Ladies and gentlemen, thank you for standing by, and welcome to Sunlands' Third Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host today, Yuhua, Sunlands' IR representative. Please go ahead.

Hello, everyone, and thank you for joining Sunlands' third quarter 2023 earnings conference call. The company's financial and operating results were issued in our press release via newswire services earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting our IR website. Participants on today's call will be our CEO, Mr. Tongbo Liu, and our financial representative, Mr. Hangyu Li. Management will begin with prepared remarks and the call will conclude with a Q&A session. Before I hand it over to the management, I'd like to remind you of Sunlands' safe harbor statement in relation to today's call. Except for the historical information contained herein, certain of the matters discussed in this conference call are forward-looking statements. These statements are based on current trends, estimates and projections, and therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. For more information about the potential risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission. With that, I will now turn the call over to our CEO, Tongbo Liu.

Thank you, Yuhua. Hello, everyone. Welcome to Sunlands' third quarter 2023 conference call. Prior to commencing, I would like to kindly remind all attendees that the financial information referenced in this release are presented on a continuing operations basis, and all figures are denominated in RMB, unless explicitly specified otherwise. In Q3, our business has consistently adjusted to the evolving economic landscape and has strategically progressed despite the challenges. Our overarching objective of propelling the group toward sustained and high-level profitability has yielded positive results, as we maintained sizable net profits for ten consecutive quarters. Net income reached RMB131.6 million. Net revenues, despite a slight year-over-year decrease, exceeded the high-end of our guidance range and reached RMB524.6 million. We were also pleased to see our ongoing efforts to optimize our product structure and expand our course portfolio rewarded with enhanced operational results, reflected in a 14.3% year-over-year increase in our new student enrollments and a 6.7% year-over-year increase in gross billings. We are delighted in our capability to remain profitable under challenging environment. This success is attributed to improvements in gross margins, the implementation of cost-cutting measures, and enhanced financial planning and analysis across the entire business. Our cost of revenues has achieved a year-over-year decrease of 24.5%, and G&A expenses have achieved a year-over-year decrease of 21%. We firmly believe that only by adhering to a long-term perspective and ensuring the healthy growth of the enterprise can we create sustainable value for shareholders and users. Now, let's turn to the performance of each of our major course programs. Due to uncertainties surrounding the macroeconomic environment, our degree or diploma-oriented consumers have adopted a more conservative approach to the spending. This sector experienced a year-over-year revenue decline of 55.2%, influenced by our strategic reduction in marketing activities. We will persistently…

Thank you, Tongbo. Hello, everyone. I am pleased to present our third quarter results, which were in-line with our expectations and demonstrated the effectiveness of our pursuit of sustainable growth. As you can see, last quarter was another excellent quarter in operations. As a result of steady growth in interest programs, new student enrollments went up by 14.3% and gross billings increased by 6.7% year-over-year. Thanks to our strategy of balanced, sustainable growth and profitability, gross profit margin increased by 2.5 percentage points to 87.8%, compared to the same period last year. Operating expenses as a percentage of gross billings decreased by 2.1 percentage points, compared to the third quarter of last year. These improvements were reflected in our net income. Last quarter, we achieved net income of RMB131.6 million, our tenth profitable quarter since the second quarter of 2021. Looking ahead, we are optimistic about long-term growth. We are committed to expanding online course offerings, optimizing cost-effectiveness, and providing exceptional service to our students. These strategic initiatives are conducive to seizing new opportunities and consolidating our position in the industry, which in turn will help us maintain our competitive edge in the industry and continue to create value for our stakeholders. Now, let me walk through some of our key financial results for the third quarter of 2023. All comparisons are year-over-year, and all numbers are in RMB, unless otherwise noted. In the third quarter of 2023, net revenues were RMB524.6 million, a decrease of 9% year-over-year. Cost of revenue decreased by 24.5% to RMB64.1 million in the third quarter of 2023 from RMB84.9 million in the third quarter of 2022. The decrease was primarily due to lower compensation expenses related to our cost of revenues personnel. Gross profit decreased by 6.3% to RMB460.5 million from RMB491.3 million in…

Once again, thank you, everyone, for joining today's call. We look forward to speaking with you again soon. Good day and good night.

This concludes this conference call. You may now disconnect your line. Thank you.