Good day, and thank you for standing by. Welcome to Phoenix New Media First Quarter 2023 Earnings Call. [Operator Instructions]. I'd now like to hand the conference over to Muzi Guo from IR Department. Please go ahead.

Thank you, operator. Welcome to Phoenix New Media's First Quarter 2023 Earnings Conference Call. The quarterly financial results and the 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 get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements. Please refer to our safe harbor statement in our earnings press release, which applies to this call as well. Also unless otherwise stated, all figures mentioned during the conference call are in RMB. Joining us on the call today are Mr. Yusheng Sun, Chairman of the Board and the Chief Executive Officer; and Mr. Edward Lu, Chief Financial Officer. Mr. Sun became our CEO at the end of March. This is his first time participating in the call. He has brought a wealth of experience and expertise to our company, and we are excited to have him leading us. Without further ado, I will now turn the call over to him to offer his greetings. I will be translating for him afterwards.

Dear investors and shareholders, greetings to everyone. My name is Yusheng Sun. It is my pleasure to join Phoenix New Media as CEO. I'll work with this exceptional team. This is my first time participating in the investor conference call, and I am honored to be here. I will do my best to take the company to a new level in the future. Currently, Phoenix New Media and its industry are facing numerous challenges. We need to analyze the underlying causes, identify breakthroughs and clarify the direction of our development. Our goal is to continue to evolve into a world-class Chinese online media platform with a focus on maximizing content dissemination influence and profitability. To achieve this, we must sustain our emphasis on creating and curating unique high-quality content, while expanding revenue streams and exercising fiscal prudence. As we move forward, we must explore and innovate in areas such as operations, management, talent acquisition and fostering team enthusiasm and creativity in order to realize our development objectives. With the collective efforts of everyone in the company, I am confident that Phoenix New Media has a promising future. Thank you for your ongoing support and I look forward to achieving further success together. And today, I will also like to take the opportunity to thank Mr. Shuang Liu, who took the company public in the States over 10 years ago and also led the company to develop to the current stage and he contributed to the company as CEO and senior management for those times. He resigned from the company as CEO for personal reasons at the end of March. And here, we thank him for his contribution over the past year and wish him all the best in his future endeavor. Thank you. This concludes Mr. Sun's greetings. I will now turn the call over to our CFO, Mr. Edward Lu, who will first read the prepared remarks on behalf of Mr. Sun and then go through the financial results. After the prepared remarks, we will open the call for questions. Edward, please go ahead.

Thank you, Muzi. In the first quarter of 2023, we continue to demonstrate our leading role in news, reporting and hot topic curation during the government's 2 Sessions events of our video column, Dialogues with Delegate. Interviewed 26 delegates and received extensive media exposure and market attention ranking 20x on the hot search list on [indiscernible] and Weibo. Our easy-to-share long posters theme, the new journey, new achievement, new responsibilities highlighted the premier, press conference, government work report and popular proposals and was widely reposted across the Internet. More importantly, the 2 Sessions are platform for China to communicate with the rest of the world. Topic hotly discussed during this year's 2 Sessions, such as gender equality, how to cope with low birth rate and aging population and education are also areas of concern for many countries. In our signature series, Dialogue With the World, we devolved into the broader implication of these issues. For example, we interviewed the Norwegian ambassador to China, . During the 2 sessions, jointly exploring final Norwegian relations and social hot topics, triggering extensive discussions on , domestic and overseas social media platforms. Additionally, our original column have provided in-depth and multi-angled commentaries on the key proposals and hot topics discussed during the 2 sessions, including the proposed increase in the threshold for personal income tax, raising of retirement age and the pension reform and wider the children of criminals should be barred from working in civil service. The commentary published by our opinion column, the message function on the last topic quickly became the top search on nearly all platforms. The article struck a balance between professional and the public acceptance, offering systematic analysis of the theme of justice in criminal law. It was read by tens of millions of people across multiple platforms…

[Operator Instructions]. Our first question comes from the line of Xueru Zhang from 86Research.

Could you kindly provide insight into the factors contributing to a decline in Q1 net revenues? Additionally, I would appreciate hearing your outlook for the ad business in the coming quarters.

Thank you for your question. Actually, Q1 2023, the recovery of the overall advertising market was a little bit below expectations. According to market research reports, the overall advertising market declined year-over-year in January and February, and advertisers are also cautious with their spending. When it comes to industries, the FMCG industry, including food, beverage and especially alcoholic beverage remains the driving force of the advertising market. The cosmetics and bathroom product industries also may come back in the top ranking list. These are the industries we focused on expanding in the first quarter, and we achieved the milestone progress by completing some major campaigns or signing 3 more contracts. Also, with the decline of brand advertising by traditional carmakers, we are placing more weight on AI new energy vehicles, domestic brands in general and especially those who are growing their overseas market as they are placing more emphasis on branding. Brand advertising has been declining in recent years as short-term growth and the sales pressures have been a priority for many. However, as the market returns to normal, the importance of branding has increased. Customers are more focused on building brand values through high-quality media channels and laying a foundation for long-term brand building in the future. [indiscernible] actually is what we are back at using high-quality content and the creativity to convene value. In the first quarter, we attracted sponsorship for our coverage of the 2 Sessions, and the numerous IP content in finance, public welfare and other fields. Currently, we are also laying our innovative marketing projects centered around themes such as rural revitalization, Golden Diplomacy season and telling the story of Chinese enterprises to create customized brand service product for our clients. We are also leveraging our capabilities in organizing large-scale events and integrating resources to serve more clients helping them achieve their marketing goals. That's my answer to your questions, Xueru.

Our next question comes from the line of Alice Tang from First Shanghai.

So we can see that the company's operating income has improved year-over-year. Was this mainly due to cost control? Are there any other plans to cut down costs further?

Actually, this is a very good question. In order to improve operational efficiency, we have done a lot of cost optimization in the past year, including debt costs, selling, G&A and R&D expenses, which have seen significant reduction. This was already reflected in the first quarter of this year with operating expenses decreasing by 26.6%. But to be honest, at this stage, there is not much room for further significant cost cuts. We will continue to focus on the return on investment of our expenses and fine-tuning our cost structure and make adjustments as needed. Our main goal this year is to strive for more revenue which is also crucial for returning to breaking even and achieving profitability in the long run. Thank you, Alice.

I am showing no further questions. I would now like to turn the conference back to the management team for closing remarks.

Thank you. We have now 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 again for joining us today on the call. Have a good day.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.