Amber International Holding Ltd (AMBR) 2019 Q4 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for iClick Interactive Asia Group Limited's Fourth Quarter and Full Year 2019 Financial Results Conference Call. (Operator Instructions) Today's conference call is being recorded. I will now turn the call over to your host, Ms. Lisa Li, Senior Manager of Investor Relations. Lisa, please go ahead.

Hello, everyone, and welcome to iClick's Fourth Quarter and Full Year 2019 Financial Results Conference Call. The company's results were issued earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting the IR section of our website, ir.i-click.com.

Sammy Hsieh, our Chairman of the Board and Co-Founder, will provide a high-level overview of 2019, a record year for us; then Jian Tang, TJ, Chief Executive Officer and Co-Founder of iClick, will review the fourth quarter results, share insights on our focus and execution strategy; followed by our Chief Financial Officer, Terence Li, who will give us more highlights on the financial results and guidance for 2020. Then we will turn the call back over to TJ for closing remarks and open the call for Q&A.

Before we continue, please know that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. 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 these and other risks and uncertainties is included in the company 20-F, as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law.

Please also note that iClick's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. iClick's press release contains a reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures.

I will now turn the call over to our Chairman of the Board and Co-Founder, Sammy Hsieh. Sammy, please go ahead.

Thank you, Lisa, and welcome, everyone, to our call today.

I am very happy to share with you that in 2019, we were proud to celebrate our 10-year anniversary and achieved another record year with strong top line and bottom line sales. Our gross billings increased by 60%, while revenues increased by 25% year-over-year. Our gross profit increased 45% year-over-year, while our adjusted EBITDA for 2019 reached $5.9 million. I'm very proud to note that our adjusted EBITDA is more than triple the total we reported in 2018.

I want to take a moment here to point out that our record-high adjusted EBITDA is proof that we are achieving ever-increasing economies of scale. I'm excited to report that our business has reached an inflection point, and we expect the increase in operating leverage to continue to drive profitability in the future.

Now I would like to highlight some of our key accomplishments.

Our Marketing Solution business hit another record high in 2019. With such a large market opportunity before us, we were always confident that this organic growth was inevitable, but it took 10 years of hard work to get here. Our Marketing Solution business forms a solid bedrock for our company, and it is gratifying to acknowledge that we have arrived at this place in our history.

In early 2019, we launched our Enterprise Software Solution business, ushering in a new era of our company. iClick now offers our clients total solutions to facilitate collection and analysis, allow marketers to target new consumers and increase sales from existing customers. These capabilities fulfill an important need in China as brand marketers are eagerly looking for cost-effective ways to improve their online sales and enhance customer loyalty.

Our solutions generate useful insights for successful marketing campaigns, customer retention and increased sales performance. In our first full year of operation, we generated over $10 million in revenue in this area, with gross margins in excess of 60%, and we are very confident that our revenues will double in 2020.

We announced a convertible bond financing and subsequent conversion from Marine Central Limited and Tech Famous Limited, backed by Mr. Tak Cheung Yam, the majority shareholder of Forbes Media. This is a key accomplishment for 2 important reasons. First, the early conversion from debt to equity is a clear indication that one of our most significant shareholders has the utmost confidence in our ability to execute and feels that the company stock is undervalued with tremendous upside potential. Second, this transaction has served to substantially reduce the debt on our balance sheet.

In addition to the financing, we recently obtained more than $30 million credit facility with HSBC GBA Technology Fund for working capital and to supercharge the growth of our core business. Access to additional funding is important as we continue to build out our Enterprise Software Solution business and develop our digital marketing platform to bolster our future progress.

Other highlights in 2019 include agreement with M&A candidates that have the potential to produce synergy and help us increase the ability to market our product and services. Our investors should take comfort in the idea that a merger can deliver increased market power in other areas. Some of our current acquisition have given us more media assets, supplementing our Enterprise Solution -- software solutions and will eventually provide us new models in the future.

Overall, I'm very proud of what we have achieved in 2019, and we believe that we will continue the strong momentum in 2020.

Now I would like to turn the call over to Dr. Jian Tang, or we call him TJ, our CEO and Co-Founder, to discuss the fourth quarter results, our company's strategy and our focus on execution in 2020. TJ?

Thank you, Sammy, and welcome to the call, everyone. I'm happy to report that the fourth quarter of 2019 capped off another record-breaking year for our company.

In the first quarter, we increased revenue by 43%, while our gross profit increased by 46% year-over-year. Our adjusted EBITDA was $2.5 million, a new record. And most importantly, we reached a new milestone as we reported quarterly adjusted net income for the first time ever in the fourth quarter of 2019. This confirms what Sammy mentioned as we are reaching ever higher economies of scale by continuing to concentrate on profitability, which is our major focus for 2020. So the current micro environment remains challenging. We think our strategy will be very effective in driving the business forward.

This year, we have 3 major goals. First, improve the profitability of our Marketing Solution business. iClick is now a leading programmatic marketing platform in China, and we should continue to benefit from our economics of scale and the building of new and higher-margin offerings. As an example, our influencer multichannel marketing products and outbound traveling products help us improve our product mix and give our customers more options.

Second, continue our revenue growth trajectory, along with increasing margin contribution from Enterprise Software Solutions business. Our team has worked very hard to develop various innovative products, services and business models in this area. We've seen promising results so far and are firmly committed to dedicating the resources to grow this business as it will become a major revenue driver and a gross margin contributor well into the future.

Third, continue to recognize and source opportunities from partnerships that leverage our existing data and technology. In 2019, we entered into various agreements and partnerships that will either serve to strategically enhance our position in the marketplace or enhance our capabilities. Our goal for this year is to continue to seek and develop additional partnerships and new business opportunities globally, leveraging our long accumulated strengths in data and technology.

As we go forward in 2020, we are encouraged by our performance in the first full year of operating our Enterprise Solution business.

As Sammy said, this is a new era for our company. We now offer our brand clients the important tools to reach and encourage with the customers in a low-cost, highly efficient and personalized manner, helping them realize higher sales and profit growth. This is particularly important in the current microenvironment given the coronavirus outbreak. We are currently noting that many more brands are now understanding how our smart retail strategy can help them enhance online customer engagement and facilitate higher returns.

For example, the many programs we've built based on Tencent WeChat platform are total solutions that facilitate the collecting of data, helping them build their brands, enhancing customer retention and loyalty. I want to note that we are still in the early stage of developing this business, and our results in 2019 confirms that the future looks promising.

During our first full year of operating this business, we opened more than 50 key account clients, and the pipeline remains robust as we continue to expand this year. We remain firmly dedicated to continuing the investment needed to double revenues in 2020 and provide incremental increases beyond.

In order to maximize our company's performance and continue our growth trajectory, we rely on increasing operational efficiencies, especially in light of the current microenvironment as we seek to navigate this temporary economic downturn caused by the coronavirus outbreak. Our focus on optimization is squarely centered on the day-to-day operations of our company to ensure that we are running the business as efficiently and effectively as possible. By being diligent in reviewing every facet of our business and how we execute, we can ensure ongoing timely, cost-effective, reliable and sustainable performance improvements in our entire operation. Our goal is to minimize current costs by controlling OpEx and maximizing our operational capabilities. We believe that our growth strategy and the focus on the profitability, coupled with dedication to operational optimization, will help our bottom line grow this year and well into the future.

In 2019, we were proud to mark our company's 10-year anniversary. Over the last decade, we have succeeded in growing our business and achieving corporate objectives by overcoming a variety of challenging issues and unfavorable macro environmental factors. I would like to take this opportunity to note that the resiliency of our business model was put to the test in the first quarter as we successfully demonstrate our ability to adapt and continue in the face of the coronavirus outbreak in China. As this has had such a profound effect on all of us, I would like to formally comment regarding the coronavirus and its impact on iClick.

First and of foremost importance, we are taking active precautions to help protect the health and well-being of our employees, while working closely with our clients and partners to ensure we support their needs. Generally, the negative market conditions the outbreak has created has led to cautious spending from advertisers and indicates that digital ad spending is not immune to the impact of coronavirus. Yet, we believe that we are impacted less than traditional media budgeting as online activities increased based on the escalation of time spent online during the crisis period.

Certain industry verticals, such as the travel and the hospitality sectors of our business, have been adversely impacted by the coronavirus for obvious reasons. However, other sectors, including e-commerce and online gaming, remains strong as homebound consumers shift more of the purchasing activities online and spend more time gaming. Based on the current environment, we predict that brands will allocate more of their advertising budgets to mobile and online targeted marketing, with the potential to benefit our mobile and performance-focused Marketing Solution business. Also, it's essential to note that brands see the importance of online and offline consumer behavioral data integration and analysis, which will favor our Enterprise Solutions business in the long run.

We also want to note that the Chinese government's highly devoted top-down efforts to contain the virus spread seem to be working, as recent reports suggest that the number of new cases are decreasing. We want to note that the fluidity of the current situation precludes any prediction as to the ultimate adverse impact of coronavirus as developments rapidly change.

We will continue to closely monitor the outbreak's impact on our operations and financial results and make adjustments if necessary.

Having said this, I would like to remind everyone that iClick was founded during the financial crisis of 2009 when the global economy was severely strained and uncertain. Over the past decade, we have developed advanced strategies that adapt with the times. I'm very confident in our ability to successfully navigate these turbulent conditions. And our future achievements will be the direct result of our experience, clear vision, solid growth strategy, strong execution capability and financial resources. Therefore, we are cautiously optimistic about our performance for the balance of this year.

With that, I would now like to turn the call over to our CFO, Terence Li, who'll review the fourth quarter and full year 2019 financials.

Thank you, TJ. Despite the challenging macro environment in 2019, we have managed to deliver another record year. Our gross billings, revenues, gross profit and adjusted EBITDA all hit historical highs, and our adjusted net loss reached a record low.

I would like to begin my comments with a few key highlights from the full year and fourth quarter of 2019.

Despite the unfavorable foreign currency movement during the year, we reported revenues of $199.4 million for 2019, an increase of 25% year-over-year. Revenues for the fourth quarter of 2019 were $56.7 million, an increase of 43% over the same period in 2018. The growth was due to the original growth of our Marketing Solution business, coupled with the contribution from our new Enterprise Software Solution divisions, which commenced operations in January of 2019.

Please note that renminbi depreciate against U.S. dollar by 4% and 5%, respectively, in the fourth quarter and full year of 2019 compared with the same period in 2018.

Looking at each business separately. Marketing Solutions reported a record high $189 million in revenue, an 18% increase on a stand-alone basis in 2019. For the fourth quarter of 2019, the revenues from this business segments grew by 34% to $53.1 million compared with the same period of last year.

I'm very pleased to point out that we had a great start to our Enterprise Software Solutions business in 2019 and it scaled up very quickly, generating $10.4 million revenue in its first full year of operation. The business continues to scale as revenue for the fourth quarter grew by 38% sequentially to $3.6 million, reflecting the spillover effect we mentioned in last earnings conference call. Gross profit grew by 46% and 45% year-over-year to $17.2 million and $56.7 million in the fourth quarter and full year of 2019, respectively. The robust growth is mainly attributable to the continued expansion of the company's Marketing Solutions and contributions from higher-margin Enterprise Software Solutions.

Adding to Sammy and TJ's comments with regard to Enterprise Software Solutions, we are very encouraged by our results for the first 12 months of operations. The margin contributions are significant and will be a key factor in our goal to achieve profitability in 2020. Also, I would like to note the financing and subsequent bond conversion from Marine Central Limited and recently secured additional credit facility from HSBC, both of them have given up abundant resources to fund our growth and achieve our longer-term objectives.

I also want to emphasize that we remain diligent in controlling costs and achieving the best possible operating efficiencies. Our company is always examining ways to better manage our cash flow, make our process better and focus on higher-margin business, products and clients. As a result of this activity, we have a strong balance sheet. As of December 31, 2019, cash and cash equivalents, time deposit and restricted cash equal $61 million together, compared with $40 million at the end of 2018.

For the rest of my discussion, I will focus on our non-GAAP results. You can find reconciliations of these non-GAAP results in the press release we post earlier today and which can be accessed at our Investor Relations website.

Adjusted EBITDA for 2019 was $5.9 million, triple the amount we report in 2018. For the fourth quarter of 2019, adjusted EBITDA was an income of $2.5 million, compared with a loss of $900,000 for the fourth quarter of 2018. The increase resulted from the significant increase in gross profit as well as better cash management and OpEx control.

We are happy to report the first ever adjusted net income of $118,000 in the fourth quarter of 2019, a substantial improvement from the loss of $1.3 million we reported in 2018. Also, the adjusted net loss for the full year of 2019 was $2.2 million, compared with $4.7 million in the same period of 2018. And finally, the gross billing grew to a record of $641 million for 2019, an increase of 60% over 2018. The improvement is primarily a result of increasing marketers demand and partially offset by the depreciation of the renminbi against the U.S. dollar by 5% compared with a year ago.

For further information, please see the detailed recap of other financial measures in the press release we issued today.

In November 2018, we allowed a share buyback as our Board of Directors authorized us to purchase up to 10 million of our own ADS in the 12-month period. As of December 31, 2019, we purchased an aggregate value of approximately $4.4 million.

I would like to finish my discussion with our outlook for 2020. Please note that our outlook for revenue is based on current market conditions and reflects our primary estimates of market and operating conditions, taking into account the coronavirus pandemic. These are subject to change. Our outlook is based on the information available as of the date of the press release distributed today.

We estimate our first quarter of 2020 revenue to be between $46 million and $50 million, and our first quarter gross profit is estimated to be between $12 million and $40 million. We now project our 2020 revenue guidance to be between $240 million and $260 million and our 2020 gross profit is estimated to be between $70 million and $75 million. Our adjusted EBITDA is estimated to be between $5 million and $8 million.

Finally, I believe that 2020 provides significant opportunity to achieve profitability given the scaling of our business, and we continually work towards operational efficiencies. Though the current operating environment is challenging as we are faced with the disruptions caused by the coronavirus outbreak, we're closely monitoring the outbreak's impact on our operations and financial results, and our outlook remains cautiously optimistic.

I will now turn the call back over to TJ for closing remarks.

Thank you, Terence. As we begin 2020, the long-term strength of our business is compelling and the market dynamics are exciting. Chinese enterprises, such as iClick, are benefiting from perhaps the world's richest array of data sources. Data lies at the heart of a virtuous cycle whereby machine learning, fed by data, powers continued development-enhancing capabilities. These dynamics are helping us provide better products and services with better refinements that are enhancing customer engagement for the brands we serve in all sectors. Our company has a considerable strategic advantage as we have accumulated a massive repository of consumer data. As such, we are transforming from China's marketing technology leader to a global integrated marketing and enterprise cloud platform, creating new opportunities for us. Our data dominance effectively creates economic modes, sprouting new entrants and creating new synergies for potential M&A.

And finally, as mentioned previously, we are facing the challenges associated with the coronavirus. Everyone in our organization is absolutely focused on protecting the health of our workforce as well as preserving the resilience of our business. The weeks and the months to come will inevitably continue to be challenging, but we are prepared and ready.

We look forward to 2020 as it will be a critical year for our company to fully transition into a platform with 2 unique growth businesses and our core focus on profitability.

This concludes our prepared remarks. Thank you for joining us on today's call. We will now open the call to questions. Operator, please go ahead.

(Operator Instructions) The first question today comes from Fawne Jiang of Benchmark.

Congrats on a very solid quarter. First one's to you, focus on the virus outbreak disruption. Just wonder whether you could give us a bit of snapshot in terms of your conversation with your key accounts, like throughout the first quarter and now we're moving into second quarter, how their sentiment -- advertiser sentiments are generally are. So basically trying to get a sense of the pace as well as the magnitude of the potential recovery if we're looking at one right now. And also, I heard TJ mention that different verticals have different performance throughout the process. Just wonder your exposure to these specific verticals, whether it's travel, or on the positive side, the gaming and I think retail entertainment side.

[Interpreted] Fawne, this is TJ.

Honestly speaking, we did observe that this pandemic has some impact to certain sector -- customer in terms of their advertising budgets.

And particularly, the sectors are including like hospitalities, hotels and also the off-line business, like automobile industry.

On the other hand, there are some unexpected benefit side to certain industries, for example, like online gaming, e-commerce and online education sectors.

Another observation we made is that customer do have a tendency to put their budgets to the mobile line -- to the mobile and online sites and to expect a higher return on investment.

However, most of our customers are mid to large-sized international top-tier brands. And for that background, they have very strong foundation and they have very good deployments for online arrangements. Therefore, they have more flexibility to face the change.

And also, we do have plans or -- in working that to help our customer to move their offline budgets to online budgets and to help to develop our marketing solutions.

And also, in your question, you mentioned about -- from the first quarter to second quarter, what are the changes we have observed. For Chinese markets, generally, that actually quite common to putting advertisement budget, and that was also the case for the second quarter. Due to the impact of the pandemic. We do see -- we did observe some cancellations of the budget. And now we are into March, and we start seeing the advertisement business coming back.

Anything you want to add, Terence?

Yes. Fawne, I guess TJ has summarized very nicely about our observation and also some of the business being picking up right now, starting in March. I think there are 3 points that I would just want to add about our resiliency. First is that we are mobile-driven. Second is that we are performance-driven. And lastly, our client base are always the top-tier clients in the market. So I think these add up why we still are cautiously optimistic about our Q1 and also going into Q2. And I think our guidance already are given to the market, and this is a clear signal about our own expectation at this moment.

That's very helpful. My second question actually focus on the Enterprise Solutions side. Just given what has going on with the recent lockdown, it seems like it further highlight how important to have integrated online/offline channels for a lot of the retailers. Just wonder whether it has potentially opened up the customer base for you on the Enterprise Solution side, your update on the pipeline for 2020 and your strategic thinking in terms of how they're shaping up, whether we are essentially looking at a potential acceleration for the industry as a whole as well for you, guys. (foreign language)

Okay. Maybe I'll just answer a bit first and then TJ may add on some points. I think as beginning of our new Enterprise Solution business in 2019, it was quite a good start by having like a Q-by-Q growth on Q3 to Q4, was basically a 38% sequential growth, $3.6 million. So I think this momentum has been keeping on. And we have successfully achieved our first year target and that we are going into our second year.

We have complete our 50 key accounts for 2019. And right now, we are seeing the momentum basically keep on. And as this virus situations that are actually bringing more opportunities than ever, that brands and marketers understand more about the online and off-line data integration's importancy, as basically TJ also mentioned before and also in our script.

And in addition, I think retailers potentially also wanting to extend more new channels, including e-commerce and WeChat commerce. So I think our solution was building on both the WeChat platform and also the off-line/online integrations data is kind of really on the sweet spot right now. So we believe that this would actually drive in more demand. Having said so, as we also understand the current challenges during this virus situation.

So properly going into the first quarter, we may not be seeing substantial uplift yet. But going into the second quarter, I think there would be some more demand in this particular business. And the outlook of these solutions, our Enterprise Software Solution remain positive. So our target for the year is still double this revenue. And we are building a very strong pipeline right now going into the second quarter. So there will be at least 20 accounts in the pipeline and the inquiries that we got during this period. So we believe that after the virus pass, we'll be able to execute them quite well in the second quarter.

And I'll just see if there is anything add-on from TJ, if not, maybe -- because we have to move on to the next questions properly.

[Interpreted] I will supplement just one point.

In a way, actually, the outbreak actually lower our market educational cost for our Enterprise Software Solutions customers.

Actually, we have a lot of customer coming from particularly the consumer goods side. They actually actively approached us during the outbreak and hope to help them to connect the off-line to online business and to help them to speed up.

So in a way -- in the long run, that is actually quite beneficial for our Enterprise Software Solutions.

Of course, in the short term, we still see the impact for communication with our customers.

I'll give you an example. When the outbreak was at the worst in February, our engineer couldn't go into the field, go on-site to visit or to help the clients.

So these are only the technical issues we can fix. And strategically speaking, actually the pandemic is quite helpful to push this business forward.

So we actually try to work on enabling our engineers to work better with our customer in the Enterprise Software Solutions sectors during the pandemic.

As the confirmed cases in Mainland is decreasing rapidly in March and we are still working on the solution, we can provide it, and we have more demands coming from the customer side. So we actually have a very positive outlook for our Enterprise Software Solutions business.

Thank you. That's my supplement.

(Operator Instructions) The next question comes from Darren Aftahi of Roth Capital Partners.

I hope you guys are well. Just I'm curious on your guidance, more so on the Marketing Solutions, which I think for 2020 implies $220 million to $240 million for revenue. Maybe, Terence, what's the implied assumption of, one, is there a recovery? And, two, if so, when does that sort of occur specific to your business and advertising budgets? And then embedded in that, could you just maybe break out what online-based businesses, gaming, education and e-commerce kind of makeup as a percentage of mix of your Marketing Solution customer budgets?

Okay. Thank you, Darren. I think you're talking about how we are so confident about the 2020 guidance in terms of the Marketing Solution and also a breakdown of some of the verticals that we mentioned basically having strong momentum. And I think if you look at our Q4 result, basically, our gross billing have already reached over USD 200 million, so it represent actually a recurring runway that we have for our business.

So actually our client base are increasing. Our clients' budget are also increasing over the year. And most of our clients are recurring clients who have been a relatively long-term relationship and contract with the company. So we believe that, even in the first quarter, I think we will still be running quite a good billing number, and that actually translate to how we divide our revenue number and also our confidence in terms of Marketing Solution business growth in 2020.

So we expect -- we do expect that to pick up more actually maybe in the second half of the year, because in the first quarter, there will be definitely some impacts due to the virus situation. But as TJ also mentioned, we are seeing some of the pickup right now. So we believe that going to the second quarter, there would be even more picking up.

So in terms of your second part of the questions about the breakdown of some of the key verticals. I think as we understand, our business are quite diversified. So basically, we have 6 to 7 verticals. Each of verticals, generally, we are controlling at around 10% to 15% in terms of our billing and even the revenue number.

So basically, the e-commerce, the online gaming and also the education, which is picking up in a relative new sector or vertical for the company and actually add up in a normal scale will be around like 25% to 30% of our budget. But during this virus situation, actually these 2 vertical, the e-commerce and gaming and education -- I mean, still, these 3 verticals are actually growing quite substantially. So I believe, in the first quarter alone, that the verticals basically would be having more than 30% to 35% of our gross billing, which would be over the normal range of like 30%.

The next question today comes from Thomas Chong of Jefferies.

I have a big picture question. Can management comment about the overall online advertising market in China? What's the growth rate that you are expecting? And how much we are actually outpacing the industry growth? I just want to get -- to see the delta from there. And on that front, can you comment about the social advertising revenue growth in China, because we have seen Tencent is quite resilient in social advertising? Can you also comment about how you think of Tencent's social advertising in 2020? That's my first question. (foreign language)

[Interpreted] I'll be sharing with you my view of the advertisement business in China.

We see a huge impact brought by this pandemic to the advertisement business in China. Particularly for off-line business industries and media.

And actually, we don't really focus on the off-line customers and off-line media.

As we answered that question before, it has -- it's highly relevant to which sector you are in when you ask the question of advertisement industry in China.

For example, hospitality, airlines, hotel, and off-line business, such as automobile, they are highly impacted.

But this is rather an opportunity for the online business, such as the gaming and online education.

For mega customer who has both online and off-line arrangements, they will try to transfer their off-line budget into online.

So overall, it's a huge impact for the advertisement industry in China. However, when you look at the sectors, the online are less impacted than the offline business.

And that's how -- also how we deploy our operations. We try to focus more on the online business.

That will be my sharing. Thank you.

The next question today comes from Brian Kinstlinger of Alliance Global Partners.

It's Brian. I realize Forbes Media has been a great investor. I'm curious if their connections or their business in any way has led to new business opportunities or you expect that it will going forward.

Ladies and gentlemen, it appears we are having some technical difficulties. Give us one moment while we reconnect.

(technical difficulty)

[Interpreted] This is TJ. I'd like to double check with you about your question. You are asking, what are the new business opportunity under the impact brought by the pandemic, is that correct?

No. Actually, I'm curious with the investment from Forbes Media. I'm wondering how that has led to potentially new business opportunities in the Marketing Solutions side, given their business, if that has actually been the case.

Okay. I got it. So this is Terence. So maybe let me answer these questions because it's also related to the investment side. The new investor from the shareholder, the Forbes, actually, would -- we foresee that there will be a lot of new strategic initiatives that we are actually undergoing discussion right now, including some of the potential M&A opportunities right now that we are in discussions. I'm sorry that I cannot release too much of the details. But right now, we have many initiative discussing with the Forbes shareholder. So there would be potential, some of their media assets or business that maybe that we would get some of the distribution rights in the region. So that's basically the directions that we are working on right now.

The next question today comes from Carson Lo of Nomura (sic) [HSBC].

This is Carson from HSBC. So I have one question about the bigger picture as well. So regarding the overall ad industry, we see actually the short-form video platforms like Douyin and Kuaishou, they are adding a lot more impact inventories in the market since 2019 and leading to some other platforms facing their ad pricing under pressure. So what are the implications to this phenomenon to iClick in particular?

[Interpreted] Sorry, we are having some technical issues.

(technical difficulty)

This is Terence. Maybe I could also answer these questions. And I think the question on other short videos, basically, they will make the whole advertising industry more dynamic and with more kind of content-rich new formats of advertisement. So from our perspective, we are always trying hard to basically enrich our traffic, content, data, and also the operations of our product and services. So I think these video-related kind of format would also allow the home market to have more traffic. And from these market conditions, particularly under this virus impact, I think this would give the company, give us more solutions to basically to provide to our advertisers and our customers. And that will definitely provide more ROIs in terms of our business portfolio. Our ad inventory will be enriched, and we will have more room to basically arbitrate across different media because you have to understand, we are kind of independent platform and we are agnostic about different media.

So basically that would help us. And we are not the media itself, but we are the platform who activate this media and provide the value-add on top of that. So if these video-related kind of media publishers release more ad format or ad space, our traffic basically increases. We would be able to help our clients to also find the best solutions, enriching their advertising returns on investment as well. I think, from that perspective, actually would be a benefit to a company like us.

The next question today comes from Bo Pang of Oppenheimer.

With the comment on the coronavirus impact, just want to get more details here. So can you share with us the business growth made in January, February and March, respectively? I just want to get the recovery trend.

I think if you look our guidance, basically, that represent still a 15% positive growth that we are budgeting right now. And we have a -- comparing to, I mean, last year on a year-over-year basis, that would still be 15%, 20% growth in terms of the overall like marketing shares.

So before the coronavirus outbreak, can you tell us like what was the growth rate in January? And then what -- does that cause a decline in February? And then what is the recovery so far in March? So just trying to get a sense of how fast we are recovering from the impact there.

Unfortunately, I don't really have the exact figures right now because our March number is still in accounting right now. But I do believe, as TJ mentioned, February is slowing down. But January is a normal run rate growth. So that would be like a 15%, 20% growth comparing to last year. So the March actually is picking up. So basically, we are missing the February growth, and that actually impact us around, overall, 10% numbers in the first quarter. So that's basically the high-level picture at this moment that I could give my best right now.

The next question today comes from Nelson Cheung of Citi.

Congratulations on the very solid FY '19 results. I have a quick question on your margin guidance going into first quarter 2020 and full year. I guess based on your guidance, the gross margins should be around 27% in first quarter 2020, compared to around 30% last quarter. Can management briefly explain what's the driver behind the margin change? And given the full year margin guidance at around 30%, can management provide your long-term margin target on gross margin level and operating margin level in longer term?

Okay. Thank you, Nelson. I think, for the first quarter, actually, our margins expectation is lower. The obvious reason is because of the slowdown in the executions of our Enterprise Solutions. Although we foresee more demand, but the execution still take a bit of time. And if you look at our numbers in Q4, actually, our gross margin is improved quite substantially.

The major contributor is obviously coming from the Enterprise Solution business. So that's why, in the first quarter, we will see the numbers or the margins would have some impact by that. And but overall in the year, as we are still relatively confident, and also, because we believe that this virus situation will ultimately pass by and that entering into probably the first -- the second half or even the second quarter, to be able to execute more of the Enterprise Solution business.

And also, we are also planning on some new high-margins Marketing Solutions products. So we believe that all this adding up, we would still be able to remain the 28% to 30% gross profit margins in the year.

And in longer terms, of course, we are targeting to basically reach at least 20%, 30% of our revenue coming from that Enterprise Solution business. But we are not talking about this year or even next year, but we are talking about a relatively longer-term period.

So -- but if we would be able to achieve that, so basically, our gross margin will be able to uplift to probably 35%-plus. And also, that our operational leverage was there. So if you look at right now our 2019 numbers, we've been able to basically doing around like a 3% operating EBITDA margins.

So going into 2020 and also into more relatively long terms, we believe that we'll be able to probably produce or uplift that numbers to a high single-digit number at least in the next like 2 to 3 years. So that's basically the target right now that we have. I hope this would make sense and answer your questions.

As there are no further questions, I'd like to turn the call back over to the company for closing remarks.

Thank you once again for joining us today. If you have any further questions, please feel free to contact iClick's Investor Relations department through the contact information provided on our website.

This concludes this conference call. You may now disconnect your lines. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]