0:03 Ladies and gentlemen, thank you for standing by for Autohome’s Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A questions-and-answer session will follow the formal presentation. As a reminder, this conference call is being recorded. If you have any objections, you may disconnect at this time. 0:30 It is now my pleasure to introduce your host Sterling Song, Autohome's IR Director. Mr. Song, please go ahead.

0:40 Thank you, Venus. Hello, everyone, and welcome to Autohome's Fourth Quarter and Full Year 2021 earnings conference call. Earlier today, Autohome distributed its earnings press release, and you may find a copy on the company's website at www.autohome.com.cn. 1:01 On today's call, we have Chairman and Chief Executive Officer, Mr. Quan Long, Co-President, Mr. Haifeng Shao, Chief Technology Officer, Mr. Bibo Xiang, Vice President, Mr. You Zhou; as well as Finance Director, Ms. Hong Jiang. After our prepared remarks, our management team will be available to answer all your questions. 1:24 Before we begin, please note that the discussion today 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 are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the Securities and Exchange Commission. Autohome doesn't undertake any obligation to update any forward-looking statements, except as required under applicable law. 2:05 The earnings press release in this call also includes discussions of certain unaudited non-GAAP financial measures. Our press release contains a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures, and is available on Autohome's IR website. As a reminder, this conference is being recorded. In addition, a live and archived webcast of this earnings conference call will also be available on Autohome's IR website. 2:35 Next, I will now turn the call over to Autohome's Chairman and CEO, Mr. Long. Mr. Long, please go ahead.

[Foreign Language] 2:48 [Interpreted] Thank you everyone. Hello, everyone, and thank you for joining us today in the earnings call. 2021 was another unusual year for all of us. Despite the challenging macro environment, we are incredibly proud of Autohome's resilient performance throughout the whole year as well as its ongoing efforts to transform and upgrade its business. We are also proud of the continued recognition we receive from both the industry and our customers, including being listed as one of China's Top 100 Internet Companies for the ninth consecutive year, ranking 20th in 2021. We delivered total revenue of RMB7.24 billion for 2021, of which the contribution from new business rose from 23.2% in 2020 to 30.9% of total revenue in 2021, with new business revenue growing 11.6% year-over-year. Our adjusted net profit for the year was RMB2.58 billion, with our adjusted net margin maintaining the comparatively high level of 35.7%. 5:46 2021 witnessed two significant milestones we achieved. In mid-March, Autohome successfully was listed on the Hong Kong stock exchange. We're delighted to have reached this milestone and to have embarked on this new journey to increase Autohome's exposure to Hong Kong's capital market. During our Investor Day in September, we unveiled our ecosystem strategy to bolster Autohome's integration with Ping An's auto ecosystem, making our unique suite of full-cycle auto ecosystem services as well as our leading-edge platform accessible to an even broader base of C-end customers, B-end OEM customers and other partners in the auto ecosystem. In addition to maintaining our annual dividend payout of around 20% net income for the year, we launched a USD 200 million share repurchase program to reward shareholders for their long-term support, which represented our commitment to our strategic upgrade and confidence in our future performance. 8:19 Amid the challenges…

29:20 Thank you, Mr. Long. Now, let me walk you through the key financials for the fourth quarter and the full year 2021. Please note that, as with prior calls, I will reference RMB only in my discussion today unless otherwise stated. Net revenues for the fourth quarter were RMB1.69 billion. For a detailed breakdown, media services revenue came in at RMB373 million, leads generation services revenues was RMB778 million, and online marketplace and others revenues were RMB543 million. 29:55 Moving on to costs. Cost of revenues were RMB262 million, compared to RMB268 million in the fourth quarter of 2020. Gross margin was 85% in the fourth quarter compared to 89% in the same period of 2020. Turning to operating expenses. S&M expenses in the fourth quarter were RMB803 million, compared to RMB871 million a year ago. The decrease was primarily due to the decrease in promotional spending and continuous budget control. Product and development expenses were RMB395 million, compared to RMB397 million in the fourth quarter of 2020. Finally, G&A expenses were RMB128 million, compared to RMB71 million in the fourth quarter of 2020. 30:44 The increase was primarily due to the consolidation of TTP. Overall, we delivered operating profit of RMB177 million for the fourth quarter, compared with RMB947 million in the corresponding period of 2020. Adjusted net income attributable to Autohome Inc. was RMB470 million for the fourth quarter, compared to RMB1,192 million in the corresponding period of 2020. 31:12 Non-GAAP basic and diluted earnings per share for the fourth quarter was RMB0.93 and RMB0.93, respectively, compared to RMB2.49 and RMB2.48, respectively, in the corresponding period of 2020. Non-GAAP basic and diluted earnings per ADS for the fourth quarter was RMB3.71 and RMB3.71, respectively, compared to RMB9.95 and RMB9.91, respectively, in the corresponding period of 2020. 31:44…

33:48 We will now begin the questions-and-answer session. [Operator Instructions]. Our first question, Mr. Thomas Chong from Jefferies. Please go ahead.

34:25 Thank you for taking my question. I have a question on our view on the auto industry outlook in the coming quarters and the competitive landscape? [Foreign Language].

[Foreign Language] 36:05 [Interpreted] Well, thank you very much. I'm glad to take the question. I'm the chairman and the CEO. My name is Long Quan. Well, actually, according to the statistics from the Passenger Car Association that mainly in January of '22 -- actually, in 2022, the Chinese auto market the -- actually, the growth of the whole market on the retail side would be about 5%. However, for the new electric vehicle, the accumulated sales would be more than 5.5 million, which the market penetration rate can be 25%. The growth rate of the sales of the NEV in China market would be around 70%. 37:39 Now let me talk about Autohome. We have two piece of business: one, the traditional business, the second would be the new business. Now let's focus on the traditional business. Actually, with the recovery of the Chinese auto market, we believe our traditional business would resume back to the normal track. Actually last year, the Chinese auto market was quite down. So that's why it dragged down our traditional business. However, having said that, I still want to say we continue to be number one in the auto vertical media market. 39:15 Now let's focus on the new business. We have three pillar industry for the new business. One is the digitalized product. Actually, we believe in 2022, the revenue of this piece would greatly increase in terms of the contribution to the total revenue. The second piece would be the NEV. Actually, we had a collaboration with all NEV brands in China, and this will continue to grow and contribute to the total revenue. And the third business would be used car. As you know, Mr. Haifeng Shao was named as the Chairman of the TTP and he would defend the strategic collaboration of TTP with Autohome, which would also drive up the revenue.

40:09 Thank you. Next question Our next question, Ritchie Sun from HSBC. Please go ahead.

[Foreign Language] 40:43 [Interpreted] Let me translate the questions myself. Thank you very much for taking my questions. Two questions, first is about 2022, your view on the used car market outlook? Second of all is what is our used car business goal or priority in 2022? Is it about profitability or it's about top line? Thank you.

[Foreign Language] 42:18 [Interpreted] Well, thank you for the question. As for the used car market, we believe it will continue to grow. Actually, in 2022, it will keep 20% of the market growth. However, the used car market has a few features, which is quite distinctive. For example, the first feature is, it is a price segmented market. A lot of players and the stakeholders in this market was quite small. There is no much leader or monopoly player in this market. And also the lack of trust between the auto sellers and the buyers would be a major problem in the used car market. 44:05 Actually, for our used car business plus TTP, we do have a good strategy. We have -- we target based on the strategy. The first one is our growth of the revenue should outpace the market average. Secondly, we want to achieve breakeven based on the breakeven foundation. We are going to further expand the transaction, especially the volume of the used car transaction, which would drive up the revenue. And thirdly, for the 2022, we are going to enhance the digital business and the digitalized business for the used car, which would be recognized by the dealers, and that would also [ Technical difficulty] the revenue. Thank you.

44:58 Thank you. Our next question [Indiscernible] Wang from CICC. Please go ahead.

[Foreign language] 45:28 [Interpreted] Thanks for taking my question. So we can see some pressure on the operating margin this quarter. And I'm wondering if we still have some ongoing investment on the digital transformation. Or we are considering some cost control in the future? And when do we expect the operating margin to improve margins? Thank you.

[Foreign Language] 45:49 [Interpreted] Well, thank you. In terms of the 2022, based on the outlook of the auto market in China, we believe the traditional auto market would recover, which would bring up our traditional business. On the 2B side, we are going to increase the efficiency and also compress the operating cost, and in this way we would achieve more cost effective. And secondly, we are going to invest more in the innovative new business, especially the new business model development and the new R&D for the 2B business 47:57 Now on the C side, we're going to bring more innovative products. For example, the live streaming and the NEV, we are going to establish NEV's bachelor area to attract the young generation and attract new traffic. And we're going to enhance the customer and the user operating and also to attract more young users. Actually, with more investments in the sales and marketing and R&D, we're quite focused on the efficiency of seeing the investment. So this would not affect our operating margin. And in 2022 [Technical difficulty] of the Chinese auto market, we believe that our margin can also be improved. Thank you.

[Foreign language]

50:49 [Interpreted] Now I want to focus on the NEV. Actually, the NEV -- the sales already established a momentum, which is quite bullish, because in 2021, the sales growth is about 160%. In January, the growth also achieved more than 100%. So we expect 2022 the NEV would continue to experience quite robust growth. As our Chairman has said, this will already account for 25% of the total passenger car in China.

51:48 Operator?

51:33 Thank you. There are no further questions at this time.

51:59 Operator, let's continue.

52:07 Sorry. There are no further questions at this time.

52:15 Okay. Can you see if there's no follow-up questions…

52:16 Anyone – do you still have any follow-up questions?

52:22 Yes, if nobody is having more questions. So I have a follow-up question on the dealers' leads. Is there any update on the leads of the dealers? And thanks for the -- so some more color on this. Thank you.

[Foreign Language] 53:46 [Interpreted] Thank you. In terms of the dealer leads product, especially our [Indiscernible], we continued our relationship with the dealers. In 2021, we already designed the strategy that the ordinary version, the price kept as flat. The VIP version, we raised the price by 20%. And for the NEV business, we create more value for the dealers. We want to empower the dealers to enhance its operating efficiency, and we also provide a lot of operating toolkits for the dealers. As our Chairman has pointed out, we want to be a differentiator in the market. 54:52 For the ordinary version, we do not raise the price because we want a wide coverage of the dealers. For the VIP version, we would offer most capable dealers to make a choice, whether they want to accept the VIP version, which is 20% more, but for good value. And we also did a lot of campaigns and activities to empower the dealers to enhance his operating. In terms of the renewal rate in 2021, which is quite positive, which is also beyond our expectations. As for the ordinary version, we want a wide coverage, which the coverage is quite positive. And for the higher version, we do see that it has good coverage as well. So altogether, it's 80% of the coverage under the renewal rate. 56:26 So in summary, I want to say in 2022 in terms of the competition between the three major players, our [Indiscernible] would be the winner.

56:40 Thank you. Operator?

56:44 Thank you. There are no further questions at this time. I will turn the conference back to management for closing comments.

[Foreign Language] 57:11 [Interpreted] Everyone, thank you very much for joining us today. We appreciate your support and look forward to updating you on our next quarter's conference call in a few months' time. In the meantime, if you have any further questions, please feel free to contact us. Thank you, everyone. Thank you, bye.

57:29 This concludes the conference all. You may now disconnect your lines. Thank you.