Greetings. Welcome to Datasea's Second Quarter Fiscal Year 2022 Financial Highlights and Updates. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I'll now turn the conference over to Annabelle Zhang. Annabelle, you may now begin.

Okay, thank you so much, and good day, everyone. Welcome to Datasea's second quarter fiscal year 2022 financial results conference call. With us today are Zhixin Liu, Chief Executive Officer; [Cathy] [Ph] Sun], Chief Financial Officer; and Annabelle Zhang, I'm the Principal IR Contact, in the U.S. This call is also being webcast from the Web site. A replay of this call will be available later today. Please refer to the press release for more details. Let me quickly go over the safe harbor statement. So, today's discussion may contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that may cause actual results to differ materially from our current expectations. For a detailed discussion of the risks and the uncertainties, please refer to our latest quarterly report, on Form 10-Q, and other documents filed with the U.S. SEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and we do not undertake any obligation to update these statements, except as required under applicable law. In addition, during today's call, Zhixin will read the prepared remarks in Chinese first, and a translator will provide consecutive translation in English. [Indiscernible] team member will give the prepared remarks in English. During the Q&A session we will take questions in both English and also Chinese, and the translator will provided the consecutive -- the translation. All translations are for convenience purposes only. In the case of any discrepancies, managements' statements in the original language will prevail. With that, I will now turn the call over to the CEO of Datasea, Zhixin Liu. Zhixin, please go ahead.

[Foreign Language] Good morning, ladies and gentlemen. My name is Zhixin Liu. I am the CEO of Datasea. Thanks for joining us today for the second quarter earnings report conference call. [Foreign Language] Datasea was incorporated, in Nevada, in September, 2014, and listed on NASDAQ in 2018. Our vision is to become a well-known high-tech multinational corporation. Our mission is to provide cutting edge artificial intelligence, including 5G messaging, acoustic intelligence, and digital smart city, to both commercial and retail customers globally. [Foreign Language] Through the great efforts of the team, Datasea became China's leading 5G messaging service provider. And we will continue to build on the first mover advantages to enhance brand awareness, build customer loyalty, and drive market share. [Foreign Language] In addition, benefiting from the great synergy between our proprietary technology and business lines, Datasea, together with MIIT, Ministry of Industry and Information Technology, [indiscernible] Laboratory stands for artificial intelligence key technology application evaluation and [informatization] [Ph], and the Cloud Computing and Big Data Institute of CAICT, China Academy of Information and Communications Technology, jointly released the first whitepaper on China's acoustic intelligence industry. At the same time, the companies series of acoustic intelligence products will create huge demand, change how people work and live, and drive the industrial revolution. The smart city will also enter explosive growth period with the development of the society. [Foreign Language] To achieve this strategic objective, we have set the following plans. Continue to aggressively promote our 5G messaging services, establish competitive advantages in the acoustic intelligence segment through innovation and product differentiation, both in the domestic and international markets. [Foreign Language] Team up with domestic and international technology institutions to strengthen our research and development capabilities, and accelerate development of the next-generation products, and lay the groundwork for international intellectual…

Okay. Thank you, Sunny, and thank you, Rachael. Sunny, just shed lights on the Datasea's long-term development strategies. I am going to dive deeper into the recent business developments in the second quarter. Datasea continues to make progress in three converging and innovative business segments: 5G messaging, acoustic intelligence, and smart city in China. Based on our financial results and business developments for the quarter ended December 31st 2021, the management team believes that our business development is on track and is supported by a strong product portfolio. This three strategic areas will establish solid foundations of Datasea [based] [Ph] long-term goal of sustainable growth in the future. Okay, so first let me introduce the business developments in terms of 5G messaging. For the 5G messaging business, this is the fastest growing business line in Datasea. And the company's flagship product in 5G IMMCP integrated message marketing cloud platform which aims to unify customer and prospect marketing signals in a single view. The company's recent business developments can be categorized in three parts. First, client expansion and diversification, since 2021 as a leading service provider in the field of 5G messaging in China, the company has been engaged for services by over 100 institutional clients from express delivery, catering, to recent ecommerce, financing, and technology industry to establish messaging marketing cloud platform. In terms of marketing and also sales expansion from October 2021 to the end of December 2021, the company was engaged in various contracts that were related to SMS, integrated 5G messaging marketing cloud platform, and value added services with over contract value of approximately $14.73 million. Among which $9.6 million worth of services has been delivered. In terms of industry recognition, Datasea is becoming a key player in the 5G messaging and initiating the industry effort to…

Good morning, everyone. My name is Cathy Sun, and I am the CFO of Datasea. It's my pleasure to introduce the Q2 financial highlights. Firstly, the total revenue of Q2 increase the rapidly compared to last quarter, which recorded a 900% growth. On top of that, blue chip customers are accumulated. This model is proven and the strong cash flow are generated, the net income change positive first time ever in the most recent, three months period. Secondly, Datasea established the leadership position in the Aquatic Intelligence industry in terms of innovation and the results allocation. Recently, the white paper was jointly released with the partnership of [indiscernible] entity institution. Finally, the business segments of Datasea are policy-driven by the central government, 14th five-year plan, notice of the Ministry of Industry and Information Technology made in China 2025. From July 2021 to December 2021, the company generated revenue of $9,650,609 consisting of 5G business with amount of $9,916,811.12, including $7,786,104.56 from 5G SMS $1,830,706.56 from 5G IMMCP mobile projects on the cloud as value-added service, and $33,797.88 from smart city projects. The three major business lines have started full operations while the 5G messaging segments is developing rapidly with attenders growth rate over 900% compared to the immediate prior quarter ended September 30, 2021. The sales amount of $8,979,479 for the three months ended the December 31, 2021 was generated which is 7,016% increase from the same period of last year. It consisted of 5G SMS $7,786,104.56 and 5G IMMCP and $1,830,706.56, the search is due to the expansion of the company's business towards 5G messaging in fiscal year 2021. For the three months ended December 31, 2021 revenues mainly consisted of service fee from the 5G SMS service platform as the company proceeds into the later stage of the…

Now I transfer to our holder, Annabelle Zhang.

Yes, so, just -- we already finished all of our English remarks. And going forward, we can do the Q&A session. And so, if you're only and you have any questions to raise about the company, if you access, by the webcast, for this Q&A session, below. And there's a -- if you call, there's already like instructions beforehand to give you some instructions on the Q&A session so you can proceed to with any questions for the company.

And [indiscernible] we have some questions that has already been proposed. Okay. So, this question is proposed by [Scott] [Ph] [indiscernible] which is from the Morgan Capital. And his first question is for the CEO. Does the CEO feel confident to keep the growth rate, [so there is color] [Ph], and what made you [indiscernible] from this type of growth? So, can CEO address that? Before that, can the translator please translate this question in Chinese, for the CEO? Thank you. [Foreign Language]

Annabelle, you mentioned there was a second question, could you repeat the second one. The first one is about confidence.

Yes, the second one is what made you [indiscernible] from the type of growth.

Got it, thank you. [Foreign Language]

[Foreign Language] I am extremely confidant about our projected growth in the second quarter -- in the next quarter, and beyond. [Foreign Language] In terms of our growth project, as I said, I'm extremely confident about our growth prospect. But in terms of potential risks out there, obviously, government policies is a factor that's beyond our control, but from what we understand or have seen so far, the government policies, as mentioned earlier, extremely pro market.

Okay. So, that's everything the company wants to share in terms of the first question, right? Just want to make sure? If that's all for the first question, we can proceed with our Q&A session. The next question is also from the analyst from the Morgan Capital. And the question is, the company delivered over [7000%] [Ph] return growth, but the company is still at a loss. What's the cost, and when will the company expect to be profitable? I think this question is better to be handled to the CFO.

I just want to add to the question asked earlier about the potential risk would impact our growth. Just want to reiterate, we are extremely [actually] [Ph] confident about the government policy. We are confident the policy will stay in its current direction to be really pro market, promoting 5G services in China. Really, so, even though it's something beyond our control, but overall, we don't really consider that a risk factor because of the direction that the government is currently taking.

Okay, thank you. And I will repeat the second question. This question is from the analyst from the Morgan Capital. The second question is, the company delivered over 7,000% return [growth] [Ph], but company is still at a loss. So, what's the cause, and when will the company expected to be profitable? [Foreign Language] Yes, I think this question should be handled to CFO.

[Foreign Language] Yes, I recognize that we have negative profit. And a lot of that reason could be traced back, in the beginning; we spent a significant amount in our R&D activities. And what we expect is, in the coming quarter, Q3, we will be able to breakeven and in Q4, we should turn profit.

Okay, CFO, is that all for this question or you do you have more to add?

[Foreign Language] In 2021, we completed revamping of our strategic positioning. And we have decided three major segments in our business lines. And, we expect that in 2022, both our acoustic intelligence solutions as well as our 5G messaging services will experience exponential growth. [Foreign Language] I'll just phonetically confirm that number because CFO -- [Foreign Language]

Yes, followed.

Okay.

The total revenue from Q1 to Q3 will reach $36 million. And we expect the 12 month cash flow will reach $4.6 million. [Foreign Language]

Okay, CFO, do you have more to add?

Yes, so I'll speak in English. Also, 5G SMS and the 5G IMMVP and value-added services, the company formally entered the 5G messaging and its related business markets last fiscal year. As 5G messaging industry is still in early stage, to attract the initial users, [indiscernible] complications, and gain market share as early as possible, our company adopted a competitive pricing strategy to expand the first mover advantage. As the company proceeds into the later stage of the 5G messaging business, the three factors will help equip the company with more [indiscernible] stability in pricing and improving the gross margin. The first is cost will spread over a large number of products as the company keeps scaling the customers and increasing the productivity. The second is growing brand recognition and technology capabilities to serve client-based complex needs will help strengthen the company's pricing power. The third is after the initialization of 5G messaging in the Chinese market expected in the first quarter of 2022, the target customers and product [forms] [Ph] will be expanded. That's all.

Okay, thank you, CFO, and thank you the management team. As we are coming to the end of this call, I like to extend our like gratitude and thanks to all the investors who are paying close attention to the Datasea, and I really appreciate that. And going forward, there might be some question we will not be able to address today. But, you can always reach out to our IR team and our contact info also like attached with this PPT. And going forward if you have any question, please feel free to reach out, and again, representing the company I thank you for joining this call. And that's all for today's call. Operator?

Thank you. This concludes today's conference. You may disconnect your lines this time. We thank you for your participation.