thank you so much, Vincent, for these two questions. And I think these two questions are well linked.
spk02: So for your first question, to comment on our outlook for this year, I think for us and for most of the companies in China and globally, 2020 must be a very challenging year from the macroeconomic level and for the facts involving market dynamics. So this situation made us to think about our business from a longer perspective. But also, in the short term, we also proactively made multiple adjustments in our operations. In the short and medium term, maybe, we will remain focused on our video-oriented strategy. and to explore opportunities in broader addressable markets for ourselves, I mean for the private and the public markets. And second, you can see we already explained for a longer term, we will involve our business model into a more scalable and counter-critical. We expected maybe a decrease in our enterprise value-added services in this year, but we believe it's extremely important for our longer-term development and for in this year our advertising site we expected a continued recovery in this year just like we performed in last Q3 and Q4 and as the offline activity restrictions are totally lifted, I believe our offline businesses will continue to restore and be strengthened. On the investment side, we will keep investing in our technical and data capabilities so as to facilitate the evolution and upgrading for our current enterprise value-added services. and other subscription products, as well as to innovate other new products. So to sum up, we will see the main driver will still be our enterprise BES. And for the second question, as you notice that there is a little bit structure changing for our fourth quarter. But actually, from the whole year's scope, the enterprise VAs were still the top contribution to our total revenue, around 50%. And compared to the advertisement account for 44.7%. As I just shared the idea that the structural change brought by the pandemic impact will mainly lie in our enterprise value-added services. So we made this prudent adjustment and involved into a more skillful and a counter-critical model for our enterprise value-added services over the last two quarters in 2020. And at the same time, we cut down some low-margin integrated marketing business, which is accounted for the most in our enterprise value-added service segment. So that you can see, that's why the revenue of the enterprise value-added services in Q4 decreased. However, we believe it's also brought already a higher JP margin and continue the improvement in operating cash flow for us. So these are for your two questions, and thank you for your question, Vince.
spk03: Thank you. Thank you.
spk05: Thank you. Our next question is from the line of Shanjiao of CICC. Your line is open. Please go ahead.
spk04: I will translate for myself. In 2020, the pandemic did have an impact on the overall offline activities, and how was the progress of offline enterprise service recovery and how to look forward in 2021? Thank you.
spk01: We held two large-scale events, one of which was called the WES Super Planner Conference, and the other one was called the China Investment Summit, and received attention and praise from the industry. In December, we held the most important WES Conference in Beijing, and received a lot of demand and praise from new economic participants. These WES Conferences, whether in terms of time and schedule, or in terms of guest invitations, and in terms of the level of participation at the end, reached a historical height. With the increase in the number of participants, we still maintain a lot higher than the industry. At the end of December, we continued the heat of the WSDA conference. We held this unique IP event in Shanghai again, which we call the Unexpected Series, to promote youth culture and successfully connect new consumer brands and potential consumers. Speaking of 2021, I think that under the premise that the epidemic did not happen twice, we expect the recovery and continued growth of current activities to be very worth looking forward to. First of all, we are most interested in the current IP, the WISE series will continue to expand the industry and domain. For example, in May, we are going to hold the China Funding Collaboration Summit and the WISE City Industry Summit in Shenzhen. We will also expand the 2C-based activities this year. For example, in many places in Shanghai and Beijing, there will be such a landing in multiple forms. In addition, we just shared that our four-level meeting and the Super Meeting and Meeting Hall are in the context of a more intimate and harmonious background in the 1st and 2nd level market, providing a more accurate new product exploration of offline and offline services provided to customers. Thank you for your question. As we mentioned earlier, just started from late August of 2020, we started to hold offline events.
spk02: As soon as the domestic restrictions were lifted, initially lifted, and these events were highly praised. And again, in December, early December in Beijing, as Paul just mentioned, we successfully hosted our featured WISE 2020 conference, which is also highly praised by industry. and all kinds of new economy participants. We extended the agenda setting and the guest invitation for this WISE, and these efforts facilitated this WISE 2020 to achieve a record high of online and offline engagement. And even though we extend the scale of this conference, but the GP margin for our offline events do retain the high level so that you can see that we still retain this ability to hold this offline event. And following the popularity of the WISE conference, we hosted another offline event in Shanghai for our 2C IP Amazement series. And this event focused more on youth culture and the connected emerging Chinese consumer brands with potential consumers. And for this year, there is no new outbreak, and we believe there will be a strong recovery as well. Our wide series will be expanded across a wider range of industries and regions. For example, the coming GPLP conference and the WISE Features Industry Summit will be held in Shenzhen soon in this May. And more 2C IPs will be launched in Shanghai, Beijing, and other cities this year as well, along with our growing and broader user base. And as I just shared with you, Also, some new offline IPs like exclusive seminars on strategy, and industry interview by Thursday's KR were launched in the fourth quarter against the backdrop of the integration of the private and the public markets. So to sum up, we are strengthening our ability to serve different new economy participants better with more offline initiatives. Thank you. Thank you, Jiaxuan, for your question. Thank you.
spk05: Thank you. Due to time constraints, that concludes today's question and answer session. Now I'd like to turn the call back over to the company for closing remarks.
spk02: Sorry for the time limitation, so that's it for us today. Thank you once again for joining us today. If we have further questions, please feel free to contact 36KR Investor Relations through the contact information provided on our website or the PSN Group Investor Relations. Thank you all. Thank you.
spk05: This concludes this conference call. You are now disconnected live. Thank you.
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