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spk04: Hello, ladies and gentlemen, and thank you for standing by for the 36th Kerr Holdings, Inc. Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's 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, Yao Li, IR Manager of the company. Please go ahead.
spk06: Thank you very much. Hello, everyone, and welcome to 36KR Holdings' third quarter 2022 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 that we see in the IR section of our website at ir.36kr.com. Participants on today's call will include our co-chairman, CEO, Mr. Da Gang Feng, and our chief financial officer, Ms. Ling Lei. Mr. Feng will start the call by providing an overview of the company and performance highlights of the quarter in Chinese, followed by an English interpretation. Ms. Wei 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 Legislation Reform Act of 1995. Forward-looking statements involving hearing risk and uncertainties. As such, the company's results may be materially different from the views expressed today. For the information regarding these and other risks and uncertainties is included in the company's first practice and other public selling as well with the USFDC. The company does not assume any obligation to update any forward-looking payments except as required under applicable laws. Please note that 36K are only expressly released and this conference call includes discussions of financial measures as well as unaudited non-GAAP financial measures. So this is Payroll's Earnings Price Release campaign's reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. And please note that all amount numbers are in RMB. I will now turn the call over to our co-chairman, CEO, Mr. Da Gangfeng. Pao, please go ahead.
spk00: Thank you. Hello, everyone. Thank you for joining our 3rd Quarter 2022 Earnings Conference Call. In the third quarter of 2022, we maintained steady growth across our business, highlighted by our fourth consecutive quarter of profitability. This strong performance in COVID-19 resurgences and macroeconomic halvings was largely thanks to our due focus on boosting our influence and a lot
spk06: and advancing commercialization.
spk00: As these jobs to empower the new economy sector throughout the third quarter,
spk06: We continue to optimize our services and build barriers to competition with our content ecosystem, setting the stage for our ongoing excellent performance. To start, I'd like to share with you some of this quarter's breakthroughs and innovations in brand influence and commercialization.
spk00: 优质的内容既是我们发展的基石,也是我们持续光大的羽翼。 36克以PTC与UDC模式并重,丰富内容体系,打造出围绕泛商业、泛科技、泛生活等多维一体的内容生态体系。
spk06: First, let's look at content. We are committed to creating value with our high quality content. It is the cornerstone of our development and powerhouse that propels continuous expansions of our brand influence. Boasted by our content platform strategy, we still focus on PGC and UGC. We have enriched our content offerings and created a multi-dimensional content ecosystem encompassing pan-commerce, pan-technology, and pan-lab content.
spk00: In this quarter, the number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has exceeded 155. The number of articles with more than 100,000 views has
spk06: In this quarter, we continue to produce engaging, professionally created content. We see a number of our articles with over 100,000 page views climbing to over 155. Among them, several articles on pan-business and pan-life topics triggered heated discussion, driving PVs up to 300,000 and even beyond 800,000 in some cases. In addition, several of our original articles were recommended by WeChat's top stories selected in the third quarter. leading to a daily page views of over 1 million for several consecutive days. 重点值得一提的是,我们的二级市场团队在本季度深度剖析海鲜电油的文章,以80万家的阅读量引发热议,创立仅半年的全新垂直子媒体36探,在本季度对正号公司的深度报道,阅读量接近20万,是我们新号的一个开门红,极大提升了我们在双探赛道的关注度。 I'd also like to highlight an insightful article written by our sanctuary market team in the third quarter. High PM, a blockbuster which generates few spots and over 800,000 views. Furthermore, our brand new vertical submedia outlet, 36 Carbon, launched only six months ago, achieved nearly 200,000 views with this in-depth coverage of EcoFlow, getting the outlets off to a flying start, which significantly boosted our visibility in the dual carbon sector.
spk00: Thank you, Ms. Shi. As for our UGC model, we implemented a breakthrough innovation in the third quarter. By optimizing operations for the 36K app's latest post feature, we established a discussion forum for our shared content.
spk06: creating a self-perpetuating content creation circle. This boosts its core user retention while also drawing attention and responses to our content, substantially reinforcing users' thickness.
spk00: In addition to the question and answer form in this quarter's continuous presentation series, we have also launched new activities in the form of short videos, live broadcasts, and other content. In terms of short videos, the number of videos is more than one million, and it has aroused the interest of netizens. Among them, the original content, which focuses on the truth behind the scenes in the hospital, has more than 400 players. In addition, 36 short videos, based on excellent content production and broadcast capability, have won two gold and one bronze awards, which fully proves that the content creation capability, commercialization capability, and brand influence of 36 short videos have been recognized by the industry. Video content is one of the effective means for us to expand the diversity of users. As of the third quarter of this year, the total number of short video fans has exceeded 7.4 million. Among them, the number of short videos that have been banned has exceeded 1.5 million by the end of October, and has become one of the best in the institutional account.
spk06: In addition to our engrossing text and graphic content, video content is one of our most effective tools for increasing user diversity. We unleash fresh vitality in our short video and live streaming content during the third quarter, with several of our short videos achieving over 1 million streams. Among them, our original content on the topic of the truth about how hospitals make money gained more than 4 million views on Bilibili. In addition, 36KR received two Gold Medals and one Cooper Medal at the China Content Marketing Awards for its excellence in content production and dissemination, highlighting the industry recognition of 36KR's original content generation and commercialization capabilities, as well as our brand influence. As of the third quarter of this year, the number of our short video followers exceeded 7.4 million. Among them, the number of our followers on Bilibili surpassed 1.5 million at the end of October. making us a leader among institutional accounts on Bilibili.
spk00: Regarding live streaming, our Youth Watch and CEO Tips programs continue to pump up fresh content, producing a continuous stream of high-quality reporting with coverage of new topics.
spk06: Together, they completed 25 live streaming sessions in the third quarter. Notably, YouthWatch established cooperation with WeChat Video Account to launch a specialized column, citing a new record in the number of streams generated.
spk00: In terms of data storage and community operation, using the experience accumulated in the past in the first and second level markets, we launched the 3.6G creative platform in this quarter. Using the data charts of 3.6G storage in the past, we continue to help early-stage projects to develop. At present, the platform has more than half of the emerging enterprises, Beyond our UGC and PGUC content, we also explore data accumulation and community operations.
spk06: during the quarter and leverage our experience in primary and secondary markets to launch the 36-year venture capital platform. This platform capitalizes on our data mining resources to continuously empower early-stage projects to secure financing. As of now, the platform has attracted over 10,000 startup companies and over 1,500 institutional investors, including such big names as Matrix Partners and Sloan Ventures, with 1,000 weekly connections facilitated on average. As the saying goes, fortune favors the bold. 36KR Venture Capital Platform marks a bold start for us as we expand beyond media service to data tools and funding facilitation services, enhancing visibility and exposure for high-quality startup companies and connecting them with investors.
spk00: With all the content and results we have received so far, our total number of fans has increased by 18.6% to 2,670,000. Our brand influence and user attention are constantly growing. This also laid the foundation for our business. Next, I will share with you the progress of our business.
spk06: Powered by these eye-catching achievements, as of the end of this quarter, the number of our followers grew by 18.6% year-over-year to 26.7 million. We have also noted consistent improvements in our brand influence and user attention, which has laid a solid foundation for our commercialization initiatives. With that, let's now turn to the commercialization progress of our main businesses.
spk00: First, our advertising revenue increased by 20% year-over-year, powerful evidence of brands' appreciation of our effective brand marketing.
spk06: Thanks to our continuous service innovations, coupled with our CSR program seeking the light, the number of our customers rose by 20% year-over-year while our pool held steady at last year level in the third quarter.
spk00: We continue to carry out content and form innovations on the brand side of the core target customer group by serving our customers in the third quarter. In terms of video, commercial video produced for Wuling Mixing makes the video angle of the truth and video crisp, making it one of the highest-priced video in the market. With the support of Zuniti, Hulang Institute, We continue to create new advertising content and formats for brands targeting C and consumers. For example, we made a commercial video for Wuling Hybrids
spk06: hybrid electric vehicle entitled The Truth About Oil Resource Depletion. Featuring our fresh perspective, this pioneering short video one raves from the customer. Our vertical submedia outlets all use also continue to gain brand influence, boosting its commercialization potential. By connecting content formats from various channels, including text, graphics, and live streaming, all use can fulfill the varied needs of our diverse customer base as for commercialization. Multiple well-known companies including iQiyi, Huawei, Jindong, and Zhihu became repeat customers in the third quarter and we established new cooperations with Funways, StubVR, and other new economy brands.
spk00: The service and marketing industry is the advantage of 3.6 customers. But at the same time, we are also constantly innovating and breaking through with customers in the traditional industry. This quarter, we have a deep cooperation with特部. Pay attention to特部's achievement of the world-class Chinese sneakers' strategic goals and new releases. Although serving the new economy sector is a key differentiator and an advantage for 36KR, we also continue to innovate and upgrade our services for traditional industry customers.
spk06: For instance, we establish in-depth collaboration with XTAP to operate their brand strategy in preparation for their new product launch. By skillfully integrating product testing of similar products with our detailed, informative, industry-specific content, we help XTAP cement their strategy for becoming a world-class Chinese running shoe brand. This collaboration mords in-depth industry content, product videos, and a product launch with a forceful statistics era. and represents a potent new tool in our arsenal for empowering traditional consumer brands. We are confident that as we continue to refine and enhance our services, we will attract more traditional brands seeking an influential and creative partner in their marketing strategy.
spk00: In addition, we have reached a comprehensive cooperation with the well-known North American leading car media, FutureCar, in terms of content marketing and industry chain transmission, and jointly launched the development opportunity for the global new car industry. In addition, this is also an opportunity to further expand
spk06: In addition, we recently entered into a strategy cooperation with FutureCar, a leading North American media platform focusing on the automotive industry. Through authorized content sharing and mutual commercialization support, the two parties will jointly tap into opportunities in the global new energy vehicle sector. In addition, this marks an important expansion of 36KR's global business footprint. building our media network and our commercialization prospects in the North American market. Regarding our secondary market products, we teamed up with Guo Tan International Securities during the quarter to share our insights into the real asset industry current situation and future investment trends through the 36-year Capital Pi program. Meanwhile, we established partnerships with renowned companies such as New Hope Group, Lao Lingmang Media, and J&P to provide empowerment services in market value management and brand management. Also, apart from 36K's self-owned capital and market business, we set up a joint venture in the third quarter with the well-known U.S. financial media company Capital Watch. Going forward, the GV will focus on offering market value management services for Hong Kong-listed companies. Turn into value at the enterprise services. In this quarter, we continue to provide high quality services for clients by integrating online and offline formats to mitigate the impact of COVID-19 on their business. As a result, we've established cooperation with more enterprises and government clients, increasing our number of customers by 26%. Total revenue from this segment also increased by 4.7% year-over-year.
spk00: One notable success was the heavyweight IT forum we hosted in September. Li Yin, 2022 China Fund Partners Summit,
spk06: Through our communications with a massive number of startups and investment institutions, we have developed a deep understanding of both the current situation and the future outlook of a broad web of industries. We capitalized on this advantage to analyze the key factors impacting the development of R&B funds from industry, policy, and market perspectives, helping local funds gain deeper insight, adapt to changes, and capture opportunities in the new investment era. In addition, we concluded our Wise New Economy King's Conference last week. With Long China Long Innovation at this year's theme, we invited eminent new economy professionals, including entrepreneur Wang Shi, economist Guan Qingyou, and Charles Lee Xiaojia, entrepreneur and former chief executive of the Hong Kong Stock Exchange, to conduct in-depth discussions of trending industries at the event, which attract total exposure exceeding 4.5 billion across online audiences.
spk00: In addition to the current activities, our consulting and corporate policy services are also continuing to grow in this quarter. Shandong Research Institute continues to deepen its industry insight ability, and continues to improve its reputation through industry research reports. In commercialization, we are working with many well-known companies such as Beijing, Chengdu, Shenzhen, Hangzhou, Chongqing, etc. and Lianxiang, Baidu, Zijie, Taodong, Baojie, etc. to achieve consulting services. In addition, in the field of corporate endorsement, we are exploring the service modelization and productization path of customer service content to improve service efficiency and service quality. Aside from offline activities, we continue to make strides with our consulting services and value ID enterprise services in the third quarter. For our consulting services,
spk06: Our 36KR Research Institute continues to deepen its industry insights and publish compelling industry research reports, enhancing its brand influence. During the quarter, we expanded our customer base with additional government agency customers in Beijing, Chengdu, Shenzhen, Hangzhou, and Chongqing, as well as renowned enterprises including Lenovo, Baidu, ByteDance, and P&G. Elevating this business commercialization as for our content operation agency services, we continue to explore content services, modernization, standardization of our app to enhance our service efficiency and quality. At the Huawei Developer Conference 2022, 36KR was granted the Excellent Technology Content Partner Award for providing agency operations services for Huawei's browsers. In addition, we attract new partners and establish collaborations with various eminent financial institutions and enterprises, including Shanghai Pudong Development Bank, Ping An Pu Hui, and Huatai Securities. Thanks to our high popularity and unreliable word-of-mouth effect.
spk00: At the same time, our regional expansion business continues to grow. We use Beijing and Shenzhen as our two headquarters, and we expand local businesses in Guangdong, Sichuan, Chongqing, Jiangsu, Zhejiang, Hubei, Shaanxi, and other 12 core areas. This season, regional customer multi-layer development, end-to-end customer revenue, and rapid growth in size have increased by more than 50% compared to the previous year. The turnover has also increased by more than 60%. At the same time, we continue to make progress in our regional business expansion. With our dual headquarters in Beijing and Shenzhen, we focus on expanding our presence to our 12 core regional offices in Guangzhou, Sichuan, Chongqing, Jiangsu, Zhejiang,
spk06: and Shaanxi. Alongside growing regional customer diversity, revenues from enterprise clients is also increasing rapidly, with up pricing by more than 50% and contract sales by over 60% year-over-year. Adding local enterprises to our client roster has improved the balance of our government and enterprises' clients, clearly reflecting the effectiveness of our lower-tier market expansion strategy. Notably, our regional office in Jiangsu organized its Fourth West event during the quarter, establishing a benchmark as we viewed the regional influence of our vertical submits and explore regional commercialization opportunities.
spk00: In addition to maintaining the traditional customer service, our customer service design and customer service type have been upgraded and expanded. In addition to the traditional customer service such as continuing to upgrade, financing, and accelerating, we have also expanded our traditional customer service
spk06: With respect to our subscription services, on top of our existing traditional courses, we upgraded our curriculum and expanded our customer base. During the third quarter, we upgraded funding acceleration camp and partnered with well-known companies including Microsoft, China, and Moneo to provide internal training. As we built out a complete curriculum, The Procurement Service will bring us more commercialization opportunities going forward.
spk00: Next, I would like to share with you the latest progress of the 36-Grad Uplift platform. Digital economy has become an important driving force for the development of our country's economy. According to the data from Northeast China, the current digital economy accounts for 40% of China's GDP, and is still improving steadily. As the second growth curve for our search for breakthroughs and growth points, Uplift is committed to promoting the development of the energy-saving industry. This quarter, we are operating data to improve the performance and integrate innovation.
spk06: Next, I'd like to share our latest accomplishments with respect to our Enterprise Service Review Platform. According to Northeast Security's data, the digital economy has become a key driver of China's economic development, accounting for 40% of China's GDP and rising. Representing our second growth engine and a commercialization breakthrough, the Enterprise Service Review Platform is dedicated to empowering the thriving SaaS industry. In the third quarter, our enterprise service review platform reported exceptional performance across multiple operating metrics, as well as great progress in functionality improvement, user acquisition innovation, and commercialization. First, the enterprise service review platform maintained rapid growth in its operating data, with monthly active users rising more than 12-fold year-over-year to exceed 1 million. The number of authentic user reviews also surged, growing by almost 10-fold year-over-year and 54% quarter-over-quarter to exceed 50,000. We showcased over 7,300 pieces of mainstream software on the platform this quarter, up 59% year-over-year. And the number of merchants on our platform is now approaching 1,000, up 328% year-over-year.
spk00: In terms of product functions, Xifu Dianping is based on software product underlying data to build a software appraisal system. Users have improved the efficiency of writing Dianping and the effectiveness of Dianping content by selecting the following forms. Regarding product functionality improvements based on the underlying data of software products, we built a labeling system for software evaluation allowing users to write reviews by choosing appropriate labels.
spk06: which improved review efficiency and effectiveness. In the meantime, we upgraded the risk control system for review verification to increase review authenticity and reliability. We also elevated buyers' experience by enabling profile saving on the H5 page of our app. Finally, we revamped our business portal in the Baidu Mini program, leading to peak daily unique visitors of over 5,000 just two months after its launch.
spk00: Huo Kexing is the founder. In addition to the continuous optimization of the flow system and more local areas, this quarter, the 36-year-old Qifu Dianping launched the Qifu Flower Selling Conference. Through the form of digitalization and industry, we invite experts in the digitalization-interested investment industry in the digitalization-interested investment industry to explore the solution of the industry in the real industry context and help more participants understand the transformation of digitalization from a practical point of view. In addition, the 36-year-old Qifu Dianping will carry out content rejuvenation in this quarter, which is an effective link between user-centered exploration of professional content and Qifu Dianping products.
spk06: As for our innovations in customer acquisition, in addition to continuous optimizations of our consumer product system and grant promotions in various regions, we launched an exclusive saloon enterprise service team party on the enterprise service review platform. We invited experts from leading enterprises across popular industries with an interest in digitalization, such as catering and new consumption, to explore industry solutions in real industry scenarios. This once deepened participants' understanding of digital transformation from a practical point of view. Additionally, we strengthened the content capabilities on our enterprise service review platform in the third quarter by combining professionally generated content and enterprise service review platform products with a user-centric approach. We unlocked the unique value of IP content in guiding industry trends and forging connections among professionals. Notably, through our deal growth dialogue program and digital growth program, we focus on real business cases and authentic user reviews to elevate the user experience and commercial value of enterprise products from users' perspectives.
spk00: Finally, Q5.0 has made significant progress in commercialization. To date, Q5.0 has reached more than 10 million levels. In the third quarter, we achieved strategic cooperation with the World 500 companies and Lenovo Group to provide deep market marketing services to the Lenovo SMB business department. We used the Tifu.com platform to collect data from the past, to deliver effective marketing and quality clues, and to help Lenovo to be more precise. At the same time, we collaborated with Lenovo to develop a new special channel, to focus on a large number of medium-sized enterprises, and to help Lenovo to improve its brand impact. This collaboration is an important milestone for Tifu.com on the commercialization road, as a follow-up to the collaboration of more well-known manufacturers, and the establishment of standard cases. Lastly, we also made significant strides in the commercialization of our enterprise service review platform. To date, our enterprise service review platform has received orders with a combined value of over RMB 10 million.
spk06: It has also established strategy cooperation with Lenovo, a Fortune Globe 500 company, to provide in-depth marketing services to Lenovo's SMB unit. Specifically, leveraging the data we have accumulated via the enterprise service review platform, we deliver valid marketing qualified leads and assist Lenovo's SMB unit in process customer acquisition. Meanwhile, by jointly developing a program for specialized, sophisticated, differentiated, and innovative companies to acquire massive traffic from small and medium-sized enterprises, we have equipped Lenovo with a powerful new tool to enhance their brand influence. This collaboration marks an important milestone in the commercialization path of our enterprise service review platform and a benchmark for future cooperation with more renowned companies. We have established our other benchmark cases through brand promotion of well-known SaaS vendors such as XINREN, XINSHI, Hotpay, Weiling Technology, and Dovetest.com, building a flywheel for the enterprise service review platform's rapid growth.
spk00: Looking back at the third quarter, despite the repeated COVID-19 pandemic and the challenges of the pandemic, everyone in the industry is still affected. In terms of the content, the service system, the professionalization, and the optimization of operations, the 36th quarter has continued to improve, making us the leading financial industry in this quarter. The total revenue will achieve the same as the double-digit growth, and the fourth consecutive quarter will achieve profit. In addition, as the second growth curve of the company, the 36G TIF rating platform will continue to achieve breakthrough-like progress, and the sales data will increase at the same rate as the high-speed growth, and the commercialization will become more and more effective. Looking forward to the future, we will continue to polish the special competitive advantage of 36G, maintain business vitality and resilience, promote the upgrade of the industry and digitalization of the digitalization trend, release greater commercial potential, and explore new growth points in the economy, creating more value for users, shareholders, and investors.
spk06: Looking back at the third quarter, despite the COVID-19 resurgences and macroeconomic challenges that still wait on everyone in the industry, we remain focused on optimizing our content ecosystem, service system, and operations, while also driving our commercialization. These efforts contributed to our encouraging financial performance in the third quarter, highlighted by our double-digit revenue growth year-over-year and the profit for the fourth consecutive quarter. In addition, we continue to break new ground with our second growth engine, the Enterprise Service Review Platform, and delivered rapid improving operating matrix and daily commercialization results. Looking ahead, we will continue to hone our unique competitive advantage to maintain our business vitality and resilience. Riding the wave of industry upgrades and digital transformation, we will unlock greater commercialization potential and explore new growth avenue in the new economy sector to create more value for users, shareholders, and investors.
spk00: With that, I will now turn the call over to our CFO, Ms.
spk06: Lin Wei, who will discuss our key financial results. Please go ahead, Lin.
spk01: Thank you, Pao, and hello, everyone. Despite the lingering challenges in the external environment, we are very pleased to have the extended our strong growth momentum into the third quarter with another quarter of double-digit top-line growth, alongside a 11.5% year-over-year increase in total revenues. Notably, our advertising businesses continued to score, increasing 20% year-over-year, while our enterprise value-added services also recorded solid growth of 5% year-over-year. In addition, thanks to our consistent and effective efforts to optimize our cost structure and operating efficiency, our gross profit margin and operating margin both improved year over year in the third quarter of 2022. And we delivered a fourth consecutive quarter of profitability. Our resilient, diversified portfolio of products and businesses bolstered by our content capabilities and multidimensional ecosystem absolutely positions us to achieve sustainable growth and generate long-term shareholder value as we move forward. Now I'd like to walk you through more details of our third quarter 2022 financial results. Total revenues were RMB 94.6 million in the third quarter of 2022, an increase of 11.5% compared to RMB 84.9 million in the same period of last year. Online advertising services revenues increased by 20% year-over-year to RMB 63.9 million in the third quarter of 2022. The increase was primarily attributable to more innovative marketing solutions we provided to our customers, as well as proactive sales strategies we adopted to navigate the challenging environment during the quarter. Enterprise value added services revenues increased by 5% year-over-year to RMB 23.6 million in the third quarter of 2022, as we continuously and proactively developed various new enterprise-level services for our customers. Subsequent services revenues were RMB 7.1 million in the third quarter of 2022, compared to RMB 9 million in the same period of last year. The decrease was primarily because some of our offline training programs were canceled or delayed due to the resurgence of COVID-19. Cost of revenues were RMB 35.5 million in the third quarter of 2022, compared to RMB 37.3 million in the same period of last year. Gross profits increased by 24% year-over-year to RMB 59.1 million in the third quarter of 2022 compared to RMB 47.6 million in the same period of last year. Gross profit margin was 62% in the third quarter of 2022 compared to 56% in the same period of last year. Operating expenses to RMB 62.1 million in the third quarter of 2022, a decrease of 23% compared to RMB 80.3 million in the same period of last year. Sales and marketing expenses were RMB 32.2 million in the third quarter of 2022, a decrease of 9% from RMB 35.5 million in the same period of last year. Decrease was primarily attributable to the decrease in share-based compensation expenses and marketing expenses. G&A expenses were RMB $16.6 million in the third quarter of 2022 compared to RMB $30.9 million in the same period of last year. The decrease was primarily attributable to the decrease in allowance for credit losses. Research and development expenses were RMB $13.4 million in the third quarter of 2022 compared to RMB $13.9 million in the same period of last year. 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 2.6 million in the third quarter of 2022, compared to RMB 4.9 million in the same period of last year. Other income was RMB 5.7 million in the third quarter of 2022, compared to RMB 1.5 million in the same period of last year. The fluctuation was primarily attributable to income generated from write-offs of accounts payable in the third quarter of 2022, after the company fulfilled all applicable notifications and other risk-eliminative barriers. Net income was RMB 2.5 million in the third quarter of 2022 compared to net loss of RMB 31.3 million in the same period of last year. Non-GAAP adjustment net income was RMB 5.1 million in the third quarter of 2022 compared to non-GAAP adjustment net loss of RMB 26.4 million in the same period of last year. Net income attributable to 36 KRs owner shareholders was RMB 1.7 million in the third quarter of 2022 compared to net loss of RMB 30.5 million in the same period of last year. Basic and diluted net income per share and per ADS were RMB 4.2 cents in the third quarter of 2022 compared to basic and diluted net loss per ADS of RMB 74.4 cents in the same period of last year. As of September 30th, 2022, the company had cash, cash equivalents and short-term investments of RMB 164 million compared to RMB 194.3 million as of June 30th, 2022. The decrease was mainly attributable to net cash outflow from operating activities, as well as certain long-term investments in several new economy startup companies were made in the third quarter of 2022. This concludes all of our prepared remarks today. We will now open the call to questions. Operator, please go ahead.
spk04: Thank you. If you wish to ask a question via the phone, you will need to press the star key followed by the number one on your telephone keypad. 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. To withdraw your question from the question queue, please press star then two. Once again, that was star then one to ask a question. And at this time, we will pause momentarily to assemble the roster.
spk08: And our first question will come from Pei Peiqiu of Industrial Securities.
spk04: Please go ahead.
spk03: I will translate my question. So we've learned from your financial report that the enterprise review platform, Xifu Dianping, developed rapidly across multiple operation metrics. Could you share with us more about your monetization timeline for this business in the coming years, more about the mid- and long-term strategy for Xifu Dianping? Thank you.
spk00: Thank you, Peifei. I should say that since this year, we have been trying to optimize and commercialize in terms of operation. Just now, we talked about the operation data, including QiFu's daily life, monthly life, real-time rating, and then income, software rating, as well as the number of business owners who have joined us, have all achieved relatively high-speed growth. Monthly life has increased by 12 times, more than 1 million. Real-time rating has increased by almost 10 times. Now it has exceeded 50,000, 50,000, and the average growth is 54%.
spk06: Since the beginning of this year, we have been trying to optimize our enterprise service review platform operations and explore commercialization opportunities. Based on our operating data, our enterprise service review platform primary metrics all improved rapidly year over year, including monthly active users, daily active users, the number of real reviews and the number of pieces of software showcased. On the year-over-year basis of enterprise-based review platforms, MAU grew by over 12% to exceed 1 million. The number of real reviews increased by almost 10% year-over-year and 54% quarter-over-quarter to over 50,000. We also showcased over 7,300 pieces of mainstream software, up 59% year-over-year, And the number of merchants on our enterprise service review platform approached 1,000, a year-over-year increase of 328%.
spk00: In terms of commercialization, we established cooperation with Lenovo in the third quarter to empower their customer acquisition and brand management.
spk06: marking an important milestone in our enterprise service review platform's commercialization path.
spk00: In the future, we will rely on the current platform data and陳電 to convert more effective solution delivery. We expect to launch an important function in the next quarter, which is to continue to collect users' intellectual comments, combine product technical data and increase opinion, and form a personalized industry selection report and product comment report. I think this product will greatly increase our The functionality of the product is perfect and the value of our commercialization At the same time, from the perspective of Jafang, we will launch a continuous expansion of the industry-based software and industry database to form a database of products With product functions, articles, live broadcasts, and many other forms, we will continue to reach out to our decision-makers and form an industry consensus to help improve the performance efficiency of SaaS products In terms of commercialization, we will continue to create standard cases and cooperate with well-known leading companies such as Lianxiang, Huoshan Engine, etc. In order to promote more companies to form standard commercialization models and maximize the efficiency of all commercialization sizes
spk06: Regarding future plans, we will leverage the existing data on our enterprise service review platform to convert more leads for delivery. So for the next quarter, we will issue a new product function. We will continue to collect users' real reviews and combine basic product data, export opinion to issue personalized industry selection reports and product comments reports to help users make correct selection decisions We think this will highly improve our service and also improve the value of the commercialization. At the same time, from the perspective of staff providers, we will continue to enrich our industry solutions and industry case-based, develop case-based products and reach out to decision makers by various means such as product functions, articles, live broadcast, salons, Thereby forming industry consensus and helping to improve the efficiency of SaaS product selection. With respect to commercialization, we'll continue to build benchmark cases and extend our collaboration models with leading well-known enterprises such as Lenovo and Volcano Engine to more enterprises, creating standardized commercialization models, and expanding our commercialization scale with maximum efficiency.
spk00: Last but not least, we'd like to emphasize the importance of digitalization The pandemic has been repeated, but it has helped the development of SaaS companies. There will be more and more companies in the future looking for digital transformation. So if we say that in this year, in 2022, the most important thing is the function of business products and commercialization, and the perfection of product functions, then we believe that we will continue to obtain better functions and larger-scale commercialization next year. We believe that only in terms of commercialization, the commercialization of 2023 will have a greater increase than in 2022.
spk06: So for the Micronomic Economy ProPax, the 20th CPC National Congress has also emphasized the importance of digitalization. Contrary to popular perception, COVID-19's flare-ups have actually facilitated the development of SaaS companies as more communistic digital transformation. So we expect that if we have more focus on the functionality of Enterprise service review platform in 2022, and we will assume a very high growth comparable to the 2022 of the commercialization for the year of 2023.
spk04: Okay, that's all for your questions. Thank you. The next question comes from Lingyi Zhao of SWS Research. Please go ahead.
spk02: Hello, everyone. I'm Lin Yi. Thank you for accepting my question. I have two questions. The first one is that we can see that the epidemic policy in various regions of the country has been released. I want to 那另外的话,我们对于12月份, 尤其是明年线下活动节奏有哪些调整? 我翻译一下。 Congrats for the great results and thank you for taking my questions. I'm Ling Yizhao from XWS Research. My first question is, how do we expect the growth potential after the relaxation of control measures? And how about expected goals? And my second question is, could you please comment, share some outcomes on the recent WISE conference and what adjustments have been prepared of offline activities for December and next year. Thank you.
spk07: Thank you, Lingyi.
spk08: Hi, Lingyi. Hi, Lingyi.
spk01: Thank you for your questions. I guess I, this is Lynn, I guess I will maybe answer your first question because it's regarding some financial guidance for next year. And then Mr. Feng will answer your second question. Yeah, you mentioned that the lifting of the pandemic control measures, yeah, that's a very good signal, a very good sign. Basically, I think all of our businesses will benefit across the board. But in terms of timing, that will be some business will benefit earlier and some will be benefiting later. Namely, advertising, I think that will be the number one business sector that will benefit from this. Because, you know, in business world, I think expectations or confidence matters the most. I think the elation of the control measures will give the business world or enterprise side a very good expectation or confidence. So I don't think they will wait to see the growth to happen in real estate. But only the sign of recovery will give them the confidence to starting to do marketing again and to do customer acquisition so they can accelerate their growth. So that's why I think in terms of advertising, that will be directly linked to the macro economy recovery. I think that's why advertising business will benefit first. And of course, advertising is in terms of volume, that's number one. contributor to Certified KR's business. And I think that's a very good sign, and that's very important. And gradually, I think after, because this measure just, I think, announced in this week, so it's still very early to tell, but gradually, I think, after those measures were taken all over the country, I think our enterprise value-added services, which mainly comprise of offline events, and some consulting businesses, as well as our subscription business, which consults a lot of offline training programs and online courses. I think that will benefit also from this measure, but that will happen a little bit later than the advertising business. But overall, all three major businesses will benefit And to quantify that benefit, I think in terms of advertising, that's the biggest volume that we will, let's say in the first three quarters of 2022, advertising grow, I think the growth rate is between 10 to 20% if you look at first three quarters results. I think next year, as Mr. Feng just mentioned, I think next year advertising will outgrow 2022s. performance, which means maybe higher, maybe to, you know, 15% to 25% or even higher. But for growth rate, I think enterprise vital ad services, which include Kifu DMP platform, as well as our subscription business, which include a lot of training programs and courses, that will benefit in terms of growth rate, that growth rate will be greater, that will be even greater than the growth rate of advertising business. But in terms of volume, that would be smaller than advertising. That's overall the answer for your first question. I think now, Amitabh will answer your second question. Thank you.
spk00: AMITABH SHARMAYER THAO, Okay. I'll answer the second question. Regarding this conference, this is our 10th conference. This event has overcome a lot of difficulties. not only plan B, but also plan C, plan B, plan E, and plan F. So, in the end, we adopted a model of online plus online, and Beijing plus Hangzhou. It should be said that it is very difficult, but in the end, we achieved a better effect. In terms of guests, we invited a lot of people, including famous entrepreneurs such as Wang Shi, and famous investors such as Zhang Yang, and famous economists and government officials, and about nearly a hundred important guests. I think our guest list is very satisfied.
spk06: So after overcoming many challenges this year, we successfully hosted our 10th WISE Conference. We have prepared Plan B to Plan C, Plan D, Plan F to prepare this conference. So we adopted an integrated model for an offline format in Beijing and an offline format in Hangzhou. And we also invited up to 100 distinguished guests, including famous entrepreneur Wang Xu, like the famous investor Zhang Ying, and also economists and some of the government agencies for this conference. So our conference attracts exposure of over 4.5 billion across offline online audiences, and having collaboration with over 50 mainstream media. So from the commercialization prospects, although the primary part of the conference will have in Beijing and combined with the offline in Hangzhou we have little impact on our revenue of the offline activities due to the impact of the COVID-19 resurgences. So we are much more satisfied with the commercialization this year.
spk00: After the 3rd of April, we will have a few small-scale activities in December, mainly in line with the needs of local governments and local customers. For next year, I hope that with the release of the pandemic, we will also increase the frequency of the major track and field events.
spk06: So in December, the WISE conference is our focus conference, and we will also have a few customized offline events focusing on local clients' needs like enterprises and governments. And also we will have some of the events that will like a small site, So regarding the next year, as the COVID-19 restrictions are lifted, we will increase the frequency of both of major industry summits and the customized events. Also, we will have issued more of our own IP events for the next year.
spk00: So we expect that after the COVID-19 restrictions are lifted, including the current activities, we will have a similar increase in revenue in 2023 as we did in 2022.
spk06: So as the reopen of the restriction, we will have more offline events. And also, it will generate more revenue in 2023 over the 2022. OK, thank you.
spk08: The next question comes from Jing Peng of CICC. Please go ahead.
spk05: I will translate myself. My question is about your video business. Can you give more color on the future plan for development and commercialization of your video? Thank you.
spk00: Okay, thank you, Tangxin. The short-term business should be said that since we launched it, it has always been a very important step for us. Because in the traditional sense of the word, E2B is the core of the client. In the short term, it's different. It's actually a core of E2C clients. So it expands our new client's scope of cooperation and brings us more
spk06: So our short video business is a very important strategy for Zend. And so we used to service more 2B customers. And so the short video will service more Zend customers. And it also helps us to obtain more collaboration from Zend brands. but also directly brought us more attention from diversified user groups.
spk00: From the point of view of common impression, in the past year, the number of short videos has been recognized by the industry. For example, in recent years, short videos have won two gold and one bronze medals. The gold and bronze medals are one of the highest awards in the industry, and the original content and content impression ability of the first six videos have been given a very high price. In addition, the number of fans of short videos in Bilibili has exceeded 1.5 million. Many of our original videos have a very high number of views. For example, a video we released at the end of November From the perspective of brand influence, 36 pairs of short video businesses have generated frequent recognition from the industry in the past year.
spk06: So for example, 36KR recently received two gold medals and one copper medal at the China Content Marketing Awards. It's one of the most recognized awards in the industry. So CCMA highly praised 36KR's excellence in original content production and content marketing capabilities. In addition, remember, The number of our followers on Bilibili surpassed 1.5 million at the end of October. And many of our original videos have also amassed a high number of streams. Among them, our original content of Topic released at the end of November has racked up more than 4 million reviews on Bilibili. So the most important thing is that our rank in the institutional medium so much high. Some of them are like government or the individual media that was just beyond us. But as for the institutional media, we are like the first one in the billy-billy.
spk00: From a commercial point of view, the revenue from each of the three short videos accounts for about 15% of the total advertising revenue. Compared to the same period of time, there has been a more obvious improvement. I think the short video model has not only effectively improved our customer base, but also increased our service completeness to a certain extent.
spk06: In terms of commercialization, short video revenue in the third quarter accounted for about 15% of our total advertising revenue, an increase compared to the same period last year. The short video format not only effectively increased our average revenue for advertising customer, and it also enhanced the comprehensive of our service to a certain extent, enabling us to provide services to a broader array of advertisers. Thank you.
spk04: Since there are no further questions, I'd like now to turn the conference back over to the company for closing remarks.
spk06: Thank you once again for joining us today. If you have further questions, please feel free to contact 36HRS Investor Relations through the contact information provided on our website.
spk04: This concludes this conference call. You may now disconnect your line. Thank you.
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