Ladies and gentlemen, thank you for standing by and welcome to Sunlands Second Quarter 2024 Earnings Conference Call. [Operator Instructions]. Today's conference call is being recorded. I will now turn the call over to your host today, Yuhua, Sunlands IR representative. Thank you. Please go ahead.

Hello, everyone and thank you for joining today's Sunlands Second Quarter 2024 Earnings Conference Call. The company's financial and operating results were issued in our press release via Newswire services earlier today and not posted online. You can download the earnings press release and sign up for our distribution list by visiting our IR website. Participants on today's call will be our CEO, Mr. Tongbo Liu and our financial representative, Mr. Hangyu Li. Management will begin with prepared remarks and the call will conclude with a 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 the 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, Yuhua. Hello, everyone. Welcome to Sunlands second quarter 2024 conference call. Prior to commencing, I would like to kindly remind all attendees that the financial information referenced in this release is presented on a continuing operation business and all figures are denominated in RMB, unless expressively specified otherwise. In the face of challenging macroeconomic conditions, our company demonstrated strategic flexibility to deliver solid results in the second quarter. We achieved a net revenue of RMB 492.2 million and a net income of RMB 82.3 million. This underscored our resilience and ability to adapt in the face of adversity and demonstrates our strong commitment to cost reduction and sustainable growth. Our cash flow also remains solid with net cash flow from operating activities showing consistent positively over the past four quarters. This strong financial standing not only equips us to handle unpredictable circumstances effectively, but also create opportunities for pioneering business development. It is also worth noting that the diversification of interest cost offering has continued to bear fruit. With overall new student enrollments up by 9.1% year-over-year and a corresponding 8.4% increase in gross billings. The strategy aims not only to attract a broader and a more varied user base but also to foster increased engagement to repeat purchases and to capitalize on core selling opportunities across our extensive product portfolio. As we continue to expand our core selection and refine our offerings, we are poised to uncover even more market opportunities. Our substantial user base will provide a strong foundation for this growth, enabling us to maximize the lifetime value of each customer. Looking ahead to second half of the year, our top priorities are to enhance brand awareness and improve the quality of our existing products and services. We are taking a prudent but proactive approach…

Thank you, Tongbo. Hello, everyone. I'd like to present our second quarter results, which are in line with our expectations. We have been profitable in the second quarter of 2024. Our business continues to dramatically adjust to market conditions while prudently pursuing new opportunities. Our gross margin was 84.4% and the net margin was 16.67%, making us profitable for the 13th consecutive quarter. Growth in sales revenues from interest cost offerings compensated for the decline in the post-secondary courses, maintaining a stable profitability. In addition, we had healthy cash flows with four consecutive quarters of positive net cash from operating activities. Our solid cash position not only enhances our ability to cope with an uncertain environment but also provide opportunities for innovative business extension, continues from education peripheral products and services accounted for 11.5% of the total in the quarter. And our efforts to diversify the offerings are working well. We are optimistic about the long-term prospects. Looking ahead, we'll continue to optimize our cost offerings while maintaining efficient operations. These strategic initiatives will enable us to capitalize on emerging opportunities, strengthen our leadership position in the industry and continue to create value for our shareholders. Now let me walk you through some of our key financial results for the second quarter of 2024. All comparisons are year-over-year and all figures are in RMB unless otherwise noted. For the second quarter of 2024, net revenues decreased by 6.5% to RMB492.2 million from RMB526.4 million in the second quarter of 2023. The decrease was primarily driven by the decline in gross billings from post-secondary courses over the recent quarters, partially offset by the growth in revenues from interest cost offerings. Cost of revenues increased by 28.8% to RMB76.6 million in the second quarter of 2024 from RMB59.5 million in the second…

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

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect your lines.