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00:06 Good day, and welcome to the Youdao 2021 Fourth Quarter and Full-Year Earnings Conference Call. Today's conference is being recorded. 00:16 At this time, I would like to turn the conference over to Mr. Jeffrey Wang, Investor Relations Director of Youdao. Please go ahead, sir..

00:26 Thank you, operator. Please note, the discussion today will contain forward-looking statements related to future performance of the company, which are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act.

Such statements are not guarantees of the future performance and are subject to certain risks and uncertainties, assumptions, and other factors. 00:54 Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion.

A general discussion of the risk factors that could affect Youdao's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligations to update these forward-looking information, except as required by law.

01:27 During today's call, management will also discuss certain non-GAAP financial measures for comparison purpose only. For the definitions of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial results, please see the 2021 fourth quarter and full-year financial results news release issued earlier today.

01:51 As a reminder, this conference is being recorded. Besides, a webcast replay of this conference call will be available on Youdao's corporate website at ir.youdao.com. Joining us today on the call from Youdao's senior management is Dr. Feng Zhou, our Chief Executive Officer; Mr. Lei Jin, VP of Operations; Mr.

Peng Su, our VP of Strategy and Capital Markets; and Mr. Wayne Li, our VP of Finance. 02:25 I will now turn the call over to Dr. Zhou to review some of our recent highlights and strategic directions..

02:39 Before we begin, I would like to remind everyone that the financial information and non-GAAP financial information mentioned in this release is presented on a continuing operations basis and all numbers are based on renminbi, unless otherwise specifically stated.

02:56 We finished the fourth quarter and the whole fiscal year 2021 with strong financial results. Total net revenue reached RMB1.0 billion in Q4 2021, and RMB4 billion in 2021 whole year, representing an increase of 22.6% and 58.9% year-over-year respectively.

03:22 In Q4, we achieved positive net income on the non-GAAP basis for the first time since our IPO, at RMB 31.1 million. Operating cash inflow from continuing operations was RMB142.2 million, mainly due to strong revenue, and lower sales and marketing expenses incurred.

To be fair, achieving non-GAAP profitability was helped by favorable seasonality in Q4, including the year-end shopping season. 03:55 Nonetheless, the year-over-year trend is clear.

The results demonstrated that our financials are steadily improving, and our business is on the right track to sustained profitability, even under the challenging regulatory environment. Moreover, Q4 results showed that our strategy of doubling down on new growth opportunities is working.

04:20 We continue to make good progress on multiple fronts, including the smart devices segment, B2B business, and STEAM education business. In Q4, Youdao has also been added to the MSCI China All Shares Small Cap Index as of market close on November 30, 2021.

We are pleased to be part of this widely recognized global benchmark and recognized our business performance and growth potential. 04:52 We continue to comply with the updated laws and government policies.

We have ceased offering the after-school tutoring services on academic subjects in China’s compulsory education system and completed the disposal of this business.

05:09 As a result, the K-9 academic AST Business met the criteria of discontinued operation and retrospective adjustments to the historical statement of operations have also been made for the previous periods, which provides a consistent basis of comparison for the financial results of the continuing operations.

I would like to thank all former teaching and operations staff for their contribution to the K-9 academic AST business in the last several years. Now, let me walk you through some of the details of our fourth quarter. Firstly, our smart devices segment kept strong momentum.

It generated revenues of RMB317 million in Q4, up 24.8% quarter-over-quarter and 33.9% year-over-year from Q4 2020’s high base. Dictionary Pen sales exceeded 500,000, a new record. 06:15 For the full year of 2021, revenue from the smart devices segment reached RMB980.4 million, representing an 81.6% increase from 2020.

In Q4, we entered into a strategic partnership with the Commercial Press, with the exclusive inclusion of Xinhua Dictionary in Youdao Dictionary Pens. In addition, many of the well-known dictionaries published by the Commercial Press will also be included in Youdao’s smart devices.

The integration of smart AI and classic content makes the Dictionary Pen, a truly indispensable tool for language learning and usage. 06:58 We also kept improving our core technologies. A new feature called Writing Guide was introduced for the pro version of Youdao Dictionary Pen.

Powered by our proprietary Natural Language Processing technology, the Writing Guide feature provides personalized assessment for students’ English writing, evaluates vocabulary usage, grammar correctness, and then offers suggestions for improvements. This is another novel application of Youdao’s AI learning technology.

07:33 Our new-category product, Youdao Listening Pod was released at the end of Q3. So, Q4 was the first full quarter of sales. We are happy to say, it is off to a strong start. The units of Youdao Listening Pod sold in Q4 was double that of the Youdao Dictionary Pen 1 in the same period.

07:56 In Q4, we introduced more licensed textbooks and added AI listening comprehension mock tests to the device. We believe Youdao Dictionary Pod is a stronger product compared with its peers from other companies and will gain further popularity in coming quarters. 08:16 Then let’s turn to STEAM courses.

The gross billings of Youdao Weiqi or Youdao Go increased by around 130% year-over-year and over 30% quarter-over-quarter, reflecting the sustainable growth and retaining the leading position in the Go course markets. 8:36 We recently launched the Youdao Boardgame Academy app, for our learners to play Go and Chess matches online with fellow learners.

It matches players with similar skill levels, supports both human-to-human and AI matches, and provides high-quality quizzes for improving skills. 08:59 Our STEAM courses are also gaining more recognition in the sector. We received two excellent-course awards for our STEAM courses from Beijing Association For Science and Technology.

09:14 In terms of adult and vocational courses, our current strategy is to drive growth in areas that have a large addressable market and fits our expertise. Examples include graduate school entrance exam preparation, and digital skills training courses.

In 2021, the Ministry of Human Resources and Social Security released a working plan on enhancing digital skills focusing on digital skills training such as artificial intelligence, big data, and cloud computing. This is a good fit for us. 09:50 Gross billings of vocational education courses grew approximately 170% quarter-over-quarter in Q4.

Besides, Youdao was included in the new base of adult education by Zhejiang Province Human Resources and Social Security Department. We believe adult and vocational training have a bright future and we are patient in this area.

10:20 As for education digitalization solutions, we kept rolling out new features for our solutions and signing up new customers and partnerships. In Q4, we signed a strategic partnership with Suzhou municipal government to build smart education solutions in the city. 10:39 Suzhou is a large and prosperous city, whose GDP is No.

6 among all Chinese cities, right after Chongqing. So, Suzhou’s endorsement is a milestone for our education digitization business. 10:53 We are also dedicated to fulfilling our social responsibilities. Youdao Foreign Language Reading Corner, the public welfare project, benefited over 30,000 people.

Besides, Youdao was awarded as the Annual Model Enterprise of CSR for its special contribution to helping the disabled and CSR CHINA TOP100 Best Brand of Fulfilling CSR of the Year. 11:21 As we close our books on 2021, we had an eventful year, which I believe will still be special when we look back a couple of years from now.

Despite the challenges, our teams were able to drive significant growth of our business at 58.9% of revenue growth.

And likely more importantly, our diversified investment in smart devices, STEAM courses, and others in the last couple of years, and long-term support from our parent company NetEase, have allowed us to navigate the changing environment relatively smoothly, and to build a stronger position for us in the market.

12:05 Looking ahead, we are committed to compliance and the focus on our growth areas, including smart devices, STEAM courses, adult and vocational courses, and education digitalization solutions. Education technology is still in its early days, and we firmly believe it has a bright future. I’d like to thank our investors for your continued support.

And we look forward to a fruitful FY2022. 12:37 With that, I will turn the call over to Su Peng to give you more details on our financial performance..

Net revenues from our learning services were RMB579.3 million, or US$90.9 million, up 20.6% from the same period in 2020. We attribute this growth to the increased revenue generated from our learning services, which were further driven by the growth in paid student enrollments during the period in 2021.

14:29 Net revenues from our smart devices were RMB317.7 million, or US$49.9 million, up 33.9% from the same period in 2020, driven by the substantial increase in sales volume of Youdao Dictionary Pen in the fourth quarter of 2021.

14:50 Net revenue from our online marketing services were RMB151.8 million, or US$23.8 million, representing a 10.2% increase from the same period in 2020. For the fourth quarter, our total gross profit reached RMB445.3 million, or US$69.9 million, up 11.5%, compared with the fourth quarter of 2020.

15:18 Gross margin for learning services was 51.4% for the fourth quarter of 2021, compared with 55.9% for the same period in 2020. Gross margin for smart devices was 30.8% for the fourth quarter of 2021, compared with 39.5% for the same period in 2020.

15:39 Gross margin for online marketing services was 32.6% for the fourth quarter of 2021, compared with 26.9% for the same period in 2020. For the fourth quarter, total operating expenses were RMB693.6 million, or US$108.8 million, up 5.8% from RMB655.7 million for the same period last year.

16:08 With that, for the fourth quarter, our sales and marketing expenses were RMB420.4 million, compared with RMB511.1 million in the fourth quarter of 2020. Research and development expenses were RMB170.2 million, compared with RMB109 million in the fourth quarter of 2020.

Our operating loss margin was 23.7% in the fourth quarter of 2021, compared with 30% for the same period of last year. 16:43 For the fourth quarter of 2021, our net loss from our continuing operations attributable to ordinary shareholders was RMB215.9 million, or US$33.9 million, compared with RMB251.2 million for the same period of last year.

Non-GAAP net loss from continuing operations attributable to ordinary shareholders for the fourth quarter was RMB168.2 million, or US$26.4 million, compared with RMB238.1 million for the same period of last year.

17:16 Basic and diluted net loss per ADS from continuing operations attributable to ordinary shareholders for the fourth quarter of 2021 was RMB1.75, or US$0.27. Non-GAAP basic and diluted net loss from continuing operations per ADS for the fourth quarter was RMB1.37, or US$0.21.

Our net cash provided by the continuing operating activities was RMB142.2 million, or US$22.3 million, for the fourth quarter. 17:58 Turning to our full-year results, our total revenues for 2021 increased by 58.9% to RMB4 billion, or US$630.2 million.

Net revenues from our learning services for 2021 were RMB2.4 billion, or US$383.1 million, up 61.3% from 2020. 18:26 Net revenue from our smart devices for 2021 grew by 81.6% year-over-year to RMB980.4 million, or US$153. 9 million. Net revenues from online marketing services for 2021 were up 25.6% year-over-year to RMB593.9 million or US$93.2 million.

18:52 Total gross profit for 2021 was RMB2 billion, compared with RMB1.1 billion in 2020. Total operating expenses for 2021 increased to RMB2.9 billion or US$460.1 million, compared with RMB2 billion in 2020.

19:12 Net loss from continuing operations attributable to Youdao’s ordinary shareholders for 2021 was RMB895.4 million, or US$140.5 million, and basic and diluted net loss per ADS from continuing operations attributable to ordinary shareholders for 2021 was RMB7.36, or US$1.15.

19:39 Looking at our balance sheet, as of December 31, 2021, our contract liabilities, which mainly consist of deferred revenue for our tutoring courses, were RMB1.1 billion, or US$167.2 million, compared with RMB894.2 million as of December 31, 2020.

At the end of the period, our cash, cash equivalents, restricted cash, time deposits, and short-term investments totaled RMB1.6 billion, or US$247.4 million. 20:18 This concludes our prepared remarks. Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead..

20:29 Thank you very much. [Operator Instructions] Our first question is from Sheng Zhong of Morgan Stanley. Please go ahead..

21:00 Thank you. Thank you for taking my question. So, could you please provide an outlook on your learning devices growth in 2022? And if you can break down to your current products and the new product pipeline that's really great. Thank you..

21:21 Thank you, Sheng. Yes, this is Zhou Feng. I believe this is going to be an inflection year for our us in terms of smart devices. We have a lot of exciting work underway and we not only drive growth, but also lay the foundation for next year and next, next year's growth.

Now, first, we are going to release new generations of our Dictionary Pen and Listening Pod products in 2022. 21:58 There's a lot to do there. For example, we have just added English writing related features to the Dictionary Pen. So, it was made possible by years of R&D and users really like them.

So, you expect us to add more hardware capabilities and more advanced AI Technologies to help users in new scenarios, new learning cases in the new Dictionary Pens and Listening Pods this year. 22:41 Second, so we expect to release more new categories of devices this year.

We're going to bring to these new products, our strengths like attention to detail great design, seamless AI, and that really works. Yes. So, all the strength that we have building Dictionary Pen to be a really popular learning product, we will bring them to our new categories of devices. 23:21 Actually, there's one that's pretty close to launch. Yes.

So, next month, yes, we will launch the Youdao smart [learning lamp] [ph]. We think a smart tabletop device like the learning lamp is a very intriguing device. So, it's very interesting device to help learners in multiple ways. And we have quite a few new ideas there, and we really like the ideas and we want to introduce them to our users.

24:03 In general, what fascinates me is that the fact that we have only really scratched the surface in using AI to help learners learn better. So, with new sensors, more computing power, more data, yes we see a future where AI really understands the learner and makes learning, orders of magnitude better. 24:28 Yeah.

So smart devices or we like to call them AIoT devices, AI plus IoT, internet of things. So, AIoT devices are the best of vehicle we believe for helping us to get the AI to the user, because they allow us to really deploy these sensors piece industry designs and the exact user interface that we want.

That works best for this, for any particular learnings scenarios. 25:07 And I want to share you that we think the trend is it becoming more and more clear. Yeah, according to 2021 China education, smart devices trends, inside to report by Tencent Research Institute.

The education smart devices market is expected to be close to [RMB100 million] [ph] in 2024. 25:32 So, we intend to be a leading player in this market. So, since 2019 we have already achieved three consecutive years triple digits or high double-digit growth for smart devices.

In 2021, the growth was 82% and with revenue reached about RMB1 billion, So, I believe we have demonstrated our fast growth for us in this area and sustainable growth. 26:10 As I talked about in earlier calls, compared to our peers, Youdao has deep knowledge in both the technologies and content required for the success of the smart devices.

And compared to many of our peers, we have also a head start in terms of supply chain build-up and also sales channel construction. So, we are in a very good position here as we compete for customers. 26:44 So far, I believe the results have agreed with our view, and we believe we could achieve good growth in 2022 as well. Thank you..

27:02 Thank you very much Dr. Zhou. May I follow-up with a quick question. The emissions – I remember in the [indiscernible] the learning devices, sorry, the listening devices had a very good sales momentum.

Can you please quickly comment what the momentum is recently for this new product?.

27:29 I didn't get your last sentence.

Can you repeat it?.

27:37 Yes, sure. About the learning device, I remember in the [indiscernible], the sales was pretty good. So, would you comment about the recent momentum of this learning device, which actually was in a new product for you..

27:55 Right. Yes. So, our recent trend, yes, as you know the seasonality of the hardware products, learning devices. So, we have actually multiple months in the year that are, kind of key drivers of sales. So, [double 11] [ph] eleven is one of that and also December, the shopping festival in December also is also pretty good.

And the sales there was also good for us. And the one after that would be the beginning of the semester, that is basically this month and next month. 28:54 So, February and March are normally the strong months. So, after Q2, yes.

So, we are looking at – it's doing pretty well for us, right now and you can expect that the beginning of the new semester is the one that we are looking at right now, and it's not finished yet. Yes. So, that's – and, let me say few about the general whole-year trend. 29:34 So, normally the sales actually are strong in February and March.

And also, one of the key months is the beginning of the whole school year, that will be August and September. And that's normally stronger than February and March, because our products are sold more online. So, the e-commerce shopping festivals are very important. So, Q4 tends to be also pretty strong. Yes. So, that's the normal seasonality..

30:28 Thank you very much..

30:32 Thank. The next question is from Brian Gong of Citigroup. Please go ahead..

30:40 Good evening, Dr. Zhou, Su Peng, and Jeffrey. Thanks for taking my question. So, my question is regarding our latest strategy and investment plan on steam courses, especially considering the latest regulation, our regulatory environment and deposits from MOE in late January. Thank you..

31:01 Thank you, Brian. This is Su Peng. And yes, I will take this question and as for the [indiscernible], right now, there is currently no flow of the regulations that impact us to develop the same process. And so in our time, we will smoothly enhance the investment on the same quarter in our business segments.

31:30 And Youdao insist on the empowering the same process with innovative technology and it's always coming to offering the high quality [quarters] [ph] to our users. And the purpose for us to produce the data high quality [quarters] [ph] is for example, let's talk to imagine the goal and, as well as Chess program.

And it’s not only to teach something to students, but also, we expect our student could understood about the history and the culture of the [indiscernible] as well as such the Chess game. 32:10 And that they know how to play the game and they can play with their family-friend and families.

And in further, we hope they can make a new friend through playing the games with the others. And we think that's really something related with the fundamental of the innovation and education. 32:29 So that's what I think about our non-subject of same process at this moment. And as Dr.

mentioned, and then we have fueled up Go apps to organize also to celebrate – to host about the online game, player versus player for students, for basically others. So, we think well that’s what we expect to build our kind of that online family for our students to play with the others.

32:59 So, and also go back to the – I think about you mentioned about the [indiscernible] definitely, we will have been paid close attention to the latest regulatory requirement and ensure running the business within the scope off the relevant role and regulation.

33:16 Obviously, and we will keep our eye open and watch closely about the update about the regulation issues. I hope that answers the question. Thank you, Brian..

33:28 Thank you. That's very helpful..

33:34 Thank you. The next question is from Thomas Chong of Jefferies. Please go ahead..

33:40 Hi, good evening. Thanks management. May I ask about, how we should think about the competitive environment for our loan ASP courses such as adult education and STEAM courses going forward? Will we expect the competition will be intensified? Thank you..

34:03 Yes. Thank you, Thomas and this is Zhou Feng. And for the competitive landscape this was regarding adult and vocational courses.

And I believe you have already read out all the information on the news from the public channels, regarding there is several or peers has been announced to enter into this area and that definitely will be the good news with the sectors because that's also been supportive by the Central Government regard to releasing several policies to support the growth of this, and the development of this vocational education business.

34:40 And [indiscernible] business, the first is about, when we think about the new business, we will think about what's the fundamental you feel say of about the quality of our products. We think that will be the fundamental things and the fundamental value, which we can provide to our users and students.

34:56 And second thing is about – yes, we are – we own about that, kind of Youdao experience that's users to and we always try to leverage our advantage from our own users on the dictionary to pass that product invoice, we also pass that trial services throughout our strong platform, and to help them to understood our business and we can help them in the different sectors.

35:23 So, at sourcing [indiscernible] right now it's because of the – also in the ways to support of separate different policy on the training and more and the more people. There is notice about the progress and growth in this area.

35:39 So, we think about the total number of users, potentially for the number of end users for the vocational training, and we have growth year-over-year and as we think about that we can be the part of the top players in this area. I hope that answered your question. Thank you Thomas..

35:56 Thank you..

36:00 Thank you very much. The next question is from Linda Huang of Macquarie. Please go ahead..

36:09 Hi, management. Thank you very much for taking my question. I have one regarding for our denormalized business. And can you share with us, how should we expect you’re your normalized growth? And how should we look at the profit margin for the remaining business, especially for 2022 and 2023? Thank you..

36:33 Hi Linda, this is Wayne. I would like to pick you question. As I mentioned, the key dynamic [indiscernible] 2021 and we already respectively disclosed our financial figures in our earnings for the remaining business. They continue operation business.

Compared with 2020, the annual growth rate of the revenue from the continuing operations to close to 50%. 37:07 Overall gross profit margin for continuing operations is around 50%. Going forward, we will concentrate more on the segment our smart devices, education, digitalization solutions, and the STEAM and adult.

37:27 Although we will not provide specific guidance on the revenue rates and the profit margin for 2022 or 2023, however I would like to add some color going forward for this business respectively.

37:48 First, for smart devices, we are good and already have a strong business, including, but not limited to branding, technology, and channel advantages when compared with those peers for our new [indiscernible]. And we are committed to invest more [indiscernible] in a new category or new pipeline. 38:14 As mentioned by Dr.

Zhou, new pipelines are expected to be launched in the near future. We believe we have maintained a great year-over-year growth rate of our revenue. Although, our revenue business is already a bit high. We also spent a better profit margin, which is mainly contributed from the achievement of economic scale.

38:45 Second, for STEAM business, say educational digitalization solutions.

We had got certain milestone in 2021 for example, [indiscernible] partnerships with [indiscernible] to provide school and teachers with our Youdao math learning terminal and solutions, which empowers them to efficiently track students learning progress and optimize teaching deadlines. 39:21 Further, the business skills were expected to enlarge.

We believe we will achieve over 100% growth relatively low business in 2021. Lastly, we also plan to invest more R&D and the marketing expenses to update the product version. Therefore, a great growth rate, as well as more losses expected to invest in this segment.

39:53 Finally, both STEAM and adult business as explained by my [indiscernible] these segments are supported by the base and we will strictly follow the regulators guidance. In addition, we have multiple products in STEAM such as [indiscernible], which increased quickly.

On the high hand, we expect to launch model competitive SKUs to achieve faster growth. 40:30 Considering the increase in user demand and the large economic skills, better profit margin are expected to achieve for this segment. But we are very confident in [insurance] [ph], in revenue and improved profit margin for the remaining business going forward.

Wish this is helpful. Thank you..

40:55 Thank you very much. Very clear..

41:00 Thank you. The next question is from Yuzhong Gao of CICC. Please go ahead..

41:09 Thanks for taking my questions. First, congratulations for the great financial performance. My question is, can you give us more color on the gross strategy for vocational service in future, for example, currently there is a policy encouraging the vocational education.

Is there any chance to operate Government other vocational students? Thank you..

41:38 Yeah, this is Feng Zhou. So, yeah, of course, we all know that the vocational training services, these are really encouraged by the government. It is a very interesting area. So, we combine that, so Youdao will combine that's with adult courses like English training courses into a segment. We recall that adult and vocational tutoring services.

And yes, let me share with you a few points regarding the overall segment. 42:21 So, this is a traditionally strong area for Youdao. We had very successful quarters like the logic English courses in the last couple of years. So, we have quite some experience in this area. And the business is changing.

So, because of COVID, because of other factors, so we had some challenges in last year, recent quarters. And right now, we're looking at several growth areas for this sector. 43:04 So, one important area is still along the similar lines of the successful courses we have. And one very interesting area, we think is graduate school entrance exam.

Tutoring for graduate school interest exams. So, this is interesting for us because we don't know that this exam is becoming more and more popular. Over 4 million students are expected to take this exam this year. 43:43 And last year was $3.7 million in 2021. And so, because it's such a popular exam and we have a few years of experience in it.

And we found that also we found that, it's an exam that students invest a lot of time and energy, which we can really help with the vast experience we have in designing courses and also using AI to improve the learning process. So, we have our team looking really seriously at this exam.

44:38 Graduates school entrance exam and we have already updated the course starting recently. And also, we will continue to update it throughout the coming quarters. So, we think it's a very promising area. 44:56 So, other areas that we think are really interesting are what we call it a digital schools training. Yes.

So, things like big data and Artificial Intelligence Application, these kind of subjects and also digital art design and kind of similar subjects. We think these are really helpful courses for adults to take and potentially have a much, much better chance of getting higher paid.

45:39 So, and also, it's something that our teams are really familiar with and good at teaching. So, we are investing a lot in these courses and so far the progress have been really well. So, going further, we are also working with different local governments.

So, recently, we have cooperated with Beijing Municipal human resources and social security department. And also, as I just talked about in the prepared remarks, we also signed a collaboration in Q4 with [indiscernible] Human Resource and social security department.

46:28 So, all working on providing vocational training and courses to adults and workers. Yes. So, overall, we think it's a very good area.

And right now, we are focusing our efforts on doing this online, instead of actually operating offline schools where we are doing this online because we think online is great for us, and online is also – has the benefits of that we can use our software and artificial intelligence skills in designing the learning experience and we were seeing that.

So, we are currently focusing on online and we will of course [Technical Difficulty]..

47:30 Thank you..

47:31 Thank you..

47:33 Thank you. The next question is from Candis Chan of Daiwa. Please go ahead..

47:40 Thank you for taking my question. My question is about your customer acquisition strategy for various business segments, and also your key investment areas in 2022.

And how will that customer acquisition strategy be different from what we've seen in the prior years and are we further expanding our studios or hiring more teachers in this year? Thank you..

48:12 This is Lei Jin. I will answer your question. In terms of our customer acquisition strategy in 2022, maybe I will answer your question from the two perspectives.

First today, for smart devices, our customer business strategy will speak to multi channels, online channels such as e-commerce platform and short-vide platforms accounted for around the two-thirds of sales of our smart devices. 48:44 We put more efforts in [indiscernible] in Q4 and achieved that with good result.

The [have a] [ph] potential offline channels at of same. Recovery business for [indiscernible] and other offline channels for our Dictionary Pen and the Listening Pod. 49:06 To increase our products of earnings in [indiscernible] are willing to share them on social media.

It is about the Channel strategy; we should move down 500,000 Dictionary Pen in Q4. Certainly, as well customer resilience strategy for STEAM courses. We decided to open more offline STEAM centers, video cost as of our [indiscernible] center established in Beijing in Q4 went well.

49:41 The further [indiscernible] last November, focusing around students integral development, largely between and the strategic thinking where we offer Youdao iCode program in quarters. Youdao [indiscernible] and the Youdao [reaching costs] [ph].

50:04 Most STEAM costs will be on our offline centers, so that our user for the [indiscernible] and a more comprehensive interaction is there. In terms of our business, we will continue to invest and are focused on smart devices, STEAM courses, adult and vocational courses, and the education digitalization solutions in 2022..

50:32 Thank you..

50:35 Thank you very much. Ladies and gentlemen that concludes the question-and-answer session. And I would now like to turn the conference back to management for any additional or closing comments..

50:48 Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Youdao directly or reach out to TPG Investor Relations in China or the U.S. Have a great day..

51:04 Thank you very much. Ladies and gentlemen, that concludes this event, and you may now disconnect..