Good day, and thank you for standing by. Welcome to Phoenix New Media Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. And now, I'd like to hand the conference over to Ms. Muzi Guo from Investor Relations. Thank you. Please go ahead.

Thank you operator. Welcome to Phoenix New Media's third quarter 2022 earnings conference call. I'm joined here today by our CEO, Mr. Shuang Liu; and our CFO, 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 third quarter 2022 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 move on to the prepared remarks, let me 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. And now, I would like to turn the call over to Mr. Shuang Liu, our CEO.

Thank you Muzi. Hello everyone, and thank you for joining our call today. The third quarter of 2022 remain a challenging one for our ad business due to weak advertising demand caused by the macroeconomic environment and COVID outbreaks. While we were seizing our monetization opportunities, we continue to build our brand differentiation through content production and distribution and elevate our media inputs in various industries and the communities, especially through industry standards and norms. Moreover we made significant updates to our products to better connect our users to our conference [ph]. During this quarter, we continued to demonstrate our media expertise and deliver in-depth news to our users across all platforms. We covered major national and new stories such as the escalation of the Russian-Ukraine war, the tension in the Taiwan Strait, the passing of Queen Elizabeth, II of the U.K.; and assassination of the former Prime Minister of Japan, Shinzo Abe. We stayed at the top of the game of running hot topics. Take the heightened tension in the Taiwan Strait as an example. It was a fast news approximately, sending push notifications on more than 75% of the key updates of the event, leading to a high user reach and pleased to reach. Once the push notification is open address, our users are directed to other related highlights on contextualized contents. Besides Pelosi's flight tracker, we were also one of the first media live streaming her landing at Taiwan Airport, following up by live interviews of field experts in military affairs and international relations, who provided their professional opinions and shared their interpretation of the situation. Our hot topics keep user up-to-date throughout the toss and turns of events. Besides a 10% increased in the click-through rates and 20% increase in average time spent year-over-year for our…

Thank you, Shuang and hello everyone. I will now walk you through our financial performance for the third quarter of 2022. All figures mentioned will be in RMB. Our total revenues were RMB194.8 million compared to RMB244.6 million in the same period of last year. To elaborate, net advertising revenues were RMB172.4 million compared to RMB216.6 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 third quarter. Paid services revenues were RMB22.4 million, compared to RMB28 million in the same period of last year. The decrease was mainly due to the reduction in the content spending of certain customers. Loss from operations in the third quarter of 2022 was RMB36.5 million, compared to RMB206.3 million in the same period of last year. This is mainly because the company recognized RMB140.4 million of allowance for credit losses in the third quarter of 2021, relating to the entire amount of accounts receivable and the notes receivable from Evergrande Group. And we did not recognize such loss in the third quarter of 2022. In addition, the decrease was also attributable to the strict cost control measures implemented. Net income attributable to iFeng was CNY 24.3 million compared to net loss of CNY 134 million in the same period of last year. Moving on to our balance sheet. As of September 30, 2022, the company's cash and cash equivalents term deposits short-term investments and the restricted cash for RMB 1.3 billion, or approximately US$159.4 million. Finally, I'd like to provide our business outlook for the fourth quarter of 2022. We are forecasting total revenues to be between CNY 203.2 million and CNY 223.2 million. For net advertising revenues, we are forecasting between CNY 187.8 million and CNY 202.8 million. For paid service revenues, we are forecasting between CNY 15.4 million and CNY 20.4 million. This forecast reflects our current and preliminary view, which are subject to change and substantial uncertainties. In summary, our top line came under increased pressure this quarter due to the current macro headwinds. While we remain dedicated to expanding our media presence and diversifying our revenue stream, we are working to align resources to appropriate sharpening focus on a clear type of priority. As such, we believe that our continuous levers will sustain us through this adversity and prepare us to achieve a better margin recovery in the future. This concludes the prepared portion of our call. We are now ready for questions. Operator, please go ahead.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Xueru Zhang from 86Research. Please ask your question.

Thank you. Good morning management. Thank you for taking my question. I have one question regarding your app business. During the recent quarters, we've seen a slowdown in ad demand, while advertisers are cautious with their outstanding. I'm wondering what's that -- the company platform other platforms that can help you stay competitive in the market? Thank you.

Good morning, Xueru. This is Edward speaking. Thank you for your question. Actually we do face a lot of challenges. But for brand advertising the value of premium and differentiated content and the media endorsement is you replace for. These are our key strengths and we never stopped trying to increase our competitiveness in this area. First of all, our breaking news coverage and the creation of hot topics have always been our key streams. This brings us high user traffic, and especially high user engagement, which is essential to effective marketing. News and information also carries significant implications of the development of the product [ph] and the international dynamics. Brands seek to be associated with these topics to elevate the exposure to a greater audience space. Our advantage also like in creating content that resonates with users through our content advertisers establish connections with their target customers and associate their brands with universal values such as courage, resilience, persistence and love. The mini documentary we mentioned earlier, The Journey is an excellent example of this type of content marketing. It conveys values shared by our audience and brands alike. Well, we are committed to provide comprehensive marketing solutions to our key account clients. We are catering to middle- to small-sized advertisers with creative and combining content marketing solutions, which in general higher in gross margin. Our brand differentiation also helped us to reach niche market. For example, a growing number of Chinese enterprises are expanding their business overseas. As they tap into our total market, they often need a complete different marketing strategy to build their brands abroad with our contracted things generally and KOLs all over the world. And our global network of resources and highlights, we can promote Chinese brands and the culture more effectively from a global perspective. We are also able to carry out marketing execution overseas under the pandemic. Actually, very few media they can ability in the market. Another important shift in advertiser demand is that they now spend a large portion of their budgets on social media and emphasis on prevention marketing instead of spending all of their budgets on mainstream media marketing campaign. In light of this change, I have mentioned above, we must break through the barriers of media. We have accumulated a large user base over 130 million third-party platforms including Weibo, Weixin, Douyin & Kuaishou and BiliBili, Kuaishou. The development and the monetization of this account has become one of our strategic priorities. We have laid out a detailed action plan for our operation on third-party platform. Our team structure and resources are also revised to the monetization target for this account. I believe with this effort we will stay competitive and continue to bring unique value for our clients. I hope I have answered your questions Xueru.

Thank you, that’s very helpful.

Thank you for your question. Our next question comes from the line of Alice Tang from First Shanghai. Please ask your question, Alice.

Good morning, management. Thank you for taking my question. So my question is regarding the balance sheet cash items. Can you give us an update on how the cash will be used, since the company still have a fair amount of cash? Thank you.

Hi, Alice, thank you for the question. Yes, you are right. Currently, we still have more than RMB 1 billion in cash. With such sufficient reserves, we are now in a very strong position to fix the ever-changing macro environment. At this point, it's very crucial for us to manage our existing capital cautiously. We have set a very strict goal to bring down cash burn, by focusing on returning to profitability and specificating, a faster turnaround of our accounts receivable. The business is only sustainable, if you can generate healthy cash flows from operations. Another way to reach that goal is to optimize our cost structure and increase operating efficiency. Our cost management efforts during the first half of the year, have paid off. During this quarter, our sales and the marketing expenses decreased by 22%, year-over-year. And our G&A expenses also decreased substantially. So overall, we will continue to manage our operation and cash position with cautious while driving to achieve perfect and positive operating cash flow. Thank you, Alice.

Thank you, Edward.

Thank you. Now there was no sign of questions, so I will hand back to the management team for closing remarks.

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

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