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spk03: Hello, ladies and gentlemen. Thank you for standing by for 36KR Holdings, Inc.' 's fourth quarter and fiscal year 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, Jonan Dhing, IR representative for the company. Please go ahead, Jonan.
spk04: Thank you very much. Hello, everyone, and welcome to 36KR Holdings' fourth quarter and fiscal year 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 prejudice by visiting the IR section of our website at ir.36kr.com. Participants on today's call will include our co-chairman and CEO, Mr. Da Gangfeng, and our chief financial officer, Ms. Lin Wei. Ms. Feng will start the call by providing an overview of the company and performance highlights of the call 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 Secretary Legislation Reform Act of 1995. forward-looking statements involve inherent risks and uncertainties. As such, the company's results will be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements except as required on the applicable law. Please note that Certificate of Chaos Earnings Pressure Lease and this conference call include discussions of our audited gap financial information measures as well as unaudited non-gap financial measures. Certificate of Chaos Earnings Pressure Lease contains a reconsolidation of the unaudited non-gap measures to the unaudited gap measures. And please note that all amount members are in RMB. I will now turn the call over to our co-chairman and CEO, Ms. Da Gangfeng.
spk07: Paul, please go ahead.
spk04: Thank you. Hello, everyone. Thank you for joining our Fourth Quarter and Physical Year 2022 Earnings Conference Call.
spk07: 2022 is a year full of challenges. Although the COVID-19 pandemic and the COVID-19 pandemic have had a lot of uncertainties, we have still achieved solid performance. The total revenue of the year is 3.22 billion yuan, which is about 2%. 2022 was a year full of challenges.
spk04: Against the backdrop of uncertainties brought about by COVID-19 resurgence and a month of high winds, we delivered solid performance. Our full-year revenue reached RMB $322 million, growing 2% year-over-year, with a profit of RMB $22.64 billion, making our first full-year profit since our listing, thanks to our refined operations and the professional expertise we have acquired over our years of delegation to the new economy sector. Driven by our dual-engine strategy fueled by content and products, we have developed a diversified business model and a comprehensive content ecosystem focusing on business, technology, and lifestyle through continuous innovation across our content, products, and services. Next, I'd like to share a more detailed progress update on each of our segments in 2022. 首先是内容生态的丰富,三六课持续增强优质内容的原创和输出。
spk07: and through different content files to meet the needs of the users. In 2022, we launched the digital time, 36th carbon, hard carbon, and anion, and other vertical media, and built the deepening of digitalization, dual carbon EFT, hard technology, and the hot channel areas, as well as the investment circle. In addition, we have integrated the way of life and hot topics into young people's lives, and reached the postgraduate research institute, superman evaluation, market bonus, and other young media, and realized the difference in user coverage. At the same time, we have also produced the CEO bag, scale, such as 2033, Long China 50, Supercomputing Factory, and many other content. The wide-ranging and in-depth interaction of new content keeps the number of published articles in the whole year at a high level. Among them, there are nearly 700 articles with a reading volume of 100,000 on WeChat. The launch of these new media will bring us a growth of tens of millions, such as digital moments. Through deepening the business digitalization field, we will further set up a market of thousands of pieces, and use the influence of our institutions
spk04: I will begin with the enrichment of our content ecosystem. We continue to elevate our content generating capabilities to meet users' diverse needs with high-quality content spanning a broad variety of topics. In 2022, we launched a series of sub-vertical media, including Digital KR, KR Carbon, Hardcore KR, and Waves, providing deep insight across popular fields in the investment circles. such as digitalization, dual carbon and ESG, hardcore technology, and specialized and innovative enterprises. We also created youth-centric content verticals based on topics related to younger generations' lifestyles, including OUs, super review, and career bonus, achieving differentiated user coverage. Meanwhile, we produced a varied slate of content programs, including CEO Tips, Skill, Proceeding 2033, Long China 50, and Super Factory. facilitating broad dissemination of new economic content. This effort enabled us to keep producing a considerable number of blockbuster articles throughout the year, with nearly 700 articles racking up page views exceeding 100,000. The launch of this subvertical media also brought us revenue upside amounting to tens of millions of R&D. For instance, by venturing deeper into the enterprise digitalization field with digital KR, we would spend our presence in this huge market worth hundreds of billions of RMB. Waves, another popular program from the subvertical, will also raise our revenue ceiling by increasing our influence among financial institutions.
spk07: At the same time, we will make more efforts in terms of graphics, short videos, audio, live broadcast, and other content, continue to promote our free platform, and coordinate with the strategic channels. Through Weibo, Xiaohongshu,
spk04: Furthermore, we made continuous efforts to launch content in diverse formats, including text, graphics, short-form video, audio, and live streaming through both our own platform and external channels. By working with new media platforms such as Weibo, Xiaohongshu, Toutiao, Zhihu, Bilibili, Douyin, and Kuaishou, among others, We have built a multidimensional content dissemination system with comprehensive coverage and full access to users and new economy players, elevating our content influence.
spk07: In addition, we have always paid great attention to the role of AI technology in the production and distribution of content, and have used the latest AIGC technology in our content ecosystem. Recently, we have become one of the leading ecological partners in Baidu, and we believe that this will further enhance our content production efficiency and quality, and increase user interaction and connectivity.
spk04: On a related note, FortisHKR has always prioritized application of artificial intelligence technology in content production and aggregation. It has adopted the latest AIGC and ChatGPT technologies in our content ecosystem. Recently, we were invited as one of the first batch of companies to partner with Baidu's ChatGPT-style earning bot ecosystem. We believe this partnership will further elevate our content production efficiency and quality, thereby enhancing user interaction and stickiness.
spk07: The expansion of 20 new users is due to the diversified structure of our content ecosystem. Our user group is constantly growing. From the quality point of view, as of the end of 2022, our total number of fans has exceeded 28 million, which has increased by 23% from the same period of time. The total number of short video fans has reached 7.75 million, which has increased by 43%. From the quality point of view, our user quality is excellent. At the same time, the image of the users is rich, covering from investment big cars, entrepreneurial elites, government officials, to large-scale shareholders, workplace newcomers, Our diversified content ecosystem has spurred continuous growth of our user base. In terms of user number, as of the end of 2022, the number of our followers exceeded 28 million, up 23% year-over-year.
spk04: of which short video followers accounted for 7.75 million, rising by 43% year-over-year. User quality also remained robust with an ever-broadening array of social profiles. Binding investment gurus, entrepreneur-related private officials, key employees in large enterprises, workplace novices, and young people chasing their dreams. Furthermore, we have effectively fortified user loyalty and engagement of our high-quality professional content virtual.
spk07: and the creation of new IPs. In this process, we have been exploring the field of new energy, and we have created and established many industry-specific IPs. In 2022, in addition to our flagship IP, WES, we have created an innovative IP, the X360, which is the theme of the China Investment People's Future Summit, which is the theme of the X360, which is the theme of the China Investment People's Future Summit, which is the theme of the China Investment People's Future Summit, which is the theme of the China Investment People's Future Summit, which is the theme of the China Investment People's Future Summit, which is the theme of the China Investment People's Future Summit, which is the theme of the China Investment People's Future Summit, Third, our new IP incubation.
spk04: Over the past years since our inception, we have continuously pioneered industry benchmark IPs in the new economy sector. Along with our flagship West New Economy Kings Conference in 2022, we created X360 Entrepreneurial Carnival and China Investor Summit with the theme Maintaining the Miracle. An innovative IP was efficiently empowered startup companies to connect with investment institutions. Moreover, the creation of our unspected and marvelous series of IPs, which integrated consumption and entertainment, job see and user, growth and customer acquisition for enterprises. Notably, the marvelous IP made a successful foray into lower-tier markets in 2022 with its exclusive The Marvelous Taste of Bashu event, jointly created with our regional offices in Sichuan and Chongqing. We worked with hundreds of CEOs, government representatives, and investors throughout the course of this event to unlock opportunities in the local new consumer industry, which also helped our brand influence and service system to penetrate further into the region.
spk07: Through the integration of information and data, we provide standardized solutions, services, and overlays for the discovery and service of high-quality early-stage projects. At present, 36 creative platforms have received tens of thousands of high-quality projects, 80% of which have received financing, and attracted the attention of thousands of investors from hundreds of first-tier investment institutions. On average, thousands of creative overlays have been completed every week. Currently, the creative platform is still in the early stage of production, and it is beginning to commercialize in the second quarter. The same products in the industry such as Smotron, Fourth, innovation on digital tools.
spk04: In November 2022, we launched a venture capital platform, reaffirming our commitment to extending media's boundaries and making our further expansion to digital tool services. By integrating information and data, we provide standardized solutions and precise financing exposure to facilitate the discovery of high-quality early-stage projects. While offering our managing services to connect projects with potential investors, up to now, the CCPR venture capital platform has collected tens of thousands of outstanding projects, of which 80% have finished at least one round of financing. Having attracted the attention of over 1,000 investors from hundreds of top-tier investment institutions, We completed up to 1,000 venture capital matches per week on average. Currently, our venture capital platform is still in the product refinement stage, but we do expect to begin commercialization in the second quarter of 2023. To give you a point of reference, a pair of similar products, PE Data along with PE Data Max, have achieved annual revenue exceeding RMB 60 million. Therefore, we believe the 36K venture capital platform With its integrated functionality spanning resources, connections, services, and analysis, it's poised to bring us considerable revenue upside.
spk07: The fifth is the upgrade of the product. Service productization is an important driver for us in 2022. We have carried on and upgraded some of the products that have been traded. For example, the strategic research institute continues to expand its industry coverage, and continues to pay attention to the development of the vertical track, capital market heat, and policy direction. We have also improved the professionalism and depth of the research, and used clear product guidelines, scientific positioning, Last but not least, product upgrades.
spk04: Service productization was an important theme for us in 2022, and as such, we integrated and upgraded some of our relatively mature product series. For example, 36KR Research Institute continues to expand its industry coverage with a consistent focus on industry vertical development, capital trends, and policy orientations. We also enhance its research depth and level of professionalism, which helps other companies as a whole improve its customer acquisition and commercialization performance through its distinct product portfolio, clear customer positioning, and evident advantages. 占州科商学院是我们重整后推出的商务培训产品。通过创投课程的课程设计和培训内容打磨,为不同阶段的中小企业
spk07: to support the poor, to open up capital, to raise resources, and to continue to develop the enterprise. Since the second half of 2022, Shandong Business School has been open to the public with the help of financing and acceleration camps. During the pandemic, we have held many training and financing public lectures on commercialized income. We have seen that the activity of the creative market has accelerated the demand for entrepreneurial training. Some of our training and consultation projects have reached the scale of annual revenue of 100 million yuan. Shandong Business School will also increase the number of open classes and materials in 2023,
spk04: Business School is a business training project we revamped in 2022. We designed this venture capital class and related training programs to provide insurance for small and medium-sized enterprises in varying stages of development and connect them with capital and other resources, contributing to their sustainable development. During the COVID-19 outbreak in the second half of 2022, 36 KR Business School held training sessions and public courses on refinancing in various class formats, such as our funding acceleration cap, which contributed to our commercialization revenue. We have observed that the thriving venture capital market is feeling increased demand for entrepreneurship training. In fact, some of our peers have reached RMB 100 million of annual revenues in this area. For 36KR, we plan to launch a wide variety of courses and send sales channels in 2023 to realize greater growth.
spk07: It is worth mentioning that our platform-based products, such as the Dandroke Qifu rating platform, continue to upgrade and loan in 2022. We have established a four-way line with the product database, user rating database, industry key data database, and knowledge map database, and have further polished the product evaluation system and industry standards. At the same time, we have established deep connections with the seller and the buyer,
spk04: I also want to specifically highlight that we continue to upgrade and iterate our platform product, the 36KR Enterprise Service Review Platform, in 2022. In addition to creating a quadrant encompassing product databases, user review libraries, key industry person databases, and knowledge graph libraries, we have further refined its industry product evaluation system and standards. The platform fosters deep connections between sellers and buyers, helping enterprises acquire customers with precision and enhance their brand influence. I will elaborate on the development of the enterprise service review platform a bit later.
spk07: As mentioned above, through the rich content ecosystem, the accumulation of product performance, and the improvement of operating capabilities, we have continued to enhance our commercialization capabilities. Thus, we have achieved the first full-year revenue financial year since the listing. Next, I will review
spk04: In summary, we built on our enriched ecosystem, accumulated product advantages, and enhanced our operational capabilities throughout 2022, consistently strengthening our commercialization capabilities. This empowered us to steadily grow our revenue and realize our first full-year profit since listing. Next, I'd like to share the details of our commercialization progress.
spk07: We achieved solid results across all of our business segments in 2022. Notably, our advertising revenue reached RMB 222 million, up 3% year-over-year. The number of our advertising customers grew to 532 with a pool remaining relatively stable year-over-year. Wang Yewu continues to play the advantage of quality and unity, constantly expanding the new scenarios and solutions of content marketing and commercial integration. In addition to the picture, we actively arrange short videos, live broadcasts, and Vlogs, and other new and wide-ranging forms for customers to provide multi-faceted multimedia combination products. In terms of industry expansion, in 2022, our wide-ranging customer base will be in the industry of TMP consumption, car real estate, advanced manufacturing, and new energy, and will be further expanded to medical, health, and banking and financial institutions, and will be in the industry of We continue to leverage the advantages of our advertising business centered on branding and efficacy while also exploring new scenarios and solutions for content marketing and commercial integration.
spk04: Along with graphics and text, we tapped into innovative advertising formats such as short video, live streaming, and vlogging, offering customers a diverse selection of media-rich products. In terms of industry expansion, we broadened our advertiser base in 2022 from our core industries such as TMT, consumer, automobile, real estate, advanced manufacturing, and new energy to include the medical industry, health and wellness, banks, and other financial institutions We also formed a partnership with leading industry players, including Johnson & Johnson and Huatai, among others. At the same time, our advertising commercialization channels have become increasingly diverse and well-balanced, and we have expanded our monetization skills across more traffic platforms such as Bilibili, Zhihu and Xiaohongshu, and WeChat video accounts, in addition to our 36KR web page, 36KR app, WeChat, and Weibo.
spk07: I would like to focus on our short video business. The previous year's revenue reached tens of millions of dollars, accounting for 17% of the total net profit, which is more than twice that of the previous year's revenue. Thanks to the high-quality original content, Zhanzhou's short videos have become the source of traffic. Not only has it attracted many young users, but it has also attracted many well-known companies, such as Intel, iQIYI, Huawei, Jindong, and Zhihu. In this episode, we have brought you a video of Weizongyi, which we have customized for Honor 80. We have also brought you a video of Weilog, which we have customized for Weizongyi. We have also brought you a video of Weilog,
spk04: Notably, our shop video revenue in 2022 more than doubled year-over-year to reach tens of million RMB on a full-year basis, accounting for 17% of total advertising revenue. Our shop videos have raked in massive user traffic with high-quality original content, attracting the attention of numerous young users and advertisers. Many renowned companies have become repeat customers of our short video advertising services, such as Intel, iQiyi, Huawei, JD.com, and Zhihu. In the fourth quarter, we customized a mini variety show video for the Honor 80 smartphone entitled, Time to Study Vlogs. The video featured a array of young opinion leaders, such as talk show actors, hosts, and travel bloggers, explaining and demonstrating the product's functions and highlights in vlog form boosting the customer's contract size to a new high. We respect to enterprise value-added services. We host nearly 30 industry summits covering hot topics including new technology, new energy, and new consumption. During the COVID-19 outbreak, we adopted an integrated online and offline format, leveraging video and live streaming, among other formats, to connect more new economy players through digital conferences. Notably, our WISE event achieved a total exposure exceeding 4.5 billion, while X-306-0 Enterprise-0 Carnival, our new IP event, attracted 350 million views from a simultaneous live streaming on a total of 24 platforms, further demonstrating our strong influence and service capabilities in the new economy.
spk07: In terms of information service, our information service revenue increased by 17% in 2022. Regarding consulting services, Apple's full-year revenue grew by 17% year-over-year in 2022.
spk04: 36KR Research Institute published research reports in various formats serving many local government customers and established in-depth collaborations with a wide range of well-known enterprises, including Wexwagon, Group China, Suning.com, Ctrip, JD.com, NetEase, ZhuanZhuang, Baddance, Higher Capital, Hongtai A+, and Beijing Shougang Fund, gathering widespread acclaim from industry professionals.
spk07: At the same time, we continue to broaden the scope of our regional expansion
spk04: Thus far, we have built a regional operating network covering 12 key provinces and cities and established mutually beneficial relationships with both local governments and enterprises. This has enabled us to empower new economy players as they expand regionally and enter lower-tier markets. In 2022, the number of our regional customers increased significantly, creating a more balanced mix of government and enterprise customers. laying a solid foundation for exploring the wider enterprise value-added services market in the future.
spk07: As for our subscription services,
spk04: Our full-year subscription revenue amounted to RMB 28 made in 2022, rising by 1% year-over-year. Not only, the number of our institution and enterprise subscribers as well as approval both improved, while the approval of individual subscription service also grew substantially thanks to the growing popularity of our CJ6KR Business School's new courses.
spk07: Finally, I would like to introduce the latest progress of our second online course, In 2022, we will continue to enhance the impact of the platform and further improve the platform service system. In terms of product functions, we have newly launched a few review reports. According to the actual needs of users, we will compare, select, and generate an independent and objective data analysis, evaluation report, and list of high-efficiency user role scenarios. At the same time, we have gradually refined the search function of the platform, added a search path for product functions and articles, and effectively improved the accuracy of user searches. In addition, we have improved the algorithm and display method of product lists. Last but not least, I'd like to share an update on our second growth engine, the 36KR Enterprise Service Review Platform.
spk04: In 2022, we remain focused on growing our platform's influence and further optimizing its service system regarding product functions. We launched Enterprise Service Review Report to compare products and recommend models based on users' actual needs, while generating independent, objective data analysis, ranking reports and charts, efficiently optimizing users' decision-making scenarios. We also refined Enterprise Service Review Platform's search function, adding search paths for product functions and articles, increasing the accuracy of users' searches. In addition, we improved our product charts algorithm and display methods to help users better understand product information, user views, and industry rankings, elevating convenience and usability. In terms of customer acquisition formats, we built a variety of content products and IPs across graphics, live streaming, Offline salons and other formats from users' perspectives consistently reach decision makers in every industry, which further enhance the enterprise service review platform's brand awareness and influence.
spk07: Through the common force of online operations, our various operating data has achieved rapid growth. As of the fourth quarter of 2022, our core number of business clues has reached 700% in the same period. The number of online products in the platform has exceeded 8,000, which is 52% of the total growth. The number of points in the collection has exceeded 60,000, which is 264% of the total growth. The number of business owners has exceeded 1,200, which is three times the total growth. In terms of commercialization, in fact, the number of points in the collection has exceeded 1,000. We have acquired many well-known manufacturers, such as Besson, Jindie, Tencent, TAPD, Google Cloud, Central Telecommunications, and other commercialized orders, as well as the world's 500 best enterprises, such as Through relentless efforts in our online and offline operations, we achieved rapid growth in the enterprise service review platform's operating matrix across the board as of the fourth quarter of 2022.
spk04: The number of leads have grown 700% compared with the same period of last year, and the cumulative number of products on the platform exceeded 8,000, a year-over-year increase of 52%, with the total number of reviews surpassing 60,000 cumulatively, up 264% year-over-year. The number of merchants on the platform exceeded 1,200, doubled the number in the same period of 2021. Additionally, in terms of commercialization, as of now, the enterprise service review platform's contracted sales exceeded RMB 10 million, with orders from an extensive roster of well-known SaaS suppliers such as Belzen, Kindi, Tencent TAPD, Google Cloud, and ZTE. We also established strategic marketing cooperation with Volcano Engine under its ByteDance brand, as well as the SMB unit of Lenovo, a Fortune Global 500 company, in 2022. Going forward, the enterprise service review platform will serve a growing cohort of enterprises in need of digital transformation and upgrades, unleashing our platform's value and greatly boosting our commercialization capability. 展望2023年,随着疫情时代的结束,
spk07: We see that the market has shown many positive signals, and the confidence of entrepreneurs and investors is improving steadily. The commercial activity in the economy is constantly improving. We will seize the commercial opportunity under the economic warm-up trend, and continue to explore the media spectrum to achieve richer products and service systems. We expect that 306K will continue to attract income growth in 2023, and realize full-time profit again. Standing at the new starting point of the smog-disposal, we believe that 306K will continue to unlock greater space for growth and corporate value,
spk04: As we embark upon the post-pandemic era in 2023, we have observed many positive market signals emerge, and entrepreneurs' and investors' confidence continues to strengthen accordingly, leading to increasing business vitality throughout the new economy sector. We will seize the commercialization opportunities afforded by the economic recovery to keep exploring media services and build a richer portfolio of products and services. We expect to see continued revenue growth and deliver another full-year profit in 2023. With darkness giving way to light as COVID-19 recedes, we believe we are well positioned to consistently unlock more growth potential and enterprise value differentiating ourselves as we accompany and empower our new economy partners, and creating long-term sustainable value for society and shareholders along the way.
spk07: With that, I will now turn the call over to our CFO, Ms.
spk04: Lin Wei, who will discuss our key financial results. Please go ahead, Lin.
spk10: Thank you, Pao. Now I'd like to walk you through more details of our fourth quarter and fiscal year 2022 financial results. Total revenues for the fourth quarter of 2022 were RMB 96.6 million, a sequential increase of 2%. Total revenues for the full year of 2022 were RMB 322.5 million, a year-over-year increase of 2% compared to the full year of 2021. Online advertising services revenue were RMB 62.2 million in the fourth quarter of 2022, compared to RMB 76.4 million in the same period of last year. The decrease was primarily attributable to relatively weak advertising spending caused by the negative impact of COVID-19 control measures and infections across China during the quarter. For the full year of 2022, our online advertising services grew by 3% year over year to RMB 221.6 million, 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 year. Enterprise vital added services revenue were RMB 25.4 million in the first quarter of 2022, compared to RMB 38.3 million in the same period of 2021. For the full year of 2022, Our enterprise value added services were RMB 72.6 million compared to RMB 74 million in the previous year. The 2% decrease was primarily because some of our offline events were delayed or downscaled due to disruptions from COVID-19. Subscription services revenue were RMB 8.9 million in the fourth quarter of 2022 compared to RMB 9.6 million in the same period of 2021. The decrease was primarily attributable to the negative impact of COVID-19. For the full year of 2022, our subscription services revenue were RMB 28.2 million, representing an increase of 1% compared to RMB 28 million in the previous year. The increase was primarily attributable to our continuous efforts to offer high-quality subscription products to our subscribers during 2022. Cost of revenues were RMB 47.6 million in the first quarter of 2022 compared to RMB The increase was primarily attributable to higher content costs related to expansion of our commercial-oriented content programs. For the full year of 2022, our cost of revenues was RMB 137.8 million compared to RMB 128.8 million in the previous year. The increase was primarily attributable to the increase in content-related costs partially offset by decrease in costs of our offline events. Gross profit was on the 48.9 million in the first quarter of 2022 compared to on the 75.6 million in the same period of last year. For the full year of 2022, our gross profit was on the 184.6 million compared to on the 187.9 million in the previous year. Gross profit margin for the full year of 2022 was 57.3% compared to 59.3% in the previous year. Operating expenses were RMB 69 million in the first quarter of 2022 compared to RMB 61.6 million in the same period of last year. For the full year of 2022, operating expenses were RMB 229.2 million compared to RMB 282 million in the previous year. Sales and marketing expenses were RMB 32.8 million in the fourth quarter of 2022, a decrease of 16.5% from the same period of last year. primarily attributable to the decrease in marketing-related expenses. For full year 2022, sales and marketing expenses were on the 122.1 million, a contraction of 15% compared to the previous year, primarily attributable to the decrease in payroll-related expenses, share-based extension expenses, and marketing expenses. G&A expenses were RMB 21.7 million in the fourth quarter of 2022 compared to RMB 9.6 million in the same period of last year. The increase was primarily attributable to the release of allowance for credit losses recognized in the fourth quarter of last year. For full year of 2022, G&A expenses were RMB 52.1 million compared to RMB 98.6 million in the previous year. The decrease was primarily attributable to the release of allowance for credit losses and the decrease in professional fees. The release of allowance for credit losses was mainly due to improved collection of accounts receivables. Research and development expenses were on the 14.5 million in the fourth quarter of 2022 compared to on the 12.6 million in the same period of 2021. For the full year of 2022, our research and development expenses were on the 55 million compared to RMB 47.5 million in the previous year. The increase was primarily attributable to the increase in payroll related expenses as we bolstered our R&D capabilities for new products and services. 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 4.6 million in the fourth quarter of 2022 compared to RMB 4.1 million in the same period of last year. For full year 2022, the total amount of share-based compensation expenses were RMB 13.9 million compared to RMB 15 million in the previous year. Other expenses were RMB 1.2 million in the fourth quarter of 2022 compared to other income of RMB 1.5 million in the same period of last year. For full year 2022, other income was RMB 67.5 million compared to other income of RMB 3.6 million in the previous year. The increase was primarily attributable to gain arising from disposal of a subsidiary and investment income arising from fair value changes of long-term investments, as well as income generated from write-offs of accounts payable. Net loss was RMB 21.5 million in the first quarter of 2022 compared to net income of RMB 15.4 million in the same period of 2021. For full year 2022, our net income was RMB 22.6 million compared to net loss of RMB 90.6 million in the previous year. This is the first time we achieved full-year profitability since our IPO in 2019. Non-GAAP adjusted net income was RMB 16.9 million in the first quarter of 2022, compared to non-GAAP adjusted net income of RMB 19.6 million in the same period of last year. For full year 2022, non-GAAP adjusted net income was RMB 36.5 million, compared to non-GAAP adjusted net loss of RMB 75.6 million in the previous year. Net loss attributable to 36 KR's ordinary shareholders was RMB 20.8 million in the fourth quarter of 2022 compared to net income attributable to 36 KRs only shareholders of RMB 14.6 million in the same period of last year. For four-year 2022, net income attributable to 36 KRs only shareholders of RMB 21.9 million compared to net loss attributable to 36 KRs only shareholders of RMB 89.6 million in the previous year. basic and diluted net loss per ADS were both RMB 49.8 cents in the fourth quarter of 2022 compared to net income per ADS of RMB 35.6 cents in the same period of last year. For full year 2022, basic and diluted net income per ADS were both RMB 53 cents compared to basic and diluted net loss per ADS of RMB 2.2 in the previous year. As of December 31st, 2022, The company had cash, cash equivalents, restricted cash, and short-term investments of RMB 184.9 million compared to RMB 164 million as of September 30, 2022. The increase was mainly attributable to positive cash flow from operating activities partially offset by the long-term investment in a new economy startup company we made in the fourth quarter of 2022. This concludes all of our prepared remarks today. We will now open the call to questions. Operator, please go ahead.
spk03: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. 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 We will now pause momentarily to assemble our roster. The first question today comes from Bing Tang with CICC. Please go ahead.
spk12: Hello. 我们看到外部环境今年会有一定的改善,想了解一下公司今年有哪些战略重点和规划。 I will translate myself as this is improvements of the environment. What are the company's strategic priorities and plans for this year? Thank you.
spk07: Okay, as we mentioned many times before, we will continue to enrich our content ecosystem and tap into more vertical industries such as artificial intelligence,
spk04: New electric vehicles and industry capital.
spk07: And also on our product front.
spk04: Apart from our existing advertising and enterprise value-added services, we will also explore several new product initiatives. For example, 36KR Enterprise Service Review Platform, as our second growth engine, we will refine our platform and products and continue to pursue commercialization. 36KR Business School will enrich course designs to empower more small and medium-sized companies. This training product has been proven by our peers to be a market with R&D hundreds of millions of market size. Also, Services Care Research Institute will enhance its professionalism and industry coverage, providing more in-depth reports to more enterprises.
spk07: Speaking of this year's focus and planning, I think it's important to mention that we have already used the large-scale and large-scale model for a while, and it makes us feel very excited. In fact, I think whether it's in our content production, And of course, we will keep investing in AIGC technology.
spk04: We will continue to advance the application of the AIGC technology in production and aggregation of high-quality content to further improve our content production efficiency. And through AIGC personalized dialog function, we'll strengthen our user interactions and thickness.
spk06: Thank you.
spk03: The next question comes from Lingyi Zhao with SWS Research. Please go ahead.
spk02: Hello, Ms. Da. Hello, Ms. Lin. Thank you for this phone call. I have a small question about the advertising industry. We all know that the advertising industry still has a certain economic potential. We want to know what changes have been made in the advertising industry in recent years. The advertising industry is the foresight of economy. What changes have taken place in the willingness of advertisers to invest recently? Can you tell us about the degree of economy recovery and prospects based on the advertising business? Thank you. 好的,谢谢。
spk07: From a technical point of view, our advertising business is recovering, but it will take some time for it to recover to a relatively high level. I will explain why this is the case in the future. In fact, our real feeling is that we can feel that our customers are very active and active in contacting us. However, their market budget has not increased rapidly. Okay, based on the Q1 2023's current situation, our ad business is already recovering steadily. However, it will take some time for advertising to return to a relatively high level while market confidence continues to recover.
spk04: And we have witnessed that a lot of our clients have rebounded their confidence in ad placement, but still they still have a limited budget for their advertising business. So this is why I feel it takes time for us to recover to a relatively high level.
spk07: Right. And today, in addition to the whole process, we also see some characteristics of the industry, such as some popular fields, such as car and e-commerce. Okay, based on market feedback and actual business performance so far, the entire advertising industry has been recovering at a steady pace.
spk04: Businesses in some popular industries such as automobiles and e-commerce have been very active in brand promotions and marketing activities with relatively stable and placement budgets. In Q1 2023, we made further progress in both commercialization channels and industry coverage. For instance, we completed JD.com's first commercialization order on Xiaohongshu and achieved our first breakthrough in the luxury goods sector. As such, we expect a fair level of growth generally in advertising in both Q1 and the full year 2023.
spk07: Looking ahead at the full year 2023, we remain optimistic.
spk04: As business activities and people's daily lives come back to normal in the post-pandemic era, we will see a significant rebound in our ag business.
spk03: Once again, if you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. The next question comes from Rui Yin with Sea Land Security. Please go ahead.
spk02: 我的第二個問題是關於利潤率。 然後我想問一下我們應當如何去預期今年的一個稅用率,包括利潤率的一個水平。 主要的改善是來自於哪些方面的努力? I'll transmit myself. Hi, management. I have two questions. The first question is about the enterprise and added business segment. Could the future growth come more from the increase in the number of paying companies or the increase in the level of corporate payments? What new actions will the company take for enterprise standard added service segments this year? And my second question is about margin ratio. How should we expect the company's expense ratio and profit margin this year? Thank you.
spk07: 好的,谢谢。 过去几年我们实际上一直保持着我们的客户数和up值的双增长, 所以我想今天我们 依然还是 Actually, during the past years,
spk04: Both of our number of clients and our pool have increased significantly, and we believe it will grow this year as well. On our pool side, we will provide diversified enterprise value added services, including offline events, consulting services, and integrated agency operation services to boost growth in this segment. On the number of clients, we will tap into broader vertical sectors and penetrate to lower tier markets like
spk11: in 12 or more regional offices.
spk07: I think these services will be strengthened in 2023 and then form our new center of attention.
spk04: In 2023, we will also leverage more products to develop our enterprise value-added services. In addition to 36KR enterprise review platform, we also launched 36KR venture capital platform as well as 36KR research institute to further grow our business.
spk10: Hi, Minrui. I think this is your first time to join the NSCOPS and 36KR. We really give you a warmest welcome. And this is Linh. I will answer your second question regarding the expense ratio and the margin question. I think for the full year 2022, you can see from our results that our gross margin is at a relatively stable level of 57%. In 2023, we will be able to maintain that level or even have more further growth margin expansion because as our CEO just mentioned, given the AIGC and the more AI-related technology application, we will be able to have higher efficiency of operation and have some cost-saving effect in our business. And secondly, I think I will highlight that I think For 2023, the margin expansion as well as operating margin and gross margin will come more from the revenue rebound or revenue growth. Although in 2022, we are proud that we have been growing our revenue given the very challenging environment in 2022, but we achieved a positive 2% growth. But that ratio will be much higher in 2023, I think. And also, we mentioned several times that our cost structure and expense structure has been very stable, given that it will not be a linear growth pattern as the revenue growth. That means we will have a lot of leverage. So I'll give you some quantitative implications. Now, if we say that in 2023, our growth margin can be stabilized at around 60% level, then our expense OPEX ratio will be, I mean, let's say, around 50%. then we'll give you an operating margin of around 10%. I think that will even have some upside if our top line, our revenue can grow at a much higher growth rate than in 2022. Hope that answers the question in the room.
spk02: What is the business connection between the company and the AIGC or GPT-Large model? And what is the plan for AI? Thank you. 其实我们GIGC应该说是非常关注和非常的看好
spk07: We've been using it for a while, whether it's ChessGPT or Baidu's text language, I think it's directly helpful to our business. For example, you know, in our content, the content chain and classification is a very important part. For third-party users, ITC can help us to mark, including classification of articles in various fields, and thus quickly optimize the accuracy of our decoding. Then for some more in-depth articles, ITC can collect the contents of the article and make it easier for users to understand the content of the article.
spk04: Actually, content production quality and efficiency have always been our priority, and we have been adopting AIGC for quite a while. Content acquisition and classification are key components of AIGC technology. By applying AIGC, 36KR can classify articles in various fields using labeling, thus optimizing the accuracy of user research. In addition, for some in-depth articles, AIGC will summarize the content of the articles to facilitate users' efficient understanding while also improving the user experience. AIGC will summarize the content of the articles to facilitate users' efficient understanding while also improving the user experience. AIGC will summarize the content of the articles to facilitate users' efficient understanding while also improving the user experience.
spk07: AIGC will summarize the content of the articles to facilitate users' efficient understanding while also improving the user experience. AIGC will summarize the content of the articles to facilitate users' efficient understanding while also improving the user experience. AIGC will summarize the content of the articles to facilitate users' efficient understanding while also improving the user experience. AIGC will summarize the content of the articles to facilitate users' efficient understanding while also improving the user experience. AIGC will summarize the content of the articles to facilitate users' efficient understanding while also improving the user experience. AIGC will summarize the content of the articles to facilitate users' efficient understanding while also improving the user experience. AIGC will summarize the content of the articles to facilitate users' efficient understanding while
spk04: On the product front, using 36KR Enterprise Review Platform as an example, AIGC technology will assist the users to better obtain detailed information, such as price and usage evaluation of products, more efficiently so as to understand products more accurately and make better purchasing decisions. Also, AIGC helps us provide better customer services through more effective user interaction and communication. According to our initial analysis, AIGC has helped improve our user interaction by 90% and improved our current production efficiency by three times.
spk07: 值得一提的是,我们最近已经率先成为百度文献语言的首批生态协作伙伴, 应该说这个数量还是比较稀少的, 所以我们能够借此成为行业的领先者之一, 能够最早地把AIGC的应用基础 应用到我们的一个体验基础端口中心。
spk04: Recently, we became one of the first batch of companies to join Baidu's chat GPT-style earning board ecosystem. We have achieved the code for internal testing and are launching the first round of our internal test, with no doubt that 36KR will be the fast mover in applying AIGC technology in our content production and business expansion. Thanks for your questions.
spk03: Once again, if you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. Press star then 1 to enter the question queue. As there are no further questions, I'd like to turn the call back over to the company for closing remarks.
spk04: Thank you once again for joining us today. If you have any further questions, please feel free to contact 36KR's investor relations through the contact information provided on our website.
spk09: Thank you, and see you next time. Thank you, operator. Thank you, everyone.
spk03: That does conclude our conference for today. Thank you for participating. You may now disconnect. you you Thank you. you Thank you. Thank you. Hello, ladies and gentlemen. Thank you for standing by for 36 KR Holdings Inc's fourth quarter and fiscal year 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, Jonan Ding, IR representative for the company. Please go ahead, Jonan.
spk04: Thank you very much. Hello, everyone, and welcome to 36KR Holdings' Fourth Quarter and Physical Year 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 priorities by visiting the IR section of our website at ir.36kr.com. Participants on today's call will include our co-chairman and CEO, Mr. Da Gangfeng, and our chief financial officer, Ms. Lin Wei. Ms. Feng will start the call by providing an overview of the company and performance highlights of the call 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 Secretary Legislation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results will be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements except as required on the applicable law. Please note that services chaos earnings pressure lease and this conference call include discussions of our audited gap financial information measures as well as unaudited non-gap financial measures. Services chaos earnings pressure lease contains a reconsolidation of the unaudited non-gap measures to the unaudited gap measures. And please note that all amount mentioned members are in RMB. I will now turn the call over to our co-chairman and CEO, Mr. Gangfeng. Paul, please go ahead.
spk07: Thank you. Hello, everyone. Thank you for attending our 4th quarter and fiscal year 2022 conference call.
spk04: Thank you. Hello, everyone. Thank you for joining our 4th quarter and fiscal year 2022 earnings conference call.
spk07: 2022 is a year full of challenges. Although the COVID-19 pandemic is repeated, and the environmental impact of the pandemic have brought us many uncertain factors, but we have still achieved a solid performance. The annual total revenue is 3.22 billion yuan, which is equal to 2.2%. The net profit is 2,264 million yuan, which is the first annual revenue of the entire year since we launched. After this, we can't leave behind our deep work and long-term accumulation in the field of new business. Under the duality of content and products, we continue to build and innovate with products and services through the continuous creation of content IP. 2022 was a year full of challenges. Against the backdrop of uncertainties brought about by COVID-19 resurgence and market high winds, we delivered solid performance.
spk04: Our full-year revenue reached RMB $322 million, growing 2% year-over-year, with a profit of RMB $22.64 billion. making our first full-year profit since our listing, thanks to our refined operations and the professional expertise we have acquired over our years of delegation to the new economy sector. Driven by our dual-engine strategy fueled by content and products, we have developed a diversified business model and a comprehensive content ecosystem focusing on business, technology, and lifestyle through continuous innovation across our content, products, and services. Next, I'd like to share a more detailed progress update on each of our segments in 2022. 首先是内容生态的丰富,36克持续增强优质内容的原创和输出,并通过不同内容板块满足用户多样化需求。 2022年,我们通过推出数字时刻、36碳、硬克、爱永等垂直子媒体,布局了对数字化、双碳EFT、硬科技、赚金特新等热门赛道领域和投资圈层的深耕。
spk07: In addition, we use the way of life of young people and hot topics as an interface to reach the post-hoc research institute, superman evaluation, market bonus, and other young-style media to realize the difference between users. At the same time, we have also made a variety of content such as ZEU bag, scale, see 2033, Long China 50, super factories, and other content. The wide-ranging broadcast and in-depth interaction of new content keeps the number of paid articles in the whole year at a high level. Among them, there are nearly 700 articles with a reading volume of 100,000 on WeChat. The launch of these three-dimensional media will bring us tens of millions of revenue growth, such as digital moment, by deepening the business digitalization field, further set up a market of thousands of miles, and by increasing our influence in the institution, we will also significantly improve the sales and sales version of this track.
spk04: I will begin with the enrichment of our content ecosystem. We continue to elevate our content-generating capabilities to meet users' diverse needs with high-quality content spanning a broad variety of topics. In 2022, we launched a series of sub-vertical media, including Digital KR, KR Carbon, Hardcore KR, and Waves, providing deep insight across popular fields in the investment circles. such as digitalization, dual carbon and ESG, hardcore technology, and specialized and innovative enterprises. We also created youth-centric content verticals based on topics related to younger generations' lifestyles, including OUs, super review, and career bonus, achieving differentiated user coverage. Meanwhile, we produced a varied slate of content programs, including CEO Tips, Skills Proceeding 2033, Long China 50, and Super Factory. facilitating broad dissemination of new economic content. This effort enabled us to keep producing a considerable number of blockbuster articles throughout the year, with nearly 700 articles racking up page views exceeding 100,000. The launch of this sub-vertical media also brought us revenue upside amounting to tens of millions of R&D. For instance, by venturing deeper into the enterprise situation field, With digital KR, we will expand our presence in this huge market worth hundreds of billions of RMB. Waves, another popular program from the subvertical, will also raise our revenue ceiling by increasing our influence among financial institutions.
spk07: At the same time, we will use multiple sources of power in the form of pictures, short videos, audio and live broadcasts, and continue to promote free platforms and coordinate with strategic channels. Through Weibo, Xiaohongshu, Toutiao, Zhihu, Bilibili, Douyin, Kuaishou, and other new media platform channels,
spk04: Furthermore, we made continuous efforts to launch content in diverse formats, including text, graphics, short-form video, audio, and live streaming through both our own platform and external channels, by working with new media platforms such as Weibo, Xiaohongshu, Toutiao, Zhihu, Bilibili, Douyin, and Kuaishou, among others. We have built a multi-dimensional content dissemination system with comprehensive coverage and full access to users and new economy players, elevating our content influence.
spk07: In addition, we have always paid great attention to the role of AI technology in the production and distribution of content, and applied the latest AIGC technology to our content ecosystem. Recently, we have become the first eco-cooperative partner of Baidu's Wenxin Yiyan. We believe that this will further enhance our content production efficiency and quality, and enhance user interaction and connectivity.
spk04: On a related note, HHKR has always prioritized application of artificial intelligence technology in content production and aggregation. It has adopted the latest AIGC and ChatGPT technologies in our content ecosystem. Recently, we were invited as one of the first batch of companies to partner with Baidu, ChatGPT-style earning bot ecosystem. We believe this partnership will further elevate our content production efficiency and quality, thereby enhancing user interaction and stickiness.
spk07: The development of 20 new users is also due to the diversified structure of our content ecosystem. Our user base is constantly developing. From the quality of our users, as of the end of 2022, our total number of fans has surpassed 28 million, which has increased by 23% from the same period. The total number of short-time fans has reached 7.75 million, which has increased by 43%. From the quality of our users, our user quality is excellent. At the same time, the image of our users is very rich, covering from investment big companies, business elites, government officials, to big companies, workplace newcomers, Second, new user expansion. Our diversified content ecosystem has spurred continuous growth of our user base. In terms of user number, as of the end of 2022, the number of our followers exceeded 28 million, up 23% year-over-year.
spk04: of which short video followers accounted for 7.75 million, rising by 43% year-over-year. User quality also remained robust with an ever-broadening array of social profiles. Binding investment gurus, entrepreneur-related government officials, key employees in large enterprises, workplace knowledge, and young people chasing their dreams. Furthermore, we have effectively fortified user loyalty and engagement of our high-quality professional content virtual.
spk07: However, the creation of new IPs has not stopped since the establishment of this city. We have opened and established several industry-level IPs. In 2022, in addition to our flagship IP, WES, we have created a innovative IP, the X360, which was created by the founder, Jian Lianhua, and the Chinese investor, Wei Laifenghui, to maintain its foundation as the main theme, the connection between high-efficiency and poor-performance start-ups and investment institutions. In addition, we have integrated the creation of consumer and entertainment IPs, the Unimagined series, and the Unable Series IPs, which has led to the growth of C-end, Third, our new IP incubation.
spk04: Over the past years since our inception, we have continuously pioneered industry benchmark IPs in the new economy sector. Along with our flagship West New Economy Kings Conference in 2022, we created X360 Entrepreneurial Carnival and China Investor Summit with the theme Maintaining the Miracle. An innovative IP was efficiently empowered startup companies to connect with investment institutions. Moreover, the creation of our unspected and marvelous series of IPs, which integrated consumption and entertainment, job see and user, growth and customer acquisition for enterprises. Notably, the marvelous IP made a successful foray into lower-tier markets in 2022 with its exclusive The Marvelous Taste of Baxu event, jointly created with our regional offices in Sichuan and Chongqing. We worked with hundreds of CEOs, government representatives, and investors throughout the course of this event to unlock opportunities in the local new consumer industry, which also helped our brand influence and service system to penetrate further into the region.
spk07: Through the integration of information and data, we provide standardized solutions, services, and overlays for high-quality early-stage projects, as well as accurate financing exposure. So far, 36 creative platforms have invested tens of thousands of dollars in high-quality projects, and 80% of the companies have received financing, which has attracted thousands of investors from hundreds of first-tier investment institutions. On average, thousands of creative overlays have been completed every week. Currently, the creative platform is still in the early stage of production, and is now in the second stage of commercialization. Referring to similar products in the industry, such as Smotron, Fourth, innovation on digital tools.
spk04: In November 2022, we launched ServicesKR Venture Capital Platform, reaffirming our commitment to extending media's boundaries and making our further extension to digital tool services. By integrating information and data, we provide standardized solutions and precise financing exposure to facilitate the discovery of high-quality early-stage projects. While offering our managing services to connect projects with potential investors, up to now, the CCPR venture capital platform has collected tens of thousands of outstanding projects, of which 80% have finished at least one round of financing. Having attracted the attention of over 1,000 investors from hundreds of top-tier investment institutions, We completed up to 1,000 venture capital matches per week on average. Currently, our venture capital platform is still in the product refinement stage, but we do expect to begin commercialization in the second quarter of 2023. To give you a point of reference, a pair of similar products, PE Data along with PE Data Max, have achieved annual revenue exceeding RMB 60 million. Therefore, we believe the 36K venture capital platform With its integrated functionality spanning resources, connections, services, and analysis, it's poised to bring us considerable revenue upside.
spk07: The fifth is product upgrade. Service productization is an important driver for us in 2020. We have made a lot of changes and upgrades to some of the products that have been traded. For example, we have expanded the industry coverage of the strategic research institute and continued to pay attention to the development of the vertical track, capital heat, political orientation, and other issues, and improved the professionalism and depth of the research. Last but not least, product upgrades.
spk04: Service productization was an important theme for us in 2022, and as such, we integrated and upgraded some of our relatively mature product series. For example, 36KR Research Institute continues to expand its industry coverage with a consistent focus on industry vertical development, capital trends, and policy orientations. We also enhance its research depth and level of professionalism, which helps other companies as a whole improve its customer acquisition and commercialization performance through its distinct product portfolio, clear customer positioning, and evident advantages.
spk07: Zhanzhou Ke Shangxueyuan is a business training product launched after our reorganization. Through the course design and training content of the creative course, we can provide a comprehensive training course to support the poor, to open up capital, and to provide resources for sustainable development of enterprises, and to increase the number of jobs. Since the second half of 2022, the Chinese University of New York has, with the help of financing acceleration camps and other rich open classes, held multiple training and financing open classes during the epidemic, bringing in commercialized income. We can see that the activity of the creative market has increased the demand for entrepreneurial training. Some of our training and consulting businesses have reached the scale of annual revenue of 100 million yuan. In 2023, the Chinese University of New York will also increase the number of open classes and numbers,
spk04: So this is KR Business School is a business training product we revamped in 2022. We designed this venture capital class and related training programs provide insight for small and medium-sized enterprises in varying stages of development and connect them with capital and other resources, contributing to their sustainable development. During the COVID-19 outbreak in the second half of 2022, 36 KR Business School held training sessions and public courses on refinancing in various class formats, such as our funding acceleration cap, which contributed to our commercialization revenue. We have observed that the thriving venture capital market is fueling increased demand for entrepreneurship training. In fact, some of our peers have reached around 100 million of annual revenues in this area. For 36KR, we plan to launch a wide variety of courses and spend sales channels in 2023 to realize greater growth.
spk07: It is worth mentioning that our platform-based products, Dynatalker, QiFu, and Dianping platform, continue to upgrade in 2022. We have established a four-way line of product database, user Dianping database, industry key data database, and knowledge map database, and further polished the product evaluation system and industry standards. At the same time, by establishing deep connections between sellers and buyers,
spk04: I also want to specifically highlight that we continue to upgrade and iterate our platform product, the 36KR Enterprise Service Review Platform, in 2022. In addition to creating a quadrant encompassing product databases, user review libraries, key industry person databases, and knowledge graph libraries, we have further refined its industry product evaluation system and standards. The platform fosters deep connections between sellers and buyers, helping enterprises acquire customers with precision and enhance their brand influence. I will elaborate on the development of the enterprise service review platform a bit later.
spk07: To sum up, through a rich content ecosystem, product performance accumulation, and business performance improvement, we have continued to enhance our commercialization capabilities, and have achieved the first full-year financial year since the launch, while also receiving more documents. Next, I will review
spk04: In summary, we built on our enriched ecosystem, accumulated product advantages, and enhanced our operational capabilities throughout 2022, consistently strengthening our commercialization capabilities. This empowered us to steadily grow our revenue and realize our first full-year profit since listing. Next, I'd like to share the details of our commercialization progress.
spk07: We achieved solid results across all of our business segments in 2022. Notably, our advertising revenue reached RMB 222 million, up 3% year-over-year. The number of our advertising customers grew to 532, with our pool remaining relatively stable year-over-year. Wang Yewu continues to play the advantage of quality integration, constantly expanding the new scenes and solutions of content marketing and commercial integration. In addition to the picture, we actively set up short videos, live broadcasts, Vlogs, and other new marketing forms for customers to provide multimedia combination products through diversification. In terms of industry expansion, in 2022, our marketing customer group will continue to expand to medical, health, and banking and financial institutions in the industry such as TMT, consumption, car, real estate, advanced manufacturing, and new energy. And with Qiangsheng Group, We continue to leverage the advantages of our advertising business centered on branding and ethics. We're also exploring new scenarios and solutions for content marketing and commercial integration.
spk04: Along with graphics and text, we tapped into innovative advertising formats such as short video, live streaming, and vlogging, offering customers a diverse selection of media-rich products. In terms of industry expansion, we broadened our advertiser base in 2022 from our core industries such as TMT, consumer, automobile, real estate, advanced manufacturing, and new energy to include the medical industry, health and wellness, banks, and other financial institutions. We also formed a partnership with leading industry players, including Johnson & Johnson and Huatai, among others. At the same time, our advertising commercialization channels have become increasingly diverse and well-balanced, and we have expanded our monetization skill across more traffic platforms such as Bilibili, Zhihu and Xiaohongshu, and WeChat video accounts, in addition to our 36KR webpage, 36KR app, WeChat, and Weibo.
spk07: Among them, I would like to focus on our short video business, The previous year's revenue reached tens of millions of dollars, accounting for 17% of the total revenue of the advertising industry, which is more than double that of the previous year's revenue. With its high-quality original content, FanZhouKou short video has become a popular search engine. Not only has it attracted many young users, but it has also attracted a lot of advertising clients. It has also attracted a lot of well-known companies such as Intel, iQIYI, Huawei, Jingdong, and Zhihu. In this season, we have prepared a micro-media video for Honor's 8.0 mobile phone, Tang Bo's V-Log and Xiao Zhao, as well as a group of talk show actors, hosts,
spk04: Notably, our short video revenue in 2022 more than doubled year-over-year to reach tens of million RMB on a full-year basis, accounting for 17% of total advertising revenue. Our short videos have raked in massive user traffic with high-quality original content, attracting the attention of numerous young users and advertisers. Many renowned companies have become repeat customers of our short video advertising services, such as Intel, iQiyi, Huawei, JD.com, and Zhihu. In the fourth quarter, we customized a mini variety show video for the Honor 80 smartphone entitled, Time to Study Vlogs. The video featured an array of young opinion leaders, such as talk show actors, hosts, and travel bloggers, explaining and demonstrating the product's functions and highlights in vlog form boosting the customer's contract size to a new high. We respect to enterprise value-added services. We host nearly 30 industry summits covering hot topics, including new technology, new energy, and new consumption. During the COVID-19 outbreak, we adopted an integrated online and offline format, leveraging video and live streaming, among other formats, to connect more new economy players through digital conferences. Not only our wise event achieved a total exposure exceeding 4.5 billion, while X306O Enterprise, our new IP event, attracted 350 million views from a simultaneous live streaming on a total of 24 platforms, further demonstrating our strong influence and service capabilities in the new economy.
spk07: In terms of information service, our information service revenue increased by 17% in 2022. The various forms of research reports issued by the 36 research institutes not only served many local government clients, but also served many well-known companies, such as Dazhong China, Suning Yigou, Jiecheng, Jindong, Wang Yi, ZuanZuan, Zijie跳Dong, HireZipen, Hongtai Fund, Shougang Fund, and other well-known companies and institutions.
spk04: Regarding consulting services, Apple's full-year revenue grew by 70% year-over-year in 2022. 36KR Research Institute published research reports in various formats serving many local government customers and established in-depth collaborations with a wide range of well-known enterprises, including Wexwagon, Group China, Suning.com, Ctrip, JD.com, NetEase, Zhuan Zhua, Baddance, Higher Capital, Hongtai A+, and Beijing Shougang Fund. Garnering widespread acclaim from industry professionals.
spk07: At the same time, we continue to broaden the scope of our regional expansion
spk04: Thus far, we have built a regional operating network covering 12 state provinces and cities and established mutually beneficial relationships with both local governments and enterprises. This has enabled us to empower new economy players as they expand regionally and enter lower-tier markets. In 2022, the number of our regional customers increased significantly, creating a more balanced mix of government and enterprise customers. laying a solid foundation for exploring the wider enterprise value-added services market in the future.
spk07: As for our subscription services,
spk04: Our full-year subscription revenue amounted to RMB 28 made in 2022, rising by 1% year-over-year. Not only, the number of our institution and enterprise subscribers as well as our pool both improved, while the pool of individual subscription service also grew substantially thanks to the growing popularity of our CJ6KR Business School's new courses.
spk07: Finally, I would like to introduce the latest progress of our second Zongchang Qixian, Shandouke Qifu. In 2022, we will continue to enhance the impact of the platform and improve the platform service system. In terms of product functions, we have newly released a few review reports. Based on the actual needs of users, we will compare, select, and generate independent and objective data analysis, evaluation reports, and lists to optimize the situation of user roles. At the same time, we have gradually refined the search function of the platform and added a search path for product functions and articles to effectively improve the accuracy of user searches. In addition, we have improved the algorithm and display method of product lists. Last but not least, I'd like to share an update on our second growth engine, the 36KR Enterprise Service Review Platform.
spk04: In 2022, we remain focused on growing our platform's influence and further optimizing its service system regarding product functions. We launched Enterprise Service Review Report to compare products and recommend models based on users' actual needs, while generating independent, objective data analysis, ranking reports and charts, efficiently optimizing users' decision-making scenarios. We also refined Enterprise Service Review Platform's search function, adding search paths for product functions and articles, increasing the accuracy of users' researches. In addition, we improved our product charts, algorithms, and display methods to help users better understand product information, user views, and industry rankings, elevating convenience and usability. In terms of customer acquisition formats, we built a variety of content products and IPs across graphics, live streaming, Offline salons and other formats from users' perspectives consistently reach decision makers in every industry, which further enhance the enterprise service review platform's brand awareness and influence.
spk07: Through the joint efforts of the company, we have achieved a rapid growth in all aspects of business data. As of the fourth quarter of 2022, our core number of business clues has reached 700% in the same period. The number of online products on the platform is over 8,000, which is 52% of the total growth. The number of comments on the platform is over 60,000, which is 264% of the total growth. The number of business owners on the platform is more than 1,200, which is three times the total growth. When it comes to commercialization, in fact, the number of comments on the platform has gone up more than 10 million. We have acquired many well-known manufacturers, such as Besson, Jindie, Tencent, TAPD, Google Cloud, Central Telecommunications, and other commercialized orders. We have also acquired many well-known manufacturers, such as Besson, Jindie, Tencent, TAPD, Google Cloud, Central Telecommunications, and other commercialized orders. Through relentless efforts in our online and offline operations, we achieved rapid growth in the enterprise service review platform's operating matrix across the board as of the fourth quarter of 2022.
spk04: The number of leads have grown 700% compared with the same period of last year, and the cumulative number of products on the platform exceeded 8,000, a year-over-year increase of 52%. With a total number of reviews surpassing 60,000 cumulatively, up 264% year-over-year, the number of merchants on the platform exceeded 1,200, doubled the number in the same period of 2021. Additionally, in terms of commercialization, as of now, the enterprise service review platform's contracted sales exceeded RMB 10 million, with orders from an extensive roster of well-known SaaS suppliers such as Belzen, Kindi, Tencent TAPD, Google Cloud, and ZTE. We also established strategic marketing cooperation with Volcano Engine under its ByteDance brand, as well as the SMB unit of Lenovo, a Fortune Global 500 company, in 2022. Going forward, the enterprise service review platform will serve a growing cohort of enterprises in need of digital transformation and upgrades, unleashing our platform's value and greatly boosting our commercialization capability. 展望2023年,就这疫情时代的结束。
spk07: We see that the market has shown many positive signals, and the confidence of entrepreneurs and investors is improving steadily. The commercial activity in the economy is constantly improving. We will seize the commercial opportunity under the economic warm-up, and continue to explore the media, and achieve a richer product and service system. We expect that 306K will continue to attract income growth in 2023, and realize full-time profit again. Standing on the new starting point of the smog-dissolving galaxy, we believe that 306K will continue to unlock greater room for growth and corporate value.
spk04: As we embark upon the post-pandemic era in 2023, we have observed many positive market signals emerge. Entrepreneurs' and investors' confidence continues to threaten accordingly, leading to increasing business vitality throughout the new economy sector. We will seize the commercialization opportunities afforded by the economic recovery to keep exploring media boundaries and build a richer portfolio of products and services. We expect to see continued revenue growth and deliver another four-year profit in 2023, with darkness giving way to light as COVID-19 recedes. We believe we are well positioned to consistently unlock more growth potential and enterprise value, differentiating ourselves as we accompany and empower our new economy partners, and creating long-term sustainable value for society and shareholders along the way.
spk07: With that, I will now turn the call over to our CFO, Ms.
spk04: Lin Wei, who will discuss our key financial results. Please go ahead, Lin.
spk10: Thank you, Pao. Now I'd like to walk you through more details of our fourth quarter and fiscal year 2022 financial results. Total revenues for the fourth quarter of 2022 were RMB $96.6 million, a sequential increase of 2%. Total revenues for the full year of 2022 were RMB $322.5 million, a year-over-year increase of 2% compared to the full year of 2021. Online advertising services revenue were RMB 62.2 million in the fourth quarter of 2022, compared to RMB 76.4 million in the same period of last year. The decrease was primarily attributable to relatively weak advertising spending caused by the negative impact of COVID-19 control measures and infections across China during the quarter. For the full year of 2022, our online advertising services grew by 3% year-over-year to RMB 221.6 million. 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 year. Enterprise vital ad services revenue were RMB 25.4 million in the first quarter of 2022, compared to RMB 38.3 million in the same period of 2021. For the full year of 2022, our enterprise value added services were RMB 72.6 million compared to RMB 74 million in the previous year. The 2% decrease was primarily because some of our offline events were delayed or downscaled due to disruptions from COVID-19. Subscription services revenue were RMB 8.9 million in the fourth quarter of 2022 compared to RMB 9.6 million in the same period of 2021. The decrease was primarily attributable to the negative impact of COVID-19. For the full year of 2022, our subscription services revenue were RMB 28.2 million, representing an increase of 1% compared to RMB 28 million in the previous year. The increase was primarily attributable to our continuous efforts to offer high-quality subscription products to our subscribers during 2022. Cost of revenues were RMB 47.6 million in the first quarter of 2022 compared to RMB The increase was primarily attributable to higher content cost related to expansion of our commercial-oriented content programs. For the full year of 2022, our cost of revenues was RMB 137.8 million compared to RMB 128.8 million in the previous year. The increase was primarily attributable to the increase in content-related costs partially offset by decrease in costs of our offline events. Gross profit was on the $48.9 million in the first quarter of 2022 compared to on the $75.6 million in the same period of last year. For the full year of 2022, our gross profit was on the $184.6 million compared to on the $187.9 million in the previous year. Gross profit margin for the full year of 2022 was 57.3% compared to 59.3% in the previous year. Operating expenses were RMB 69 million in the first quarter of 2022 compared to RMB 61.6 million in the same period of last year. For the full year of 2022, operating expenses were RMB 229.2 million compared to RMB 282 million in the previous year. Sales and marketing expenses were RMB 32.8 million in the first quarter of 2022, a decrease of 16.5% from the same period of last year. primarily attributable to the decrease in marketing-related expenses. For full year 2022, sales and marketing expenses were on the 122.1 million, a contraction of 15% compared to the previous year, primarily attributable to the decrease in payroll-related expenses, share-based extension expenses, and marketing expenses. G&A expenses were RMB 21.7 million in the fourth quarter of 2022 compared to RMB 9.6 million in the same period of last year. The increase was primarily attributable to the release of allowance for credit losses recognized in the fourth quarter of last year. For full year of 2022, G&A expenses were RMB 52.1 million compared to RMB 98.6 million in the previous year. The decrease was primarily attributable to the release of allowance for credit losses and the decrease in professional fees. The release of allowance for credit losses was mainly due to improved collection of accounts receivables. Research and development expenses were on the 14.5 million in the fourth quarter of 2022 compared to on the 12.6 million in the same period of 2021. For the full year of 2022, our research and development expenses were on the 55 million compared to RMB 47.5 million in the previous year. The increase was primarily attributable to the increase in payroll related expenses as we bolstered our R&D capabilities for new products and services. 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 4.6 million in the fourth quarter of 2022 compared to RMB 4.1 million in the same period of last year. For full year 2022, the total amount of share-based compensation expenses were RMB 13.9 million compared to RMB 15 million in the previous year. Other expenses were RMB 1.2 million in the fourth quarter of 2022 compared to other income of RMB 1.5 million in the same period of last year. For full year 2022, other income was RMB 67.5 million compared to other income of RMB 3.6 million in the previous year. The increase was primarily attributable to gain arising from disposal of a subsidiary and investment income arising from fair value changes of long-term investments, as well as income generated from write-offs of accounts payable. Net loss was RMB 21.5 million in the first quarter of 2022 compared to net income of RMB 15.4 million in the same period of 2021. For full year 2022, our net income was RMB 22.6 million compared to net loss of RMB 90.6 million in the previous year. This is the first time we achieved full-year profitability since our IPO in 2019. non-GAAP adjusted net income was RMB 16.9 million in the fourth quarter of 2022, compared to non-GAAP adjusted net income of RMB 19.6 million in the same period of last year. For full year 2022, non-GAAP adjusted net income was RMB 36.5 million, compared to non-GAAP adjusted net loss of RMB 75.6 million in the previous year. Net loss attributable to 36KR's ordinary shareholders was RMB 20.8 million in the fourth quarter of 2022 compared to net income attributable to 36 KRs only shareholders of RMB 14.6 million in the same period of last year. For four-year 2022, net income attributable to 36 KRs only shareholders of RMB 21.9 million compared to net loss attributable to 36 KRs only shareholders of RMB 89.6 million in the previous year. Basic and diluted net loss per ADS were both RMB 49.8 cents in the fourth quarter of 2022 compared to net income per ADS of RMB 35.6 cents in the same period of last year. For full year 2022, basic and diluted net income per ADS were both RMB 53 cents compared to basic and diluted net loss per ADS of RMB 2.2 in the previous year. As of December 31st, 2022, The company had cash, cash equivalents, restricted cash, and short-term investments of RMB 184.9 million compared to RMB 164 million as of September 30, 2022. The increase was mainly attributable to positive cash flow from operating activities, partially offset by the long-term investment in a new economy startup company we made in the fourth quarter of 2022. This concludes all of our prepared remarks today. We will now open the call to questions. Operator, please go ahead.
spk03: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. 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 We will now pause momentarily to assemble our roster. The first question today comes from with CIBC. Please go ahead.
spk12: 我们看到外部环境今年会有一个改善,想了解一下公司今年有哪些战略重点和规划。 I will translate myself as this is improvements of the environment. What are the company's strategic priorities and plans for this year? Thank you.
spk07: As we mentioned many times before, we will continue to enrich our content ecosystem and tap into more vertical industries such as artificial intelligence,
spk04: new electric vehicles and industry capital.
spk07: And also on our product front,
spk04: Apart from our existing advertising and enterprise value-added services, we will also explore several new product initiatives. For example, 36KR Enterprise Service Review Platform, as our second growth engine, we will refine our platform and products and continue to pursue commercialization. 36KR Business School will enrich course designs to empower more small and medium-sized companies. This training product has been proven by our peers to be a market with R&D hundreds of millions of market size. Also, Services Care Research Institute will enhance its professionalism and industry coverage, providing more in-depth reports to more enterprises.
spk07: Speaking of this year's main focus and planning, I think we need to mention the Chinese CPT. We have been using this large-scale and large-scale model for a while, and it makes us feel very excited. In fact, I think no matter whether it is in our content production, And of course, we will keep investing in AIGC technology.
spk04: We will continue to advance the application of the AIGC technology in production and aggregation of high-quality content to further improve our content production efficiency. And through AIGC personalized dialog function, we'll strengthen our user interactions and stickiness.
spk06: Thank you.
spk03: The next question comes from Lingyi Zhao with SWS Research. Please go ahead.
spk02: The advertising industry is the foresight of economy. What changes have taken place in the willingness of advertisers to invest recently? Can you tell us about the degree of economy recovery and prospects based on the advertising business? Thank you. 好的,谢谢。
spk07: From a technical point of view, our advertising business is recovering. However, it may take some time for it to recover to a higher level. We still have a long way to go before the market recovers. Let me explain why this is the case. Our real feeling is that we can feel that our customers have been very active and active since last year. However, their market budget hasn't increased rapidly. Okay, based on the Q1 2023's current situation, our ad business is already recovering steadily. However, it will take some time for advertising to return to a relatively high level while market confidence continues to recover.
spk04: And we have witnessed that a lot of our clients have rebounded their confidence in ad placement, but still they still have a limited budget for their advertising business. So this is why I feel it takes time for us to recover to a relatively high level.
spk07: Yes, and today we have seen some characteristics of the industry, such as some popular fields, such as cars and e-commerce. Okay, based on market feedback and actual business performance so far, the entire advertising industry has been recovering at a steady pace.
spk04: Businesses in some popular industries such as automobile and e-commerce have been very active in brand promotions and marketing activities with relatively stable and placement budgets. In Q1 2023, we made further progress in both commercialization channels and industry coverage. For instance, we completed JD.com's first commercialization order on Xiaohongshu and achieved our first breakthrough in the luxury goods sector. As such, we expect a fair level of growth generally in advertising in both Q1 and the full year 2023.
spk07: Looking ahead at the full year 2023, we remain optimistic.
spk04: As business activities and people's daily lives come back to normal in the post-pandemic era, we will see a significant rebound in our ag business.
spk03: Once again, if you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. The next question comes from Rui Yin with Sea Land Security. Please go ahead.
spk02: 我的第二個問題是關於利潤率。 然後我想問一下我們應當如何去預期今年的一個稅用率,包括利潤率的一個水平。 主要的改善是來自於哪些方面的努力? I'll transmit myself. Hi, management. I have two questions. The first question is about the enterprise value-added business segment. Could the future growth come more from the increase in the number of paying companies or the increase in the level of corporate payments? What new actions will the company take for enterprise and added service segments this year? And my second question is about margin ratio. How should we expect the company's expense ratio and profit margin this year? Thank you.
spk07: 谢谢。 过去几年我们实际上一直保持着我们的客户数和up值的双增长, 所以我想今天我们依然还是 Actually, during the past years,
spk04: Both of our number of clients and our pool have increased significantly, and we believe it will grow this year as well. On our pool side, we will provide diversified enterprise value-added services, including offline events, consulting services, and integrated agency operation services to boost growth in this segment. On the number of clients, we will tap into broader vertical sectors and penetrate to lower tier markets like in 12 or more regional offices.
spk07: In terms of the product category, we will make this product more diverse in 2023. For example, we will focus on the 36-car TIF point platform, as well as the 36-car creative platform and 36-car research institute that we just did for a few months.
spk04: In 2023, we will also leverage more products to develop our enterprise value-added services. In addition to 36KR enterprise review platform, we also launched 36KR venture capital platform as well as 36KR research institute to further grow our business.
spk10: Hi, Minrui. I think this is your first time to join the earnings call for 36KR. We really give you a warmest welcome. And this is Linh. I will answer your second question regarding the expense ratio and the margin question. I think for the full year 2022, you can see from our results that our gross margin is at a relatively stable level of 57%. In 2023, we will be able to maintain that level or even have more further growth margin expansion because as our CEO just mentioned, given the AIGC and the more AI-aggregated technology application, we will be able to have higher efficiency of operation and have some cost-saving effect in our business. And secondly, I think I will highlight that I think For 2023, the margin expansion as well as operating margin and gross margin will come more from the revenue rebound or revenue growth. Although in 2022, we are proud that we have been growing our revenue given the very challenging environment in 2022, but we achieved a positive 2% growth. But that ratio will be much higher in 2023, I think. And also, we mentioned several times that our cost structure and expense structure has been very stable, given that it will not be a linear growth pattern as the revenue grow. That means we will have a lot of leverage. So give you some quantitative implications Now, if we say that in 2023, our growth margin can be stabilized at around 60% level, then our expense OPEX ratio will be, I mean, let's say around 50%. Then we'll give you a operating margin of around 10%. I think that will even have some upside if our top line of revenue can grow at a much higher growth rate than in 2022. Hope that answers the question. Thank you, Mr. Wei.
spk02: I have another question about AIGC. I want to ask if the company has any business integration points with AIGC or GPP? And what are the plans for AIGC? What is the business connection between the company and AIGC or GPP large model? And what is the plan for AI? Thank you.
spk07: Thank you. Actually, our AIGC should be We are very concerned and optimistic about it. We have been using it for a while, including Shutter CVT and Baidu's new language. I think they are directly helpful to our business. For example, you know, in our content, the content chain and classification is a very important part. For our third-party customers, ICC can help us to label, including the classification of articles in various fields, and thus quickly optimize the accuracy of our decoding.
spk04: Actually, content production quality and efficiency have always been our priority, and we have been adopting AIGC for quite a while. Content acquisition and specification are key components of AIGC technology. By applying AIGC, 36KR can classify articles in various fields using labeling, thus optimizing the accuracy of user research. In addition, for some in-depth articles, AIGC will summarize the content of the articles to facilitate users' efficient understanding while also improving the user experience.
spk07: 再以我們的企服點評平台為例, AIGC技術可以幫助用戶更高效的後期產品的詳細信息,價格和使用評價。 On the product front, using 36KR Enterprise Review Platform as an example, AIGC technology will assist users to better obtain detailed information, such as price and usage evaluation of products.
spk04: more efficiently so as to understand products more accurately and make better purchasing decisions. Also, AIGC helps us provide better customer services through more effective user interaction and communication. According to our initial analysis, AIGC has helped improve our user interaction by 90% and improved our current production efficiency by three times.
spk07: This is a topic that we have recently become the first business partner of Baidu Wenxin. Recently, we became one of the first batch of companies to join Baidu's chat GPT-style earning board ecosystem. We have achieved the code for internal testing and are launching the first round of our internal testing.
spk04: with no doubt that 36KR will be the fast mover in applying AIGC technology in our content production and business expansion. Thanks for your questions.
spk03: Once again, if you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. That's star then 1 to enter the question queue. And as there are no further questions, I'd like to turn the call back over to the company for closing remarks.
spk04: Thank you once again for joining us today. If you have any further questions, please feel free to contact 36KR's investor relations through the contact information provided on our website.
spk09: Thank you and see you next time. Thank you, operator. Thank you, everyone. That does conclude our conference for today.
spk03: Thank you for participating. You may now disconnect.
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