Ladies and gentlemen, thank you for standing by, and welcome to the Kanzhun Limited First Quarter 2023 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 first quarter 2023 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 first quarter 2023 earnings conference call. On behalf of the company and our employees, I would like to express our sincere gratitude to our users and investors and our employees. [Foreign Language] In general, this is the season when our business began to return to its healthy development trajectory as we step into the post-pandemic era. [Foreign Language] In the first quarter, we recorded revenue of RMB1.28 billion, representing an increase of 12% and 18% year-on-year and sequentially. Our calculated cash billings reached RMB1.65 billion, representing an increase of 28% and 49% year-on-year and quarter-on-quarter respectively. Along with the recovery of our revenue, we demonstrated our healthy profitability and achieved a net profit of RMB32.7 million, compared to a net loss in the same period of last year. Over adjusted net income, which excludes share based compensation expenses was RMB245 million increasing by 102% year-on-year. [Foreign Language] After Lunar New Year, our user base grew rapidly. In first quarter, we had [14.61 million] [ph] newly verified users. The average monthly active users on BOSS Zhipin app were approximately 40 million, up 58% year-on-year. The average daily active users increased by 54% year-on-year on this quarter. With DAU reaching nearly 15 million – with peak DAU reaching nearly 15 million. Notably, blue collar and the lower tier city users were the fastest growing cohorts across our user base. In this quarter, blue collar users contribute to more than 40% of the newly verified user growth with accumulated verified blue collar users accounting for 31% of our total users by end of this quarter. [Foreign Language] In terms of the common demand from enterprise users, which many of you care about, since the first quarter P&L, our monthly active enterprise user sale continuously reached record…

Thanks Jonathan. Hello, everyone. Now, let me walk through the details of our financial results for the first quarter of 2023. We are pleased to deliver a solid quarter results with strong revenue growth, as well as healthy profitability in the strong operating cash flow. Driven by the robust user growth and we [indiscernible] the recruitment demand, holds us through a festival, we have witnessed our reacceleration of both revenue and the calculated cash filling stocks. Our revenues reached RMB1.28 billion, up 12% year-over-year. And our calculated cash billings reached RMB1.65 billion, representing a year-over-year increase of [28%] [ph]. Quarterly number of paid enterprise customers, [allowed] [ph], reached to historical high level. Mainly due to increase in number of active enterprise customers and improve the paying ratio. As a result, our number of paid enterprise customers in the past 12 months also recovered and expect to continue to increase in the coming quarters. Revenue contribution from small sized accounts increased asset equipment demand from SME grew better. Moving to the cost side, total operating costs and expenses in this quarter were RMB1.37 billion, up 20% year-over-year, excluding share based compensation, adjusted operating cost and expenses in this quarter increased about 15% to RMB1.16 billion, considering other operating income, our adjusted operating margin for this quarter is 10.6%. Cost of revenues in this quarter was RMB247 million, up 39% year-over-year, mainly driven by increases in server and bandwidth costs, due to [higher user traffic] [ph] and payment processing costs, which is related to the higher growth of cash collections from our online [self-service affiliates] [ph]. Excluding share based compensation expenses, our adjusted sales and marketing expenses were RMB568 million, 15% year-over-year. This increase was primarily due to higher marketing expenses, compared to last year as we have strong user and traffic…

[Foreign Language] Thank you for taking my question. I have two questions. The first one is that, if you look at the [user unemployment] [ph] rate has been reached record high in April. And we will see another batch of the graduates in the coming two quarters. So, do you think the high – an appointment of the use could be a long-term structural issue? And how it will impact our business in the longer-term? And the second question is that, you mentioned in April and May, we do witness that the job posting and active enterprise users, the level has been higher than we witnessed in March. However, if you consider the overall economy recovery actually is slightly lower than we expected, at the same time, we do see the user unemployment rate has been high. Do you think this recruitment demand recovery is sustainable into the second half of this year? Thank you.

[Foreign Language] Thank you for your question. And I would like to give my conclusion to your first question first. Regarding the current situation that with more job seekers compared to relatively less recruitment demand, which led to a high unemployment rate of the younger people aged between 15 to 24, well that can turn into a long-term structural question. My answer is that, no, and I believe the situation has been improving. There are two interesting observations I'd like to share with you. First one is that, in February, March, April, and May, on a year-on-year and historical view, the ratio between jobseekers and recruiters is relatively at a very unpleasant level, but after January 21 after the spring festival about 17 weeks to 18 weeks, we have seen that the situation have been improving on a weekly basis. [Foreign Language] Another interesting thing is that the graduates this year, they’re active reach out to the small and medium sized enterprise, the [app ratio] [ph] has raised about over 10%, compared to last year. This is a scenario I have never seen historically, which my personal feeling is that people have tried their best to adjust to the environment. And to strive for their development opportunities? [Foreign Language] And in terms of the impact to the company, this year today, the pressure I have seen the most is that the situation of more job seekers compared to less job demand, job supply, which have placed great pressure through our recommendation system and our customer service system. If we cannot deal with it correctly, that will impact our – impact especially on the job seekers side. We have been working quite hard on this and if you look at the – from the perspective of the average achievement – average achievements or average job – resume changes each month per person, we have done pretty well until now. [Foreign Language] And about your second question, of the recent demand recovery in April and May, we have observed that compared to February and March, weekly newly posted jobs have been increased by 7% on a weak basis. And another number is that for each job opening, the enterprise users, the recruiters behind that, the situation of the recruiters actively looking for people, compared to February and March [indiscernible] that situation also increased by 6%. This is an encouraging number. And I'm glad to look at that. Whether this is sustainable, my answer is pretty sure the situation is improving and quite sustained. [Foreign Language]

Thank you. We'll now move on to our next question. Our next question comes from the line of Wei Xiong from UBS. Please go ahead. Your line is open.

[Foreign Language] Thank you management for taking my question. Firstly, regarding the enterprise users, could management comment on the recovery trends for your KA users and SME users separately, for example, in terms of the user engagement, paying ratio, recruiting cycle, etcetera, what has been trending in the past few months? And are there any noticeable changes compared to a few years ago? And secondly, just want to follow-up on the blue collar recruiting business, could management share more progress in that regard, as well as your strategic focus for the year? And given we have made very good progress in the services sector, if we want to see bigger breakthrough in the manufacturing sector, what actions do we plan to take this year? Thank you.

[Foreign Language] Okay. For the comparison between large companies and SMEs, one interesting point is that, we have seen demonstrations. In January and February, we have observed that SMEs has been recovered very rapidly, while the large companies is more slowly. But in April and May, the situation is different. One data to look at is, for the enterprises with less than 100%, the daily active job postings increased by 1% in April and May, compared to January and February. However, for the enterprises with people more than 10,000, the daily active jobs increased by 7% in April May, which they showed a trend with faster recovery. [Foreign Language] And another data which we often look at internally, which is in April and May, among the different job categories within enterprise, the jobs related to marketing and [indiscernible] has seen increase faster, which means [indiscernible] are related to the company’s development to help them either spending more or earning more money, which means they have better confidence at this stage. [Foreign Language] Generally speaking, there are millions of enterprises and tens of millions of job seekers on our platform each month. Our weakness is that they have been working very hard to try to solve their own problems and we are also trying our best to help them with that. So, the demonstration is that April or May is better than February and March for other large companies and SMEs. [Foreign Language] About your question on blue collar. So, the first person is on the urban service industry, which we have a high confidence of this and we have demonstrated a strong value after years of efforts. And after the COVID with the fast recovery for other [indiscernible], all of our previous efforts have some concrete evidence on numbers. So, we just discussed that either users and revenue contributions from other service industry and the blue collar have increased rapidly. [Foreign Language] And as our major sub factors for blue collar include manufacturing construction, logistics, and warehousing etcetera, so we have also been doing our job to create more values for all those industries. We are not as confident as those urban service sectors, but we are our way and we are on the right direction. That's my view for this. [Foreign Language] There are hundreds of millions of manufacturing workers 14 million to 15 million of construction workers and maybe 20 million to 30 million of logistics warehousing job seekers. So, for all these sectors, they have their own industry, no house. We have been actively and progressively to explore all those solutions through these industries to try to provide more value to them, while achieve our own business development.

[Foreign Language] Thank you management.

[Foreign Language] Thank you.

Thank you. [Operator Instructions] Our next question comes from the line of Timothy Zhao from Goldman Sachs. Please go ahead. Your line is open.

[Foreign Language] Thank you management for taking my question. I have two questions here. One is regarding the enterprise paying ratio and ARPU trend. Could management share any new products or new strategies in improving the overall enterprise paying ratio is actually related to the small size and medium size customers isn't, as well as the new customer the company has acquired? And secondly, regarding the sales marketing, we understand the first quarter is typically the peak quarter in terms of sales and marketing spending. Just wondering if management could provide some updates on the company's sales and marketing plan for the rest of this quarter for the rest of this year and what is our margin forecast for this year? Thank you.

Okay, Timothy. So, I'd like to answer those two questions. So, regarding our paying ratio, for the quarter. So, generally speaking, our paying ratio improved a little bit in the quarter, compared with last year. And then in terms of the ARPU kept stable in the quarter, I think the overall paying ratio improvement is mainly because of the healthy growth of job seekers and business customers in urban services and a few other like logistics and tourism sectors. So, the competition is between the business customers [indiscernible] the platform naturally increase a little bit about our paying ratio. Rest of other sectors maintained a quite stable paying the ratio in the quarter. In terms of the new business customers, and business customers from lower tier cities, they are the key contributor to their growth. So, this is the first question. The second question regarding our selling, marketing expenses, and our overall expenses, you're right that the first quarter in terms of the seasonality, normally it's a high quarter because of usually industry by the branding campaign happened after spring festival. So, in our situation, we did a little bit of brand advertisement in the first quarter. But moving ahead, there's no other big marketing event in rest of the year. So, this is a branding advertisement. In terms of our traffic acquisition cost, which is related to our user growth, supported by our well-established brand recognition, I think this area is shown with a very high efficiency in the first quarter. And we believe that this high efficiency will further continue in following quarters. So that means in terms of the branding and in terms of traffic acquisition marketing, so the overall [sales and marketing] [ph] will be kept in – typically in the situation. So, our overall marketing spending will hope to generate further like leverage in the year. And other cost items like R&D, like G&A will follow the [suit] [ph] in a similar trend. So, our overall operating margin for 2023, compared with last year will be up in our thoughts. So, that's pretty much our [directional stop] [ph] regarding our operating margin. So, that's my answer to the second question.

Thank you.

Thank you. Due to time constraint, that concludes today's question-and-answer session. At this time, I will turn 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 or reach out directly. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.