Yahoo Finance

Participants

Dagang Feng; Co-Chairman of the Board, Chief Executive Officer; 36Kr Holdings Inc

Xiang Li; Chief Financial Officer; 36Kr Holdings Inc

Rui Yin; Analyst; Sealand Securities

Presentation

Operator

Hello, ladies and gentlemen. Thank you for standing by for 36Kr Holdings Inc.'s second half and fiscal year 2024 earnings conference call. (Operator Instructions) Today's conference call is being recorded.
I will now turn the call over to your host, [Xin Wang], IR Manager of the company. Please go ahead, Xin.

Thank you very much. Hello, everyone, and welcome to 36Kr Holdings second half and 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 Co-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 and the performance highlights for the second half and full year in Chinese, followed by an English interpretation. Mr. Li 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 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 the US SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.
Please note that 36Kr's earnings press release and this conference call include discussion of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. 36Kr's earnings press release contains a reconciliation of the unaudited non-GAAP measures to unaudited GAAP measures. And please note that all amounts are in RMB.
I will now turn the call over to our Co-Chairman and CEO, Mr. Dagang Feng. Pal, please go ahead.

Dagang Feng

(interpreted) Thank you. Hello, everyone. Thank you for joining our second half and fiscal year 2024 earnings conference call.
2024 marked a year of comprehensive operating efficiency improvement for 36Kr. Notably, our operating expenses in the second half of 2024 decreased by 50% compared to the same period of 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 above 50% for the second half of 2024. As a result, we vastly narrowed our operating losses while cash reserves remained essentially stable, establishing a resilient framework to support company's long-term solid business operations.
These operational achievements were primarily driven by our business structure and the workforce efficiency improvements throughout the year. We also consistently fortified our content ecosystem in 2024, leveraging our peerless content creation promise and 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 AI across real-world scenarios. These efforts drove significant progress in both our global expansion and AI application.
Let's take a closer look at the company's development from two key perspectives. First, our existing business, and second, our growth initiatives. For our 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 36Kr and 36Kr Pro, we broadened our reach in subverticals, actively expanding high-quality content-specific accounts like the emergence of Intelligence, 36Kr Auto Future Consumption, 36Kr Games, [Vapes] and 36Kr Finance, among others. These accounts made our metrics more comprehensive by adding both broad content coverage and deep expertise in specialized domains to provide users with invaluable insights into industry trends and evolving business dynamics.
At the same time, we continued to tailor content experiences for younger generations by launching our Oh! Youth and TIDE subvertical media channels, featuring a broad content metrics of text in graphics, comics and customized videos. These channels successfully engaged the younger audiences, greatly extending our content reach. In August 2024, we officially launched a new content-specific account, 36Kr Games dedicated to exploring gaming products, technology, business value and cultural stories.
We utilized a vibrant mix of text, graphics, live streaming and video formats to capture the vigorous development of the gaming sector and engage its dynamic audience. To date, our accounts cover advanced manufacturing, digitalization, dual carbon and ESG, hardcore technology, highly specialized and innovative enterprises, consumer lifestyles and much more, fostering a thriving content ecosystem. In 2024, our editorial team published 8,090 articles through content-specific accounts, of which 2,465 were original, garnering over 220 million page views, more than 241,000 comments in the 5.253 million shares. Notably, on the 36Kr official accounts alone, 757 of our articles achieved over 100,000 page views.
Moving on to our content dissemination network, we steadily expanded our footprint across diverse channels, crossing a comprehensive circulation metrics encompassing major new medium platforms like Weibo, RedNote, Toutiao, Zhihu, Bili, Douyin, and Kuaishou among others. Broad channel exposure brings us wider overall dissemination and higher visibility for our premium content. Our consistent production of high-quality content expanded and diversified our user demographics, further elevating user engagement and stickiness. As of the end of 2024, we had over 35.9 million followers, marking 16 consecutive quarters of growth.
We explored the growing area of content formats throughout 2024, including text, graphics, short- and long-form videos, audio and live streaming, enriching our content offerings with a greater diversity of styles. In terms of short video, our exceptional content creation capabilities earned us widespread visibility in the rave reviews from users. Our video followers exceeded 9.31 million by the end of 2024, including a significant 2.47 million on Bilibili alone, up by 10% year-over-year.
Our WeChat channel's followers surged by 58% year-over-year. Our short video business continued to excel with its contribution to advertising revenue consistently on the rise.
In the long-form video segment, we collaborated with popular short-form video platform, Douyin to launch a new season of our elite talk show series, [Foreseeing] 2034 in the second quarter. We made notable strides in content creation and channel distribution through this robust partnership. The debut episode of Foreseeing 2034 featuring NIO Founder, William Li Bin delved into upcoming shifts in the new energy vehicle sector, garnering widespread interest in racking up over 84 million views across various platforms.
For live streaming, this year, we optimized our resources with a streamlined team in the fully leveraged WeChat channels to cultivate an area of content-specific accounts, including 36Kr Pro Plus, global expansion in Golden Shovel and 36Kr [CEO Tips]. These efforts not only significantly elevated our live streaming content influence, but also drove commercial convergence and supplemented our low ARPU offerings. We hosted 272 live streaming sessions in 2024, addressing a diverse spectrum of training topics, including AI large models and Chinese brands global expansion. Additionally, we launched our first e-commerce live streaming in late 2024. Our debut episode featured 38 tech products and garnered over 1.63 million views with a live audience of 289,000.
Notably, the 36Kr live streaming channel ranked number one on Douyin's smart device category leader board during the same time period as live streaming. What's more for the full year, our live streaming revenue surged by 68.5% year-over-year. Moving forward, we will continue to explore new live stream formats and scenarios, delighting both our users and clients with richer content scenarios in more diverse service models.
Now let's turn to enterprise value-added services. In 2024, we achieved a substantial success with the launch of a major event IP, Advanced Productivity AI Partner Summit. In collaboration with industry giants like Alibaba, Baidu, Lenovo and Intel, we delved into the latest trends in AI application, sharing insights on both opportunities and the challenges gleaned from day-to-day business operations. This summit attracted an impressive 100 million-plus views sparking extensive industry buzz. Additionally, we held our highly anticipated signature IP event, the WISE2024 Business Kings Conference in November 2024. The submit focused only 11 trending industry verticals and featured two regional sub forums, the WISE2024 Continue to Sink Globalization Sub-Forum, Shenzhen, and the WISE2024 Always with You Future Consumption Conference, Beijing.
The event brought together more than 200 Chinese business leaders and elite representing a wide area of industries, including Lee Kai-Fu, CEO of [01.AI] and the Chairman of Sinovation Ventures; Lu Weibing, Partner and President of Xiaomi Group; Dai Wei, Senior Vice President of Lenovo Group; Jia Jingdong, Vice President of Vivo; Yin Ye, CEO of BGI Group; and Zhang Peng, CEO of Zhipu, sharing visionary insights into the future of China's business advancement. Our WISE2024 Business Games Conference attracted over 850 million total views.
In addition to off-line events, we continued to make strides in our consulting services and other enterprise value-added service offerings this year. For instance, 36Kr Research Institute delved into key sectors pointed for disruptive growth with significant upside potential, such as global expansion, embedded artificial intelligence, low-altitude economy and artificial intelligence, among others. Their in-depth analysis considered factors like policy guidance, funding activity, market demand, industry change structure, competitive landscape, business model and development trends. In 2024, followers of 36Kr Research Institute increased by over 11% while workforce productivity ratio significantly improved. On the commercialization front, we strengthened our foundation in industry research and strategic market planning while expanding into due diligence, branding consulting and other services.
The various efforts I just described have also contributed to client structure optimization. Our enriched content ecosystem and diverse content distribution channels empowered us to consistently expand our portfolio of services and products this year, enhancing our commercialization capabilities. This has enabled us to expand our outreach to clients in emerging sectors like new energy vehicles in the luxury goods consumption while actively broadening partnerships with legacy brands in traditional industries like apparel and food.
These coordinated initiatives have meaningfully benefited our existing business as we improved the productivity, optimized the business and client structures and enhanced the sustainability of revenue streams. Going forward, we will continue to expand the boundaries of the media, explore new products in the business models for global expansion to drive revenue growth and advance AGI applications to further optimize content production and commercialization efficiency.
Turning now to our growth initiatives. In 2024, global expansion emerged as a crucial opportunity that no Chinese company could afford to meet and 36Kr is no exception. 36Kr has already established a solid presence in Japan through 36Kr Japan and Southeast Asia, while -- Asia, building on years of extensive efforts by its overseas teams, 36Kr has cultivated significant ties with foreign governments, major industry players, start-ups in capital ecosystems amassing a wealth of success stories and experiences in facilitating global business expansion. For years, we have been providing media services and marketing support to Chinese companies overseas, while our international teams have been helping foreign institutions and enterprises to tap into business opportunities in China.
On the content front, we have extensively covered globalization success stories for leading Chinese companies such as MINISO, (inaudible), ePropulsion, Nationality Digital in [Manrich], keeping a close eye on the global expansion dynamics of Chinese enterprises.
To advance our global expansion, we launched the 36Kr European Central Station in 2024. Currently, 36Kr Europe mainly features new operational start-ups from the 36Kr ecosystem, along with original content such as a quarter package equipping overseas stakeholders with timely and comprehensive information on Chinese businesses. This initiative enables 36Kr Europe users to access the same information at the same time as those in China. Additionally, 36Kr Europe leverages AIGC technology to empower its content ecosystem, notably improving productivity while lowering content creation cost. It currently supports browsing English, German and Chinese with plans to add more languages in country-specific channels.
To maximize the synergy of domestic resources in December 2024, 36Kr initiated and launched the Beijing International Chamber of Commerce Global Expansion Service Committee under the guidance of China Council for the Promotion of International Trade Beijing Sub-Council. 26 leading institutions have joined the committee, including LinkedIn China, China Mobile International, KPMG and Ant Financial. The committee brings together Beijing's top industry and professional service providers specializing in global expansion-related solutions to help local businesses expand into global markets, aiming to gradually enhance the international competitiveness of Beijing-based companies.
Moving on to commercialization. At the beginning of 2025, 36Kr signed an agreement to enter a strategic partnership with Hangzhou Qiantang New Area Construction and Investment Group Company for the Chinese Enterprise International Service Center Operations project. This collaboration will leverage our expertise in organizational operations in online content distribution as well as our vast network of global expansion resources to support Qiantang New area in building a unique service ecosystem and operational framework for corporate global expansion. This initiative seeks to create a powerful brand for Qiantang New area and amplify its international influence to empower Chinese enterprises to expand globally.
Moving forward, 36Kr will remain committed to expanding and integrating cooperative resources fostering synergy within an extensive global partnership ecosystem. This will enable us to better serve Chinese businesses and institutions in their international ventures, empowering Chinese businesses' global expansion while driving 36Kr's revenue growth.
In addition to exploring global expansion offerings, we continue to focus on artificial intelligence, deepening our innovative AGI applications to further optimize content production and commercialization efficiency.
We also provided intensive coverage of China's AI ecosystem throughout 2024. We are the only tech leading outlet worldwide to have exclusively interviewed DeepSeek's Founder twice, while first in the industry reports on topics like six AI tigers faced exit from pre-training in the GPU leasing dilemma for AI computing centers to tracking and swiftly capturing the latest AI developments of tech giants like Alibaba, ByteDance and Xiaomi. Our coverage for China's AI community is both broad and deep, amplified by our network's extensive reach.
In addition to our broad content reach and the King insights, we have actively integrated AIGC technology into our content ecosystem to enhance efficiency company-wide. In 2024, we launched an area of AI-powered tools, including AI Text to Image, AI Web and AI Financial Report Interpretation as well as AI Media Coverage, which fully leverages large-scale AI model technologies and AI algorithm to produce AI-powered interviews in a generated content. The underlying system currently incorporates multiple developers, large AI models such as (inaudible), among others. And we integrated DeepSeek in February 2025. AI Media coverage has covered over 330 companies since its launch, highlighting their latest initiatives were fundraising ventures.
In addition, we launched the 36Kr Corporate Omni Intelligence in October 2024, targeting stock market investors by providing daily sentiment analysis reports for public companies. The service currently covers over 7,800 public companies listed in Mainland China and Hong Kong. Users can search, filter and subscribe to reports on their preferred companies, receiving daily analysis in a personalized content format. The product's underlying sentiment data is a collaboration between 36Kr and [Soften], a wholly owned subsidiary of Beyondsoft.
Currently, subscriptions for this daily reports totaled [324] with a cumulative user base of [600] -- more than [600]. Our exploration of AI products and tools further underscores 36Kr's foresight acumen and outstanding execution capabilities in AI, leveraging the inherent synergies between AIGC technology in the content production industry. We maximized AIGC technology utilization in our content production activities this year, including information identification, text processing and image generation. Moreover, we continued to broaden our business scope by actively promoting AI application across diverse business scenarios.
For example, we partnered with SenseTime to jointly launch AI financial report interpretation services by introducing diverse AI products. We broadened the purview in the precision of our customer outreach initiatives, effectively connecting with a diverse spectrum of enterprises and organizations, previously beyond reach due to resource-intensive workloads and manpower limitations.
In summary, 36Kr comprehensively improved its operating efficiency throughout 2024, thanks to our peerless content creation prowess, robust IP assets, deeply engaged users, refined customer structure and diversified product and service lineup. Looking ahead to 2025, as a prominent brand in the pioneering platform supporting new economy enterprises, we are poised to hone on competitive edge in content creation, broaden the reach of our products and service offerings and further harness AI technology to empower high-quality development among new economy stakeholders.
With that, I will now turn the call over to our CFO, Mr. Xiang Li, who will discuss our key financial results. Please go ahead, Xiang.