Jianpu Technology Inc.

Inc. Third Quarter 2022 Earnings Conference Call. All participants will be in 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 have pressed star and then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Colin Chung, Head of Corporate Development and Investor Relations. Please go ahead.

Thank you, Operator. Hello, everyone, and thank you for joining us today. Our third quarter and first nine months 2022 earnings release were distributed earlier today and is available on our IR website at ir.jenpu.ai, as well as on PR Newswire services. On the call today from Jenpu Technology, we have Mr. David Yeh, co-founder, chairman, and chief executive officer, and Mr. Oscar Chen, chief financial officer. Mr. Yeh will talk about our operations and company highlights, followed by Mr. Chen, who will discuss the financials and guidance. They will all be available to answer your questions during the Q&A session that follows. Before we begin, I'd like to remind you that this conference call contains four looking statements as defined in Section 21E. of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and current market and operating conditions and relate to events that involve known and unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company's control. These risks may cause the company's actual results or performance to differ materially. Further information regarding these and other risks, uncertainties, or factors is included in the company's filings with the U.S. SEC. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required under applicable law. Finally, please note that unless otherwise stated, all figures mentioned during the conference call are in remandee. It is now my pleasure to introduce our co-founding chairman and chief executive officer, Mr. David Yeh. David, please go ahead.

Thank you, Colin. Hello, everyone, and thank you for joining us today. During the third quarter, we reported another set of resilient results against the backdrop of a challenging macro environment. Our revenue growth remained solid at 26% year-over-year. Our adjusted net loss reduced by 82% year-over-year, to remain the 9.4 million. And our adjusted net loss margin improved significantly to 3.5% from 24% a year earlier and 12% in the previous quarter. These results were primarily driven by our balanced and diversified revenue structure, continued operational efficiency improvement, and disciplined cost optimization measures. The results further demonstrate the resilience and nimbleness of our asset-light platform model, our team's capability to navigate through the challenges and uncertainties, as well as our commitment to progressing for our vision of becoming everyone's financial partner by empowering the digital transformation through our technology and product innovations. Let me now go through the key operational highlights for the third quarter. First, we have further strengthened our competitive positions as an independent open platform and continued to gain market share with a balanced and diversified revenue structure. In the third quarter, we continue to empower the financial industry with solutions based on our technical capabilities in digital marketing and acquisition, data analytics, operational and risk management. Leveraging our market-leading position with further geographical and a demographic expansion, our recommendation business sustained a robust revenue growth of 30% year-over-year in the third quarter. In terms of credit card recommendation services, we have leveraged our strong partnership with banks and the unique omnichannel capabilities to further expand into more products and services. For instance, we worked with several digital savvy banks to promote a ruler revitalization credit cards to less affluent geographic areas, helping some banks acquire and engage with new users in the new urban resident category. In addition, we customized our digital solutions by building ecosystems for banks to improve their cardholder retention and engagement, improve their operational efficiency. We also continue to cooperate with the leading banks to expand and explore the digital currency electronic payment, or DCEP, initiatives. Financial institutions have been encouraged to extend more lendings to support the real economy, in particular, the small and medium-sized business sectors. We have taken advantage of such policy shifts, adjusted our product coverage of our loan recommendation services to target more SMEs and the increasing new urban citizens, and continue to expand our geographical coverage to service users with financial needs in less affluent cities and less developed areas. In the third quarter, Revenue from our loan recommendation services grew by 76% year-over-year in the third quarter. Over 60% of our loan recommendation revenue was contributed from certain third-tier and less affluent areas in the first nine months of 2022. Overall, we continue to achieve a solid total revenue growth of 26% year-over-year in the third quarter. At the same time, our business mix has become more diversified. Moving on to my next point, we have seen continuous gain in operational efficiency. Anticipating the challenges and uncertainties of the macroeconomy and the regulatory environment, we further prioritize efficiency over growth. With our platform business model, technological and product innovation capabilities, we have seen tremendous efficiency gain. Our overall ROI, or revenue from recommendation services, advertising and marketing services, divided by the corresponding cost of acquisition and promotion improved by 12 percentage points year-over-year in the third quarter and six percentage points year-over-year in the first nine months of 2022. We have also seen sequential improvements The ROI in the first quarter, second quarter, and the third quarter of 2022 were 125 percent, 126 percent, and 135 percent respectively. Third, our ongoing cost optimization measures led to a significant margin improvement. Our total operating expenses including sales and marketing R&D and G&A, decreased by 19% year-over-year in the third quarter of 2022. As a result, we recorded further margin improvement and a sharp fall of net loss in the third quarter. Specifically, our operating loss and long-gap adjusted net loss narrowed significantly in by 47 percent year-over-year and 82 percent year-over-year in the third quarter. Our non-GAAP adjusted net loss margin improved significantly from 24 percent a year earlier and 12 percent in the previous quarter to 3.5 percent this quarter. We maintained the strategy of optimizing company resources and streamlining operations, which yielded further results through a reduction in the fixed cost base, including office rentals and other back office costs and resources. Going forward, we will maintain disciplined cost control and strive to improve our productivity and margin further. Finally, I will now take a few minutes to discuss the outlook to the macro environment and our businesses. With regard to the macro environment, China's real GDP growth remained moderate at 3.9 percent year-over-year in the third quarter. As the ongoing pandemic prevention and control measures continued, specifically, growth in the retail sale weakened to 2.5 percent in September. Meanwhile, the residential mortgages and the household consumption loans recorded a moderate growth rate of 4.1 and 5.4% year-over-year, respectively, at the end of September 2022. The Chinese government and the regulators have recently unveiled various measures to stimulate the real estate industry and ease certain pandemic control policies. However, the recent resurgence of the pandemic indicates a more complicated macro outlook, with uncertainties likely to persist in the first quarter of this year. In the longer run, we believe the government will maintain a more relaxed physical and monetary policy to revive the economy. Besides, with the government's emphasis on the quality development of the economy, we believe China will be able to regain the growth momentum in the coming years. While the COVID control measures may continue to impact some of our operations in the next few quarters, the potential slow recovery in consumer sentiment may also constrain the growth of our business. Normally, the fourth quarter would be our strongest quarter of the year, even our historical seasonality pattern. But we would take a cautious view that the upcoming fourth quarter may not follow the historical pattern and expect our growth rate would be dampened in the near term. At the same time, We believe our industry-leading position, technological capabilities, and a strong execution will enable us to successfully navigate through these challenges. While our diversified revenue structure, optimized operational efficiency, and disciplined cost control measures will help us to continue enhancing our overall productivity, efficiency, and supporting our goals in the future. I now hand over our call to CFO Oscar Chen to go through our financials.