36Kr Holdings Inc. Q4 FY2023 earnings call

• Content Ecosystem Enrichment: In 2023, built upon flagship channels like 36Kr and 36Kr Pro, rolled out high-quality content-specific accounts, tailored content for younger generations, expanded across various channels with comprehensive circulation, had over 32.7 million followers by end-2023, explored diverse content formats including short and long-form videos, audio, and live streaming. Short video followers exceeded 9 million, including 2.2 million on Bilibili; launched first long video talk show series 'Say in 2033' with 2 productive seasons.
• IP Product Development: Continuously augmented content IP with various programming, broadened scope of annual flagship-wise conference, unveiled new summit waves and culture and leisure IP series, emphasized IP-oriented upgrades for branded service offerings, KR Research Institute conducted thorough research, 36Kr Business School offered diverse courses and advanced degree-based programs in partnership with global institutions, and launched global intelligent entrepreneurial initiative with top-tier institutions.
• AI Applications: Strategically integrated AI technologies throughout content ecosystem, improved store operation efficiency, innovated with AI-driven Asian Game blogger during Asian Games, partnered with Baidu, developed AI power solutions for financial report importation, and planned to unveil AI-driven products in 2024 like corporate briefings and medium spotlight seekers.

Advertising: Revenue increased by 8% year-over-year. In the fourth quarter of 2023, online advertising services revenue was RMB68.6 million, a 10% increase compared to the same period of last year. For full year 2023, online advertising services revenue grew by 8% year-over-year to RMB238.7 million. Enterprise value-added services: In the fourth quarter of 2023, enterprise value-added services revenues were RMB26.3 million, a 4% increase from the same period of last year. For full year 2023, enterprise value-added services revenue was RMB67.3 million, a 7% decrease compared to the previous year. Subscription services: In the fourth quarter of 2023, subscription services revenues were RMB8.4 million compared to RMB8.9 million in the same period of last year. For full year 2023, subscription services revenue was RMB34.2 million, representing a 1% increase year-over-year.

• Cautiously optimistic about 2024 revenue growth and improved profitability.
• Will further enrich content ecosystem and reinforce products/services.
• Actively utilize AI technology across content production and launch additional AI-driven products to engage with diverse enterprises.
• Optimize organizational structure and control costs to enhance operating leverage and profitability.

Q: Congratulation to a solid growth in the revenue in 2023. And how does the management view the advertising revenue trend in the first quarter and in 2024?

A: Despite macroeconomic changes, advertising business had solid growth in 2023. Cautiously optimistic about 2024 growth, expecting robust growth in advertising business due to macroeconomic rebound, stimulus policies, and new development strategies, especially in business and AI sectors.

Q: What is the latest progress on both long- and short-video business? What are the plans for further explore growth potential? And what is the company's layout and further developed plan in generative AI?

A: Short video had wider customer acceptance and higher ARPU, with 9 million followers by end-2023 (2.2 million on Bilibili). Long video talk show series 'Say in 2033' had over 350 million views. In 2024, will deepen investment in content creation and service customization. Leveraged AIGC technology, rolled out specialized accounts, integrated AIGC with content production, pioneered AI Taobao store, and advanced AI applications in various scenarios.

Q: The subscription service business is growing faster than expected. So what are the main factors behind this? And what are the new growth strategies for this segment in the future?

A: Main factors include launch of premium training courses, partnership with global top-tier institutions for degree-based programs, and response to need for AI expertise. Future strategies: diversify core course offerings, expand AI-driven subscription offerings to 2C and 2B segments, including AI-powered solutions for financial report interpretation and corporate briefings.

Q: What are the growth prospects for 2024?

A: Cautiously optimistic to sustain revenue growth and improved profitability. Will further enrich content ecosystem, utilize AI technology, optimize organizational structure, and capture commercialization opportunities from advanced productivity strategy.