Good day and thank you for standing by. Welcome to the Phoenix New Media Fourth Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the call over to your first speaker today, Ms. Muzi Quo [ph] 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 today by our Chief Executive Officer, Mr. Shuang Liu; and our Chief Financial Officer, Mr. Edward Lu. 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.ifeng.com. A replay of the 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, Muzi [ph]. Hello everyone and thank you for joining our call today. In the face of growing condition [ph] 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. During the past few weeks, the Russia-Ukraine conflict has captured the public's attention. Starting in mid-February. We were the first online media platform to launch full coverage of the conflict. Since then, our multi-dimensional coverage of the crisis consisting of frontline 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 15 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've 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 outburst. Our ability to execute given a difficult situation is a result of our effective teamwork, dedication, and creativity. Several of these events include our iFeng food festival, together with a golden [indiscernible] Chinese restaurant guys launch press conference. [Foreign Language] Our iFeng Fashion Award [Foreign Language] and the finance, economics plummet [Foreign Language]. We upheld our high standards for event skill, attendee experience, and public rich. Live events were big success in meeting our demand in clients up flying 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…

Thank you, Shaun and thank you all for joining our conference call today. Our total revenues in the fourth quarter of 2021 were RMB302.9 million as compared to RMB362.2 million in the same period of last year, hitting the high end of our previously announced guidance range. To provide some additional color on our revenues, net advertising revenues in the fourth quarter of 2021 were RMB279.2 million compared to RMB336.7 million in the same period of last year. The decrease was mainly due to the reduction in advertising spending of advertisers in certain industries. The intensified industry-wide competition and the negative impact of the COVID-19 outbreak in certain regions in China in the fourth quarter. Paid services revenues in the fourth quarter of 2021 were RMB23.7 million compared to RMB25.5 million in the same period of last year. Revenues from paid content in the fourth quarter of 2021 were RMB7.9 million compared to RMB11.2 million in the same period of last year, mainly due to the reduction in content spending of certain customers. Revenues from e-commerce and others in the fourth quarter of 2021 increased by 10.5% to RMB15.8 million from RMB14.3 million in the same period of 2020. Loss from operations in the fourth quarter of 2021 was RMB53 million compared to loss from operations of RMB28.8 million in the same period of last year. Operating margin in the fourth quarter of 2021 was negative 17.5% compared to negative 8% in the same period of last year. Non-GAAP loss from operations in the fourth quarter of 2021 was RMB51 million compared to non-GAAP loss from operations of RMB3.3 million in the same period of last year. Non-GAAP operating margin in the fourth quarter of 2021 was negative 16.8% compared to negative 0.9% in the same period of last year.…

Thank you. [Operator Instructions] First questions comes from the line of Xueru Zhang from 86Research. Please go ahead.

Good morning management. Thank you for taking my question. I have one question regarding our business. We know that 2022 is a tough year for the markets. And wondering do you also observe the challenges from macro war regulation on your ad business as well? And is there anything we can do to offset impact? Thank you.

Hi Xueru, this is Edward. I will answer this question. Actually our brand advertising business revenues did face challenges due to the market downturn in the fourth quarter of 2021. In some industries, such as autos and real estate, clients are very cautious with their advertising spending. Also, we usually hold more offline activities and events in the fourth quarter, which were affected by the nationwide COVID-19 outbreaks. Even though we overcame many challenges and successfully held our signature events, such as the finance and economic summit, and food festival, we still have some projects being delayed or even canceled, unfortunately. In 2022, I think the macro environment is still uncertain. However, if we take a look at the trend of marketing demand, advertisers pay more attention to precision marketing. This is because mobile internet traffic growth has picked. Now, advertisers focus more on comprehensive and IP content than fragmented content and the short-term attention. So, we will continue to strengthen our differentiation in -- I think in the following ways. First, we will continue to enhance our media brand value, through news coverage on signature events, original content and large scale events planning. We will integrate and distribute live content through live streaming video and other forms of media. So, we can create unique marketing resources for our clients. Also, we have we have unique strengths in providing international marketing solutions. We have a variety of resources, the creator of our [indiscernible] series things global -- observer group, either professional generally located around the world or overseas influencers. They have successfully created a video content to help domestic advertisers promote their brands globally. Over international IP such as the high end forum, dialogue with the work, [Foreign Language] is widely endorsed by our advertisers. We are also building our influence and distribution capabilities abroad by growing our presence on the overseas social media platforms. Our -- also our collaboration with Phoenix TV will also allow us to integrate bulk size marketing and advertiser resources and complement each other. This will enable us to create a total marketing solution that covers internet and TV audiences. Together, we can further reach and attract new clients such as central and the state-owned enterprises. We hope to create greater value for our clients and boost our monetization efficiency through this effort. Thank you, Xueru.

Thank you. That's very helpful.

Thank you.

Thank you for your questions. Next questions comes from Alice Tang of First Shanghai. Please go ahead

I got two questions on my end. So, the first one is, our company has mentioned diverse revenue streams over the past few quarters many times. So, could you please talk about the company's progress in services segments?

Hi, I will take this one. Actually on our online reading and e-commerce revenues, both grew in 2021. For online reading, we have reorganized our team and recruit more experienced talent. We also improved the core competency of our IP content and created various monetization channels, including recording and selling audio books, producing and distributing short form video series, and selling film rights. We expect revenues from these segments to continue to grow in the future. In terms of our reading app, we attract new users by offering free high quality e-books and earn revenue through advertising. We expect its revenue to scale up in the next few years. For our e-commerce business, we focused on positioning ourselves as the go-to platform for culture and the house product, leveraging third-party platforms such as TikTok, and Crenshaw. Our private label brand has achieved meaningful growth in GMV on these third-party platforms. I think as we continue to create more original content, our followers and influence on third-party social platforms also grew. We are still working on how to turn our increasing number of followers into our e-commerce users. We hope this growing traffic can boost our e-commerce business growth in future. I hope I have answered your question.

Yes, thank you very much. So, my next question is so by the end of the year 2021, the company still had about RMB1.5 billion in cash reserves. So, does the company has any investment plans for these cash in the future?

Hi, this is Shuang, let me take your question. We are fortunate to have huge amount of cash on hand. It's about RMB1.5 billion, you're right. I think we're lucky to have this amount of cash, especially given the current market condition. It’s a very volatile market, we experienced panic selling last night. This amount of cash will make us more ready, independent and stronger for future challenge and to enable us to navigate the turbulent waters. Simply because we have this amount of cash does not necessarily mean that we could -- we should be more aggressive to invest. I think at the current stage, we need to be more prudent, more conservative in spending it before we figure out what's happening, before we clearly analyze the concrete impact of these uncertainties will have on our business, our financial prospects perspective. So, in the near future, I think we will be more cautious in making investments. That's it.

Thank you.

Thank you for the question. We have no more questions from the line. I would like to hand the call back to the management for closing.

Thank you operator. We have come to the end of our Q&A section and our conference call. Please feel free to contact us if you have any further question. Thank you for joining us today on this call. Have a good day.

This concludes today's conference call. Thank you for participating You may now disconnect.