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Earnings Transcript for DTSS - Q4 Fiscal Year 2022

Operator: Greetings. Welcome to the Datasea Fiscal Year 2022 Financial Highlights and Corporate Updates Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded. At this time I will now conference over to Annabelle Zhang. Ms. Zhang, you may now begin.
Annabelle Zhang: Thank you, Rob. Good day everyone and welcome to Datasea's fiscal year 2022 financial results conference call. With us today are Fu Liu, Founder and Chairman of the Board of Directors of Shuhai Beijing, Cathy Sun, Chief Financial Officer, and I'm Annabelle Zhang, the Principal IR contact based in the U.S. This call is also being webcast from the website. A replay of the call will be available later today. Please refer to the press release for more details. Now allow me to go over the Safe Harbor. Today's discussion may contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that may cause actual results to differ materially from our current expectations. For detailed discussion of these risks and uncertainties, please refer to our latest fiscal year report on Form 10-K and other documents filed with the U.S. SEC. Any forward looking statements that we make on this call are based on assumptions as of today, and we do not undertake any obligations to update these statements except as required under applicable law. In addition, during today's call, Cathy and I will give the prepared remarks in English. During the Q&A session other than Cathy and I, Mr. Fu Liu is also open to take questions and he'll answer in Chinese. All translations are here for convenience purposes only. In the case of any discrepancies management statements in the original language will prevail. With that, now I will turn it over to Cathy, who will walk you through the details of our financial results. Cathy, please go ahead.
Mingzhou Sun: Good morning, everyone. My name is Cathy Sun. And I'm the CFO of Datasea, Inc. It's my pleasure to discuss the 2022 financial highlights. Datasea is a leading provider of products, services and the solutions in three converging and innovative industry
Operator: Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions]
Annabelle Zhang : Thank you.
Operator: At this time, we have no questions. And I'd like to say this concludes today's conference. You may disconnect your lines this time and we thank you for your participation. Have a wonderful day.
Annabelle Zhang : Sorry, Rob. I think I saw some like on the webcast.
Operator: My apologies. My apologies, Annabelle. I'm sorry. Please go ahead. My apologies.
Annabelle Zhang : Yes, we received some questions regarding the company's operations and also the financial from the webcast. And the first -- yeah, this question is from Derick Cole from the Car Capital [ph]. And he has two questions. The first is how will you describe the company's competitiveness in the 5G messaging and acoustic intelligence? And the second is also if the Smart City solutions is now generating significant revenue, why the company decide to keep it? Okay, I will like refer this question to Mr. Fu Liu. I will tell him this question in Chinese.
Fu Liu: To address the question about your like competitiveness in the 5G messaging. So Mr. Liu four things. First, the market in China is very promising and also it's enlarging. China has 1.6 billion like mobile end users. And through the 5G messaging you can reach every single of them. So that's quite large market even in the global perspective. Another advantage or competitiveness Datasea has always is -- Datasea has already authorized by the three Chinese major operators, which means that the company can have access to the national market. And the national market, which I just mentioned, they were like 1.6 billion mobile end users. They can interact with 5G messaging. That's second point. The third point is Datasea has a very strong and also comprehensive product portfolio. Other than the solutions, I think Cathy and Annabelle they all shared, other than that, Datasea has built its own online cloud platforms such as messaging cloud, so which makes their solutions more comprehensive. And also, last, I want to mention that Datasea is one of the earliest like movers in this market, especially if you follow the company's disclosure closely you can tell that the company has already formed very strong relationships with the leading industry leaders such as other express delivery companies, several and also the commonly held strength is competitiveness, especially in the industry applications. Even this is so important in the 5G messaging area and also because this area is in its infancy. So that's why the Chinese -- in China, Datasea helped even involved with some regulation, draft and also propose their ideas about the commercial applications from that in very important conferences and also seminars. So because of these four reason, first, the very large market. Second, the company has already been authorized to access to the national market. The company has a very comprehensive and also like competitive portfolio. The third, the company is one of the first movers and also has already built up its own competency in this market. Because of these four reasons we think the 5G messaging and the company in this area is very well positioned. Thank you for the question.
Annabelle Zhang : [Foreign Language]
Fu Liu: [Foreign Language]
Annabelle Zhang : So for the second question regarding the competitiveness, about the abilities of acoustic intelligence, Mr. Fu Liu, he thinks that first Datasea really is China's first white paper with the co-authors, which we mentioned earlier, like Institute of Cloud Computing and Big Data, China Academy of Information and Communications Technology, and also other leading research institutions. This is the first white paper to actually discuss, acoustic intelligence and its commercial applications with a very comprehensive perspective. So that laid a foundation, very solid research foundation for Datasea that Datasea is a trailblazer in this and also a pioneer in this industry. And acoustic intelligence, not only the Datasea own the technology strength, but also the applications can be very wide. Other than the recent company's product blowout, for example, we leverage this ultrasonic generation [ph] technology to kill virus such as COVID-19 in 9 seconds with efficacy as 99.83%. Other than this, acoustic intelligence can be applied in so many other areas, for example, agriculture, medical, beauty, and more. So that's why this technology, that Datasea owns currently with a lot of like patents pending. And also, this has wide applications and Datasea has already looked through studied through this and even like public white paper to safeguard it. So that's the area that Datasea is actually staying ahead of the market, Chen. Thank you for that question.
Annabelle Zhang : [Foreign Language]
Fu Liu: [Foreign Language]
Annabelle Zhang : So for the third question, so the company has Smart City business, but it may not generating the significant revenue in the recent years. So why the company start to keep it. So for that question, Mr. Fu Liu feels, first, the company starts with our Smart City solutions. And this is the market that has tremendous opportunities. So the market position itself is very good and promising. And also as companies start to add other business lines, for example, like 5G messaging and acoustic intelligence, in those two areas, there's a lot of things can happen together, and also reinforced and strengthen Datasea's solutions in terms of smart cities, or you can tell the synergies among these three businesses are very strong. Let me give you an example. So in our Smart City solutions Datasea integrates 5G messaging, and it can help the customers to come in with [indiscernible]. And for the acoustic intelligence in the smart city solutions, which in the old model, maybe just focus on those base, like security. But with the introduction of acoustic intelligence, the security can be like taken to another level. For example, the today's COVID like threatens a threat, and also people's worries about health, or something like that. So with the solutions, we are now providing in the 5G and also acoustic intelligence, when we introduced those solutions into the Smart City, the Smart City solutions can be stronger than ever. So that's why -- that's two main reasons the company doesn't feel there's any need to drop it off because of the marketing position and also the other group business, the great synergies there to support the Smart City going forward. Okay, that will be the answer from Mr. Fu Liu about the third question. Unfortunately, we are running out of time. Actually, there's still investors questions about the financials, but we will make sure that IR team to write it down, and then we can follow up with the investor raising that question. Okay, well, I think that will be offered today. And please go ahead with the conclusion. Thank you.
Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time and log off your computers and thank you for participating.