36Kr Holdings Inc. (KRKR) Earnings Call Transcript & Summary

Hello, ladies and gentlemen. Thank you for standing by for 36Kr Holdings Inc.'s Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I will now turn the call over to your host, [ Joanne Anding ], IR Representative for the company. Please go ahead, Joanne.

Thank you very much. Hello, everyone, and welcome to 36Kr Holdings Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. The company's financial and operational results were released earlier today and have been made available online. You can also view the earnings press release by visiting the IR section of our website at ir.36kr.com. Participants on today's call will include our Co-Chairman and CEO, Mr. Dagang Feng; and our Chief Financial Officer, Ms. Lin Wei. Mr. Feng will start the call by providing an overview of the company and performance highlights of the quarter in Chinese, followed by a English interpretation. Ms. Wei will then provide details on the company's financial results before opening the call for your questions. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results will be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Please note that 36Kr's earnings press release and this conference call include discussions of our audited GAAP financial information measures as well as unaudited non-GAAP financial measures. 36Kr's earnings press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited guide measures. And please note that all amount mentioned numbers are in RMB. I will now turn the call over to our Co-Chairman and CEO, Mr. Dagang Feng. Pal, please go ahead.

[Interpreted] Thank you. Hello, everyone. Thank you for joining our fourth quarter and fiscal year 2022 earnings conference call. 2022 was a year full of challenges. Against the backdrop of uncertainties brought about by COVID-19 resurgence and macro headwinds, we delivered solid performance. Our full year revenue reached RMB 322 million, growing 2% year-over-year with a profit of RMB 22.64 million, making our first full year profit since our listing thanks to our refined operations and the professional expertise we have acquired over our years of dedication to the new economic sector. Driven by our dual-engine strategy fueled by content and products, we have developed a diversified business model and a comprehensive content ecosystem focusing on business, technology and lifestyle through continuous innovation across our content, products and services. Next, I'd like to share more detailed progress update on each of our segments in 2022. I will begin with the enrichment of our content ecosystem to continue to visit our content-generating capabilities from the user diverse needs require contract spanning a broad variety of product. In 2022, we launched a series of sub-vertical media, including digital Kr, Kr carbon, hard-core Kr and [ Weights ], providing deep insight across popular fields in the investment circle, such as digitalization, dual carbon and ESG, hard-core technology and specialized and innovative enterprises. We also created user-centric content verticals based on topics related to younger generation's lifestyles, including Oh! Youth, super review and career bonus, achieving differentiated user coverage. Meanwhile, we produced a varied slate of content programs, including CEO Tips still proceeding 2033, Long China 50 and Super Factory, facilitating broad dissemination of new economy content. These efforts enabled us to keep producing a considerable number of [ robust ] articles throughout the year with nearly 700 articles racking up page views exceeding 100,000. The launch of this sub-vertical media also brought us revenue upside amounting to tens of millions of RMB. For instance, as entering deeper into enterprise-rich relation field with Digital Kr, we will send our presence in this field market worth hundreds of billions of RMB with another popular program from the sub-vertical will also raise our revenue savings by increasing our influence among financial institutions. Furthermore, we made continuous efforts to launch content in diverse formats, including text, plastics, short-form video, audio and live training through both our own platform and external channels working with new media platforms such as Weibo, [indiscernible], Toutiao, Zhihu, Bilibili, Douyin and Kuaishou among others. We have built a multidimensional content dissemination system with comprehensive coverage and full access to users and new economy players, elevating our content influence. On a related note, 36Kr has always prioritized artificial intelligence technology in content production and aggregation has adopted the latest AIGC and ChatGPT technologies in our content ecosystem. Recently, we were invited as one of the first batch of companies to partner with Baidu, ChatGPT style Ernie Bot ecosystem. We believe this partnership will further elevate our content production efficiency and quality, thereby enhancing user interaction and stickiness. Second, new user expansion. Our diversified content ecosystem has spurred continuously growth of our user base in terms of user number. As of the end of 2022, the number of our followers exceeded 28 million, up 23% year-over-year, of which short radio followers accounted for 7.75 million, rising by 43% year-over-year. User quality also remained robust with an ever broadening array of [indiscernible] spanning investment growth and relates several official pay employees in large enterprises will play [indiscernible] and young people chasing their dreams. Furthermore, we have effectively codified user loyalty and engagement of our high-quality professional content virtual. Third, our new IP incubation. Over the past years since our inception, we have continuously pioneered industry benchmark IPs in the new economy sector, along with our flagship New Economy [ King's ] conference in 2022, we created X360 entrepreneurial carnival and China investor submit with the same maintaining the miracle and innovative IP was efficiently empowered start-up companies to connect with investment institutions. Moreover, the creation of our unexpected and modular series of IPs, which integrated consumption and entertainment drove [ free-end ] user growth and customer acquisition for enterprises. Notably the marvelous IPs made a successful foray into lower-tier markets in 2022 with its exclusive marvelous pace of fashion events jointly created with our regional office in Sichuan and Chongqing. We worked with hundreds of CEOs, government representatives and investors throughout the course of this event to unlock opportunities in the local new consumer industry, which also helped our brand influence and service system to penetrate further into the region. Fourth, innovation on digital tools. In November 2022, we launched 36Kr venture capital platform, reaffirming our commitment to extending media boundaries and making our further expansion to digital tool services by integrating information and data will provide standardized solutions and precise financing exposure to facilitate the discovery of high-quality early-stage projects, while offering our management services to connect projects with potential investors. Up to now 36Kr venture capital platform has [indiscernible] tens of thousands of outstanding projects, of which 80% have finished at least one round of financing, having attracted the attention of over 1,000 investors from tenders of top-tier investment institutions. We completed up to 1,000 venture capital measures per week on average. Currently, our venture capital platform is still in the product refinement stage. We do expect to begin commercialization in the second quarter of 2023. To give you a point of reference, a peer of similar products, [ PE Data ] along with [ PE Data Max ] have achieved annual revenue exceeding RMB 60 million. Therefore, we believe the 36Kr venture capital platform with its integrated functionality, spanning resources connection, services analysis exposed to bring us considerable revenue upside. Last but not least, product upgrades. Service productization was an important thing for us in 2022. And as such, we integrated and upgraded some of our relatively mature product series. For example, 36Kr research institute continues to expand its industry coverage with a consistent focus on industry vertical development, capital trends and policy orientation. We also enhanced its research depth and the level of professionalism, which helps as the company as a whole improve its customer acquisition and commercialization performance through its distinct product portfolio, clear customer positioning and evident advantages. 36Kr business school is a business training product that we revamped in 2022. We designed its venture capital class and related training program provide intern for small and medium-sized enterprises in various stages of development and connect them with capital and other resources contributing to the sustainable development. During the COVID-19 outbreaks in the second half of 2022, 36Kr business school held training sessions and public courses on refinancing in various class formats such as our funding acceleration cap, which contributed to our commercialization revenue. We have observed that the thriving venture capital market fueling increased demand for entrepreneurship training. In fact, some of our peers have reached RMB 100 million of annual revenues in this area. For 36Kr, we plan to launch a wide variety of courses and extend sales channels in 2023 to realize greater growth. I also want to specifically highlight that we continue to upgrade and iterate our platform product, the 36Kr enterprise service review platform in 2022. In addition to creating a [ quadrant ] encompassing product databases, user review libraries, pay industry [indiscernible] and knowledge graph libraries, we have further refined its industry product evaluation system and standards. The platform fosters deep connections between sellers and buyers, helping enterprises acquire customers with position and enhance their brand influence. I will elaborate on the development of the enterprise service review platform a bit later. In summary, we built on our enriched ecosystem accumulated product advantages and enhance our operational capabilities throughout 2022, consistently strengthening our commercialization capabilities. This empowered us to steadily grow our revenue and realize our first full year profit since listing. Next, I'd like to share the details of our commercialization progress. We achieved solid results across all of our business segments in 2022. Notably, our advertising revenue reached RMB 222 million, up 3% year-over-year. A number of our advertising customers grew to 532 with ARPU remaining relatively stable year-over-year. We continue to leverage the advantages of our advertising business centered on branding and efficacy while also exploring new scenarios and solutions for content marketing and commercial integration. Along with graphics and text, we tapped into innovative advertising formats such as short video, live streaming and vlogging, offering customers a diverse selection of media range products. In terms of industry expansion, we broadened our advertiser base in 2022 from our core industries, such as TMT, consumer automobile, real estate, advanced manufacturing and new energy to include the medical industry, health and wellness, banks and other financial institutions. We also formed a partnership with leading industry players, including Johnsons and Johnsons and [indiscernible], among others. At the same time, our advertising commercialization channels have become increasingly diverse, well-balanced, and we have expanded our monetization skill across more traffic platforms such as Bilibili, Zhihu and Kuaishou and WeChat radio accounts in addition to our 36Kr webpage, the Kr app, WeChat and Weibo. Notably, our short video revenue in 2020 more than doubled year-over-year to reach tens of million RMB on a full year basis, accounting for 17% of total advertising revenue, our short videos have raked massive user traffic with high-quality original content, attracting the attention of numerous young users and advertisers. Many renowned companies have become repeat customers of our short video advertising services such as Intel, ICE, [indiscernible], JD.com and Zhihu. In the fourth quarter, we customized a mini-variety show video for the Honor AT smartphone entitled Tongaat [ Time to study ] vlog. The video featured an array of young opinion leaders such as talk-show actors, hosts and travel bloggers, explaining and demonstrating the product functions and highlights in vlog boosting the customer's contract site to a new high. With respect to enterprise value-added services, we host nearly 30 industry summits, covering hot topics, including new technology, new energy and new consumption. During the COVID-19 outbreaks, we adopted an integrity online offline format, leveraging video and live streaming among other formats to connect more new economy players through digital conferences. Notably, our wide event achieved a total exposure exceeding 4.5 billion, while X360 enterprise carnival, our new IT event attracted 350 million views from a simultaneous live streaming on a total of 24 platforms, further demonstrating our strong influence and service capabilities in the new economy. Regarding consulting services as our full year revenue grew by 70% year-over-year in 2022. 36Kr Research Institute published a research report in various formats, serving many local government customers and established in-depth collaboration with a wide range of well-known enterprises, including Volkswagen Group China, [indiscernible] JD.com, [indiscernible], [ Higher Capital ], [ Hong Tai Eplat ] and The Beijing Shougang Found, garnering widespread acclaim from industry professionals. At the same time, we continue to potent the scope of our regional expansion. Thus far, we have built a regional operating network covering 12 state [ voluntaries ] and cities and established a mutually beneficial relationship with both local government and enterprises. This has enabled us to empower new economic players as they expand originally and enter lower-tier markets. In 2022, the number of our regional customers increased significantly, creating a more balanced mix of government and enterprise customers, laying a solid foundation for exploring the wider enterprise value-added services market in the future. As for our subscription services, our full year subscription revenue amounted to RMB 28 million in 2022, rising by 1% year-over-year. Notably, the number of our institution and enterprise subscribers as well as ARPU both improved. Further, ARPU of individual subscription service also grew substantially just to the growing popularity of our 36Kr business schools new courses. Last but not least, I'd like to share an update on our second growth engine, the 36Kr enterprise service review platform. In 2022, we remain focused on growing our platform influence and further optimizing its service system regarding product functions. We launched enterprise service review report to compare products and recommend models based on users' actual needs while generating independent objective data analysis, ranking reports and charts, efficiently optimizing users' decision-making scenario. We also refined enterprise service review platform search function, adding search path for product functions and articles, increasing the accuracy of user researchers. In addition, we improved our project charge algorithm and display matters to help users better understand product information, user views and industry rankings, innovating convenience and usability. In terms of customer acquisition format, we built a variety of content products and IPs across graphics, live streaming, offline [indiscernible] and other formats from user's perspective, consistent they reach decision-makers in every industry, which follow enhanced the enterprise service review platform's brand awareness and influence. Through relentless efforts in our online offline operations, we achieved a rapid growth in the enterprise service review platform's operating metrics across the board. As of the fourth quarter of 2022, the number of leads have grown 700% compared with the same period of last year. And the cumulative number of products on the platform exceeded 8,000, a year-over-year increase of 52% with a total number of reviews surpassing 60,000 cumulative hits, up 234% year-over-year. The number of merchants on the platform exceeded 1,200, double the number in the same period of 2021. Additionally, in terms of commercialization. As of now the enterprise service review platform's contracted sales exceeded RMB 10 million with orders from an extensive wealth of well-known SaaS suppliers such as [ Nelson ], [ Q&D ], [indiscernible], Google Cloud and [ SAYTV ]. We also published strategic marketing cooperation with Volcano Engine under its Titan brand as well as the SMB unit of Lenovo, a Fortune Global 500 company in 2022. Going forward, the enterprise service review platform will serve a growing cohort of enterprises in need of digital transformation upgrades on reaching our platform's value and greatly boosting our commercialization capability. As we embark upon the post-pandemic era in 2023, we have observed many positive market signals in March and role and investors' confidence continues to strengthen accordingly, leading to increasing business volatility throughout the new economy sector, we will see the commercialization opportunities afforded by the economic recovery to keep exploring media boundaries and build a richer portfolio of products and services. We expect it to see continued revenue growth and deliver another full year profit in 2023. With that being said, we have a way to light as COVID-19 recedes, we believe we are well-positioned to consistently unlock more growth potential and enterprise value, differentiating ourselves as well a company and empower our new economy partners and creating long-term sustainable value for society and shareholders along the way. With that, I will now turn the call over to our CFO, Ms. Lin Wei, who will discuss our key financial results. Please go ahead, Lin.

Thank you, Pal. Now I'd like to walk you through more details of our fourth quarter and fiscal year 2022 financial results. Total revenues for the fourth quarter of 2022 were RMB 96.6 million, a sequential increase of 2%. Total revenues for the full year of 2022 were RMB 322.5 million, a year-over-year increase of 2% compared to the full year of 2021. Online advertising services revenue were RMB 62.2 million in the fourth quarter of 2022 compared to RMB 76.4 million in the same period of last year. The decrease was primarily attributable to relatively weak advertising spending caused by the negative impact of COVID-19 control measures and infections across China during the quarter. For the full year of 2022, our online advertising services grew by 3% year-over-year to RMB 221.6 million. The increase was primarily attributable to more innovative marketing solutions we provided to our customers as well as proactive sales strategies we adopted to navigate challenging environment during the year. Enterprise value-added services revenue were RMB 25.4 million in the fourth quarter of 2022 compared to RMB 30.3 million in the same period of 2021. For the full year of 2022, our enterprise value-added services were RMB 72.6 million compared to RMB 74 million in the previous year. The 2% decrease was primarily because some of our offline events were delayed or downscaled due to disruptions from COVID-19. Subscription services revenue RMB 8.9 million in the fourth quarter of 2022 compared to RMB 9.6 million in the same period of 2021. The decrease was primarily attributable to the negative impact of COVID-19. For the full year of 2022, our subscription services revenue were RMB 28.2 million, representing an increase of 1% compared to RMB 28 million in the same period in the previous year. The increase was primarily attributable to our continuous efforts to offer high-quality subscription products to our subscribers during 2022. Cost of revenues were RMB 47.6 million in the fourth quarter of 2022 compared to RMB 40.7 million [indiscernible] the year. The increase was primarily attributable to higher cost, higher content costs related to expansion of our commercial oriented content program. For the full year of 2022, our cost of revenues was RMB 137.8 million compared to RMB 128.8 million in the previous year. The increase was primarily attributable to the increase in content-related costs, partially offset by decrease in costs of our offline events. Gross profit was RMB 48.9 million in the fourth quarter of 2022 compared to RMB 75.6 million in the same period of last year. For the full year of 2022, our gross profit was RMB 184.6 million compared to RMB 187.9 million in the previous year. Gross profit margin for the full year of 2022 was 57.3% compared to 59.3% in the previous year. Operating expenses were RMB 69 million in the fourth quarter of 2022 compared to RMB 61.6 million in the same period of last year. For the full year of 2022, operating expenses were RMB 229.2 million compared to RMB 282 million in the previous year. Sales and marketing expenses were RMB 32.8 million in the fourth quarter of 2022, a decrease of 16.5% from the same period of last year, primarily attributable to the decrease in marketing-related expenses. For full year 2022, sales and marketing expenses were RMB 122.1 million, a contraction of 15% compared to the previous year, primarily attributable to the decrease in payroll-related expenses, share-based expansion expenses and marketing expenses. G&A expenses were RMB 21.7 million in the fourth quarter of 2022 compared to RMB 9.6 million in the same period of last year. The increase was primarily attributable to the release of allowance for credit losses recognized in the fourth quarter of last year. For full year of 2022, G&A expenses were RMB 52.1 million compared to RMB 90.6 million in the previous year. The decrease was primarily attributable to the release of loan credit losses and a decrease in professional fees. The release of loans for credit losses was mainly due to improved collection of accounts receivables. Research and development expenses were RMB 14.5 million in the fourth quarter of 2022 compared to RMB 12.6 million in the same period of 2021. For the full year of 2022, our research and development expenses were RMB 55 million compared to RMB 47.5 million in the previous year. The increase was primarily attributable to the increase in payroll-related expenses as we bolstered our R&D capabilities for new products and services. Share-based compensation expenses recognized in cost of revenues, sales and marketing expenses, research and development expenses as well as G&A expenses totaled RMB 4.6 million in the fourth quarter of 2022 compared to RMB 4.1 million in the same period of last year. For full year 2022, the total amount of share-based compensation expenses were RMB 13.9 million compared to RMB 50 million in the -- compared to RMB 15 million in the previous year. Other expenses were RMB 1.2 million in the fourth quarter of 2022 compared to other income of RMB 1.5 million in the same period of last year. For full year 2022, other income was RMB 67.5 million compared to other income of RMB 3.6 million in the previous year. The increase was primarily attributable to gain arising from disposal of a subsidiary and investment income arising from fair value changes of long-term investments as well as income generated from write-offs of accounts payable. Net loss was RMB 21.5 million in fourth quarter of 2022 compared to net income of RMB 15.4 million in the same period of 2021. For full year 2022, our net income was RMB 22.6 million compared to net loss of RMB 90.6 million in the previous year. This is the first time we achieved full year profitability since our IPO in 2019. Non-GAAP adjusted net income was RMB 16.9 million in the fourth quarter of 2022 compared to non-GAAP adjusted net income of RMB 19.6 million in the same period of last year. For full year 2022, non-GAAP adjusted net income was RMB 36.5 million compared to non-GAAP adjusted net loss of RMB 75.6 million in the previous year. Net loss attributable to 36Kr's ordinary shareholders was RMB 20.8 million in the fourth quarter of 2022 compared to net income attributable to 36Kr's ordinary shareholders of RMB 14.6 million in the same period of last year. For full year 2022, net income attributable to 36Kr's ordinary shareholders RMB 21.9 million compared to net loss attributable to 36Kr's ordinary shareholders of RMB 89.6 million in the previous year. Basic and diluted net loss per ADS were both RMB 0.498 in the fourth quarter of 2022 compared to net income per ADS of RMB 0.356 in the same period of last year. For full year 2022, basic and diluted net income per ADS were both RMB 0.53 compared to basic and diluted net loss per ADS of RMB 2.2 in the previous year. As of December 31, 2022, the company had cash, cash equivalents, restricted cash and short-term investments of RMB 184.9 million compared to RMB 164 million as of September 30, 2022. The increase was mainly attributable to positive cash flow from operating activities, partially offset by the long-term investment in the new economy start-up company were made in the fourth quarter of 2022. This concludes all of our prepared remarks today. We will now open the call to questions. Operator, please go ahead.

[Operator Instructions] The first question today comes from Jing Chen with CICC.

I will translate myself. As we see improvements of the environment, what are the company's strategic priorities and plans for this year?

[Interpreted] Okay. As we mentioned many times before, we will continue to enrich our content ecosystem and tap into more vertical industries, such as artificial intelligence, new electric vehicles and industry capital. And also on our product front, apart from our existing advertising and enterprise value-added services, we will also explore several new product initiatives, for example, 36Kr enterprise service review platform as our second growth engine, we will refine our platform and products and continue to pursue commercialization. 36Kr business school will enrich course designs to empower more small- and medium-sized companies. This training product has been proven by our peers to be a market with RMB hundreds of millions of market size. Also, 36Kr Research Institute will enhance its professionalism and industry coverage, providing more in-depth reports to more enterprises. And of course, we will keep investing in AIGC technology. We will continue to advance the application of the AIGC technology in production and aggregation of high-quality content to further improve our content production efficiency and through AIGC personalized dialogue function will strengthen our user interactions and stickiness.

The next question comes from [ Ling Yi Zao ] with SWS Research.

The advertising industry is the foresight of economy. What changes have taken place in development of advertisers to invest recently? Can you tell us about the degree of economy recovery and prospects based on the advertising business?

[Interpreted] Okay. Based on the Q1 2023 current situation, our ad business is already recovering steadily. However, it will take some time for advertising to return to a relatively high level while market confidence continue to recover. And we have witnessed that a lot of our clients have rebound their confidence in ad placement, but still, they still have a limited budget for the advertising business. So this is why I feel it takes time for us to recover to a relatively high level. Okay. Based on market feedback and actual business performance so far, the entire advertising industry has been recovering at a steady pace. Businesses in some public industries such as automobile and e-commerce have been very active in brand promotions and marketing activities with relatively stable and placement budget. In Q1 2023 we made further progress in both commercialization channels and industry coverage. For instance, we completed JD.com's first commercialization order [Foreign Language] and achieved our first breakthrough in the luxury goods sector. As such, we expect a fair level of growth generally in advertising in both Q1 and the full year 2023. Looking ahead at the full year 2023, we remain optimistic as business activities and people's daily lives come back to normal in the post-pandemic era. We will see a significant rebound in our ad business.

[Operator Instructions] The next question comes from [ Lui Yin ] with [ Stellant Securities ].

I will translate myself. I have 2 questions. The first question is about the enterprise value-added business segment. So the future growth come more from the increase in the number of paying companies or the increase in the level of corporate payments, what new actions will the company take for enterprise value-added service segment this year? And my second question is about margin ratio. How should we expect the company's expense ratio and profit margin this year?

[Interpreted] Actually, during the past years, our -- both of our number of clients and our ARPU has increased significantly and we believe it will grow this year as well. On the ARPU side, we will provide diversified enterprise value-added services, including offline events, consulting services and integrated agency operation services to boost growth in this segment. On the number of clients, we will tap into broader vertical sectors and penetrate to lower-tier markets by growing more plants [indiscernible] in 12 or more regional offices. In 2023, we will also leverage more products to develop our enterprise value-added services. In addition to 36Kr enterprise review platforms, we also launched 36Kr venture capital platform as well as 36Kr research institute to further grow our business.

I think this is your first time to join the earnings call on 36Kr. We really give you a warmest welcome. And this is Lin. I will answer your second question regarding the expense ratio and the margin question. I think for the full year 2022, you can see from our results that our gross margin is at a relatively stable level of 57%. I think in 2023, we will be able to maintain that level or even have more further gross margin expansion because as our CEO just mentioned, given the AIGC and the more AI-related technology application, we will be able to have higher efficiency of operation and have some cost saving effect in our business. And secondly, I think I will highlight that I think for '23, the margin expansion as well as operating margin and gross margin will come more from the revenue rebound or revenue growth. Although in 2022, we are proud that we have been growing our revenue given the very challenging environment in 2022, but we achieved a positive 2% growth. But that ratio will be much higher in '23 I think. And also, we mentioned several times that our cost structure and expense structure has been very stable, given that it will not be a linear growth pattern as the revenue growth. That means we will have a lot of leverage. So give you some cautious implication. Now if we say that in '23, our gross margin can be stabilized at around 6% to 8% level. And then our expense -- OpEx ratio will be, I mean, let's say, around 50%, then we'll give you an operating margin of around 10%. I think that will even have some upside if our top line or revenue can grow at a much higher growth rate than in 2022. Hope that answers the question, Lui Yin.

What is the business connection between the company and the AIGC or GPT large model? And what is the plan for AI?

[Interpreted] Actually, content production, quality and efficiency have always been our priority and we have been adopting AIGC for quite a while. Content execution and classification are key components of AIGC technology. By applying AIGC, 36Kr can classify articles in various fields using labeling, that optimizing the accuracy of user research. In addition, for some in-depth articles, AIGC will summarize the content of the articles to facilitate users' efficient understanding while also improving the user experience. On the product launch using 36Kr enterprise review platform as an example, AIGC technology will assist the users to better obtain detailed information, such as present usage evaluation of products more efficiently so as to understand products more accurately and make better purchasing decisions. Also, AIGC helps us provide better customer services through more effective user interaction and communications. According to our initial analysis, AIGC has helped improve our user interaction by 90% and improve our current production efficiency by 3x. Recently, we became one of the first batch of our companies to join Baidu's ChatGPT-style Earnie bot ecosystem. We have achieved the code for internal testing and are launching the first run of our internal test with no doubt that 36Kr will be the fast mover in applying AIGC technology in our content production and business expansion. Thanks for your question.

[Operator Instructions] And as there are no further questions, I'd like to turn the call back over to the company for closing remarks.

Thank you once again for joining us today. If you have any further questions, please feel free to contact 36Kr's Investor Relations through the contact information provided on our website.

Thank you, and see you next time.

Thank you, operator. Thank you, everyone.

That does conclude our conference for today. Thank you for participating. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]