Gaotu Techedu Inc.

Ladies and gentlemen, thank you for standing by and welcome to the GSX TechEdU, Inc. Third Quarter 2020 Earnings Conference Call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded on November 20th, 2020. I would now like to hand the conference over to your first speaker today, Ms. Sandy Chin, IR Senior Manager of GSX. Thank you. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining us today. GSX earnings release was distributed earlier today and is available on the company's IR website. On the call with me today are Mr. Larry Chen, GSX founder, chairman, and chief executive officer, and Ms. Shannon Shen, chief financial officer. Larry will give a general overview and then Shannon will discuss the financials. Following the prepared remarks, Larry and Shannon will be available to answer your questions. Before we begin, I would like to remind you that this conference call contains forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations in current market and operating conditions and relates to events that involve known or unknown risks uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company's control and may cause the company's actual results, performance, or achievements to differ materially. Further information regarding these and other risks, uncertainties, or factors is included in the company's filings with the FTC. The company does not undertake any obligation to update any forward-looking statements except as required in their applicable law. As a reminder, this conference is being recorded. In addition, a live and archived webcast of this conference call will be available on GSX Investor Violations website at gsx.investorroom.com. You are also welcome to subscribe to our quarterly investor newsletters through the same website. It is now my pleasure to introduce Larry. Larry, please go ahead.

Thank you, Sandy. Good evening and good morning to you all. Thank you for joining us today on this earnings call. We have achieved another robust quarter with net revenues hitting an all-time high of R&D 1.97 billion, which is 3.5 times that of the same quarter of last year. We are also pleased to report that our student structure has grown healthier, with net revenue from our primary school became the largest contributor. These outstanding results speak to our continuous focus of providing the highest quality services to students and parents, our consistent training to frontline employees, and our unwavering efforts to improve the operational efficiencies and organizational capabilities. In the face of increasingly fierce competition and ever-rising customer acquisition costs, we remain committed to pursuing effective traffic acquisition through high ROI channels. sticking to efficient sales and marketing spending, and to executing an effective growth strategy based on consumer lifetime value. This summer, we have achieved the highest operating efficiency in the sector, and we believe we will continue to be so on a four-year basis in 2020. In the meantime, we continue to invest extensively in our teaching staff, product design, content development, and technology innovation raise overall compensation for our tutors and attract more top-tier talents. While it does put pressure on our gross profit and net income over the short term, we view all of this spending as an important investment in our long-term future. Online education is a labor-intensive and talent-intensive industry, and leading companies have to manage and serve a huge number of employees. Excellent organizational capabilities will be the key driver for players to achieve long-term success and be the ultimate winner. In terms of business model, we chose to focus on the online live class format in the past, and we'll continue to focus on it in the future. We recently integrated our K-12 business and our GoToKetong brand. GoToKetong fully combines and streamlines our instructors and tutors teams, service standards, products, and technologies. Our goal is to deliver the quality of a large class, the learning experience of a small class, and the feeling and educational results of one-on-one tutoring. We believe this integration further demonstrates our dedication to our focused strategy, opens a new chapter of operational efficiency enhancement, and better positions us to capture the enormous opportunities ahead during our coming era of fast consolidation for the online education industry. So far, the integration has exceeded our expectations. The class completion rates and the conversion rates are showing significant improvements. Our brand will focus on providing post-secondary education training courses, such as the CET, graduate school admission exam, and various professional qualification exams. Some investors may wonder what we think about AI interaction courses. From what we've witnessed, the adoption of artificial intelligence in online education is still only at the buzzword stage. The application of AI in the preschool market and the synergies created by AI between the pre-K and the K-12 markets are still in need of further observation and discussion. Of course, with the advancement of technology, we can solve some of the basic needs of students through systems and AI, then the requirements and personalized demands will be better matched by technology. Hence, as you may see, we have been constantly making efforts to increase our investment in research and technology with the third quarter's R&D expenses totaling R&D 200 million. However, no matter how technology and AI develops, frankly speaking, I believe the ultimate key to genuinely earn the trust of clients and truly bring meaningful learning results to students is to always try to win over their hearts to impress and bring warmth to our students, to ignite their interest in learning, to help them cultivate great learning habits and to shape their personalities through our sincere and distinguished services. Regardless of the intense competition today, we still see vast potential in the online education industry. and are fully prepared to explore all possibilities based on the solid foundation that we have built over the past years. We are looking forward to generating more value for our shareholders and sharing the future of online education with you. Now, I will pass the call over to our CFO, Shannon, to walk you through our financial and operational details.