Ladies and gentlemen, thank you for standing by for 36Kr Holdings, Inc, second half and fiscal year 2024 earnings conference call. At this time, all participants are in listen only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I'll now turn the call over to your host, Shin Wang, IR, Manager of the Company. Please go ahead, Shin.

Thank you very much. Hello everyone, and welcome to 36 Kr, holding the second half and the fiscal year 2024 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 Chairman and CEO, Mr. Dagang Feng and our Chief Financial Officer, Mr. Xiang Li, Mr. Feng will start the call by providing an overview of the company in the performance highlights for the second half in the full year in Chinese, followed by an English interpretation. Mr. Lee 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 US private security litigation reform act of 1995 forward looking statements involving hearing the risks in uncertainties as such, the company's results may be materially different from the views expressed today. Further information regarding in other risks, in uncertainty included in the company's perspectives in other public filings, as filed with us. Sec, the company does not assume any obligation to update any forward looking statements, except as required under our law. Please note that 36 Kr's earnings press release in this conference call include discussion of unaudited GAAP financial measures as well as unaudited non GAAP financial measures. 36 Kr's earnings. Press release contains a reconciliation of the unaudited non GAAP measures to its unaudited gap measures. And please note that all amounts are in RMB. I will now turn the call over to your coaching. And the CEO, Mr. Dagang Feng please go ahead.

Thank you. Hello everyone. Thank you for joining our second half in the fiscal year 2024 earnings conference call. 2024 marked a year of comprehensive operating efficiency improvements for 36 Kr, notably, our operating expenses in the second half of 2024 decreased by 50% compared to the same period for 2023 our total operating expenses as a percentage of the total revenue decreased by 17% percentage in the second half of 2024 compared to the second half of 2023 while our gross profit margin remained about 50% for the second half of 2024 as a result, we vastly narrowed our operating losses, while cash reserves remain essentially stable, establishing a resilient framework to support companies long term, solid business operations. This operational achievements were primarily driven by our business structure in the workforce efficiency improvements throughout the year, we also consistently fortified our content ecosystem in 2024 leveraging our peerless content creation promise in comprehensive marketing offerings, we continued to optimize our advertising operations while broadening our media reach. We embraced the emerging global expansion trends and remained focused on AGI innovation, further accelerating our implementation of the AI across real world scenarios. This efforts gives significant progress in both our global expansion and the AI application. Let's a closer look at companies development from two key perspectives, first, our existing business, and second, our growth initiatives. For existing business. I will start with an update on our content influence in commercialization. In terms of content ecosystem development, we continue to create high quality content on multiple fronts, while maintaining our existing content metrics, building our flagship channels, including 36 Kr in the 36 Kr Pro. We broadened our reach in sub verticals, actively expanding high quality content specific accounts like the emergence of intelligence, 36 Kr auto, future consumption,…

Thank you for joining or today's conference call, we will now review the second half. Of 2024 and the full year financial performance. Please note that all amount are in RMB, unless otherwise stated, the company's total revenue were 128.7 million in the second half of 2024 compared to 200.3 million in the same period of 2023 the total revenue for the full year of 2024 were 231.1 million, compared to 340.2 million in the previous year. Online advertising services revenue were 100.2 million in the second half of 2024 compared to 139.8 million in the same period of 2023 for the full year of 2024 or online advertising services revenue were 180.6 million, compared to 238.7 million in the previous year. The decrease was primarily due to the reduction in advertising spending by advertisers from certain industry and ongoing elimination of underperforming customers as a proactive measure to reduce credit risk, enterprise value added services revenue were 19.4 million in the second half of 2024 compared to 40.5 million in the same period of 2023 for the full year of 2024 for enterprise value added services revenue were 32.8 million, compared to 67.3 million in the previous year. The decrease was mainly due to a strategic degree focusing on the core high marketing business through the optimization of underperforming Regional Operations, subscription services revenue were 9 million in the second half of 2024 compared to 20 million in the same period of 2023 for the full year of 2024 or subscription services revenue were 17.6 million compared to 34.2 million in the previous year. The decrease was mainly due to the strategically transition in the business model for training services. Cost offered revenue was 61.8 million in the second half of 2024 compared to 88.1 million in the same…

[Operator Instructions]. Your first question comes from [indiscernible].

The company's overall advertising revenue declined this year. Was the company's outlook for its advertising business moving forward?

First of all, in 2024 we proactively optimized our advertising products in advertiser customer base, adjusting certain low margin in high risk advertising businesses, this strategy could move resulted in a greater reduction in relevant cost, in the expenses driving continuous improvement in the overall profitability of our advertising business. Although our overall advertising revenue declined slightly, our internet sector, key accounts in the leading brand customers remained stable in 2024 we maintained the strong partnerships with key accounts like Alibaba, jd.com Lenovo and Huawei, additionally leveraging the content influence with our VCAT content specific accounts, including our youth in TIDE, we continuously accelerated the growth in our high quality customer base by consistently meeting our customers diverse Content marketing needs. We continued to attract premium customer customers across the sectors such as food and beverage, restaurant chains, sports in outdoor beauty and personal care, home appliances and more, we onboarded various premium global brands as partners, including Apple artery covers, PFC and PNG with the proportion of a new customers consistently on the right. We are cautiously optimistic about our advertising growth trajectory for 2025 despite the micro economic headwinds, we continue to deepen our expertise in key content verticals that matter mostly to our clients, such as AI and global expansion among others, by empowering customers across our industries with premium content solutions and constantly optimizing our products in the client structure, we are confident we can strengthen our advertising business resilience.

Thank you for your question. And do you have more questions?

Throughout 2024 what progress has a company made in reducing costs, in improving efficiency?

Firstly, through rigorous cost control in the cost structure. Optimization of gross margin responded to over 50% in the second half of the year. Secondly, as for expenses, we implemented an area for cost cutting in The efficiency enhancement initiatives, including relocating to an office building with lower rental costs, streamlining our tech and R&D teams, adjusting unprofitable businesses, improving workforce efficiency In cooperation in upgrading our organizational structure, etc. as usual. Additionally, we are integrating, integrating AI technology in the AI tools on all fronts, effectively saving costs in the elevating efficiency. This initiative led to a significant reduction in operating expenses in the second half of 2024 down by over 50% compared to the same period of 2023 Meanwhile, our operating expense ratio declined by 17% year over year. As a result, we badly narrowed our operating losses compared to the same period of 2023. In 2025 the company will continue to refine its products or customer base in the organizational structure to further enhance overall profitability. That's all for the answer. Thank you for your question. Do you have more questions?

Thank you. Your next question comes from [indiscernible]. Please go ahead

What led the decline in the full year revenue from enterprise value added services. Can you share the outlook for this huge revenue from enterprise value added services?

Small and median enterprises in the government institutions made up the majority of our enterprise value added services points, and they are relatively more affected by massive economic dynamics, uncertainties as a macro level, may promise more in the median enterprises to certain to curtain spending on consulting in offline initiatives, while government institutions may implement budget cuts. These factors collectively contributed to the decline in demand for enterprise value added services. Additionally one more important reason, this year, we strategically restructured our existing network of regional outlets in the once again optimized our service architecture and offerings for government in the public services system. As a result, we scaled down low margin, unprofitable, low. Government projects, leading to a decline in revenue from enterprise value added services, but on the upside, the strategies, this strategic adjustment has optimized our business in the product portfolio, reinforcing both sustainability in profitability. In 2025 we plan to carry on many of our legacy IP events, including wage our signature gathering designed for individual customers, and why our flagship year end submit, along with a variety of industry specific sharing programs in the forums that cater to diverse customer segments, like AI partner, these activities will lay the groundwork for revenue growth in enterprise value added the services Moreover, we will continue to expand the initiatives related to global expansion within our enterprise value added services in 2025 sustaining our strong globalization momentum from 2024 in addition to Southeast Asia, Japan, the Middle East and Europe will further strengthening, strengthen our global network and collaborate with the China Council for the promotion of international trade Beijing sub council to tap into additional resources from Beijing based service providers specializing in global expansion related solutions and enterprises seeking global expansion. At the beginning of this year, we made our first worry into operating a local government global expansion service center in our capacity as a meeting entity, partnering with partnering with Hangzhou Qian Tong new area construction in Investment Group company for The Chinese enterprise International Service Center Operation projects, moving forward, 36 Kr will remain committed to expanding and integrating cooperative resources for storing synergy within an extensive Global Partnership ecosystem. This will this will enable us to serve Chinese businesses in the institutions, in their international ventures, empowering Chinese businesses for expansion, while driving 36 Kr's revenue growth. Thank you for your question. Do you have more questions?

How does the company position itself in generative AI, across content in the product offerings?

Thank you for your question. Before DeepSeek gained widespread attention, we were the only tech media that worked to have exclusively interviewed the deep six founder then one phone twice. We were also the first in the industry to report on key industry development related six. Ai typers faced acid from pre training GPU leasing dilemma for AI computing centers in 2024 we also hosted the highly influential AI quantum submit for AI sub verticals. Those achievements underscored our broad and deep coverage of China's AI community and qualified by our network's extensive reach. As I just mentioned, the company launched an area of AI powered products in 2024 including AI text to image, AI Lab, AI financial report, interpretation, AI meeting coverage in the 36 Kr corporate, company intelligence, among others, notably AI meeting coverage has covered over 330 companies highlighting their latest initiatives in fund raising ventures. And we integrated in February 2025 meanwhile, 36 Kr cooperative Omni intelligence currently covers over 707,800 public companies listed in mainland China, in Hong Kong, subscriptions for its daily reports have reached more than 3000 and with a cumulative user base of more than 6000. In 2025 we will continue to develop our AI content ecosystem, maintaining our edge in corporate covering the latest AI trains, inconsistently, delighting users with premium content associated with AI GC technology. We will also further integrate AI GC technology with content production to unlock new avenues for success. Thank you for your question.

Thank you. As there are no further questions, I'd now like to turn the call back over to the company for closing remarks.

Thank you once again for joining us today. If you other questions, please feel free to contact 36 Kr's investor relations through the contact information provided on our website.

This concludes the conference call. You may now disconnect your line. Thank you.