36Kr Holdings Inc (KRKR) 2022 Q3 法說會逐字稿

Hello, ladies and gentlemen, and thank you for standing by for 36Kr Holdings Inc. Third Quarter 2022 Earnings Conference Call (Operator Instructions) Today's conference call is being recorded. I will now turn the call over to your host, Yang Li, IR Manager of the company. Please go ahead.

Thank you very much. Hello everyone and welcome to 36Kr Holdings' third quarter 2022 earnings conference call. The company's financial and operational results were released earlier today and have been made available online. You can also view the earnings press release by visiting the IR Section of our website at ir.36kr.com. Participants on today's call will include our Co-Chairman and CEO, Mr. Dagang Feng; and our Chief Financial Officer, Ms. Lin Wei.

Mr. Feng will start the call by providing an overview of the company and performance highlights of the quarter in Chinese, followed by an English interpretation. Ms. Wei will then provide details on the company's financial results before opening the call for your questions.

Before we continue, please note 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's prospectus and other public filings as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.

Please note that 36Kr's earnings press release and this conference call include discussions of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. 36Kr's earnings press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. And please note that all amount numbers are in RMB.

I will now turn the call over to our Co-Chairman and CEO, Mr. Dagang Feng. Pal, please go ahead

Thank you. Hello everyone. Thank you for joining our third quarter 2022 earnings conference call.

In the third quarter of 2022, we maintained steady growth across our business, highlighted by our fourth consecutive quarter of profitability. This strong performance amid COVID-19 resurgences and macroeconomic headwinds was largely thanks to our dual focus on boosting our influence and advancing commercialization.

As we strove to empower the New Economy sector throughout the third quarter, we continued to optimize our services and build barriers to competition with our content ecosystem, setting the stage for our ongoing excellent performance. To start, I'd like to share with you some of this quarter's breakthroughs and innovations in brand influence and commercialization.

First, let's look at content. We are committed to creating value with our high-quality content. It is the cornerstone of our development and the powerhouse that propels continuous expansion of our brand influence. Bolstered by our content platform strategy with dual focus on PGC and UGC, we have enriched our content offerings and created a multi-dimensional content ecosystem encompassing pan-commerce, pan-technology and pan-life content.

In this quarter, we continued to produce engaging professionally-created content, with the number of our articles with over 100,000 page views climbing to over 155. Among them, several articles on pan-business and pan-life topics triggered heated discussion, driving PVs up to 300,000 and even beyond 800,000 in some cases. In addition, several of our original articles were recommended by WeChat's "Top Stories Select" in the third quarter, leading to daily page views of over 1 million for several consecutive days.

I'd also like to highlight an insightful article written by our secondary market team in the third quarter, Haitian, a blockbuster which generated huge buzz and over 800,000 views. Furthermore, our brand-new vertical sub-media outlet, 36 Carbon, launched only 6 months ago, achieved nearly 200,000 views with its in-depth coverage of Ecoflow, getting the outlet off to a flying start which significantly boosted our visibility in the dual carbon sector.

As for our UGC model, we implemented a breakthrough innovation in the third quarter. By optimizing operations for the 36Kr app's "Latest Posts" feature, we established a discussion forum for our short content, creating a self-perpetuating content creation cycle. This boosted core user retention while also drawing attention and responses to our content, substantially reinforcing user stickiness.

In addition to our engrossing text and graphic content, video content is one of our most effective tools for increasing user diversity. We unleashed fresh vitality in our short video and live streaming content during the third quarter, with several of our short videos achieving over 1 million streams. Among them, our original content on the topic of "The Truth About How Hospitals Make Money" gained more than 4 million views on Bilibili. In addition, 36Kr received 2 gold medals and one copper medal at the China Content Marketing Awards for its excellence in content production and dissemination, highlighting the industry's recognition of 36Kr's original content generation and commercialization capabilities, as well as our brand influence. As of the third quarter of this year, the number of our short video followers exceeded 7.4 million. Among them, the number of our followers on Bilibili surpassed 1.5 million at the end of October, making us a leader among institutional accounts on Bilibili.

Regarding live streaming, our "Youth Watch" and "CEO Tips" programs continued to pump out fresh content, producing a continuous stream of high-quality reporting with coverage of new topics. Together they completed 25 live streaming sessions in the third quarter. Notably, Youth Watch established cooperation with WeChat Video Account to launch a specialized column, setting a new record in the number of streams generated.

Beyond our UCG and PCG content, we also explored data accumulation and community operation during the quarter and leveraged our experience in primary and secondary markets to launch the 36Kr venture capital platform. This platform capitalizes on our data mapping resources to continuously empower early-stage projects to secure financing. As of now, the platform has attracted over 10,000 startup companies and over 1,500 institutional investors including such big names as Matrix Partners and Plum Ventures, with 1,000 weekly connections facilitated on average. As the saying goes, fortune favors the bold. 36Kr venture capital platform marks a bold step for us as we expand beyond media services to data tools and funding facilitation services, enhancing visibility and exposure for high-quality startup companies and connecting them with investors.

Powered by these efforts and achievements, as of the end of the third quarter, the number of our followers grew by 18.6% year-over-year to 26.7 million. We have also noted consistent improvements in our brand influence and user attention, which has laid a solid foundation for our commercialization initiatives. With that, let's turn now to the commercialization progress of our main businesses.

First, our advertising revenue increased by 20% year-over-year, powerful evidence of brands' appreciation of our effective brand marketing. Thanks to our continuous service innovations, coupled with our CSR program "Seeking the Light", the number of our customers rose by 20% year-over-year while ARPU held steady at last year's level in the third quarter.

We continued to create new advertising content and formats for brands targeting C-end consumers. For example, we made a commercial video for Wuling Hybrid Electrical Vehicle entitled "The truth about oil resource depletion". Featuring our fresh perspectives, this pioneering short video won raves from the customer.

Our vertical sub-media outlet "Oh! Youth" also continued to gain brand influence, boosting its commercialization potential. By connecting content formats from various channels, including texts, graphics and live streaming, "Oh! Youth" can fulfill the varied needs of our diverse customer base. As for commercialization, multiple well-known companies, including iQiyi, Huawai, JD and Zhihu, became repeat customers in the third quarter and we established new cooperations with Bon Way, STEPVR and other New Economy brands.

Although serving the New Economy sector is a key differentiator and advantage for 36Kr, we also continued to innovate and augment our services for traditional industry customers. For instance, we established in-depth cooperation with XTEP to upgrade their brand strategy in preparation for their new product launch. By skillfully integrating product testing of similar products with our detailed, informative industry-specific content, we helped XTEP cement their strategy for becoming a world-class Chinese running shoe brand. This collaboration merging in-depth industry content, product videos and a product launch was a first for 36Kr, and represents a potent new tool in our arsenal for empowering traditional consumer brands. We are confident that as we continue to refine and enhance our services, we will attract more traditional brands seeking an influential and creative partner in their marketing strategy.

In addition, we recently entered into a strategic cooperation with FutureCar, a leading North American media platform focusing on the automotive industry. Through authorized content sharing and mutual commercialization support, the two parties will jointly tap into opportunities in the global New Energy Vehicle sector. In addition, this marks an important expansion of 36Kr's global business footprint, building our media network and commercialization prospects in the North American market.

Regarding our secondary market products, we teamed up with Guotai Junan Securities during the quarter to share our insights into the real estate industry's current situation and future investment trends through the "36Kr Capital π" program. Meanwhile, we established partnerships with renowned companies, such as New Hope Group, ClouDr, Linmon Media, and Jenscare, to provide empowerment services in market value management and brand management.

Also, apart from 36Kr's self-owned secondary market business, we set up a joint venture in the third quarter with the well-known U.S. financial media company Capital Watch. Going forward, the JV will focus on offering market value management services for Hong Kong-listed companies.

Turning to value-added enterprise services. In this quarter, we continued to provide high-quality services for clients by integrating online and offline formats to mitigate the impact of COVID-19 on their businesses. As a result, we established cooperation with more enterprise and government clients, increasing our number of customers by 26%. Total revenue from this segment also increased by 4.7% year-over-year.

One notable success was the heavyweight IP forum we hosted in September, "Lean In: 2022 China Fund Partners Summit". Through our communications with a massive number of startups and investment institutions, we have developed a deep understanding of both the current situation and the future outlook of a broad swath of industries. We capitalized on this advantage to analyze the key factors impacting the development of RMB funds from industry, policy and market perspectives, helping local funds gain deeper insight, adapt to changes and capture opportunities in the new investment era. In addition, we concluded our "WISE New Economy Kings Conference" last week, with "Long China, Long Innovation" as this year's theme. We invited eminent New Economy professionals including entrepreneur Wang Shi, economist Guan Qingyou, and Charles Li Xiaojia, entrepreneur and former chief executive of the Hong Kong Stock Exchange, to conduct in-depth discussions of trending industries at the event, which attracted total exposure exceeding 4.5 billion across online audiences.

Aside from offline activities, we continued to make strides with our consulting services and value-added enterprise services in the third quarter. For our consulting services, our 36Kr Research Institute continued to deepen its industry insight and publish compelling industry research reports, enhancing its brand influence. During the quarter, we expanded our customer base with additional government agency customers in Beijing, Chengdu, Shenzhen, Hangzhou and Chongqing, as well as renowned enterprises including Lenovo, Baidu, ByteDance, and P&G, elevating this business' commercialization. As for our content operation agency services, we continued to explore content service modularization and standardization of our app to enhance our service efficiency and quality. At the Huawei Developer Conference 2022, 36Kr was granted the Excellent Technology Content Partner Award for providing agency operation services for Huawei's browsers. In addition, we attracted new partners and established cooperations with various eminent financial institutions and enterprises, including Shanghai Pudong Development Bank, Ping An Puhui, and Huatai Securities, thanks to our high popularity and an unparalleled word-of-mouth effect.

At the same time, we continued to make progress in our regional business expansion. With our dual headquarters in Beijing and Shenzhen, we focused on expanding our presence through our 12 core regional offices in Guangzhou, Sichuan, Chongqing, Jiangsu, Zhejiang, Hubei and Shaanxi. Alongside growing regional customer diversity, revenue from enterprise clients is also increasing rapidly, with ARPU rising by more than 50% and contract size by over 60% year-over-year. Adding local enterprises to our client roster has improved the balance of our government and enterprise clients, clearly reflecting the effectiveness of our lower-tier market expansion strategy. Notably, our regional office in Jiangsu organized its first Wise event during the quarter, establishing a benchmark as we build the regional influence of our vertical summits and explore regional commercialization opportunities.

With respect to our subscription services, on top of our existing traditional courses, we upgraded our curriculum and expanded our customer base. During the third quarter, we upgraded "Funding Acceleration Camp" and partnered with well-known companies including Microsoft China and Mengniu to provide internal training. As we build out a complete curriculum, subscription services will bring us more commercialization opportunities going forward.

Next, I'd like to share our latest accomplishments with respect to our Enterprise Service Review Platform. According to Northeast Securities' data, the digital economy has become a key driver of China's economic development, accounting for 40% of China's GDP and rising. Representing our second growth engine and a commercialization breakthrough, the Enterprise Service Review Platform is dedicated to empowering the thriving SaaS industry. In the third quarter, our Enterprise Service Review Platform recorded exceptional performance across multiple operating metrics, as well as great progress in functionality improvement, user acquisition innovation and commercialization.

First, the Enterprise Service Review Platform maintained rapid growth in its operating data, with Monthly Active Users rising more than 12-fold year-over-year to exceed 1 million. The number of authentic user reviews also surged, growing by almost 10-fold year-over-year and 54% quarter-over-quarter to exceed 50,000. We showcased over 7,300 pieces of mainstream software on the platform this quarter, up 59% year-over-year, and the number of merchants on our platform is now approaching 1,000, up 328% year-over-year.

Regarding product functionality improvements, based on the underlying data of software products, we built a labeling system for software evaluation allowing users to write reviews by choosing appropriate labels, which improved review efficiency and effectiveness. In the meantime, we upgraded the risk control system for review verification to increase review authenticity and reliability. We also elevated buyers' experience by enabling profile saving on the H5 page of our app. Finally, we revamped our business portal in the Baidu mini program, leading to peak daily unique visitors of over 5,000 just 2 months after its launch.

As for our innovations in customer acquisition, in addition to continuous optimizations of our customer profile system and ground promotions in various regions, we launched an exclusive salon "Enterprise Service Team Party" on the Enterprise Service Review Platform. We invited experts from leading enterprises across popular industries with an interest in digitalization, such as catering and new consumption, to explore "industry solutions" in real industry scenarios. This event deepened participants' understanding of digital transformation from a practical point of view.

Additionally, we strengthened the content capabilities on our Enterprise Service Review Platform in the third quarter. By combining professionally generated content and Enterprise Service Review Platform products with a user-centric approach, we unlocked the unique value of IP content in guiding industry trends and forging connections among professionals. Notably, through our "Dual Growth Dialogue" program and "Digital growth" program, we focused on real business cases and authentic user reviews to evaluate the user experience and commercial value of enterprise products from users' perspectives.

Lastly, we also made significant strides in the commercialization of our Enterprise Service Review Platform. To date, our Enterprise Service Review Platform has received orders with a combined value of over RMB 10 million. It has also established strategic cooperation with Lenovo, a Fortune Global 500 company, to provide in-depth marketing services to Lenovo's SMB unit. Specifically, leveraging the data we have accumulated via the Enterprise Service Review Platform, we deliver valid marketing-qualified leads and assist Lenovo's SMB unit in precise customer acquisition. Meanwhile, by jointly developing a program for "specialized, sophisticated, differentiated and innovative" companies to acquire massive traffic from small- and medium-sized enterprises, we have equipped Lenovo with a powerful new tool to enhance their brand influence. This collaboration marks an important milestone in the commercialization path of our Enterprise Service Review Platform, and a benchmark for future cooperation with more renowned companies. We have established other benchmark cases through brand promotion of well-known SaaS vendors such as Xinren Xinshi, Hotpay, Weiling Technology and Dustess.com, building a flywheel for the Enterprise Service Review Platform's rapid growth.

Looking back at the third quarter, despite the COVID-19 resurgences and macroeconomic challenges that still weighed on everyone in the industry, we remained focused on optimizing our content ecosystem, service system and operations, while also driving our commercialization. These efforts contributed to our encouraging financial performance in the third quarter, highlighted by our double-digit revenue growth year-over-year and a profit for the fourth consecutive quarter. In addition, we continued to break new ground with our second growth engine, the Enterprise Service Review Platform, and delivered rapidly improving operating metrics and daily commercialization results. Looking ahead, we will continue to hone our unique competitive advantages to maintain our business' vitality and resilience. Riding the wave of industry upgrades and digital transformation, we will unlock greater commercialization potential and explore new growth avenues in the New Economy sector to create more value for users, shareholders and investors.

With that, I will now turn the call over to our CFO, Ms. Lin Wei, who will discuss our key financial results. Please go ahead, Lin.

Thank you, Pal, and hello everyone.

Despite the lingering challenges in the external environment, we are very pleased to have extended our strong growth momentum into the third quarter with another quarter of double-digit topline growth alongside a 11.5% year-over-year increase in total revenues. Notably, our advertising business continued to soar, increasing 20% year-over-year, while our enterprise value-added services also recorded solid growth of 5% year-over-year. In addition, thanks to our consistent and effective efforts to optimize our cost structure and operational efficiency, our gross profit margin and operating margin both improved year-over-year in the third quarter of 2022, and we delivered a fourth consecutive quarter of profitability. Our resilient, diversified portfolio of products and businesses, bolstered by our content capabilities and multi-dimensional ecosystem, aptly positions us to achieve sustainable growth and generate long-term shareholder value as we move forward.

Now, I'd like to walk you through more details of our third quarter 2022 financial results.

Total revenues were RMB 94.6 million in the third quarter of 2022, an increase of 11.5% compared to RMB 84.9 million in the same period of last year.

Online advertising services revenues increased by 20% year over year to RMB 63.9 million in the third quarter of 2022. The increase was primarily attributable to more innovative marketing solutions we provided to our customers as well as proactive sales strategies we adopted to navigate the challenging environment during the quarter.

Enterprise value-added services revenues increased by 5% year-over-year to RMB 23.6 million in the third quarter of 2022, as we continuously and proactively developed various new enterprise-level services for our customers.

Subscription services revenues were RMB 7.1 million in the third quarter of 2022, compared to RMB 9 million in the same period of last year. The decrease was primarily because some of our offline training programs were cancelled or delayed due to the resurgence of COVID-19.

Cost of revenues was RMB 35.5 million in the third quarter of 2022, compared to RMB 37.3 million in the same period of last year.

Gross profit increased by 24% year over year to RMB 59.1 million in the third quarter of 2022, compared to RMB 47.6 million in the same period of last year. Gross profit margin was 62% in the third quarter of 2022, compared to 56% in the same period of last year.

Operating expenses were RMB 62.1 million in the third quarter of 2022, a decrease of 23% compared to RMB 80.3 million in the same period of last year.

Sales and marketing expenses were RMB 32.2 million in the third quarter of 2022, a decrease of 9% from RMB 35.5 million in the same period of last year. The decrease was primarily attributable to the decrease in share-based compensation expenses and marketing expenses.

G&A expenses were RMB 16.6 million in the third quarter of 2022, compared to RMB 30.9 million in the same period of last year. The decrease was primarily attributable to the decrease in allowance for credit losses.

Research and development expenses were RMB 13.4 million in the third quarter of 2022, compared to RMB 13.9 million in the same period of last year.

Share-based compensation expenses recognized in cost of revenues, sales and marketing expenses, research and development expenses, as well as G&A expenses totaled RMB 2.6 million in the third quarter of 2022, compared to RMB 4.9 million in the same period of last year.

Other income was RMB 5.7 million in the third quarter of 2022, compared to RMB 1.5 million in the same period of last year. The fluctuation was primarily attributable to income generated from write-offs of accounts payable in the third quarter of 2022, after the company fulfilled all applicable notifications and other risk-eliminative measures.

Net income was RMB 2.5 million in the third quarter of 2022, compared to net loss of RMB 31.3 million in the same period of last year.

Non-GAAP adjusted net income was RMB 5.1 million in the third quarter of 2022, compared to non-GAAP adjusted net loss of RMB 26.4 million in the same period of last year.

Net income attributable to 36Kr's ordinary shareholders was RMB 1.7 million in the third quarter of 2022, compared to net loss of RMB 30.5 million in the same period of last year.

Basic and diluted net income per ADS were both RMB 4.2 cents in the third quarter of 2022, compared to basic and diluted net loss per ADS of RMB 74.6 cents in the same period of last year.

As of September 30, 2022, the Company had cash, cash equivalents and short-term investments of RMB 164 million, compared to RMB 194.3 million as of June 30, 2022. The decrease was mainly attributable to net cash outflow from operating activities, as well as certain long-term investments in several New Economy start-up companies in the third quarter of 2022.

This concludes all of our prepared remarks today. We will now open the call to questions. Operator, please go ahead.

(Operator Instructions) And our first question will come from Peipei Qiu of Industrial Securities.

I will translate my question. So we've learned from your financial report that the Enterprise Review Platform, (foreign language) developed rapidly across multiple operation metrics. Could you share with us more about your like monetization and time line for this business in the coming years, more about the mid and long-term strategy for (foreign language).

Since the beginning of this year, we have been trying to optimize our Enterprise Service Review Platform's operations and explore commercialization opportunities. Based on our operational data, our Enterprise Service Review Platform's primary metrics all improved rapidly year-over-year, including monthly active users, daily active users, the number of real reviews and the number of pieces of software showcased.

On a year-over-year basis our Enterprise Service Review Platform's MAU grew by over 12-fold to exceed 1 million. The number of real reviews increased by almost 10-fold year-over-year and 54% quarter-over-quarter to over 50,000. We also showcased our 7,300 pieces of mainstream software, up 59% year-over-year and the number of merchants on our Enterprise Service Review Platform approached 1,000, a year-over-year increase of 328%.

In terms of commercialization, we established cooperation with Lenovo in the third quarter to empower their customer acquisition and brand management, marketing and important milestone in our Enterprise Service Review Platform's commercialization cost.

Regarding future plans, we will leverage the existing data on our Enterprise Service Review Platform to convert more leads for delivery. So for the next quarter, we will initial our new product expansion. We will continue to collect users' real reviews and combine basic product data, expert opinion to issue personalized, industry selection reports and product comments report to help users make correct selection decisions. We think this will highly improve our service and also improve the value of the commercialization.

At the same time, from the perspectives of SaaS providers, we will continue to enrich our industry solutions and industry case base, develop case-based products and reach out to decision-makers by various means such as our product functions, articles, live broadcasts, salons, thereby forming industry consensus and helping to improve the efficiency of SaaS product selection.

With respect to commercialization, we'll continue to build benchmark cases and extend our collaboration models with leading well-known enterprises such as Lenovo and Volcano Engine to more enterprises, creating standardized commercialization models and expanding our commercialization scale with maximum efficiency.

So for the macroeconomic economy protects on the 20th CPC National Congress has also emphasized the importance of digitalization. Contrary to popular perception of COVID-19 flareup has actually facilitated the development of SaaS companies as more holistic digital transformation. So we expect that if we have more focus on the functionality of Enterprise Service Review Platform in 2022, and we will assume a very high growth comparable to the 2022 of the commercialization for the year of 2023.

The next question comes from Lingyi Zhao of SWS Research.

Congrats for the great results. I'm Lingyi Zhao from SWS Research. My first question is, how do we expect the growth potential after the relaxation of control measures? And how about expected goals?

And my second question is, could you please comment, share some outcomes on the recent WISE Conference? And what adjustments have been prepared of offline activities for December end next year?

Hi, Lingyi, thank you for your question. This is Lin. I guess I will maybe answer your first question because it's regarding some financial guidance for next year and then Mr. Feng will answer your second question.

Yes, you mentioned that the lifting of the pandemic control measures, yes, that's a very good signal a very good sign. Basically, I think all of our businesses will benefit across the board. But in terms of timing, that will be some business will benefit earlier, and some will be benefiting later.

Namely, advertising, I think that will be the number one business sector that will benefit from this, because you know in business world, I think expectations or confidence matters the most. I think the lifting of the control measures will give the business world or enterprise side a very good expectation or confidence.

So I don't think they will wait to see the growth to happen in reality, but only the sign of recovery will give them the confidence to starting to do marketing again and to do customer acquisition, so they can accelerate their growth. So that's why I think in terms of advertising that will be directly linked to the macroeconomy recovery. I think that's why advertising business will benefit first.

And advertising is in terms of business volume, that's number one contributor to 36Kr's business. And I think that's a very good sign, and that's very important. And gradually, I think after -- because this matter is just, I think, announced in this week, so it's still very early to tell. But gradually, I think after those measures, was taken all over the country, I think our enterprise value-added services, which are mainly comprised of offline events and some consulting businesses as well as our subscription business, which comes out a lot of offline training programs and offline courses, I think that will benefit also from these measures. But that will happen a little bit later than the advertising business.

But overall, all 3 major business will benefit. And to quantify that benefit, I think, in terms of advertising, that's the biggest volume that will, let's say, in the first 3 quarters of 2022, advertising grow -- I think the growth rate is between 10% to 20% if you look at its first 3 quarter results.

I think next year, as Mr. Feng just mentioned, I think next year, advertising will outgrow 2022 performance, which means maybe higher, maybe to 15% to 25% or even higher. But for growth rate, I think enterprise value-added services, which includes Enterprise Review platform as well as our subscription business, which includes a lot of training programs and courses, that will benefit in terms of growth rate. That the growth rate will be even greater than the growth rate of advertising business. But in terms of volume, that would be smaller than advertising. That's overall the answer for your first question. I think now Mr. Feng will answer your second question.

So after overcoming many challenges this year, so we successfully hosted our 10th WISE Conference. We have prepared like plan B to plan C, plan D, plan F to prepare this conference. So we adopted that into a greatest model for online format in Beijing and offline format in Hangzhou. And we also invited up to 100 distinguished guests including famous entrepreneur Wang Shi, like the famous investor Zhang Ying and also economist and some of the government agencies for this conference.

So our conference attracted exposure of over 4.5 billion across offline, online audiences and having collaboration with over 50 mainstream media. So from the commercialization prospect, although the primary part of the conference was held virtually in Beijing and combined with offline in Hangzhou, we have little impact on our revenue of the offline activities due to the impact of the COV1D-19 resurgences. So we are much more satisfied with the commercialization this year.

So in December, the WISE Conference is our focus conference, and we will also have a few customized offline events focusing on local clients' needs like enterprises and governments. And also, we will have some of the events still like a small size.

So regarding the next year, as the COVID-19 restrictions are lifted, we will increase the frequency of both our industry summits and customized events. Also, we will have issued more our own IP events for the next year. So as the reopen of the restriction, we will have more offline events and also it will generated more revenue in 2023 over the 2022.

The next question comes from Jing Tang of CICC.

I will translate myself. My question is about short video business. Can you give more color on the future plans for development and commercialization of short video?

And so our short video business is a very important strategy for C-end. And so, we used to service more to-B customers. And so the short video will service more C-end customers, and it also help us to obtain more collaboration for C-end brands, but also directly brought us more attention from diversified user groups.

Okay. From the perspective of brand influence, 36Kr's short video business have generated frequent recognition from the industry in the past year. So for example, 36Kr recently received 2 gold medals and one copper medal at the China Content Marketing Awards. It's one of the most recognized award in the industry.

So CCMA highly praised 36Kr's excellence in original content production and content marketing capabilities. In addition, the number of our followers on Bilibili surpassed 1.5 million at the end of October. And many of our original videos have also amassed a high number of streams, among them our original content of topic released at the end of November has racked up more than 4 million reviews on Bilibili.

So the most important thing is that our rank in the institutional medium is so much high. Some of them are like government or the individual medium that was just beyond us. But as for the institutional media, we are like the first one in the Bilibili.

In terms of commercialization, short video revenue in the third quarter accounting for about like 15% of our total advertising revenue, an increase compared to the same period last year. The short video format not only effectively increased our average revenue per advertising customer and it also enhanced the comprehensiveness of our service to a certain extent, enabling us to provide services to a broader area of advertisers.

And there are no further questions. I'd like now to turn the conference back over to the company for closing remarks.

Thank you once again for joining us today. If you have further questions, please feel free to contact 36Kr's Investor Relations with the contact information provided on our website.

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

[Statements in English on this transcript were spoken by an interpreter present on the live call.]