Phoenix New Media Limited

Good day and thank you for standing by. Welcome to Phoenix New Media 4th Quarter 2021 Earnings Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the call over to your first speaker today, Ms. Mo Zi Guo from IR Team. Please go ahead.

Thank you, operator. Welcome to Phoenix New Media's fourth quarter 2021 earnings conference call. I'm joined here by our Chief Executive Officer, Mr. Shuang Liu, and our Chief Financial Officer, Mr. Edward Liu. On today's call, management will first provide a review of the quarterly results and then conduct a Q&A session. The fourth quarter 2021 financial results and webcast of this conference call are available on our website at ir.iphone.com. A replay of this call will be available on the website in a few hours. Before we continue, I'd like to refer you to our safe harbor statement in our earnings press release, which applies to this call as we will make forward-looking statements. Finally, please note that unless otherwise stated, all figures mentioned during the conference call are in RMB. With that, I would like to turn the call over to Mr. Shuang Liu, our CEO.

Thank you, Mu Zi. Hello, everyone, and thank you for joining our call today. In the face of growing competition and macro uncertainties, we stay at the forefront of the media space, thanks to our strong media DNA and our mission to provide high-quality and professional news content. In the past few weeks, the Russia-Ukraine conflict has captured the public's attention, starting in mid-February was the first online media platform to launch full coverage of the conflict. Since then, a multi-dimensional coverage of the crisis, consisting of front-line updates from a network of Phoenix TV journalists, discussions and analysis from experts in international relations, video clips from content creators in Ukraine, ongoing events, live streaming, and more, has attracted an average of 50 million daily views across the internet. Besides breaking news coverage, we continue to emphasize the uniqueness of our content and enhance our user experience. We remain committed to cultivating new business initiatives and expanding our revenue streams. We successfully held a number of high-profile signature events in the fourth quarter to expand our brand influence despite restrictions and challenges related to recent COVID outbreaks. Our ability to execute, given the difficult situation, is a result of our effective teamwork, dedication, and creativity. Several of these events include our iPhone Food Festival, together with the Golden Buttonwood Chinese Restaurant Guide, lunch, press conference, 2021 Fenghuang Meishi Shengdian, Jinwutong, China restaurant, our iPhone Fashion Award Gala, and the Finance and Economics Summit. We upheld our high standards for event skill, attendee experience, and public reach. These events were a big success in meeting our demanding clients' offline marketing needs and set a new historical record. in commercialization of our events and brand exposure. In addition to these signature events, we launched an innovative program called Inside Business Schools 走进商学院. We invited scholars, business leaders, and nearly a thousand students from leading MBA programs to visit the corporate campus of our clients. The program addressed topics such as corporate development, industry transformation, and tech advances through a series of presentations and roundtable discussions. The MBA students gained access to business case studies. We successfully provided our clients with precision marketing solutions to help them attract high net worth customers and assist them in generating product sales. This event is just one of many ways we are able to monetize our media brand value. and a broad business network of resources. While maintaining our offline event presence, we continue to involve our original content metrics. During the fourth quarter, we rapidly advance our editorial segments, our international news column, Trend, Fengxiang, publish in-depth commentary and daily headlines regarding international relations, issues, and events. Having optimized the content production process, we saw substantial improvements in both the quality and quantity of articles published for the column, as the performance indicators of the column, including views and click-through rates, rank among the top-tier news media outlets. The column is receiving widespread information from journalists, influencers, and the academic community from leading Chinese universities. Also, through our joint efforts with other leading companies, we distributed global top news to international markets, weekly raising our brand recognition both at home and abroad. Meanwhile, our index commentary column called the message function is positioned to provide our audience with a deeper insight and understanding of today's complex world by covering modern issues and current events with vivid imagery, intellectual reasoning, and emotional emphasis. During the fourth quarter, the column reported a wide range of social concerns, including celebrity social ethics, public administration issues, women's rights issues, and evolution of taxation laws. Since its launch, the column's pageviews, user comments, and new follower counts have all been on a steady climb with an increasing proportion of its articles exceeding the 100,000 pageviews through Benchmark for visual popularity and exposure on WeChat. On the IP content front, We successfully validated the monetization capability of Your Achievements, an innovative short video series that combines large-scale field production with TED Talk-style presentations. The series featured several super construction projects and reviewed behind-the-scenes challenges faced by the construction teams and creativity and skills that made these projects possible. The production seamlessly align its theme presentation of transforming challenges into opportunities with our advertiser's bright image, maximizing its content distribution and reach. In the fourth quarter, your achievement reached 22 million views through social media platforms across the Internet. Besides media series, our IP production also developed a live-screened show focusing on interviews, and discussions of trending cultural topics. For example, we invited guests such as outstanding authors and production teams of popular drama and movies into our studio to talk about their work. The show acquired a highly engaged user base as fans of these artistic works are keen to interact with our guests through the medium of live streaming. The show is live streamed on our iPhone app as well as on other social media platforms, spreading virally and generating online discussion. Through a combination of our offline events and online content, we have formed a positive feedback loop, which allows both parts of our business to jointly create value and let us offer a high-quality multi-channel experience to all our customers. On the product side, our iPhone app continues to power distribution of our online contents and offline events. During the quarter, we made several updates to further improve the app's user experience. For example, we improved our algorithm to enhance distribution efficiency for our short video content, which saw a major increase in user reach. penetration rate, and click-through rate. Compared to last quarter, our short video content's average viewing time increased by 14%, and penetration rate grew by over 10% during the fourth quarter of 2021. Meanwhile, we're further enhancing the interactive features of our app, including forums and live chats, which are directly integrated with trending topics. by encouraging our users to participate in text or audio discussions after viewing their topic of interest. They will spend more time on our app and continue to explore it. This creates a sense of community and thus increases our user engagement and boosts user stickiness. All of our hard work in constant creation and improving our technology has laid the foundation for us to make solid progress in diversifying our revenue. In the online reading segment, we continued to monetize our original content IP. We completed the sale of the movie rights of Wheel of Time , one of our original reality scene works of online fiction. In addition, at the end of December 2021, we started laying the groundwork to export our online literature content to overseas markets. As of today, we have built a library of English titles in the hundreds ready to be monetized. As for e-commerce, we continue to develop products for our private label brand in the health and wellness segments. In the fourth quarter of 2021, we'll launch a nutritious low calorie meal replacement series featuring popular superfood ingredients, making the most of the traffic from third-party live streaming platforms and their own vertical channels. We drove this product into the top-selling list of its category among lunch. For culture and creativity, we partnered with IP licensing firms to bring carefully crafted art and cultural objects from some of the world's leading museums and galleries to our e-commerce platform. Going forward, we plan to utilize the natural synergies between e-commerce and accountants, such as health, fashion, and our newly developed culture, live streaming, to integrate content themes with merchandise selection and capitalize on our user traffic. Finally, we definitely adapted our realistic vertical to the challenging macro environment despite the market downturn. On one hand, we continue to exercise our media influence in the rural sector to deliver original content and launch special events. We launched a new column focusing on the industry's movers and shakers, and we held our industry summit in the fourth quarter, featuring hot topics such as urban renew, land supply, sector debt levels, and the government's three red lines policy for real estate developers. In conjunction with events, we also published industry-wide papers, specifically regarding ESG development and industry dynamics in the real estate sector. On the other hand, our real estate team remained active in exploring new business opportunities during the fourth quarter by addressing customer pain points and marketing needs while applying new monetization models beyond traditional advertising. As a result, we achieved new breakthroughs in customer acquisition and improved our revenue mix. To summarize, we demonstrated vitality and resilience during challenging times in the fourth quarter. As we continue to host high-profile signature events, create original and exclusive content, enhance our content distribution technologies, and explore new business initiatives during the fourth quarter. We continue to monitor and plan for external challenges as we execute our strategy of revenue diversification and business growth. We started 2022 with renewed commitment to overcome near-term challenges and build a thriving business in rapidly changing macro environment. With that, I will turn the call to our CFO, Edward Lutz. to provide a closer look into our quarter financials.