Phoenix New Media Limited

Good day and thank you for standing by. Welcome to Phoenix New Media First Quarter 2022 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 the 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 conference over to your host today, Ms. Muzi Guo from IR Team. Thank you. Please go ahead.

Thank you, Operator. Welcome to Phoenix New Media's first quarter 2022 earnings conference call. I'm joined here today by our Chief Executive Officer, Mr. Shuang Liu, and Chief Financial Officer, Mr. Edward Liu. On today's call, management will first provide a review of the quarter results and then conduct a Q&A session. The first quarter 2022 financial results and webcast of this conference call are available on our website at ir.iphone.com. A replay of the call will also 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 first quarter, the nationwide COVID resurgence continued to impact the execution of some of our advertising services. Our advertising revenues were also negatively affected as many advertisers reduced their budgets in response to macroeconomic uncertainties. Nevertheless, this quarter was eventful in terms of news and events. We sharpened our competitive edge in reporting and distributing original content and were able to maximize our brand influence through key events. At the same time, we continue to expand and elevate our monetization capability across all channels. In the first quarter, our coverage of a number of significant news events once again received extensive media exposure. and market attention, highlighting our team's professionalism, our leading position in news reporting. These events included the two sessions, the Winter Olympics, the Russian-Ukraine War, COVID resurgence, the stock market slump, and the major aviation accidents, to name just a few. From the onset of the Russian-Ukraine War, we have been reporting the events through live streaming from the front line by leveraging our local connections with Finnish TV correspondents, Chinese actors in Ukraine, and local Ukrainian residents. We launched the first channel in China to report on the latest developments in the military conflict and designated a special segment to dispel rumors and misinformation regarding the conflict. To enhance our user online news viewing experience, we adopted timeline format in our news presentation, which tracks the real-time development of the wall. It became the all-in-one place for users to follow events. In addition, we distributed tailored content catering to diverse individual user needs by offering slow live-streaming, short videos, and reporting from frontline correspondents. We interviewed experts in military affairs and international relations who provided their professional opinions and shared their interpretation of the situation in Ukraine. Our live streaming coverage of the war garnered 250 million views on our own platform and over 1 billion accumulated views on third-party platforms including Douyin, Kuaishou and WeChat Video. We reported the event from multiple angles in capital, person, history, humanity, and economics. Our original in-depth news stories generated 3 million accumulated views through our WeChat official accounts. In addition to our breaking news coverage, we also continue to expand the monetization capabilities of our original content production. In the first quarter of 2022, our documentary series titled MAGA Projects demonstrated unique commercial values as we focus on developing high-quality content related to the renewable energy industry. A number of well-known automotive companies collaborated with us and sponsored the series as it is in alignment with the corporate strategies to reduce their carbon footprint. For the remainder of 2022, we plan to dive deeper into the topic of carbon neutrality and clean energy and assist our advertisers to demonstrate their transformation to low-carbon business models. For our multi-channel network, MCN platform, we build further on the success of the Finnish Global Observer Group series launched in 2021. Such series engaged our tech company Phoenix TV's global network of reporters, and generated globalized content. We employed social media as its main distribution channel, helping to broaden our audience reach. With our globally-themed product offerings, we are exploring additional avenues for commercialization. In the first quarter of 2022, we achieved a breakthrough in commercialization, by partnering with clients in the banking and automated industries to launch a number of original content series that support their globalization initiatives. For example, in conjunction with our content creators around the globe, we tailor-made a short video series for a major band featuring Chinese people around the world celebrating the Spring Festival. This series was very effective in promoting the bank's coarse border brand image and helping it to expand its global output. In addition to developing original content, we continue to explore the live streaming format while further enhancing our distribution and monetization capabilities. There are many styles of content in live streaming, and our differentiation is in live interview format, which maximizes synergies between our professional media DNA content production capabilities, and extensive contact network. For example, for our coverage of the Russian-Ukraine war, we interviewed over 50 commentators and specialists, delivering a variety of authoritative opinions to audiences. On the financial news front, we conducted live interviews with a number of renowned economists, analysts, and business executives who shared their thoughts on global stock market trends and related financial topics. Moreover, we brought many popular writers, performers, and artists to our live streaming channel to discuss culture and artistic topics. To assure the highest possible quality of our interviews, we meticulously drafted discussion topics and interview questions. During our interview, we interacted with our viewers and received high youth engagement and views. After live streaming sessions, the video recordings are edited into short clips, text, and images. This content is then distributed over across our app and third-party platforms for further circulation. This, in turn, expanded our audience reach our number of followers on social platforms. For example, our interview with a popular writer in our Culture Lightroom program, 文化直播间, became an immediate hit upon its launch. It attracted nearly a million viewers during live streaming sessions, received over 1.3 million playbacks. Of course, the Internet has also exceeded the milestone of 10,000 paid views for viral sharing and exposure on WeChat, which added $40,000 to our official account. To keep this traffic momentum, not only do we need to focus on the consistent production of the live shows, we also need to build viewers' anticipation through active promotion, such as social media announcements, live stream alerts, and teaser videos. As we attract it and grow our fan base on certified platforms, we should be able to further strengthen our advertising distribution capabilities and increase our monetization potential. On the user app side, we continue to roll out upgrades to improve our interactive features. Specifically, we improve our iPhone apps, live chat, and community forum features. For our live chat features, we mainly offer professionally generated content with a focus on military affairs and trending topics in various content verticals. By integrating core content production with user interactions, we attracted more users to join our live chats to discuss the topics of interest with the guest hosts, thus enhancing our user retention as well as lengthening users' time span in the app. For our community forum feature, we aim to create a friendly and engaging discussion community for all trending topics and content verticals. With many other online communities featuring user-generated content ecosystem, we must face the challenge of recruiting the top-tier content creators and generating high quality and more interactive content for our users. We have recruited a number of influencers who are popular with our younger user cohorts, and we are continuing to evaluate our user feedback and the usage data, aiming to attract more younger users to our platform. Next, let's turn to our progress in revenue diversification. We continue to develop our online reading segment during the quarter, collaborated with a few more online reading platforms to monetize our premium IP content, and further expanded our original content IP library to lay the groundwork for developing new revenue growth drivers. As for our real estate vertical, the industry is facing headwinds from the current nationwide COVID resurgence and lingering effect of the stringent industry regulations implemented in 2021. During this challenging period, our team continued to increase our media influence in the real estate sector by delivering a recent content event campaigns. For example, for World Consumer Rights Day, we interviewed 350 home buyers, published quality reports on a number of real estate developments, and collaborated with developers, industry associations, and law firms to produce multi-dimensional coverage of industry pain points. Meanwhile, our team has taken proactive measures to navigate through the uncertainties. and explore new business opportunities. In summary, during the first quarter, we worked tirelessly to overcome the negative impact of macro uncertainties on advertiser demand and our own offline operations. We continue to enrich our content offerings, refine our live streaming capabilities, and enhance the user experience of our app. Looking ahead, in the face of macro headwinds, we will prudently manage our business operations and coarsely execute our new business initiatives while maintaining our focus on business development and areas of emerging growth. With that, I will now turn the call to our CFO, Edward Liu, to provide a closer look into our quarterly financials.