Hello, ladies and gentlemen, thank you for standing by for 36Kr Holdings Inc.'s First Quarter 2020 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I'd now like to turn the conference over to your host, Yolanda Liu, IR Manager of the company. Please go ahead, Yolanda. Yolanda Liu;IR Manager: Thank you very much, operator. Good evening. Hello, everyone, and welcome to 36Kr Holdings' First Quarter 2020 Earnings Conference Call. The company's financial and operational results were released via Newswire services 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 CFO, Ms. Jihong Liang. Mr. Dagang Feng will start the call by providing an overview of the company and the performance highlights of the quarter in Chinese, followed by English interpreter. Ms. Jihong Liang 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 may 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 the applicable law. Please note that 36Kr's earnings press release and this conference call include discussions of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. 36Kr's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. And please note that all amount numbers are in RMB. I will now turn the call over to our Co-Chairman and CEO, Mr. Dagang Feng. Please go ahead.

[Foreign Language] Yolanda Liu;IR Manager: [Interpreted] Thank you, and hello, everyone. Thank you for joining us for our first quarter 2020 earnings conference call. We just completed a challenging first quarter of 2020, where the COVID-19 pandemic and its relatively containment measures upended the normal business operations of our clients, ultimately creating delays in their demand for our services. Despite the unfavorable macroeconomic conditions, we were able to promptly take actions in response to the evolving market dynamics and adjust our operational strategy to address clients' changing demands, extending valuable support to the New Economy community. Before providing an overview of our first quarter performance, I want to thank all of our employees for both their dedication and creativity, which allowed us to not only overcome numerous challenges but also make positive overall headway during this unprecedented time. As a permanent and influential New Economy-focused content provider, we once again demonstrated our strength in content production with further content enhancements, such as the rollout of new themed columns and engaging hot topics. In the first quarter, we published over 26,579 pieces of content in various modalities, including an increasing volume of our content in popular media forms such as short video and live streaming. Our timely and high-quality content distributed through diverse channels has allowed us to generate healthy and growing traffic. Our average monthly page views reached 473.9 million in the first quarter of 2020, up 110.2% year-over-year, reflecting the strong reception of our engaging content across our expanding user base. In the first quarter of 2020, amid adverse market conditions, our enterprise value-added services delivered modest revenue growth of 3.4% year-over-year. In addition, since the COVID-19 outbreak in January, we have taken swift response, which included the introduction of a series of special programs to support companies in…

Thank you, Mr. Feng, and hello, everyone. In the traditionally weak season of the first quarter, the unprecedented COVID-19 outbreak, coupled with early Chinese New Year in 2020 applied intensive pressure on our top line performance. Specifically, the postponed marketing plans from our clients and the restriction of the off-line policies have severely impacted the revenues of our advertising services and the subscription services, both of which usually deliver relatively higher gross margins. As a result, we reported a substantial decrease in gross profit and lowered gross margins for the quarter compared with the prior year period. Additionally, in consideration of the broad impact of the pandemic on the macroeconomic and the majority of our corporate clients' businesses, we decided to take the conservative approach and to deploy a more prudent doubtful debt policy. As such, we recognized a significant one-off doubtful debt provision for accounts receivables and in the first quarter of 2020, which further adversely impacted our bottom line results. Please note, along with the economic recovery, this provision shall be reversible if we ultimately collect the outstanding accounts receivables overdue. As the pandemic is gradually contained in China, we will continue to proactively explore, identify and fulfill the evolving demand of our clients by providing diversified and premium services, while broadening our monetization channels and capabilities in addition to more prudent cost control. We believe in the New Economy's resilience and strength and our ability to grow and thrive along with the vibrant community that is full of the opportunities. Now I'd like to walk you through more details on our first quarter of 2020 financial results. Total revenues were RMB 65.2 million in the first quarter of 2020 compared to CNY 33.8 million (sic) [ CNY 83.8 million ] in the same period of 2019. Online…

[Operator Instructions] Your first question comes from the line of Roger Duan from Needham.

So I have 2 questions. First is, have we seen any meaningful recovery of business spending after the reopening of the economy? Is there any difference between small and large-scale companies that we're seeing? And the second question is, can we expect to see new products and services to be introduced in 2020? And can you guys give us any update on the 36Kr Plus platform? [Foreign Language]

[Foreign Language] Yolanda Liu;IR Manager: [Interpreted] Okay. I'll just do a translation. And for the first question, with the pandemic containment measures gradually being removed and the off-line business recovering, the data reflects the operation recover for the industry, such as tourism, catering and consuming as well, which means the business spending in these industries will recover soon later. And actually, for us, 36Kr, generally speaking, the smaller -- relatively smaller scaled corporates have better performance in Q1. But we also believe demand from large companies has been -- just has been delayed, which is similar to that from the local government, and we believe these demands will respond and contribute to our revenue in the near future. And the overall economic environment has more impact on smaller companies, which in turn will tighten their budgets. But as I just mentioned, they have a better performance in Q1 actually. And for the second question, actually, we found a new business opportunity under the pandemic and containment circumstances. That is a commercial -- to establish the commercial live streaming ecosystem. And we launched our China concept stock channel in this March. So far, we have engaged with several clients already, and we can see a significant share market in this year maybe. Also, through our Winter Warmth Program, under the epidemic situation, we not only aided the large and the small enterprises with effectively consumer acquisition, but also reached the connection with number of excellent enterprise service providers. These service providers will be docked on our enterprise service platform later. Okay. Thank you, Roger.

Our next question comes from the line of Kenneth Fong from Crédit Suisse.

[Foreign Language] I have 2 question. The first one is, how has the impact of COVID-19 affects the company business? Any structural change that we have seen? And then how much of the business may come back later? My second question is, on the online training business. Have you seen any significant increase of the sign up amidst the COVID-19 virus? [Foreign Language]

[Foreign Language] Yolanda Liu;IR Manager: [Interpreted] Okay. [Foreign Language] Kenneth, I'll just do the translation quickly. For the first question, we expect demand from our advertising service will gradually recover, while the structural impact will be reflected in our enterprise value-added services sector. And many market views will think these off-line to -- and we believe in the long run, our enterprise value-added services will transition to online strategy. And maybe many market views will think these off-line to online trends will be temporarily just, but we believe this trend and this structuring changing will be profound and in long run. And so that's where we will continue to focus on in the future. And this change may not have big influence on us for this year actually. And for this year, we can see our off-line events having a relatively severe impact, but we will launch more off-line IPs in the coming quarters, which will offset the COVID-19 impacts on our off-line businesses. And for the second question, as we mentioned during the first quarter, our content production increased significantly, and also, our monthly average PV was up significantly. Our online training business actually suffered due to the 2 major reasons, we believe. First of all, our online training business, essentially -- it's hard to separate it from the off-line parts because it's [indiscernible] nature. Secondly, we focused on providing a broad range of free courses after the pandemic outbreak for public welfare, which demonstrated our commitment to social responsibility. Okay, that's -- these are for your 2 questions. Thank you, Kenneth.

Our next question comes from the line of [ Yu Sang Wan ] from CICC.

I am wondering what is our current China structure in terms of the company size and industry? And could you please share your future plans on further diversifying the client base? [Foreign Language]

[Foreign Language] Yolanda Liu;IR Manager: [Interpreted] Okay. Thank you, Yu Sang. We believe we will continue to further the diversification of our client base in the short and the long run. As we mentioned, at the end of 2019, our customers are distributed in 19 industries such as 3C, financial, retailing, real estate and e-commerce, et cetera. In general, the traditional [ 2 ] TMT customer ratio is 55 to 45. And we believe this is due to the definition of the New Economy itself is expanding. Well, some of our multiple clients delay their expanding in this Q1. We also received a new demand from new clients, especially clients from the industries that experience booming demands, such as online education, online content and enterprise services. Also, we plan to further cover sectors like online games, entertainment and high-end consumption in the second half of the year. It is worth mentioning as well, we also diversified our client base to include more local governments during the pandemic period by providing service online, which further enhanced our brand image and brought about these synergies. Okay. Thank you, Yu Sang.

Our next question comes from the line of Brian Li from AMTD. Brian Li;AMTD Group;Analyst: We know it's a difficult situation right now. So I want to know, is there any change of the industry type of your key customers amid COVID-19? And have you expanded your customer base to new industry type? For example, the online education you mentioned in the last call that may have potential opportunity. [Foreign Language]

[Foreign Language] Yolanda Liu;IR Manager: [interpreted] Okay. I'll just do a quick translation. I think this question is -- can be following last question from Yu Sang. And just to share some more color about our client base with you. The top-tier players in the online education industries are already our customers. I won't mention names here, but all of them are big names. And quite a few top-tier online content providers have spent on our platform already in this Q1, which -- who are -- haven't spent on us in the last Q1. Also, the same for the online enterprise service providers. I think this is the answer for your question. Thank you, Brian.

Our next question comes from the line of Sisi Tang from Citic Securities. Sisi Tang;Citic Securities;Analyst: My question is, which segment of the revenues are key focus for next year? [Foreign Language]

[Foreign Language] Yolanda Liu;IR Manager: [Interpreted] Okay. Thank you, and I will just do the quick translation. We think enterprise value-added services will still be the key focus. We are dedicated to spending service offerings meanwhile to extend the depth of the services in order to further improve the user to customer conversion rates. And we can see live streaming will be the basic tool of this industry, and we plan to establish a commercial live streaming ecosystem from this year which will further strengthen our consumer acquisition capability and brands' influence. And we have successfully served different types of our customers actually via the live streaming during the pandemic containment period. And to sum up, we can boldly tell the online service offerings will become the new value-added package after the economy reopening and the off-line recovers. Okay. Thank you.

Our next question comes from the line from [ Wentao Liu ] from Huatai Securities.

I have a question for the business strategy. So New Economy industry and primary market have experienced some rationalization changes. So under such new normal, how will management adjust business development plans for these few years? [Foreign Language]

[Foreign Language] Yolanda Liu;IR Manager: [Interpreted] Thank you, [ Wentao ] to answer your question, we indeed see the primary market didn't perform very well. And the public may say 36Kr was dedicated to serve the primary market. But what we want to say is in the past 3 years, we have been experiencing our own business model revolution, which is to generalize our business model. And in the -- until the end of last year, we can see the revenue from the relatively traditional enterprises have surpassed the revenue from the relatively smaller enterprises, which is mainly in TMT industries. And in the future, we will take active strategies to cover more in the secondary market and to better empower more and more industries. That is because we took a positive view on China's New Economy, and we can see the new normal as a better integration of the New Economy and what we so-called old economy. And the 36Kr is able to better serve than any other players in the market, and we are dedicated to better connect between the different participants in New Economy space by launching more tailored value-added services and our subscription services. Okay. This is for your questions. Thank you so much, Wentao.

[Operator Instructions] As there are no further questions now, I'd like to turn the call back to the company for closing remarks. Yolanda Liu;IR Manager: Thank you once again for joining us today. If you have further questions, please feel free to contact 36Kr's Investor Relations through the contact information provided on our IR website and the TPG Group. Thank you.

This concludes our conference call. You may now disconnect your lines. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]