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spk00: Hello, ladies and gentlemen. Thank you for standing by for Li Jue's first quarter 2021 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 is being recorded. I would now like to hand the call over to your host, Effie Kang, head of capital markets for the company. Please go ahead.
spk04: Thank you very much. Hello, everyone, and welcome to the G-Ink first quarter 2021 earnings conference call. We released our financial and operating results via Newswire services earlier today, and they are available online. Participants on today's call will include our founder and CEO, Mr. Marco Lai, and our acting CFO, Ms. Chen Fanglu. Management will begin with prepared remarks, and the call will conclude with a Q&A session. As a reminder, this conference is being recorded. In addition, Ernest's highlights presentation and the webcast replay of this conference call will be available in the IR section of our website at ir.leach.fm. Before we continue, please note that today's discussions will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements typically contain words such as may, will, expect, target, estimate, intend, believe, potential, continue, or other similar expressions. Forward-looking statements involve inherent risks and uncertainties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, many of which factors are beyond our control. The company, its affiliates, advisors, representatives, and underwriters do not undertake any obligation to update this forward-looking information, except as required under the applicable law. Please note the religious earnest press release and this conference call include discussions of unaudited gap financial measures, as well as unaudited non-gap financial measures. Li Zhi's press release contains a reconciliation of unaudited non-GAAP measures to unaudited GAAP measures. I will now turn the call over to our founder and CEO, Mr. Marco Lai. Please go ahead.
spk07: 大家好,感谢大家参加今天的业绩电话会。 Hello everyone, thank you for joining us today. 2021年第一季度作为一个新的开始,我们在... and still maintain a strong growth trend. This year's sustainable development has created a good start. The first low level of our overall user size continued to increase. The average number of domestic users reached 59.7 million on the mobile end. The monthly payment amount achieved 12% of the previous growth, reaching 47.5 million. We are very pleased to have started the year off strong as we maintain our robust growth momentum in the first quarter of 2021, laying a solid foundation for sustainable development throughout this year.
spk04: Our overall user base continued to grow in the quarter, with average mobile MAUs reaching 59.7 million, while the average monthly paying users increased by 12% quarter-over-quarter to approximately 475,000. Thanks to the effective execution of our operational strategies, we also witnessed the strong growth in our first quarter revenue. of RMB495 million, up 34% year-over-year and 18% sequentially.
spk07: In the first quarter of 2021, we continue to strive to build our unique and positive eco-ecotourism system, especially through the expansion of the overseas market, further strengthening our global strategy. At the same time, During the first quarter, we continued building and enhancing our unique and virtuous audio ecosystem, in particular, expanding our footprint overseas to further reinforce our globalization strategy.
spk04: In the meantime, we continue to advance our core technological capabilities in AI and audio transmission and processing to empower our business development. I would now like to share with you more information on recent developments.
spk07: By the end of March, the number of audio and video content accumulated within the platform has reached 1.73 billion. In terms of operation strategies, we combine the current hot points to combine content category construction and the strategy to strengthen the community atmosphere. By cutting into the category of youth literature, emotional expression, love garden, etc., which are deeply loved by young people, KOL, which has a lot of influence, and created a unique audio and video platform. We also launched the campaign outside of the station, attracting a large number of users to continue listening, commenting, liking and reposting. We have further intensified the community atmosphere and expanded the influence of the community. In addition, we continue to strive to help creators grow, including through the deco show to attract different types of creators to participate in the creation process to help the creators discover their own voice advantages. In early April, we also held a brand event for the LiZi App, which is LiZi Voice Festival. Through the form of online fan-raising, we gathered artists from all over the industry, talented creators and voice enthusiasts, First, our audio-centered UGC community built on the LeadGF maintained its high level of engagement in the first quarter. Notably, our average monthly interactions maintained 3.3 billion times during the period
spk04: As of the end of March, cumulative audio content across the platform reached 273 million. As part of our operational strategies, we continue to enrich content genres and enhance the community atmosphere surrounding hot social topics. In our effort to tap into genres that are widely sought by younger generations, including youth literature, emotional expression, and ACG, We joined forces with a number of influential KOLs to create inclusive premium audio programs and promote these programs across and outside our platform. This effort has attracted a large number of users to join our platform to listen to, comment on, praise and share our audio content, further uplifting the vibrancy of our audio community and amplifying the community's influence. In addition, we remain committed to helping outstanding content creators grow on our platform. For example, our talk show Star Talent program, specifically unveiled for content creators, influenced a variety of content creators to produce content and supported them to discover their vocal talents. In early April, we also successfully held our branded campaign, 2021 Leeds Voice Festival. This online carnival event featured various industry celebrities, quality content creators, and voice enthusiasts, attracting voice lovers to come together and enjoy the fun of voices, and providing a space for more people to showcase their vocal talents. During the event, there were more than 2 million people having participated in the live streaming show and also gained widespread attention across and outside our platform.
spk07: In addition, through a diversified activity and operation strategy, we also effectively promote the integration of audio and video entertainment and live broadcasts while strengthening user connection and interaction in the UGC community. We encourage live broadcast content creators to carry out more real-time audio and video creation. Through the interaction play and live broadcast function of audio and video entertainment, we can interact with fans and increase user attention and participation. It also made our number of paid users improve effectively.
spk04: Leveraging diversified campaigns and operational strategies, we increased user engagement and interaction in our UGC community. In the meantime, our efforts to encourage content creators from the pre-recorded audio content segment to join live streaming and audio interactions under the audio entertainment segment have effectively boosted the integration of both segments. Those content creators can build upon the interactive features and the live streaming features to interact with users, and therefore, our user engagement further increased, and the number of our paying users has grown effectively.
spk07: In terms of globalization, our global voice social platform, TIA, has continued to grow rapidly this year. We are very happy to see that TIA's monthly active user count has increased to more than 2 million in March. Last quarter, the monthly MAU increased by 90%. Meanwhile, this quarter, TIA's ranking on the U.S. social network chart remains at the forefront.
spk04: As we executed our global strategy, TIA app, our audio-based social networking app targeting overseas markets, continued its strong growth momentum in the first quarter. We are pleased to note that Li Zhi's mobile MAUs rose to more than two million in March, representing a 90% increase compared with the average mobile MAUs in the fourth quarter of 2020. In the quarter, TIA remained among the leading social networking apps in the U.S. market,
spk07: At TIA's product and operation level, we continue to focus on the relationship between users, user activity, and the optimization of products in terms of topic and scene expansion. By introducing new product functions, users can better gather with each other based on different interests and themes, interact with each other through real-time language, and make friends through different topics. At the same time, we also help users to form a more diversified interest circle, and to promote the growth of user-relationship. This has further strengthened TIA's social attributes. In the first quarter, we focused on the topic of EP games, anime, and so on. The relevant KOL joined TIA. Through group live broadcasts, the users interacted with each other and played games. The interest groups of various users are also growing on the platform, which is very good to promote user activity. In addition, we also see that users are continuing to improve their participation in different social topics. Currently, various room topics present more diversified trends. It covers games, animation, lifestyle, music, daily life, and so on. In the first quarter of this year, the number of rooms implemented by Ye Jun has increased by 4.5 times compared to the previous quarter. Based on different interests and themes, users have introduced more new friends in TIA. As of the end of March this year,
spk04: Furthermore, we continuously work to optimize overseas operations along with the integration of products by pivoting to enhancement of user engagement and retention, extension of social scenarios and related aspects. Our new features enable the tiered users to make social connections based on various interests and topics. interacting via real-time online audio, and making friends virtually with people who share their interests across a wide range of topics. Meanwhile, we help users form and foster diverse interest circles, improving users' thickness while further strengthening the social networking capabilities of TIA. In the first quarter, We also noticed that a number of KOLs focused on gaming and animation joined the TIA platform to interact and play games with TIA users through group audio live streaming. And all kinds of user-generated interest groups grew exponentially on TIA, which greatly spurred user interactions. In addition, we also saw growing engagement across user groups with different social networking topics. We are seeing a wide spectrum of chatroom topics, including gaming, animation, lifestyle, music, daily lives, etc. Notably, the average monthly chatrooms in the first quarter increased by 450% from the prior quarter. Based on a wide array of interests and topics, our users have made more new friends on TIA. As of March 31, the number of user-friend connections increased by 230%, From December 2020.
spk07: For users, TIA can not only be a tool for them to practice voice, but also provide new friends through voice interaction. It is a voice social platform for young people. In the future, we will further enrich and optimize the form of the product, strengthen the global layout, and meet the needs of young users. For users, TIA is not only a tool to make real-time voice chat, but also gives the younger generation space to connect with and get to know new friends. It is effectively an audio-based social networking platform for younger generations.
spk04: Looking ahead, we will further broaden and optimize product features to strengthen our global footprint presence. We are poised to attract more younger generations to use and share TIA as we remain focused on catering to their social networking needs. Building upon our innovative operational initiatives, we will also steadily cement TIA's network effects to form a closed loop that supports long-term and stable user growth.
spk07: In terms of the application of Bokeh and the layout of multi-mid-ranges, we launched LiZi Bokeh in January this year. With the advantage of Bokeh multi-mid-ranges application, we have further combined Bokeh with the layout of the car terminal and established cooperation with more excellent car companies. And on more models, In the middle of more models, we have listed the appropriate products for Li-Zhiboke. The new cooperating enterprises include the automotive technology company E-Carton, Tianji Automotive, Weima Automotive, and many other well-known domestic enterprises. In addition to the expansion of the vehicle scene, we also strive to provide more diversified blogging content. Among them, the content of art, technology, and entertainment is very popular with users. We also continue to work with more brands and enterprises to achieve brand and blogging cooperation, including Pop-up Mart, Tiger Securities, Weimart Motors, etc., to encourage enterprises to expand the brand's volume through blogging. In terms of implementation of podcast offerings and applications on multiple devices,
spk04: We launched our brand new virtual content platform, LiZhi Podcast, in January 2021. Leveraging the features and advantages of podcasts that are applicable to a variety of devices and scenarios, we are propelling our strategy roadmap to ink our audio market. In this spirit, we have been establishing cooperations with more elite enterprises, launching LiZhi Podcast products that are compatible to the in-car scenario, spanning an increasing number of vehicle models. Our new partners include more leading domestic companies, such as automotive intelligence technology company eCarX, and electric vehicle makers Innovate Motors and WM Motors. In addition to our expansion in the in-car scenario, we are committed to increasing the diversity of our forecast content libraries. In particular, aesthetic art, technology, lifestyle, and entertainment are highly popular amongst our users. We also continue to cooperate with more brands and enterprises in developing branded podcast programs to help increase their brand awareness, including Pop Mart, Tiger Brokers, WM Moto, etc. Meanwhile, in order to promote copyright protection of original podcast content created through Leach Podcast, We collaborated with AntChain to leverage its proprietary blockchain-based copyright solutions to provide greater copyright protection options for our podcast creators. 为方便创作者和用户进行有效的实时互动和交流,我们在4月初也在励志播客上推出了播客直播的功能。
spk07: In addition to the live broadcast of the original creators and the exclusive KOL, we also invited the main vocal team of Dunhuang, Happy Flower, JoySide band, and other well-known people and teams from all walks of life to participate in the live broadcast, providing users with a more diverse listening experience. Live broadcasts not only enhance the interactive content of the broadcast, It effectively increases the participation of users and also deepens the connection between the broadcast team and the audience. In addition, our broadcast live function has also begun to be applied to the car storage end and first appeared on the smart car storage system of Xiaopeng. This is also the first application of broadcast live in the car storage scene. We hope to open the car storage end and mobile phone end together Users can also enjoy the interactive live broadcast experience in the car. We always strive to innovate through live broadcasts to provide a more diversified live broadcast experience for users. We are also very happy to see that LiZi Live Broadcast received Apple App Store's JingXian recommendation a few days ago. This is also the first Chinese live broadcast product recommended by Apple JingXian.
spk04: In a bid to provide more efficient real-time connection and interaction between content creators and users, we debuted a new live streaming podcast feature on Leach Podcast app in early April. Apart from attracting original content creators and KOLs to be with Leach Podcast to conduct live streaming, we also invited the core production team of the history documentary film Donghuang, Edge of the World, Kaiqing Magua Comedy Team, the punk rock band Joyside, and other celebrities and groups from all walks of life to participate in our live streaming podcast, thereby delivering more diversified podcast listening experiences to our users. Live streaming podcasts not only allow podcasts to be more interactive, so as to better increase user engagement, but also deepen the connections between podcasters and the audiences, Additionally, VEG Podcast also applied the live streaming podcast feature for the in-car scenario, which was first unveiled on the smart in-car operating system of Expo Motors. This is the first time live streaming podcasts have been implemented in the in-car scenario. We expect to connect and integrate in-car podcast usage with mobile podcast usage so that users can enjoy immersive and interactive podcasting experiences in the in-car scenario as well. We strive to innovate our LiZhi Podcast product to offer more diversified podcast experiences for our users. We are very pleased to note that LiZhi Podcast became one of the featured apps on Apple's App Store several days earlier, making it the first Chinese podcast app recommended by Apple. 除了业务方面的积极进展,
spk07: In the first quarter, we also further promoted the development and application of speech technology. Among them, our voice technology solution program, Doremi, provides support for more businesses in the underlying technology. Doremi provides speech and real-time communication technology, also known as RTC technology. It is also used in the live broadcast function of our new live broadcast. In addition to the mobile end, Doremi also effectively supports the application of live broadcasts on the end of the car, allowing participants to connect through the network in the scene of the car exhibition to carry out stable and smooth real-time dialogue and interaction. This is also an important achievement of the company's years of professional audio and video technology. In addition, we are also continuously focusing on the study of comprehensive sound technology solutions, Aside from the positive progress in our business,
spk04: We also further advanced the development and application of our in-house developed technology in the first quarter. Specifically, our in-house audio technology solution, the Doremi project, provides technology infrastructure to support more business. The in-house real-time communication, which is the RTC technology provided by Doremi, has also been applied to the live streaming podcast feature of our newly launched LiZhi podcast. In addition to the mobile devices, Doremi also effectively supports the application of live streaming podcasts in the in-car scenario, enabling users to have stable and smooth real-time communication and interactions through the Internet. This is a remarkable achievement for our in-depth research on audio technology over years. Furthermore, we continue our focus on developing comprehensive audio technology solutions consisting of audio filters, audio quality improvement, and other technologies. We believe that strong technology capabilities are one of our key advantages to boost the region's competitiveness in the online audio space. We plan to implement an increasing share of our in-house technologies to a wider spectrum of business in the future. allowing users to have better listening and interactive experiences while further propelling our business growth.
spk07: In summary, we believe that our robust business development in the first quarter kicked off a great start of the year. Going forward, we remain committed to building and enhancing our competitive audio ecosystem.
spk04: We will strengthen our audio technology capabilities, drive the development of our audio community, execute our globalization strategy to create an audio-based social networking platform, and ultimately drive continuous business growth by leveraging our advantages to expand our product and service offerings across a broader range of devices. Thanks everyone. With that, I will now turn the call over to our Acting CFO, Ms. Chengfeng Lu, who will discuss our financial results in more detail. Okay, thank you, Michael.
spk05: Hello, everyone. I will now provide a brief overview of our financial results for the first quarter of 2021. First, we are very pleased to have achieved strong top-line growth in the first quarter of 2021. Our robust growth was driven by our continued efforts to build a competitive audio ecosystem, including a vibrant UDC community and advanced commercialization capabilities. In addition, we have strategically invested to strengthen our brand equity as we boast our lazy podcast and in-car audio business. and to expand our footprint overseas through TIA, all of which we believe will prepare our business growth in the future. In the first quarter, our total net revenue increased by 34% to RMB 495.1 million from the same period of 2020. Our audio entertainment business, which contributed RMB 489.3 million to net revenues in the first quarter of 2021, and represented year-over-year growth of 34%. The increase was mainly due to the continuous growth in our MAUs and paying user base, as well as enhanced commercialization capabilities of our apps. Additionally, podcast, advertising, and other revenue grew by 50% year-over-year to RMB 5.7 million in the first quarter of 2021. The increase was mainly due to the increase in the number of advertisers. Cost of revenue was only $370 million in the first quarter of 2021 compared to only $297.4 million in the first quarter of 2020. The year-over-year increase was mainly due to an increase in revenue-sharing fees to our content creators, payment handling costs, and bandwidth costs, which are generally in line with the growth of the company's business. Our gross profit was RMB 125.1 million in the first quarter of 2021, representing an increase of 72% from RMB 72.9 million in the first quarter of 2020. Our long gap gross profit was RMB 127.7 million in the first quarter of 2021, representing an increase of 64% year-over-year. And gross margin for the first quarter of 2021 increased to 25% from 20% in the first quarter of 2020. And long gap gross margin for the first quarter of this year grew to 26% from 21% in the first quarter of 2020. Operating expenses increased by 64% year-over-year to RMB 197.3 million in the first quarter of 2021, Research and development expenses were armed with $56.9 million in the first quarter of 2021, representing a year-over-year decrease of 3%. The decrease was mainly attributable to decrease the share-based compensation expenses, as well as declining expenses related to research and development services provided by third parties, partially offset by the growth of salary and welfare benefits. Selling and marketing expenses were RMB 120.8 million in the first quarter of 2021, representing an increase of 238% from RMB 35.7 million in the first quarter of 2020. The increase was primarily due to our increased investment in branding and marketing for our products and brand name. General and administrative expenses were RMB 19.6 million in the first quarter of 2021, representing a decrease of 26% from RMB 26.4 million in the first quarter of 2020. The decrease was mainly driven by a decrease in the share-based compensation expenses and other miscellaneous expenses. Our operating loss was RMB 72.2 million in the first quarter of 2021, up by 51% year-over-year. Lung gap operating loss was RMB 64 million in the first quarter of 2021, compared to RMB 28.7 million in the first quarter of 2020. And hourly loss was RMB 70 million in the first quarter of 2021, up by 45% year-over-year. Long gap land loss was RMB 61.8 million compared to RMB 29.2 million in the first quarter of 2020. And base and diluting land loss per ADS were RMB 1.5 in the first quarter of 2021 compared to RMB 5.33 in the first quarter of 2020. Long gap base and diluting land loss per ADS were RMB 1.33 compared to RMB 0.77 per ADS in the first quarter of 2020. As of March 31, 2021, we have cash-on-cash equivalents, restricted cash, as well as short-term investments of RMB 318.9 million. Looking ahead, we remain committed to leverage our strong operating capabilities and advanced technologies to further develop our global audio ecosystem and enhance brand building to consistently deliver solid and long-term growth. Okay, this concludes all of our prepared remarks today, and we will now open the call to questions. Operator, please go ahead.
spk00: Thank you. For the benefit of all participants on today's call, if you wish to ask a question to management in Chinese, please immediately repeat your question in English. And for the sake of clarity and order, please ask one question at a time. Management will respond, and then feel free to follow up with your next question. your first question today comes to the line of Vincent Yu from Needlehem and Company. Please ask your question.
spk06: Thank you. Thanks, Management, for taking my question. Actually, I have quite a few questions, three questions. The first question is, can Management share some metrics on peer app, and will Management start to focus more on monetization with app in 2021? For the metrics, I mean, like, for example, user time spent per day and the user demographics. My second question is can management give us a sense of the user demographic of LiZhi podcast app? And how much do they overlap with LiZhi main app? My third question is we see increased content investment by other players in the industry. Can management talk about the size of content investment Li Zhi looks to make in 2021, and how will that affect Li Zhi's margin? Thank you. I will quickly respond. Thank you, Guan Yicheng, for giving me this opportunity. My first question is whether Guan Yicheng can share some indicators about the TIA app, such as the user's daily usage time and the specific age of the user, and will we start to pay attention to some changes in 2021? The second question is about the management. Can the management share with us whether the user group of the LiZhi blogger app and the users of our LiZhi main app have a good overlap? The third question is about other players in the industry are investing in the content of Jada. Can the management talk about the investment scale of LiZhi in 2021? And how much will this affect LiZhi's revenue? Thank you.
spk07: Thank you, Vincent. Currently, we are focusing on the rapid growth of the user size in TR. At the same time, we are also concerned about the participation of users. In terms of user size in Q1, we achieved a strong growth. At the same time, the participation of users increased significantly compared to last quarter. First of all, the number of users in the relationship at the end of March is 2.3 times higher than it was at the end of December last year. Users will also increasingly be interested in and create more diversified rooms, which will further promote the activity and flexibility of users, and also lead to a high growth in user size. On the other hand, after the launch of the new group function, I will translate for Marco. Currently, we are focused more on the user scale and engagement on TIA.
spk04: In the first quarter, our user base achieved a strong growth and the user engagement reached higher levels compared with the prior quarter. This was reflected by improved user stickiness and user engagement as the number of our user-friend connections increased by 230% from December 2020. Based on various interests and topics, users created a wider spectrum of the chatroom topics, which greatly spur user interactions and drive the higher growth of user base. On the other hand, we noticed that both vibrancy and penetration of users in the group was gradually enhanced with the launch of our new group function, which also drove the user engagement in various segments.
spk07: In general, TIA's focus is more on the growth of user-to-user relationships and the growth of user-to-user relationships, because this is our foundation. We will strive to provide users with diversified social scenarios and some innovative features. Use audio as the center and social integration to further satisfy the needs of young people's social friends and online entertainment. Become a more universal and publicized social product. We will, according to the feedback and experience of users, continue to optimize TIA this product to achieve a stronger network response. Currently, TIA lays more emphasis on the growth of the user base as well as the user engagement.
spk04: We are dedicated to providing users with our diversified social scenarios and innovative functions while also popularizing the audio-centric social product to further satisfy the social and online entertainment needs of the younger generation. We also remain committed to optimizing the product based on user feedback and user experiences to achieve a stronger network effect. Therefore, exploring commercialization is not actually our key focus at the moment. Once our user base grows to a certain scale, we will implement commercialization attempts based on different stages of the product step-by-step, and we will also keep the market updated of any developments in this regard.
spk07: The second question is about the use of the Li-Fi app and Li-Fi app. There is still a big difference between the users group of Leeds and the users group of Leeds. Among the users groups of Leeds, the ratio of users in the first and second line is higher, and the ratio of men and women is more balanced. At the age of 25 to 34 years old, the ratio of users is higher, and at the age of 35 to 44 years old, the number of users is higher. The second question is about the user base of Leech Podcast.
spk04: There is actually a significant difference between the user groups of LiZhi Podcast and those of the LiZhi app. In particular, LiZhi Podcast features a higher proportion of users from Tier 1 and Tier 2 citizens in China with a balanced gender distribution. Additionally, the proportion of users aged 25 to 34 is higher, followed by ages 35 to 44. This is almost in line with the target user group we originally aimed to reach, which is young and middle-aged users in top tier cities that we intend to target through our LiZhi podcast and application across multiple devices and scenarios.
spk07: On the other hand, we also pay attention to the degree of user use of LiZi播客, which is also gradually increasing. The daily play time of people is about 80 minutes. This is much longer than LiZi's play time than LiZi's users. Users are also more interested in the new播客 content. You can see that the user's subscription behavior is relatively competitive in the market. At the beginning of April, we introduced the function of live broadcast, and realized the actual interaction between the audience and the broadcast team. This has further increased the participation and contractiveness of users. In the future, we will continue to innovate the broadcast, and also hope to further promote the development of Chinese broadcast.
spk04: Moreover, we are seeing an increasing level of usage of the LiZhi podcast from its user group. with average daily spending time per user reaching about 18 minutes, which is much higher than the Leach app. Users also demonstrated a stronger interest in our new podcast content offerings, where other metrics, including our user subscriptions, remain relatively competitive in the podcast market. In early April, we unveiled a new live streaming podcast feature on Leach Podcast to foster the real-time interactions between audiences and the podcasters, which further enhanced our user engagement and user-activeness. Looking ahead, we will continue innovating LiZhi podcast while aiming to further propel the development of the Chinese podcast industry.
spk07: The third question is about the competition in terms of content investment and the interest rate of LiZhi. We pay great attention to the accumulation of high-quality and diversified content. We will also combine the tone of the platform to make some targeted investments in content construction. But overall, we think these investments are very limited in terms of profitability. First of all, the cost of content on Leeds is relatively very low. It mainly depends on the ecosystem of our UGC community. by using the original content of this growth to accumulate content, and to select and distribute high-quality content through AI technology. So, the content in the example blog is based on the selected blog content in the example app. In other words, the selected content will be selected from a basic theme. On the other hand, it is also based on the exclusive blog we signed up for. We will have some layout on the exclusive content. We will use diversified strategies to attract more excellent bloggers to achieve the results of controlling costs, including to dig and cultivate more potential creators, to introduce innovative blogging forms, and to use blockchain to protect copyright, to attract more bloggers to join, and to provide more possibilities for blogging development. In general, blogging does not have content monopoly. we can increase our content to a lower cost by differentiating it. On the other hand, we also actively set up application scenarios for bloggers, including the car terminal and other smart devices to help bloggers reach more audiences. The multi-faceted strategic layout actually helps us attract new bloggers and control the cost of content. At the same time, we will also The third question is about the margin impact.
spk04: Currently, we focus on accumulating the high-quality and diversified content offerings and also plan to make targeted investments towards building a content library that is aligned with our platform's features. Overall, we believe this investment will have a limited impact on our profitability. First, the LeadG app has a relatively low cost in terms of the content offering, as it can leverage our unique UGC community to spur the organic growth in UGC content offering. Furthermore, we can discover and distribute high-quality content using our advanced AI technology. In addition, Leach podcast contains curated podcasts from the Leach app's extensive content offerings, as well as inclusive podcast offerings from podcasters we have signed. So we have our own strategy roadmap for inclusive content investment. In this regard, we will adopt diversified strategies to attract more outstanding podcasters and optimize the cost structure. including discovery and cultivating more content creators with great potential, launching the innovative podcast features, adopting blockchain technology for the copyright protection to attract more podcasters to our platform, and providing podcasters with more opportunities for their future development. In addition, it's all about differentiating ourselves from other platforms so we can have better strengths on the cost structure and the investments. Moreover, we are actively developing and expanding the applicable scenarios for podcasts to help podcasters reach a broader audience base, including in-car scenarios and other smart devices. Indeed, our strategic roadmap in various aspects enable us to attract a new podcast while optimizing the content cost of control and we can optimize the cost of structure for more mature business step by step. Overall, I believe that our growth margin and the profitability will have a meaningful space to grow.
spk07: 好,我回答这些。Thank you.
spk04: Yeah, this concludes my answers.
spk00: And our next question today comes from the line of Vicky Wei from Citi. Please ask your question. 王立成,早上好。谢谢接受我的提问。
spk03: 我的提問也是關於投資規模對利潤率的影響。 就是我們也看到公司非常積極地佈局力資博客和PR等投資。 然後在2021年具體看,請問公司覺得這對利潤率具體 一點的影響會有什麼呢? 謝謝。 我自己翻譯一下。 So, good morning, management. Thanks for taking my questions. My question is about the scale of the investment for the podcast and its implication for the margin profile. Thank you.
spk05: Thank you, Vicky. Let me share some information about this question. Actually, in the first quarter, along with the launch of our new program and our strategy to bolster podcast applications across multiple devices, We increased the investment in branding and marketing. We also invested in TS expansion in overseas markets, but the investment scale is relatively small at this stage. All this led to an overall increase in selling and marketing expenses compared to the prior quarter, which also led to our net loss in this quarter. Additionally, we also paid close attention to our content offerings on these podcasts. which also increased content cost compared to the prior quarter. But I believe it had a limited impact on our overall margin. And as Marco mentioned before, as we have diversified pollcaster resources, including the content creator from Leads app, and some inclusive and non-inclusive pollcasters were assigned additionally, I think the overall investment is limited. In the future, we will focus more on the local operating overseas. In general, our investment at every stage will always be based on the company's long-term development plans. It will likely have some impact on our margin in a short time, but we realize our efforts towards efficient brand promotion can help the company establish a higher reputation and amplify brand awareness among users. which is beneficial for our long-term growth, diversification of our low-light layout, and acceleration of our business growth. So in the future, we will undertake dynamic adjustments for each business segment and diversify forecast metrics to further optimize our cost structure and enhance overall operating efficiency. Thank you. Thank you, Vicky. And I'll say it again in Chinese. Regarding the investment scale and the impact of our profits on TIA and BOKER, it is true that in the first quarter of this year, we have launched new products, mainly our TIA APP, the Lease BOKER APP, and our multi-faceted layout in the car dealership. In terms of overall product promotion, including brand creation, there are some major investments. We also have some investment in TIA overseas development, but in the current stage, because TIA's entire user size is still based on capital growth, so the entire investment scale is relatively small. So you can see that in the first quarter, we have some investment in marketing, including marketing, compared to the previous quarter. So, in terms of the cost of the content, compared to the previous quarter, there is a certain improvement. But this has a relatively small impact on the overall profit rate. The main reason is also mentioned by Marco just now, is that we are more diversified in terms of content creators. In addition to the original content creators on the original interest app, we have also expanded some exclusive or non-individual content creators to supplement our entire content supply. So in general, our investment at all stages is based on the long-term development of the company. In the short term, it may have a certain impact on our profitability, but we also feel that this kind of effective brand construction can help the company to build a better reputation, including improving the overall knowledge of the user, and our long-term development and diversification layout is very helpful. And our next question today comes from online.
spk00: of Ivy Liu from Credit Suisse. Please go ahead.
spk01: Thank you, management, for taking my question. I have a quick one here. Could we have some color on the update on the Doremi project? And thinking about longer term, how do we think the technology development will continue to feel the business growth for Li Zhu? Thank you.
spk07: The first one is about the progress of the Doremi project. Doremi is our voice technology solution, including real-time voice, voice filter, sound research and optimization, etc. This year, Q1, we have made good progress in the field of voice technology. The Doremi project also provides support for the underlying technology for more businesses. The live broadcast function of LiZi播客 is supported by Doremi's low-end technology, which ensures stable and smooth voice transmission. In addition to the mobile phone, we have also made special accessories for the car storage. We have further supported the application of the live broadcast function in the car storage, including the optimization of the hygiene system. I will translate Marco's answers. The first question is about the development on the Doremi project.
spk04: Doremi is our in-house developed audio technology solution, providing real-time online audio and audio filters, audio research and optimization. In the first quarter, we achieved great progress for our in-house audio technology. The Doremi project also provided technology infrastructure to support more businesses. Our in-house audio technology has also been applied to the live streaming podcast feature of the Leisure Podcast. ensuring the stable and smooth real-time audio transmission. Particularly, in addition to the mobile devices, we have also made tailored configurations for the in-car scenario, further supporting the live streaming podcast feature for the in-car use, including the optimization of the ample suppression system to improve the sound quality and audio effects. Because in the in-car scenario, Audio transmission with the echo suppression is quite different from with the mobile devices. Thereby, we can deliver a competitive sound effect and user experiences with our in-house developed technology.
spk07: Next, we will continue to promote the development of speech technology. In fact, in addition to Doremi, we still have some technologies that have been accumulated over the years that have not been released. We are still in the process of preparation. I believe that in the future, we will have more of our own underlying systems that will be applied to our business. The Doremi project will continue to optimize and upgrade. We plan to supply more businesses. We have now joined other businesses with other users. From a long-term perspective, our own technology can improve our competitiveness in the market. Compared to the third-party technology platform, we also hope that in the future, we will be able to improve the cost structure, improve the efficiency of operation, and also provide users with a very personalized audio experience. Because through the third party, it is difficult for us to provide a personalized audio experience that has its own characteristics.
spk04: Going forward, we will continue to advance our in-house technology. Actually, besides the Doremi project, we also have other in-house development technologies that we might discuss in the future. And the Doremi project will also be optimized and upgraded to empower more business lines. In the long run, our in-house technology is able to improve our competitiveness in the market. Instead of relying on third-party technology platforms, we hope to apply more in-house technologies to further optimize our cost structure and also improve the operating efficiency and provide more personalized audio experiences to our users while achieving a scalable business growth. Because when we use the third-party technology platforms, it's hard for us to provide personalized audio experiences to our users.
spk07: 好,回答了这些,Thank you.
spk04: Thank you.
spk00: And our last question today comes from the line of Freya Zhao from Haitong. Please ask your question.
spk02: 感谢管理总接受我的提问,我就有一个很快的问题,想请教一下励志未来的这个业务规划和重心,尤其是像咱们这个音频社区励志APP的这个后续发展规划,I will translate for myself. Thanks, management, for taking my question. I have a quick question regarding your future plan and focus, especially for the audio community. Thanks.
spk07: Thank you, Fei. Our overall strategy and business plan actually has only one feature, which is to focus on the ecosystem. Through the diversification of business and the development of underlying technology, we can create more potential to promote the development of the overall business.
spk04: Thank you, Fayah. And I will translate for Marco. The question is about our strategy. So firstly, our overall strategy will be based only on our audio-centered ecosystem. We will, through the diversified footprint and advancement of our technology infrastructure, to create more growth potential and drive the continuous growth of the overall business.
spk07: First of all, the Leets app, as our flagship product, has grown into a comprehensive community platform. It combines a diversified UGC audio content and a rich audio entertainment play style. It also provides users with more comprehensive audio creation, sharing, and interaction tools. Our QA's overall MAU is 59.7 million. Most of it comes from Leets app. This means that the example app still has a lot of commercialization space. Next, we will further consolidate the high-efficiency community ecosystem through the operation strategy. At the same time, we will strengthen the fusion of audio and video entertainment and broadcasting to increase the penetration rate of audio and video entertainment users. At the same time, we are also promoting the transformation of paid users in order to achieve a strong growth in income.
spk04: Firstly, our flagship product, VJApp, has grown into a comprehensive community, which combines diversified UGC audio content and abundant audio entertainment features, also providing users with wide-ranging tools for audio content creation, audio content sharing, and interaction. In the first quarter, our overall average MAUs increased to 59.7 million, most of which generated from the Liege app. It also indicates that Liege app remains further commercialization potential. In the next, by leveraging our operational strategies, we will further cultivate our highly engaged community and enhance the integration of audio entertainment and the pre-recorded content segments to boost the user penetration in the audio entertainment segment. Meanwhile, we will continue improving the conversion of the paying users to achieve the solid top-line growth.
spk07: Our years of experience in the audio and video industry has provided us with a lot of support for our global development. So, as I mentioned before, in the future, we will use the advantages of technology operation to promote our global strategic layout. We will also continue to strengthen the construction of the bokeh ecosystem and promote bokeh in multi-faceted applications. Recently, we are still in cooperation with more car manufacturers. In the future, I believe that there will be more application landings on the car side. At the same time, we will also insist on doing bokeh innovation to provide better bokeh experience for users and also for the bokeh group.
spk04: Our years of experiences in the audio entertainment provides widespread support and sets the stage for our global expansion. As mentioned earlier, we will leverage our technical and operational advantages to further boost our global strategic footprint. We will also continue building the podcast ecosystem and improve the application of podcasts across multiple devices. Recently, we have been discussing the collaboration opportunities with more auto companies, and we will implement our in-car products in more auto systems. Meanwhile, we will continue the podcast innovation to provide better user experiences and create more development opportunities for our podcast content creators.
spk07: The Lease App will become a powerful driving force for our future income growth. TIA provides a very imaginative space for our global development. Lease Book is also creating opportunities for us in the era of smart cars in the future. I am very confident in Lease's future development. In summary, LiZhi App will continuously drive our top-line growth,
spk04: and the TIA business in overseas market provides great potential for our globalization expansion. For the LiZhi podcast, we think it provides more potential in the podcast market in the era of the electric vehicle market. I am very confident in LiZhi's future development. With our years of operating experiences and strong technical capabilities in the online audio industry, We are poised to capture the market opportunities and create more business value. I also expect to continue achieving a stronger business growth for the full year.
spk07: Thank you.
spk04: Thank you.
spk00: Due to time constraints, that does include today's question and answer session. I would now like to hand the call back to the company for closing remarks.
spk04: Thank you once again for joining us today. If you have further questions, please feel free to contact Leej's investor relations through the contact information provided on our website at ir.leej.fm or our TPG group investor relations. Thank you.
spk07: Thank you. Thank you, everyone.
spk04: Thank you, everyone.
spk00: This concludes the conference call today. You may now disconnect your line.
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