Q3 2020 JOYY Inc Earnings Call

[music].

Ladies and gentlemen, thank you for standing by and welcome to enjoy a incorporated's third quarter, a 2020 earnings call. At this time all participants are in a listen only mode. After the managements prepared remarks, we will have a question and answer session.

Please note. This event is being recorded I'd now like to hand, the conference over the years Speaker hosted a myth James J., the company's senior Investor Relations manager. Please go ahead of them.

The.

Good morning, and good evening, everyone welcome to join.

The 20.

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Joining us today on the day.

Chairman.

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Today's call management will provide a review.

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When we walk ins on when they section.

The order of 20 to 20 financial result, a webcast of this conference call available at <unk> Dot why why don't call.

The play on this call will also be available on our website in a few hours.

Before we continue I was a huge while a safe harbor statement.

On Threed, which apply to the call as we will make forward looking statements.

Finally, please note that unless otherwise stated all figures mentioned during this conference call line than maybe.

I will now turn the call bunch of our chairman and CEO Mr. day. This journey.

Please go ahead.

For the on Hall funding from the old RDR Union, the certainty to the you'd see the walk.

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Hello, everyone work on calls the quarter 21 of the on his call today.

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Before updating everyone on all of this is per west will this quarter I would like to take a moment to elaborate on the recent developments domestic business.

At the closing of the press release, we issued the live on November 16, we have entered into a definitive with a binding agreement was by two percentage.

Pursuant to which by the will acquire a choice video based entertainment lot of cement business in China, while in line.

The closing of this transaction the subject to certain the conditions on its current rate expected to occur from the first half of 2021.

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That's the idea in kind of like in the industry joint has come from deeply engaged on the lighting in the scoop for many years.

As a result of our years of hard work on experiences we have built a flow alive into what is now a leading the dual based entertainment on streaming platform in China.

Today, while the life because that's just not only a comprehensive system of operational procedures, but also domain expertise related to the development of lives from me ecosystem and the innovation of Lightweighting technologies content operations monetization features as well as a host of integration and host of open assistance.

As a leading integrated information and the knowledge focus of Internet service provider in China Baidu has built an extensive mobile internet ecosystem covering over a 1 billion monthly active users, including over 200 million daily active mobile users honest by two half a loan.

As a result of this transaction, while a life will be able to assess by the was massive user traffic.

Its business growth and expenses at the system monetization capabilities to unleash greater value in by doing a massive business acquisition.

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As a true win win arrangement. This deal. We're also focused on our own growth prospects.

Moving forward, we plan to leverage the resources obtained through this transaction to further accelerate our global engine of growth strategy established a foothold in the industrial internet sector and explore new business opportunities ecommerce as low as other areas.

The only investing into our operations. We will also actively focus on exploring other ways to return value to our shareholders and delivering a maximum shareholder value, including but not limited to the potential of additional disbursement of dividends for example.

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As usual.

Now turning to our business update for the third quarter.

Has been a 2020 has been a year of challenges and opportunities at the COVID-19 pandemic, we emerge and regional geopolitical risk drive on certainty throughout the global economy video as one of the most effective tools will communication has become a crucial medium for consumer entertainment and social networking.

As such a video is occupying and increasingly significant portion of the USIS time doing.

During the third quarter of 2020, our platforms continue to gain user traction usage and engagement.

Despite Indian governments Mashes to block certain Chinese on apps in its local market and other geopolitical risks, we achieved rapid growth in other regions and a global and they use remained relatively stable sliding only slightly by 4% year over year to $390.1 million.

Such accomplishment is a result of a wavering commitment towards globalisation per.

For active penetration into multiple overseas markets, a reduced reliance on any single market.

By overcoming geopolitical challenges, we have not only validated our business models resilience, but also laid a solid foundation for the continued implementation of a global do engine of growth strategy driven by line coming on short form video.

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Legalized maintain this robust growth trajectory during the third quarter 2020 at it's ambiguous outside of India grew to 26.5 million, representing an increase of 58% year over year on 16% quarter over quarter.

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The will of also remained focus on his visit development efforts in several key markets during the quarter, including North America, Europe, the middle East and regions of the Eastern Pacific further.

Further diversifying its chip geographic coverage and thus reducing its reliance on any single market. Consequently feels like a human revenue increased by a 131% the over here to RMB 3.28 billion, which is just all the $483 million.

More specifically on a year over year basis, the ghosts lighting revenues from developed markets grew by 272%.

The European markets grew by 270% on Easton Pacific regions grew by 231% the over here.

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Firstly, the shuttling of which is was that the actually on a quarterly simona.

Our long term commitment to localizing, our overseas operations and team building has been instrumental to the success of Pico line.

At the pandemic situation continues to evolve that fleet around the world, our internet of things and the internationally distributing and extensive experience in multicultural and multi lingual cross regional operations enable us to quickly adapt to the changes in market dynamics on user needs. The.

The efforts also allowed us to further strengthen equalized geographic expansion and launch highly localized campaigns to doing the a pandemic.

In Turkey for example people of introduced a large number of local Coelce key opinion leaders on whose platform during the stay at home period.

Wishing is content invigorating the interactions between Turkish users and the favorite QL doing less from the sessions as.

Significantly from seeing social engagement on a platform.

As a result, the Eagle life's user base in Turkey expanded significantly within a very short period of time.

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The cumulative June time of usage on the other goes with them now.

Secondly, we implemented a series of the product upgrades and marketing tactics to boost our user engagement continuously during.

During the third quarter. For example, we released a number of product upgrades and optimization designed to satisfy uses the need for online social networking sales.

Significantly boost from the number of users hosting line streaming sessions are posting content. Additionally, we continue to see high levels of user engagement across the platform with a percentage of total users who actively posting content consistently exceeding 10% in the period.

On the number of using the injections as measured by likes and comments achieving high single digit growth on a sequential basis.

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On a short form video platform likely also accelerated its global user base expansion in the third quarter.

Despite the Indian governments measures two blocks of in Chinese on apps is local market and the resulting short term impacts on our operations like the maintain a solid user growth at the end we use outside of India grew to 97 million, representing an increase of 147% year over year and 15.5%.

Quarter over quarter.

More specifically like this and the use in the Middle East North America on Europe, all achieved significant growth in the third quarter further diversifying and optimizing the platforms global use of based structure and laying a solid foundation for future growth on the on the monetization from.

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As the world stock to the covered from the pandemic. We have also noticed that many of the more traditional offline entertainment industries are actively taking measures to bring the services on line.

Helping to better cultivate consumers and the team and habits.

The increase the amount of time consumers spent using online entertainment services.

In line with the strength, we forged partnerships with many of peace of flight Entertainment business is helping us to further expand our user base and enhance our brand interest in turn.

In September for example, we launched the Nike music Billboard in Russia.

Wearing we organized the exclusive that view of new sales on top of musical celebrities.

As part of this initiative. We also introduced new product features which anticipate more fast to cheer for an intact with a favorite Russian musicians and thus attracted a significant number of new fans to the platform.

Our persistence in localizing likely is content and including his product functionality through innovation over the long one has been the driving force behind the platforms achievement in Russia.

Such efforts have also resulted in the continuous diversification of our core user demographics, which will help to accelerate post all of streaming business in Russia as well as a shop on video monetization capabilities across a broader range of international markets.

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The on increasing its global market share and advancing is written on localization likely also introduced new product features to better meet the diverse needs of its users during.

During the third quarter to further empower content creators likely upgraded multiple functions for the video production tools and the blog on innovated customize the function, enabling its users to easily create and shit animated videos with their friends.

In addition, likely also continue bachmann the social nature of this platform introducing a slew of novel social features with dynamic community and automatic functionalities, such as matchmaking print on direct dialogue.

Consequently, the daily average number of like a uses outside of India that hosted Flushing sessions increase by more than 90% quarter over quarter with the platforms percentage of monthly content creators, reaching approximately 18% in the third quarter of 2027.

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For our goal during the third quarter, we quickly adjusted cargo sequential trends in the period entering into a number of the emerging markets, including the middle East and South America as a result hub of crews and the use by 20% year over year when excluding India.

I will also make good progress in terms of monetization with the slicing revenues, increasing by 42.4% year over year.

Looking ahead, we currently expect cargo to achieve breakeven for a single month in the fourth quarter of 2020.

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In summary, our global business delivered strong results in the third quarter of 2020 going forward. We will continue to upgrade our platform functionality strengthen our localization capabilities enhance our platform social nature and execute our two engine of growth strategy.

Despite the uncertainties caused by the resurgence of COVID-19, and geopolitical uncertainties, we believe that our global market coverage will help to steadily bolster both the flexibility and resilience of our business model.

In addition, we remain confident that the combination of our technological advantages and stable user base will keep us on the right growth trajectory.

Looking ahead, we remain focused on perfecting our ecosystem for line, assuming a shop on the use as well as the establishing and solidifying our foothold in core original markets around the world with.

With the innovators vision and a penny as fore sight, we plan to continue expanding across the entire growth reaching communications between individuals from all corners of the world and delivering joyful and useful experiences to all people.

That concludes David's prepared remarks, now as Joy CFO I will talk about the financial results.

Please be noted that the financial information a non-GAAP financial information disclosed in our third quarter earnings press release is presented on a continuing operational basis, unless otherwise specifically stated.

After the deconsolidation of who we are the company accounts for our investment in Korea, as an equity method investment and apply the equity method of accounting one quarter in the rias to enable us to provide financial disclosures independent of the reporting schedule of Julio.

During the third quarter of 2020.

We maintain our strong momentum and deliver a robust financial and operating results.

Our total net revenue for the pause for the third quarter increased by 36.1% year over year to RMB 6.29 billion exceeding both the high end of our previous guidance range and street consensus.

In particular on lighting revenues for the third quarter increased by 40.1% year over year to RMB 6.05 billion driven by licensing revenue growth from legal settlement.

Other revenues in the third quarter decreased by 20.8% to RMB $237.3 million, primarily due to the decrease in other revenues in wireless segment.

Cost of revenues for the third quarter increased by 38.8% year over year to RMB 3.96 billion.

Revenue sharing fees and content costs increased to RMB $2.84 billion in the third quarter from on the $1.95 billion in the same period of 2019.

Which was in line with the increase in licensing revenues.

Bandwidth cost decreased to RMB two on is 36.9 million from RMB $286.3 million in the same period of 2019, primarily related to the termination of service and assessed to use as the India. After governments measures two blocks of in Chinese on apps in late June.

Gross profit for the third quarter increased by 31.9% year over year to RMB 2.32 billion gross.

Gross margin in the third quarter of 2020 decreased to 37% from 38.2% in the same period of 2019.

The gross margin contraction was primarily caused by the fact that people segment had lower gross margins. The contributed significantly greater portion of net revenues in the third quarter of 2020 compared to the corresponding period of 2019.

Operating expenses for the third quarter increase on the $2 billion from on the $1.81 billion in the same period of 2019.

Sales marketing expenses increased to on the one point.

Two 8 billion in the period from RMB $957.3 million in the same period of 2019.

Primarily due to the company's increased efforts in sales marketing initiatives in overseas markets.

Our R&D expenses for the third quarter increased to RMB $636 million from on the 538.1 million a in the same period of 2019, mostly due to the increase in head count and investments in talent of equipment as part of the company's efforts to enhance this research and development capabilities.

Our GAAP operating income for the quarter was RMB $466.6 million compared to RMB $96.4 million in the same period of 2019.

Operating margin for the third quarter increased seven.

7.4% from 2.1% in the prior year period, primarily due to narrowing operating loss of vehicle segment.

On non-GAAP operating income for the third quarter, which exclude share based compensation expenses amortization of intangible assets from business acquisitions, as well as impairment of goodwill on investments and gain on disposal of subsidiaries and business.

Increased by 77.8% to RMB 825.8 million from RMB $464.4 million in the same period of 2019.

On non-GAAP operating margin for the third quarter was 13.1% compared to 10.1% in the same period of 2019.

GAAP net income from continuing operations attributable to controlling interest of join Inc. For the third quarter of 2014 was RMB 2.3 billion compared to RMB six the $1.8 million in the same period of 2019.

Net margin was 36.6% in the third quarter of 2020 compared.

Compared to 1.3% in the corresponding period of 2019, mainly due to the gain from partial disposal of investment in Korea.

Non-GAAP net income from of continuing operations attributable to controlling interest of Joy, Inc. Increased by 64% to RMB 809.4 million from RMB $493.4 million in the same period of 2019.

Non-GAAP net margin increased to 12.9% in the third quarter of 2020 from 10.7% in the same period of 2019.

Diluted net income from continuing operations per 80 EPS in the third quarter of 2020 was RMB 25.92 compared to RMB 0.56 in the same period of 2019.

Non-GAAP diluted net income from continuing operations Prady EPS increased by 58.8% to on the 8.89 from RMB 5.6 in the same period of 2019.

In addition in accordance with our quarterly dividend plan approved on August 11, 2020, we will be distributing a dividend of yours dollars 0.31 per 80 EPS for the third quarter of 2020, which is expected to be paid on December 20, Threerd 2020 to shareholders.

Of record as of the close of business on December 11, 2020.

As we remain in a bomb and cash position of the recent transaction with by two we will continue to invest in business development efforts to further expand our global market reach and cultivating new business to enhance our service offerings.

We will also actively explore other ways to return value to our shareholders to maximize shareholder value.

Due to the above mentioned transaction the company, we're not providing any revenue guidance for the fourth quarter of 2020.

That concludes our prepared remarks, operator wed now like to open up the call to questions.

Thank you, ladies and gentlemen, if you wish to ask a question. Please press star line on your telephone keypad in a week for your name to the announced if you wish to cancel the request. Please pass the pound already has a ski for the convenience of everyone on the call. Please ask one question at a time, if you wish the ask more.

A question. Please rejoin the queue all sales when asking a question. Please take your question in Chinese based that immediate the repeat your question in English. Thank you.

The first question comes from the line of channel Sushi of Nomura. Please ask your question.

A congratulations on good morning, managing the country.

Regulations on a base on the quanta since.

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What's the design shop, Yeah, I have two questions. That's a first.

First question just about the Eagle and just one the one is the latest matis net.

Revenue for from fall peak on life business in the sort of content and at least on people on the Eagle achieved a very strong revenue growth in the also 10 profitably in Q3, and just wonder how we should look on the trend for beagles revenue on a margin in Q4 as well as next year and the end.

The second question is.

The it's about the investment and the management mentioned in the earlier remarks.

Joining a well continue to explore opportunities a eating a.

He in Chinas Internet industries, such as the <unk>, Yeah, I remain the a in the streets and after the sale of the why life business. So just wonder if management can you elaborate on net on that one of the areas a joint will likely low to enter or imbalanced in China in the future.

Thank you.

Oh Mega Channel I'll answer the first question on division on Internet the second one.

For the people lives.

Gross profit trajectory of things we cannot provide the numbers I just gave you some colors.

In the third quarter, you can see on a year on year basis and on sequential basis. The what I continue to have a very strong a result of the main original a composition are the growth wells Middle East and South East Asia a if.

The looks at the composition from April a markets a.

It's already a well over 40% on.

The the key components in the road markets, our North America.

In countries and on.

Also Japan Korea, New ideas, New Zealand, Australia so.

We see a sub regions on the type of markets continue to drive on on of the gross a four.

People like a middle East the is still around a one third of the total revenue for the life and again that is a very established market.

With our clear leadership position. So we expect we will continue to drive additional revenue of on Middle East.

Southeast Asia and other parts of the world accounts for roughly a year.

As a 25% to 30%.

Of the total revenue from people like a.

We do think that we will continue to establish our interest in southeast Asia and also explore other emerging markets as well so I.

I think in general for the third quarter over the fourth quarter 2020, and also going forward to 2021.

The main driver for people that will come from the a developed markets with higher paying a mounts and also higher ARPU English on high ARPU.

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What's going wrong a.

Frankly from dollars volume.

Thank you for the question first of all the time. This transaction does not mean net joy will abandon our domestic business.

Actually we will continue to explore new businesses in China and continued to execute implement a longtime strategy, which is to continue to bring the areas that Chinese company have come kind of advantages and to replicate these experiences and competitive advantages.

Across the globe. So we have seen that time on.

Chinese companies have the technology on.

The result is over on the East company and we have witnessed the successful ratification of the business model in overseas market and also you will also notice that on China has a lot of industrial chain on advantages, especially in the manufacturing sales.

Historically speaking Chinese company has advantages as a manufacturing company on taking the hour and load, which is without our day on van nor a harangue channel simply taking on it.

In fact, the other brand products in the future, we believe that more Chinese companies will be able to establish a brand establish their channel.

On the build out a new.

And the related business model and this is the future trends and the opportunity that choice for key.

So on actually since last year joint has actually begin to explore on.

The new businesses in terms of overseas economists on.

Going forward that will continue to be focused on.

On our on long term strategy, that's a continuously bringing the successful experiences a technology advantages and business model in China, a replicate these experiences to generate more wells.

The CLO.

Our channel on iOS I think you also asked about the margin trends. Let me also a give you some color.

If you look yeah. Thanks.

Yeah, a margin profile for vehicle in the third quarter on the non-GAAP operating margin level is already breakeven is only possible on that is thanks to the in terms of the gross margin for us with the saving of the bandwidth cost and also with the a.

A the leverage of the economy. We have also reduce the percentage of our spending on the sales marketing as part of the revenue. So on that result in a in a passive on non-GAAP operating margin I think that's kind of will continue in the fourth quarter.

And also on next year, even though if you asked me about the balance between the user growth and margin on we want to continue to invest in our business to attract more users around the world because we do think that globalize the stuff on the you unless you have massive potential but again as we have demonstrated our capability to generate positive margin I think that will give a lot of confidence.

A couple of investors as well.

Thanks, you know should any of the Hilton zone.

Your next question comes from the line of Alex <unk> from Morgan Stanley. Please ask your question.

[noise] [laughter] uncle Shibani tone Dolf on man, though true that's big on comes in a team done a word.

Well the one did you actually acquire the likely a.

Good day. Thanks, the are you see us inside a balance in the U.S. The team's done soon divestments income a higher would sort of go everybody else on me on our Uniondale sponsored go at the most you piece of the NCCN jump would don't on quotes a joke I told me on a Google.

Google total debt ceiling tile due to some of the haul a sale.

Entire too low suits support so it's a good some can be go live could go native on shipping on engagement being range. So to go put on the.

The two times so you got some of the detail a.

Well a supports the why high yield long ago a.

Dan sounds a lot of I mean, a it's a win yet.

He's accepted out on the go some a sound.

Sounds like the the higher day, I give the and the its a.

Yes, and some of the two sounds like sort.

Moving up on is out of those yeah.

My question is related to like a good management, please help to share with us some of the monetization congrats and a monetization user growth on investments a.

Hi, good for next year and in terms of monetization.

For example for a live streaming how is it compared with the engagement metrics with be go lives and the short videos in China and I'll pass the line streaming a.

Are we seeing any progress on advertising, maybe even E commerce. Thank you very much.

[laughter].

Non think Alex on the address a question for the monetization of the lack of visits a as I cannot disclose the the numbers in general it's going very well a as I explained in the first half of the ship. It's true in a relatively I was a early stage, but we have freed up the monetization over from the third quarter on continuing through the fourth quarter. So.

We are confident to achieve the level of much of a monetization of for Nike.

As we communicate with with the rest of before a I.

I think overseas as I mentioned users tend to have more solution captures and as a screen in the prepared remarks, we have incubated more functionalities to allow a more users to create content and up low to like he's ACO system and to share the comment on the charters content. So the engagement on the action because of users within liking a is very healthy.

Even though we have encountered the Indian government's ban of Chinese app debt, resulting in a.

For a quarter and the decline, but if you ask the India you can see like he's user base on a year on year basis, and on a sort of sequential basis on which you very high on user growth. So we're confident that the addition of users from other parts of the world will provide the additional traffic from low to monetization a into the of the different formats of monetization.

I think overseas markets to value of early compare was China, so, but everything happening in China will be replicated Google as well as just met of time. So in the initial days as a sales this year and next year, we will be focusing on converting a user traffic funnel to like the me because licensing is a perfect twin brother with so from the deal because they all share similar types of.

A six.

And the we utilized speak on lights backend of pushing expertise to monetize the use of each of them. The the like Apple system. So.

So that the claim ratio and profit will gradually channel up to the some of the level of people net which would take some time.

After we realized a hands on portion of the use of conversion to life to me then we will continue to explore advertising the E commerce as a friend to divest of before advertising a is a very natural monetization for sure from video as a as well because we kind of explore a native ads a as.

On a way for user engagement as well in the price was my decision for Nike a 40.

E Commerce, David has claimed that the we have a.

Establish the value of ecommerce capabilities.

Across the border.

The assumption. So we'll also utilize like his massive user base to feed into this ecosystem utilize Chinese supply chain.

And then to maximize the a the the use of value, but I think the advertising and E commerce at the for meaningful revenue contribution will come at a later stage a then balance sheet. Thanks.

Okay. Thank you very much.

Your next question comes from the line of Evens line of Citi. Please ask your question.

Yeah, She's everybody is centered on the events on the family good grades reported though.

Oh, no one wants to talk about your thoughts on what you book of the true yes. The control of the Linco sort of on your will normalize on two situation on those little of a health is one of the you'll see a Q4. Okay. So one of course, okay of course, they sit there so the poor Q seamless from a kind of trouble weighed on the because he a tight though a.

Well one of my suddenly me a tool.

Well take a highlight some of the opinion goes from what's your thoughts on that.

So it's the mainland and in spite of what they came on a country.

I ask your view on live streaming of a modeling into the future. So what weve pioneered a with the pieces sure.

On a take a decadent go on the thing it won't be a mobile showroom and the need to pay to the upper came not streaming on that.

Also a good suppose the industrial a bit here.

A couple of market you know buses so what's your view of the that's true remote Orient the future. So apart from this mode on nature of the what about the opportunities. If you see a good with low away a lot of I played into future. Thank you.

Thank you let me a just a question on.

I think interest only on a lighting a is not a I was here I was a business model per se. It can be integrated with many different business model. That's the beauty of a month of luxury and I for example of a social networking platform a used a lashing for monetization on music to use money unless you have a monetization and thats. The reason why we have so our.

Domestic a video based on the two machines in two by two because by two does have a lot of traffic from these different apps and those traffic can feed into a machine and how high do to build a bigger EPS system with a better monetization also a.

Help while I like to expand its could the bleed of monetization in the Big acquisition. So I think in China on my simple will continue to grow the will for the expense of different.

Categories of industry, a different business formats Google.

Google Life is the same thing, but we think global wise, there will be more opportunity for line should we not only as a way for many of whom amortization with the competition on shop on video, but also a.

The allowance you mean as the explained before has to run a unique features overseas. One is that in general the entry barrier price remains low overseas. That's why the participation rate from a a.

A host in overseas markets much higher the in China, a secondly, the social interaction between uses a.

Among users among the host also more prevalent in the overseas market, resulting in a higher engagement and also a high paying amount.

Per users so a.

In short that our sales machine has a massive potential both in China on overseas.

And we will make sure that we can do the investing overseas operation and a creates more opportunities down the road.

Thank you.

Your next question comes from the line of Daniel Chen of JP Morgan. Please ask your question.

Oh, Glenn is a sit here, there's a lot of until we do none of them quite on the good news from the woman to the to do they go well a lot of the realities of the outcome dinner in a pay hold a gaming system Oh, yeah. There's a woman so there's a high why sit on email a woman. She had a Nick this is on that day, the Yahoo, a dumbed down because it'll be a standard acquire see on teradata.

Sadly the sit here I was trying to say myself. My question first question is on a a why like kind of business. A this quarter. We see there is a substantial improvement in the margin what's the driver behind the second line is the on Beagle, a more on the market or a market.

Okay segment, a which market do we think it has the biggest potential in both use the anymore of that Asia in the next three to four years. Thank you.

I think it's true let me answer the question a if you look at the wireline segment, but.

It has two components one is why a licensing in China domestic and also the other is a hot going on the business.

In terms of why a domestic luxury business, we have but should better and better operating margin a as you can see from the past few quarters. One is on the gross margin side a way.

The tend to do some of the campaigns in the quarter reported a low I was a I wish I really show in the third quarter a in.

In terms of the sales marketing we have also a pay more attention to the ROI. So we have a cheap better I will say sales marketing a leverage as a percentage of revenue a wi.

We have also pay close attention to the on the on Jennie personnel spending so on that that's the reason why we have maintained a healthier and healthier margin profile for like a domestic machine of business a.

For a lot of Pos or on the wireless segment, including cargo as a explain the prepared remarks, probably is on the on a well track to the becoming a breakeven on some of the key regions. So a the the better margin profile of heart will also help a with the enhancement of the year on wireline segment margins.

Pension.

A second question is regarding the a because the potential area of overseas market.

I think in general it would fall on the tip of markets as I said this on well over 40% of the value of revenue contribution from people, who know a within a couple of markets, we think that a north.

North America a.

I agree U.S. market will be one of the a big.

The market and also secondly is the Japan career.

You'll see the non sequitur, which I caught a pan Pacific region of Eastern Pacific regions a true.

The third one is the a more on the western Europe, a riches a those.

Those Richard the shifts of several key common kind of risk is one is a pick a population base. The second is a high dispose the income.

It is a very high a propensity for social engagement on social interaction, resulting in a high paying ARPU with the machine a scenarios.

Thanks.

Okay.

Thank you.

Your next question comes from the line a fleet Zhang of.

The as a please ask your question.

Oh, hi balance and alcohol sales. It is on what you on goes the items in a yet the higher a why why not do a deal how would the eagle and he thought when sad to see a woman's a hot why don't you of Atlantic City say quite simple much inquiries. He sits on I'll make 1000 homes. On then can you talk what the way potentially Oh, yes, yes, no Tim yes.

Sure on thin film financing back on the index <unk>, a pique on bathrooms on that now the lag when he said that when you take on so you went too yeah. When the why why line no. One day, yeah, we don't yet a I see how you do food you. The gang thesis is going on why you don't see it home Oh sales down $2 sorry on the.

It's a good deal with you folks on the home and they said they had the information on this R&D adult day got your hands on me on where you extend beyond that you could be a I don't know a what do you think the thanks management for taking my question Congrats on the deal and sell the knowledge on that first a question regarding a the commutation in short we doing the over team on.

Okay, Oh, especially after a part time, so geopolitical change out of the U.S. relaxing a second delay a about Oh no why why a nice deal a few weeks later hasn't seen a gene in terms of data on the R&D wait a while by line don't match. It. It's nice so do I continue to hear.

Oh no state how non stop why did you change the way you can see after the deal. Thank you.

Oh, when I started in the region.

Oh, what do the Michigan on the D. the woman take a a high whatever it got a bunch of you can easily true she the GGR or not yet.

As an a or would you the do a movie also mean of of on a should dealer true from dashes eat the Arizona sure seem quite a the young merger. The you will read out in the can go on to notably the off the there was a resilient and got a funeral homes on the high volume from in a given kind of area. The to go country a country analogy moving from we ended the from Hong will hang on.

The Oh my God not jumping on me as a general from whether the the yeah. Hello, how are you able to the food you. The ones you see on woman under the tone has a 20 of them. Then they are a 200 people kind of probably a good tool already on the sunia Union has some of their own home into them quite young women shoes of I can go.

On the owner highlighting a where you're doing work is a year with a true fruit juice on for me were going on whether to go across a new roof, which on kind of there's really two books from that or to the lumpy in the do the food on.

This is David on.

Let me answer the question EPS for the short form video a competition landscape.

I think.

Sales and strategy.

The consistent number.

The number one is that well continue to wait for the right.

Secondly, we will make sure that how the business day on a healthy balance track and that's what the.

Oh, the distinguishes that from either.

And well take a storage and operation everything establishment of equal in 2014 on People's Operation has been on separated from my line nine auto financing or on on overseas.

Well the season Trc operation a.

That's correct me a lot and operating thank.

Thank you.

Oh, thank you.

Our final question is from T. on who of T.H. capital. Please ask your question.

Oh, Thank you management kind of regulations for the great quarter a.

So.

After you a I see on a why why she made you. So I guess the focus is going to be on EUV of overseas business like T. go and yeah that you might have on.

No don't know when it all the time, England City.

Hey, how how do you make a.

Hi, David tail being bought of interest yeah, you can make a but they they see the two so to cool wet sand canyon. They don't seem to the she's a variety of it yeah of course eco a nike on hit on that that you would see so what's your take on a pack look we'll need a you can then they give a quick when he sounds a bit. So you should you be.

The quite quickly you really see a complete g., a and a piece how many cities on D. and I must say a one that you bought the hot Blake shipping hi, ill take a I should be on what the daily E. Oh Gee well then <unk> told me the show and then of course you include the night. The show them of course, you showed the you'll meal.

Good day to come down the of the M pay a day she the davinci yeah. The he not a tech will need a which is a sound should keep obviously a hole in the heating I'm sure a woman she is without any true she Mike Hi, there Yeah, I think I know a isn't the he kind of war well what did I say well need the you shop I taught me on that he did teach a bit.

I'm sure the well not hitting the teams the nobody likes a good she she's a chip on a normal thing he back so I have to say a of why make domestic shula a true Ah I do I guess the company's spoke of is it's going to be a youre all the heat business, including like key vehicle, a IMO and the hospital.

So I wonder a in terms of like Genie, a the business how could we see is that going to be the number two why why domestically with each of the union driven and so that's number one oh, so a lot of different yeah, I keep the ATP. So a what is the.

On a stick a plan for each of the amount, which why is the traffic a generally true we true why is the revenue what profit then it later so whats your plan. So that's the first question a the second question, it's not a domestic on a I said the management said that you guys are going to get each of the new business a last quarter I will.

Then the a as she didn't sell machines that you guys go into a entering into a a community a of fresh produce a pick a simple and it is a a very oh, hi, a how to say a momentum a a area. So I wonder what's companies new business are going to be a.

Yeah, you know some of the new business you are already started a it's a you know what he's a at the current to a.

Status at the.

That's the question. Thank you.

Oh, just quit either do the ego not a real woman size of the high lectures on I'm not sure. He's on a major surgery got so many of the Eagle life easier to Eagle, So volume of who phones on the on the remains on on that sort of a woman. She is on a human who truly a from non nothing on class. The it's really not to go on the go line.

Because the shiny emotional touch on your going on and they see you got a fees on Chen comedy you go to the true to the yield on that to the on a light you know one channel to the actually you would from now is we all of a because of Sushil no. Thanks, a lot on the woman's ago. Your average on doctors are likely the to the to the shows again here the at home junior on the Union tumor from him woman's.

On to the challenge illegal day Domino, a shimon on union, the what kind of loans would be on each of the.

We'll go back on the.

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I don't know on to the the lines on a user to the.

On woman churches on because of awards that some of that people are not true Lewis from a Lutheran holds one of them at a time down the to the.

Yeah, no debt no.

Oh, no true the she's a woman totals on one of those is a given the tone of emotions that go on and trajectory of the food was low again. So the what you look to the two hours a day a woman day from go to the seem the game to some of the more sure sorry, a more sure info on pilots to the to the to the when she day a woman them to the to the the hedging the all high school.

The bar from order to the time he or she is on your you're sure hi, or to the channel you should bellatrix, yes the.

Moving on back in on Monday through the selling a more shipping hundreds years on a bunch of on buscher, if he hung on of the Sumant two of weighted to the cheap the all she did a kind of on bonuses from weather to the she Moshe.

Mm Hmm.

For our growth in the all the sector for the goal we've been seeing growth there.

A revenue and user base. So he got a different model has a relatively healthy as for liking and at the current day remained the out of the current focus of mainly on the gross.

User base on.

We have kickoff to start to kick off the monetization of Nike.

On a net on Twentytwenty and we foresee.

But the and expect to see a more the improvement in 2021.

As for our domestic business in terms of on on community of recipes true patches business, we did invested in and in a company focused on it area on the screen on that.

That is and then a our investment in the heat.

On sector does not mean that we intend to enter into the mid September by a.

So, but it shows our interest income.

The area, our long term of okay.

Continuously on replicate operating the advantages of Chinese and in terms of product technology and business model and try to replicate these advantages over the.

Thank you.

Okay. Thank you David.

The kids at this time I would now like to hand, the call back to the management for each of my closing remarks.

I think thats the end of the call. Thank everybody for joining the call. We look forward to speak of we'd have a one on next quarter. Thank you. Thank you very much.

Ladies and gentlemen that does conclude your conference for today. Thank you for the participating and you may now all disconnect.

[music].

[music].

[music].

Ladies and gentlemen, thank you for a standing by and welcome to enjoy a incorporated third quarter. A 2020 earnings call. At this time all participants are in a listen only mode. After the managements prepared remarks, we will have a question on an actress session. Please note the.

This event is being a recorded a net.

Now like to hand, the conference over to your Speaker a whole today net James James The company's senior Investor Relations manager. Please go ahead ma'am.

Thank you operator the.

Good morning, and good evening, everyone welcome to join the call.

The 2020.

Conference call joining.

Joining us today on them to do the study chairman and CEO of Joy.

The at home the kind of in June.

I feel old mentality.

For today's call National will provide a review.

Uh huh.

We walk on topic you when they section.

The thought with a 2020 financial result, a webcast of this conference call available at <unk> Dot one wise on call.

I would tell you on this call will also be available on a website in a few hours.

The only continue I would suggest a draw with a safe Harbor statement.

That's a pretty which apply to the school as we will make forward looking statements.

Finally, please note that unless otherwise stated all figures mentioned during this conference call Linderman B.

I would now it's on the call a bunch of our chairman and CEO Mr. then the journey. Please.

Please go ahead.

Hi, Good morning, everyone know a party art in any sort of the people the yet you're doing a win.

Hello, everyone work on call. It the quarter of 21 is on his call today.

The only thought out you go back on did you go on bought a you would use on a change of this yeah. Oh go away you kind of know the warmer you don't see us the do you buy a door Joe trends on the Socal Wildlife One day shipping into one of you do you buy line you all been cool. So you don't usually on the street either a channel.

Oh, John Joey joke on Chujah, yet she did the Americas. The Java told you on Cherry the on Galleria RDR, Yes somebody on line.

Before updating everyone on all the business for west with this quarter I would like to take a moment to elaborate on the recent developments going on domestic business.

This closing of the press release, where you should go live on November 16, we have entered into a definitive with a buyer.

The of women with Baidu.

I was hoping to which by the will acquire a choice. They do based on the payment last from me. This is in China one on line.

The closing of this transaction is subject to a certain conditions on is currently expected to occur from the first half of 2021.

On Tuesday, wanting a recent on boarding yeah sure on anymore or should be answered.

You will hear the current diesel well.

Well, if youre sort of one of Indians, Chen, though philosophy on you're looking the tags are bullish on cash toward useful later on.

Moving your news on file for works, usually low for a while okay on the on from yen. The what are you turn the call rights on a low twentys. She Virginia I don't believe wondering being generally shapes your growth generally a floating the wholesale on full Gulf War.

The lapel not a usual well on so national price on shy of VP of full GAAP cohort three.

She launching by the way the P. the order volume of will be more toward out the French.

Thanks, John Youre going on.

Hi lives the volume or general by a would you not on the grounds sure that goes on a shown had some of our country.

Well one of the answer.

The one job here within the officer bunker now the Johnson.

That's a line here in kind of like from the industry joint has been a deeply engaged in a nice in the industry from many years.

As a result of on use of hot work on experiences we have built flow in line into what is now a leading the low based on the timberland streaming platform in China.

Today, I would like a status not only a comprehensive system of operational procedures, but also domain expertise related to the development of much from the ecosystem and the innovation of machining technologies content operations monetization features as well as host of centralization and host of open systems.

As a leading integrated inflammation and the knowledge focus of Internet service provider in China Baidu has built an extensive mobile internet ecosystem covering over 1 billion monthly active users, including over the 200 million daily at the mobile users on in spite of App alone.

As a result of this transaction while in line, we'll be able to assess by two of the massive user traffic.

Most of its business growth any kind of this emphasis on monetization capabilities to unleash greater value in by the massive business acquisition.

And the Joe you feel Mobileye interest you quite sure you toward on box European.

Financing notes on George on the challenging year low turnover Virgin all the time well on a global.

Equal GTN zone, I made a senior war going on from a harder for you.

Well done a Tony.

Well, a accessory job the yield on a quarterly on many adjacencies you kind of thought you now.

The roads Chen inside of a from a model we were on the Varsha rig move on hold on the amount of Doctor.

As a true win win arrangement. This deal will also bolster our on growth prospects.

Going forward, we plan to leverage the resources obtained through this assumption to further accelerate our global engine of growth strategy. The established a foothold in the industrial internet sector and explore new business opportunities in ecommerce as low as other areas.

We are investing into our operations. We will also actively focus on exploring other weighted to return value to our shareholders.

Moving maximize shareholder value, including but not limited to the potential of additional disbursement of dividends for example.

We're not the signing of will be surgical the you didn't GAAP.

The answer to the torrents your hotel revenue.

I assume on churn intro dilution from Genzyme and future over the achieved year on your phone Daniels on title change on one thing is on.

From that which hitting the operating job warmer torture channel you should view of impact the there may be a future. So increase on whats your client who take a phone we're seeing sees on maybe some of your you enjoy your current digital only on a unit sales accu, who was on June or July on our circle the important.

These are the is arguably a woman of Cemex Richie Reagan pool saw channel.

Well question on Greenway or both.

We will focus on on boarding on the view on 200 of momentum job on that.

For the look also true do you have your debt.

Good morning, good line of work.

No from a true.

Not all the time again, George Clooney Darchinyan once you box Philippines.

One of the of would you maybe revenue.

So the you were mentioning should we intend to realize on it is huge and that order of highlights from Tal.

Put on hold you the time.

You sit on the.

Right on I guess on June during the course of the.

Yes.

So we certainly addressing on drawdowns on our shipping volume change on a kind of.

Yes, Josh average useful.

Now turning to our business update one of the core.

After.

Has been about 2020 has been a year of challenges and opportunities.

The call the 19 pandemic re emerge and original geopolitical risk drive uncertainty throughout the global economy video as one of the most in front of tools will communication.

Has the comp a crucial medium for consumer entertainment on social networking.

As such a video is occupying an increasingly significant portion on the use of time.

During the third quarter of 2020.

From continuing to gain user traction usage and engagement.

Despite Indian couple of months measures two blocks of in Chinese on apps in its local market and other geopolitical risks, we achieved rapid growth in other regions and a global and the use remained relatively stable sliding only slightly by four percentage year over year to $390.1 million.

Such a accomplishment is a result of our wavering commitment towards globalization.

Active penetration into multiple overseas markets on a reduced reliance on any single market.

By overcoming geopolitical challenges, we have not only validated our business models resilience, but also laid a solid foundation for the continued implementation of a global do engine of growth strategy driven by last from me on shop on the deal.

So to on R&D 70 rule Big a liar choose your box turns on gold or a tone on perisher I'm a little.

What I'm getting a little only zone down by of a nuclear bomb true down channel that will show up.

Why don't be sound on on that and just.

Legalized maintains a robust growth trajectory of during the third quarter 2020, and if I may use outside of India grew to $26.5 million, representing an increase of 58% year over year on 16% quarter over quarter.

On to equalize the focus is on should evaluate strategic value payment auto coming on board on here.

She's on one is just how you will give you a little further alongside our debt is all the time without a U line fungible peak on the divorce all the can be zone on revenue by thanking the darla sorry on by year end. The MB two here through the end volume.

Product sales on those year on.

And on up by a vendor are all of our chief HR.

Sheetal auto we offered on wont be zone on up by a vendor down by a chooser don't have any out of the shoot on B zone on our 500 down sequentially.

The will have also remained focused on its business development efforts in several key markets during the quarter, including North America, Europe, the middle East and regions of the eastern parts of the further.

Further diversifying its Jim geographic coverage and thus, reducing the reliance on any single market.

Most importantly, the authorized streaming revenues increased by 131% the over year to RMB 3.28 billion, which is net dollar $483 million.

More specifically on a year over year basis. The goes lighting revenues from developed markets grew by 272%.

European markets grew by 270% on Eastern Pacific regions grew by 231% the over here.

Certainly the of course on on currency to answer a highlight on deal I mean, the gene Hyundai cash flow property loans, if you don't on the flow.

Revenue from us in CMBS loans near term sheet, what your line of pay on for Baker from robot volume.

Prior to the value in the June there just wondering on the index is on our core sort of on fees will be a lot sort of targeted reinsurance you got a highlight the fed.

Adjusted on a quarter on to Brent.

So on the orders from the <unk>.

Sealy sales engine into the reliable total current remote in cable out you're not on a full of didn't have a natural seeing lot of mansion gross orders from local yet while yellow done many of the two adults. She's on June four as you the issue languages will that buyer. So again this quarter low Shimon.

Our long term commitment to localize the overseas operations and team building has been instrumental to the success of equal line.

At the pandemic situation continues to evolve rapidly around the world.

The internet of things and the internationally distribute team and extensive experience in multicultural and multilingual cross regional operations enable us to quickly adapt to the changes in market dynamics on user needs.

These efforts also allowed us to further strengthen the go lives.

Rapid expansion and launched a highly localized campaigns during the pandemic.

In Turkey for example, the will introduce a large number of local Pos sales key opinion leaders on this platform doing the stay at home period.

The mission is content in a good rating the interactions between Turkish users and their favorite sales doing less from the sessions.

Significantly from seeing social engagement on its platform.

As a result, legalize user base in Turkey expanded significantly within a very short period of the fund.

Just a little more usually a timing versions of energy. So will the time, you do or the yield on a t. So on more probable both on a turn begin a hotel of future the attempting a continual while serving a war dribble headboard Kim of Barclays.

The boom in kind of diesel fuel.

On to your who are tied to a box of that talk on us repeal of the.

The valuable to low market will be the interest you talk about ownership will again.

On June one of the uses and talk on the goal is for growth.

Secondly, we implemented a series of product upgrades and marketing tactics to boost our user engagement continuously.

During the third quarter. For example, we released a number of product upgrades and optimization designed to set of by users need for online social networking.

Significantly boost in the number of users hosting Lansing sessions are posting content. Additionally, we continue to see high levels of user engagement across the platform with a percentage of total users actively posted content consistently exceeding 10% in the period.

On the number of using the injections as measured by likes and comments achieving high single digit growth on a sequential basis.

Thanks for the England, I'd like key tissues outweighs the change.

Change, although in the level of what's your strategy the routine annual into the up on change on likely I know you on the turned on Tuesday on variances year.

I will provide the and do not all of the Georgia and should.

I want to be built on our 500 buybacks as a cheap quantities on a lot of I understood. The award from give a woman that on the only number of closing the two June production on the gene pool, you on our trends moving on with general rate a host reduction of unit or sorry, a lot and the images.

On a short form video platform liking also accelerated the global use a base expansion in the third quarter. Despite.

Despite the Indian governments measures two blocks of the Chinese on apps in these local markets and the resulting short term impacts on our operations likely maintain a solid use of growth at the end the use outside of India, which was $97 million, representing an increase of 147% deals a year and 17.5 percentage.

Quarter over quarter.

More specifically like these and the use in the Middle East North America on Europe, all achieved significant growth in the third quarter further diversifying and optimizing the platforms global use of the structure and laying a solid foundation for future growth on the on the monetization from.

Well not on sooner current Rudolph who is your interest year for interest on our sales are usually a term true format, who says I want to change the either throughout harsher tivo to the annual returns on euros. Your comment on the average hoping she wants to pay up 200, each user branch of the woman that kind of on charter should on TGP.

Year over year, the idea of gene will go on with GE put line, which in general.

The answer here on the.

Our sisters on people like key unit volume are you looking milled of human genome promo line key towards GAAP hardware single the increase rule.

Overall on seemed takedown referenced.

She the last year index.

The likely that all of US are non she religion war for you on the challenges on their own Brandywine chargeable, none of them in a position.

From a total.

Total of Hershey on will trend on from on fiber to the us on what you will accrue on on that growth goes on to treat the and by a surgeon to volume media revenue.

The lag on one quarter of what you said on Threeg influx of new signing of on income.

As the world start to the covered from the convention. We have also noticed that many of the more traditional offline entertainment industries are actively taking measures to bring their services on line, helping to better cultivate consumers entertainment habits and increase the amount of time consumers spent using on my head of human services.

In line with the trend we forged partnerships with many of these of like entertainment businesses, helping us to further expand our user base and enhance our brand infers in current.

In September for example, we launched the Nike music Billboard in Russia.

Wayne we organize the exclusive.

On the new sales on top of musical celebrities.

Part of this initiative, we also introduced new product features which entities more fast to a chair for an intact with a favorite of Russian musicians.

Thus attracted a significant number of new fans for the platform.

ALP assistance in localizing, the lackeys content and including his product functionality through innovation over the long on as being the driving force behind the platforms achievement in Russia.

Such efforts have also resulted in the continuous diversification of a core user demographics, which will help to accelerate both our lighting business in Russia as well as a shop on video monetization capabilities across a broader range of international markets.

Flow put on tangible sharper low load shoes. The fund do you want to.

Like a sitting from over time, the more warmer month low volume of future open channel like is on Jemima and on the from the annual which is on to draw up to the open channel model.

On the other push out of here team reported actually the in sort of not only of the tumor tissue a dry and they also on the annual flow closure on this on Jay you should assume the so don't of hot room matched the valuable saw some of the Amazon goes on to imply the trends of Huntsville, Ala Moana channel, while a pain I have a search universe of additional debt.

And you do a change order to kind of war, therefore, Q3 indoor climbing.

Non-GAAP total of a 102, a share you'll hear us on highly away by the new survival.

Beyond increasing its global market share and advancing this vision on localization light. The also introduced new product features to better meet the diverse needs of its users during.

During the third quarter two for the in how content creators likely upgraded multiple functions for the video production tools and the block on innovated compromise the function, enabling its users to easily create and shit animated videos with their friends in.

In addition, like the also continue ultimate the social nature of this platform introducing a slew of novel social features with dynamic community that dramatic functionality, such as matchmaking print on direct dialogue.

Consequently, the daily average number of likely uses outside of India.

That hosted flashing sessions increase by more than 90% quarter over quarter.

The platforms percentage of the monthly content creators reached approximately 18% in the third quarter of 2020.

Certainly the heart of our man is on the dual the ships will toggle on put on wheel are tied to our total non a drilled on door growth engine what actions on.

I hope all of our indoor plenty of.

Yes on all of our Menasha hardware was on your margins on fungible orders and boots.

Total 25 years from now on that.

Chris This audits.

Engineers, so when you do a two down cash this year on year the lingering wrong. That's four hogs sold during the third quarter. We quickly adjusted hospitals. The question class in the period entering into a number of the emerging markets, including the Middle East and South America as a result hub of goods and the use by 20% year over year, when excluding Inc.

Yes.

Hi, we're also making good progress in terms of monetization with the slicing revenues, increasing by 42.4% year over year look.

Looking ahead, we currently expect hardware to achieve breakeven for a single month in the fourth quarter of 2020.

So to answer a fool from Giggle woman debt. However, you will find a for the unless you're a nursing war on the not issued on what she is on well known food on rental climbing year on accrual.

The entire extra adopted on from search to treating going slower on stronger volumes from Galleria Jim on.

Moving on to a couple of R&D Chick Fil, a and 200 leans on furniture Thompson replicating channel further growth sort of churn Joel would you. The agenda is on selling a most of the hearing the CNG complement a user who santerre fused with the user dealer engender.

The good useful years on providing an update on a quarterly and year.

C zone.

Some of which gives you a dry Andrew you Vice chairwoman a trend to dribble on top of shipping so national but don't have all of the enrollment has into sort of choose the ocean on EBIT. So in terms of into a ceiling on range on tissue volume trend Joel Tiss.

The utterly you range change of the a good either I mentioned on a goes on targeting takedown Lee Chen joining on all of that out one of a quality that yet.

In summary, our global business delivered strong results in the third quarter of 2020 going forward. We will continue to upgrade our platform functionality strengthen our localization capabilities enhance our platform social nature and execute our new engine of growth strategy.

Despite the uncertainties caused by the resurgence of over 19 and geopolitical uncertainties, we believe that our global market coverage will help to steadily bolster most of the flexibility and resilience of our business model.

In addition, we remain confident that the combination of a technological advantages.

They will use a base will keep us on the right growth trajectory.

Looking ahead, we remain focused on perfecting our ecosystem for less units a show up on videos as well as the establishing a solidifying our foothold in coal original markets around the world.

With the innovate a division and a penny as foresight, we plan to continue expanding across the entire growth reaching communications between individuals from all corners of the world and delivering joyful and useful experiences to all people.

That concludes David's prepared remarks, now as Joy CFO I will talk about the financial results.

Please be noted that the financial information on non-GAAP financial information disclosed in our third quarter earnings press release is presented on a continuing operational basis unless otherwise the specifically stated.

After the deconsolidation of who we on the company accounts for our investment as an equity method investment and apply the equity method of accounting one quarter in the rias to enable us to provide financial disclosures independent of the reporting schedule of who we are.

During the third quarter of 2020.

We maintain our strong momentum and deliver a robust financial and operating results on.

The total net revenue for the pause for the third quarter increased by 36.1% year over year to on the 6.29 billion exceeding both the high end of our previous guidance range and street consensus.

In particular on lighting revenues for the third quarter increased by 40.1% yield a year to RMB 6.0 of 5 billion driven by licensing revenue growth from legal settlements.

The other revenues in the third quarter decreased by 20.8% to RMB $237.3 million, primarily due to the decrease in other revenues in wireless segment.

Cost of revenues for the third quarter increased by 38.8% year over year to RMB $3.96 billion.

Revenue sharing fees and content costs increased two on the $2.84 billion in the third quarter from on the $1.95 billion in the same period of 2019.

Which was in line with the increase in lashing the revenues.

Bandwidth costs decreased to RMB two on is 36.9 million from RMB $286.3 million in the same period of 2019, primarily related to the termination of service and assessed to uses the India. After governments meshes two blocks of the Chinese on apps in late June.

Gross profit for the quarter increased by 31.9% year over year to RMB 2.32 billion gross.

Gross margin in the third quarter of a point 20 decreased to 37% from 38.2% in the same period of 2019.

The gross margin contraction was primarily caused by the fact that began a segment had lower gross margins. The contributed significantly greater portion of net revenues in the third quarter of a point in 2000 compared to the plus one a period of 2019.

Operating expenses for the third quarter increase on the $2 billion from on the $1.81 billion in the same period of 2019.

Sales marketing expenses increased to on the one point.

Two $8 billion in the period from on the $957.3 million in the same period of 2019.

Primarily due to the company's increased efforts in sales marketing and initiatives in overseas markets.

R&D expenses for the third quarter increase on the $636 million from on the 538.1 million in the same period of 2019.

Mostly due to the increase in head count and investments in talent recruitment as part of the company's efforts to income.

As a research and development capabilities.

Our GAAP operating income for the quarter was RMB $466.6 million compared to RMB $96.4 million in the same period of from 2019.

Operating margin for the third quarter increase sales.

7.4% from 2.1% in the prior year period, primarily due to narrowing offers from loss of people segment.

On non-GAAP operating income for the third quarter, which exclude share based compensation expenses.

On the position of intangible assets from business acquisitions as rise impairment of goodwill in investments and gain on disposal of subsidiaries on business increased by 77.8% to RMB 825.8 million from RMB $464.4 million in the same period of 2019.

On non-GAAP operating margin for the third quarter was 13.1% compared to 10.1% in the same period of 2019.

GAAP net income from continuing operations attributable to controlling interest of joining for the first quarter of 2014 was RMB $2.3 billion compared to RMB six the $1.8 million in the same period of 2019.

Net margin was 36.6% in the third quarter of 2020 compared.

Compared to 1.3% in the corresponding period of 2019, mainly due to the gain from partial disposal of investment income.

Non-GAAP net income from continuing operations attributable to controlling interest on the joint Inc. Increased by 64% to RMB 809.4 million from RMB $493.4 million in the same period of 2019.

Non-GAAP net margin increased to 12.9% in the third quarter of 2020 from 10.7% in the same period of 2019.

Diluted net income from continuing operations per a EPS in the third quarter of 2020 was RMB 25.92 compared to RMB 0.56 in the same period of 2019.

Non-GAAP diluted net income from continuing operations per 80, EPS increased by 58.8% to on the eight point a nine from RMB 5.6 in the same period of 2019.

In addition in accordance with our quarterly dividend plan approved on August 11, 2020, we will be distributing of dividends of the US dollar 0.31 per a EPS for the third quarter of 2020, which is expected to be paid on December 20, Threerd 2020 to shareholders.

Of record as of the close of business on December 11, 2020.

As we remain in up on the cash position of the recent transactional is by two we will continue to invest in business development efforts to further expand our global market reach and cultivating new business to enhance our service offerings.

The also actively explore other ways to return value to our shareholders to maximize shareholder value.

Due to the above mentioned transaction the company, we're not providing any revenue guidance for the fourth quarter of 2020.

That concludes our prepared remarks, operator wed now like to open up the call to questions.

Thank you, ladies and gentlemen, if you wish to ask a question. Please press star one on your telephone keypad and wait for a year name to the announced if you wish to cancel a very class. Please press the pound or to hash key for the convenience of everyone on the call. Please ask one question at that time, if you wish the app.

Maybe a question please rejoin the queue all sales when asking a question.

A question in Chinese price that immediate the repeat your question in English. Thank you.

The first question comes from the line of channel from Sea of Nomura. Please ask your question.

Congratulations on good morning, managing cash.

Regulations on the various on the quarter.

She's units in the us unions on teams on the Mackie non holiday season on the T., Let's now Hall attorney on the on this on the way.

And here on holiday go into the holiday in Argentina on non intelligent on line two of the boutique ondeck to guidance the analyst challenge listener weighted charges from the just a couple of your commentary on you said on Shaw said to the directional color dilution of language of the Beagle. The revenue then take the margin senior on the to flow.

On a are you nature of menia, continuing a trend we should somebody out revenue on the margins on the edge of the Eagle that in a business you guys. Just a follow up then see the sand to peak on the big on line. The Douglas on rule you have seen on top of the dominant deal multifamily units each in the attention of dieting essentially a dual peak on line to the ends up with all of the shares.

Sure Tom hundreds of revenue mix some of the on the non holiday went issuance on two Nelson on to the share gains on the winning on the annual tied to the.

The thought legally you mentioned the need the Nick Nick Jonas.

Fundamentally the attention is that the the while highlights of the Youll of Mitel to home loans, which you see.

Some of the some of the deal on the unless the diabetes you told so most of the only position.

Someone a tie in the mention should is on cash on the adult magenta, social our true tissue on the share that as yet.

Yeah, what a share.

Yes.

10 year on then lead the Darden seen share should hold to the quarter.

Since the choose a woman fall on the choice.

Quickly true toward the day.

The line elimination on C. difficile might you share.

The two the Cts.

What's the design shop.

Yes, I have two questions.

Thats a first questions about the Dol and just one the one is a latest matis led by a revenue fall off of Eagle life business in the third quarter and we saw a peak on the Eagle achieved a very strong revenue growth in the also 10, possibly in Q3 and just wonder how.

He showed low cap the trend for vehicles revenue on a margin in Q4 as well as from next year and on.

And the second question is.

It's about the investment and the management mentioned in the earlier remarks.

Joining a well continue to explore opportunities Inc.

Yeah in Chinas Internet industries, such as the realignment.

In the streets and after the sale off the line by line business I, just wonder if management can you elaborate on net on that.

One of the areas, joining while launching a low to enter or investing in China in the future. Thank you.

I don't think its general a hours of the first question on previous earnings on as the second one.

For the people lives.

Gross profit trajectory of things we cannot provide the numbers are just give you some colors.

In the third quarter, you can see on a year on year basis and on sequential basis. The we'll continue to have a very strong result on the main original composition are the wells Middle East and South East Asia.

If you look at the composition from April a markets.

It's already a well over 40%.

The the key components in the growth markets, our North America.

The second countries.

Also of Japan, Korea, our annuity New Zealand, Australia so.

Three sub regions on the debt markets continue to drive on the of the gross.

We'll be relied on a middle east is still around a one third of the total revenue for the line and again that is a very established market.

With all of clearly in a position. So we expect we will continue to drive additional revenue of on Middle East Southeast Asia and other parts of the walls accounts for roughly.

As a 25% to 30%.

Of the total revenue of people as.

We do think that we will continue to establish our interest in southeast Asia and also explore other emerging markets as well so.

I think in general for the third quarter over the fourth quarter 2020, and also of going forward to 2021.

The main driver for people that will come from the a developed markets with a higher paying a mounts and also a higher ARPU plainridge on high ARPU.

So I would say that the that the answer to a question.

Our sales with Santiago NTM was were the ego the referral on.

Joy has been a term fees, which are pharmacies on what your thoughts are sure which is on the highest three our future uses of that on where the yield quota.

We'll move on to the.

On the decision on our trigger certainties of that one from the Chinese rely the you book of.

Most of the accounts you got earlier tertiary, Joe usually where youre sure through a change or a quarter.

Two of the silver dollar of horizontal drilling machines through the we'll be on well we'll move on.

Okay. So as a roll on mobile video from dollar to order a chiefly osha kind of that's in other areas of the trends on a yield million on two Virginia on Merkel on water, sorry, a moisture or through the year.

Hold on Borderlines and the the ownership present to the channel geography issue said, we're seeing the volume washer governor or the the higher you hit on World dynamics Youre sure Theres, a warmer I assure you. The a few dollars is a channel given the lectures RGB.

Number two on quality like on on channel to order to the time Youre sure non SEC on change order the put on a report on Luna tumor home and those are the OEM business for the inquiry on non durable meals. The looking past the mills either channel.

On a non-GAAP, Japan in the quarter, if you're on a year.

Compared to the United execute on Gonya federal loans enormous on horizontal on knowledge of the.

June quarter due to the call non loyal to the European Pirates of the there's also achieved offers.

In the us on a more sure centennial's look on the would you the to the the habit of the new uniting lie low density and considered function again cash or alone until there was something the changeover to haul to the Kopin has all of the liquid securities in volume and build on cash flow was actually in the low single warm and most of the year. We will go on the RG Joel.

Moving on to the gel users of whom will usually the translarna on moqueta.

The adjusted.

To the to what Youre, just a use of drilling unit.

The owner of boxes in the future debt on trend towards utilization, which.

What's going wrong.

Probably from dollars volume.

Thank you for the question first of all high on these transaction does not mean that joy will abandon our domestic business.

Finally, we will continue to keep a lower new businesses in China and continued to execute on implement our long term strategy, which is to continue to bring the areas that Chinese company have competitive advantages and to replicate these experiences and competitive advantages.

Across the globe. So we have seen that time on.

Chinese companies have the technology on the three sizes on the company and we have witnessed the successful ratification of the business model in overseas markets and also you also noted net on China has a lot of industrial chain on advantages.

It's actually on the manufacturing side historically speaking Chinese companies has advantages as a manufacturing company on taking the OEM loans, which is without our day on where our.

Our current channel simply taking orders from them.

In fact on.

Brent product in the future, we believe that more Chinese companies will be able to establish a brand establish their channel and so on the build out a new.

Innovative business model and this is the future trends and the opportunity that join foreseen.

So on average.

Really since last year joint has actually begin to flow.

On certain new businesses.

In terms of overseas E Commerce.

On the.

Going forward, we will continue to the focus.

On an hour on long.

The long term strategy that continuously bringing the successful experiences on technology advantages and then the models in China, a replicate these experiences to generate more wells across the globe.

Well.

John on iOS I think you also asked a bump the margin trend on let me also give you some color.

If you look at yes. Thanks.

The a margin profile for vehicle in the quarter on the non-GAAP operating margin level is already put the EBIT is our deposits that is thanks to the year in terms of the gross margin first on with the saving of the bandwidth cost and also with the Inc.

The leverage of economy, we have also reduced the percentage was spending on the sales marketing as going into a revenue. So on that result in deposits from our non-GAAP operating margin I think that trend of will continue in the fourth quarter.

And also on on next year, even though if you ask me about the balance between the user growth and margins on.

So on to continue to invest in our business to attract more users around the world because we do think that globalize. The shop on video unless you have massive potential but again as we have demonstrated our capability to generate positive margin I can that work a lot of confidence for investors as well.

Thanks, you should any of the IPO Tinto.

Your next question comes from the line of Alex Soon of Morgan Stanley. Please ask your question.

And so if you go through on its own door farmland, though to the big on terms of units on Doug.

Well the ones the GRC Clay you line.

Good day, Thank you I'll use the since the inception the.

Do the team does digoxin with some kind of.

Hi, I would say go a little warehouse on the NII in the end of Claude circuits and much of a team of.

The NCCN jump with downs on hold true Jos Antonio a group.

Google, It's only been sent out to achieve some of the Hoff sales.

Throughout most of the substantial so a good some can be go live growth coordinate a by shipping so engaged on paying ratio to cook a blip on the.

The two times so you got some of the detail.

So what's the July high yield while the golf.

Dan sounds a lot of on their own.

Yes, so values accepted out on the goes from a cell.

The higher directly on the Utica.

Debt balance and some of the two sides of the telephones out those yet.

A question is related to line.

Management, please help to share with us some of the monetization progress and a monetization user growth and the investments.

Hi, good for next year and in terms of monetization for example for a live streaming how is the compare with the engagement metrics will be go lives and a short videos in China and a part the live streaming.

Are we seeing any progress on advertising, maybe even E commerce. Thank you very much.

And the Eric on the address a question for the monetization of the like of business as I cannot disclose the the numbers in general it's going very well.

As I explained in the first half of the share. So in a relatively I was a early stage, but we have speed up the penetration of or from the third quarter on continuing through the fourth quarter. So we are confident to achieve the level of much of a monetization on for Nike.

As we communicate with the invested before I.

I think overseas as I mentioned users tend to have more solution actions and as I explained in the prepared remarks, we have incubated more functionalities to allow more users to create content and up low to nikes acquisition and to share the comment on the charters content. So the engagement on the option between users within liking it.

Very healthy.

Even though we have encountered the Indian government's band of Chinese App debt rezoning of.

From a quarter and the yield decline, but the if you axe, India as you can see like as user base on a year on year basis and on a sequential basis on which you very high our use of growth. So we are confident that the addition of users from other parts of the low will provide the additional traffic from low to monetization.

And all of the different formats of monetization.

The in overseas markets to revenue early compare was China, so, but everything happening in China will be replicated global as well as just met on time. So in the initial days as of that this year. A next year, we will be focusing on converting user traffic flow to lightning. The goes licensees a perfect twin brother with cash flow from video because the all share similar types of risk.

Thanks.

And the we utilized be growth right smack in operating expertise to monetize the user nature from the the like ecosystem.

So that the claim ratio and profit will gradually channel up to the a similar level of people net which would take from time.

After we realized a hands on portion of the use of conversion to last from me. Then we will continue to explore advertising the ecommerce as a friend to divest of before advertising is a very natural monetization for a short form video as a as well because we can explore native ads.

On a way for user engagement, that's where a lot less wiseman decision for Nike for.

E Commerce, David has claimed that the we have.

Establish the balance ecommerce capabilities for cross border transactions. So we'll also utilize like is massive user base to feed into this acquisition on July Chinese supply chain.

The and to maximize the the.

Use of value, but I think the advertising and E commerce at the.

For a meaningful revenue contribution will come at a later stage than their machine. Thanks.

Thank you very much.

Your next question comes from the line of even zone of Citi. Please ask your question.

She their current centered on the land or the bottom line Cook Press reports on May the kind of top of your.

No one wants to talk about your thoughts such a book also true, yes, a cotwo linco sort of on your last on two Fitch on digital of multiple.

The also to poor hersha. So one of the shipping day of coordinated shit to sell the Fourq seamless more current that support weighed on the Goodyear.

Well, it's on the mid tool.

The core like a highlight some.

On the upside it goes from what's your thoughts on that.

A tip of so many managed by the politically.

Flow taking market share.

I ask the of the all live streaming of a model into a future. So while a pioneer of with up to sales sure from a tech a decade ago unattended of loyalty of mobile showroom and the need to pay to the claim that streaming and the it.

Also of exposure in touch on the dealer sizable market overseas. So what's your view of the that's true nemoto into future. So apart from this model I mentioned, the what are the opportunities if you see a quick.

Low away a lot of white play in the future. Thank you.

Thank you on demand just a question I think interest only on a licensing business I was the I was a business model per se. It can be integrated with many different business model. That's the beauty of a month of machine by folks on board a social networking platform a use lashing for monetization on music App will use one of the machine has a monetization.

And Thats. The reason why we have so our domestic revenue based on the two machines in two by two biggest by two.

Have a lot of traffic from a different apps on those traffic can feed into a nice should be and how high to to build a big the Apple system with a better monetization also.

Hello, while I'd like to expand its typically the of monetization in that the acquisition. So I think in China on lighting. The will continue to grow the will for the expense of the different categories of industry a different business formats global.

Globalize the the same thing, but we think globalized there'll be more opportunity for last year, not only as a wave of money from monetization with a combination of triple on video, but also.

The machine as I explained before has two very unique features overseas. One is that in general the entry barrier price means low overseas, that's why the participation rate from a whole.

Host the overseas market is much higher the in China.

Secondly, the social interactions between users.

Among users on host also more prevalent in the overseas market, resulting in a higher engagement and also a high paying amount.

Per users so.

In short that I will say machine has matched the potential both in China on overseas.

And we will make sure that we can do the invest in our overseas operation and create more opportunities down the road.

Thank you.

Your next question comes from the line of Daniel Chen of JP Morgan. Please ask your question.

Does the Algovita seizure disorder. When he was on element quite on eager to some of the warm and do the to do they go on line the realities of the accounts Dina through the pay hold a gaming system line.

Most of the orders so the the higher prices on a woman Jay the.

This is on Saturday, the Yahoo turned down because of the BNS and the class Teradata 10 leader sit here I was trying to say myself. My question. The first question is on the well on like kind of business. This quarter. We see there is a substantial improvement in the margin what's the driver behind the second line is on Beagle among all of the market.

Mark a segment, which market to a saying has the biggest potential in both user and the more that Asia in the next three to four years. Thank you.

I think on trio lineage of a question.

If you look at the wireline segment.

Has two components one is why a lessening in China domestic and also the other is a high going out of the business.

In terms of one of our domestic Russian business, we have achieved better and better operating margin.

As you can see from the past few quarters. One is on the gross margin side, we tend to do some of the campaigns in the quarter, resulting a low hour sales revenue showed a ratio in the third quarter.

In terms of the a sales marketing we have also.

Pay more attention to the ROI. So we have achieved better our sales marketing leverage as a percentage of revenue. We have also paying close attention to the R&D on channel personnel spending so on that.

So that's a piece of why we have maintained a healthy unhealthy of margin profile for worldwide.

Just a question of business.

A lot of Pos.

On the wireline segment, including cargo as I explained in the prepared remarks hobble is on the on a well track to the becoming breakeven on some of the key regions. So.

The the better margin profile of heart will also help with the enhancement of the year on wireline segment margin expansion.

For a second question is regarding the year because of potential area for overseas market.

In general it would fall on the growth markets as I said this on well over 40% of the vendor from revenue contributions will be Google now.

Within a couple of market, we think that.

North America.

But to your EPS market will be one of the big.

The market and also secondly is the Japan Korea.

The new sales in Australia, which I quote from Pacific region of Eastern Pacific regions a.

Third one is the year more on the Western Europe.

Which is a low.

Gross visions share several key comment kind of risk is one is.

Pick a population base second it's a high dispose the income.

It is.

The higher propensity for social engagement on social interaction, resulting in a high paying ARPU within machine scenarios.

Thanks.

The Q.

The Q.

Your next question comes from the line of Lee Chen.

The as a please ask your question.

Hi, Brian is index.

The this will allow goes the on comes in a year the high or low.

Our licensee of a deal.

Our Eagle index outweigh the sad to see a woman's why don't you of Atlantic City say quite income multi client disciplined on make what asking for the hall on then current tick tock part tanks on a.

Ill now turn the order share on seeing from financing platform. Your net income pink and bath inside of that.

Now I'll tackle NCTC is not when you take on the user to count on that why why a lifestyle what day, yes.

I see how easy food again, you anticipate the again why on home sales on $2 ARPU and it's a good deal with you folks the Harlem a day to day pad the information for the R&D the day.

Well beyond the you've got the end, though not all the t. Thank the asset management for taking my question. The congrats on the deal on strong results. My first a question regarding the.

The competition in short we doing over to the market.

Especially after the price.

Okay. So geopolitical change out of the us election of second delay.

On the why why a nice deal of Jewish.

Late hasn't seen a change in terms of day tar and the R&D weighed on our balance so Matt its net so do I continue to hear.

The state how those stop while at the change we can see after the deal. Thank you.

When I turn in the current.

Whether the shutdown of the dealer momentum. The however, since the launch of the annual can easily interest you the general manager Thats.

Turning to know which of the ducommun platform in the third.

Sure the index strategies, the Arizona Usher Sinclair the merger of the away with margins can count on that we thought the there was a little on the corruption loans on the.

Revenue from in the given relative to the economy, a conditioned on a general days on the end of the from Hong Kong.

The downhole make our knowledge on the remains of to the tune whether through the year, we'll Hello, how are you able to the food you. The ones you see here on what lenders are so on cash of higher than the.

The two for people from the tone RDM, the sunia Union cash amount there.

The home to them quite yet when a series of Amgen growth.

Former highlighting a where you're doing work of the year orders from fruit juice transformation of whether to go across nearly all of which are Tyler this range.

The transaction the lumpy on that in a true.

On the statement.

On the announcing a question.

For the.

Competitions asking of.

Inc.

So on strategy low.

The consistent.

Number one of that we'll continue to wait for the right.

Secondly, we will make sure that cover the business day.

On a healthy balance correct and that is what the.

The thing, which is that from other expenses and for our data storage and operations as a person.

Patterson and of equal in 2014 people operation has been on separated from by White line auto packing on.

On a overseas Npis the operations.

That's correct.

And operating thank.

Thank you.

Thank you.

Our final question is from Chen who of T.H. capital. Please ask your question.

Thank you management congratulations for the great quarter.

So.

After you.

So why why a coupon ideal so I guess the focus is going to be on year of overseas business like key vehicle and yet you might have low.

No donor.

On the dialing England city.

Hey, how high the Nic.

David tail being one of MTCL human nature of Atlantic Sea. The two so to co. What's on current and they don't seem pushes that 90 day.

Yes.

The equal on Nike items on his own that's a highlight Utica what's your take on past look we'll need the U can and by the year, we'll quickly you sense that from.

You should you book a class Quibbling, Yale you see a complete.

The piece on many cities the now lets say one the coupon the hot line shipping Hale take a should the I'll take a leading.

Well the co net.

The main issue on then.

Coordinate the show a Mcclatchy show you a meal you could even without.

Any of the M Hi, Casey the the vintage yes, the Tina thank well Nate.

Which in a sense should keep obviously a hole in the hitting commercial woman without the purity, Matt Hi, the yes. The Teekay. This is that the cash.

No well over $2. Thank when the the Russia.

He did.

Good day count should the on hitting that use the number.

None of the lighting a good shipments a number of payback. So after sale line may domestic shula too bye.

Do I guess, the company's focus is going to be your overseas business, including like key vehicle.

Moving on to have growth so I wonder in terms of lives steaming.

The business acquisition is the Kentucky, the similar to why why domestically with the Union driven and so Thats number one also among different.

Hi, Pete.

A ti so what is the.

Yes tissue capacity each of them, which why is the traffic generators, which line is the revenue of has taken a later so whats your plan. So that's the first question the.

The second question is the domestic of asset. The management said you guys are going to get into the new business on line.

The quarter I remember.

Since the mentions that you guys go into a enter into a.

A community a of fresh produce application program. It is a very oh, hi, how to sales momentum a area. So I wonder what's companies new business are going to be and so.

On the new business you already started.

What is that at the current stage.

Yes, that's.

That's the my question. Thank you.

Oh, the with either to the deals on a Roman size of the Highlighters on how nationalism.

Many of you should resolve so neither of the go lives easier to Eagle So volume on who found on the removal of on that sort of a woman. She is on a unit.

Sure there is none of it on class the.

So you know to the people I would say the emotional touch on your very nice legal fees on Chen Karma you go to the Sun to the yield on.

The other line, which Antarctica, the higher yield on loans.

Sushil non terminal, a woman's ago, which on doctors a likely the to the Susan.

Sure the against the.

Hometeam landing on the Angela from women's is on the to the Challenger legal day.

On the assumed on Union that will kind on ships on the engine.

The better.

And then on to the memorize on merger to the warmer unsure of the answer the rewards us on the achievable.

True Lewis from.

Total a much higher than the to the.

Yes debt.

The owner of the settlement hoses on one of those is a given the sound of emotions that go on loans.

From war, so again the channel.

Adjusted to the throughout the day on Monday from good assume the again the sound a little more sure shiny a more sure income highlighted to the.

When she's the aluminum to the to the the hedging the all highly variable from quarter two the timing users on the Osha hi on two which is a real sure bellatrix years from there.

The second on Monday of is a shining a more shipping hundreds of thousands on Lucia if the on dollar debt settlement joke weighted to achieve the our CGM kind of.

On broader due to weather delays you Moshe.

Yes.

As for our growth in the all the sector for the goal we've been seeing growth.

Revenue and user base, so bigger business model has been relatively healthy as per line key at the current day remain the out of current focus is mainly on the growth.

User base on we have a car to start to kick off the monetization of like key.

On a net on 2020 and we are.

The and expect to see a more.

Improvements in 2021.

As for our domestic business in terms of on on community investing future purchase business, we did invested in and in.

And the company focused in the area on index journey on the.

That is our investment in the E commerce on.

That does not mean that we intend to enter into this debt.

So by the shows our interest.

The area.

Our long term focus is to continuously on.

On replicate operating the advantages of Chinese from in terms of product technology and business model and try to replicate these advantages of a key.

Thank you.

Okay. Thank you David.

Thank you.

This time I would now like to hand, the call back to the management for a short closing remarks.

I think thats the end of the call. Thank everybody for joining the call. We look forward to speaking we like the one on next quarter. Thank you. Thank you very much.

Ladies and gentlemen that does conclude your conference for today. Thank you for participating and you may now disconnect.