Ladies and gentlemen, thank you for standing by and welcome to Sunlands Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After prepared remarks by the management team, there will be a question-and-answer session. Today's conference call is being recorded. [Operator Instructions] I would now like to turn the call over to your host today, [Yufei Ye] [ph], Sunlands' IR Representative. Please go ahead.

Hello, everyone and thank you for joining Sunlands second quarter 2020 earnings conference call. The company's financial and operating results were issued in our press release via newswire services earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting our IR website. On the call, our CEO, Tongbo Liu will provide an update on our operational performance as well as our strategic initiatives. Our CFO, Selena Lu Lu will give you an overview of our financial performance and also provide our guidance for the second quarter of 2020. Following their prepared remarks, we will move into the Q&A session. Before I hand it over to the management, I'd like to remind you of Sunlands' Safe Harbor statement in relation to today's call. Except for the historical information contained herein, certain of the matters discussed in this conference call are forward-looking statements. These statements are based on current trends, estimates and projections, and therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. For more information about potential risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission. With that, I will now turn the call over to our CEO, Tongbo Liu.

Thank you, Yufei. Hello, everyone. Welcome to Sunlands second quarter 2020 conference call. While the COVID-19 pandemic in China was effectively contained during the second quarter due to the varying work resumption requirements in different regions. The average resumption rate of our Wuhan campus and at the headquarters in Beijing was about 80%. Against this backdrop, we are pleased with maintaining steady growth in the second quarter, thanks to our self-developed collaborative online office system, efficient operation management and rigorous execution, we achieved the satisfactory financial results for this quarter. Our net revenues reached RMB 512.5 million in line with our guidance. Additionally, we are proud to say that our more than 8,000 employees in four cities are all safer and sound. Our gross billings achieved year-over-year gross for the first time in five quarters, increasing by 21.3% to RMB 531.5 million compared with the prior year period. In addition, new student enrollments increased by 10.2% year-over-year. The increases were mainly driven by our strategy to diversify product and service offerings, continuous expansion in training course categories, improved efficiency of our sales team, as well as tremendous efforts from all of our employees. Next, let me provide highlights for the period's segment level. Our business mainly focuses on three categories, STE, Master's degree-oriented programs and professional certification skills programs. Our STE programs have maintained a solid market position and market share. And Master's degree-oriented programs have become our strong new growth driver. According to Ministry of Education, the number of applicants for postgraduate programs are expected to reach a record high of 3.41 million, representing an increase of 510,000 or 17.6% year-over-year from 2.9 million in 2019. In response to the strong growth of applicants, the Ministry of Education made an announcement in February to expand the number of admissions…

Thank you, Tongbo and hello, everyone. During the second quarter, our net revenues declined 7.3% year-over-year due to the decrease of gross billings last year. However, we are pleased that even against the backdrop of pandemic in a severe macroeconomic environment, our gross billings achieved more than 20% year-over-year growth, reaching an important inflection point and given us confidence in this continuous growth in the future. We also noticed a greater change in the product mix of our gross billings. The proportions of Master degree-oriented programs and the professional certification and skills programs with our total gross billings both further increased. This service periods of these two categories are much shorter compared with our STE offerings. Their increase in proportions will accelerate our revenue recognition and reduce the time gap due to mismatch between revenue recognition over time and expenses booking upfront. On the expense side, we continued our pursuit of cost structure optimization, achieving 33.9% and 33.6% reductions in administrative expenses and R&D expenses, respectively, compared with the same period last year. Going forward, our focus remains on the diversification of our online courses and the improvement of our technology and operational capabilities. More product offerings translate to bigger addressable market for us, and higher costs to leverage as well as increasing repurchasing potential from our students. Whereas technological and operational improvements provide our students better experiences, which will further strength our brand image and reputation and ultimately improve our referral rate. We're also continue diversifying our student acquisition strategy and upgrading our conversion model, all in effort to further improve our sales conversion rate and efficiency and drive sustainable long-term growth. Now, let me walk you through some of the key financial results for the second quarter of 2020. All comparisons are year-over-year and all numbers are in…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Showing no further questions, this will conclude our question-and-answer session. At this time, I'd like to turn the conference back over to management for any closing remarks.

Once again, thank you everyone for joining today's call. We look forward to speaking with you again soon. Good day and good night.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.