Hello, ladies and gentlemen, thank you for standing by for 36Kr Holdings Incorporated's Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded. I will now turn the call over to your host, Yolanda Liu, IR Manager of the company. Please go ahead, Yolanda.

Thank you very much. Hello, everyone, and welcome to 36Kr Holdings' third quarter 2020 earnings conference call. The company's financial and operational results were released via Newswire services earlier today and have been made available online. You can also view the earnings press release by visiting the IR section of our website at ir.36kr.com.

Thank you, and hello, everyone. Thank you for joining us for our third quarter 2020 earnings conference call. In this quarter, our fundamentals remained solid and the market demand for our business-themed content and services have been quite robust. Despite macro headwinds from residual pandemic effects and the changing market conditions, in the third quarter, we achieved our second consecutive quarter of sequential growth with 61% increase in revenue compared to the previous quarter. Notably, our user traffic continued to grow rampantly across our core platform and a major third-party platform during this quarter. Driven by our strong operations, industry-leading content production capabilities and our stellar brand, many of our key traffic metrics also continued to demonstrate strong growth. In particular, our average monthly page views for the trailing 12 months surged to a record high of 566.3 million as of the end of September, up 45.4% for year earlier. This marks our 10th consecutive quarter of PV growth, demonstrating our core capabilities.

Thank you, Mr. Feng, and hello, everyone. despite the challenging operating environment, our third quarter financial performance experienced a meaningful improvement on a quarter-over-quarter basis. This is a testament to the resilient market demand for our products and services. Nevertheless, total revenues in this quarter, slightly decreased year-over-year largely attributable to a lingering effect related to COVID-19.

Ladies and gentlemen, we will now begin the question-and-answer session. Your first question comes from the line of Ivy Ji of Credit Suisse. Please ask your question.

Thanks, management, for taking the questions. I am asking on behalf of Kenneth. So just to want – just wanted to ask about advertising business. So can management share with us first the at – demand recovery trend by vertical in the third quarter and also the overall ad demand outlook into the fourth quarter and early 2021? Thanks.

Thanks, Ivy, and thanks, Kenneth, and I think it's a long answer. I will do a quick translation for also recovery in Q3 and also our outlook for Q4 and maybe early next year. So for the advertisement demand recovery in this quarter, we see this quarter have seen a more rapid recovery for our advertisement segment with 63% quarter-to-quarter growth and compared to Q2 was 48.9% quarter-to-quarter growth. And compared to the same period in last year, it is -- we achieved 21% quarter-to-quarter growth. So also, we can see some of our multinational clients, which they delayed their budget for the first -- in the first-half of the year, due to the impact of the pandemic, resumed their advertising on our platforms in this quarter. And most significant recovery were witnessed from automobile and hardware industries. And especially among domestic brands, we noticed that automobile and real estate have experienced the strongest recovery. So this is what we observed in this quarter. And as we can see in this quarter our online advertisements, offline events, and offline trainings have been continuously recovering, which is continuing, which we believe in - will continuing into the next quarter. And giving a bit more color on the breakdown of different industries, for example, entertainment and media and e-commerce, both of which are sectors enjoying benefits from the stay-at-home lifestyle in the COVID-19 pandemic, improved their ranking to the top five industries in our advertiser base at the end of this quarter. Instead automobile and finance were replaced, which are under short-term pressure we believe. And consumer sector is another rapidly increasing industry for advertisement on our platform. And also we want to mention that we – we’ve seen the resilience of TMT companies and the rise of domestic brands in first three quarters. We believe these trends will continue in next quarter. At the same time, we believe the demand from automobile and financial sectors will start to recover, supported by macro level favorable policies. But, of course, everything is under the assumption that there is no second wave of COVID-19 outbreak in Mainland, China. So that's what we think. Thank you, Ivy.

Thank you.

Your next question comes from the line of Vincent Yu of Needham and Company. Please ask your question.

Thank you, management, for taking my question. I have two questions. One is on the cost side. We have seen - we decreased quite some cost base and giving the margin is already 34% in this quarter. Any comments on the margins and the trends and when we will we recover to the 2019 level? My second question is on the offline events, any visibility on whether hosting offline events is possible in the next few quarters, particularly in the first quarter? Thank you.

Thanks, Vince. I will do a quick translation. First, for your question regarding our GP margin, I think, as we can see, our GP margin in the first three quarters of this year compared to the same period last year slightly increased. And we think this benefit, first of all, our revenue of the quarter-to-quarter increased over 90% - sorry, 60%. And the second reason, we think is because the fixed costs, which means that our content production cost is controlled pretty good and have the quarter-to-quarter decreased, as we can see. And the third reason, well, thanks to our revenue structure, actually. As we can see, the enterprise value-added services contributed slightly lower than the previous quarter and maybe in the first-half. So that's we can see because the GP margin for enterprise value-added services, it's relatively low compared to our online advertisement and subscription services. So when it has achieved as a quarter-to-quarter decrease, we can see the whole structure has been improved. So that's for your first question. And for our offline events, and we feel very excited to tell everyone that our flagship event, WISE conference will be held in Beijing from December 8th to 10th this year as scheduled. And for this year, we will cover even more industry topics and we have a very strong speaker lineup. And it happens to be the 10th anniversary since we launched our website. So it will be a brand skill event welcoming all 36Kr fans join us. And so - but as we mentioned, these are still under the assumption there is no second outbreak of COVID-19. So thank you, Vince, for your questions.

Thank you.

Your next question comes from the line of Shan Jiao of CICC. Please ask your questions.

Thanks management for taking my question. My question is about what is progress of new Codecs developments in the third quarter relating to live streaming and and I look forward to the fourth quarter?

Thank you for the questions, Chen and as we can see our monthly page views has continuously increasing and our content in various fronts -- various forms are welcomed on the forums and platforms. So we think, first of all, well thanks to our content capability, which is continuously strengthening and the second one we will see we will find and explore more strategic collaboration opportunities, and even some other platforms that we didn't think about before. But we think these strategic collaborations will bring us to more and more opportunities both in our internet traffic, but also for our monetization capabilities. And third, we will still explore more opportunities in different content format. For example, as I mentioned in the earlier remarks, that our video formed content on the top tier platforms have attract larger and larger viewerships on different platforms such as , and the top tier platforms. So with all the three strategics, we believe will continuously strengthen our living position in the content business. So this we want to share on our new product and especially on our content.

Thank you. Thank you very much.

Sir, maybe, Mr. Feng will want to add some more points?

Okay, I thank Mr. Feng just add some more, more solid examples in terms of our content capabilities. I think many people will just agree that 36Kr has a living strength in the text and the picture content in the past several years. But now, from this year, we started to cover more video form content, but we still maintain this living position in as a content provider. For example, our fans on billability accumulated over 300,000 on Bilibili and for our Douyin fans we have seen nearly, there are nearly 3 million there on Douyin from different account of 36Kr. And let's say, this on one hand is we will give credit to our program content capabilities too and at the same time we will give thanks to our diversified operational strategies on different distribution platforms especially in terms of this new formed content such as short videos as well as the live streaming content and maybe as I mentioned our live streaming content on our self-owned platforms have very good performance. For example, the average viewership as well as the average user spend time are both increasing on our own platforms. And the very famous IP now and now become popular IPs such as 36Kr live and our co-produced programs with for example, Citic Press and made good performance as well in the viewership on our platform. So that gives us the confidence that we can still maintain our leading position as a content provider. Thank you. Thank you, for these questions.

Thanks.

Your next question comes from the line of Brian Li of AMTD Group. Please ask your questions.

Let me translate quickly, we noticed that your account receivable declined substantially. So can you share with us more details on the improvements you have done in this area this quarter? Thanks.

Thanks Brain for your question and also quick translation. Regarding our improvements on our account for receivables, our accounts receivables improved greatly in this quarter as of the date of September 13. And the balance of the accounts receivable decreased by RMB 73 million compared to the balance as the date of the end of June, which shows sequential decrease for two consecutive quarters. And the settlements in Q3 partly offset the allowance for doubtable accounts in the first half of this year, so that's why just lead to this result. And actually, this is the question we really want to take. Maybe many people are concerned about. Thanks, Brian again.

I'd like to turn the call back over to the company for the closing remarks.

Okay. As there are no further questions, now I would like to turn the call back over to the management and thank you again for joining us today. If you have further questions, please feel free to contact 36Kr Investor Relations through the contact information provided on our website, or the TPG Investor Relations. And thank you all again for joining us today.

This concludes today's conference call. You may now disconnect your line. Thank you.