Q3 2021 HUYA Inc Earnings Call
Hello, Ladies and gentlemen, thank you for standing by for the third quarter 2021 earnings Conference call, So who yacht Inc.
At this time all participants are in a listen only mode.
Today's conference call is being recorded I will now turn the call over to Midtown you Lil Company Investor Relations. Please go ahead.
Hello, everyone and it will come true, who yes third quarter trying to talk to you why earnings conference call. The company's financial and operating results were issued earlier today and are posted online you can also views on earnings press release by visiting the IR website at IR Docs, who have thought.
Com a replay of the call will be available on the IR website in a few hours participants on today's call will be Mr. Jia Dong, Chief Executive officer of who yeah and the Ms Ashleigh.
Vice President of Finance management will begin with our prepared remarks, and the call will conclude with a Q&A session.
Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provision of the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involve inherent risks and uncertainties as such.
Such the company's results may be materially different from the views expressed today.
Further information regarding this and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U S Securities and Exchange Commission. The company does not assume any obligation to update any forward looking statements.
Except as required under applicable law.
Please also know that who yes earnings press release and this conference call include discussions of our audited GAAP financial information as well as audited non-GAAP financial measures <unk> press release contains a reconciliation of them Oh, they didn't non-GAAP measure.
<unk> chose our audited most directly comparable GAAP measures I will now trying to call over to our CEO. Mr. Huang Jia Dong. Please go ahead.
Hello, everyone.
You all for joining our conference call today.
The third quarter our 2010.
<unk> data solid results values as leisure that record high.
And we continue to steadily grow our topline.
Well I love mobile emails leads to that.
Hey, Tate fun playing to win.
In the third quarter.
15% year over year, and 10% quarter over quarter.
Our strong user growth was mainly driven by all our comprehensive comp.
Content offerings.
Operational activities and the continued promotion.
During the summer esports events.
Next month, the passing late for who we are live app.
Oh solar Linda symbol at over 17%.
As a technology.
Ed.
Platform, we have are being continuously focused.
Product and service.
Great.
To deliver more fun and more sale.
Yes.
Our users in particular.
Actively promoted so development and expectation.
Oh more interactive features in live streaming supporting broader cost us.
Ability to.
Produce quality content more conveniently as well as it makes it easier for our users to participate.
<unk> loves genes.
I will now provide you with some uptick.
Also in Asia too.
Our open platform for third party application developer.
Yes.
Has it being up and running for almost two years.
And.
Timber more than 200, and then paid to US had the being honest this open platform and over.
Hey, Jed.
The broadcast is covering our tactical race, including esports tournaments.
And the Pan Entertainment had to use that to us.
In particular.
Recently and did that.
Capabilities for multi user participation such as Gerrard and.
Further attending the Wawa and <unk>.
There are five keys.
Randall.
All parts of the pop here us more users can join.
<unk> Interactive X gene and gifting and the bullet.
Chad.
And by users can also in Korean battle.
Six inclusive.
<unk> activity <unk> broadcast us, helping users to effectively lever up and as Jan said that monetization capabilities.
Yes.
In Augusta.
We introduced a feature called.
So KOL data, one Clayton who joined broadcasters game.
<unk> play he's 10-K it was at first the applied piece Keith.
A litre channels.
What does this impact your gaming functioning he owes us can team up with Cmos to play games, well launching live streaming sessions.
It gives the drop feature we released.
Earlier CCI is now available in more games.
Including the latest L O L y that lift.
Through our cooperation with game Stacey.
<unk> gift.
If the job will be to that.
Life channel four use us to plan came to us and the schemes.
Downloading six new game.
Using a certain length, all viewing time, Oh and broadcast.
Because our thoughts on Q in handsets.
Engagement.
In the <unk> sensing as well as participating pacing I was again itself.
We believe the introduction of <unk>.
Excellent.
VITAS slots only offers more in a V.
They too can play for our users and the broadcasters.
Also improves.
You'll need to nip.
Two games studios.
Importantly, it opens up more opportunities for a lot deeper.
Penetration in the game value chain.
In terms of.
Streaming technologies, we recently added HD.
Support to our esports tournament.
The neighboring use us.
Enjoy more dedicated game themes.
Comparator tools are exerting ultra HD.
As far as well.
Well they have a lodging ourself the weapon.
Was that because of the initiating technology for game live streaming.
The newly launched AI tax gene function identifies <unk> game terms as well as Claire and the team.
In names.
And that provides real time <unk>.
Titles for live events.
Together with our live event event instant payback.
And that's the meal pain, yes.
How to squeeze there.
Functions, we were able to provide the best tournament.
His progress so far in the recently concluded 2000.
20 win season, a league Liga La.
And would there.
Chang Championship.
So put together about managing data technology and operational.
Expertise.
We continue our leading market share in broadcasting was 2010 they would.
And like how is that dynamic business.
Environment.
It is.
Teva toll for us to strengthen.
Competition competitive advantages here.
Primarily.
They decide in fostering and retaining streaming talent, enriching and producing quality content and delivering technology and product innovation.
We are also confident that we can capture opportunities.
Note by the new game launches.
In recent quarters.
They are being more Reg Reg.
Attaching.
Surrounding our industry, we believe thats the intention is to better regulator, so space and promote a healthy long term development, we have been closely monitoring and following.
Borrowing Lego.
Lego luxury guidelines.
And then we will continue to strengthen.
Our operations in accordance with the regulatory requirement.
Despite the potential impact of a regulatory change yes.
To them because we believe in.
Ajay, let's say and the ability to remain.
Competitive and relevant and to create long term value as we continue investing in quality content.
Adding products.
User growth, improving monetization and Saudi they're fighting how our leading position in the game live streaming market there.
With that overview I will now introduce our VP of finance has today.
Who has been with who we are for yes and has extensive company.
Company and Thats great knowledge.
She will provide you with operating metrics in more detail and our financial assessment Ashford Inc. Please go ahead.
Thank you, Mr Kelley and Hello, everyone.
Mr. Don suite.
I will start with an update.
Our content enrichment and diversification initiatives.
Eastbourne is at the core of our content ecosystem.
We have been committed to bring more high quality and popular esports content too.
During the third quarter.
131.
E sports tournaments generating total relationship.
Hunter and $19 million.
L P L somewhere on the octane World champion Com and SBC somewhere well amongst the most watched event in the third quarter.
Our exclusively broadcast comprehensive Richard condiments, including National electronic spot tonnage.
And esports Championships East Asia.
Well also welcomed by users.
Although some license events were temporarily delayed during the season.
Is it more professional comprehensive content in comparison.
Yes schedule.
In the third quarter, we had 58 south cookie.
Tons of money and entertainment P. J C shows.
In total we are she reached 142 million.
Over 40% year over year.
Among the esport tournaments that mean, you could do it so well, yeah, Oh stock comp.
On Monday has become a signature eventful peacekeeper elite.
In this event some nice season, we in Y to talk professional press and well known broadcaster from multiple like streaming platform in China as well as several international teams.
Hum.
Mickey, especially popular.
During the period.
We also hosted the round Cup.
Full crossfire mobile Crossfire HD.
We'll file and no record breaking point.
All of which complement the content for both skin titles already on the platform.
Okay.
More traction.
Lafferty.
Notably our pension Cup.
So L a y.
Okay.
How in August.
Okay.
Pension before the formal launch of this much.
As anticipated.
In addition, during the period okay.
Okay.
We put yourself complemented program show Truecar integrating professional game right Anthony.
At this show.
It is the first time.
For these extra okay.
We believe it was the first thing.
Our teammate of Wheeler ship over 12 million build in the quarter.
On the entertainment PTC program from.
Our long standing like season.
Lagging.
You know, we keep a werewolf game show and we are of course will come in one season.
Yeah.
Yeah.
Mixed martial arts competition.
Continue to be the top performing shows.
In September we.
Sure.
Can you restate pump Shang guang.
Our first near 16 invest into real program.
These programs and one well known musician through shared yes, sorry.
In reaching our entertainment offerings.
We continue to strengthen our efforts for weekends are encouraging.
To also become content creators.
In addition to the popular we deal on the mountain.
There'll be Gil carousel format.
Bullshitting.
This surplus uncle in the play.
It's also well light on our platform.
It feels like G&A user habits.
In the third quarter ever reached.
Who watch video on our platform increased to approximately $14 million.
Representing a quarter over quarter growth of 30%.
Moving onto our international expansion progress.
The average <unk>.
Nemo Kinsey.
I will also assist game live streaming platform.
Increased to more than 28 million.
In the first quarter.
Oh for <unk> revenue.
She has over 200% year over year growth.
The sequential user growth was mainly driven by certain regional E sports tournaments.
Particularly in South East Asia.
As we continue to deepen our relationship with local content providers.
And game companies.
Yeah also refining our cooperation with local H in Tennessee.
Most of the preclinical and healthy fear show revenue growth.
Next I will walk you through our financial highlights.
In the first quarter.
Our total net revenues were approximately.
Ian.
6% year over year.
Our life streaming revenue or $2 6 million in the quarter.
A slight decrease from the same period last year, primarily due to lower average spending per paying user.
Right.
It really offset by the increase in the overseas live streaming revenue.
The number of paying users.
Right right.
$6 million, which is flat compared with the same period last year.
Now what does this all.
We're paying your son numbers improved compared with the second quarter.
Well in line with our mobile expansion.
Expansion Chen.
So you should know sending from newly at the paying users has resulted in a lower a.
<unk> in the third quarter.
Advertising and other revenue.
Increased by 137% year over year to almost three.
374 million industrial quarter.
Param really driven by revenue from content licensing.
Profit level in the first quarter.
Impacted at least that.
Investment in our content.
Our non-GAAP profit.
Uh huh.
116 median.
Non-GAAP gross margin was 71, 3%.
Our non-GAAP operating profit was RMB $154 million.
Our non-GAAP.
Margin was.
Five 2%.
Our non-GAAP net profit was I N B 188 million.
With a non-GAAP net margin of 6%.
Now moving onto our financial details.
Unless otherwise specified.
The growth rate I really revealing oh on year over year.
Cost of revenue increased by <unk>, 6% to RMB, two 5 billion for Q3.
Primarily attributable to the increase in revenue sharing fees and content costs.
Revenue sharing fees and content costs increased by 16, 3% to RMB two chows.
<unk> billion for Q3 <unk>.
Due to the increase in revenue sharing fees.
In relation to certain broadcast incentive co brands.
The increase in spending on E sports content and content creators.
Bandwidth costs decreased by 14, 2% to RMB 178 million for Q3.
Hi, Marie do to improve this cost management and continued technology enhancement efforts.
Gross profit decreased by 18, 8% to RMB 504 million for Q3.
Primarily due to the increased cost of revenue.
Dressing by higher revenue sharing fees and content costs.
Gross profit was 18 16, 9% for Q3.
Research and development expenses.
Increased by <unk>, 9% to RMB 206 million folks feel free.
Primarily attributable to increased personnel related expenses.
Yeah.
Sales and marketing expenses increased by 15, like one 5% to RMB 200, and Penn two 9 million for Q3.
Primarily attributable to increased marketing expenses to promote the company's content products services and brand name.
Particularly including promotional activities for E sports events and cooperation with various marketing channels during the summer vacation.
General and administrative expenses.
Decreased by 32, 6% to I M B.
8 million for Q3.
Due to lower share based compensation expenses.
As a result.
<unk> income decreased by 62 points, there, 1% to RMB 83 million for Q3.
Operating margin was 12, 8% for Q3.
Interest and short term investments income well I N B sixty-three median for carefree.
Compared with RMB 76 million.
Think of 2002.
Turnkey primary attributable to decrease interest rates.
Income tax expenses decreased by my teeth.
Our 9% to RMB 41 million for Q3.
Sure.
Equity method investments net of income taxes.
I N B 317, 9 million for Q3 comps.
Compared with I M B zero Contumelious for the same period of 2020.
Primarily attributable to the investment income related to a disposal equity investment.
As we disclosed in July this year.
Highly equity funds that we are investing in.
As one of the limited partners entered into its definitely agreement to sell its minority stake in a gaming company.
Net income attributable to <unk>, Inc was RMB 524 million for Q3.
Compared with RMB.
$253 million for the same period of 2020.
Non-GAAP net income.
Visible to Inc.
Which exclude share based compensation expenses.
And gains on fair value change and disposal of equity investments.
On income taxes.
I N B 118 million for Q3.
Compared with RMB 361 million for the same period of 2020.
Diluted net income per ads was <unk>.
M B to <unk> 17 for Q3.
Non-GAAP diluted net income per atheists with I N B single corn 75 for Q3.
As of September 10th Tricky 2021.
The company has cash and cash equivalents shut time deposits and short term investments.
And B is that one plus billion.
Compared with I M. B 10 point 74 billion as of June 22021.
Primarily attributable to a cash inflow from the equity investment.
Also mentioned about.
With that I would now like to open the call to your questions.
Thank you.
Ladies and gentlemen, if you wish to ask a question. Please press star one on your telephone and lights for your name to be announced if you wish to withdraw your request. Please press the pound or harsh key for.
For the benefit of all participants in today's call. If you wish to ask a question to match men in Chinese. Please immediately repeat your question in English.
Once again, ladies and gentlemen, if you wish to ask a question. Please press star one on your telephone keypad.
Your first question comes from the line of Thomas Chong from Jefferies. Please go ahead.
Well, it's I'll call. It as I said my name is holding its own.
Oh Boy Oh language.
The Eagle a chunk of it because it wasn't something you saw that can make a S. C E O N.
Yes, the whole Oh, so far that it's all shareholders.
Would that trend higher sogou is that your expectation.
Management about taking my questions I have two questions from my side. The first question, Yes, I can management comment about the performance, but as you know I've been and number two it's about ER, our expectation with regard to the there was a trend that's why I always thought the revenue expectation.
Expectation thank you.
Ah I see some so more on that issue.
Women and girls, saying they come dollar answers to the U K.
The churning as either a whole Luna against Phishing No American.
It may come down I am till they do so it's a religious thing too.
Jean <unk>.
So the <unk> 13 for the job.
The S 11 that actually took place last weekend and we are more than happy to see that this has caused a sensation of outcomes in the world of our games and we are very happy to see that another L. P. L team entered into the final and got the title in the end.
And we believe that the influence of factors. They found is expanding.
Well I saw 1 million golfing sideburns, so they see that she is here.
The women side, so the 10th and thoughts.
Samsung <unk>.
We're very happy to see that during this whole S 11 period, Oh, Yeah had continued our lead in the market shares.
It was actually it sounds out of doors him soon.
Who did you see in there.
So the things you like.
If anything you saw in your dividend policy.
Honestly a ton in China without pain relief. So does it go.
During this event, we I had sought a number of new records made for the viewership.
Specially for PC use this year actually is a two times I've thought from the last edition and it is also a record at a record as the highest piece are you for who yeah platform in its history.
So this is one could argue your attention clubs.
Yeah.
Hi, Linda so youll fashionable don't go to the to the know how the cycle well then Congress sushi that says boy the tissue, you'll file size quantified that yet.
Yes, absolutely.
I think there's something totally.
Thank you. Thank you don't take off.
During this tournament, we had launched operational activities together with a person and also we launched a mobile game based on the tournament. Both of those activities has delivered very nice results and we will continue to improve our live streaming technologies to.
Does the viewer experiences the penetration rate of our full year and does that plant actually has the highest during the past three additions.
Yes.
How does sound me on what I point out is that when you're young who has shown good I think the one thing I'm not don't collateral one that you'd see sugar.
You'll find me I shouldn't uncle tissue function something.
I can answer each one off we always said.
So now well my sense of woman doesn't you don't have a rule do you you don't cool formula He got some time now.
So you can see those things I've seen yoshii aegis I shouldn't uncle thing.
So Mindy Israel.
No Miss a little well I'll talk about the users and our revenue expectations in Q4 of next year. So overall speaking, we expect our users to grow continuously and despite some seasonality changes we believe that our investment in the content will help us to grow our view.
Our ship and also we expect some very positive.
Packed from most recent new mobile launch a new game launches as well this tournament events.
COC just show them all of course Youre in Florida, you can throw me out of late and that's that's the S. G. The talk Latin seeking an injunction.
I'm quite sure you already begin to narrow that equal portion.
Hung and I kind of who yet courtyard and say you're cautious.
Senior portion of the content.
New games has always been an important source for our uses and winning the title for US 11th as time and also becoming for E sports, becoming an official item and Asian games will both create very positive impact for all of you to the viewers and will help us to enter into a wider audiences.
<unk> so for the longer term, we believe that our potential user.
Gross well have well continue to increase.
Especially for me in the Wow, well initial let's say you didn't do software shutdown from Guam hunting issue.
So luckily either moved out or source, you I'm not going to change the chunky.
Gotcha and Dominion dishes. She says she will do that themselves.
In terms of revenue with the leaves that revenue to some extent is under the impact of the macro environment as well as a live streaming sector as a whole. So our target is to keep a higher than average gross a pace and continue to grow in years to come.
Had enough with us without Sally.
Next question please.
Thank you. Our next question comes from Evelyn Chow from China Renaissance. Please go ahead.
Quite so much.
I don't want to what's.
I was just wondering the emotional.
Yes.
Fostering a true because grandma credit to your question is are people really starts with what's your what's the tumors with central cause Michelle alcohol its own culture.
Yeah all good.
Yeah.
It will fall back to school sales force you talk two cuts a boiler.
Cool.
Okay Gotcha.
Chesapeake at lunch.
Oh it does.
To your question I should always telling my way to play with some sort of issue.
Yeah.
Paul Bulcke was how to bolt on more Oh, My God you ship the biosensor copay.
Help I'll call. It just helps you thought they're kind of tie that you show or what to know what kind of voice. So I'll, let's see if I didn't shop.
Taking my question I have two questions.
Sure.
Okay.
It's exactly what else it would take to indulge.
So more color onto new just like it always from this title.
And I guess when you make a reference to honour of Kings and also pushed.
That's a bit what type of cap between $10.
You thought coming into <unk>.
And then secondly can you discuss the preparation we made before.
Oh animal about what.
And it all came out recruitment and also our self organized tournaments and additionally, how much incremental content cost do you expect when cool. Thank you.
Hello.
So think of Sunshine.
You could do that.
Just can you on young women.
So you're seeing news on men and women.
So let's say that.
Hum.
No.
Hum.
So do you see the tickets as bullish as GE.
Well, Jay that until I saw the Ohio to Louisiana.
Rishi dialing in women's and that has shown to mutual funds will host Sandra.
Sure.
You're right by saying that L. O L. Mobile was launched about one month ago, and Oh, Yeah platform continue to take the significant market share and right now the use Oh viewership our performance is better than.
Again, such as pop cheap, but of course, we will continue to monitor the performance going forward.
Hello, gentlemen.
So you can see the kinds of wine to go so well.
Again kind of the engine and the diode.
Who are the ones who proceeded to Douglas.
So and dumping agenda that finds women do it either.
The way that I see.
If you don't put a quota in women's hesitated on introducing.
This L O L. Mobile is by no means replacing the uses for a L. O L. P C or edge. Okay. Therefore, we have the right confidence of gaining more viewers and users from live streaming for it does a mobile game.
What we need.
Sure.
And based on.
Emerging from the top banana.
Today with me. So you can find cancer changes in solar and good I'd say, they're 10 years, but it's a bit yeah again.
So that's all taken each of their paper.
And to in preparation for the launch of the scan all we've done a lot of things in operation for instance, we had signed some live streamers as well as our working together with talent agencies in preparation for the launch.
So those aren't here and say Oh.
Well then she's done a toy company in the past.
Hello.
So no major changes with the larger <unk>.
Uh huh.
Hi, Doug.
So is the tangible book as you know what I'm, saying at Santana.
<unk> sits at the center.
Since the launch we had organized a number of tournaments and events in order to give opportunities for live streamers to.
Make their shows and make exposures. We have now signed over 1000 streamers and also how that signed a number of our professional teams.
Oh sure.
Ali <unk>.
So that should help us actually the zip on churn picture.
On young wait until these years ago.
So that's why Peter Thanks.
Going forward, we would consider acquiring I'm not license the tournament's.
In China for domestic leagues as well as the other key important tournament on top of organizing our own tournament events.
Okay next question please.
Thank you. Your next question comes from Lei Zhang from Bank of America Merrill Lynch. Please ask your question.
Oh, Hi, Glenn anytime I somehow autistic disorder.
Yes, he goes with Rockwell as a woman.
They acquired all of which are malware allowed us to showcase and Toyota store My dogs, So little phone calls, they're all come down to two.
Now I'll go on here why don't you tell them go sorry stood up by Oh, yeah, well, but you're not long ago all else.
You got Joe Oh, sorry for all that.
Insurance based on kind of Darwin I want Matt Oh Boy I can't hide don't go outside so poultry that's cool.
Yeah Oh.
So the whole dog's size. So there talk whether you mean, you couldn't Goldman Sachs Dharma, Oh, Yeah, Oh, Yeah, two questions here Oh, four states on Oh marching fan art can you give us more color on that margin trend, especially on any change in revenue sharing cost in that compound called second delay one.
Ah you're all updates on your strategy about esports talking about and then how should we think about the talking about related to cost cutting the field trial. Thank you.
Uh huh.
Quite nice how quiet it took a little religion quantum.
No way that somehow or other things you'll need to check on how the food Oh.
Oh gosh, it's home Tucson cashes, Josh how let's say narrow the total actually I'll I'll call. It should never once all sorts of central.
I should mention needle in such a narrow formulary.
Not say too often transform in a winner take all she was helpful. But that's how can how to teach on me.
Let's say wish him Lucente shorten chancellor begin at some countries China will make it.
Each of Charlotte team quality, though to what do you say Oh, why they should see Lee.
In order to improve our competitiveness and better serve our users we had a step up our effort and putting more resources in content since Q3, including by making more investment for content creators as well as the self produced high quality content and life.
Tournament content as well in terms of revenue sharing with our live streamers in order to improve our competitiveness, while maintaining the basics of revenue sharing mechanism. Some changed we will also have trust and trying to give more incentives for the life.
Streamers, according to the market dynamics.
No Wonder woman, one shot, though Joel Luton.
They're gonna dealerships now please say so you're just not sure that I'm Pei Helene don't clearly <unk> seen a forethought not stating anticity to oh, it yet so I shouldn't say cause such wound up at what juncture as she took a threshold push it all kill Selectric been let's say quite a way through that's actually shown that somehow quealy shaking some.
91, I think you'll see union, who you'll be down toward that they don't need let's.
And I'd say quite I Shouldnt create 10 dollar Tricia <unk>, but there's always somebody told me I always felt like all you do.
In terms of margin levels, well there is some seasonality changes according to the scheduling of our operational events as well as a tournament, especially in Q4 of those yet because they are a number of our big events towards the end of the year and also there are some.
Spoons of events and tournaments such as the S. 11 auto plays in Q4, so that has generated some impact on our.
Turning them on costs and also the operation costs with regard to content.
Oh that agenda.
Okay, that's all getting to the faqs answers as to know that if all goes well.
Well I thought I'd take 100 of anguish Tianjin.
Yeah.
Sure. So you know John Peeler mattresses.
Dan you're sensitive.
So they look to you guys.
Actual muji with its own country in Israel sensitive antenna exactly.
So what you said.
Yeah.
So Mrs. Don will take the question with regard to a tournament in its IP cost well actually we believe that our esports all will continue to be very popular in a few years to come, especially with the 11 final title as well as and shouldn't again, so we believe that.
The cost for our top tier tournaments will probably go higher in the future.
That's anyway.
And I was just.
See you will see all of this.
It's good to.
She says that this has been going three times at the table on the chance. So he doesn't have an answer on that so the challenging as Penguin.
You sound good on languages.
So as you know.
Okay.
She is simply I will say Sunshine that you didnt need them.
On the other hand first on the long tail tournament's or a new toward them and so it really depend on the promotion of flight three main platforms. So the costs for these kinds of events will probably be quite a flattish.
On the other hand, we also notice that our self produced content is also a very important source of content all four yeah.
Yeah.
It sounds as if I'm answering your question is all I can do this house is boho chic Sudan, there didn't essentially he probably disadvantaged essentially day when there's one will address all of them into the South African Williams and dealing with so you should see this afternoon punishing that'd be Bianca.
Yes.
Today, the needle very well Sean soon.
This again so it was on the BD and go so that's.
So understand that and so again it sounds enough understood.
Ovens.
Yeah.
So for our self produced content as well as our own E sports tournaments, where event entertainment events. We believe that the this kind of content to create a better value for money and it's quite a unique to our platform. So we will continue to invest in these.
Kind of areas and we hope.
To raise the percentage points from the current level to around 10% to 20% in years to come.
Okay next question please.
Next question comes from ever Chi Tsang from HSBC. Please go ahead.
Hey, Chris how much alcohol, she said it but just on what the Q1.
Yeah.
<unk> got something Joey.
So you're seeing the system Gertrude Pam Palmer a woman site.
Well tayo being high yield seem to how it should be that he doesn't see lots of shots of Manhattan.
He comes.
So the legal shaping thiago.
Thiago what you just saw what you saw a woman she shipping so quite a consulting job guns, how you thought about <unk> 10 watts.
Hey, good home Oh, no payable you said he taught US shoot you cannot and Youll push how are you trying to do here I hope you understand that you have.
Chinese huh.
So I wish I'd say the questions myself, so firstly I want to ask about the competitive landscape dynamics, how has that been trending and without M&A and also ongoing intense competition. How should we think about the long term that margin level for the for the <unk>.
Second question is can you share about the progress made in game video you mentioned <unk> 40 billion. So what about the user time spent retention as well as monetization plan. Thank you.
Oh geez.
Hi.
Yeah.
I'm going to tell you that you could see this aging susana.
So you're not just so amazed when you include Villa Jean Didnt see say the thing that's interesting.
The voters, England Gucci to Susan you want to be Santa Teresa.
Uh-huh Dodge at all easy language, there shouldn't be tobey to answer them.
We I know you're sounding so you couldn't go there.
Oh, just a woman she did it meet your eventual isn't good.
You choose to their bandwidth.
So as I mentioned certainly.
You'll see the ball, where I think <unk> done she neighborhood.
Sure.
Mr. Don on the question of competition landscape, while since way or not to join hands with that though you hadn't became competitors again, we believe that in recent quarters. The overall competition landscape for game live streaming does not changed a lot compared with only I think we have a much.
Operational efficiencies and we have outperformed in terms of like are you serious as all of US our revenues there at all.
Was it all just to.
And then two there.
Gene.
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Inches so to say.
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Yes.
Even though our carriers are making more and more investment in live streaming for esports. However, we are a professional platform for esports and we rely on our core our competitiveness and continue to strengthen our positioning and their sweetheart.
So you understand the uncertainty there.
Sure.
Boot season.
It's in their used visibility.
So there is certainly there.
Just.
The two Shuang Wheeler and then go to the Chengdu site.
Uh huh.
The how long life I mean, it's just when you say the.
Hey, this is a burden to the EMA and that's and then when we show them to easy to deal with.
So it just so doggone ballroom kolenda it says in the Netherlands, we see the China total.
As I said before it will continue to gain our market share and also to.
Keep strengthening our advantages are in.
Last swimming for esports and over time, as we are accumulating more and more professional no house and experiences and running esports.
Wed love to have a more diversified that business models and by relying on self produced contents for instance.
Yes.
Uh huh.
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So social go home for that you guys should be in that room.
Missile.
<unk> of our video content production well actually for videos user actually had an increase since Q3 hour and then you reached a $40 million compared with the previous quarter Q2. There is an increase of about of about 30% we.
We believe that our video business is a natural extension to the live streaming business that we have a lot of video content originate adder from the advance toward a man.
Basically about editing and reproduction of the live streaming content. So I think one of our biggest advantage in this regard is that we have abundant.
Resources in terms of content.
Origins and we have a very good ability of editing and we're producing them into video.
So for the.
Video content production, we encourage live streamers and talent agencies to make content to.
To make a video content and in terms of the products. We have launched a lot of new features for instance, we have there's a a highly efficient editing features and we can use AI technology to identify the key moments in points and generate a video.
Eclipse are automatically so this is a very positive hum feature that we have for producing content social.
Social videos.
Okay and then we can have the next question. Thank you.
Thank you. Your next question comes from Brian Gong from Citi. Please ask your question.
Uh huh.
I wanted to know for sure.
Sure.
Quarter to quarter standpoint.
Which is R 22.
Hello, Michael.
Folding them yourself.
Alright.
That's all I can tell you well control.
Okay.
Hopefully it supposed to be showing them a charger.
Oh, no translate myself.
What are your latest view on the impact from regulation.
Screaming and screaming.
Screaming a.
Toward our operation and the fundamentals.
And it changed our structures.
That's just a recommendation.
Sure.
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He says future.
Thank you S. You rightly pointed out that in recent months our industry has received quite a lot of attention from the regulators and we believe the purpose of doing that is to better regulate the industry and to promote a healthy long term growth we've been keeping an eye on.
The latest regulatory changes and to make sure that our business operation.
Full compliance with Astellas regulations.
Even though there will be some short term changes in terms of the revenue or user base growth because of the regulatory changes for the short term, but we believe that for the longer term, we would be a draw enough to mitigate the impact on our business and to actively addressed our product.
The operation to make sure that we can cater for the demand for yourselves and also had to sometimes be compliant.
Oh, so you're woman yeah for tissue it holds for that.
So it's like a huge in their room, there you got to hold or not yet.
They choose shouldn't you want less hunting tissue can cool that's helpful. So that you could see in Germany.
I'll talk to you I kind of watch and I'm sure. You'll do you have that for your own cool Tricia sand goes to the Doctor.
Yeah.
That said, we will continue to invest in high quality content production to upgrade our product as well as to consolidate our competitiveness.
The business as a whole and for the longer term. We believe that this will help us to better serve our clients and generate long term value.
Thank you.
Thank you. Our final question today comes from Tien Ho from T. H capital. Please go ahead.
But any time I think when you have a Jacob <unk> and then how are you.
Sundar control, but.
She is she on the <expletive> Sheldon Fox Finally, Asia. So just flaunt management give some color on your overseas business Diebold commenced.
Well as you know our plan or some thoughts about the cooperation with Tencent going forward. Thank you.
Okay.
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Tucson.
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Chaco I should now Tampa.
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To show them, a $10 you need to call me on the gas there should be no.
And I wonder how it was shortly it's about she could shoot the Zhengzhou Toby jumped on Chaco passenger number.
Thank you Mr. Hu on overseas Nemo television business.
Well, thanks to the tournaments and overseas as well as local operational activities our M E U.
Where is this market reached 28 million and especially we had a very stellar performance in the market of Indonesia, and our revenue from overseas market also continued to increase by over 200 percentage point year over year.
Which I'm not sure what you would've Treehouse foods, I should say, but do you want <unk>.
Shouldn't government it seems that what yield I think it should count tissue could ideal for sure, but that's how I'm personally.
Our main strategy going overseas is to continue to use the local partners to cultivate our overseas markets and to expand our user base and to enhance our monetization ability.
Hum once they get to see a woman that's withheld drunk, who you'll class a downbeat colquitt Asia sourcing should not what must be wound down shortly.
Good sometimes seem kind of biogen.
But since this quarter, we're already finding our cooperation with local talent agents and keep optimizing our cooperation with them. We believe that this will be positive for a healthy.
Ecosystem building for the overseas market.
Well now you see why it wouldn't.
She might I sure wish we are eager to alluded to it on and use.
Well I have a question who would be willing to guarantee that you will need it you can't push okay.
We believe that for the short term the overseas market.
We continue to be in the investment stage, but the loss in overseas market as a percentage points two margin level will continue to be lowered.
Oh go ahead, Tom Sham control of the team.
Jack.
Morten.
In addition, she thought and uncle passion deep with that household. So once you, though I'm really kind of all one thing you always see farmland, you'll you can fish hunting neither ego.
So with our regular.
Cooperation with Tencent, we truly hope that we can continue to deepen our cooperation with Tencent and our businesses, especially in the area of again testing quite close.
Oh, I see yeah, no yeah tissue lunchables in telco Ete's anti hate thinking something like golf, who don't go Crazy Chico Yoga teacher product, who don't see most of you who don't know one five seats inside function of hooking thing you keep how youll see from.
Oh gosh, yeah, no that's exactly it sounds like you'll see some bullshit upwards for the cycle.
This year, we had launched some new features such as gift dropping or one click to join the broadcasters play again see Jim Cai, Hey, and this are to improve the interactivity of the live streamers and its users and we had our first launch such.
<unk> futures in cans by Tencent to such as P. J E and others and suppose it from our side and from the games side had to seem very nice outcome.
My first question for me and now we are yes.
Send me about chassis that they got from sort of quasi Tom.
I'm sure you can think about L. P I would like to see.
That's what I C E D.
It's our money should pencil it seemed that specialty and samples.
In terms of a tournament, we had a long term relationship with Tencent for instance by signing a five year agreement also preparation for LPL and this will help us to explore a new ways of monetization.
Yeah.
Okay. That's it.
Great. Thank you I'll like to turn the call back to the company for closing remarks.
Thank you once again for joining US today. If you have further questions. Please feel free to contact who asked in restaurant in Asia. So are the contact information provided on our website or TPG investor relations. Thank you.
This concludes the conference call you may disconnect. Your line. Thank you.
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