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spk02: Hello, ladies and gentlemen. Thank you for standing by for 36KR Holdings Incorporated Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's remarks, there will be the question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Chu-Chen Wang, IR Manager of the company. Please go ahead, Chu-Chen.
spk06: Thank you very much. Hello, everyone, and welcome to 36 Corp holding fourth quarter and official year 2021 earnings conference call. The company's financial and operation results were released early today and have been made available online. You can also view your earnings price release by visiting the web selection of our website at ir36corps.com. Participants on today's call were including our co-chairman and CEO, Ms. Da Gangfeng, and our CFO, Ms. Lin Wei. Mr. Feng will start with call by providing an overview of companies and the performance highlights of the quarter and Chinese, followed by an English interpretation. Ms. Wei will then provide details on companies' financial results. Before opening the call for your question, before we continue, please note that today's discussion will contain forward-looking statements made under safe harbor provision of U.S. Provided Securities Litigation Reform Act of 1995. forward-looking statements involve inherited risks and uncertainties. As such, the company's results may be materially different from the reviews expressed today. Further information regarding these and other risks and uncertainties, including in the company's prospectus and other public feelings, is filled with USSEC. The company does not assume any obligation to update any forward-looking statements except as required and applicable law. Please note that 36 CUR earnings price release and this conference call including discussion of undoubted gap financial measures as well as undoubted non-gap financial measures. 36 CUR's earnings price release contain reconciliation of non-gap measures to the undoubted gap measures. Please note that all amount numbers are in RMB. I will now turn the call over to our co-chairman and CEO, Ms. Da Gangfeng. Pulse, please go ahead.
spk07: Thank you.
spk06: Hello, everyone, and thank you for joining us for the fourth quarter and Fisher Year 2021 Earnings Conference Call.
spk07: 2021 is an extremely unusual year based on challenges. China's new economy has shown strong willpower and vitality. As always, we hope that the new economy participants will achieve higher achievements, continue to witness and accompany the development and rise of many new industries and new channels. 2021 has been an even four-year given the complex environment. A year we face both expansion opportunities and the rising challenge. Despite the rapid global change, China's new economy demonstrated a strong resilience and vitality.
spk06: Commitment to our mission of empowering new economic participants to achieve more, we continue to witness as well as accompanying many new industries and verticals on their journey of development and expansion. In the meantime, 36Q delivered a solo top-line growth in 2021, with our total revenue reaching RMB $370 million for the full year. Notably, we also achieved quarterly profitability in the fourth quarter of 2021 for the first time in the past eight quarters. These robust financial results were driven by the significant accomplishments and breakthroughs in many aspects, including content strategy, product development, platform refinement, branding influence, and monetization capability.
spk07: In the fourth quarter of 2021, our net net cash flow reached 8.5 billion times, and increased by 35%, achieving a growth of 15 consecutive quarters, once again proving the leading position of 36K in the new business field. In the fourth quarter, we delivered another record-setting performance in user traffic, with average monthly page views reached 800, up to 35 year-over-year.
spk06: This 50-constitutively quarter of the growth demonstrated 36-curve unique leading position with new economy. The release of the blockbuster article such CTL crack in the trillion RMB battery empire. Corporate Spanish in CRG undercover intelligent hunters in internet giants and all use white paper stay up late is for the evidence of the continual rise of our content influence. These articles attract widened attention and the giant popularity with their premier quality.
spk07: As of 2021, our 10,000 WeChat official account has nearly 700 articles. More than 200,000 articles have been read. Some online financial content articles have reached 300,000 or even 600,000 readers. We continue to implement a platform-based strategy, PGC and UDC varieties, to further enhance the quality, depth, and breadth of content. In addition, we have expanded the impact in the content form, distribution channels, user experience, and influence.
spk06: During 2021, near 700 pieces of articles published on their WeChat official account smashed over 100,000 reviews each, with some of them attracting more than 200,000 views. Even more impressively, some of the financial articles achieved a phenomenal level of readership, over 300,000 reviews, and in some cases, over 600,000 reviews. Meanwhile, our content platform strategy remained intact, as we delegated to further enhancing our content quality, deep and diversify through both PGC and UGC. In addition, our ongoing efforts both fruits with results in product development, presentation formats, distribution channels, user experience, and the expansion of our footprint. 在栏目和产品上,我们不断拓宽至更多行业和赛道,如新消费,智能汽车,先进制造,速度化升级,北交所,双碳经济等。
spk07: At the same time, we focus more on the new economy and capital market, product horizontalization of the first and second level market, and comprehensive interpretation and interpretation of the whole area. For this reason, we have newly launched a series of new products, such as the digital time, the 36K financial number, the後浪研究所, the superman evaluation, and the 36K research institute, the 36TAN, the暗涌, etc. In addition, we have continued to optimize and innovate a series of IP products, such as the WESDA meeting, the founder's self-government meeting, the 36M36, the three-way star class, and the 36K starting point rating platform, etc.
spk06: With respect of the content column and product development, we continue to expand our high-quality content metrics. We target a wide range of industry, including new consumption, smart vehicle, high-end manufacturing sector, corporate digital transformation, and Beijing Stock Exchange, dual carbon economy. Meanwhile, we place more focus on new economy and capital market and continue to upgrade our product offering across private and secondary markets. To this end, we launched a series of new products such as Digital36, Kerr Finance, All Use, Super Review, 36 Kerr Research Institute, Kerr Carbon, and Waves. Providing in-depth professional analysis of latest business trends. In addition, we continue to optimize an innovative series of IP products such as Wise Conference, 36 and 36, Speedway Start Classes, and 36 Kerr Enterprise Service Review Platform.
spk07: In terms of content, in addition to consolidating the advantage of the picture and text field, we have increased the investment and layout of short videos, audio videos, and live broadcasts. Especially short videos, we have produced nearly 200 short video programs. The total number of views on the platform has exceeded 6 times, and the number of likes is close to 20 million. Currently, the total number of fans of 36G short videos has exceeded 6 million. What is especially worth mentioning is that our fans in Bilibili have exceeded 1 million, which fully reflects the welcome level of 36G short video content in the younger generation of users.
spk06: Regarding content formats, in addition to reinforcing our advantage in text and image, we have further strengthened our strategy efforts and investment in audio live streams, in particularly short-form videos. We have produced near 200 short-form videos, acquiring over 600 million views across our platform with closely to 20 million likes. These videos are unique in terms of topic selection, visual presentation, appealing to a broad range of user demographics. and have currently attracted more than 6 million followers of our video across our platform. It is particularly not worth that. The number of followers to our official corporate account on Bilibili now exceeds 1 billion. The testament to that increasing popularity and raising influence of 36-core short-form video content among young audiences.
spk07: The video content is also an important part of our content. The products, such as the 360-degree video, allow users to watch our content 36 call audio content is another highlight of our content metrics. Example of one of our exciting audience program is Current Workman, which provides users with the latest business highlights in short audio clips that takes just a few minutes to digest.
spk06: We also collaborate with new radio to broadcast our business-centric product program on their new radio playlist, enabling 36Q to deliver primary content to a wide audience across various settings. Furthermore, live streaming is a significant addition to our content advantage. Leveraging its interactive first feature and 36Q reach for all the business, gurus, and industry experts. We have attracted many new users to our live stream content.
spk07: On the content distribution front, we continue to reinforce our omni-channel distribution strategy.
spk06: Establishing a more than comprehensive range of channels for distribution. In addition to our proprietary platform, 36-core website, and 36-core app, we also distribute our content through external channels, such as our official WeChat account, Weibo, Zhihu, Douyin, Kuaishou, Bilibili, and Xiaohongshu, and several other web portal and apps. We have expanded our reach to almost all the mainstream platforms and our followers exceed 22 million, providing us unprecedented influence.
spk07: 在用户体验上,我们进行了诸多优化和升级,利用iOS桌面小组件及全新的UI、UE体验,用户可以更便捷,顺畅地浏览我们的内容。 全新上线的用户成就体系以及社区化运营策略,极大地提升了用户在36个平台的活跃度和典型。 2021年,
spk06: In terms of user experience, we continue to optimize and upgrade our product offering. For example, the iOS desktop wedges and the brand new UI UE upgrade have made it easy for users to discover and browse our content more conveniently and smoothly. Moreover, the new user-achieved system and localized community operation strategy have greatly promoted user-active and enhanced user-sickness in our platform. Compared with prior year, on year-over-year basis, in 2021, the number of users posting comments increased by 47%, the number of comments rose by 204%, and our third-day retention rate rose by 97%, across to 36 websites and 36 current apps.
spk07: On the impact map, we have new layout on domestic regional expansion, down-to-earth market, and international expansion. In August 2021, we officially established the second headquarters in Shenzhen and actively invested in the new economic development wave in the DaWan area. Our local branch business expanded to 12 key provinces such as Hangzhou, Chengdu, Zhengzhou, Xi'an, Chongqing, etc. to increase the potential of the nuclear industry promotion in the lower market. On the other hand, our overseas business, 36Global, has also expanded from Southeast Asia to Auxin and Europe. In addition, the quality content of 36Global has also been greatly improved by Pengbo Central, Daoxiongsi and Rijingse, etc.
spk06: Moving to expansion of 36-car footprint, we extend our presence across a broad range of domestic market, low-tier cities, and international markets. In August 2021, our official launch established our dual headquarters in Shenzhen, and through a localized operation strategy, we have enthusiastically participated in the wave of new economy development in South China Great Bay area. We have expanded our regional office to 12 key provinces and cities, including Hangzhou, Chengdu, Zhengzhou, Xi'an, Chongqing, to explore the potential of the low-tier market and the industry upgrades. On the internet front, 36 global folder expansion is present from South Asia to Australia, New Zealand, and Europe. Furthermore, 36 of the primary content also adopted by Bloomberg, Dow Jones, and Nikkei, which substantially boost our global influence.
spk07: Through the above statements, our customer group has grown rapidly in 2021. From start-up companies, TMT giants, investment institutions, government, to traditional enterprises and C-level customers, these six large customer groups are constantly growing. At the same time, we have also created a product and service that has grown from the initial start-up to the development cycle. With this, our business efficiency continues to improve. Next, let's take a look at the progress we have made in terms of commercialization.
spk06: Driven by the initiatives above, our customer bases grew rapidly in 2021. Each of our six major customer communities continued to expand, including startups, TMT gens, investment institutions, local governments, traditional enterprises, and individual clients. At the same time, we have built a closed-loop product and a server offering that empowers the entire enterprise lifecycle, spanning from startups, and development to the expansion stage will also continually boost our new commercialization efficiency. Next, let us look at our achievement in terms of commercialization.
spk07: In 2021, the economic situation has been complicated many times. In 2021, our business has been growing steadily. Advertising revenue of 2.15 billion yuan is 24% higher than the average level of the same industry. The number of advertising customers in the whole country is more than 500. The unit price is more than 400,000 yuan, which is a double growth. Unlike other 6-channel platforms, 316 has established a brand reputation and image marketing ad. It shows a strong profit potential due to strong leverage and weak cycle. Advertisers choose to cooperate with 316. On the one hand, it is based on the strong influence of 316 in the field of new technology for many years. On the other hand, it pays attention to 316's full platform operation, covering a wide and accurate high-quality customer base. The spread is very good.
spk06: They expected the recovering COVID-19 outbreaks and complex microeconomic environment. We achieved solar top-line growth on a comparable basis in fiscal year 2021. Our four-year advertising revenue reached RMB $215 million, representing a year-over-year increase of 24%, which was above the industry average. In addition, the number of advertisers exceeded 500, and average revenue per advertising customer was above RMB 400,000, both achieving solo year-over-year growth. Unlike other traffic platforms, 36-car advertisement for building brand reputation and visibility has benefited from the platform's significant leverage capability, as well as limited impact of the recent macroeconomic cycles. Enabling us to exhibit powerful revenue potential, the advertisers choose to collaborate with 36Curve because of our deep-seated industry expertise and strong influence on the new economy. On the other hand, they are also near to harness 36Curve omni-channel distribution, which accurately targets distinct audiences within our high-quality customer base, testament to our powerful platform assets.
spk07: Especially with our short video business and the launch of many C-level platforms, we are clearly showing the wide-ranging advantage of 3G customers in the field of products and services. We use short videos to demonstrate the strong attraction, rich content, and the characteristics of the media, and provide brand publicity and content influence for customers. Our wide-ranging customer group from B-end to C-end, the brand facing C-end customers, attracts Intel, Samsung, Nike, Baojie, iQiyi, Zhihu, Yuanqi Forest, and many international and local famous customers. Customer orders are also born at any time.
spk06: Notably, our short-form video business and the launch of various content columns targeting customers and users has demonstrated 36 advertising advantages in achieving both brand awareness and performance. Leveraging the rich media characters of the short-form videos, such as its visual effect, strong engagement, diverse content, and well-distribution capabilities, we provide brand promotion promotion, and the content marketing solution to help customers enhance their brand image and influence. Our customer bases expand from corporate clients to brands targeting customer audience, including Intel, Samsung, Nike, P&G, iQiyi, Zhihu, Yankee Forest, and many other international and well-known local companies. At the same time, our average revenue per customer has been rising steadily. 接下来是我们的企业综制业务。
spk07: Turning to the latest update regarding our Venu Ada Enterprise Service. In 2021, we have...
spk06: strategically reduce low-margin business, while increasing our investment in offline events consulting service. Meanwhile, we proactively incubated platforms to get enterprise service products, such as enterprise service review platform, with the purpose of driving our same growth curve, and as its results, made positive progress. Our four-year revenue from enterprise value-added service reached RMB $74 million, among those services Offline events and consulting service record a remarkable growth of 19% and 13% compared with 2020 respectively.
spk07: Our offline events break through past offline exchanges and use video, live broadcast, and other forms of service customers in a more flexible way. In the second quarter, we launched a live broadcast of the Galaxy. In the offline high-quality summit, we also cooperated with TikTok to conduct live broadcasts and live broadcasts, as well as the second creation and distribution of the Galaxy. In 2021,
spk06: Besides the usual offline events, we adopt a more flexible approach to serving customers by regularly leveraging the video and live stream formats for offline events. In the fourth quarter, we hold our annual Vice Conference with Year of Hardcore. In addition to holding high-quality offline summits, We also partnered with the Wing to create an online live streaming program and the same thing to promote our WISE conference. We successfully created a long-term effect from event promotion to live stream and finally the content recreation and the distribution and turned the event into a major industry influencer. Not only did the revenue from 2021 WISE conference remain a high level, but the user exposure also increased a total of $1.3 billion across our platform, effectively accepting this partnership as a benchmark for win-win collaborations between financial media and Douyin.
spk07: In 2021, we held many live events. The number of events and three-stage revenue rose significantly last year. Our events involved industry trends, investment hot spots, global exploration, overseas e-commerce, local industry recruitment, industry upgrade, and many other themes.
spk06: In 2021, we hold various offline events. Furthermore, the number of our events and the revenue per event has both increased compared with last year. Our events cover a diverse range of topics, including industry trends, investment opportunities, the outlook for the MedWave, overseas commercial expansion, local investment promotion, and industry upgrades. 资讯服务作为企业分支服务的重要组成部分。
spk07: In 2021, we also continue to make positive progress in our consulting service.
spk06: an important component of our enterprise value-added solution. On the corporate side, we help leading high-tech companies such as ByteDunk, Antigroup, and Biomon issue Cosmite industry research report. On the government side, we produce research report on the investment, promotion, and construction planning for new developed zone for local governments in Shenzhen, Hangzhou, Xi'an, among others, generating substantial monetization opportunity. In November 2021, 36 research institutes joined Osteometric Research Alliance, a testimony to our professional capabilities with recognition from professional authorities.
spk07: Taiwan, I would like to introduce our focus project, the progress of the 36-second start-up evaluation platform. In the era of digitalization and digitalization, the SaaS industry entered a fast-growing period. According to the IREIT consultation report, China's enterprises and SaaS industries Next, I would like to share in details upgrades regarding our K-Incubation project.
spk06: the 36-year enterprise service review platform. The digital and smart technology trends have ushered the SaaS industry into a year of fast growth. According to the iResearch, the size of China's enterprise SaaS market is expected to grow from RMB $53.8 billion in 2020 to RMB $130 billion by 2023, with a component annual growth rate of 34%. As a result, we launched a 36-core enterprise service review platform to fuel for this huge product demand and market potential driven by corporate undergoing digital transformation. After more than a year of optimization and fine-tuning, our enterprise service review platform has become China's largest, most authoritative, and most convenient enterprise service software selection platform. 主演于买卖双方的信息不得胜的痛点。
spk07: Thank you very much.
spk06: targeting the pinpoint of information asymmetric between demand side and the sell side. Service providers, 36 enterprise service review platform team has built its platform within three notebook features to empower every enterprise that is seeking the best solution for their corporate digitalization transformation. First, a library rich in product information covering the key industry in China, enterprise service market, and the major of leading players in each industry, allowing the demand side to compare similar software product in terms of the functionality, price, rating. Secondly, authentic user reviews from real users of the software product, willing to share their experience. Third, A structured knowledge system is created by integrating various distinct items of knowledge from across enterprise service industry to help users accurate knowledge and information. As of the fourth quarter of 2021, we have grown our enterprise service review platform to including close to 6,000 software applications, up 13 substantially in the 21st year of the year. The platform market activities have reached almost 600,000. with an increase of 72% from third quarter and a growth of nearly 600 times year-over-year. The cumulative comments amount to nearly 20,000, increasing more than 400 times quarter-of-the-quarter and 1,000 times year-over-year. These ascending operation metrics further proven that our product review portal has become appealing to an even broader but still growing user base.
spk07: In 2022, we will accelerate the construction of the Hu Zheng He brand and increase the overall impact of 36G in the qi fu point of view market. First, we will establish the evaluation standards of the qi fu industry in China. We will take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users to take advantage of the new trend of users We have the reason to believe that as the market coverage of the 36-year-old Qifu Dianping platform continues to deepen, our platform advantages, product advantages, and service advantages will help us to draw the lead in this 1,000-year-old market and achieve high commercial returns.
spk06: In 2022, we are accelerating the development of 36-course competitive advantages and overall influence in the enterprise service review market. Firstly, we will set the evaluation standards for China enterprise service industry and leverage our first mover advantages to educate the market. Second, through improvements in the product library, user reviews, knowledge and key influence library, we will further reinforce our enterprise service review platform and reinforce the product's competitive advantages. In addition, as an independent third party, 36Core Enterprise Service Review Platform will collect real comments from a wide user demographic as well as encourage users to voice their opinions to ensure the objectivity and fairness of our platform. Furthermore, we will gradually begin testing Enterprise Service Review Platform's commercialization potential Looking to achieve monetization by generating sales leads, providing consulting service and a brand marketing solution, plus other effective measures to realize the monetization of our platform. Building on our own advantages, we will collaborate with leading domestic SaaS and cloud service providers, as well as industrial with digitalization demands, such as finance, new energy, and healthcare, to establish enterprise service review benchmark. and create a flagship platform. Today, we have grown the platform to cover over 16% of enterprise service products in the market. We believe that we deepen enterprise service review portal's market Advantages of a platform produce and service will position us to capitalize on the best opportunity of this 100 billion RMB market and enable us to achieve impressively for the return. 客户是我们的订阅服务,2021年前年收入为28002万元,同比增长35%,机构和企业订阅客户数及客单价均得到提升,客户数同比增长40%,客单价同比增长9%. Last but not least, let's turn to our subscription service. Our four-year revenue from subscription totaled RMB $28 billion, up to 35 years of the year. In 2021, we achieved a solo growth in number of institutional and enterprise customers, which increased by 40% year-over-year, with average revenue per customer growth by 19% year-over-year. Thank you.
spk07: We believe this platform-based product will become the company's second-largest company.
spk06: Looking ahead to 2022, a permanently brand pioneering platform dedicated to survey the new economy. We will continue to build and develop our content products and ecosystem to provide entire lifecycle of the service for our customer. We will continuously optimize the three major business segments to grow our customer base, including enhancing new formats such as short-form video, programs targeting individual subscribers, We will also increase our pro and explore new business opportunities from low-tier markets and industry upgrades. Additionally, regarding our emerging business, we will continue to maintain an unwavering commitment to bolstering the research and development operations and commercialization of 36-curve enterprise service review platform. We believe this enterprise service review platform will become our second growth curve.
spk07: We have been exposed to the challenges of the pandemic and the impact of the global economy. Despite the difficulties, our various main businesses have shown a bright performance and achieved a consistent growth. We believe that with the advent of industrial upgrades and the advent of digitalization, as well as the rise of new consumption, hard technology, specialization and specialization in the industry, we will seize this historical opportunity to create a better product and service system, and thus achieve a faster and higher-quality business growth. We expect that the epidemic will gradually be controlled and the global economy will remain stable. For quite some time, we have faced a challenge of COVID-19 outbreaks and a complex macroeconomic environment. Despite those difficulties we have thrown in by
spk06: exceptional performance of our core business, which achieved solid year-on-year growth. Riding the wave of industry upgrades and digital transformation aimed at the rise of new consumption, advanced technology, and dual-carbon industry, plus the growth of specialized, refined, differentiated, and innovative enterprises, we will cite the historical opportunity to build a system of optimized product and service, achieving faster and high-quality business growth. We expect 36-curve will continue to deliver stronger revenue growth and achieve profitability in four-year basis in 2022. Under the circumstances, the COVID-19 pandemic is complexly contained and the macroeconomy is stabilized. They will result in a comprehensive resharping of 36-curve business fundamentals, promoting the market to re-ash 36-curve valuation and us in the inflection point of a company's value. We are confident that our robust long-term fundamental will empower us to forge ahead to deliver long-term sustainable value to society and our shareholders.
spk07: Besides, I will now turn the call over to our staff for Ms. Lin Wei, who will discuss our key financial results. Please go ahead, Ms. Lin.
spk00: Thank you, Pao, and hello, everyone. We are very pleased to report another set of solid financial results for the fourth quarter and fiscal year 2021. Despite the intermittent resurgence of COVID-19 and the complex microeconomic environment, we achieved strong growth across all three business segments on a comparable basis in fiscal year 2021, beating Wall Street consensus on both the top line and bottom line. I want to highlight that Our online advertising business grew 24% year over year, outperforming most of our peers in the industry. Most importantly, as we continuously improve our operating efficiency, we booked record high gross profit margin of 65% and a net income of RMB 15.4 million for the fourth quarter of 2021, the first time of profitability in the past eight quarters. In addition, we ended the year of 2021 with a very strong cash position of RMB 216.1 million as we generated positive operating cash flow in both the fourth quarter and full year of 2021. When we venture further into 2022, we will continue to solidify our core strengths in content production and service offerings while expanding our monetization channels. We believe that we are well-positioned to capture the vast opportunities in China's new economic space and create greater value for our users, customers, and shareholders. Now I'd like to walk you through more details of the fourth quarter and fiscal year of 2021 financial results. Online advertising services revenue increased 10% year-over-year to RMB 76.4 million in the fourth quarter, and it grew 24% year-over-year to RMB 214.7 million for the full year of 2021. The increase was primarily attributable to more innovative marketing solutions we provided to our customers. The number of advertising customers and the average revenue per advertising customer both achieved growth in fourth quarter and full year of 2021. Enterprise value-added services revenue were RMB 30.3 million in the fourth quarter of 2021 and RMB 74 million for the full year of 2021. As we stated in our end-use release, starting from the first quarter of 2021, we ceased to act as a principal assuming low-growth margin businesses and acted solely as an agent Hence, revenues of such businesses were recognized on a net basis from the first quarter onward. To increase comparability of operating results and help investors better understand our business performance and operating trends, we introduced gross transaction value as a supplemental metric to describe our business. Gross transaction value of enterprise value-added services increased 46% year-over-year to RMB $60.5 million in the fourth quarter of 2021, and increased 12% year-over-year to RMB 217.2 million for the full year of 2021. In particular, our consulting services revenues and offline events revenues increased by 13 and 19% year-over-year respectively for the full year of 2021, reflecting the sustained growth despite the influence of the lingering pandemic. Subscription services revenue decreased by 11% to RMB 9.6 million in the fourth quarter of 2021, mainly because some of the offline training programs were canceled or delayed due to the resurgence of COVID-19. For the full year of 2021, our subscription revenues increased by 35% to RMB 28 million, primarily attributable to our continuous efforts in offering high-quality substantive products. Total revenues were RMB 116.3 million in the fourth quarter of 2021 and RMB 316.8 million for the full year of 2021, respectively. Taking into consideration of the aforementioned changes in revenue recognition for enterprise value-added services, where there was a RMB 30.2 million and RMB 143.2 million variance between revenues and gross transaction value for the fourth quarter and full year, investors can figure out that our overall business trend is upward and demonstrated solid year-over-year growth. Cost of revenues decreased 42% year-over-year to RMB 40.7 million in the fourth quarter and decreased 51% year-over-year to RMB 128.8 million for the full year of 2021. The decrease was primarily due to our continued shift in focus towards higher margin businesses and recognition of certain revenues on a night basis. Gross profit increased 49% year-over-year to RMB 75.6 million in the fourth quarter. of 2021 and increased 50% year-over-year to $187.9 million for the full year of 2021. Gross profit margin reached a record high of 65% in the fourth quarter of 2021 compared to 42% in the same period of last year. For full year 2021, gross margin was 59% compared to 32% last year. The increase was primarily due to our continuous shift in focus towards higher gross margin businesses and recognition of certain revenues on a net basis, as well as our improved operating efficiency in fiscal year 2021. Operating expenses decreased 52% year-over-year to RMB 61.6 million in the fourth quarter of 2021, and decreased 28% year-over-year to RMB 282 million for the full year of 2021. Sales and marketing expenses were RMB 39.3 million in the fourth quarter of 2021. The increase was primarily attributable to an increase in payroll-related expenses and marketing expenses, partially offset by the decrease in share-based compensation expenses. For full-year 2021, the sales and marketing expenses were RMB 143.9 million. The increase was primarily attributable to an increase in payroll-related expenses, partially offset by the decrease in share-based compensation expenses and marketing expenses. G&A expenses were RMB 9.6 million in the fourth quarter and RMB 90.6 million in full-year 2021. representing a 88% and 57% reduction compared to the corresponding period of last year. The decrease was primarily attributable to a release of the allowance for credit losses and the decrease in service compensation expenses, partially offset by the increase in payroll-related expenses. The release of allowance for credit losses was mainly due to improved collection of account receivables, as well as continuously increased our efforts in accounting receivable collection. Research and development expenses will unbeat 12.6 million in the fourth quarter of 2021 and unbeat 47.5 million for the full year of 2021. The year-over-year increase was primarily attributable to the increase in payroll-related expenses as we bolstered our research and development capabilities. Share-based compensation expenses recognized in cost of revenues, sales and marketing expenses, research and development expenses as well as G&A expenses totaled RMB 4.1 million in the fourth quarter of 2021 compared to RMB 9.1 million in the same period last year. For full year 2021, the total amount of share-based compensation expenses were RMB 15 million compared to RMB 39.3 million in 2020. Other income was RMB 1.5 million in the fourth quarter of 2021 and RMB 3.6 million for full year 2021 respectively. compared to other expenses of RMB 10 million and RMB 8.3 million in the corresponding period of last year. The fluctuation was primarily attributable to net losses recognized from equity-mastered investments in fiscal year 2021. Net income was RMB 15.4 million in the fourth quarter of 2021, compared to RMB 90.1 million net loss in the same period of last year. This is the first quarter we achieved quarterly profitability in the past eight quarters. For the full year of 2021, net loss was RMB 90.6 million compared to RMB 279.3 million in 2020, a significant reduction of full year net loss. Land gap adjustment net income was RMB 19.6 million in the first quarter of 2021 compared to RMB 81.1 million net loss in 2020. For full year 2021, the adjustment net loss was RMB 75.6 million compared to RMB 240.1 million last year. Net income attributable to 36 KR Holdings ordinary shareholders was RMB 14.6 million in the fourth quarter of 2021 compared to RMB 91.4 million net loss in the same period of last year. For full year 2021, net loss attributable to ordinary shareholders was RMB 89.6 million compared to RMB 280.2 million in last year. Basic and diluted net income per share were both RMB 1.4 cents in the fourth quarter of 2021 compared to net loss per share of RMB 9 cents in the same period last year. For four years 2021, the basic and diluted net loss per share were both RMB 8.7 cents compared to RMB 27.5 cents in 2020. As of December 31, 2021, the company had cash, cash equivalents, and short-term investments of RMB 216.1 million the highest cash level in the past two years. This was mainly because we generated positive operating cash flow in both the fourth quarter and full year 2021. Lastly, let me provide some updates on our share repurchase program. On May 6, 2020, the company announced that its board of directors authorized a share repurchase program under which the company may repurchase up to a total of one million of its American depository shares, each representing 25 Class A ordinary shares. As of December 31, 2021, the company had repurchased approximately 786,000 ADSs for approximately RMB 17.5 million under this program. This concludes our prepared remarks. We will now open the questions.
spk02: Thank you. Ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and 1 on your telephone keyboard and wait for your name to be announced. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. The first question comes from line of Jing Tang from CICC. Please ask your question.
spk04: Good evening. Can you hear me? Yes, we can hear you. I have two questions. The first is under the current microenvironment, how do you view the advertising business in 2022? And my second question is, how did COVID-19 in March affect the company's offline business in the first quarter? Thank you.
spk07: Okay, thank you. First of all, in 2021, we just talked about that our advertising revenue in 2021 increased by 24%. This increase should be relatively high in the industry, especially in the case of an epidemic, to achieve such an increase. We expect that if the epidemic in 2021 does not become more serious, we will still There has been a significant growth in advertising in the past two years. Why is there a significant increase in advertising? I think it's mainly because it's similar to our previous years. What we're talking about is the increase in the number of advertisers and the double promotion of the price of the product. In the past few years, we have done more coverage in the distribution channel, including more traffic increases, and new products and new forms such as short videos. I think these things will bring better service to our customers. So the other point is that we are doing more of this kind of strong and weak-term brand ads. So the impact of big trends on the economy will be relatively small. This is to talk about this ad business exhibition for the third class. For the entire industry, I think the entire industry is still relatively dependent on the situation of the epidemic. We have seen that the growth of new media is still greater than that of traditional media. And then we think that there may still be growth overall. It may be that the growth will not be so big due to the epidemic.
spk06: Thanks for your question. For your first question, I would like to say in 2021, advertising revenue grew 24% year-over-year, a relatively high growth rate compared to our peers. As the pandemic comes under control, I believe the economy will gradually recover, and we believe the advertising industry will trend upward as well. From our perspective, our advertising growth mainly comes from two sources, the increasing number of advertisers and the steady growth of Apoor. Our 36-core distribution channels became more diversified and target more niche markets. And new forms like short-form videos, we're expecting both number of advertisers and Apoor will grow. We subsidize the branding advertising, which is characterized by stronger leveraging and less susceptibility to economy cycles. Therefore, our advertising business will be less affected by the infections in the economy. From the industry side, it's more dependent on the pandemic situation. I believe the new media will be better than the traditional media. That's my opinion about the industry.
spk07: Okay. The second question is about the impact of the pandemic on current activities. The pandemic will have an obvious impact on offline activities, but we are also communicating with customers to turn some offline activities into live broadcasts that combine online and offline. This can effectively reduce the impact of the pandemic. In fact, the WESA meeting in February last year has already proven that our online and offline mode is more effective for customers. For them, the whole effect will be better than the simple offline activities. In addition, from a historical perspective, Q1 is not a high-end period for offline activities held by a third party, so it will not have a great impact on our revenue. About your second question, the pandemic will indeed impact our offline events. However, we're planning to communicate with customers about the moving certain events online. We're aiding the live streaming component,
spk06: alleviate the pandemic impact. From a historical perspective, Q1 is not the peak season for offline events in any cases, so the pandemic should not have too great an impact on revenue. And we also may communicate with our customer about postponing their events so that even if our Q1 revenue is affected by postponements, four-year revenue will remain intact. Thank you.
spk02: Thank you. The next question comes from Pei Pei Chu from Industrial Securities. Please ask your question.
spk05: Hello, can you hear me? Yes, Pei Pei. I will translate my question. We know that companies start with new economy content and recently making a lot of efforts to expand the content boundaries. Could you give us more color of what you've achieved and how would you maintain your competitive advantage in content writing? Thank you.
spk00: Thank you for your question, Peipei. Yeah, you asked a very good question. Yes, in terms of content innovation and production, we have been doing a lot of initiatives. First of all, we have been expanding our presentation format. For example, we previously only have text, flash information, flash news, and pictures. Now we are expanding to more rich formats, including short videos, audio formats, as well as live streaming formats. That's number one on the presentation format. And number two, on our columns and content productions, we have mentioned in our prepared remarks that we now have many, many WeChat account metrics, including our 36KR official account and 36KR Pro and 36Finance and the 36, you know, the secondary market, which have accounts, and the 36 research institute, 36 carbon and the waves, which target at the institution, as well as, you know, all use, which targeting at the younger generation lifestyle content, as well as super reveal, for example, we provide reviews for the 3C products as well as new consumption products. Overall, our presentation formats as well as the coverage of the channels and the verticals are both expanding. That turns out into our commercialization. First of all, our short-form video contributed a lot to our commercialization. We have more C-end customers before. Before, we only had a lot of B-end customers, for example, Intel. expanding into, you know, IT, Zhuhu, Nike, P&G, a lot of beverage brands. That's our, you know, expanding the category of customers. So that helped us to, you know, increase our advertising customers as well as our pool. That's why we are very confident, as Mr. Feng just mentioned, that we expect in 2022, both our advertising revenue as well as our enterprise value ad services revenue will both grow, and we expect... we will achieve a full-year profitability in 2022. Hope that answers your question, Peipei.
spk05: Very clear. Thank you.
spk02: Thank you. The next question comes from the line of Downtown from TH Capital. Please ask your question.
spk01: Hi, Good evening. Thank you for answering my question. Congratulations on your very good performance. My question is about the interest rate. 我们可以看到公司四季度的毛利率是达到了65%,创下了历史新高,然后比上个季度也提高了大约9个百分点。 我的问题就是可不可以请管理层分享一下这个毛利率改善的原因和2022年毛利率的一个趋势呢? 我自己快速的翻译一下。 Hi, management. Thanks for taking my question. I have a small question regarding margins. So the overall growth margin was a record high at 65%, up about 23 percentage points year-over-year, and 9 percentage points quarter-over-quarter. So I wonder what the reason for this trend, and how should we look at margin outlook in 2022? Thanks.
spk00: Thank you for the question, Dawn. That's a very good question. Yes, our overall growth pattern of 65% is a record high, actually, in our history. That's a very amazing gross margin level. Actually, the year-over-year increase of gross margin, mainly because we recognize certain revenues on that basis, that gives us almost a 20% raise for gross margin. If you compare every quarter compared to the first three quarters of last year, we basically increased gross margin by almost 20%. That's the main reason for year-over-year improvement of gross margin. The quarter over quarter growth margin improvement mainly comes on the economy of scale, which in other words, if you look at our revenue for the fourth quarter, due to seasonality, the fourth quarter is the strongest quarter for the entire year. So we achieved almost 120 million RMB revenue. That's a very high level. And our cost remain on a relatively stable level. That's why you will have a leverage here, which we call it an economy of skill. That's why sequentially our Q4 gross margin also increased a lot. And to a smaller extent, because some of the revenues, we recognize the revenue on a cash basis out of prudential accounting policy. And due to our efforts in collecting collecting account receivables, we have improved a lot in the fourth quarter. So before year end, we collected some revenues on cash basis that also were recognized in Q4, which we couldn't recognize in the previous quarter. That also resulted in a higher, you know, gross margin in the fourth quarter. Hope that answers your question, Dawn.
spk02: Very clear. Thank you. Thank you. Thank you. The next question comes through the line of Lingui Zhao from SWS Research. Please ask your question.
spk03: 不要变成一个以广告为主的公司。 那当前广告业务仍然是公司的核心主业。 如何看待广告业务以及其他新业务的潜力? 这个是我的第一个问题。 那我先翻译一下吧。 Thank you for taking my questions. I have two questions. One is Mr. Feng said that never to be a company that live by advertisement. Currently the ad business is still the core business of our company. how we see the potential of advertising business and other new business in the future.
spk07: Although it has a profit margin, we have been trying to increase the proportion of non-commercial businesses. Of course, we have never relaxed the support of commercial businesses. We have always been The advertising business is still growing steadily. In the long term, our advertising business will still have a relatively high growth of 30% or more. But at the same time, we also remember more and more hopes for our new starting products and platforms. Sometimes we joke that we must surpass the starting platform in the case of high-speed advertising growth. So it has to get a higher growth, for example, a growth of more than 100%. This is how we can reach our goal. From today's actual situation, In the past few years, our advertising business, under the KB Star, accounts for about 46.6% of our revenue. Our startup business accounts for about 47.2% of our revenue. So in fact, we can see that our startup business today has surpassed the advertising business, and it should have surpassed it last year. So we hope that in the future, through our startup business, we can achieve a healthier company structure and a bigger future through a higher growth than the advertising business. Thank you.
spk06: Thanks for following my interview view. I would like to say I'm not a very big fan of the advertising business because no matter from the revenue scape or the gross margin, they have the limitation there. Of course, from our advertising business perspective, we are confident that in the future we have at least 30% or 40% growth in the but I would like to say we would like to put more attention on our new business, like enterprise service review platform. Actually, in 2021, our advertising business and the value-added enterprise service counted for 46.6% and 47.2%. comparable of the GTV respectively, which indicating a very healthy revenue mix. In the future, we'll continue to build our second growth curve enterprise service in the short term. Hope this revenue will be the important part of the future revenue. And we believe that driving by the enterprise service review platform, 36-curve growth will continue upwards along the new curve. Thanks.
spk03: 我翻译一下这个问题。 As a tool provider in the enterprise service industry, what is the advantages of 36K's enterprise service platform? Thank you.
spk07: 谢谢。 其实我们在一年半以前开始做铁浮的总经理产品的时候, 我们已经分析过这件事情可能需要的几种核心的能力。 那么我接下来说一下36K我认为相对于大厂来说具备的一些独特的东西。 首先是我们的独立客观性。 当然今天市场中, There are other big companies, such as MoMo Cloud Market. They already exist, but their development is not good. I think it is largely related to their lack of third-party independence and objectivity. And SanLuke is a third-party media brand that has a lot of credibility in the industry. It is recognized by the entire industry and has very good customer resources. I think this is our first advantage. The second advantage is that we are doing uh, uh, Thanks for your second question. 36 provides enterprise service review platform with three advantages. First, I would like to say is the fairness and objective of our enterprise service review platform.
spk06: As an independent platform, we especially value authoritative user reviews which should not be exhausted by commercial purpose. Compared with other large internet companies with their own SaaS and cloud products, our enterprise service review platform can display user feedback on software application sale and impartially, enhancing decision-making efficiency for both the sales and the buyers. The second one is about ability and the willingness to serve customers. The last advantage is our completed product system. We originally saw the pin point for both seller and buyer in enterprise service market and start to build our presence earlier. Content such as the software products library, user review library, key person database, and knowledge maps contain the magical magical quadrants in our enterprise service software selection platform. Hope my answer is enough for you. Thanks.
spk02: Lingyi, do you have any further questions?
spk03: Thank you, Lingyi.
spk02: Ezra, for the questions now, I would like to turn the call back over to the company for closing remarks.
spk06: Thank you, Operator. Thank you again for joining us today. If you have any further questions, please feel free to contact 36er Investor Relations through the contact information provided on our website or TPG Investor Relations.
spk00: Thank you.
spk02: That does conclude our conference for today. Thank you for participating. You may all disconnect. Have a nice day.
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