17 Education & Technology Group Inc (YQ) 2024 Q1 法說會逐字稿

Good evening and good morning, ladies and gentlemen, and thank you for standing by for 17 EdTech's first quarter 2023 earnings conference call. (Operator Instructions) As a reminder, today's conference call is being recorded. I'll now turn the meeting over to your host for today's call, Ms. Laura Chow, 17 EdTech's Investor Relations Manager. Please proceed, Laura.

女士們、先生們，晚上好，早上好，感謝你們出席 17 EdTech 2023 年第一季財報電話會議。（操作員說明）謹此提醒，今天的電話會議正在錄音。現在我將把會議轉交給今天電話會議的東道主 Laura Chow 女士，她是 17 EdTech 的投資者關係經理。請繼續，勞拉。

Thank you, operator. Hello, everyone, and thank you for joining us today. Our earnings release was distributed earlier today and is available on our IR website. Joining us today are Mr. Andy Lu, Founder, Chairman, and Chief Executive Officer; and Mr. Michael du Director and Chief Financial Officer. Andy will walk you through our latest business performance and strategies, followed by Michael, who will discuss our financial performance and guidance. They will be available to answer your questions during the Q&A session after their prepared remarks.

謝謝你，接線生。大家好，感謝您今天加入我們。我們的財報已於今天稍早發布，並可在我們的投資者關係網站上取得。今天加入我們的有創辦人、董事長兼執行長陸安迪先生；董事兼財務長 Michael du 先生。安迪將向您介紹我們最新的業務績效和策略，隨後邁克爾將討論我們的財務績效和指導。在準備好發言後，他們將在問答環節回答您的問題。

Before we begin, I'd like to remind you that this conference call contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 and the US Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and current market and operating conditions and relates to events that involve known and unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control. These risks may cause the company's actual results, performance or achievements to differ materially. Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the US SEC. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law.

在開始之前，我想提醒您，本次電話會議包含 1934 年《證券交易法》第 21E 條和 1995 年《美國私人證券訴訟改革法》中定義的前瞻性陳述。這些前瞻性陳述是基於管理層當前的預期以及當前的市場和經營狀況，並涉及涉及已知和未知風險、不確定性和其他因素的事件，所有這些因素都難以預測，其中許多因素超出了公司的控制範圍。這些風險可能導致公司的實際結果、績效或成就出現重大差異。有關這些和其他風險、不確定性或因素的更多資​​訊包含在該公司向美國證券交易委員會提交的文件中。除適用法律要求外，本公司不承擔因新資訊、未來事件或其他原因而更新任何前瞻性聲明的義務。

I will now turn the call over to our Chairman and Chief Executive Officer, to review some of our business development and strategic direction. Andy, please go ahead.

我現在將把電話轉給我們的董事長兼首席執行官，以審查我們的一些業務發展和策略方向。安迪，請繼續。

Thank you, Laura. Hello, everyone, and thank you all for joining us on our first quarter 2023 earnings call. Before we begin, I would like to mention that financial information and non-GAAP numbers in the release are presented on a continuing operation basis and all numbers are based on RMB unless otherwise stated.

謝謝你，勞拉。大家好，感謝大家參加我們的 2023 年第一季財報電話會議。在開始之前，我想指出的是，除非另有說明，本新聞稿中的財務資訊和非公認會計準則數據均以持續經營為基礎提供，所有數據均以人民幣為單位。

Before we go into the details, let me provide you with the quarter's business update and financial from our performance across our business lines. The COVID outbreak in China in the fourth quarter of 2022 caused delays in the bidding and delivery processes of our major products, which adversely affected our financial performance in the last two quarters. However, our institutional business continues to advance beyond the financial results might indicate.

在我們詳細介紹之前，讓我向您提供本季度的業務更新和我們各業務線業績的財務狀況。2022年第四季中國爆發的新冠肺炎疫情導致我們主要產品的招標和交付流程出現延誤，對我們過去兩季的財務表現產生了不利影響。然而，我們的機構業務持續取得超出財務業績可能顯示的進展。

During the quarter, we continued to explore various business models for growth constantly developing and refining our offerings to meet the demand of original regular use and promoting the signing and delivery of each project. At the same time, we actively expanded our distribution networks and enhanced our operational efficiency. We responded to challenges in a new environment through diversified distribution channels and flexible financial arrangements. As a result, our business maintained its momentum and earned recognition from our customers beyond what the financial statements might indicate.

本季度，我們繼續探索各種業務模式的成長，不斷開發和完善我們的產品，以滿足原有的常規使用需求，並推動各個專案的簽約和交付。同時，我們積極拓展分銷網絡，提高營運效率。我們透過多元化的分銷管道和靈活的財務安排來應對新環境的挑戰。結果，我們的業務保持了成長勢頭，並贏得了客戶的認可，超出了財務報表所顯示的範圍。

In the past quarter, the impact of various pandemic containment measures were lifted across [China]. We saw business activities and projects relevant to our business returning to normal. The demand for our teaching and learning stuff offerings is guided by China's [commons] long-term policies and founded by dedicated government budgets. We believe this creates a real opportunity for us to grow in this uncertain environment. We have made steady progress in our in-school teaching and learning SaaS business during the first quarter of 2023, despite the fact that the bidding and delivery of some of our major products were delayed and our financial results were correspondingly affected.

過去一個季度，各項疫情防治措施的影響逐漸解除[中國]。我們看到與我們業務相關的業務活動和項目恢復正常。對我們的教學和學習產品的需求是由中國的[公共]長期政策引導並由專門的政府預算建立的。我們相信，這為我們在這個不確定的環境中成長創造了真正的機會。2023年第一季度，儘管部分主要產品招標和交付延遲，財務業績受到相應影響，但校內教學SaaS業務仍取得穩步進展。

Part one, exclude teaching and learning business. Several of our key product are original scheduled for the fourth quarter of 2022 what delayed due to the COVID outbreak. However, through the joint efforts of our dedicated team, significant progress was made on these key projects in the first quarter of 2023. Notably, we won the RMB116 million smart pen and intelligent [homeware] based education, digital transformation project in Shanghai, Beijing District. We have complemented the signing of the contracts and delivery has already started as of today.

第一部分，排除教學業務。我們的幾個關鍵產品原定於 2022 年第四季推出，但由於新冠疫情爆發而推遲。但經過我們專業團隊的共同努力，這些重點項目在2023年第一季取得了重大進展。值得注意的是，我們贏得了上海、北京地區1.16億元的智慧筆和智慧家庭教育數位轉型計畫。我們已經完成了合約的簽署，並從今天開始交付。

This represents a milestone in our company's development and showcases our ability to provide industry-leading total solutions for one of the most demanding regions in China. We have received significant inbound inquiries about this product and our offerings from various education bureaus and original discrete filters. [Shichung] district cloud custom bid won and signed. On April 3, we won the bid for the cloud classroom devolution system product in Beijing Shichung district with a contract value of RMB20.22 million.

這是我們公司發展的一個里程碑，展示了我們為中國要求最嚴格的地區之一提供領先業界的整體解決方案的能力。我們收到了來自各個教育局和原始離散過濾器的有關該產品和我們的產品的大量入站詢問。 【時中】區雲客製化得標並簽約。4月3日，得標北京什中區雲課堂下放系統產品，合約金額2,022萬元。

This remarkable achievements closely follows our successful bid for the smart pen and intelligent homeware products in Shanghai Shichung district in March of this year. It further reinforces the widespread recognition of the high-quality and diverse application of our teaching and learning SaaS offerings for China's educational digital transformation.

這項驕人的成績是繼今年3月我們成功中標上海市中區智慧筆和智慧家居產品之後取得的驕人成績。這進一步強化了我們的教學SaaS產品在中國教育數位轉型中的高品質和多樣化應用的廣泛認可。

The cloud classroom evolution system project is to be implemented across 41 schools in Shichung district, leveraging our one teaching one learning intelligence education platform and smart pen technology. It enables the collection and analysis of interaction data between teachers and students during and after classes. This allows for comprehensive improvement of the overall quality of classroom instruction, ongoing enhancement of the original curriculum evaluation system and the refinement of educational content and approaches.

雲端課堂進化系統計畫將利用我們一教一學的智慧教育平台和智慧筆技術在石中區41所學校實施。它可以收集和分析教師和學生之間的課程和課後互動資料。全面提升課堂教學整體品質，不斷完善原有課程評鑑體系，精進教育內容與方式。

Product and service portfolio iteration. From a product and service offerings perspective, the company is committed to continually refining and enhancing our product and service portfolio to cater to needs for a solution that can achieve regular use in major teaching and learning scenarios. As a result, we have witnessed a constant improvement in the overall product experience. Moreover, our multi based SaaS products have undergone a series of continuous optimization and iterations, propelling them to the forefront of the front markets.

產品和服務組合迭代。從產品和服務的角度來看，公司致力於不斷改進和增強我們的產品和服務組合，以滿足主要教學場景中可實現常規使用的解決方案的需求。結果，我們見證了整體產品體驗的不斷改進。而且，我們的多基礎SaaS產品經過一系列的不斷優化和迭代，已經走在了前端市場的前面。

These offerings have gathered widespread recognition and high praise from our customers as a top solution. Throughout the reporting periods, we made efforts to optimize and (inaudible) our product and service portfolio with a particular emphasis on developing staff based the system and construction and [preparing] that user experience. We implemented updates to the core functionalities of our SaaS operations, resulting in noticeable improvements in our product experience indicators.

這些產品作為頂級解決方案贏得了客戶的廣泛認可和高度讚揚。在整個報告期間內，我們努力優化（聽不清楚）我們的產品和服務組合，特別注重培養基於系統和建設的員工以及[準備]用戶體驗。我們對 SaaS 營運的核心功能進行了更新，使我們的產品體驗指標得到顯著改善。

Consequently, we observed a significant increase in user activity and retention rates, reflecting the growing satisfaction and engagement of our customer base. We are also implementing measures to ensure a more constant delivery and service experience as well as managing associated expenses.

因此，我們觀察到用戶活動和保留率顯著增加，反映出我們客戶群的滿意度和參與度不斷提高。我們也採取措施確保更穩定的交付和服務體驗以及管理相關費用。

Ongoing hardware optimization. Meanwhile, we are continuously enhancing the core functionalities of our proprietary smart pens to achieve a better user experience and additional application cases, providing an unparalleled user experience in our comprehensive internal business test. The regular writing performance of our in-house developed [dot mixed plan] has complemented the testing period and it's capacities to enter mass production in the fourth quarter of 2023 to further enhance the hardware performance of our total solution.

持續的硬體優化。同時，我們不斷增強自有智慧筆的核心功能，以實現更好的使用者體驗和更多的應用案例，在我們全面的內部業務測試中提供無與倫比的使用者體驗。我們內部開發的【點混方案】的常規寫入效能已經補充了測試期，並有能力在2023年第四季進入量產，進一步提升我們整體解決方案的硬體效能。

Additionally, the company is actively exploring various use cases with AI-plus execution businesses. We see great potential from integrating the latest AI technology with what we have accumulated in the space, creating novel applications and improving operational efficiency. During the quarter, the Ministry of Education held the world Digital Education Conference in Beijing. Representatives from over 130 countries and regions work well registered to attend the meeting with hundreds of regional Chinese education bureaus invited to listen and exchange with industry peers and educational authorities.

此外，該公司正在積極探索人工智慧+執行業務的各種用例。我們看到了將最新的人工智慧技術與我們在該領域累積的技術相結合、創造新穎的應用程式並提高營運效率的巨大潛力。本季度，教育部在北京召開世界數位教育大會。來自130多個國家和地區的代表踴躍報名參會，中國數百個地區教育局受邀聆聽並與業界同行和教育主管部門進行交流。

(inaudible) was honored to be invited as one of the only two smart educational technology service providers to present at this prestigious event. We showcased our industry leading teaching and learning such offerings with application cases in multiple leading [centers] in the education space, such as Beijing and Shanghai. Visitors were captivated by the professionalism and efficiency of our products and technical services. Our intelligent teaching and learning solutions left a lasting impression on [attentive] and received broad recognition from local educational authorities.

（聽不清楚）很榮幸能作為僅有的兩家智慧教育科技服務提供者之一受邀出席這場享有盛譽的盛會。我們在北京和上海等教育領域的多個領先[中心]展示了行業領先的教學和學習產品以及應用案例。我們的產品和技術服務的專業和高效性給參觀者留下了深刻的印象。我們的智慧教學解決方案給人留下了深刻的印象，並得到了當地教育主管部門的廣泛認可。

Part two other educational service business. In terms of other educational services business, we offer personalized self-learning products. Membership services and a range of digital products and services designed specially for students. Our in-house developed personalized self directed learning product, address the unique challenges associated with personalized learning in school. They empower students to tailor their learning [stack] strategies based on their unique interest, abilities, learning styles, and goals by providing a curated selection of learning content and styles that align with their progress.

第二部分其他教育服務業務。在其他教育服務業務方面，我們提供個人化的自學產品。會員服務以及一系列專為學生設計的數位產品和服務。我們內部開發的個人化自主學習產品，解決了與學校個人化學習相關的獨特挑戰。他們透過提供符合學生進度的精選學習內容和風格，使學生能夠根據他們獨特的興趣、能力、學習風格和目標來客製化學習[堆疊]策略。

Students can choose the most fitting resources to support their educational journey. Our portfolio includes digital tools that has [correction] books, personalized experience book, which has proven instrumental in enabling students to excel in personalized learning. The demand for these products is highly dependent on the regulatory environment and the provision of completing services.

學生可以選擇最合適的資源來支持他們的教育旅程。我們的產品組合包括帶有[批改]書籍和個人化體驗書的數位工具，事實證明，這些工具有助於學生在個人化學習中取得優異成績。對這些產品的需求高度依賴於監管環境和完整服務的提供。

Moving forward, we'll remain committed to expanding educational products and services that comply with regulatory requirements. We [still] consistently optimize and iterate our offerings in response to evolving market trends and the changing needs of our valued customers and our other educational service business.

展望未來，我們將繼續致力於擴展符合監管要求的教育產品和服務。我們仍然不斷優化和迭代我們的產品，以應對不斷變化的市場趨勢以及我們尊貴的客戶和其他教育服務業務不斷變化的需求。

Now I will turn the call over to Michael, our CFO, to walk you through our latest financial performance. Thank you.

現在我將把電話轉給我們的財務長邁克爾，向您介紹我們最新的財務業績。謝謝。

Thanks, Andy, and thank you, everyone for joining the call. I will now walk you through our financial and operating results. Please note that all financial data I talk about will be based in RMB terms. I would like to remind you that the quarterly results we presented here should be taken with care in reference to our potential future performance are subject to potential impacts from seasonality and the one-off events as a result of the series of regulation introduced in 2021 and corresponding adjustment to our business model optimization and workforce.

謝謝安迪，也謝謝大家加入這通通話。現在我將向您介紹我們的財務和營運績效。請注意，我談論的所有財務數據均以人民幣計算。我想提醒您的是，我們在此提供的季度業績應謹慎考慮，因為我們未來的潛在業績可能會受到季節性和 ​​2021 年推出的一系列監管措施所導致的一次性事件的潛在影響，我們的業務模式優化和人員團隊也隨之調整。

Our revenue and gross profit in the first quarter of 2023 were impacted due to the delay in the bidding and delivery of our several projects. However, the recent winning of major projects have [mothballed] another key milestone in the company's new business strategies. These projects are expected to be delivered gradually over the upcoming quarters and reflected in our financial statements. As of March 31, 2023, we have cash reserve of RMB639 million on our balance sheet, providing us with sufficient funds for future developments.

由於多個專案招標和交付的延遲，我們 2023 年第一季的營收和毛利受到影響。然而，最近贏得的重大項目已經[封存]了公司新業務策略的另一個重要里程碑。這些項目預計將在未來幾季逐步交付，並反映在我們的財務報表中。截至2023年3月31日，我們的資產負債表上擁有現金儲備人民幣6.39億元，為我們未來的發展提供了充足的資金。

Next I will go through our financials of first quarter financials in greater detail. Our net revenues for the first quarter of 2023 RMB9.3 million, representing a year over year decrease of 96% from RMB233.4 million in the first quarter of 2022. Our revenues are recognized based on delivery and service provided of our projects and they were delayed by the significant delay in the bidding and deliberate process of our major projects, which was affected by the COVID outbreaks in the fourth quarter of 2022.

接下來我將更詳細地介紹我們第一季的財務狀況。2023年第一季的淨收入為人民幣930萬元，較2022年第一季的人民幣2.334億元年減96%。我們的收入是根據專案的交付和提供的服務確認的，由於受到 2022 年第四季度新冠疫情爆發的影響，我們的主要專案的招標和審議過程嚴重延遲，導致收入被推遲。

Our cost of revenues for the first quarter of 2023 was RMB7 million, representing a year-over-year decrease of 92.4% from RMB91.8 million in the first quarter of 2022, which was largely in line with the decrease in our revenues. Gross profit for the first quarter of 2023 was [RMB2.3 million], representing a year-over-year decrease of 98.4% from [RMB141 million] in the first quarter of 2022. Gross margin for the first quarter of 2023 was 24.4% compared with 60.7% in the first quarter of 2022.

2023年第一季的收入成本為人民幣700萬元，較2022年第一季的人民幣9,180萬元年減92.4%，與營收的下降基本一致。2023年第一季毛利為[人民幣230萬元]，較2022年第一季[人民幣1.41億元]年減98.4%。2023年第一季的毛利率為24.4%，而2022年第一季的毛利率為60.7%。

Total operating expenses for the first quarter of 2023 were RMB106.3 million, representing a year-over-year decrease of 37.8% from RMB117.8 million in the first quarter of 2022. Loss from operations for the first quarters of 2023 was RMB104 million compared with RMB29.1 million for the first quarter of 2022. Loss from operations as a percentage of net revenues for the first quarter of 2023 was negative at 1,121.8% compared with negative 12.5% in the first quarter of 2023.

2023年第一季的總營運費用為人民幣106.3百萬元，較2022年第一季的人民幣117.8百萬元年減37.8%。2023年第一季的營運虧損為人民幣1.04億元，而2022年第一季的營運虧損為2,910萬元。2023 年第一季營運虧損佔淨收入的比例為負數，為 1,121.8%，而 2023 年第一季為負數 12.5%。

Net loss for the first quarter of 2023 was RMB92.5 million compared with net loss of RMB24.8 million for the first quarter of 2022. Net loss as a percentage of net revenues was negative 997.9% in the first quarter of 2023 compare was negative 10.6% in the first quarter of 2023. Adjusted net loss on a GAAP basis for the first quarter of 2023 was RMB64 million compared with adjusted net income of RMB9.9 million in the first quarter of 2022. Please refer to the table caption and reconciliations of non-GAAP measures to the most comparable GAAP measures at the end of the press release. For a reconciliation of net loss under US GAAP to adjusted net income or loss on a GAAP basis.

2023年第一季淨虧損為人民幣9,250萬元，而2022年第一季淨虧損為2,480萬元。2023 年第一季淨虧損佔淨收入的百分比為負 997.9%，而 2023 年第一季為負 10.6%。2023年第一季以美國通用會計準則計算的調整後淨虧損為人民幣6,400萬元，而2022年第一季調整後淨利為人民幣990萬元。請參閱新聞稿末尾的表格標題以及非公認會計準則衡量指標與最具可比性的公認會計準則衡量指標的調節表。用於將美國公認會計準則下的淨虧損與公認會計準則下調整後的淨收入或虧損進行調節。

Looking ahead, we are optimistic about [industry] opportunities and the competitiveness of our teaching and learning SaaS offerings, and we are confident our financial performance will recover as our major winnings are being delivered to our clients.

展望未來，我們對[行業]機會以及我們的教學 SaaS 產品的競爭力持樂觀態度，並且我們相信，隨著我們的主要成果交付給客戶，我們的財務業績將會恢復。

With that, that concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q&A sessions. Thanks.

我們準備好的演講到此結束。謝謝。接線員，我們現在準備開始問答環節。謝謝。

(Operator Instructions) Thank you. We have no questions. I'll now turn the conference back to Ms. Laura Chow for closing remarks.

（操作員說明）謝謝。我們沒有問題。現在我將請週女士致閉幕詞。

Thank you, operator. In closing, on behalf of 17 EdTech's management team, we'd like to thank you for your participation on today's call. If you require any further information, please feel free to reach out to us directly. Thank you for joining us today. This concludes the call.

謝謝你，接線生。最後，我們謹代表 17 EdTech 的管理團隊感謝您參加今天的電話會議。如果您需要任何進一步的信息，請隨時直接與我們聯繫。感謝您今天加入我們。通話就此結束。

Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect.

謝謝。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。