Lastly, in terms of adult courses, we made positive progress in Q2. Despite macro challenges, we launched a digitized [ph] product for math preparation for postgraduate entrance exam, which provide knowledge teaching, step by step guidance and personalized practice. So, this product has been very well received by users with the next day retention rate of over 50%. So in the second half of the year, we will continue to focus on post graduate entrance exam courses in the adult category because of strong demand. It is projected that college graduates and postgraduates exam participants will exceed 12 million and 5 million, respectively in 2024, both historical highs. We will strive to further explore and expand our digitalized product with a specific focus on enhancing our English preparation for postgraduate entrance exams.
Yes, that’s our plans for learning services. I hope that answers your question. Thank you.
Candis Chan: Great. Thank you very much.
Operator: The next question will come from Lian Duan of Huatai Securities. Please go ahead.
Lian Duan: Good evening management. Duan Lian from Huatai Securities. Thanks for taking my questions. Just a quick one. With the ongoing investments in AI result in a significant increase in R&D expenses in the second half of this year.
Wayne Li: This is Wayne. Thank you for your question. I will take your question. In terms of R&D investment, we are prudent on it and we believe our investment is continue and more focused education is not widespread for all scenarios. As just mentioned about Dr. Zhou, our recent AI investment mainly focused on fixed applications such as large language based in translation in English grammar from an instruction and AIGC [ph]. Just a reminder that this is not our first time we invested in AI area. Youdao is planning in implementing AI technology, and such technologies has been widely applied in our learning services and smart devices. At the same time, we have received the benefit from adopting more effective methods, which enhance our R&D efficiency.
For example, in the first half of this year, although we deployed our proprietary large language model in certain education scenarios. We still experienced around 6% year-over-year decline in R&D expenses when compared to the same period last year, which mainly contributed from our efficiency improvements with more comprehensive experiences in AI investment, and saving costs through applying AIGC technology. The introduction of AIGC has resulted in a notable enhancement in work efficiency. For instance, the incremental implementation of AIGC has led to a 50% increase in the efficient production of content for our courses’ teaching materials. We anticipate that such improvements will be continued in the future. Both cost saving in AI investments and the application of AIGC technology enable us to accumulate potential technological [indiscernible] the knowledge for further advancement.
By the end of this year, we plan to launch more AI application as we will continuously balance our investment in large language models and applications. We believe our team will gain more experience on it and will develop a clear understanding on investment yield with great — greater effectiveness. We expect the effectiveness of the application side will continue to improve. Going forward, we are continuously on the clear path to achieving profitability, and we will continue to optimize the structure of our R&D investments. For example, eliminating R&D expenditure on those unclear perspective projects, so that we can allocate the savings to our preferred AI project. Above all we will enhance investment in AI. But we do not expect a significant year-over-year increase in overall R&D expense in the second half year, which is helpful.
Thank you.
Lian Duan: Thank you.
Operator: And that concludes the question-and-answer session. I would like to turn the conference back over to management for any additional or closing comments.
Jeffrey Wang: Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Youdao directly or reach out to Piacente Financial Communications in China or the U.S. Have a great day.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
