Phoenix New Media Q4 2023 Earnings Call Transcript

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March 12, 2024

There are 3 speakers on the call.

Operator

day, and thank you for standing by. Welcome to Phoenix New Media 4th Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

Operator

I would like to hand the conference over to your first speaker today, Mu Zhu Gao of IR Department. Please go ahead.

Speaker 1

Thank you, operator. Welcome to SiNiX New Media's earnings conference call for the Q4 of 2023. Joining me here today are our CEO, Mr. Yuqiong Sun and our CFO, Mr. Edward Lu.

Speaker 1

During this call, our management team will begin by providing an overview of our quarterly results, followed by a Q and A session. You can find the financial results for the Q4 of 2023 as well as the webcast of this conference call on our website at ir. Ifeng.com. A replay of this call will also be made available on the website within the next few hours. Before we proceed, I would like to draw your attention to our Safe Harbor statement, which can be found in our earnings press release.

Speaker 1

This statement is important as it pertains to our forward looking statements during this call. Additionally, please note that unless otherwise specified, all figures mentioned throughout this conference call are in RMB. Now I will pass the call to Mr. Sun, our CEO, for his opening remarks. I will provide the translation.

Speaker 1

Sun Zong, pay cash Hello, dear investors. Today's meeting aims to provide an overview of the company's operational progress in the Q4 and to share our reflections for the future. We look forward to engaging in discussions and addressing any questions you may have. Before delving into the report, I'd like to emphasize that regardless of shifts in the macro environment, our company's enduring core competency lies in news. This competency will be a focal point in our ongoing efforts to optimize operational resources, enhance brand value premium, foster innovation in business models and ensure the sustained and robust development of the company.

Speaker 1

Now I'll have Edward present a more detailed report on my behalf.

Speaker 2

In the Q4, we focused on boosting our content productivity, emphasizing content distribution via video platforms and monetization of our content and the event marketing offerings. Throughout Q4, we maintained our lead in covering major events and breaking news, such as the 3rd Belt and the Road Foro for International Corporation in Beijing. Through meticulous planning and swift execution, we delivered a diverse array of reports from on ground interviews to insightful commentary. We are leveraging our social media presence to disseminate curated content across various platforms. Our interviews with influential political figures, foreign journalists and the Belt and Road Scholars gathered widespread acclaim reflected in the remarkable 13,000,000 views of Belt and Road related content on our Weixin video accounts.

Speaker 2

Our dedication to original content creation was duly recognized exemplified by our short documentary series Journey, which changed the China Documentary Top 10 Award. Across the 11 episodes released in Q4, Journey captivated audiences with over 700,000,000 views, with several episodes surpassing the 100,000,000 view milestone. Notably, the poetry of elderly people in nursing homes resonated deeply, accumulating 213,000,000 views overall, including 110,000,000 views on Douyin, securing permanent positions on trending and the social risks. By year end, Journey posted over 2,000,000 subscribers on Douyin, highlighting its commercial variability within our content portfolio. As the year grew to a close, we successfully executed a series of flagship events and marketing initiatives, reaffirming our media influence in the industry.

Speaker 2

Our iPhone Finance Summit in December seemed closing the circle, boosting the confidence, commend luminary from academia and the industry to engage in discussions on issues shaping the global and the Chinese economies in 2024. Additionally, we hosted the 1st influencer awards, earning together over 100 KOLs. I'm seeing agency representatives and brand representatives to celebrate the transformative impact of social media influencers across diverse domains. From beauty and fashion to fittings and lifestyle underscoring our commitment to recognizing and amplifying positive industry developments. On the product front, we concentrated on optimizing the content recommendation algorithm, resulting in a seamless fusion of timely updates, personalized insights and immersive experiences.

Speaker 2

Bolstered by a 20% year on year increase in click through rates and double digit growth in video engagement metrics. Our content strategy was well received by our users, driving deeper engagement and extended user sessions. In parallel with our content and product enhancements, we embarked on a strategic overhaul of our advertising sales team, transitioning from regional sales hubs to industry specific business units. This realignment facilitated sharper industry focus, streamlined resources allocation and accelerated innovation laying the groundwork for sustained commercial growth. Our priorities are clear to expand our customer base, unlock untapped opportunities and fortify our market positioning across diverse segments with a tailored approach to customer engagement, strategic content investments and our renewed focus on marketing differentiation, we are well positioned to support conventional media boundaries and provide comprehensive marketing solutions to our clients.

Speaker 2

In 2023, through improvements in operational efficiency, we managed to significantly reduce operating losses. Moving forward, we are committed to sustain this momentum by prioritizing operational excellence and strategic innovation. We are also continuing to strengthen our media influence and brand value. As such, we are confident in our ability to navigate the evolving media landscape and work towards achieving our financial objectives. This concludes our CEO, Mr.

Speaker 2

Sun's prepared remarks. I will now walk you through our financial performance for the Q4 of 2023. All figures mentioned will be in RMB. Our total revenues were $211,800,000 as compared to $223,900,000 in the same period of last year. To elaborate, net advertising revenues were $197,000,000 compared to 205,400,000 in the same period of last year.

Speaker 2

The decrease was mainly due to the reduction in advertising spending of advertisers in certain industries and intensified industry wide competition. Paid services revenues were RMB 14,800,000 compared to RMB 18,500,000 in the same period of last year. The decrease was mainly due to the decline in e commerce revenues. Cost of revenues in the Q4 of 2023 decreased by 11.3% to RMB120,500,000 from RMB 135,800,000 in the same period of last year. And gross margin in the Q4 of 2023 increased to 40 3.1% from 39.4% as a result of strict and cost control measures implemented.

Speaker 2

Income from operations was 22,900,000 compared to income from operations of RMB 46,700,000 in the same period of last year. Net income attributable to ifeng was RMB 8,100,000 compared to net income attributable to ifeng of RMB41.6 million in the same period of last year. Moving on to our balance sheet. As of December 31, 2023, the common cash and cash equivalents, term deposits, short term investments and the restricted cash were RMB1. Billion or approximately $154,000,000 Finally, I'd like to provide our business outlook for the Q1 of 2024.

Speaker 2

We are forecasting total revenues to be between $130,800,000 $145,800,000 For net advertising revenues, we are forecasting between $121,300,000 $131,300,000 For paid service revenues, we are forecasting between $9,500,000 $14,500,000 This focus reflects our current and preliminary view, which are subject to change and the substantial uncertainties. This concludes the prepared portion of our call. We are now ready for questions. Operator, please go ahead.

Operator

Thank you. Our first question comes from Alice Tan of First Shanghai. Please go ahead. Thank you, Alice. Good morning.

Operator

Thank you for taking my question. So it appears that the company's operational profits saw a notable uptick in 2023. Could you please provide some insights into your expectations for the company's performance in 2024? And additionally, what are the prospects for the advertising market anticipated for the upcoming year? Thank you.

Speaker 2

Thank you for the question. This year, we will focus on further boosting operating profit and reducing losses. This means increasing revenue, keep a close eye on our costs and ensuring stable cash flow. When we planned out our goals for 2024, we took a good hard look at the landscape and came up with same solid strategies to help us hit these targets. We are easing up collaboration between ourselves and the content teams, making sure our tech and the management are on point providing essential support.

Speaker 2

We also set up operational metrics that are both actionable and accountable, supplemented by appropriate incentive structures to drive performance. Now about the advertising market. We saw a decrease in Internet ad sizes last year. The advertising market will still be closely tied to economic shifts. There will be challenges, but regardless of the environment, we believe there are always opportunities to pursue.

Speaker 2

Through innovative thinking, targeted strategies and execution, we believe we can seize the opportunities. We will maintain our unique positioning as a mainstream media outlet while accelerating the development of innovative marketing solutions and responding quickly to market changes. Leveraging our extensive media influence and international marketing capabilities, we will explore new avenues for growth in areas like global branding, culture, tourism, marketing and the monetization of our accounts on the video platform.

Operator

Thank you. Thank you for the questions. I see no further questions at this time. I'd like to hand back the conference to Mu Zhu. Please go ahead.

Speaker 1

Thank you. We have come to the end of our Q and A session and our conference call. Please feel free to contact us if you have any further questions. Thank you for joining us today on this call. Have a good day.

Operator

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

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Earnings Conference Call
Phoenix New Media Q4 2023
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