QandK international Group Ltd (NASDAQ:QK) Q1 2020 Earnings Conference Call - Final Transcript

Good morning ladies and gentlemen, and thank you for standing by for Q&K's First Half Fiscal Year 2020 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded.

I will now turn the meeting over to your host for today's call, Mr. Rene Vanguestaine. Please proceed, Rene.

Thank you, AJ. Hello, everyone and thank you for joining us today. Qingke's first half fiscal year 2020 earnings release was distributed earlier today and is available on our IR website at ir.qk365.com as well as on GlobeNewswire Services. On the call today from Qingke, we have Mr. Chengcai Qu, Chief Operating Officer; and Mr. Frank Sun, Chief Financial Officer. Mr. Qu will review the business operations and company highlights. He will deliver the prepared remarks in Chinese and Mr. Sun will deliver the same content in English. Mr. Sun will then discuss the financials and guidance. If you have any questions or require any further information, please write to the company's IR Department at ir@qk365.com at any time following this call. Before we begin, I'd like to remind you that this conference call contains forward-looking statements as defined in the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995.

These forward-looking statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance, or achievements to defer materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors are included in the company's filings with the U.S. SEC. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

It is now my pleasure to introduce our Chief Operating Officer, Mr. Qu. Mr. Qu, please go ahead.

Thank you, Rene. [Foreign Speech] Thank you, Rene, and thanks everyone for joining our earnings call today. [Foreign Speech] With that, I would go back to our prepared remarks regarding our operating key points in the first half of the year. [Foreign Speech] During the first half of fiscal year 2020, due to the impact of the COVID-19 pandemic, our average occupancy rate decreased to 87.7% from 90.9% in the first half of 2019. Therefore, we continued to pursue our defensive strategy as a pioneer in China's long-term apartment rental market. We have the most experience managing our business through the economic cycle. Our experience tells us that during economic downturns, especially facing this pandemic, consolidating our internal resources, further improving operating efficiency, and focusing on asset quality improvement is much more important than aggressive expansion.

We believe that, as the industry weeds out weaker players through the economic downturn and the pandemic, the industry will become more mature and rational with the remaining