Expert Meeting Minutes | Kanzhun Limited 22Q4 and Annual Performance Exchange

1. In the fourth quarter, the company realized non-GAAP cash receipts (Non-GAAP) of RMB 1.1 billion, and GAAP income of RMB 1.08 billion, which was the same as the same period last year. For the full year of 2022, the company will achieve GAAP revenue of RMB 4.51 billion, and the calculated cash receipts (Non-GAAP) will be RMB 4.61 billion.

2. In the fourth quarter, the company did two major things. On December 22, the company achieved dual listing in Hong Kong through introduction. In addition, as an official FIFA partner, it sponsored the 2022 World Cup in Qatar, which effectively enhanced the company's brand awareness and influence, but also generated relatively high market costs in the short term.

3. Strategic ordering for this year: 1) As a recovery year, the most important thing in this year is the overall user growth. 2) Income growth, the urban service industry is a bright spot this year. At the same time, the company will actively expand white-collar industries such as high-end manufacturing and manufacturing, and actively deploy in low-end blue-collar manufacturing. 3) New business, further extending the value around the recruitment chain.

【CEO】

Let me first introduce the situation of the fourth quarter and the full year performance. In the fourth quarter, the company realized non-GAAP cash receipts (Non-GAAP) of RMB 1.1 billion, and GAAP income of RMB 1.08 billion, which was the same as the same period last year. This is an unsatisfactory result, mainly due to the impact of the epidemic, especially the peak of the epidemic in December, which posed a greater challenge to the business in the fourth quarter.

In the fourth quarter, the company did two major things. On December 22, the company achieved dual listing in Hong Kong through introduction. In addition, as an official FIFA partner, we sponsored the 2022 Qatar World Cup, which effectively enhanced the company's brand awareness and influence, but also generated relatively high market costs in the short term. Even so, we still achieved profitability in the fourth quarter. After deducting equity incentive expenses, the adjusted net profit in the fourth quarter was RMB 59.45 million.

For the full year of 2022, the company will achieve GAAP revenue of RMB 4.51 billion, and the calculated cash receipts (Non-GAAP) will be RMB 4.61 billion. After deducting equity incentive expenses, the adjusted net profit for the year was RMB 800 million.

At the operational level, although the fourth quarter is the traditional off-season for recruitment, we still maintained a good momentum of user growth. In the fourth quarter, MAU reached 30.9 million, a year-on-year increase of 26%; user activity, that is, the ratio of DAU to MAU also remained stable.

Regarding the user growth and business recovery after the Spring Festival, after the resumption of work during the Spring Festival this year, we ushered in strong user growth, with all data hitting record highs. The company accumulated about 9 million new and perfect users in January and February; on the APP in January and February, the MAU increased by more than 50% year-on-year; user activity, that is, the ratio of DAU to MAU hit a new high, 2 The number of monthly active enterprises in the month also exceeded the highest level in history, and it also achieved a good growth year-on-year. While users are growing rapidly, in February, the average harvest per user (the number of successful exchange of resumes or contact information) has continued to improve, both on the job seeker side and the enterprise side, which is based on the bilateral network effect. It is also the result of our continuous improvement of algorithms and understanding of users.

Among the growth we have seen in the first quarter, we have noticed several keywords worth sharing with you. The first word is "blue-collar". Among the new users, blue-collar workers are faster than white-collar workers both in terms of absolute number and growth rate. The second keyword is "second-tier and below cities", and its growth rate is significantly faster than that of first-tier cities, which proves that the company's efforts to continue to penetrate into the sinking market are quite effective. The third key word is "small and micro enterprises". Small and micro enterprises recover faster than large enterprises. The fourth key word is "cash". The recovery of cash income is very fast. We are confident that cash receipts will reach a record high in the first quarter. The fifth keyword is "urban service industry", which is an industry characterized by the need for face-to-face contact. The number of newly released jobs in this industry has increased by more than 40% year-on-year since the holiday.

Some other industries also performed well. Retail, transportation, high-end manufacturing represented by new energy and automobiles, and the healthcare industry all performed well. The real estate industry and the education industry also showed signs of recovery after the Spring Festival. Recently, sales, marketing, procurement, and other functional positions that represent the increase in business activities of enterprises have continued to improve month-on-month, and the recruitment activities of large enterprises after the Spring Festival have also gradually begun to pick up. These all show that the overall economy is showing a recovery trend, and it also makes us full of expectations for this year's performance growth.

We continue to strive to fulfill our social responsibilities as a listed company. In October 2022, the company was listed in the top 500 Chinese charities for the second time in a row. The company and the Employment Service Guidance Center of the China Disabled Persons' Federation jointly launched a barrier-free seeking assistance service plan for the disabled, serving a total of 121,000 disabled job seekers throughout 2022. Recently, we jointly launched the "Angyang Spring Recruitment Festival" with the 24356 campus recruitment service of the Ministry of Education, which is expected to cover more than 2,000 companies and provide a considerable number of jobs for college students.

Today our company's board of directors approved a new stock repurchase plan, which will repurchase up to 150 million US dollars in the next 12 months.

【CFO】

22Q4 operating costs increased by 35% year-on-year to 202 million yuan, mainly due to the increase in staff-related expenses, and the increase in server and broadband costs as the user base continues to expand under higher security requirements. Gross profit margin excluding stock-based compensation expenses was 82.6%, a decrease of 1% year-on-year, mainly due to the impact of the epidemic, and most of the costs are relatively fixed.

The operating cost for the whole year of 22 increased by 36% year-on-year to 755 million yuan, and the adjusted gross profit margin was 84.1%, a decrease of 3% year-on-year. Based on similar reasons, we expect that the gross margin may recover gradually this year.

22Q4 sales and marketing expenses increased by 83% year-on-year to 682 million yuan, mainly due to marketing activities during the 2022 Digital World Cup.

For the full year of 2022, sales and marketing expenses will be 2.001 billion yuan, a year-on-year increase of 3%. Excluding World Cup sponsorship costs, brand and user acquisition costs in 2022 decreased by 46% year-over-year, indicating that our marketing efficiency has improved due to improved brand recognition and user satisfaction. In 2023, we expect continued strong user growth while maintaining an effective marketing strategy. Our marketing expenses will be controlled.

22Q4 R&D expenses increased by 48% year-on-year to 294 million yuan, mainly due to the increase in employee-related expenses. For the whole year of 2022, R&D expenses will increase by 44% year-on-year to 1.18 billion yuan.

22Q4 G&A expenses increased by 108% year-on-year to 248 million yuan, mainly due to the increase in staff-related expenses and the increase in professional service fees for our listing in Hong Kong. Excluding stock-based compensation and Hong Kong listing-related expenses, adjusted G&A expenses for the quarter rose 50% year-over-year to $123 million. For full-year 2022, G&A expenses were down 64% year-over-year, as a one-time stock-based compensation expense of $1 billion related to the U.S. IPO was recognized in 2021.

Our simple calculations show an adjusted operating margin of 20% for the quarter and 19% for the full year '22, excluding stock-based compensation, World Cup sponsorship, and professional services fees associated with the Hong Kong listing. The net loss for the quarter was 185 million yuan. Excluding stock-based compensation, adjusted net income for the quarter was $59 million. In 2022, the net profit will be RMB 107 million, and the adjusted net profit will be RMB 799 million. The net cash generated from operating activities in this quarter was 156 million yuan, and it will be 1 billion yuan in 2022.

As of December 31, 2022, our cash equivalents and short-term investments reached 30.2 billion yuan. From the perspective of business prospects, the total revenue in 23Q1 is expected to be 1.25 billion to 1.27 billion yuan, a year-on-year increase of 9.8% to 11.6%. Cash collections for the quarter are expected to grow by more than 45% sequentially and by more than 25% year-over-year, which is promising. We've had strong user growth this year and signs of an economic recovery have improved. We remain optimistic about the full year thus far and are confident that we will pursue accelerated business growth.

【Q&A】

Q: The first one is to trouble the management to share more about the trend of our recovery after the Spring Festival. For example, from the perspective of the user side, what is the ratio of B and C among our new users? From the perspective of the enterprise, if we look at the new positions and recruitment budgets of enterprise users, what is the difference in the speed of recovery between large enterprises and small enterprises? The second question is about how to view the competition in the online recruitment industry in 2020 and 2033? Because this year is under the background of a recovery, will other online recruitment companies increase their investment? From a strategic point of view, how does our company balance this year's revenue growth and profit goals?

A: Everyone is very concerned about the situation after the Chinese New Year and the recovery of work after the Chinese Lunar New Year. We have seen that after the Spring Festival, that is, after the end of January, the MAU and average DAU of the company's APP are at the highest level in history. From the perspective of the b-side, the number of active enterprises has exceeded the highest level in history.

The current situation of the ratio of B and C is about 9:10, but the trend is in the process of getting better. We've always seen a small business that's more nimble, it recovers a little bit faster, and it's a little slower to go down when things don't go well. For large enterprises, we have also seen that the resumption of recruitment by large enterprises will lag behind that of small enterprises, but it is also in the process of recovery. Let me add one more point of my personal observation. In fact, it is often not entirely because of strength. In terms of strength, the strength of large companies will be stronger. I think it is often because of the degree of prudence in making decisions. The larger the decision the larger the company. Be cautious. So in 2008 and 2009, I experienced the same situation myself, and the recovery speed of small enterprises is faster, and large enterprises will gradually recover.

As far as the current situation is concerned, I think our competitive position in China's Internet recruitment industry has not changed much. Second, I agree with your prediction. This year, because the entire economy is recovering, several of our colleagues are like us, and everyone has held back for a few days. This year we spend more budget to increase user acquisition and income acquisition. In the first quarter of this year, we also felt the pressure from our major competitors in terms of user acquisition. I think your prediction is right. How will we do the third thing? Will it affect our profits. I don't think we will implement such a strategy of following the competition. We have not implemented it. We will still do things in our own way and maintain our reasonable user growth strategy based on high user retention and activity. , and will still hope to achieve the annual plan of 40-45 million user growth. I feel very confident that in this process, it is not a way to spend too much money, so it should not affect the realization of our margin too much.

Q: The unemployment rate in February was still relatively high, especially among young people. Mr. Zhao also mentioned before that the demand for blue-collar workers may still grow relatively fast, and the demand is relatively large, while white-collar workers are relatively not so large. Because more young unemployed people may be college graduates, I wonder if such a mismatch will have any impact on the overall recruitment market this year? For us, what is the impact of our mismatch on the recruitment platform? Don't we know what kind of adjustments we will make in terms of strategy? What about a more blue-collar focus on recruiting? The second question is that there are some rumors that after the return of the Spring Festival workers, the supply of the entire labor force may be in short supply in a week or two, because everyone has come back one after another. But maybe if you look at some excess labor in March? Third, the emergence of CHAT GPT will replace some of these positions, especially those that may be low-end knowledge output. I don't know if you have ever thought about it, will it have a greater impact on the Chinese recruitment market in the long run, especially blue and white collars?

A: We have seen two types of blue-collar workers, one is blue-collar workers in the urban service industry, and its users are growing rapidly, and its jobs are also growing rapidly, such as restaurants, hotels, and travel agencies, which have no job seekers. . The issue of job growth is not fast. In the field of manufacturing, it is indeed from working after the Spring Festival to this week, about seven or eight weeks. In the beginning, the growth rate of jobs is relatively slow, and the growth rate of job seekers is relatively fast. . In fact, over the past few weeks, what we have seen is that this situation is gradually easing. What we have seen is quite interesting. In fact, looking at the situation of the manufacturing industry, compared with previous years, the harvest has indeed declined, but the amount of decline is not very large. Conversely, this person wants to get such a harvest, but his efforts have increased a lot. A blue-collar worker in the manufacturing industry is looking for a job. To be honest, the result is not very serious, but the physical feeling is indeed quite serious.

As for the mismatch, it is true that when a bunch of job seekers have no jobs and there are fewer recruiters, this is a bit of a headache as a platform, because we actually can’t invent many jobs. However, what is interesting is that a considerable number of laborers actually have relatively strong mobility in the positions of ordinary workers in the manufacturing industry, in some positions in the urban service industry, and in some positions in urban logistics and express delivery. In terms of his age and his skills, it is actually possible to adapt to more positions. In the past few years, we have seen that many job seekers use this method to adapt and satisfy themselves when there are relatively few jobs of a certain type. It's a supply and demand thing about blue collar.

Chat gpt is a hot topic recently. From the perspective of the company, our business has encountered challenges due to the gradual maturity of chat gpt technology and the release of recent applications, and we are ready to do something. We have always paid close attention to the challenges and opportunities that technology may bring. Recently, I have seen some application scenarios of link in, such as generating resumes, generating a person's advantages, etc. Will it make the work of many white-collar workers encounter challenges? Indeed. Just as in the process of moving items in factory production, manufacturing, and warehousing, robots have largely replaced human physical labor. Next, some so-called mental work may also be replaced by generative AI technology, such as chat gpt. I also hope to be able to tell our users and investors what more valuable things we can do based on AIGC technology at a speed no later than some advanced companies. Hope you have confidence in us.

Q: I have two questions. 1) Our R&D will account for about 20% of our overall revenue in 2022. May I ask where the company plans to invest in product and technology research and development in 2023? Especially considering that we just talked about AIGC technology, how do we think about the impact of this technology on the entire Internet recruitment model, especially on the optimization of human resource allocation efficiency. This is the first question. 2) With regard to marketing, the advertising and marketing of the World Cup has ended, can the management share the marketing effect of the World Cup? What will our marketing rhythm look like in 2023?

A: Regarding your first question, we will continue to increase investment in technology research and development this year, but we have not considered much about the scenarios of generative technology, model training, and even the construction of basic capabilities. input. We are just planning a normal increase now, but we have not yet made a budget for R&D investment this year. The main increase in expenditure is still more engineers and scientists in computer science. At the same time, we also considered the investment in hardware. We still had some shortcomings in this area. Of course, we haven't considered the specific input here.

Regarding your second question. What do you think of the big marketing campaign at the end of last year, the results of the World Cup marketing? It can only be said that it met our expectations. In the acquisition of new users in the first three months of this year, we achieved very efficient digital marketing efficiency. It is very cheap to buy a user, not because the market price has dropped, nor is it because the delivery technology has been greatly improved, but because the World Cup launch from November 18th to December 18th last year was a successful approach, which brought great brand awareness to the company. It has greatly improved, so the digital marketing cost of user acquisition has been reduced this year, and it has been continuously effective.

I would like to add something to this question. First of all, in terms of user growth, we are very confident about 2023. Everyone knows that we use brand + performance traffic acquisition ads to acquire new users, and now we are devoting more resources to brand advertising rather than performance advertising, and the proportion of the former in our marketing expenses continues to rise , and this trend will continue in the future. In general, our user growth strategy or user growth goals will not affect the overall profit margin. Our margins are linear, or more relative to the roles we play. Therefore, we expect to see further market expansion in 2023 if revenues can grow higher and faster.

【callback】

Q: What is our outlook for this year? In addition, from the perspective of the sinking of white-collar workers to the priorities of blue-collar and gold-collar projects, what is our strategic order for this year?

A: Regarding the outlook for the whole year, based on the existing data of the first 20 days of January, February and March, we have given the outlook for Q1 of this year. This year's Q1 cash collection has increased by more than 25% year-on-year. Considering that last year’s Q1 was basically before the epidemic, and Shanghai only started to be closed on March 20th, the impact of the epidemic was actually relatively small at that time, so this year’s 25% growth is quite a good result. In the first two months of the first quarter of this year, MAU increased by more than 50%, and the monthly activity of the B-end hit a record high. The overall situation is good. In addition, the urban service industry and small and medium-sized enterprises have recovered rapidly. good.

As for the situation of the whole year, it is actually difficult for us to make an accurate judgment at present. Because our business is highly related to the overall economy, what is the direction of the overall economy this year? After all, it is a year of recovery after the epidemic, and we dare not speculate or make random diagnoses. The government work report also mentions that the overall economic growth rate for this year is around 5%. "About" actually means that the report mentioned that various unexpected events may occur at any time, affecting economic growth.

We are optimistic about the growth of overall revenue so far. We are optimistic about the first quarter, user growth, business growth, and growth for the whole year. But if you want us to give a clear number, it is more difficult, because this year the previous low may be too high. We have internal goals, but we just work hard to achieve this goal, and there is no clear guideline update.

In terms of margin for the whole year, if the impact of the World Cup and the one-time listing fee were removed last year, we achieved a margin of 19% for the whole year. This year we expect the margin to continue to improve, so there is a relatively large cost item involved here, that is, the marketing fee. We have a growth target of around 45 million users this year. Last year, because we voted for the World Cup, thanks to brand promotion, we improved the customer acquisition cost of new users after the Spring Festival this year is relatively low. We believe that this relatively low cost will continue in the future, so the overall market cost this year is relatively controllable. Therefore, as long as our income can achieve relatively good growth and other expenses do not increase significantly, the overall margin will improve, and it is expected to reach 25%. The specific realization depends on the actual situation.

Now to answer your second question about strategic sequencing. 1) This year is a recovery year, the first must be the recovery of the main business, and the most important thing is the overall user growth. We just mentioned our goal of 45 million new users this year. And we think that the current growth this year will come more from blue-collar workers in the urban service industry and second-tier cities. This is a general direction. 2) Income growth. We believe that the urban service industry is a bright spot industry this year. At the same time, we will actively expand white-collar industries such as high-end manufacturing and manufacturing. We will also actively deploy in the low-end blue-collar aspects of manufacturing, including these We also hope to receive the money for manufacturing that has been relatively prosperous in the past two years, new energy electric vehicles, and the like. 3) New business, further extending the value around the recruitment chain. This area will definitely advance this year, because your new business will only be used when the overall economic environment is good, the demand of the enterprise increases, and the enterprise has a budget, and last year was not such a good time. In this new business, we have various ideas for blue-collar, white-collar and gold-collar workers. We will report any good news to you in the future.

The above is the main layout of this year. Other than that, some other new business priorities will be lower, so I won’t say more.

Tianfeng Trading Company: 1) Did the 9 million registered users in January and February exceed our expectations? How has the ratio of B-end and C-end improved, as well as the payment rate of Q1 B-end and the number of posted jobs compared with the previous low point? 2) The part of our offline team and online self-payment may be due to the relatively fast growth of small customers this year. How do we look at the budget expectations of large offline customers?

A: Regarding the first question, we think the increase in new and perfect users in January and February is very good. Because before the Spring Festival on January 27, the epidemic situation is basically in the stage of recovery. In fact, the so-called January and February are mainly in February. More than 10,000 new daily additions, this is actually a very high number. After March, our daily new additions have also remained at a relatively high level. So we think the user growth is going well this year. In terms of monthly active users (MAU), including the month before the Spring Festival when the epidemic has not fully recovered and after the Spring Festival, the number of companies with monthly active users has increased by more than 50% year-on-year. The number of B-end active enterprises in a single month in February hit a record high. Overall, we feel that this year is off to a good start. After three years of the epidemic and two large-scale lockdowns last year, many companies and industries have been greatly affected. We think it is quite good to be able to achieve such figures in the first two months after the epidemic. The cash collection in 23Q1 also reflects the situation of our overall business.

Regarding the second question, in terms of online and offline, online more reflects the needs of self-service purchases of small and medium-sized enterprises, while offline reflects the needs of signing annual bills. At present, it must be that the recovery of small and medium-sized enterprises is faster; the growth rate of online is faster, and the growth rate of offline is catching up with online.

But from the experience of the past few years, we found that in the long run, the overall growth rate of online and offline will eventually converge. At a certain stage, online or offline may be faster, but after a period of time, the two trends are basically the same. Therefore, on the whole, the proportion of our company's online and offline cash receipts has remained basically stable. Online rises first, and offline follow-up will follow this logic to catch up, although it will take some time. So we think that the growth rate of subsequent offline annual bills will increase, at least from the perspective of the whole year, or we hope that from the perspective of half a year, we can catch up as much as possible. In general, small and medium-sized enterprises recover quickly, and large enterprises need time to recover. This year may show a trend of lows and highs.

Q: I have two questions to ask. The first one is to ask you to help disassemble the revenue ratio of KA and SME in this single quarter, and how do we look at the growth drivers of these two areas in the future? The second is that you just mentioned that the urban service industry is a bright spot this year. I would like to ask you to analyze it again. From the current point of view, the blue-collar workers, especially the urban service industry, have brought about an increase in the number of users on the income side of the platform. What kind of changes can be seen from the perspective of payment rate and ARPU?

A: Regarding the first question, for the whole year, the proportion of KA has increased, while the proportion of SME has decreased, mainly because the income of SME was affected by the second quarter and fourth quarter and the stop of new additions last year. And KA itself has a good growth rate, which further increases its proportion. But by the first quarter of this year, if the recovery of SME is not bad, the situation should ease. This is actually related to the epidemic or the growth of SMEs. This is a general trend.

Regarding your second question, the urban blue-collar service industry is currently the second largest position in our entire platform, and the largest position is related to technology, involving the Internet, communications, electronic software, data, and so on. We have not announced the proportion of the C-end in the urban service industry. In the past, the proportion of the income of the urban service industry was less than 10%. After the Spring Festival this year, the proportion of the urban service industry has increased rapidly, to more than 10%. Because the proportion of our online self-service purchase is different from this offline signing, in the self-service purchase, the proportion of the urban service industry will be higher, so the overall progress of the urban service industry is still good, which is the brightest point industry. We have not seen the payment rate of the urban service industry. Its ARPU is lower than other positions, mainly due to slower realization and lower pricing. Therefore, some price adjustments will be gradually made in the future.

Q: The first question, our SBC in Q4 has actually improved, what is the reason? And what level will the follow-up SBC stabilize at? Another question is, as you mentioned just now, the blue-collar market is a focus of development this year, and the proportion of the urban service industry will increase. What impact will this have on the structure of BC end users in the future?

A: The increase in SBC in Q4 is mainly because during the IPO in Q4, the company’s option plan covered more grassroots employees (one-third, or even half), and the original option coverage was mainly team leaders. This piece comes with a one-time cost. There will be no IPO in the future, so this problem does not exist. In the previous option incentive plan, according to Hong Kong listing regulations, if these shares are not issued, that part will be invalidated.

Q: What impact does the development of the urban blue-collar service industry have on the relationship between B and C?

A: There is not a big difference between urban blue-collar service industry and white-collar occupations, because both are small and medium-sized enterprises, and neither is a large-scale recruiting enterprise. (Blue-collar) The number of positions behind the head count may be more than that of white-collar workers.

The urban service industry is very suitable for the direct chat mode of fast and quick communication and non-large-scale recruitment. We are not unsuitable for the recruitment model of hundreds or thousands of people, but we have to find ways to participate in the market to some extent with the intermediary.

Our users and revenue ratio in the manufacturing industry are very low, so this year's industry downturn has little impact on us. In the future, the layout of the manufacturing industry will be laid out, and we hope that when the industry recovers, we will be ready. The overall urban service industry is our key industry.

Q: 1) What is the margin of Q1? 2) Compared with the recovery in the second and third quarters of last year, the quarter-on-quarter growth rate was about 20%, but this year's Q1 growth rate was even higher. From this point of view, what is the difference between this year's Q1 and the recovery in the third quarter of last year?

A: In the whole year, normally, the margin of Q1 is the lowest, because there are Spring Festival bonuses. Last year's Q1 margin was about 10%. This year, Q1's GAAP revenue is in the previous quarter with more epidemics and lockdowns, so it will not rise particularly quickly. Therefore, the margin of the overall Q1 is about 7% to 10%. The annual margin will grow rapidly with revenue, and we hope to have more than 20%.

As for the difference between the quarter-on-quarter growth from the first quarter to the fourth quarter and the quarter-on-quarter growth from the third quarter to the second quarter last year, Q3 is not a particularly busy season. From a seasonal perspective, Q3 is the peak season for recruitment activities, and Q4 is the peak season for business signings , Q3 is the peak season for college students to find jobs and leave school after graduation. I don't think the two are related.

The growth in Q1 compared to Q4 was good. It may be due to the factors of the peak season in spring and Q4, which was weaker in the epidemic last year. More should be seen in this year's Q1 and last year's Q1 growth. Last year's Q1 was only affected by the epidemic for two weeks, so most of them were not affected by the epidemic. In January this year, there were still a little people in Yangyang, and then February and March were okay. Under comparable circumstances, the impact of the epidemic on enterprises in the second and fourth quarters of last year was skipped, which led us to be able to Achieving a 20% increase in cash receipts. This is the first quarter after the epidemic. We hope that as the economy improves, business demand increases and operations can be better.

Q: Questions about advertising sales expenses and brand effects: Last year, the proportion of brands increased significantly. This year, in terms of structure, relatively speaking, the absolute value of brand investment is less. Will the proportion structure be more balanced?

A: Before the U.S. launch in 2021, most of the money will be spent on effect-based advertising, because it needs to be done during the growth stage. After being reviewed in 2021, no money was spent during the review period, and not much money was spent after the review, and the growth was not bad. In the fourth quarter of last year, brand promotion was added from the World Cup. This year, we have acquired a large number of users with very little performance-based advertising. In the past year and a half, it has been like this since the review. Most of the users came to the BOSS direct employment brand, and they are all our own users. The popularity of the brand is very important and effective for reducing sales costs.

In the face of this year's situation, the user growth is good, and the cost of adding new users for each user is quite low, so we can continue to acquire users without spending too much additional marketing fees. Therefore, the overall market expenses are controllable this year, and the margin can be further increased with the growth of income.