Ladies and gentlemen, thank you for standing by, and welcome to the Kanzhun Limited Fourth Quarter and Full Year 2022 Results Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a Q&A session. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Wen Bei Wang, Head of Investor Relations. Please go ahead, ma'am.

Thank you, operator. Good evening and good morning, everyone. Welcome to our fourth quarter and full year 2022 earnings conference call. Joining me today are our Founder, Chairman and CEO, Mr. Jonathan Peng Zhao, and our Director and CFO, Mr. Phil Yu Zhang. Before we start, we would like to remind you that today's discussion may contain forward -looking statements, which are based on management's current expectations and observations that involve known and unknown risks, uncertainties and other factors not under the company's control which may cause actual results, performance or achievements of the company to be materially different. The company cautions you not to place undue reliance on forward-looking statements and do not undertake any obligation to update these forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For definition of non-GAAP financial measures and the reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. In addition, a webcast replay of this conference call will be available on our website at ir.zhipin.com. With that I will now turn the call to Jonathan, our Founder, Chairman and CEO.

[Foreign Language] Hello, everyone. Welcome to our fourth quarter and full year 2022 earnings conference call. The past year has been a tough one for all of us. I would like to express our sincere gratitude to our users and investors and our employees. [Foreign Language] First, I would like to share with you our performance for the fourth quarter and full year of 2022. Over the past quarter, we recorded calculated cash billings of RMB1.1 billion and GAAP revenue of RMB1.08 billion, which is relatively flat compared with the same period of last year. Flat is not quite an ideal outcome, primarily affected by the cumulative effects of the COVID-19 outbreaks over the past quarters. The epidemic resurgence, particularly the surge in last December, posed great challenges to our normal operations during the fourth quarter. [Foreign Language] In the fourth quarter, we achieved two significant milestones. On December 22nd, the company successfully completed our dual primary listing on the Stock Exchange of Hong Kong by way of introduction. Secondly, we became an official partner of FIFA and sponsor the FIFA World Cup Qatar 2022. Although our sponsorship elevated our marketing expenses for the period, the broad exposure from this renowned event both effectively enhanced and expanded the influence of the company's brand. Despite this increase in expense, we were still able to achieve profitability in the fourth quarter. Our adjusted net income, which excludes share-based compensation expenses, reached RMB59.5 billion. [Foreign Language] For the full year of 2022, our GAAP revenues were RMB4.51 billion. Our calculated cash billing reached RMB4.61 billion and our non-GAAP adjusted net income excluding share-based compensation expenses, reached RMB800 million. [Foreign Language] In terms of operations, the fourth quarter is the traditional off season in the recruitment industry. Nevertheless, we maintain a solid growth momentum…

Thanks, Jonathan, and also everyone. Now let me go through the details of our financial results of the fourth quarter and full year of 2022. Let me help you better understand our numbers. Before I begin, please note that all comparisons are on a year-on-year basis unless otherwise stated. Our revenues and the calculated cash billings reached RMB1.08 billion and RMB1.1 billion respectively this quarter stayed at the same level with the fourth quarter of 2021, despite the COVID impact. For the full year of 2022, our revenues grew by 6% to RMB4.5 billion. Total paid enterprise customer number for 2022 was 3.6 million, down by 10% compared to 2021, mainly due to the decreases in small sized accounts affected by the user registration suspension in the first half of the year, as well as COVID outbreak in second quarter and fourth quarter. While the paying ratio and ARPU in each quarter stayed steadily at healthy level. Revenues and the numbers of key accounts and medium-sized accounts maintained good growth momentum and both achieved a record high in 2022. Now let's turn to the cost side. Total operating costs and expenses were RMB1.4 billion in the quarter up 70% year-on-year mainly due to number one, increases in employee related expenses, including share based compensation related to Hong Kong IPO. And number two, 2022 World Cup sponsorship. For the full year of 2022, total operating costs and expenses decreased by 12% to RMB4.7 billion. Cost of revenues increased by 35% to RMB202 million in this quarter, primarily driven by the increases in employee related expenses and server and bandwidth costs as our user base continues to expand and higher security requirements. Gross margin, excluding share-based compensation expenses was 82.6% for the quarter down by one percentage point compared to last quarter…

Thank you. [Operator Instructions] Thank you. We'll now take our first question. Please stand by. And your first question is from the line of Wei Xiong from UBS. Please go ahead.

[Foreign Language] Thank you management for taking my questions. My first question is about could management share more color on the recovery trends post Chinese New Year? For example, how do you see the ratio between business user growth versus the jobseeker user growth? And if we look at the recruiting budget recovery, how do we compare the difference between the K customers versus the SME customers? And second, also want to ask your thoughts on the competitive landscape in 2023. If we think about whether the competitors will raise or step up their investment in a reopen environment and how do we balance the revenue growth versus the margin target for the whole year 2023? Thank you.

[Foreign Language] Thank you for your question. Regarding your concerns about the situation after the Spring Festival, as I just discussed, we recorded historical highs for both our MAUs and DAUs, which have a very significant -- significant growth in the first quarter. And in terms of enterprise users, our active enterprise number has -- has hit a historical high, which means not only encouraging, but also a good recognition. And for the ratio of enterprise customers to jobseekers, which still stay like one to nine or one to 10, but the trend is improving. In terms of the size of enterprises, we have witnessed that the small SMEs is more flexible and their recovery speed is faster. And of course if the situation is bad, we can also say it does follow them also much faster. And for the large enterprises, their recovery is later than the SMEs, but it is still during the recovery process. I would like further to add that this is not all about capability, it's because the large enterprises, they are more prudent when making their decisions. I have the same experience in 2008 and 2009. In that situation, the SMEs also recovered much faster. [Foreign Language] And for your second question about the competition, currently the overall competitive landscape has not changed, as you have correctly predicted that along with the recovery of the economy, our peers, they -- they are planning to spending more to -- to acquire new users this year. And we have already feel that kind of pressure in this quarter. But in terms of what we're planning to do and whether it will impact our profits, our strategy is that we will not follow. We will do things according to our own pace and strategies. Based on our high user retention and stickiness and -- and a reasonable growth strategy. We are still hoping to acquire to -- to reach the new user growth target of 40 million to 45 million this year. I have -- I'm quite confident that we can achieve that target without overspending and it won't affect our margin.

[Foreign Language] Thank you management.

Thank you.

Thank you. We'll now take our next question. Please stand by. And the next question is from the line of Eddy Wang from Morgan Stanley. Please go ahead.

[Foreign Language] Thank you for taking my question. I have three questions. First is about the -- the unemployment rate in the February and January actually has been quite high, especially for the youth unemployment rate. So do you expect that there I think in terms of the labor supply side, there is a more of the -- the university or college -- college graduates, but for the demand side, actually the blue-collar jobs actually have quite a high demand. So this mismatch will impact on the overall the landscape of the recruitment in China and how faster can -- we'll trying to leverage on this mismatch and adjust our strategy in this year. The second question is we heard that there is no longer the labor shortage after the Chinese New Year when more and more the labor actually coming back to the -- to the Tier 1 or Tier 2 cities. Not sure if this is what we also witnessed on the ground as well. The third question is a little bit long term about the ChatGPT. People are talking about that, in the longer term, it's a little bit, you know, the lower or a little bit mid to low, the job of the white-collar could be replaced by the ChatGPT in the longer term. So what's your thought on this? Thank you.

[Foreign Language] Thank you for your question. Regarding your first question, there are two types of blue-collar users on our platform. The first one is the urban service. And within the urban service industry, we have -- we have witnessed both the fast growth in user as well as job postings. So there is no issue about lack of job postings. It is fine for this sector. And in terms of manufacturing, after the Chinese New Year Festival until this week, which is seven to eight weeks after the Spring Festival. In the first, we did saw that the job postings growth has been much lower compared to the job seeker growth. But the situation has been improving recently. There is a quite interesting observations. There is a key metrics we look at on our platform, which is the achievement, which means the mutual consent achieved between job seekers and enterprise users on our platform. So within the manufacturing industry, what we have observed that compared to last year, the average achievement per person has slightly decreased but not huge, but the efforts for job seeker to achieve some level of achievement has been much greater. This is the first time I have been talking about this metric publicly. So the result is that the overall achievement result has decreased a little bit. But the efforts when job seekers need to put is much bigger. So they felt, the feelings of the severity of the of job seeking is much greater compared to the result that they have to get. So about the mismatching questions you asked, which is quite professional that a lot of job seekers cannot find a job and less job offerings which under this situation is quite difficult for our platform. But in the past what…

[Foreign Language] Thank you.

Thank you. We'll now take our next question. Please stand by. This is from the line of Timothy Zhao from Goldman Sachs. Please go ahead.

[Foreign Language] Thank you management for taking my question and congrats on the solid result and the strong outlook for the first quarter. I have two questions. First is about technology innovation, including the recent AIGC [GPT] (ph) technologies. And considering the R&D expenses account for around 20% of the revenue in 2022. How should we think about in which areas that we are planning to invest in 2023 in terms of R&D investments? And what do we think about the impact from these technologies on the online recruitment model and on improving the efficiency of human capital allocation? And secondly as we understand the marketing campaign around the FIFA World Cup has finished, could management share anything that you have observed about the marketing outcome and what is your pace on marketing and branding that we are thinking for this year? Thank you.

[Foreign Language] About your first question regarding our R&D investment this year. As always, we will continue to enhance the technology investment this year, but we haven't taken too much into the consideration of all those potential AIGC application scenarios and model -- modeling, training and etcetera. We are actively looking at that, but haven't done that for our annual budgeting. So in our normal plan, the major expense will be for better and even more expensive engineers and computer scientists. And also we will increase our input in hardware, which we have been -- we have -- we will pay more notice into this. But as I just said, we haven't considered too much about all those AIGC and -- and related technologies. [Foreign Language] And but I'm confident and to say that we have enough capability and -- and ambitious to -- to invest further invest into this technology as a -- as a large company. And we are absolutely capable and we'll do that. [Foreign Language] And about your second question regarding our big event of the sponsorship of FIFA World Cup, I can say that the result, the outcome is -- in accordance of our expectations. So we -- the -- the very robust user growth in the first two months of this year, we have witnessed is quite efficient within the digital marketing, which results in very cheap customer acquisition cost per person. This is not because the market has offered a lower price or more we have find out some new technology for marketing, but mainly because the -- the very high exposure of our marketing campaign during the last -- last one month, last year has been quite successful. So our brand recognition has been improved. And -- and this effect to reduce our digital marketing spend will continue to benefit us during this year.

So I would like to add a little bit to this marketing expense question. So I think that's first of all, in terms of the user growth, 2023 would be -- we consider this would be a good year of user growth. And you know that we use branding as performance based traffic acquisition, advertisement as an approach to acquire new users. And nowadays we put more resources towards the branding over the performance. So the branding percentage branding related expenses, their percentage continues to rise within our overall marketing expenses. And this trend will continue. And we think that looking ahead for 2023 there -- there is no other big branding events ahead. So overall our -- like growth user growth strategy or user growth target for 2023 won't affect our overall margin. And I also need to mention that our margin is more, you know, linear or more related to our top line growth. So we expect that if the revenue can grow higher and faster, then we would like to see further margin expansion for 2023. So, so far we think that we are, you know, holding positive views toward this trend. So we believe that margin should be improving for 2023.

Thank you. That's very helpful.

Thank you. Due to time constraint that concludes today's question-and-answer session. At this time, I will hand the conference back to Wen Bei for any additional or closing remarks.

Thank you once again for joining us today. If you have any further questions, please contact our IR team directly or TPG Investor relations. Thank you.

Thank you. This does conclude the conference for today. Thank you for participating and you may now disconnect.