Hello, ladies and gentlemen. Thank you for standing by for 36Kr Holdings Inc.’s Second Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After management’s 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, Yang Li, IR Manager of the company. Please go ahead, Yang.

Thank you very much. Hello, everyone. And welcome to 36Kr Holdings second quarter 2022 earnings conference call. The company’s financial and operational results were released 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. Participants on today’s call will include our Co-Chairman and CEO, Mr. Dagang Feng; and our Chief Financial Officer, Ms. Lin Wei. Mr. Feng will start the call by providing an overview of company and the performance highlights of the quarter in Chinese, followed by an English interpretation. Ms. Wei will then provide details on the company’s financial results before opening the call for your questions. Before we continue, please note that today’s discussion 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 involve inherent risks and uncertainties. As such, the company’s results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company’s prospectus and other public filings as filed with U.S. SEC. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please note that 36Kr earnings press release and this conference call include a discussion of unaudited GAAP financial measures, as well as unaudited non-GAAP financial measures. 36Kr’s earning press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. And please note that all amount numbers are in RMB. I will now turn the call over to our Co-Chairman and CEO, Mr. Dagang Feng. Feng, please go ahead.

Thank you. Hello, everyone. Thank you for joining our second quarter 2022 earnings conference call. In the second quarter of 2022, against the backdrop of measures, as well as economy. We delivered robust financial performance, with double-digit growth in terms of revenue and continue to increase in gross margin. We are achieving profitability for the third consecutive quarter that has been to our powerful brands influencing our business, strong resilience and vitality. High quality content has always been our most prominent advantage and the backlog of our business developments. In the second quarter, we continue to optimize our content ecosystem and innovate our content columns and formats. While we certify our content platform strategy, we still focus on PDs and DC. We are expanding our content more industries with their worth perspective, calculating an even ratio content ecosystem are helping us expand our reach to a wider high quality user base. Let’s take a closure look at some of our 2022 accomplishment in content during the quarter. First our content refinance have contributed to more than 150 articles with over 100,000 views, leaving us at the forefront of industry. In a second quarter our articles gather readership over 100,000 views each due to the trendy economy following the latest dynamic of popular industry with more or use owing the topic or label which deeply resonates with users attracting nearly 300 million views and sparkling animated discussion across the internet. Second we launched our series of innovative media in China, which significantly improve the reach of our content reach while meeting the needs of a more diverse area of users and customers. For example, we launched the Long China 50 Series. In May, we are reselected and showcase 50 of the new economies most representative companies, all of which are important…

Thank you, Feng, and hello, everyone. Against the backdrop of the pandemic and macroeconomic uncertainties, we achieved solid topline growth in the second quarter, with a 13% year-over-year increase in total revenue and the third consecutive quarter of profitability, a strong testament to our business resilience and vitality. Notably, our advertising revenues continued to grow, up 12% year-over-year to RMB57.8 million, outpacing the overall market. In addition, through our multiple efforts to navigate the impact of stringent COVID-19 prevention measures, we were able to maintain our enterprise value-added services revenues at a stable level, while our subscription services revenue recorded remarkable growth of 58% year-over-year, as we proactively executed certain services through online and virtual scenarios. In addition, as we continually optimize our cost structure and operating efficiency, we further improved our gross profit margin to 62% in the second quarter, up 5 percentage points year-over-year. On the cash position front, we once again generated positive operating cash flow in the second quarter. Our cash, cash equivalents and short-term investments increased by over RMB20 million quarter-over-quarter and over RMB40 million year-over-year, respectively. Looking ahead, we will continue to hone our core capabilities and explore diversified growth avenues to drive monetization, we are also strengthening our longstanding commitment to cultivating a compelling value proposition for more customers, users and investors. Now I’d like to walk you through more details of our second quarter 2022 financial results. Total revenues were RMB81.7 million in the second quarter of 2022, an increase of 13%, compared to RMB72.1 million in the same period of last year. Online advertising services revenue increased by 12% year-over-year to RMB37.8 million in the second quarter of 2022. The increase was primarily attributable to more innovative marketing solutions we provided to our customers, as well as the proactive sales strategies…

Thank you. And today’s first question comes from Lingyi Zhao with SWS Research. Please go ahead.

Let me translate my questions in English. The first one is since the third quarter, the impact of COVID in first half subsequently ease, how about the recovery of the company’s various business? The second question is, recently, 36Kr has held several offline summit and we have noted that more summits have been scheduled. What are your expectation and arrangements for offline activities in the second half of the year? My third question is, Enterprise Service Review Platform officially announced a one-step marketing service corporation with ByteDance. Could you give us more color on this cooperation progress? Thank you.

We are currently seeing some improvement in advertising business in the third quarter compared to the same period of last year. Compared with last year, we made -- we have been following several efforts to improve the vitality of advertising business this year. First, we have extended the coverage industry supporting this year, such as Jilin province, digital transformation, career and so on, so which will bring new business opportunities in the third quarter and the second half of the year. Second, after more than one year of deputation, short video and QC columns have attracted more and more advertisers, at the same time, further expanding more with attracting fee end users. So finally, we will continue to optimize our product portfolio as we have. So we can go through the hard times together with our advertising clients and grow our advertising revenue. So our advertising is more a combination of branding and effects, but therefore, even enter macroeconomic pressures, advertiser demand for brand advertising still exists. So for offline business, in the first half of this year, due to the impact of the pandemic, many of our offline events were delayed or transferred to online form, which did have some impact on revenue. However, we are confident in the pandemic control in the second half of the year, we have planned many same offerings in our pipeline. For example, going global forum, super automation forum, new media trans forum, exciting series and the end of year grand event last conference. Even if there was resurgence of the pandemic has a certain impact on offline events, we still have the capability to prepare online forums. For example, the flagship IP 36 Under 36, the risk we held insurance with a pure online event with great performance in terms of both…

Thank you. Our next question comes from Peipei Qiu with Industrial Securities. Please go ahead.

I will translate my question. The first question is about advertisement. We can expect the economy is going to be in low level for a relatively longer time as expected. Could you give us more color of the growth of other enterprise clients in that pool and where we can expect for the coming two quarters? And second question is about -- the second question is, management could explain more about your plan to growth and monetization in short video platforms? Thank you.

Hi, Peipei. Thank you for your question. Yes. You can see that in Q2 we delivered another very strong quarter of advertising revenue growth and compared to others, I think this is a very remarkable success. The reason being, actually, if you look at our ARPU and the number of advertisers disclosed in our ER -- in our earnings release, actually, our number of advertisers grew by 13% and the ARPU actually for the first time in many quarters, I think, declined slightly 1%. Yes, that’s because, as mentioned -- as the CEO mentioned in our prepared remarks that, we launched Seeking the Life program, which means in Chinese, . That means we actually adjusted our product portfolio and the rate card in the second quarter, meaning that we actually provide some favorable pricing for customers, especially SME advertising customers. That’s why you can see that by that program, we expanded effectively the number of advertisers. That number grows strongly, well, we can see that ARPU remained at a very stable level. It actually only slightly declined by 1%. And if you look at our industry-wise, actually the top industries in our advertisers, namely, number one, we call it, hard core technologies, and number two, still Internet services; and number three is, enterprise services. And also, there’s intelligent manufacturing and new consumption -- new consumer businesses. So that’s very diversified and especially the hard core technology sector emerged as a very top ranked advertising industries for us. I think that’s partially driven by our proactive sales strategy that I just described for Q2. And for your second question regarding short-form video, as well as our -- some new columns, new product columns, that’s very successful. I think that’s another very strong driver for the advertising revenue growth in Q2. And we said, the short-form video is more and more welcomed by many advertisers. They previously mainly advertise with us with some articles on retried account disclosure. But now they are more and more using short-form video and our new columns. We created, for example, the OUS Ho Long End User and Super Review, and some other columns are very, very popular among audiences, as well as customers. As we mentioned in the prepared remarks, we -- this quarter, we entered into advertising cooperation with Intel and Icon Globin and Quico and even IT and Juhu lot of Internet brands advertising with us. So that’s another success. And give you -- to give you some ballpark idea of the contribution from short-form video. Actually, if you remember, by the end of last year, I said the proportion of short-form videos revenue contribution for advertising dollars is less than 10%. But by the end of the second quarter, actually, the contribution from short-form video has already rose to around 15%. You can gauge how quickly that short-form video has been developing for the company. I hope this answers the question, Peipei. Thank you.

And our next question today comes from Jing Chen with CICC. Please go ahead.

I will translate myself. Congratulations on the strong financial performance in the challenging environment, the company has strong content capability. Is there any consideration for improving the monetization capability on the user side? Thank you.

So at present, our year end monetization is mainly reflected in our individual subscription business, especially 36Kr business school. So the 36Kr business school has set up a number of products such as the recently we completed business plan building camp and finance acceleration camp, which has been cumulated recently. So those courses are mainly high-value offline courses and the main target customers is the founders of the startup. On the other hand, we also have a low-cost online training courses, like, KR Lab, which focus on course content such as skill improvement. So moving forward, we will provide the core content in the form of open class and small class to build corresponding membership service system and provide courses on clear inbound improvement, business administration, investment and home management courses to entry-level employees and professional elites and high net worth individuals. Thank you.

Thank you. I am showing no further questions. I’d like to turn the conference back over to the company for closing remarks.

Yeah. Thank you once again for joining us today. If you have further questions, please feel free to contact 36Kr’s Investor Relations with the contact information provided on our website.

Thank you. This concludes this conference call. You may now disconnect your lines. Thank you.