Greetings. And welcome to ATA Creativity Global’s First Quarter 2023 Financial Results Call. At time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference call is being recorded. It is now my pleasure to introduce your host Alice Zhang with the Equity Group. Thank you, Alice. You may begin.

Thank you, Camilla, and hello, everyone. Thank you for joining us. The press release announcing ATA Creativity Global’s or ACG’s results for the first quarter ended March 31, 2023, is available at the IR section of the company’s website at www.atai.net.cn. As part of this conference call, the company has an accompanying slide presentation available on its website. A replay of this broadcast will also be made available at ACG’s website for the next 90 days. Before we get started, I would like to remind everyone that this conference call and any accompanying information discussed herein contain certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terms such as anticipate, believe, could, estimate, expect, forecast, future, intend, look forward to, outlook, plans, should, will, and similar terms and include, among other things, statements regarding ACG’s future growth and results of operations, ACG’s plans for mergers and acquisitions generally, ACG’s growth strategy, anticipated growth prospects and subsequent business activities including initatives taken by ACG as Chinese public health situation has been improved, market demand for and market acceptance and competitiveness of ACG’s portfolio training program and other education services, and the impact of the COVID-19 pandemic on ACG and its operations. Although the company believes that the expectations reflected in its forward-looking statements are reasonable as of today, those statements are subject to risks and uncertainties that could cause the actual results to differ dramatically from those projected. There can be no assurance that those expectations will prove to be correct. Information about risks associated with investing in ACG is included in its filings with the Securities and Exchange Commission, which we encourage you to review before making an investment decision. The company…

Thank you, Alice, and welcome, everyone. Good evening to those in America. We appreciate everyone’s time. 2023, we got up to a soft start of ACG, we still do kind of teaching staff back in the classroom across our 21 training centers nationwide. We were pleased to report our 10% increase in student enrollments during the first quarter, which was driven by a notable increase in portfolio training student. We have stable total net revenue of RMB42.3 million, which was supported by the portfolio training services and overseas study counselling services business. Everyone at ACG is working hard in anticipation of launching our overseas summer camps and pilot programs that will be held during the summer for the fourth time since the pandemic began in 2020. And we have seen strong demand from students for the summer progress. Total student enrollment for first quarter 2023 was 1,097, a increase of 10% from 997 in the prior year period, exclude the 171 student who enrolling for foreign language training business ACG disposed of in Third Quarter 2022. The enrollment increase which have been 32.8%, enrollment in our core portfolio training programs increased more than 20% with 648 students enrolled during first quarter 2023 compared to 537 student in the prior year period. We had delivered 27,630 credit hours for our portfolio training programs. We are more flexible project-based portfolio training programs accounting for approximately two-third of our portfolio training credit hours delivered. We continue to encourage our students to opt from project-based programs, and more favorable mix shift contributing to improve operational efficiencies, giving us an opportunity to grow revenue without sacrificing the quality of teaching. With that let's move to financials for first quarter 2023. Total net revenue for first quarter 2023 remain stable at RMB42.3 million compared to RMB42.1…

[Foreign Language] Thank you. Mr. Sima. We're honored to have served so many students who have remained committed to the creative service education during the past few challenging years. Our goal during this time has been to continue providing a quality curriculum, access and support from teachers and staff, guiding them from start to finish on a competitive portfolio, and then reaching their education with hands on art related experiences. Our hope is that all of this will eventually culminate in a student having a well rounded education and experience that would set them apart from others who are applying for school. We believe a track record of positive student outcomes sets us apart from the competition, and we expect to be on the current momentum and continue to grow our business by providing superior art education experiences to our students. ACG have continued to offer immersive research based learning projects. We're excited about overseas summer camps we're currently enrolling students in. one of the projects is a summer school at University of the Arts London, all participating students will be able to take courses designed for each stage of the art study on a UL campus and immediately engaged in an English speaking environment. We're also offering a future of design exploration work and hosted in the Netherlands and Denmark, through which students will learn about the current and future design trends and be exposed to the interdisciplinary methodologies. The goal is for students to independently create a design proposal. Students who participate in this project will receive certificates of completion at the end of the camps, and one-on-one study opportunities with some of the greatest minds in a particular areas of creative arts. We're very excited to be offering this summer programs this year, and cannot wait to hear from students about their experiences. We continue to be committed to offering valuable, insightful research-based learning experiences to our students. We believe first quarter 2023 mark an inflection point for our business. With a favorable operating environment given relaxed domestic and international travel restrictions at the beginning of the year. We're seeing an increasing number of students re engaged in the pursuit of a creative arts education and study abroad opportunities. We're confident in our ability to serve a wide range of students, both those who have followed a more traditional education and those who have opted to follow a non-traditional path of study and continue to actively explore various service options to meet the needs of all student types. Our mission continues to be to provide quality learning experiences that cultivate and enhance student's creativity. In a post pandemic environment, we believe we're well prepared to take advantage of the recovering market and strengthening our leading position in the creative arts education market in China. With that, I'll turn it back over to Mr. Sima.

Thanks Zhang. In closing we are excited about opportunities for us in 2023 and feel confidence in our ability to see the opportunities ahead of us. Our top priority remains our students and we look forward to continuing to explore ways in which we think we can do our services to better support the creative art journey. With that operator, let's open it up for questions.

Thank you. We will now be conducting a question and answer session. [Operator Instructions].

As we wait for questions to queue, I received some questions via email from William Gregozeski from Greenridge Global that I would like to post to the management team. I'll start with this one. Was there any COVID related impact on the first quarter numbers? Or is it a true reflection of the period?

Thank you. I think, yes, of course, I think [Indiscernible] during the -- after the COVID period. But maybe for one figure, I think for the sales volume, I think, which is very directly reflected. But I think it will continue -- I think compare for the last -- for the same quarter last year, I think we have taken a very great increase. And maybe the total sales is around RMB50 million and to around RMB80 million. But also we come here with the same figure and this is for the same period in 2019, I mean, the period before the COVID-19 occurred. And I think we also take a very big increase that from it. The total sales volume increase from RMB60 million to RMB90 million. I think this average means that this increase is not only from the COVID impact, but its also from some natural increase. Beside of these, I think we notice that this increase is not similar increase from enrollment numbers, but also inputs about the unit [ph] price. So in that way, I think that figure can reflect the real situation of increase during the period of the year. Thank you.

Thanks, Mr. Sima for the answer. The second question I have is, can we expect to see student enrollment and credit hours increase on a year-on-year basis for the remainder of 2023?

Yes. I think we hope that this trend can be continued. I think our portfolio got bigger and bigger. And currently we still believe that its increase over key business -- their increase trend on the following is positive.

Great. Appreciate the answer. One last question from Bill is, where do you think you need to be in terms of enrollment or credit hours to reach profitability? And do you have the cash to get there?

I think in order to get probability is not as simple question here to just simply and increase enrollment or credit hours. I think, of course, and for the marketing side, I think that our sales volume increase is a one way and beside of these and we also try to develop more new business lines, and also we have made our pricing methodology more closer to the class of marketing, situation changes. And beside of these maybe will also focus on our internal controls. I think we've made our operating and more efficiency, and we'll focus on cost controls and the teaching management and more efficient, and I think in that way we can enhance our operating efficiencies. By those approaches, I think we're going to make our cash management balance and exactly I think we can gather data and to make our probability. Thank you.

Great, thank you. That's all the questions from Bill. I'll hand it back to the main Q&A session now. Thank you.

Thank you. [Operator Instructions] There are no questions at this time. I would like to turn the floor over to Mr. Sima, CFO for closing comments.

Thanks again to all of you for joining us. If anyone have questions for us, please feel free to reach out directly to us or our investor relation form the faculty group. We are always available to speak to you afterwards and look forward to speaking with you all during our next quarter call. Thank you.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.