Phoenix New Media Limited (FENG)

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Phoenix New Media Limited (FENG)

Q4 2012 Earnings Conference Call

March 6, 2013 20:00 ET

Executives

Matthew Zhao - Investor Relations Director

Shuang Liu - Chief Executive Officer

Ya Li - Chief Operating Officer

Lily Liu - Chief Financial Officer

Analysts

Alex Yao - Deutsche Bank

Julia Chung - Morgan Stanley

George Meng - Macquarie

Eddie Leung - Merrill Lynch

Martin Bao - CICC

William Huang - Barclays

Jiong Shao - Macquarie

Presentation

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Phoenix New Media Fourth Quarter and Fiscal Year 2012 Earnings Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions) I must advise you that this conference is being recorded today, Thursday, March 8, 2013.

I would now like to hand the conference over to the Investor Relations Director, Matthew Zhao. Thank you, sir. Please go ahead.

Matthew Zhao - Investor Relations Director

Thank you, operator. And thank you and welcome to Phoenix New Media fourth quarter and fiscal year 2012 earnings conference call. I am joined here by our Chief Executive Officer, Mr. Shuang Liu; our Chief Operating Officer, Mr. Ya Li; and our Chief Financial Officer, Ms. Lily Liu.

For today’s agenda, management will provide us with a review on the quarter and also include a Q&A session after the management’s prepared remarks. The fourth quarter and the fiscal year 2012 financial results and webcast of this conference call are available at Investor Relations sections of www.ifeng.com. A replay of the call will be available on the website in a few hours.

Before we continue, I refer you to our Safe Harbor statement in our earnings press release, which applies to this call, as we will make forward-looking statements. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in renminbi.

With that, I would like to turn the call over to Mr. Liu Shuang, our CEO.

Shuang Liu - Chief Executive Officer

Thank you, Matthew. Good morning and good evening everyone. We are very pleased to report strong fourth quarter results in terms of both financial and operational performance that help us complete a challenging, but solid year of strengthening in our overall foundation to year 2012. Because of the strengthening of our convergence technology platforms, unique and sought after content as well as our strong execution during the tough year, we were still able to achieve a major milestone of reaching annual revenue of over RMB1 billion.

In addition, we grew net advertising revenue by over 31% to RMB610 million. This growth clearly demonstrated the deepening of our relationships and increasing awareness among advertisers about our fast growing, highly educated higher income readers and viewers would depend on iFeng for obtaining news, finance, technology, entertainment and the lifestyle content.

With that today, I would like to discuss three key focus, which is one, elaborating on user base expansions on premium company offerings; two, our year end activities in promoting our iFeng brands and expanding our media footprints; and three, our strategy to further expand our mobile internet business. First, our strong user growth and continued expansion, throughout the year 2012, our web portal continued to significantly outpace our peers’ growth rates and narrowed the viewership gap which according to iResearch, our daily unique visitors grew by over 43% year-over-year reaching 33 million viewers.

Likewise, monthly unique visitors grew dramatically by over 64% reaching 262 million. This growth was significantly faster than any other major portal websites in China, and means that over 50% of all Chinese internet users came to iFeng to consume our premium content, this average out to over 338 million page views per day throughout December alone. We believe that our coverage of major domestic and international news events like the 18th CPC National Congress, which generated over 38 million page views or the Taiwan Golden Horse Award with over 93 million page views, and of course, the famous wedding ceremony of the Diving Queen Guo Jingjing, which generated an amazing 167 million page views clearly demonstrates our differentiated focus on highly desired media in China.

On the video front, we experienced even greater growth, because of our unique focus on short-form professional made new contents. iFeng view grew its daily unique visitors count by over 94% year-over-year. This was over 30 million viewers watching over 60 million videos per day in December. This strong growth in our video business accounted for 18% of overall ad revenue in the fourth quarter, up from 12% in the third quarter. We continued to acquire the significant traffic growth for two primary reasons. One media consumption had us continued to involve at portal and mobile access points, we are monitoring and involving with it. This is necessary in order to provide improved and innovative constant formats that make it easier for Chinese readers to connect and consume our content.

In addition, we continue to experiment with these formats to improve the advertising possibilities on ROI for our advertising clients. As an example, we have a new video program called iFeng Daily News or (indiscernible) in Chinese. This show leverages our audience appetites for updated news by providing attraction of 15 most followed stories twice a day. This segment is provided in the stimulus format that can be easily and quickly viewed by audience.

In addition, it is exclusively sponsored with a $1 million contract over the course of several quarters. This sort of innovativeness demonstrates our ability to involve with our audience leveraging our media-centric DNA, plus one our parent, Phoenix Satellite TV’s premium content enabling us to offer Chinese viewers a more balanced perspective on real-time global news coverage on in-depth feature stories in new and convenient ways. The second reason is because we continue to show iFeng commitment and the dedication in providing an un-biased journalistic voice in the online media world with other portals focused more on social networking or entertainment videos and online games. We remain focused on what matters providing Chinese a well-granted perspectives of the world as it is.

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