Corporate executives interpret quarterly results

Beijing time March 19 Morning News, Renren (Nyse:renn) today released the fiscal year 2013 as at December 31 of the quarter and the full year of unaudited financial reports. The report showed that Renren's total net revenue for the fourth quarter was $30.7 million, down 29.1% from the same period last year, with a net profit of $101.5 million for Renren, and a net loss of $21.1 million for everyone last year.

After the release of earnings, the Chairman and CEO of Chen, COO, and CFO Huang, and so on, held earnings conference calls to interpret the earnings points, and answer the analyst questions.

The following are the main elements of the analyst question and answer session:

Jefferies analyst Cynthia Meng: Can you make a forecast for the first quarter of 2014 company games and advertising revenue? Also, can you tell me about the progress of the company's mobile social communication business?

Huang: We expect net operating income to decline by 40% to 45% in the first quarter of 2014 over a year earlier. Most of the revenue from the company comes from the gaming business, which is taking some time to resume growth as the business is undergoing a major restructuring. It is estimated that game revenue will fall by 30% in the first quarter.

Chen: The latest version of the company's instant messaging applications has joined the Peer-to-peer chat group chat. Most of the mobile users are migrating to this new version, and some of the users are still using the Web page version. There are also a few users of the old version of Android that we can't upgrade for, but it is expected that as the price of high-quality Android phones drops fast, this part of the user will be able to gradually change the machine and use the company's application.

In addition, the company's marketing and product costs are mainly used to the campus groups and young professionals to promote, this has been the company's core user base, but also everyone is different from other communication tools competitors market positioning.

Macquarie analyst George Meng: The company has previously mentioned that only by joining the chat communication function can not make everyone's application products different from other instant messaging products, can introduce companies to join other new features of the program to increase user activity?

Chen: The number of potential users in the company is large, with a rough estimate of about 80 million to 100 million of Chinese students aged 16-26. Everyone's product design is also targeted at this target user base, and the company's competitors because of the larger group of services, so it is not easy to focus only on this user base.

No details about more new features can be provided, but take everyone's development platform as an example, our platform can be promoted specifically for this age group design of the application products, users can also subscribe to a number of public accounts to get a variety of school-related services, such as examination scores, courses, canteen recipes and so on. This information is provided by a third party and is distributed to the user. All in all, by working with third parties and pre-installed functions, everyone can better serve users.

Macquarie analyst George Meng: did the company monitor the increase in communication activity after joining the chat exchange function in the four quarter?

Chen: Yes, of course, there is an increase in the level of communication activity per user. The corporate social networking business is characterized by content sharing and photo sharing, including, of course, communication services, especially group chats, which are also available in previous versions of the company.

The largest number of instant messaging tools on the market are gaining market share, and companies need to provide differentiated services.

Macquarie analyst George Meng: just mentioned that 8% of everyone's advertising revenue comes from the mobile end, and the company provided a number of 10%, can you explain? Besides, will this percentage of the future increase significantly? At what point does it take into account that 80% of the current user time is spent on the mobile side?

Huang: In last year's third-quarter earnings call, the company predicted that 8% of the ad revenue from the four quarter last year came from the mobile end, while the actual number was 10%.

Advertising revenue for the company's mobile-side open platform has accelerated in the wake of the Lunar New Year, but as Chen previously said, advertisers are still very small on the move in the Chinese market compared to the traditional online advertising effort.

In addition, the domestic Internet enterprises rarely actively open up mobile advertising business, and brand advertisers to promote this business. You may hear that some companies are contributing more advertising revenue than everyone else, these companies are mainly electric business enterprises, and purely mobile marketing of the number of brand advertisers is limited. Everyone's mobile advertising business is expected to grow this year, but because the industry is still in the early stages of development, the company cannot accurately predict the speed and scale of growth.