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Edited Transcript of WUBA earnings conference call or presentation 12-Mar-20 12:00pm GMT

Q4 2019 58.Com Inc Earnings Call

Beijing Mar 26, 2020 (Thomson StreetEvents) -- Edited Transcript of 58.com Inc earnings conference call or presentation Thursday, March 12, 2020 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Jinbo Yao

58.com Inc. - Chairman & CEO

* Wei Ye

58.com Inc. - CFO

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Conference Call Participants

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* Alicia Yap

Citigroup Inc, Research Division - MD and Head of Pan-Asia Internet Research

* Jin-Kyu Yoon

New Street Research LLP - Analyst

* Thomas Chong

Jefferies LLC, Research Division - Equity Analyst

* Tianxiao Hou

T.H. Capital, LLC - Founder, CEO & Senior Analyst

* Yue Wu

China International Capital Corporation Limited, Research Division - Analyst

* Christian Arnell

Christensen & Associates - MD

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Presentation

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Operator [1]

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Good day, and welcome to the 58.com Fourth Quarter 2019 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to Christian Arnell. Please go ahead.

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Christian Arnell, Christensen & Associates - MD [2]

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Thank you. Hello, everyone, and thank you for joining us today. The earnings release was distributed earlier today and is available on the IR website at ir. 58.com and through PR Newswire.

On the call today from 58.com are Mr. Michael Yao, Chairman and Chief Executive Officer; and Mr. Wei Ye, Chief Financial Officer. Michael will review business operations and company highlights, followed by Wei, who will discuss financials and guidance. They will both be available to take your questions during the Q&A session that follows.

Before we begin, I would like to remind you that this call may contain forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market, regulatory and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties and factors is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

It is now my pleasure to introduce Michael. Michael, please go ahead.

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Jinbo Yao, 58.com Inc. - Chairman & CEO [3]

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Thanks, Christian, and thank you all for joining our call this evening. I would like to start by sending our best wishes to the people of Wuhan who fight those outbreak of coronavirus. As the largest online classified marketplace in China, we immediately jumped into action to help those affected by the outbreak throughout China. We (inaudible) that a large quantity of urgent need protective medical suppliers to Wuhan and adjacent regions. Some of the suppliers were sourced through our partnership with overseas platform. Throughout the 58 Town and the 58 communities, more than 10,000 local partners were mobilized to promote up the medical provision and containment measures in rural areas. We also provided another channel for the local residents to reach out for help during the period.

As the leading online recruiting platform, we organized and launched a series of special online job fair with free video live streaming interview system for medical supply manufacturers, logistics companies and many other companies working on the front line. We also helped those stuck in Wuhan during the lockdown to find job and a place to stay. Lastly, we brought top suppliers on our selected home service. Together (inaudible) a logistic consortium called [Loving Heart] fleet to organize the transportation of daily necessities in 24 cities. I will talk about this more later.

Turning to the fourth quarter of 2019, I'm pleased to report another set of strong financial and operational results to close our 2019 on a solid footing. Despite the challenging macroeconomic environment, we delivered RMB 4.16 billion revenue, above the high end of our guidance. Revenue for the year reached RMB 15.6 billion, an 18.6% increase from last year. Traffic for our main apps continued to grow steadily and at a faster pace than revenue, which again reflects our ability to effectively execute our strategy and continuously drive better return on investment for our customers.

We maintained a healthy non-GAAP operating margin of 23.1% for 2019 as we continued to invest in new business and technologies to further strengthen the user experience and solidify our market-leading position. Meanwhile, we continue to make good progress in optimizing our headcount structure. Total headcount for the quarter was about 12% lower than the same period last year, with a 9% increase in product and technology staff, but also a 9% decrease in sales and marketing personnel. Paying business users was approximately 3.3 million during the quarter, an increase of 4.2% year-over-year.

We can't ignore the elephant in the room, however, the outbreak is definitely a black swan event. The outbreak has already had a significant impact on our business and will likely continue to do in the weeks ahead. We launched our new strategy, all-in service, in late 2019. So we are doing everything within our power to serve our customers and fulfill our corporate social responsibility. We brought out various measures to help and support them, including free membership extensions, free job posting and the technology and tools. We will commission for select home service and the free insurance for the employees of merchants in Hubei, among others.

We started 2020 with high expectation, building off the sound foundation we laid in 2019. With the Chinese New Year holiday falling early this year, January was particularly weaker than normal due to seasonality. We will anticipate a long and strong rebound post the Chinese New Year during February after outbreak changed [all that]. Almost all of our customer business have literally been on hold for a month.

Our revenue structure throughout 2019 has been gradually shift from membership to online marketing service, which provide a more flexibility offering to our customer and was the right strategy move. The outbreak has significantly impact our revenues [strong].

The impact will be short term. However, even if it carries on into the second quarter, we have utmost faith in the containment effects and the hope that outbreak will be over soon. Regardless of the (inaudible), we remain committed to the 3 pillars to drive our long-term growth, the solid fundamental of the classified ad business model, the massive market size of China and this growing demand for high-quality service from expanding middle class. Most of the service provided on our platform are essentially too many. Demand for these service will likely be postponed in the short term but will never disappear if the underlying needs continue to develop.

I would like to reiterate our commitment towards the all-in service strategy. This will allow us to transform ourselves from a traditional information provider to value-added solution, provider for both our customer and the user, leveraging our strong technology capability, and there's a scale created by network effect.

The outbreak provides us with an opportunity to better understand our customers' needs, while, at the same time, provides them with an opportunity to really see how our technology and the service offering can help grow their business. This also provides us with an opportunity to reassess our organizational and cost structure and reinforce the improvements we have been making for operation efficiency.

At the beginning of this year, we aligned our 4 core business group within expanded and unified middle office to carry out our new strategy. I'm confident that once the economy recovers, we will be in an even better position to create more value for our customers, shareholders and employees.

Now let me hand over to Wei to go through more details of the financial results. Wei, please?

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Wei Ye, 58.com Inc. - CFO [4]

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Thanks, Michael, and thanks to everyone, again, for joining our call tonight. I will now walk you through the highlights of our fourth quarter financials.

Total revenue were RMB 4.16 billion, a 15.1% increase from the same quarter of 2018. Membership revenue were RMB 1.1 billion, relatively flat compared with the same quarter of 2018. Online marketing services revenues were RMB 2.7 billion, up 19.3% year-over-year, which reflects the strategic structural shift in revenue we have been making that allows us to offer more flexible online products and solutions to better serve our customers.

Total number of paying business users was approximately 3.3 million, down sequentially but up year-over-year. This reflects normal seasonality in our business, especially with the Chinese New Year holiday falling earlier than normal. On a year-over-year basis, this number represents a 4.2% increase from fourth quarter 2018, which is higher than the growth rates from last quarter. This indicates the underlying demand may start to rebound as the uncertainty created by the U.S.-China trade war gradually clears up. However, due to the outbreak, we anticipate our number of paying business users will be adversely impacted during the first quarter of 2020.

Outside of revenue from membership and online marketing services, the revenue from e-commerce services and other services continued to gain growth momentum with a combined increase of 55.3% year-over-year.

Gross margin was 86.4% for the quarter compared with 87.3% in the same quarter of 2018 due primarily to changes in revenue mix.

Operating expenses were RMB 2.8 billion, an increase of 16.5% from the same quarter of 2018. Sales and marketing expenses in the fourth quarter of 2019 were RMB 2 billion, increase of 17.7% year-over-year.

Within sales and marketing expenses, advertising expenses were approximately RMB 0.86 billion, an increase of 8.6% from the same quarter of last year. Non-advertising sales and marketing expenses in the fourth quarter of 2019 were approximately RMB 1.16 billion, up 25.4% year-over-year.

Research and development expenses in the fourth quarter of 2019 were approximately RMB 0.56 billion, up 16.6% (sic )[13.6%] year-over-year.

General and administrative expenses in the fourth quarter of 2019 were approximately RMB 0.26 billion, up 14% year-over-year.

Overall, operating expenses for the first quarter was slightly lower sequentially while the structural change continues.

The total number of employees at the end of the fourth quarter 2019 was approximately 21,700, a 5% decrease from the same quarter last year. As Michael just mentioned, this includes 9% decrease in sales and marketing personnel and a 9% increase in research and development personnel.

Non-GAAP income from operations was approximately RMB 950 million in the fourth quarter of 2019, up 6.3% year-over-year.

Non-GAAP operating margin was 22.9% in the fourth quarter of 2019 compared with 24.8% in the same quarter of last year.

Net other income in the fourth quarter of 2019 was approximately RMB 2.1 billion, which is predominantly composed of investment income generated from the sale of a portion of equity stake and the revaluation of the remaining equity stake in Che Hao Duo, formerly known as Guazi.

Non-GAAP net income attributed to 58.com Inc. ordinary shareholders was approximately RMB 4.9 billion in the fourth quarter of 2019. Non-GAAP net margin was 117.4% in the fourth quarter compared with 21% in the same quarter of 2018. Excluding the gain from the sale of a portion of the equity stake in Che Hao Duo and related income tax expenses, non-GAAP net income would have been approximately RMB 1.1 billion, which would have represent a 42.9% increase from the same quarter of 2018. Non-GAAP net margin would have been 26% under the same measure. Net cash provided by operating activities was approximately RMB 1.2 billion, an increase of 22.2% year-over-year.

In the interest of time, I will not go through the full year financials in similar details, but only some highlights.

Total revenue for the full year was RMB 15.6 billion, an 18.6% increase from the year 2018. Non-GAAP income from operations was RMB 3.6 billion, an 18% increase year-over-year. Non-GAAP operating margin was 23.1% for the full year 2019 compared with 23.2% for the full year 2018. Non-GAAP net income attributed to 58.com Inc. ordinary shares was approximately RMB 8 billion, and non-GAAP net margin was 51.2% for the full year 2019.

Again, excluding the gain from the sales of a portion of the equity stake in Che Hao Duo and the related income tax expenses, non-GAAP net income would have been approximately RMB 3.6 billion, which would have represented a 32.4% increase from full year 2018. Non-GAAP net margin would have been 23.1% under the same measure compared with 20.7% for the year 2018.

As of December 31, 2019, the company had cash and cash equivalents, term deposits, restricted cash and short-term investments of approximately RMB 14.3 billion.

Now let's turn to guidance. As Michael already pointed out, our business has been significantly impacted by the outbreak of COVID-19. We have limited visibility as the situation continues to evolve and remains highly uncertain. Based on our current assessment, we anticipate the total revenues for the first quarter of 2020 will be between RMB 2.16 billion and RMB 2.26 billion. This represents a year-over-year decrease of approximately 25% to 29% in RMB amounts. These estimates reflect the company's current and preliminary view, which is subject to change.

With that, we'd now like to open up for the call for Q&A. Operator, please begin.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question today comes from Alicia Yap of Citigroup.

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Alicia Yap, Citigroup Inc, Research Division - MD and Head of Pan-Asia Internet Research [2]

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My question is on the coronavirus impact, the industry opportunity and also the competition situation. So as we emerge and recover from the short-term coronavirus impact, how would you assume if any of the current business model could change? And what could be some of the industry opportunity you foresee driven by potential user behavior or merchant behavior change? In your -- do you have any comment on how your competitors are faring relative to WUBA during this negative impact? And any change of the competitive disruption or industry consolidation opportunity?

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Jinbo Yao, 58.com Inc. - Chairman & CEO [3]

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Okay. I will take this question. (foreign language)

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Wei Ye, 58.com Inc. - CFO [4]

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Okay. I'll translate.

[Interpreted] So the outbreak is definitely a very difficult situation for us, but we believe it will be more difficult for most of our competitors in the vertical. We have very stable profit and sufficient cash reserve. And lots of our vertical competitors relying on financing. And in this situation, external financing will be very difficult, all right?

And so we actually are seeing there's definitely opportunities for us to make new investments and maybe certain acquisition opportunities. We definitely have the faith in China for long term. And we believe if the outbreak is over toward the end of the first half, the growth in the second half was -- will be likely getting back to the double-digit growth area, all right?

And in terms of the impact to consumer behaviors and product innovations, I think this also provides an opportunity to us because people cannot meet in person, force them to rely more on the online products and services. For example, we see very good opportunities in the primary housing segment, which might be the only one to have a chance to show actual growth in the first quarter among all the other units. You see that all the developers are now moving towards virtual showroom and other online products, and we have the technology capabilities to provide the solution for them. So what we want is in a difficult situation that against all competitions, we can gain relative competitive advantage. And after the outbreak is over, we'll be in a much better position. Thank you.

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Operator [5]

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The next question comes from Thomas Chong of Jefferies.

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Thomas Chong, Jefferies LLC, Research Division - Equity Analyst [6]

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My question is about Zhuan Zhuan. We noticed that it shows quite strong growth momentum in Q4. And how we should think about the impact of coronavirus to Zhuan Zhuan? Should we expect the shortage of logistics supply will affect the growth momentum of Zhuan Zhuan? And then a follow-up is more about the monetization potential as well as the timing of profitability for Zhuan Zhuan, if -- any color on that would be great. And will our investment strategies be affected because of the coronavirus?

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Jinbo Yao, 58.com Inc. - Chairman & CEO [7]

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Okay, Zhuan Zhuan. (foreign language)

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Wei Ye, 58.com Inc. - CFO [8]

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[Interpreted] Okay. Yes, for Zhuan Zhuan. I think the outbreak actually also provides some opportunity for the used goods transactions. And Zhuan Zhuan has pure online used goods transacting platform. I think the impact is actually smaller to them than our other core business units because on the other core business units, our customers actually have heavy off-line service activities.

So we do expect for Zhuan Zhuan will continue the momentum from last year. We'll still see revenue growth this year, even with the outbreak impact. And the net loss from Zhuan Zhuan should narrow down this year. And we remain optimistic that Zhuan Zhuan is going to be the most important used cellphone online transaction platform. And the other good thing is Zhuan Zhuan completed its Series B financing in -- last year. And this is very critical for them to stay very healthy for probably the next 2, 3 years without additional financing, and focus on innovation and improving user experience and new ways of monetization. Thank you.

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Operator [9]

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The next question comes from Natalie Wu of CICC.

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Yue Wu, China International Capital Corporation Limited, Research Division - Analyst [10]

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I have a question regarding on the 2 new initiatives, Zhuan Zhuan and Tongcheng, and also, the sales marketing plan. Can you update us in 2019, how much dollar spend was related with Zhuan Zhuan and Tongcheng? And what's the investment scale for those 2 new initiatives this year? Also what should we expect for the synergy from those 2 new initiatives with our major classified business this year? Wondering if there any time line for any significant revenue contributions especially from Tongcheng program.

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Wei Ye, 58.com Inc. - CFO [11]

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Sorry, the second part of the question seems a little bit broken. Would you mind to repeat one more time?

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Yue Wu, China International Capital Corporation Limited, Research Division - Analyst [12]

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Yes. Just wondering if there's any synergy around Zhuan Zhuan and Tongcheng, especially for Tongcheng program with our major classified business to come this year. Especially, is there any kind of the time line for the revenue contribution from Tongcheng program?

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Wei Ye, 58.com Inc. - CFO [13]

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Okay. Sure. I'll take that one. So the first part, you asked for the net loss impact for Zhuan Zhuan and Tongcheng. Overall, I think in the past couple of years, our net investment through -- went through P&L for Zhuan Zhuan and Tongcheng, I would say, at the same range, somewhere between CNY 1 billion to CNY 1.5 billion. And I think we just talked about Zhuan Zhuan in the question raised by Thomas, so I'll spend a little bit more time talking about Tongcheng.

We see, again, great momentum for this new platform. And last year, we have been spending a lot of effort to migrate the traffic from WeChat to the 58 Town's own app, which is called 58 local version. And if you look at the traffic on the 58 main app and 58 local version, you see actually there's very little duplication. So those are actually new traffics that are waiting for us to monetize.

And you mentioned synergy, I think that's a great point, and that's definitely one of the actions we are going this year. Michael mentioned the organizational realignment. Actually, 58 Town now is part of our greater middle office, right? We definitely expect 58 Town will start to monetize, not on its own, but start to converge those additional traffic and adding new monetization opportunities for the core businesses, specifically for -- on the job and housing categories. And of course, at the same time, it will keep a certain specific and unique categories on its own, like those really local services and even certain social type of business opportunity on its own. I hope this answers your question.

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Yue Wu, China International Capital Corporation Limited, Research Division - Analyst [14]

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Got it. Yes, got it. Actually, I have a very quick follow-up, if I may. The question is regarding the jobs category. Just wondering if management can share with us the revenue contribution from large companies versus SMEs in the job category. And how long do you expect it would take for the paying pattern for those employers to back to normal from this outbreak?

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Wei Ye, 58.com Inc. - CFO [15]

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Okay. Yes. So on the job category, actually, probably a majority of those are small, medium enterprises. There are certain larger-scale companies. But in the past, the way they worked with us is either through their regional agencies or their branch offices. So one of the strategy in the job segment is key account strategy that while we -- as part of the all-in service strategy that we are going to start to establish a corporate-to-corporate level relationship, which has started from the super job season we launched in third quarter last year, and there has been a continuous effort to establish a deeper relationship with the bigger corporate accounts, right? And at the same time, on the other hand, we're trying to also offer more flexible product and services and more convenient tools for the really long tail small companies.

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Jinbo Yao, 58.com Inc. - Chairman & CEO [16]

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(foreign language)

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Wei Ye, 58.com Inc. - CFO [17]

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[Interpreted] Okay. Yes. So the small and medium merchants with its robust -- let me put it this way, okay? Even in a normal situation, on average, the small, medium companies will have the average life cycle time of maybe 3 years, and that's a reality in China. And that is -- and so -- but there's always new companies replace the old companies. And the underlying demand is more important than the individual companies themselves.

And as far as individual demand there, we think that's more important to our long-term growth. And of course, for those investing small and medium companies, we'll do everything in our power to help them and support them. And actually, if you look at -- since we pretty much serve very broad in terms of territory or industry or segments of small companies, there's a natural supplement for different cycles.

So right now, what we see is definitely lower tiers recovering faster than top tiers companies. And if you look at different industries and actually even under the current situation, we see very high demand from those medical supply companies and logistic companies, right? So I think, overall, that the coverage of our services actually help to offset some of the negative impact of the outbreak.

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Operator [18]

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The next question comes from Jin Yoon of New Street Research.

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Jin-Kyu Yoon, New Street Research LLP - Analyst [19]

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Just wanted to ask a couple of questions regarding engagement. I understand right now that monetization, especially those that are exposed more towards SMEs are a lot harder to monetize on their current environment. But when you kind of look at your platform, especially during the last 4 to 6 weeks, have you -- what kind of engagement levels -- or have you seen any drop-off in engagement, whether that's on the user side, call it, MAUs or DAU ratios, or even on the merchant side, whether they're engaging? I know that, for example, a lot of these real estate agents may be away from their -- away during the extended Chinese New Year. Have they still been engaging on the platform, talking to their prospective clients, uploading pictures or whatever it may be? Can you help us just kind of talk about how -- where the engagement level tend to fare. Certainly, that'll help us understand the type of recovery we may see over the next couple of months.

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Wei Ye, 58.com Inc. - CFO [20]

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Okay. I'll take that one, too. Thank you. So from what we can see, February definitely was a very, very difficult month for pretty much everyone, right? And -- but as it gets into March, definitely, on the engagement side, we start to see much strong rebound in terms of recovery. Actually, if you -- if we look at -- especially with the traffic on the job segment, it's already getting close to the same level of last year, okay? So a lot of the demand for the yellow page has also started getting back to normal level. Well, the difficulty is, right, I mean, sometimes, those demand is there, but the service cannot be provided because of all those stringent containment requirements, right?

But again, a lot of the services on our platform are essential demand. They may be delayed but they are there. They will not -- they will never disappear, okay? And so you mentioned the brokerage companies, that's a very good example. Actually, lots of agents, having been our clients for long term, they are very savvy and very -- even though they cannot perform any off-line activities right now, they are actually still heavily engaging using our platform with potential customers, right? So they try to build up the prospects and prepare for the recover. And once they get back to harvest, they can roll in the same way and get down the field right away, okay? So I think the engagement standpoint, I think we still see a very healthy development here. It's just the recovery on the merchant side might take longer time with all those evolving situations. Does that answer your question?

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Jin-Kyu Yoon, New Street Research LLP - Analyst [21]

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Great.

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Operator [22]

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The next question comes from Tian Hou of T.H. Capital.

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Tianxiao Hou, T.H. Capital, LLC - Founder, CEO & Senior Analyst [23]

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(foreign language) So the company came out with a new business model, services model in -- towards the end of last year to cope with weakness of the economy. And now we have this Q1 unexpected event happened to make the economy much weaker. So I want to know how the company is going to -- because of the weakness of the economy, company came out with services model. And this year, as the weakness continues, what the company is going to do with the services model? What sense, at what level the services model can actually help the company return to its norm? That's my question.

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Jinbo Yao, 58.com Inc. - Chairman & CEO [24]

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Okay. (foreign language)

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Wei Ye, 58.com Inc. - CFO [25]

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Okay. Let me translate.

[Interpreted] So yes, we launched the all-in service strategy late last year, and it will definitely remain still one of the core strategy this year and probably years forward. That -- in Chinese, we call it (foreign language). It actually has several different meanings. One of them is definitely try to have a better and deeper understanding of the real customer needs and turn them into innovative products. And for example, right now, in the housing segment, the VR technology has already been used extensively in both the secondary segment and the primary segment. On the primary segment this year, as I previously mentioned, right, there's a virtual showroom going on with the developers. And on the secondary side, a lot of the -- VR showing has already become a commercial product package.

And at the same time, with all those new solutions to our customers, it also provides a much better user experience for the consumers and help building better ecosystem on our platform. I believe no matter how difficult the situation is, as long as we can provide a better service to our customers, customer will definitely stick to us over the long term.

And the second point is, under current difficult situations, we will also look internally and continue to optimize our cost structure. Our headcount has been on a steady declining trend throughout 2019, and this year, I think, we'll continue our efforts. We'll move toward more flex models with local partners, and we'll move more sales to our online model. And with the remaining sales force, we'll try to convert more of them into service providers and solution providers to either serve key accounts or provide a more of a consultant type of role to our customers.

And the third one, I think there's also industry consolidation opportunities under such situation. I mentioned that there's definitely a lot of vertical competitors who rely on financing, and they may face a more difficult situation than us. We right now have approximately $2 billion cash reserve on hand. And we'll -- we have the continuous ability to generate more cash flow through our core businesses. And when the right opportunity emerge, we'll definitely take the opportunity to integrate certain of those products and offerings into our system. I hope that answers your question.

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Tianxiao Hou, T.H. Capital, LLC - Founder, CEO & Senior Analyst [26]

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That's a very good answer. So I have one more follow-up question.

(foreign language) So you also mentioned about the cost control, and it will continue in 2020, particularly Q1. So I think that Q1 is relatively easier because a lot of employees literally have no work to do. But when we get into second quarter, what is company's plan in terms of cost control?

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Jinbo Yao, 58.com Inc. - Chairman & CEO [27]

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(foreign language)

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Wei Ye, 58.com Inc. - CFO [28]

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Okay. Let me translate and add little more comments on this.

[Interpreted] So yes, for first quarter, especially February, most of our customers are basically on pause for the whole month. So if our customers are not working, there's no point for all our employees to come back to work. And that's also from safety standpoint, everybody coming back to work is really actually a dangerous situation under current outbreak. So one is from the customer service standpoint and the other is from health and safety standpoint. We started rotating our employees in terms of returning back to work and to remain sufficient service to our customers, and at the same time, make sure everyone stay healthy and safe.

So we talk about second quarter, we have limited visibility, but we're hoping everything will be over soon. And once the business recovers, I think from 70% to 80%, we probably will see everybody returning back to work. And I want to separate those 2 things, right? I mean we have been on the continuous optimization efforts since beginning of last year, and that will definitely continue to make our organization stronger. That has nothing to do with the outbreak itself, right? So I think in second quarter, once everybody comes back, we assume a normal pace, so we assume everything will be back to normal, including the normal optimization process will continue. And I will, of course, definitely, make sure the overall headcount and related personnel costs stay at a reasonable level and hopefully lower than [March].

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Jinbo Yao, 58.com Inc. - Chairman & CEO [29]

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(foreign language)

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Wei Ye, 58.com Inc. - CFO [30]

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[Interpreted] Yes. Okay. So we are very, very confident and remain highly optimistic in the situation in China to contain the massive outbreak. I think if the Congress gets into session, maybe in April, that will be a very good sign that things will resume to normal pretty soon. And specifically, if we can now contain the possible second wave of infection that's coming from outside of China, now the overseas situation is getting worse right now, I think China may very likely, my personal view, the first one to start a rebound in the whole world. First in, first out, maybe. All right. Okay. Does that answer your question?

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Tianxiao Hou, T.H. Capital, LLC - Founder, CEO & Senior Analyst [31]

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Yes.

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Operator [32]

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This concludes our question-and-answer session. I would like to turn the conference back over to Christian Arnell for any closing remarks.

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Christian Arnell, Christensen & Associates - MD [33]

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Thank you, everyone, for joining us this evening. If you have any questions or comments, please don't hesitate to reach out to us. Thank you. Have a good night.

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Operator [34]

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