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Yintech Investment Holdings Limited (YIN)
Q4Â 2019 Earnings Call
Mar 17, 2020, 8:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good day and good evening, and welcome to the Fourth Quarter 2019 Yintech Investment Holdings Limited Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Yvonne Young, Investor Relations of Yintech. Please go ahead.
Yvonne Young -- Investor Relations Director
Thank you, Andrew. Hello, everyone, and thank you for attending Yintech's fourth quarter and full year 2019 earnings conference call. Our earnings release was released earlier today and is now available on our IR website.
On the call today from Yintech are Mr. Wenbin Chen, Chairman and CEO; Mr. Raphael Qian, CFO; and myself, Investor Relations Director. Mr. Chen will review our business operations and Company highlights followed by Raphael Qian, who will go through the financials and guidance. We will be -- all be available to answer your questions during the Q&A session that follows. Questions can be asked in English and -- or Chinese. If you ask your questions in Chinese, please translate into English yourself afterwards, or I may help to do the translation.
Before beginning, we would like to remind you that discussions during this call contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Such statements are subject to risks, uncertainties and factors that may cause the actual results to differ materially from those contained in any such statements. Further information regarding potential risks, uncertainties or factors is included in Yintech's filings with the US Securities and Exchange Commission. Yintech does not undertake any obligation to update any forward-looking statements, except as required it by applicable law.
During this call, we will be referring to several non-GAAP financial measures as supplemental measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the US GAAP. For information about these non-GAAP measures and reconciliation to GAAP measures, please refer to our earnings press release.
I will now turn the call over to Mr. Wenbin Chen. Mr. Chen will speak his remarks in Mandarin. I will translate for him. Mr. Chen, go ahead.
Wenbin Chen -- Co-Founder, Chairman and Chief Executive Officer
[Foreign Speech]
Thank you, Yvonne, and thanks to everyone for joining us on the call today. In the fourth quarter of 2019, we experienced a strong demand in our primary products despite a modest decline in total revenues compared with the previous quarter, mainly due to less trading days as a result of China's National Day holidays. Net commissions and fees generated by commodities and securities business increased by 41% year-on-year. As in trading gains, we achieved a total revenue of RMB450 million, nearly 10% higher than our high-end guidance. Overall, we are happy with the results.
Next, I would like to spend a bit more time talking about some major changes and breakthroughs we made in strategies, operations and quarter [Phonetic] developments in 2019. And finally, I will share my personal perspective on markets and opportunities that lie ahead of -- ahead to us in 2020.
[Foreign Speech]
In the past three years, we have experienced three landmark transformation in our business model upgrade, namely, from single-spot commodity trading focus in 2017 to horizontally expanding to both commodities and securities in 2018, and further to deepening our full scale transitioning with the introduction of financial mobile apps.
[Foreign Speech]
While pursuing development, we are questioning and seeking for the optimized value of the Company. In the second half of 2019, we officially launched initiative of upgrading our Company, our mission, value -- vision and values. Finally, we came to form new counter values as below.
[Foreign Speech]
The new mission, making investment and trading simpler, more professional and enhance the happiness of the investment and trading placed us to transform from market -- a marketing-driven business model before 2019 to product and content-driven model in and beyond 2019. The new vision, be a lifetime companion to guide customers' investment and trading is our positioning for who we are. The new values, customer-centric, embrace the change. Teamwork, innovation, focus, duty, serious in life and happy working will guide us to continuously improve our internal management to strengthen our capabilities, leading us to achieve our strategic goals and ultimately realizing our vision and mission.
[Foreign Speech]
With respect to our business model transformation, especially in the second half of 2019, while maintaining a solid growth of the two category of business lines, we formed a complete financial product metrics based on mobile apps and WeChat mini-programs for each of our product lines, including securities, gold and futures. These products bring together more than 30 million highly active and highly sticky funds and user groups.
Among these products, the Gold Master, our gold TD trading and information app, has accumulated a massive traffic and industry-leading influence in the segmented business area. The number of ours securities at product metrics is also increasing on monthly basis and we are also accelerating the upgrade of our futures app product. This self-developed app have injected stable potential clients to us. In the future, based on the mobile apps, we are expected to incubate more of these in line [Phonetic] and eventually transform from marketing-driven business to product incubation business lines.
[Foreign Speech]
These efforts combined with our incremental investments in content, compliance, marketing and technology in 2019 are the key factors driving revenues from two category of business lines to grow by nearly 50% year-on-year. And for the first time, we returned to profitability since our transformation in the second half of 2017 with consolidated net profit reaching RMB130 million.
[Foreign Speech]
As profits improve, our balance sheet is getting healthier as well. In 2019, our net operating cash flow exceeded RMB100 million, a significant improvement from last year's negative RMB65 million and free cash flow turned positive. As of the end of 2019, our cash and short-term investments reached RMB2.1 billion, an increase of 21.3% over the same period. Maintaining ample cash positions has enhanced our core competency and our ability to withstand external risks. In order to give back to shareholders and boost investors' confidence, we spent a total of $2.65 million on stock repurchase repurchase throughout the year and at the same time, our Board of Directors approved a cash dividend of $0.30 per ADS to shareholders for 2019, including our special dividend of $0.20.
[Foreign Speech]
Thanks to the advantages in developing customers using mobile apps and our diverse portfolio of securities, futures and gold offerings, we were able to provide customers to switch investment varieties and cross-selling among our product lines by following market dynamics. In particular, since the second half of 2019, we have timely grasped and guided customers to seize the opportunities of volatility in the gold and securities, and prioritized our resources to the gold TD and security advisor business accordingly. Thereby, revenue contribution from gold TD in 2019 was more than three times that of the same period, and financial advisory revenue growth of more than 100%.
Our own asset management business has created considerable revenues for the Company, while sustaining industry-leading performance. Our futures and overseas securities brokerage services contributed solid revenue and are actively benchmarking tier 1 companies. They are both expected to accelerate within [Phonetic] favorable macro environment.
[Foreign Speech]
In 2019, we provided financial products and services to a total of 90,000 individual clients and the proportion of those who purchased more than two of our products increased from 3% in 2017 to over 16% in 2019, of which, the proportional purchasing more than two -- three products has increased year-by-year. We believe that our enhanced customer development capabilities as a front product line -- product and efficient customer conversion capabilities at mid-end and excellent service capabilities at back end allow us to navigate market downturns and take the most profit by swiftly adjusting business lines, eventually maintaining solid growth regardless of market ups and downs.
[Foreign Speech]
In addition, as we previously communicated, we never stopped investing in technology and the compliance as well as the application of cutting-edge technology, such as big data, AI, blockchain and business intelligence in various of our business scenarios. In 2019, we conducted trial implementation of blockchain in the field of financial advisory services, becoming the first of its kind in the industry to introduce blockchain technology into compliance. We also received recognition from the China Securities Regulatory Commission, the small and medium Securities Regulatory Commission and the Investor Protection Bureau for our active participation and promotion in the field of investor education.
[Foreign Speech]
Looking forward to 2020, we expect our market cap of A-Share has a good chance to rebound with a host of favorable financial policies and regulations coming into play, including the implementation of the new securities law in China pushing for healthier and more rational reform of China A-Share relatively to mature counterparts, the final US trade war and WTO triggering more loose market access to foreign financial institutions, and A-Share potentially positioning to be a preferred [Indecipherable] target market caused by the COVID-19 epidemic, as well as China continue its strong GDP growth in the globe. As a company with overseas and domestic presence, cross-industry business lines and diversifying the financial product portfolio, Yintech is expected to take advantage of these favorable policies and regulations to grow further and faster.
[Foreign Speech]
With that, I will now turn the call over to Raphael Qian, our CFO, to kick start our financial results for the fourth quarter and full year 2019, as well as providing guidance for the first quarter of 2020. Mr. Qian, go ahead.
Raphael Qian -- Vice President and Chief Financial Officer
Thank you, Mr. Chen. Hello, everyone. I'm glad to speak with you on today's call. Overall, we delivered a better-than-expected Q4 results, showed the impressive turnaround in our earnings in full year 2019 and kept growing our assets, increasing our cash positions and generating more returns on equities to our shareholders. And as such, highly volatile global capital market environment, especially seen in recent weeks from the COVID-19 epidemic, it is safe to say we maintained a quite healthy and strong balance sheet that gives us lot of possibilities to further expand our business both organically and through financial arrangements.
Next, I will walk you through our results starting from Q4 2019 first followed by full year 2019. And finally, I will take you to look at our Q1 2020 guidance. We finished Q4 at RMB447.2 million in total net revenues, down 10.8% sequentially as due to less trading days in the quarter as Mr. Chen mentioned, and up 51.5% Y-o-Y driven by strong demand on our commodities and securities services. Total customer trading volume was RMB699.3 billion, up 67.8% Y-o-Y primarily due to an increase in trading volume of spot commodities and a decrease of 32.4% Q-o-Q mainly as a result of the decrease in trading volumes of spot commodities. Effective fee rate for the quarter was slightly up at 0.038% compared with 0.038% last year and 0.033% in Q3.
Now turning to our expenses. They were RMB429.5 million, a decrease of 58.7% Y-o-Y mainly because of decrease in impairment of goodwill and intangible assets, and an increase of 16.3% Q-o-Q as a result of increases in advertising and the promotion expenses as well as employee compensation and benefits. As a result, net loss for the quarter was RMB12.9 million compared with net loss of RMB732.2 million in Q4 last year and net income of RMB113.7 million in Q3. This translates to diluted loss per ADS of RMB0.36 compared with RMB10.39 Q-o-Q and diluted earnings per ADS of RMB1.30 Y-o-Y. Non-GAAP diluted loss per ADS was RMB0.25 compared with negative RMB1.52 in Q4 last year and non-GAAP diluted earnings per ADS of RMB1.40 in Q3.
Now, let me walk you through our full year 2019 financial results. Our total revenues for the year was RMB1,691.8 million, up 54.5% from 2018, mainly due to the increase in net commissions and fees. Net commissions and fees for the year were RMB1,399.6 million, up 48.6% from 2018 due to our clients' growing demand on our commodities and securities products and services. Customer trading volume for the year was RMB2,665.6 billion, up 54% from 2018. Effective fee rate for the year slightly decreased to 0.036% as compared to 0.038% in 2018. Expenses for the year was RMB1,433.3 million, down 27.1% from 2018 mainly because of decrease in impairment of goodwill and intangible assets.
Net income for the year was RMB130.6 million compared to net loss of RMB873.4 million for 2018. Diluted earnings per ADS was RMB1.14 compared with diluted loss per ADS of RMB12.03 for 2018. Non-GAAP diluted earnings per ADS for the year was RMB1.74 compared with non-GAAP diluted loss per ADS of RMB2.64 for 2018.
Now comes to our balance sheet. As of December 31, 2019, we had RMB2.1 billion in cash and the short-term investments compared with RMB1.7 billion as of December 31, 2018. Total shareholders' equity was RMB27.7 [Phonetic] billion compared with RMB26.3 [Phonetic] billion as of December 31, 2018.
Finally, let's look at our guidance. Based on the information available as of the day of this press release, we'll provide the following Q1 2020 guidance. Revenues from commissions, interest income and other revenues will be the range of RMB380 million to RMB400 million, an increase of 54.2% to 62.3% from the first quarter of 2019. Revenues from trading gains will be in the range of RMB70 million to RMB90 million.
This concludes our prepared remarks for today. Operator, we will now open the call to questions. Thank you.
Questions and Answers:
Operator
We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Hunter Diamond of Diamond Equity Research. Please go ahead.
Hunter Diamond -- Diamond Equity Research -- Analyst
Hi. Firstly, congratulations on the very strong result in overall tough environment. So, I had a few questions regarding just the results and some of the business developments. One of the things highlighted on the call was the spending on apps and online learning content to create areas of growth, big data, AI, blockchain. I'm just trying to get additional color, which areas are you really seeing opportunity and sort of the timeline on when you're looking to release new offerings in those areas?
[Foreign Speech]
Wenbin Chen -- Co-Founder, Chairman and Chief Executive Officer
[Foreign Speech]
Okay. I will translate first. Well, just now Mr. Chen mentioned in his script that we have invested a lot of our efforts and resources and capitals in the production of some app products based on the portfolio of products we have now, including the securities, gold TD and futures. So, all of the efforts we made are based on making the better user experience and trading information to the users and investors who have purchased these financial products.
Well, let me give you more colors on our progress in these three products in -- specifically. The first on securities. We have develop securities product metrics. And -- not only for the mobile users, but also for the PC users. So this is targeted to provide better trading experience and also information platform for the securities trading investors.
Secondly, for the futures product. This is also investment information and trading service platform targeting for retail investors in China that especially interested in the futures. And third, on the overseas securities brokerage product, which is kind of app product targeting investors from Hong Kong and US for those quite interested in trading stocks in the overseas market. We have invested for two and three years. And currently, we have seen a very impressive progress and breakthroughs in the recent months.
And finally, the gold TD products is also just now I shared a lot more details already in my remarks. It's already a industry-leading trading information platforms that has accumulated massive traffics. So we are very confident that the investment in these three products will make more breakthroughs. And by developing these products to both the mobile users also the PC users that will help us to gain more information of the customers' trading activities and help us to better serve our clients in the future. So, this is the first about our app products.
[Foreign Speech]
So Hunter, we are not sure we answered your questions, because these are our primary focus for investment in the ad products, and that's what Mr. Chen highlighted in his remarks.
And regarding the investments -- regarding investment in blockchain, AI and big data, those are the -- some other investment that we are working on. And especially, we highlighted the blockchain in the last quarter and also in this quarter, because we are the first company that introduced blockchain into the compliance in securities advisory. So we believe that we have this already industry-leading presence in adoption of leading cutting-edge financial technologies. So this is another area we are focused on.
Hunter Diamond -- Diamond Equity Research -- Analyst
Okay. No, perfect. Thank you very much for the additional details. So just going on that point, obviously, the gold trading is probably, I would imagine, a very strong technology and app offering right now given that gold is near its highs and investors are looking for safety. I'm just confirming in line with that, with COVID-19, it sounds like the Company doesn't anticipate, at least from the press release and the call, major impacts because most of the operations are online and that you have offerings that are very useful in all market scenarios. Is that sort of the way the Company is sort of guide? I mean, how do they feel that it's going to have fairly limited impact versus other peers, such as Noah that have a lot of physical locations in China.
Wenbin Chen -- Co-Founder, Chairman and Chief Executive Officer
Yes. That's a good question. I will translate for Mr. Chen. [Foreign Speech]
Okay. I would like to share my views on my perspectives of how the COVID-19 impact our business in three perspectives. The first is impact to our business operations. Well, currently, we see a lot of benefits from this COVID-19 epidemic, which make us -- our business -- move our business from offline to online in terms of internal communications and offline working seen from a marketing, research and development, customer surveys and -- as well as working tools are all based on the online platforms such as WeChat working software. So this is quite obvious change. We have seen that benefit us in terms of improving our operating efficiencies.
Secondly, in terms of communication habit, communication with our customers. In the past, some of the customers tend to use other communication tools to talk to us, such as the phones or others. But with the -- thanks to the COVID-19, our customers have used to using the online software and also the online apps to coordinate with us. So we have seen a tenancy that more and more of our clients are communicating with us online and leverage the rich information we provided on our apps products.
And thirdly, regarding its impact to the market environment. Well, as I introduced in my remarks, we see, overall, it's a very positive impact in our business as we have seen that the volatility of A-Share securities, as well as gold TD and futures products have experienced very dramatic increase of trading volumes and volatilities. So, at the very beginning or on the first day, the China A-Share market experienced a strong drop in terms of market cap. But after that immediately, the A-Share picked up strongly. So we have seen a relatively stable trading of A-Share since the first day. And well, even in one day, the trading volume is over RMB100 million.
So we have seen a very clear sign that the highly volatility of these three, five [Phonetic] major financial products that we provide services to the customers has experienced a very huge volatility. And we see this a very positive sign for the Company and the customers to benefit from this market dynamics.
So overall, in conclusion, we seen that from operating perspective, customers communication habit perspective, and also impact to the market dynamics, we think that we benefit a lot more from this coronavirus outbreaks rather than some negative impacts as many of the companies experienced.
Hunter Diamond -- Diamond Equity Research -- Analyst
Okay, perfect. Thank you for the additional details, Yvonne. My final question and then I'll open the line up for other investors. Just in terms of guidance, I know the Company, as an analyst, you guys gave first quarter revenue top line guidance. The Company, I know, was profitable for the year but the quarter was not. Is the Company -- going forward, as investors, should we sort of anticipate, I imagine, some -- a few quarters being negative, few being slightly negative and positive as the Company decide whether to invest or buy back shares. Just any clarity on sort of the profits going forward would be useful.
Wenbin Chen -- Co-Founder, Chairman and Chief Executive Officer
Yes. Thank you. Let me translate. [Foreign Speech]
Yes, OK. Well, let me turn translate. Yes. We see some volatility of bottom line profitability on quarterly basis in 2019 and in certain quarters we lost money, but in other certain quarters we make profits. But looking into 2020, we think that with the improvement of our business, especially after we have made some initial success in our business transformation, we have seen the -- more stabilized our top line growth. As you can see from the Q1 guidance, we deliver relatively a quite strong Q1 guidance, a year-over-year comparison. So, with the improvement with the further success of our business transformation and with the further improvement of our top line in 2020 and our bottom line, we also improve a lot from last year. So we expect that in the early stage that our business will be profitable again in 2020. Hopefully, we can deliver a very good bottom line result in each quarter.
[Foreign Speech]
Our CEO, Mr. Chen will give more colors.
[Foreign Speech]
Yes. Well, I think it's relatively -- for you -- you can make your modeling based on analysis of our cost structure. You can break down the cost by three sections. The first one is marketing and promotion cost. The second one is labor cost. The third one, other expenses, especially tax expenses. So for the first, marketing and promotion costs. With the increase of this cost, it's highly possible that this investment in marketing will drive revenue on the top line as well. So, the proportion of investment in advertisement and promotion will highly lead to the same proportion or even higher revenue growth.
Secondly, in terms of the labor cost. We have relatively stable total employees in the Company around 3,000. So, with the increase of the employees, you are expected a certain level of increase in the revenues as well. But we, at current, expect a relatively stable employee size around 3,000 or some a little higher than that, but we don't expect a very big increase in the total employees.
And thirdly, on the tax expense. While it's very hard to explain because this is a very much accounting kind of issues that we have tried to reconcile between the China tax rules and the US GAAP rules. So this involve some adjustment of tax between China and the US tax policies and accounting rules. So I will not spend more time to elaborate on details of how we develop these financial results for the tax adjustment, but this is all fully compliance with the US laws and regulations.
So, these are the three major reasons you will see the volatility of our cost structure on quarter-over-quarter basis. But as our CFO mentioned just now, you will highly expect a very better bottom line result in 2020 both on Q-over-Q and year-over-year basis.
Hunter Diamond -- Diamond Equity Research -- Analyst
Okay. Thank you very much, Yvonne. That's very useful in terms of just modeling and thinking about the Company going forward. That's all I have in terms of questions. And again, congratulations on the strong fiscal year.
Yvonne Young -- Investor Relations Director
Okay, thank you.
Operator
[Operator Instructions] The next question comes from Scott Powell of Skyline Corporate Communications [Phonetic]. Please go ahead.
Scott Powell -- Skyline Corporate Communications -- Analyst
Hi. Good afternoon, everyone, and thanks for taking my call.
Yvonne Young -- Investor Relations Director
Thank you. Thank you, Scott.
Scott Powell -- Skyline Corporate Communications -- Analyst
Yes, of course. Thank you and then congratulations on the strong financial performance. My question is, I would like to know if you could elaborate a little bit more about some of the drivers for 2020 first quarter guidance. You mentioned, revenue is being driven by commissions, interest income and trading gains. Can you explain some of the drivers of those factors that go into revenue? And also, what you expect in terms of additional milestones over the course of 2020 and what investors should be expecting?
Wenbin Chen -- Co-Founder, Chairman and Chief Executive Officer
Okay. Let me translate. [Foreign Speech]
There are two drivers that make us very confident to give the Q1 guidance, revenue guidance. So firstly, as I share with you that we have transformed our business models in the second half 2017. And after three years, we have a relatively stabilized business model and we have seen that the new upgraded business model demonstrate the strong resilience of the business and we will further continue and maintain the success we made. And we made solid growth by -- under this new upgraded business model on one hand.
On the other hand, we have seen -- as I shared a lot, we have seen the volatility of the global financial markets, including securities, gold and the futures. So these high volatility and dynamics in this capital markets will benefit a lot to our Company and the clients. So we will timely guided our clients to grasp the opportunities to trade -- to benefit from this market dynamics and to make the most profit from that. So this is another advantage. We think that we can sense the opportunities and seize the opportunities on timely basis and guided our clients to trade under this such favorable market dynamics.
[Foreign Speech]
So, two primary focus for us in 2020. And firstly, as I shared with you that we have made some initial progress in our business model upgrade in 2019. And this upgrade in business model has demonstrated its effectiveness in taking our business to the next level. So in the 2020, we'll continue to focus on and further strengthen our business model. And hopefully, it will take us to the next stage of development.
And secondly, in terms of market dynamics. Just now I already shared with you, I want to further emphasize, we think that we are placing an exceptional opportunity in the face of this highly volatile global financial markets seen from the securities, spot gold as well as futures. This is exceptional opportunity in the past 10, 20 years we have never seen before. So we will seize these opportunities as much as we can to guided our customers to benefit from this market volatilities as well. And both the Company and the clients can take the advantage from this market dynamics.
As a company that's doing primarily the brokerage business, we've seen that the volatility of the market is very, very strong and positive triggering point to the Company. And so -- and like some other companies, they have a negative impact to the business. We've seen a very positive impact to our business from both operational and customers trading behavior change as well as the industry changed three perspectives of both positive factors to our business. But we will seizes these very precious opportunities to grow our business and to become stronger in 2020.
Scott Powell -- Skyline Corporate Communications -- Analyst
Great, thanks. Thanks, Yvonne. Appreciate the color and the perspective. And I know you've discussed this a bit already and it's very interesting to see how Yintech is: a, not feeling the negative impact of the virus that a lot of other companies and industries are feeling; and b, some of the steps that the Company is taking to actually take advantage of some of the market volatility. I think, for American investors, we are experiencing the negative impact of the virus that China probably experienced a month or several weeks back. Maybe could you help for American investors understand what's going on actually in China. Here in the US, we're seeing significant disruptions as it relates to mobility, infrastructure, transportation. But it sounds like China has sort of moved beyond a lot of the negative impacts of the virus.
So, could you maybe for just -- for American investors explain the situation there and the impact of the virus in China? Are your employees able to get to work or is infrastructure and transportation and things functioning properly? And is it just the fact that now you're able to take advantage of some of the volatility in the global markets, whether it's the European stock markets or the US to benefit Yintech. So if you could just maybe provide a little bit more color on the situation there and some of the additional opportunities that it creates for Yintech?
Wenbin Chen -- Co-Founder, Chairman and Chief Executive Officer
Yes, sure. Okay. Let me translate. [Foreign Speech]
Yes. I'd like to share my views on two perspectives. Firstly is, how we -- how the COVID-19 impact our business operations. I already talked some previously in the call. I'd like to share more on how the epidemic help our Company improving the efficiencies. Firstly, most -- majority of the employees have got back to work as normal in Yintech. And efficiencies of our work has improved instead, rather than a negative impact. And we have seen that the employees has used -- formed a habit to work online. So, this help us to better utilize the technology to improve the working efficiencies as a very, very positive signal to our business operations. And secondly in terms of the situation in China right now, we have seen that the government has put a lot of measures, very strong strict control on the increasing of the new cases. So you have seen that we have controlled new cases to a very low number. You can rely on the official number the Chinese government published to gain that information. But as far as we can see that the new cases have decreased to single digit. And so this is very effective measures that Chinese government put in place to control the outbreak of the COVID-19 epidemic. So we are all very optimistic to see the situation evolving in China.
And in terms for impact, for the five major big cities in China we have offices, including Beijing, Shanghai, Guangzhou and Shenzhen. We have seen that the majority of the employees have back to normal and returned to work as well. So we don't see any abnormal situation in the Company in these offices. And so, these are the -- secondly, we're seeing how this impact to China.
And thirdly, we have observed that a lot of new cases -- not a lot of, but some new cases were importing from overseas. So this is a new phenomenon occurred in China. The Chinese government has also seen this new situation and has adopted some measures to have very strict control on the new entrants of the overseas travelers to China. So, we have seen that some very effective measures have been put in place. And we believe that over time, the situation is getting better and better in China.
Scott Powell -- Skyline Corporate Communications -- Analyst
Great, thanks a lot. I'll let other investors ask questions. But congratulations and it's very encouraging to hear the Company's outlook for 2020 and the steps that you're using to capitalize on the current market conditions. So best wishes going forward.
Yvonne Young -- Investor Relations Director
Thank you. [Foreign Speech] Thank you.
Operator
This concludes our question-and-answer session. I'd like to turn the conference back over to Yvonne Young for any closing remarks.
Yvonne Young -- Investor Relations Director
Thank you. Thank you, everyone, for joining the call today. If you have any more questions because of the limited time of this call, please feel free to contact me. You can find my contact information at the end of the earnings release. Thank you, everyone, and have a good night. Andrew, we may now disconnect.
Operator
[Operator Closing Remarks]
Duration: 75 minutes
Call participants:
Yvonne Young -- Investor Relations Director
Wenbin Chen -- Co-Founder, Chairman and Chief Executive Officer
Raphael Qian -- Vice President and Chief Financial Officer
Hunter Diamond -- Diamond Equity Research -- Analyst
Scott Powell -- Skyline Corporate Communications -- Analyst
