Greetings. Welcome to the ATA Creativity Global First Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to Alice Zhang of The Equity Group. Thank you. You may begin.

Thank you, operator. Good morning to all of you joining us from the United States and good evening to all of you joining us from China. Please be advised that today's discussions may include forward-looking statements. Such statements involve certain risks and uncertainties that may cause actual results to differ materially from these projections. Please refer to the company's most recent SEC filings for a more complete description of the risk factors that could affect these projections and assumptions. The company assumes no obligation to update forward-looking statements due to new information, future events, or otherwise. I would also like to refer you to Slide 2 of the conference call presentation, which is accessible via the IR section of ACG's website. A simultaneous audio webcast is also accessible via the IR section of ACG's website, including the replay which will be available for the next 90 days. ACG's Chairman and CEO, Mr. Kevin Ma, will start this call by highlighting the company's first quarter 2025 key operational achievements and financial highlights. CFO, Mr. Ruobai Sima, will provide an overview of financial and operating results for the first quarter 2025 and briefly discuss expectations for the full year 2025. President, Mr. Jun Zhang, will conclude the prepared remarks with an update on the company's long-term growth strategy before opening the floor for questions. For those of you following the accompanying slide presentation, please refer to the slides for further details. With that, I'll turn the call over to ACG's Chairman and CEO, Mr. Kevin Ma. Please go ahead, Mr. Ma.

Thank you, Alice, and welcome, everyone. Good morning to those who are in America. We appreciate everyone's time. Q1 2025 was highlighted by an approximately 16% increase in net revenue and gross profit, respectively, driven by increased contributions from portfolio training and research-based learning services. Portfolio training program credit hours delivery to ACG students increased by 5.8% during the first quarter of 2025. Higher net revenues and slightly reduced operating expenses contributed to improved bottom-line results during the quarter as compared to Q1 2024. Moving on to first quarter operational highlights. Portfolio training services continued to account for the majority of our revenue for the quarter. Total credit hours delivered increased by 5.8%, with project-based programs contributing about 74% of total credit hours delivered, translating into an 11.5% growth in revenue from the portfolio training programs. Combined revenues from the research-based learning overseas study counseling and other educational services also increased by more than 28%, becoming responsible for nearly 30% of total net revenues. During the first quarter 2025, we brought a variety of in-person and online research-based learning projects to ACG students. In-person projects included a themed camp to Hainan Province, an AI training camp at Alibaba, tours to the United States and Japan, the Milan Fashion Week project in Italy, engaging a total of more than 100 students. Apart from delivering our usual level of Master Class projects to students in an online group class format, we also hosted a creative art therapy training program taught by University of London lecturers, accommodating around eight students in total. We continue to receive positive feedback from our students about the full 2025 admission results. During first quarter 2025, ACG students received numerous admissions from prestigious overseas institutions, including major Ivy League schools. Other top schools admissions include those from Cambridge University, Hong Kong University, Nanyang Technological University, and more. Additionally, our students have received offers from top art schools, some of which are the most popular, matched with extremely high application requirements and overall low acceptance rates, including the MFA in Film & Television Production at the University of Southern California, Arts & Cultural at UC Berkeley, and Engineering Design Innovation at Northwestern University. We remain excited about the upcoming admission results for the remainder of the full 2025 application series. We are proud to announce that on March 29th, ACG was awarded the 2025 Forbes China Studying Abroad leading brand alongside New Oriental Education and New Channel International Education at the 2025 International Education Leaders Annual Conference and the Forbes China Studying Abroad Industrial Selection Service Award Ceremony. We are pleased that the campaign is recognized not only by students, but also by industry experts as a leading brand in generating positive outcomes for students who want to study arts abroad. In March, ACG toured five key cities in China as part of our Spring Art Education Exhibition, including Beijing, Shanghai, Wuhan, Chengdu, and Chongqing. Similar to the October Autumn Art Education Exhibition, we hosted seminars to discuss art design topics and observe changes in overseas study application missions, giving participating students and parents a face-to-face opportunity to communicate with professors from prestigious overseas arts institutions. With that, I will hand over the call to Sima for the first quarter 2025.

Thank you, Kevin. I will start with the first quarter 2025 key financial metrics. Total net revenues for first quarter 2025 were RMB55.8 million, an increase of 15.9% from RMB48.1 million in first quarter 2024, primarily due to increased revenue contributions from portfolio training programs and research-based learning services as we delivered more services and hosted an increased number of research-based learning experiences. Gross profit for first quarter 2025 was RMB25.4 million, an increase of 15.9% from RMB21.9 million in first quarter 2024, mainly due to higher net revenues. Gross margin was 45.5% during first quarter 2025, unchanged compared to 45.5% in the prior year period. Total operating expenses were RMB42.2 million in first quarter 2025, slightly decreasing from RMB43.6 million in first quarter 2024, while as a percentage of net revenue, total operating expenses decreased to 75.6% during first quarter 2025, compared to 90.6% in the prior year period. The slight decrease in operating expenses was due to a RMB1.3 million decrease in selling expenses and a RMB0.3 million decrease in research and development expenses as ACG's system development was completed in Q2 2024, alongside the collection of previously impaired loans and other receivables, offset by increased general and administrative expenses mainly related to professional fees and the development of new projects. As a result of higher net revenues and slightly lower operating expenses, loss from operations in first quarter 2025 was RMB16.8 million compared to RMB21.7 million in the first quarter 2024. Net loss attributable to ACG during first quarter 2025 was RMB13.3 million compared to RMB17.9 million in the prior year period. Moving to the balance sheet highlights, at March 31, 2025, we have RMB39.4 million in cash and cash equivalents, total assets of RMB457.3 million, total liabilities of RMB390.9 million, and total shareholders' equity of RMB66.4 million. Moving to year-to-date enrollment trends, starting with student enrollment. For first quarter 2025, total student enrollment was 1,104, representing a decrease of 19.4% from the prior year period. The decrease in student enrollment resulted from normalized demand for our services in 2025 compared to the same period in 2024 and 2023. As we discussed in the fiscal year 2025 outlook last quarter, portfolio training student enrollment for first quarter 2025 was 626, and student enrollment for all other programs for the same period was 478. Moving on to credit hours delivery. For first quarter 2025, credit hours delivery slightly increased by 5.8%, driven by a 15.5% increase in project-based programs, which have accounted for a continuously increasing percentage of total credit hours in recent years. This was partly offset by decreased time-based programs credit hours. With that, let's move to our expectations for the full year 2025. We're expected to report total net revenues of between approximately RMB276 million to RMB281 million for the year ending December 31, 2025, which represents a year-over-year increase of around 3% to 5% compared to the full year of 2024. We anticipate the growth to be primarily driven by our portfolio training services and supported by all other lines of business. We remain prudently optimistic about our fiscal year 2025 guidance range, and these assumptions are based on the company's existing business initiatives underway for the year ending December 31, 2025, and the current and preliminary view of existing domestic and international market conditions, which are subject to change. I'd now like to turn it over to Jun, who will expand upon our long-term growth strategy. Jun, please go ahead.

Thank you, Sima. I will now highlight recent progress in our long-term growth initiatives. Our focus in 2025 is on driving organic growth, managing expenses, and enhancing operational efficiency. As part of our efforts to boost classroom usage and offer valuable programs, we are strategically directing marketing resources towards our better-performing campus locations, which helps enhance local sales to meet the rising demand from new students. Over the years, the interest students have shown in our services and their trust in us have motivated us to strive towards being a leading provider of creative arts education. We are committed to making quality educational offerings available to a larger student population and remain optimistic about the creative arts education sector in China. We anticipate that our organic growth across all four key areas will propel ACG's long-term growth. Our students continue to place a high value on our services and products. We encourage them to choose the more flexible and personalized project-based tracks in our training programs while assisting them with their portfolio projects through careful planning and enhanced coaching. The array of new project-based programs we offer is gaining popularity as we support creative thinking in an interactive learning environment while providing flexibility through both in-person and online completion options. Students in portfolio training have demonstrated an increasing interest in our research-based and overseas study counseling programs, contributing significantly to our revenue growth. Additionally, we are utilizing our teaching resources and current services to cater to a broader student base, including older adults and younger generations seeking experiential learning in art, workshops, and themed travel. For the second quarter of 2025, we have a strong lineup of new research-based projects for ACG students, including the Cannes Film Festival Tour and various online Master Class offerings in stage design, digital media visual communication, jewelry design, and interactive sensation. We expect to introduce more research-based experiences in the summer quarter, further supporting ACG's growth. Furthermore, in 2025, we will continue to expand our geographic presence. Expanding our international partnerships beyond the UK and the US has enhanced our access to global resources and accommodated more students looking to study abroad in destinations like Europe, Japan, and Southeast Asia, such as Singapore. We believe our competitive edge comes from a solid foundation of domestic and international partnerships, a highly skilled teaching team with experienced educators from renowned institutions worldwide, and our ongoing investment in new offerings. With that, let's open the floor for questions.

Thank you. We will now be conducting a question-and-answer session. Thank you. I'm showing no questions at this time. I would now like to hand the call back over to Mr. Kevin Ma for any closing remarks.

Thanks again to all of you for joining us. If anyone has questions for us, please feel free to reach out directly to us or our Investor Relations firm. We are always available to speak to investors and look forward to speaking with you during our next earnings call. Thank you.

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.