Phoenix New Media Limited

and thank you for standing by. Welcome to the Phoenix New Media first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, press star one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Ching Liu. Thank you. Please go ahead.

Thank you, operator. Welcome to Phoenix New Media First Quarter 2021 Earnings Conference Call. I'm joined here by our Chief Executive Officer, Mr. Shuang Liu, and Chief Financial Officer, Mr. Edward Lu. On today's call, Mike Zeman will first provide a review of the quarterly results and then conduct a Q&A session. The First Quarter 2021 financial results and webcasts of this conference call are available on our website. A replay of the call will be available on the website in a few hours. Before we continue, I would like to refer you to our Safe Harbor Statement in our earnings price release, which applies to this call as we will make forward-looking statements. Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB. With that, I would like to turn the call over to Mr. Shuang Liu, our CEO.

Thank you, Qing. Hello, everyone. Thank you for joining us on our call today. In the fourth quarter of 2021, the industry-wide competition continued to exert pressure on business growth. We focused on fortifying our core advantages by creating and delivering original, exclusive, and high-quality content and securing our brand advertising baseline while striving to create new growth curves. Additionally, we remain committed to exploring our new business initiatives to augment our revenue source mix. In the first quarter, we continue to demonstrate our leading role in news coverage, especially as a go-to place for breaking news. During the government two-session event in 2021, iPhone engaged in full coverage of the event through our PC and mobile channels, as well as our content on all major social platforms. Our original news coverage, especially our featured live broadcast and exclusive content from Phoenix TV generated a record-breaking 2 billion views across the Internet. Our professionalism and credibility in journalism allow us to stand out among other commercial media and gain more interaction opportunities with government officials. Additionally, we published an original interview series with dozens of commissions scholars and experts on issues to discuss at the two sessions, which were widely republished by other domestic and foreign media, such as CCTV, Singapore, Lianhe Caobao, and Forbes China, and rank on Weibo's top list of hot searches. Our coverage extended beyond news articles and short videos. Phoenix TV's two-session coverage which included eight important event sessions, was broadcasted through our live platform to reach millions of users across the globe. Our results from the two sessions speak for themselves. The number of brand advertising clients for the event reached new highs compared to prior years, and our brand advertising revenues from the event increased by 50% year over year. Another major event that we covered was the China-US dialogues held in Alaska in March. As the first in-person dialogue between the Chinese government and the Biden administration, this was one of this year's highest-profile events so far. Of the four Chinese media outlets who had access to the event, we were the sole commercial media outlet. By capturing the official dialogue, interacting with the Chinese representatives outside of conference rooms, and raising questions on general public concerns. We covered the event from various perspectives. As the only commercial media outlets on the front line, we published exclusive live video feeds and interviews, most of which were republished by our peers to generate massive user traffic across all major social media platforms. Our coverage of the dialogues and the post-event interviews accumulated more than 700 million views on social media platforms across the Internet. Other than news content, our original IP programs, such as On the Cover in our financial vertical and iPhone Talk in our entertainment vertical, continue to gain popularity among viewers and brand advertising customers. We integrated our vertical team's expertise in capturing trending topics on social buzz as well as our core sales team's in-depth understanding of our advertisers' branding needs to create IP programs tailored to those same needs. Consider Junping Talks, Junping Tan. We deliver this cultural interview program specifically for Xi leader. Junping Talks facilitates in-depth dialogues between various industry experts and the celebrities align with SheLiters' brand image in order to effectively market and promote the brand's products. Moreover, by making our premium IP programs, such as Dreamping Talks, available on Weibo and other main third-party social media platforms, we gain access and exposure to a broader audience base. further enhancing our brand recognition and influence. While we actively distributed our content to other third-party platforms and executed distribution strategies tailored to the unique characteristics of each platform, our total number of followers on social media platforms exceeded 100 million in the first quarter. More specifically, our official Weibo account exceeded the 20 million followers mark for the first time and earned eight hot searches, 80 hot searches in the first quarter. The increased exposure of our brand across other social media platforms bring us new monetization opportunities. Although we are still exploring various possibilities, we believe the monetization of our third-party traffics will serve as a new driver of business growth. Now, turning to our iPhone app. In the first quarter, in the presence of severe competition from other algorithm-based apps, we put significant substantial effort in enhancing iPhone's user experience and retention, implementing a series of upgrades to boost its algorithm efficacy, streamline its content operations, and expand its highly differentiated content library. First, we refined our algorithm to differentiate generic trending social topics from interest-based vertical content and tailored our distribution strategies based on content classifications, allowing us to not only maximize the exposure of these topics across our platform, but also provide our users with easy access to personalized interest-based content. Furthermore, we also refine the segmentation of our user profiles by providing a constant flow of aggregated content based on individual user profile and interests. We continue to improve the user experience of our product. Second, we continue to strengthen the operation of our premium content pool. During the quarter, we focus on maximizing the exposure of the premium content that was closely related to trending hot topics. By providing consistent and complimentary topics and information that users are interested in, we have enhanced the platform's user experience. In the meantime, we also directed our resources to the production of high-quality articles and videos to further enrich and diversify our premium content pool and enhance the overall content quality of our news app. Third, to provide our users with access to Phoenix TV's live feeds and classic television programs, we introduced a feature channel on our news app, which further enhanced iPhone's spread influence and user retention. As a result of the efforts mentioned above, our 30-day user retention rate increased by 10% on a sequential basis. and user click-through rate increased by 3% on a sequential basis. Now, turning to new initiatives. During the quarter, we remain committed to advancing various new initiatives to further diversify our revenue streams and augment growth. For real estate, we focus on establishing our B2B influence. One of the B2B products we rolled out was our smart content generation solution Hurricane system. This system provides users with key industry updates and analysis of areas related to new real estate companies, including their stock price fluctuations, strategic changes, and property development. On the other hand, our digital real estate news service, Feng Caixun, focuses on active operation and distribution of B2B content. By closely monitoring the quarterly earnings results of more than 300 listed real estate companies. The product has helped real estate brands to boost their market exposure while also demonstrating its capacity to function as a premium news service for the executives, managers, and other stockholders of real estate enterprises. On the online reading front, we have accumulated an extensive library of premium online library IP, literary IP. Our primary goal has been to foster more diverse monetization opportunities for this IP. Our initial work in audio content reproducing our literary IP was an instant success. By the end of March, our audio channel on Himalaya, one of China's largest audio platforms, had over 1.51 million followers. and an excess of 570 million plays. We transform other luxury IP into video content. Our in-house production of Boss Lin's Sweetheart, Lin Shao's Tianxing Gangjie, a short-form video series, has already collected 40 million views since launching on Kuaishou in February. In fact, audience reception to the series has earned it a spot on the platform's top five must-watch list. On the e-commerce front, to enhance our e-commerce platform's overall competitiveness, we continue to strengthen our original content production capabilities and personalized content recommendation algorithm to efficiently convert the user traffic we generated from content into e-commerce customers. We also accelerated the optimization of our independent developed e-commerce platform. In the quarter, we upgraded the PC version on WeChat mini program of Phoenix Premium products to provide a better user experience. As a result of these upgrades, we achieved an increase in user conversion rates on both platforms. More importantly, we also actively explored different ways of generating user traffic from third-party platforms through our premium content offerings to lower our e-commerce customer acquisition costs. During the first quarter, for example, we officially launched our e-commerce live streaming feature, and the progress we have made so far is quite encouraging. Driven by these combined efforts, Phoenix Premium products grew its GMV by 24% sequentially and gross profit by 23% sequentially in the first quarter. In summary, we were aware of the downward pressure on certain segments of our advertising business and that we are facing existing competitions in areas of our new business initiatives. Nevertheless, we have proactively realigned our business strategies to increase user traffic through our exclusive and premium content offerings. At the same time, we continue to invest in new business initiatives in order to diversify our revenue streams. Going forward, we will stay focused on fortifying our leadership in news reporting, expanding our new media influence, and optimizing our cost structure to build a solid foundation for sustainable business works. This concludes my prepared remarks. I will now hand the call to our CFO, Mr. Edward Lu, to provide a closer look into our quarterly financials.