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spk01: Thank you for standing by for 36KR Holding Inc.' 's fourth quarter and fiscal year 2023 earnings conference call. At this time, all participants are in 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, Gianna Ding, IR manager of the company. Please go ahead, Gianna.
spk03: Thank you very much. Hello, everyone, and welcome to 36KR Holdings' fourth quarter and fiscal year 2023 earnings conference call. The company's financial and operational results were released earlier today and have been made available online. You can also view the earnings press release by visiting the IR section of our website at ir.36kr.com. Participants on today's call will include our co-chairman and CEO, Mr. Da Gangfeng, and our chief financial officer, Ms. Ling Wei. Mr. Fung will start the call by providing an overview of the company and performance highlights of the COVID change, followed by an English interpretation. Ms. Wei will then provide details on the company's financial results before opening the call for your questions. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the US SEC. The company does not assume any obligation to update any forward-looking statements, except as required on the applicable law. Please note that the 36KR's earnings press release and this conference call discussions of unaudited gap financial measures as well as unaudited non-gap financial measures. 36KR's earnings press release contains a reconciliation of the unaudited non-gap measures to the unaudited gap measures. And please note that all amount numbers 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 joining our 4th quarter and physical year 2023 Earnings Conference Call. 2023 was an extraordinary year for 36KR as we continuously strengthened our content ecosystem
spk03: Leveraging our peerless content creation partners and comprehensive marketing offerings, we effectively dropped growth in both our user base and monetization. As a result, our annual revenue reached RMB 340 million, up 5% year-over-year, and we sustained our high gross profit margin of 54%. 2023 also marked the inaugural year of explosive growth in AIGC. By actively embracing the vast opportunities brought by this industry transformation, we were able to dive deeper into visionary AGI applications, accelerating AGI adoption in real-world scenarios. Let me share some additional details of our 2023 progress across three core areas, the enrichment of our content ecosystem, IT product development, and the comprehensive AI applications.
spk07: First, in terms of content, The company continues to create high-quality content with a wide range of content. In 2024, the company, on the basis of flagships such as 36K, 36K Pro, and other flagships, accelerated the development of a comprehensive range of areas, and launched smart cable, 36K car, future consumption, 36T, hard drive, and other high-quality content. The coverage of the content covers a wide range of areas and accumulates depth in the segment area, leading users to explore the trend and business points of the industry. At the same time, the company continues to create exclusive content for young users, and launched a later research institute. I will start with our content ecosystem. While we further enrich and diversify our content matrix,
spk03: continuously creating high-quality content on multiple fronts. In 2023, we built upon our flagship channels, including Certisys KR and Certisys KR Pro by accelerating our reach in subvertical. We rolled out high-quality content-specific accounts like the Emergency of Intelligence, Certisys KR Auto, Future Consumption, KR Carbon, and Hardcore KR, among others. These accounts made our matrix more comprehensive bringing both broad content coverage and a great depth of experts in specialized domains to provide users with invaluable insights into industry trends and evolving business dynamics. At the same time, we continue to tailor content experiences for younger generations by launching our OUs and tied subvertical media channels, featuring a broad content matrix of text and graphics, comics, and customized videos, This channel successfully engaged younger audiences, greatly extending our content reach. With approximately 40 accounts so far covering advanced manufacturing, digitalization, dual carbon and ESG hardcore technology, highly specialized and innovative enterprises, consumer lifestyles and much more, we have successfully introduced and fostered a solid content ecosystem.
spk07: At the same time, we continue to promote the distribution of the whole network. Through Weibo, Xiaohongshu, TouTiao, Zhihu, Bilibili, Douyin, Quaishou, and other new media distribution channels, we realize the comprehensive distribution and coverage of high-quality content, helping high-quality content to gain more widespread exposure and transmission. In 2013, we had many reprinted articles, including more than 740 articles of WeChat with a reading capacity of 100,000, and produced 23 Weibo hot search topics, more than 100 hot topics, and continuously created hot search lists. We also expanded our footprint across various channels, crafting a comprehensive circulation machine, encompassing major new media platforms like Weibo, Xiaohongshu, Toutiao, Zhihu, Bilibili, Douyin, Kuaishou, etc.,
spk03: Spot channel exposure brings us wider overall dissemination and higher visibility for our primary content. With blockbuster articles emerging back-to-back throughout 2023, 740 of our articles achieved over 100,000 page views. We also made Weibo's trending topics list with 23 hot search topics and over 100 hotly debated topics thanks to our continuous stream of fresh perspectives. Our consistent production of high-quality content expanded and diversified our user demographics, further elevating user engagement and stickiness. As of the end of 2023, we had over 32.7 million followers, marking 11 consecutive quarters of growth.
spk07: In addition, we gradually enriched the content of the content in the form of pictures, long videos, audio, live broadcasts, and so on. In terms of short videos, Moreover, our overview content ecosystem is now more comprehensive and diverse. We explore the growing array of content formats, including text, graphics, and short and long-form videos, as well as audio and live streaming.
spk03: In terms of short video, our exceptional content creation capabilities earn us widespread visibility and rave reviews from users. Our short video followers exceeded 9 million by the end of 2023, including a significant 2.2 million on Bilibili alone.
spk07: Moving on to long-form video.
spk03: In 2023, we unveiled our first long video talk show series. Foreseeing 2033, owing to its roster of distinguished guests and in-depth discussion, a reality within the industry, our show rapidly captured audience attention and admiration. So far, we have aired two productive seasons of the show. As a host, I discussed and explored exciting aspects of the new economy with visionaries from various industries, including AI triple lasers, traditional automotive manufacturing veterans, leaders in the burgeoning electric vehicle sector, carbon neutrality industry, luminaries, and capital market experts. Live streaming, foreseen in 2033 at Youku and Beijing Radio and Television Station, also marked a pivotal milestone for us. It extended our reach beyond social media, successfully breaching out into long video platforms and television networks, and fostering a broader content portfolio and a closed-loop ecosystem. In terms of live streaming, we integrated our resources and maximized the utilization of WeChat channels to launch in live streaming IP, live from KR Star, primarily centered on two programs, Youth Watch and CEO Tips. In 2023, we hosted 95 live streaming sessions, addressing a diverse spectrum of training topics, including perspectives on employment at Internet giants, industry know-how, such as AI's role in corporate cost reduction and efficiency enhancement, and global expansion of Chinese brands. These coordinated initiatives are aimed at bringing more in-depth content, experiences, and services models to our users and clients alike.
spk07: In terms of audio, Sanzhouke's audio channel has become a top-notch anchor for the Himalayan platform. In the audio realm, ServicesCare's audio channel has emerged as a top-tier streamer on platforms like Himalaya, delighting listeners with a varied slate of initiatives such as 815 Morning Pulse, Major Moments, and Business Intelligence Hub.
spk03: garnering massive acclaim. We also further deepen our commitment to expanding our audio content portfolio and functionality in 2023 with the launch of our live podcast, Get Off Work, Have Fun.
spk07: 第二点是IP型产品的打造。 三人客不断锻造自身媒体价值, 以优质的内容为 核心, 构筑媒体平台的壁垒。 2023年,我们通过内容IP的打造 与储备持续丰富的内容矩阵, such as the KAN2033 series and the Houlang series that we mentioned earlier. With these IPs, we have launched a multidimensional picture, short video, and live broadcast, to further expand the content influence. At the same time, in terms of the innovation of the activity IP, the 365 flagship IP, the WIPS Business Network Conference, has been officially upgraded to the WIPS Business Network Conference, which covers the entire business field of the conference. At the same time, while enriching the diversity of the conference, it also provides the audience with a wider perspective on the industry. In addition, we have launched a brand new summit IP, the WIPS New Wave Conference,
spk03: Our second main area of progress is in IP product development. We consistently reinforce our medium value by contaminating our medium platforms' competitive barriers with high-quality content offerings. In 2023, we continuously augmented our content matrix by creating and nurturing our content IP with programming like those I just mentioned, foreseeing 2033 and our youth series. We also launched a diverse range of initiatives supporting our newer IP, including text and graphics, short videos, and live streaming programs, further reinforcing our content's influence. In terms of event IP innovation, we broadened the scope of our annual flagship WISE conference to encompass all business domains, culminating its evolution from the WISE king of the youth new economy conference to the wise king of the business conference. This strategic graduation enriched the event's diversity while also providing its audience with broader industry perspectives. We also unveiled a brand new summit, Waves, as well as two culture and leisure IP series, Surprise and the Incredible, successfully driving growth in our to-see business and facilitating enterprise client acquisition.
spk07: Furthermore, 36KR emphasizes IP-oriented upgrades to enhance its branded service offerings.
spk03: In 2023, as a keen observer and interpreter of industry and market trends, Statistics Care Research Institute has maintained its focus on conducting thorough research on state-of-the-art technologies, innovative trends, and business advancements. Through high-precision data mining and actual analysis, We support the government and corporate clients with tailored consulting services, offering invaluable perspectives and insights to drive industry transformation and innovation.
spk07: At the same time, San Diego Business School, as a brand-new show in the field of business development, provides a variety of courses, including open lectures, four sessions, business interviews, and so on. Our high-level management staff in the field of innovation have created a series of academic courses, and the University of New York, France, ISEEC, High School of Science and Technology, Marlin University of the United Kingdom, and other world-renowned universities have jointly launched international software projects. In addition, in order to respond to the constant growth of the need for AI, we have jointly launched the Global Intelligent Entrepreneurship Project with Peking University and Tsinghua University to further promote the development of the artificial intelligence industry. Since then, San Diego Business School has become a comprehensive business training IP in the field of innovation.
spk03: Additionally, as a rising star in the business training field, 36KR Business School offers a diverse array of courses including open lectures, exclusive fireside chats with C-level executives, corporate site visits and interviews. We also advanced our development of degree-based programs for senior executives in the new economy sector in China, teaming up with globally-estimated institutions such as Oxford University, INSEAD business schools in France, and Queen Mary University of London, among others, to jointly deliver world-class master's and doctoral programs. Moreover, in response to the escalating needs for AI applications, We joined forces with top-tier institutions, including Peking University and Tsinghua University, to unveil the Global Intelligent Entrepreneurial Initiative for the propelling AI advancement. As a result, 36 KR Business Schools IP has gradually emerged as a permanent player in the training sector, enabling recent graduate business elites as well as AI professionals with all-in-one training solutions. empowering them to anticipate and amplify the new economic growth trend.
spk07: The third and final aspect I want to highlight today is how we have advanced our AI applications in innovative scenarios.
spk03: Seizing new opportunities with the emergence of large language models, we strategically integrated LLM technology throughout our content ecosystem and pioneered the use of AI technology in opening a Taobao store. This significantly improved the efficiency of store operations while reducing relevant costs. During the Asian Games, we innovated once again, creating an AI-driven Asia game blogger on Xiaohongshu, and teaming up with Alibaba's TongYi AI model. This joint initiative marked a significant content creation milestone for us, while also underscoring 36K's foresight, acumen, and outstanding execution capabilities in AI applications. In 2023, by virtue of our outstanding proficiency in creating pan-business and pan-finance content, we were one of the first batch of companies invited to partner with Baidu's chat GPT-style earning about ecosystem. This cooperation has since evolved into a more in-depth strategic partnership with Baidu, under which we are actively advancing innovation and commercialization of AI technology in content production and enterprise services.
spk07: At the same time, with AI-tc technology and the natural fit of the content production industry, we fully exploit AI-tc technology in the advantages of information recognition, text processing, and image production, etc.
spk03: Furthermore, leveraging the inherited synergies between AIGC technology and the content production industry will maximize the utilization of AIGC technology across content production activities, including information identification, text progressing, and image generation. This upgrades effectively reduce costs while enhancing efficiency. Ongoing updates and interrelations of AI-powered video tools will also lower the costs associated with video production going forward.
spk07: In addition, we continue to expand our business boundary, actively promote the application of AI technology in multidimensional scenarios, and cooperate with commercial technologies to launch AI financial reporting and analysis business. Through AI technology, we generate financial reporting and analysis reports for companies, and provide higher quality subscription services to customers. At the same time, we also plan to launch a series of new AI-driven products this year, such as company newspapers and search reports.
spk03: Moreover, we continue to broaden our business scope by actively promoting AI applications across diverse business scenarios. Our AI power solution for financial reporting application jointly launched with SenseTime. empowered customers with unparalleled insight into corporate financials by harnessing AI technology, ensuring our subscribers receive a superior level of service and value. Additionally, we plan to unveil an array of AI-driven products in 2024, such as corporate briefings and medium spotlight seekers, among others. Through the strategic deployment of AI technologies, we broaden the purview and position of our customer outreach initiatives, effectively connecting with a diverse spectrum of enterprises and organizations previously beyond reach due to resource-intensive workloads and demand power limitations.
spk07: 综上口述,三轮可通过内容生态的丰富,服务及产品势能的积累, AI技术的应用赋能,使得我们的商业化能力不断加强,营收实现稳健增长。
spk03: In short, through our enriched content ecosystem, growing matrix of services and products, and extensive AI empowerment, we have continuously strengthened our commercialization capabilities, resulting in solid revenue growth. Now, I'd like to take a closer look at the commercialization progress we made in each segment in 2023.
spk07: The advertising revenue is 8% higher than before. We continue to explore a new mode of content marketing. Gradually, we have expanded the multi-layered marketing service consisting of pictures, long videos, audio and live broadcasts to help customers achieve the same marketing demand. Under our continuous service innovation, the average customer price is 17% higher than before. In terms of industry expansion, the company has further strengthened the expansion of the new design of cars, luxury goods consumption, and other new fields, and has actively developed more clothing, food, and other large-scale traditional industry customers. At the same time, Starting with advertising, revenue increased by 8% year over year. We continue to craft innovative content marketing strategies and expand it into diverse marketing formats like text, graphics, short and long-form videos,
spk03: audio and live streaming to fulfill clients' holistic branding needs. Our ongoing service innovation draws a pull upon by 17% year-over-year. To expand our industry footprint, we ramped up advertising initiatives in emerging sectors, such as energy vehicles and electric goods consumption, while also broadening partnerships with legacy brands in traditional industries like apparel and food. We also continue to diversify our advertising commercialization channels. Beyond revenue growth across our flagship platforms, like the 36KR website, 36KR app, WeChat, and Weibo, we made significant headway in monetized platforms like Bilibili, Xiaohongshu, Zhihu, and WeChat channels, among others.
spk07: Our short video business continues to show that the share price of Zangguang is constantly increasing. Moving on to short video.
spk03: Our shop video business continues to excel with its contribution as a percentage of advertising revenue consistently on the rise. Our shop videos attracted a large following with high-quality content, positioning us as a standout among corporate accounts across various platforms. Notably, our shop video team covering the automotive sector has garnered widespread claims within the industry for its top-notch content. This job ongoing expansion of its follower based as well as partnerships with S-teamed auto brands including BMW, Mercedes-Benz, Danza, and Jiyue. This accomplishment highlight our competitive edge in the short video sector and lay a robust foundation for our future expansion.
spk07: Next, in terms of corporate service, we will continue to focus on new technologies new energy, new consumption, and other new fields, and held about 20 industry summits to bring a more direct and efficient energy-saving experience to the company. The company continues to strengthen its response to young users and proposes a new summit IP for the new 5G wave. It proposes creative ideas, technology, people, music, and other diverse scenarios, creating a new business party for young founders and investors. The total amount of exposure to the whole network is more than 83 million. At the same time, at the end of the year, Now let's turn to enterprise value-added services. Throughout 2023, 36K remains committed to verticals such as new technology, new energy, and new consumption.
spk03: Approximately 20 industry summits to more directly and efficiently empower enterprises. We extended our reach to younger demographics with our own new summit waves, integrating venture capital, technology, culture, and music themes to zero in on young business founders and investors. This celebration of youth for entrepreneurship amassed over 83 million views. Meanwhile, more than 300 distinguished commercial and economic experts, scholars, business elites, and investors, including Kai-Fu Li, Ya-Ting Zhang, and You-Ting Guan, joined us at our year-end flagship summit, the Wise 2023 Kings of Business. The event's vibrant discussion sparked new ideas and innovations. We also enhanced this year's conference with certain functional upgrades to amplify its networking potential and foster even more social engagement among users.
spk07: 除了线好动外,咨询等企业政治服务也在持续发力。 2023年,三联合研究院持续深化行业研究和洞察能力,发布了新能源、出海、自动化、智慧农业、企业及SaaS等多个领域的行业报告。 In addition to offline initiatives, we continue to make strides in our consulting services and other enterprise service offerings.
spk03: Throughout 2023, we continue to fortify 36KR Research Institute's expertise in industry research, regularly issuing top-notch research reports with valuable insights, including industry exports on an array of topics like new energy, global expansion, automation, smart agriculture, and enterprise SaaS, etc., while forging in-depth alliances with leading companies like Lenovo, Alibaba Cloud, Baidu, Douyin, and NetEase, Cloud Music, among others. Furthermore, this year, we are poised to further deepen our engagement with the governmental and public service systems, drawing upon our comprehensive grasp of government structures at different levels and our wealth of service expertise. We offer customers with integrated suite of services, including facilitating industry-specific partnerships and investment inflows addressing their varied needs with precision. Next up, for subscription services, we continue to refine our membership system and the subscription product offerings, achieving significant year-over-year annual revenue growth of 21%. One good example is our optimization of 36 care business school services. As part of our aforementioned initiatives to craft a permanent business training IP, In addition to consistently refining our primary training courses, including funding acceleration camp, we also dived deeply into the development of international degree-based programs. This now features insightful lectures by distinguished leadership scholars and professors covering an array of exciting topics. As a result, our subscription services are pooled such to over-earn the $140,000. Reflecting a notable improvement in our holistic commercialization capabilities.
spk07: In short,
spk03: 36K has sustained its solid growth trajectory throughout 2023. We achieved a full year revenue of RMB 340 million, up 5% year-over-year, thanks to our peerless content creation partners, robust IP assets, actively engaged users, and a diversified product and service lineup. As of the end of 2023, we had over 32.7 million followers, a surge of 14% year-over-year, That marked our 11th consecutive quarter of growth. 2023 also ushered in the era of AIGC. Large language models are reshaping and redefining nearly every sector of the economy, content production included, driving a new wave of technological transformation. 36KR has actively embraced the AI boom, further optimizing content production and commercialization efficiency through visionary AI applications. Debting into 2024, as a provider and facilitator of advanced productivity, we are opposed to hone our competitive edge in content creation, broaden the reach of our product and service offerings, and further harness AI technology to empower high-quality development among new economy stakeholders.
spk07: Next, I will hand over the time to our CFO, Wei Li. She will introduce the main performance of the financial side.
spk03: With that, I will now turn the call over to our CFO, Mr. Cui, who will discuss our financial results.
spk02: Please go ahead, Dean. Thank you, Paul. Now I'd like to walk you through more details of our fourth quarter and fiscal year 2023 financial results. Please note all amount numbers are in RMB unless otherwise stated. Total revenues were $103.3 million in the fourth quarter of 2023, a 7% increase from 96.6 in the same period of last year. Total revenues for the full year of 2023 were $340.2 million, a year-over-year increase of 5.5%. Online advertising services revenue was $68.6 million in the first quarter of 2023, an increase of 10% compared to the same period of last year. For full year of 2023, our online advertising services grew by 8% year-over-year to $238.7 million. The increase was primarily attributable to more innovative marketing solutions we provided to our customers, as well as proactive sales strategies we adopted during the year. The average revenue per online advertising customer in 2023 were $489,000, a 17% increase year-over-year. Enterprise value-added services revenues were 26.3 million in the fourth quarter of 2023, a 4% increase from the same period of last year. For full year 2023, our enterprise value added services revenue was 67.3 million compared to 72.6 million in the previous year. The 7% decrease was primarily due to the transition of our integrated marketing services, partially offset by the growth of our other enterprise value added services in 2023. Subscription services revenues were 8.4 million in the fourth quarter of 2023, compared to 8.9 million in the same period of last year. The slight decrease was primarily attributable to the structural changes to our institutional clients in China, partially offset by the increase in individual subscription services. For full year 2023, our subscription services revenue was 34.2 million, representing an increase of 21% year-over-year. The increase was primarily attributable to our continuous efforts to offer high quality subscription products to our subscribers, especially individual subscribers. Cost of revenues was 45.8 million in the fourth quarter of 2023 compared to 47.6 million in the same period of last year. The decrease was primarily attributable to the optimization of personnel related costs. For full year 2023, our cost of revenues was 158.2 million compared to 137.8 million in the previous year. The increase was primarily attributable to higher content costs and fulfillment costs. Gross profit was 57.6 million in the fourth quarter of 2023, increasing by 18% from the same period of last year. Gross profit margin was 56% in the fourth quarter of 2023, up five percentage points from 51% in the same period of last year. For the full year of 2023, our gross profit was 182 million compared to 184.6 million in the previous year. Gross profit margin for full year 2023 was 54% compared to 57% in the previous year. Operating expenses were 70 million in the first quarter of 2023 compared to 69 million in the same period of last year. For full year 2023, operating expenses were 276.2 million compared to $229.2 million in the previous year. Sales and marketing expenses were $30.3 million in the fourth quarter of 2023, a decrease of 8% from the same period of last year. This is primarily attributable to the decrease in payroll-related expenses, partially offset by the increase in marketing expenses. For full year 2023, sales and marketing expenses were $127.5 million compared to $122.1 million in the previous year. The slight increase was primarily attributable to the increase in marketing expenses and promotion fees during the year. G&A expenses were $35.3 million in the fourth quarter of 2023 compared to $21.7 million in the same period of last year. The increase was primarily attributable to the increase in the loss of credit losses. For four-year 2023, G&A expenses were $107 million compared to $52.1 million in the previous year. The increase was mainly attributable to the increase in allowance for credit losses, as well as certain one-off expenses, including severance payments as we optimized our organization and office lease termination fees as we moved our headquarters office in fiscal year 2023. Research and development expenses were 4.4 million in the first quarter of 2023, a 70% reduction compared to 14.5 million in the same period of last year. For full year 2023, our research and development expenses were 41.7 million, 24% down from 55 million in the previous year, as we proactively embraced AI technology and streamlined our research and development teams, resulting in a decrease in payroll-related expenses. Share-based compensation income recognized in cost of revenues, sales and marketing expenses, research and development expenses, as well as G&A expenses, totaled $0.4 million in the fourth quarter of 2023, compared to SBC expenses of $4.6 million in the same period of last year. This fluctuation was primarily due to the reversal of share-based compensation expenses related to forfeiture in Q4 of 2023. For the full year of 2023, the total amount of share-based compensation expenses were $4.7 million compared to $13.9 million in the previous year. Other expenses were 5.1 million in the fourth quarter of 2023 compared to other expense of 1.2 million in the same period of last year. For full year 2023, other income was 4.9 million compared to other income of 67.5 million in the previous year. The decrease was primarily because the company recognized 38 million gain on disposal of subsidiaries and 16 million of long-term investment income in 2022 but recognized 8.1 million fair value loss of long-term investments in 2023. Net loss was 17.7 million in the fourth quarter of 2023, compared to net loss of 21.5 million in the same period of last year. For full year of 2023, our net loss was 89.2 million, compared to net income of 22.6 million in the previous year. Non-gap adjusted net loss was 18.1 million in the fourth quarter of 2023, compared to non-GAAP adjusted net loss of $16.9 million in the same period of last year. For full year 2023, non-GAAP adjusted net loss was $84.6 million compared to non-GAAP adjusted net income of $36.5 million in the previous year. Net loss attributable to 36 KR's ordinary shareholders was $18.8 million in the first quarter of 2023 compared to net loss attributable to 36 KR's ordinary shareholders of 20.8 million in the same period of last year. For full year of 2023, net loss attributable to 36-year ordinary shareholders was 90 million compared to net income of 21.9 million in the previous year. Basic and diluted net loss per ADS were both RMB 45 cents in the fourth quarter of 2023 compared to net loss per ADS of RMB 50 cents in the same period of last year. For full year 2023, basic and diluted net loss per ADS were both RMB 2.16 compared to basic and diluted net income per ADS of RMB 53 cents in the previous year. As of December 31st, 2023, the company had cash, cash equivalents and short-term investments of RMB 117 million compared to RMB 160 million as of September 30th, 2023. This concludes all of our prepared remarks today. We will now open the call to questions. Operator, please go ahead.
spk01: 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're 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. Your first question comes from Shan Jia with CICC.
spk06: Congratulations to the solid growth. in the revenue in 2023? And how does the management view the advertising revenue trends in the first quarter and in 2024? Thank you.
spk07: Some of the continuous growth of industry customers, especially in the top customers and or more than the waist of the customer, which is relatively speaking, is a large-scale customer. It should be said that it has a greater contribution to our growth, so you can see that our average customer price has increased by 17%. Then we are also exploring some of the marketing effects in the field of AI, including personalized advertising content, generation, upload and digital live broadcast, etc. Then provide our customers with a more intelligent, more efficient and innovative marketing solution. For 2024, we hold a with a relatively optimistic attitude, including the trend of leading big customers as I mentioned earlier, and the trend of this AI effect, which is also very obvious in QE. I believe that as the economy recovers, it will be beneficial for our business. We expect to see a better global business growth in 2024. Specifically, especially those related to AI business, those related to large enterprises, and those related to traditional enterprises, especially those related to the demand for technology transmission of traditional enterprises, I think these will be our driving factors.
spk03: Thank you. Despite persistent macroeconomic changes in 2023, our advertising business demonstrated solid growth momentum, achieving 8% year-over-year revenue growth. This success is attributable to our unwavering commitment to enhancing content influence and our ongoing client-based expansion across diverse industries, particularly among top-tier and mid-size advertisers. The steady growth trend in ad spending by our advertisers propelled a year-over-year increase in our approval of 17% attachment to 36K's robust business resilience. In addition, we have been actively exploring and harnessing AI technology to enhance marketing effectiveness and craft innovative strategies, including personalized advertising content generation, advertising placement, and live streaming featuring digital influencers, etc. As such, we are providing our customers with marketing solutions that are smarter, more efficient, and more innovative. We are cautiously optimistic about our advertising growth trajectory for 2024 aimed at an ongoing macroeconomic rebound, sustained stimulus policies, and new development strategies such as advanced productivity, As a leading service provider for and a facilitator of new economy and advanced productivity stakeholders, we expect robust growth in our advertising business in 2024, particularly in these three sectors, such as growth demand from government business and AI business sectors, as well as the need to market advanced technologies from traditional enterprises. Thank you.
spk01: Your next question comes from Lingyi Zhao with SWS Research.
spk05: Your next question comes from Lingyi Zhao with SWS Research. The second question is, What is the latest progress on both long and short video business? What are the plans for our further exploring growth potential? And what is the company's layout and further development plan in generative AI? Thank you.
spk07: Okay, thank you, Linyi. Let me answer the first question first. Regarding short video and long video, our development plan, First of all, let's talk about short video. Short video should be said to have a wider customer acceptance and higher price. Since we launched short video business three days ago, the ratio of short video business in our advertising revenue is constantly increasing. By 2023, we have reached tens of millions of yuan of revenue, accounting for almost 20% of the company's advertising revenue. At the same time, our professional financial content, including young people's content, in Bilibili, Douyin, Kuaishou, and many other platforms, should be said to be widely loved by users. So by the end of 2023, the number of our short video fans will reach more than 9 million, of which the number of fans will be more than 2.2 million. Then in terms of long videos, today I am the host of a program called See 2033. Because this guest is relatively high-end and the content is relatively scarce, so it should be said that the traffic and the reputation and the commercialization are double. Then his first season and the second season of the whole network total sales amount is currently more than 350 million. Now we are making a new issue of See 2034. As a result, in 2024, the development of our long-term video will continue to increase our original ability and the ability to digitalize services. In addition to 2034, I think we will also launch new long-term video content to further improve our content.
spk03: Thank you for your question. Well, for your first question, our short video adds both a wider customer acceptance and a higher approval compared to other advertising formats, providing a major copy of the company's overall advertising revenue. In 2023, leveraging our peerless content creation partners and a substantial influence across major platforms, commercial partnerships with various leading companies, This generated annual revenues totaling tens of millions of RMB, accounting for over 20% of the company's total advertising revenue. At the same time, our engaging content across finance, economics, and useful lifestyle garnered widespread user attention across major platforms like Bilibili, Douyin, and Kuaishou, etc. As of the end of 2023, our short video followers reached 9 million, including a significant 2.2 million Bilibili alone. Regarding long videos, throughout 2023, our long video talk show series, foreseeing 2033, owing to its roster of distinguished jazz and in-depth analysis, a rarity within the industry, our show rapidly captured audience attention and achieved substantial monetization success while earning glowing reviews. Its two seasons amassed over 350 million views. We also... thrilled about the two programs of our upcoming series, foreseeing 2034, which is in full swing. In 2024, we will deepen both short and long video development, setting up our investment in content creation and service customization, and exploring a wider array of formats. We have a handful of long video programs in the pipeline, which will further enhance our content ecosystem.
spk07: Okay, the second question is about some development plans and layout in terms of AI. I would like to answer this question in three aspects. The first aspect is that as a media institution, in 2023, we launched a new public number, Smart Lines, to provide users with continuous high-quality content in terms of AI technology. The second aspect is that as an innovative service institution, we also used AI last year The third point is also the most important point. As a We are promoting the development of AI, including our recent collaboration with Shazam, which has already launched AI data analysis. And then we are working on a company's daily news product that will be released very soon, as well as the product of the search report. The company's daily news is cooperating with another company, and the search report is developed by us. These AI-based applications have provided a lot of room for growth for our customer groups and our service capabilities. Our theory is that we think that there were a lot of needs in the past, but they were not realized due to cost or efficiency reasons. Through the help of AI, we can cover these customers, which is obviously very helpful for the company.
spk03: Well, for your second question, as we all know, 2023 ushered in the era of AIGCs. As a new economy content creation platform, 36KR skillfully leveraged the inherited synergies between content creation and AIGC technology. We rolled out the Emergency of Intelligence, a specialized account focused on providing high-caliber AIGC tech content. We also further deepened our interpretation of AIGC with content production, actively harnessing AIGC technology for content creation across abroad, from copywriting and text translation to image generation and more, reducing costs and enhancing efficiency. In addition, leveraging our keen acumen and vision for AI technology, we pioneered the process of opening a Taobao store exclusively using AI during the Asia Games. We innovated once again to create an AI-driven Asia Games blogger on Xiaotongshu, We also teamed up with Alibaba's Tony AI model. We have also advanced AI applications across diverse scenarios and unveiled an array of AI-driven projects this year, such as the AI financial report interpretation launched in collaboration with SenseTime, as well as the company daily brief and the medium coverage outreach. These offerings empower customers with intelligent information collection, analysis, and reporting services. Through the strategic deployment of AIGC technology, we broadened the preview and position of our customer outreach initiatives, effectively connecting with a diverse spectrum of enterprises and organizations previously beyond reach due to resource-intensive workloads and manpower limitations. Thank you for your question. Next, please.
spk01: Your next question comes from Pei Pei Q with Industrial Securities.
spk00: Hello, Ms. Lin. Good evening. Congratulations to the company for achieving such a good performance in such a difficult red-light environment. I have a more detailed question here. We noticed that our subscription service is actually growing quite fast this year. Some are beyond everyone's expectations. So I also want to ask what the specific reason behind this is. And in the future, will there be a new growth strategy for this part? I will translate my question. The subscription service business is growing faster than expected. So what are the main factors behind this? And what are the new growth strategies for this segment in the future? Thank you.
spk07: Okay, thank you. The reason why the subscription service business is growing faster than expected is because in 2013, a series of academic courses were launched. For example, we just talked about this English universities, French universities, and some famous schools. We are promoting a series of regular learning processes. These things have greatly improved our class price. Our class price broke 140,000 yuan last year. This should be said to be one of the important reasons for our growth. Another important reason is that we noticed the extreme curiosity and demand for AI in the industry, so we also launched courses in the field of AI. For example, we are working with Peking University, Tsinghua University, to launch the Global Intelligent Entrepreneurship Project. This project is also very popular. So in the next few days, we will continue to cooperate with more world-renowned universities in various fields, and we will continue to enrich our service system. At the same time, we are also trying to launch new subscription products for AI systems to C and B segments. This may bring us a new growth in the subscription section in 2024, including the company report we just mentioned. It relies on AI technology to achieve intelligent information collection, intelligent language analysis, and intelligent output reports. So I don't think such a product has ever appeared in the media industry. But I think it will be a product that is very valuable to users. I hope that such a product will be launched. By the way, this product is a very low cost, very high value business. So I think this product will be launched. It may play a very important role in the subscription service block this year.
spk03: While the rapid growth in our subscription services were primarily propelled by the launch of our equipment, like I just mentioned, throughout 2023, as we diligently optimize our premium training courses that venture capital class and funding acceleration cap, we also joined hands with globally esteemed institutions to deliver world-class master's and doctoral programs for corporate executives. our subscription services are pooled search to over 140,000. Moreover, in response to the escalating need for AI expertise and applications, we partnered with top tier institutions, including Peking University and Tsinghua University to unveil the Global Intelligent Entrepreneurial Initiative, enabling participants to further advance their AI awareness and AI utilization through hands-on training. In 2024, we will continue to diversify our core course offerings and welcome more institutions as partners, continually enriching our portfolio of training options. In addition, we are actively expanding our AI-driven subscription offerings to cater to both to-see and to-be segments, including AI-powered solutions for financial reports, interpretation, corporate briefings, and more. By harnessing AI technology for intelligent information collection, analytical intelligence, and reporting, among other things, we ensure our subscribers receive a superior level of service and value, further accelerating the growth in our subscription services. Thank you, and next question, please.
spk01: Your next question comes from Reki Liu with Sealand Securities.
spk04: What are the growth prospects for 2024?
spk07: This is not an easy year. And then it should be said that under the influence of all kinds of factors, the company has achieved a 5.5% increase in revenue, which is not easy. And then in 2024, we have a cautious and optimistic attitude. I believe that in 2023, compared to 2024, compared to 2023, our revenue will continue to increase, and then our profitability will improve. So this includes what we just mentioned, the new products we have launched, especially AI system products, which also includes our customers, Looking back on 2023, despite macro uncertainties and shifting external dynamics, we delivered solid results with 5% 5%
spk03: 5.5% year-over-year revenue growth. We are cautiously optimistic of 2024 and we expect sustained revenue growth and improved profitability. For one thing, we will further enrich our content ecosystem and reinforce our products and services. We will also actively maximize utilization of AIGC technology across content production initiatives and launch additional They are driven products to engage with a diverse spectrum of enterprises and clients previously beyond reach due to resource-intensive workloads and many other limitations. Moreover, the introduction of the notion of advanced productivity has fostered a strong sense of confidence and assurance across the company, given other comprehensive offerings that support and empower a diverse spectrum of businesses. We are well positioned to capture greater commercialization opportunities arising from this national strategy. Furthermore, with the optimization of our organizational structure and systematic cutbacks in cost and expenses, we are posed to advance our goals of cost reduction and efficiency enhancements, which will further bolster our operating leverage, driving overall profitability to new heights. Thank you.
spk01: As there are no further questions, I'd now like to turn the call back over to the company for closing remarks.
spk03: Thank you once again for joining us today. If you have further questions, please feel free to contact 36KS Investor Relations through the contact information provided on our website.
spk01: This concludes this conference call. You may now disconnect your line. Thank you.
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