Piyush mubayi: a question about the company’s business recovery in the third quarter. Yu Zhengjun just mentioned that the medical business has made profits, which is very encouraging. Could you give us more details on the recovery, such as the growth rate and how to look at the growth potential in the future? In addition, the company also mentioned that other businesses have begun to recover. Can you predict how long it will take for these businesses to fully recover? How does the company judge the current macroeconomic recovery? Moreover, compared with the first quarter, the company’s gross profit margin in the second quarter has increased significantly. Is this level sustainable? < p > < p > Yu Zhengjun: the year-on-year decline of the company’s medical business is still more than double-digit, but the recovery from the month on month is very good. It is expected that with the current speed of development, the medical business will recover to the level of last year in the third quarter. Some other businesses also have the same development trend, so our forecast for the year-on-year growth of revenue in the third quarter is higher than that in the second quarter, and the performance of the second quarter has reached the middle value of the forecast range in the first quarter, and the growth performance of the second quarter is also higher than that of the first quarter, which is the general trend. In my opening remarks, I also mentioned that Beijing has experienced the second round of epidemic situation. The latter situation will improve, and so will the macro economy. The business recovery of the company is also based on the continuous operation of stores and the purchase of traffic from Baidu. < p > < p > the gross profit margin and operating profit margin of the company are similar to the situation in previous quarters. We promised in May last year that we would carefully review all the operation projects and consider how to better allocate investment and improve the return on investment. Six months later, our performance in the fourth quarter and the performance of the profit and loss statement did improve greatly. This is the way we have always followed. We did it in the first quarter and the second quarter, and it is expected to be something we will continue to do in the second half of the year. There are several aspects to be observed in the cost structure of the second quarter. In terms of marketing expenditure, if the revenue is hard won, we will be more cautious in terms of marketing expenditure. For example, we may reduce the investment in promotion activities and pre installed applications, because the sales of smart phones have also declined. Of course, if there is a very high return on investment in the pre installation of a certain department, then we will continue to purchase. Face to face recruitment may be more inconvenient in the third and fourth quarters, but with the gradual restart of the economy, we believe that we will increase more recruitment and the company’s relevant budget will also increase. From the second quarter to the third quarter, Baidu’s core business sales costs and operating expenses, which are not calculated according to U.S. general accounting principles, are estimated to increase by more than 10%. Eddie Leung, BofA Merrill Lynch analyst: two questions. First, can you comment on the merger of Tencent and its competitors? What is the impact on the current competitive landscape? How does Baidu deal with the possible market changes? Secondly, the opening remarks mentioned that the epidemic situation in Beijing had a certain impact on the core business of the company in the second quarter. Could you elaborate on the impact on the investment of advertisers in Beijing? < p > < p > Shuo: Tencent and Sogou have cooperated for a long time, which is not new news. In the mobile era, some key functions are still very important for users to remember an app. Baidu is recognized as the best search engine in China, and this brand awareness is difficult to replicate. We attach importance to the improvement of Baidu app ecosystem and constantly improve the user experience. Users get not only information but also closed-loop experience from us, such as information search to online shopping completion. The more perfect our ecosystem is, the more perfect the experience we can provide users, and Baidu will continue to maintain its leading position in the field of search innovation. < p > < p > Yu Zhengjun: on this point, product positioning is very important. Wechat is a social platform that connects people. The purpose of search is not to connect people, but to connect people and content, whether it is text content, pictures or videos. When using social networks, users want to see other news updates or read some pushed content, while when using search engine services, they may be more interested in a certain topic. As Robin Li said in his introductory remarks, some users may be able to listen to an audio broadcast for more than an hour because they are concerned about a topic. We need to provide users with very rich information, whether the information comes from the account of the social platform or some app. Our management page provides users with such a website. The more information we can provide on a certain topic, the more we can meet the needs of users and let users get enough information. Social platform embedded search function may also do a good job in search, but it also loses the social attribute. The question is whether Tencent wants its social platform to develop in the direction of search, focusing on search and reducing social attributes, because once it decides to do so, its door will open, allowing other companies to create better search products for it It’s a better social product. The proportion of Beijing business is not very large, so the overall impact is not big, but we do have a lot of northern advertisers, may have a single digit impact, not too much. Alicia Yap, Citi analyst: the proportion of revenue contributed by the management page to the total revenue of core marketing business has reached 30% in the second quarter. Does the company have its own forecast for the time point when the proportion of revenue contributed by management page reaches 100%? Previously, in H5 website, what proportion of advertisers have been transferred to the management page? How much is not transferred? In addition, has the input of advertisers been affected by the tension between China and the United States in the past two months?
Shen Shen: Robin Li also mentioned proportions in his opening remarks. The purpose of introducing the management page is to provide customers with a safer experience and more accurate information. Later, we found that advertisers have even begun to use the functions of the management page without our participation. This is mainly because we constantly add more functions to the management page to help advertisers improve their return on investment more effectively. The number of advertisers using the management page is growing as our products help them grow their business more easily. < p > < p > Yu Zhengjun: we have not set a target for the revenue contribution ratio of the management page. We have mentioned many times before that these tools are used to help our platform to add more content and improve the user experience. Therefore, we did not deliberately increase the revenue contribution ratio of the management page to 100%, and we did not set a target for the revenue contribution proportion of the applet. As a search engine platform, we hope to provide users with the content in their own ecosystem, and also hope that they can query the content outside our system. More searchable World Wide Web content can also help users improve the user experience, not only on the management page. With the deepening of our mobile strategy implementation, we find that more and more external content can be used on the platform. As for the investment intention of advertisers under geopolitical tension, we believe that the current customer’s willingness to invest is more related to China’s economic situation and to the degree of economic restart. With the continuous improvement of economic restart level, we are more and more willing to go out of our home, and Baidu’s business recovery will be better. The current geopolitical situation is of great importance to our industry Business has little impact. James Lee, analyst of Mizuho Securities: could you please explain why the number of active users of Baidu app dropped month on month? Does this have anything to do with the suspension of updates in the second quarter? Or is it because of the large-scale resumption of work that the user’s use time is reduced? What measures will the company take in the second half of the year to deal with this decline? Or is the current number of active users enough to drive business growth? In addition, will Baidu management participate in the investigation of iqiyi by the US Securities Regulatory Commission? What kind of internal investigation will the company carry out to cooperate? < p > < p > Yu Zhengjun: the epidemic in the first quarter had a great impact on China and had a heavy impact on the economy. In February, everyone kept a strict social distance, which lasted until March. Later, the situation eased, and the resumption of work and school began gradually. The number of our daily active users is the number in the third month of each quarter. So if we compare the numbers in June and March, many places have been closed down, many shops have reopened, and schools have reopened. As a result, people’s activities of going out of their homes have increased significantly, so the time of using Baidu app has been reduced. According to questmobile’s data, the most frequently used apps in China are in a similar situation. The traffic in June was significantly lower than that in March. < / P > < p > SHEN Shuo: for increasing the number of daily active users, we have also taken some measures, including adding more content and services to Baidu app, increasing user participation and interaction with products, and improving the algorithm to increase the user’s use time. At the same time, we have added a lot of new functions for different user groups. For example, we have provided some new services for college students returning to school. We have seen the trend that the number of users is growing again. However, due to the current summer vacation, it may take some time to see whether our countermeasures can really play the expected role. < p > < p > Yu Zhengjun: with regard to iqiyi, baidu adopts a zero tolerance attitude towards fraud. After the issuance of relevant reports by short sellers, we believe that it is very important to listen to the opinions of independent investigators. The audit committee of iqiyi urgently intervenes, requires the initiation of self-examination procedures, and employs independent external consultants. These measures are the body of good corporate governance Now, to win the trust of investigators, this verification process is very important. As a member of iqiyi’s parent company, we did not participate in the independent investigation, so I can’t comment on the relevant situation, but I can talk about the general investigation procedure. In addition to reading short sellers’ reports, independent external consultants also investigate financial figures, which can take a long time. After the SEC intervenes, it will also ask the independent external consultant questions, so the independent external consultant will conduct additional investigation procedures. Before the outbreak, similar investigation takes months to more than a year. Due to the impact of the epidemic, the investigation process of iqiyi report should be longer. We have highly qualified independent external consultants to conduct the investigation. If there is evidence that a company has engaged in fraud and the financial data is not credible, then the audit committee of the company will withdraw from the investigation. In short, hiring independent external consultants is the best way to quell the accusations. Baidu will take measures to ensure good corporate governance and ensure the interests of all parties. Only in this way can we better develop and utilize the capital market. I hope I answered your question. In addition to marketing or advertising, the company’s AI, cloud and intelligent transportation businesses have driven the company’s overall performance this quarter