At the beginning of the New Year, everything looks new. It is advisable to summarize the gains and also look forward to the future. On the evening of January 5, 2024, at the headquarters' annual meeting held in Beijing, Zhang Xiaolong, the CEO of Fenbi, and Wei Liang, the president, enthusiastically shared the company's business performance and growth over the past year with colleagues based on their personal work and life insights. They also exchanged plans and expectations for the company's future development direction and encouraged everyone to break through themselves. At the same time, it is once again emphasized that the entrepreneurial original intention on which Fenbi pursues sustainable and healthy development is: to teach well and make good products, and not to engage in price wars, because good education is about building a good brand, rather than blindly expanding the scale. The following are the on-site speech records of Zhang Xiaolong and Wei Liang respectively.
Zhang Xiaolong, founder, chairman and CEO of Fenbi:
Dear colleagues, it's been a long time since I last talked to you all. Overall, our revenue in 2023 was OK and at a very good level in the industry. For the upcoming tasks, the main focus remains on stability: maintaining the existing business, avoiding large-scale expansion, and instead continuously enhancing efficiency and streamlining processes through technological and institutional means. After the company went public last year, many people began to care about the stock price. However, I believe that the continuous and healthy development of the company is what matters. Providing users with good products and services, ensuring that everyone's income level is higher than the social average and can increase sustainably is the responsibility I value. So, in my current daily work decisions, I'm rather cautious and seldom even post on Weibo . I also want to tell everyone that in 2024 and even in the next 3 to 5 years, it is important to maintain the income level and strive to get through the cycle. During this process, we will also continue to explore, stabilize and maintain the fundamentals while striving to find a larger market. This can also gradually increase everyone's income. In the medium and long term, the future development of our company will place greater emphasis on efficiency. We will mainly focus on teaching well and making good products, and avoid engaging in price wars. This is because good education is about building a good brand rather than blindly pursuing scale. Only with a good brand can one gain recognition from the market and users, achieve good gross profit margins, and be able to afford good benefits. We do not produce products of poor quality. We only make products of good quality and moderate price. We still focus on stability and will not be so aggressive. We will also do our best to reduce everyone's work pressure and burden through technological innovation means, so that colleagues can have a steady increase in income while being healthy and happy. As you can see, I'm wearing sneakers today. I started running in October. At the beginning, I was in excruciating pain and needed to stop and rest after running 300 meters. Now, I can finish one kilometer in just seven minutes. I ran a half marathon two days ago. Although my pace was not fast, it took me 2 hours and 14 minutes. However, I successfully completed a half marathon in just two months since I started running. Of course, running training requires scientific methods. I have also combined it with complementary training such as wall squats. Since I started running, I have no belly and lost fifteen pounds of fat. I used to have little confidence in my body. But just now, after I got off the plane, I had to travel from the airport to the venue, which was about ten kilometers. I even told my colleagues that if the traffic jam was severe, I might be able to run here. Having said so much, the main thing I want to convey to everyone is that people can break through themselves. When I was in middle school, I ran the last 1,500 meters in the whole school, and it was still the second to last. When I first started running, I went back to my hometown and had a race with my former classmates. I was still the last one. Two months later, I went back to compete with them again. This time, I ranked among the top three. So people can constantly improve themselves, but they should follow scientific methods. The day before yesterday, I attended the completion and commissioning ceremony of a printing project of our company. We managed to secure a large order. In line with strategic needs, we built a new factory. I arrived early on the day of the ceremony and ran five kilometers around the factory. Sometimes when I treat friends to a meal, if I arrive early, I will also run around the restaurant. After three years, the most important thing is still to wish everyone good health and happiness in 2024. Finally, I'll hold you up for one more minute. I would like to recommend a book called "Built to Last". Our Wei Liang is always a person who pays great attention to details, so he is an excellent professional manager. He can sort out the company's systems and processes well, and only with good process construction can our company develop for a long time and remain prosperous. That's all for today. I wish everyone a good meal, a good drink and a great time!
Wei Liang, co-founder, executive director and president of Fenbi:
Good evening, everyone. Just now, Xiaolong pointed out the company's long-term strategy and the direction of progress for us. I mainly summarized the business lines of each department and made an overall "report" on the highlights of everyone's work in 2023.
In 2023, especially in the past few years since the outbreak of the pandemic, we have faced quite a few challenges. In recent years, the company's overall strategy has been to prioritize stability and, on this basis, focus on honing its basic skills.
The following shares the work of each business line.
The first part is the construction of the teaching staff system. For the teaching staff part, we have changed from decentralized management to unified management now. The overall efficiency has increased by six percentage points, laying a solid foundation for the company's profit growth.
Previously, our industry was confronted with a challenge - the peak and off-peak seasons were quite distinct. After the company's overall planning, all online and offline teaching staff were integrated. The overall class hour utilization rate increased from 86% to 106%, solving the problem of the difference between peak and off-peak seasons. This is also a competitive point that gives us an edge over our peers.
In addition to the construction of the teaching staff system, there is also the improvement of teaching staff quality. This is also what Xiaolong often talks about: the core competitiveness of chalk. Through the establishment of systems such as teacher training and experience assessment, our interview pass rate has been steadily increasing every year, and the interview pass rate has also been continuously rising. Take the national civil service examination as an example. In 2023, it increased by 11% compared to 2022, which further laid the foundation for Fenbi to follow the word-of-mouth route.
Meanwhile, the complaint rate has been gradually declining. Taking the data of the premium class as an example, with a satisfaction score of 5 out of 10, we have now achieved a score of 4.98, which is extremely difficult. The overall complaint rate of the company has dropped below 1%.
The company has also further enhanced its teaching and research in a targeted manner, covering specific provinces and cities. For instance, in Shenzhen, we conducted separate research on the examination situation in each region. It is particularly worth mentioning that the improvement in the coverage of teaching and research not only includes civil service examinations but also public institutions and teachers. The public institutions cover the entire 11 major categories and 25 question banks, comprehensively covering all examinations with a recruitment volume of over 100 people. This also provides a necessary foundation for the company's further expansion.
The above are some improvements in the teaching staff aspect, and the following are the technical aspects.
First, let's talk about the daily active users and new additions of the Fenbi APP. Preliminary statistics show that the number of new users in 2023 was 11.81 million, with a peak daily active user count of 2.93 million and a peak monthly active user count of 10.6 million. The number of users who removed duplicate files throughout the year was over 30 million, and the overall growth momentum was maintained. At the same time, various functions, including the number of people in the question bank, the number of applicants, and the number of people live-streaming, have also set new records.
In 2023, we conducted live video streaming, which significantly lowered the threshold for new customers. The peak number of live-streaming users has increased by 254% compared to the previous year. Especially in the context of such fierce competition on platforms like Douyin, such a breakthrough is far beyond expectations. This is also the foundation for our future growth.
In addition, in the research and application of the Chalk AI technology, especially in the field of artificial intelligence, we have made a lot of explorations. Some explorations have been implemented and applied to daily work. Functions such as AI interview review, question setting and analysis have all been launched, with an average usage rate of around 90%, which has greatly helped the chalk teacher improve work efficiency and service quality. AI interview reviews have helped teachers save 50% of their time. The AI used in public institutions for analysis and question setting has increased the efficiency of teaching and research by more than 15%.
Next, let's synchronize the adjustments of the entire market sales with everyone. This year, we have quantified all aspects including market promotion, user acquisition, sales commitment and after-sales service, and have provided corresponding revenue contribution incentives. At present, a preliminary system has been formed and achieved very good results. Our S5 is at the highest level. Currently, the average annual performance of the company's marketing and sales colleagues is approximately 2.4 million yuan, and the average productivity of the top ten sales colleagues in the company is 6 million yuan. This is far ahead of others in the entire education industry.
Compared with the previous year, our marketing and sales colleagues contributed a 48% increase to the overall revenue growth. This has also produced very good results. We made a trip to various places a while ago and found that most of our employees, whether they are colleagues in the Marketing Department or teachers, can earn at least one square meter of housing in their local areas. This has initially achieved our basic goal of hoping that everyone can live and work in peace and contentment.
Fourth, the construction of the educational administration system. The aspect of educational administration services is a very complex part. It is a section that we have received the most complaints about before because it involves all aspects of life, including all aspects of clothing, food, housing and transportation. In 2023, apart from the core training business as a whole, we managed to entrust other basic tasks to the corresponding outsourcing as much as possible. At the same time, we sorted out the standards for each business, which greatly increased the workload. The result is that the overall number of classes led by our academic affairs staff throughout the year has also increased further. The average number of people served by the offline academic affairs office throughout the year is 862. The branch school with the highest work efficiency has an average of approximately 4,000 people served per person, and during peak periods, it can serve up to 240 people simultaneously. On the basis of maintaining the intensity, the satisfaction of our educational administration has improved, and the complaint rate has further decreased. The academic affairs service received an average score of 4.8, which is also the highest value in our history.
The fifth point, the construction of books with chalk. In addition to maintaining its leading position in the public examination series, we have also made new breakthroughs in the teacher series of books. The Ziyang printing factory for chalk has also started to be put into use, providing a solid guarantee for the entire chain.
In addition to the above business aspects, the company's support system also saw many improvements and advancements in 2023.
One is our financial system. Currently, all business data can be provided in a timely manner, and more dimensions of income data can be seen in the background. At present, the immediacy of data from all dimensions that we can provide has increased by more than three days compared to last year, which can facilitate our various departments to make decisions more promptly. Among them, various cost analyses also provide forward-looking estimates. The planning of the entire product provides data support for the company's business.
Next comes the legal affairs of the company. This year, the legal department has also provided solid guarantees in protecting intellectual property rights, combating piracy and resolving daily disputes. Especially in the field of combating piracy, it protected the copyright of Fenbi and helped the company recover losses from piracy amounting to 10 million.
The third is the brand building of the chalk. The company has recently won various awards, including the Best Party Branch of the Year, the Best IR Team, the Influential Brand of 2023, and the Leading Enterprise in Digital Education, among others. It is worth mentioning that Fenbi also made it to the list of the top 100 private enterprises in the cultural industry in Beijing in 2023.
The above are the efforts and achievements of Fenbi in various projects in 2023. I also thank you all for your hard work throughout the year. Thank you all. In 2023, we have laid a solid foundation, which can be summed up in one word: "stability". In 2024, it is hoped that the company can maintain stability while seeking progress steadily and make further progress, focusing on growth.
Recently, I have made considerable preparations and adjustments together with colleagues from various business lines, and have also set a rather challenging growth target for next year. I hope we can make steady progress next year and achieve greater development.
Let's cheer up together in 2024.