Q2 2024 DouYu International Holdings Ltd Earnings Call

September 12, 2024

Unknown Executive: Good morning and good evening, ladies and gentlemen.

Good morning, and good evening, ladies and gentlemen.

Unknown Executive: Thank you and welcome to Douyu International Holding Limited setting quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Speaker Change: Thank you and welcome to Dell You International Holdings Limited second quarter 2024 earnings Conference call.

Speaker Change: At this time all participants are in a listen only mode.

Unknown Executive: We will be hosting a question-and-answer session after management prepared remarks.

Speaker Change: We will be hosting a question and answer session. After management's prepared remarks.

Lingling Kong: I will now turn the call over to our first speaker today, Ms. Lingling Kong, IR Director at Douyu. Please go ahead, ma'am.

Speaker Change: I will now turn the call over to our first speaker today, Ms. Wang Ling Tong.

Speaker Change: Our director Australia. Please go ahead Ben.

Lingling Kong: Thank you. Hello everyone. Welcome to our second quarter 2024 earnings call.

Speaker Change: Thank you.

Speaker Change: Hello, everyone well comes from second quarter, 'twenty 'twenty four earnings call.

Lingling Kong: Join us today, a Mr. Lingling Su, Chief Strategy Officer, Mr. Hao Cao, Vice President of Fan Nan, Ms. Lingling, Vice President from Intermanagement Committee. You can refer to our second quarter 2024 financial results on our IR website at rr.douyu.com. You can also check a replay of this call when it becomes available in a few hours on our IR website.

Speaker Change: Joining us today are Ms. Jenny <unk>, Chief strategy Officer, Mr. Hao, Cao Vice President Al Sandman.

Speaker Change: Yes, My question from interim Management Committee.

Speaker Change: Third while the second quarter 'twenty financial results on our IR website at IR <unk> com.

You can also check a replay of this call.

Speaker Change: Funds available.

Speaker Change: Hum.

Speaker Change: IR website.

Lingling Kong: Before we start, please note that this call may contain forward-looking statements made pursuant to state power provision for the Private Securities Litigation Reform Act of 1995. This forward-looking statements of based on management, current expectations and observations that involve known and unknown risks, uncertainties, and other factors not under the company's control, which may cause actual results, performance, or achievements of the company to be materialized different from the results, performance, or expectations implied by this forward-looking statement. Or forward-looking statements are expressly quantified in their entirety by the cautionary statement, risk factors, and details of the company's filing with the SEC.

Speaker Change: Before we start take note that this call may contain forward looking statements.

Speaker Change: Doing two safe Harbor position with the private Securities Litigation Reform Act of 1995.

Speaker Change: These forward looking statements are based on management's current expectations and observations that involve known and unknown risks.

Speaker Change: And other factors not under the company's control.

Speaker Change: Which may cause actual results performance or achievements of the company to be materially different from the way the outperformance all expectations implied by these forward looking statements.

Speaker Change: All forward looking statements lastly, quantified in their entirety by the cautionary statements risk factors and details of the company's filings with SEC.

Lingling Kong: The company undertakes no duty to update or update any forward-looking statements for selecting events of circumstances after the date of this conference call.

Speaker Change: The company undertakes no duty to update.

Speaker Change: To revise or update any forward looking statements for selecting England all circumstances. After the date of this conference call.

Lingling Kong: I will now speak on behalf of our Intermanagement Committee on our business updates. The call will then be handed over to a resident of Fan Nan, Mr. Hao Tao, for financial discussion. In the second quarter, we undertook several initiatives under our strategy of sponsoring a healthy, vibrant, game-centric, counter-legal system. Mainly, we focused on harnessing our robust assets in top tier streamers and premium content, and depend our cooperation with game developers to explore more diverse and sustainable partnership models. At the same time, we worked closely with streamers to drive content innovation in more revenue-generating scenarios. As we optimize our revenue structure, we are introducing premium content that is more resonate with user preferences and in rating our game service line.

Speaker Change: I will now speak on behalf of ours interim management Committee.

Speaker Change: Our business update.

Speaker Change: The call will then be handled all of the southwest threatened all finance, Mr. Hao, Cao with a national discussion.

Speaker Change: In the second quarter, we undertook several initiatives under our strategy all sports game in healthy library games century content ecosystem.

Speaker Change: Lee with brokers harnessing our robust assets in top tier streamers and premium content.

Speaker Change: And deepen our cooperation with game developers.

Speaker Change: We're more diverse and sustainable partnership models.

Speaker Change: At the same time, we worked closely with standard to drive content innovation and more revenue generating scenario.

Speaker Change: As we optimize our revenue structure, we are introducing premium content that is more aggressive Nate waste user preferences and engaging our gaming service now.

Lingling Kong: All of these initiatives serve to consistently elevate user experience and refine our platform's game-centric content ecosystem. In the second quarter of 2024, our quarterly average mobile MAU was 44.1 million, a decrease of 12.3% year-over-year. The decline was primarily due to competition from short-video platforms. Our ongoing data tracking indicated that user extrusion was predominately from low frequency users with short-videoing hours and low thickness. While this shifts, places short-term pressure on our all-or-user base call user behavior as demand stable in terms of viewing hours and activity levels. We are joined in fresh users and re-engaging in active ones by rolling out game commercialization programs, invades, fostering a more vibrant ecosystem, of course, our gaming segment.

Speaker Change: All of this initiative served to consistent lay out a great user experience and who will find our path once game centric content ecosystem.

Speaker Change: In the second quarter of 2024, our quarterly average mobile and they use was $44 1 million a decrease of 12 point Quinn.

Speaker Change: 8% year over year.

Speaker Change: The decline was primarily due to competition from short video path.

Speaker Change: Our ongoing data tagging indicated that you'd attrition was predominantly from low frequency users, which felt the museum hours and lost there.

While this shift.

Speaker Change: Places short term pressure on our all of our user base.

Speaker Change: Their behavior has been stable in terms of new hours and activity levels.

Speaker Change: We are joined in fact users and re engaging and actually won by rolling out game commercialization program makes.

Speaker Change: During a more vibrant ecosystem of course, our gaming segment.

Lingling Kong: In the quarter, we broadcasted nearly 30 last-year official tournaments, including the LPL, Green Split, and MI side, alongside the Spring tournament of KPL, PL, and Cisco Blot, among others. Aligned with the strategy we introduced last quarter to refine our gaming invent content operations, we ramped up our cooperation with game developers on promotional campaigns centered on game crops, enhancing user engagement and driving monetization. For example, we launched an area of special initiatives for our game-specific membership services during the PL official tournament, and offered time-limited game crops, game crops motions during QQ speeds official tournament. The organic integration of gaming invent content with game crops has driven higher ROI of popularity content.

Speaker Change: It was a quarter with what constitutes nearly 30 large scale official tournaments, including the L. P. L streams Blake on my side.

Outside the Green tournament of pay P L.

Speaker Change: P L M Cisco blocked among others.

Along with the strategy, we introduced last quarter to refine our gaming, England content operation, we ramped up our cooperation with game developers and promotional campaign centered on gamecocks enhancing user engagement and driving monetization.

Speaker Change: For example, we launched a special initiatives, while our game specific membership services in the P M Central time.

<unk> offered a time limited gain program gained 12 motion during QQ speed official tournaments.

Speaker Change: The organic integration of gaming in rank hunting with game ops has driven higher all I O copyright He council.

Unknown Executive: Good morning and good evening, ladies and gentlemen.

Unknown Executive: Thank you and welcome to Douyu International Holding Limited setting quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Lingling Kong: Through game crops, monetization will also elevate user interaction during live stream, and in terms at once our healthy vibrant gaming ecosystem. Regarding our self-produced content, we broadcasted over 50 self-produced esports tournaments during the quarter. We continued exploring course platform content sharing cooperation, leveraging our unique streamer assets to crops high impact, collaborative tournaments across diverse gaming segments, including King Pro League, Dota 2, and Valorant. If we look at the PL center glory crop as an example, we enriched the KPL professional tournament experience with entertainment elements, closely aligned with user preferences. This included in listing public health streamers for live commentary to boost engagement and hosting show matches featuring professional teams and streamer faiths of beyond-on-facial gaming events.

Speaker Change: Joe game called monetization, well also antibodies and user interaction during livestream and intern at one hour housing why doing game gaming ecosystem.

Unknown Executive: We will be hosting a question-and-answer session after management prepared remarks.

Speaker Change: Regarding our self produced content with forecasted over 50 self puddings esports tournaments during the quarter.

Lingling Kong: I will now turn the call over to our first speaker today, Ms. Lingling Kong, IR Director at Douyu. Please go ahead, ma'am. Thank you. Hello everyone.

Speaker Change: We continued exploring cost, perhaps one content sharing collaboration.

Speaker Change: Leveraging our unique assets to crops high impact.

Lingling Kong: Welcome to our second quarter 2024 earnings call.

Speaker Change: Collaborate taped hardeman across diverse gaming segment in.

Speaker Change: Including Kim poorly Donuts U and Valerie.

Speaker Change: If we look at <unk> P M Central caloric hub as an example.

Speaker Change: We enriched the K P. Our professional firm antics hearings waste entertainment elements closely align with you their preferences.

Speaker Change: That's included in <unk> public how streamer four life commentary to boost engagement.

Speaker Change: And hosting show matches, CTO and professional team and three months they saw b.

Speaker Change: Official gaming.

Lingling Kong: This enhancement brought our users more calculating and enjoyable content. We also launched a targeted self-produced event tailored to different gaming audiences, including the DDoE Heroes Cup Season 5 for Team 5 Tactics, our signature Peacekeeper Elite Mount Haruna Cup, as well as the Valorant Cup, which we have held for the fourth consecutive series. While managing large-scale gaming content, we also focused on refining our content operations within gaming verticals where we have a strong competitive edge. Haruna seeing our robust streamer network, the delicate user base will nurture the over-the-year in our extensive experience in year-round operations. We unveiled a wide range of personalized content and initiatives, including self-produced events, TGC programs, and in-game socialization ventures.

Speaker Change: This enhance meant our users more calculating any dry bulk Hudson.

Generating lively discussion.

Speaker Change: We also launched a targeted itself pretty with England.

Two different gaming audience.

Speaker Change: Including Big though you Sheila Copps season, 514 by tactics, our signature Peacekeeper elite Mount Carvana Com.

Well at the water and coffee, which we have held for fourth consecutive series.

Speaker Change: Well managing large scale gaming content. We're also focused on refining our content operations waiting gaming verticals, where we have a strong competitive edge.

Lingling Kong: The company undertakes no duty to update or update any forward-looking statements for selecting events of circumstances after the date of this conference call.

Speaker Change: Nathan our robots to streamer network.

Speaker Change: Danny paid user base live nurtured over the years in our extensive experience in year round operations.

Lingling Kong: I will now speak on behalf of our Intermanagement Committee on our business updates.

Speaker Change: We are really a wide range of personalized content and initiatives, including self produce.

Lingling Kong: The call will then be handed over to a resident of Fan Nan, Mr. Hao Tao, for financial discussion. In the second quarter, we undertook several initiatives under our strategy of sponsoring a healthy, vibrant, game-centric, counter-legal system. Mainly, we focused on harnessing our robust assets in top tier streamers and premium content, and depend our cooperation with game developers to explore more diverse and sustainable partnership models. At the same time, we worked closely with streamers to drive content innovation in more revenue-generating scenarios. As we optimize our revenue structure, we are introducing premium content that is more resonate with user preferences and in rating our game service line.

Speaker Change: And then T J C programs and in game commercialization languages.

Lingling Kong: In the blear segment, we leverage the momentum of this game's return to the domestic market by orchestrating engaging our in-cop gaming events. This sparked substantial enthusiasm among streamers and users alike. Our initiative boosted engagement across the community and enhanced streamer user discussions, facilitating deeper cohesion community-wide. In the Dota 2 segment, we capitalized on streamer's return impact to launch offline TGC variety shows that blended local scenes and cultural ideas. This innovative approach fully showcased local culture, amplified the program's appeal, and fostered greater user engagement. In the moonlight play segment, we strategically aligned game-pop promotions with streamer content through target marketing campaigns and active streamer participation.

In the <unk> segment, we're not ready to go momentum of this games to return to the domestic market by auction, creating engaging <unk> kop gaming events.

Speaker Change: This box the substantial enthusiasm amongst streamers and users alike.

Speaker Change: And initiative.

Speaker Change: Deep engagement across the community and enhance the streamer user discussions.

Consolidated demobilization communitywide.

Speaker Change: In the Dota, two second bench, well capitalized onstream with reach and impact to launch offline P. D C well why they chose that blended local teams and the culture of IP.

Speaker Change: This innovative approach when they showcased local colleges amplified the program's appeal and fostered greater user engagement.

Lingling Kong: All of these initiatives serve to consistently elevate user experience and refine our platform's game-centric content ecosystem. In the second quarter of 2024, our quarterly average mobile MAU was 44.1 million, a decrease of 12.3% year-over-year. The decline was primarily due to competition from short-video platforms. Our ongoing data tracking indicated that user extrusion was predominately from low frequency users with short-videoing hours and low thickness. While this shifts, places short-term pressure on our all-or-user base, call user behavior as demand stable in terms of viewing hours and activity levels. We are joined in fresh users and re-engaging in active ones by rolling out game commercialization programs in waves, fostering a more vibrant ecosystem; of course, our gaming segment.

In the Moonlight Blade segment, where strategically online game co promotion, which drove more content to targeted marketing campaigns and acting streamer participation.

Lingling Kong: This approach increased user engagement levels, promoting lively involvement and interaction. As a result, the campaign was a success. This innovative approach to content operations not only sustained the enduring appeal of classic games, but also cemented engagement and user sickness across our platform, raising new lives into our community ecosystem.

Speaker Change: This approach increase the user engagement level promoting likely involvement and interaction.

Speaker Change: <unk> reads out the campaign was a success.

Is this innovative approaches to content operations not only sustained the enduring appeal of classic games, but also cemented engagement and user stickiness across our platform.

Speaker Change: Racing new life into our community ecosystem.

Lingling Kong: Streamers are crucial to our content ecosystem. While enhancing the efficiency of streamer management, we launched a virus streamer recruitment initiative. First, we widen our recruitment scope to cover all gaming segments, eased entry stress homes, and added additional streaming rights and benefits. Second, we diversified our recruitment channels by conducting promotional activities on multiple external platforms, reaching a broader audience of games in Syria. Third, we include streaming incentives by accessing streamer performance across multiple external platforms, reaching a broader audience of games in Syria. Third, we include streaming platforms across multiple external platforms, reaching a border such as streaming duration and efficiency.

Speaker Change: Streamers are crucial travel company ecosystem.

He has been the inefficiency of Streamer management will launch why rates extremely lacuna initiative.

Speaker Change: First we widened our recruitment scope to cover all gaming segments.

Speaker Change: Interest dress homes and added additional screening lifetime benefits.

Second we've diversified our recruitment channels by conducting promotional activities are multiple external platforms.

Lingling Kong: In the quarter, we broadcasted nearly 30 large-scale official tournaments, including the LPL green split and my side, alongside the green tournament of KPL, PL, and Cisco blocks, among others. Aligned with the strategy we introduced last quarter to refine our gaming in-went content operation, we ramped up our cooperation with game developers on promotional campaigns centered on game crops, enhancing user engagement and driving monetization. For example, we launched an area of special initiative for our game-specific membership services during the PL official tournament, and offered time-limited game crops, game crops motions during QQC's official tournament. The organic integration of gaming in-went content with game crops has driven higher ROI of copyrighted content.

Speaker Change: To a broader audience of games in Syria.

Speaker Change: Third we improved screening incentives by accessing streamer performance across multiple metrics.

Speaker Change: Such as screening duration and efficiency.

Lingling Kong: We also introduced a tiered incentive system to motivate our streamers and increase stream consistency. Overall, by increasing the content depth of top tier streamers and improving the stream frequency of mid-tier and long-tailed streamers, we significantly enriched our content law, laying a solid foundation for refining our game-centric content ecosystem.

Speaker Change: We also introduced a tiered incentive system to moderate our streamers and increase stream consistency.

Speaker Change: Our or by increasing the content, that's all top tier streamers and improving the student to equant sea of mid tier and long held streamers.

Speaker Change: We're significantly enriched our content lineup.

Speaker Change: A solid foundation for refining our game centric how can the ecosystem.

Lingling Kong: Moving on to monetization. Our total number of paying users in the second quarter was 3.4 million, with a quarter of R pool of R&D twangles for the three. The year-old will be decline paying users was caused by prolonged macroeconomic challenges and our strategy of decision to scale back emotional activities and initiatives focused on paying user acquisition. Our long-term data monitoring revealed that this initiative rarely resulted in sustained standing by the users they attracted. Instead, led to higher promotional costs. The number of total users remains stable quarter over quarter as we focus on maintaining our co-user spending habits.

Speaker Change: Moving on to monetization.

Speaker Change: The total number of paying users in the second quarter was $3 4 million, whereas a quarter the op, who RMB 12 months from the street.

Speaker Change: Oh, well you're declined paying users was caused by prolonged macroeconomic challenges and our strategic decision to scale back promotional activities and initiatives focused on paying user acquisition.

Lingling Kong: So game crops monetization will also elevate user interaction during live stream, and in terms, it wants our healthy vibrant gaming ecosystem. Regarding our self-produced content, we broadcasted over 50 self-produced e-sports tournaments during the quarter. We continued exploring course platform content sharing cooperation, leveraging our unique streamer assets to crops high-impact, collaborative tournaments, of course, diverse gaming segments, including King Pro League, Dota 2, and Valorant. If we look at the PL centered glory crop as an example, we enriched the KPL professional tournament experience with entertainment elements closely aligned with user preferences. This included in listing popular poll streamers for live commentary to boost engagement and hosting show matches featuring professional teams and streamer faiths of beyond-on-facial gaming events.

Speaker Change: Our long term data monitoring revealed that this initiatives exactly without it being sustained spending by the users they are capped at.

Speaker Change: Since that natural higher promotional costs.

Speaker Change: The non bulk total users remained stable quarter over quarter as we focused on maintaining our coal use their spending habits.

Lingling Kong: To address the macroeconomic impact on users' willingness to spend. In addition to promoting traditional affordable price revenue-generating products, we introduced more budget-friendly paid products tied to platform rewards and game costs. This approach encourages spending among gamers and helps them maintain the overall spending patterns of our paying users. As a result, while quarter of R pool was down year over year, it remains stable quarter over quarter. In the quarter, we continue to depend on our commercialization collaborations with game developers. We recently wrote out a review of the game's specific membership program in the League of Legends.

Speaker Change: To address the macroeconomic impact.

Speaker Change: Users' willingness to spend.

In addition to promoting traditional affordably priced and revenue generating products were introduced more buckets currently paid products tied to platform rewards and game pass.

Speaker Change: This approach encourage spending among gamers and helped to maintain the overall space spending patterns of our paying users.

Speaker Change: As it reads out well put on the op, who was down year over year, it remains stable quarter over quarter.

Lingling Kong: This enhancement brought our users more calculating and enjoyable content. generating library discussions. We also launched targeted self-produced events tailored to different gaming audiences, including Bidou Yihiro's Cup Season 5 for Team 5 Tactics, our signature Peacekeeper Elite Mount Haruna Cup. As well as the gaming content, we also focused on refining our content operations within gaming verticals where we have a strong competitive edge. Hanei Singh, our robust streamer network, the delicate user base will nurture the over the years in our extensive experience in year-round operations. We unveiled a wide range of personalized content and initiatives, including self-produced events, TGC programs, and in-game commercialization ventures.

In the quarter, we continued to deepen our commercialization collaboration with game developers.

We recently rolled out do you gain specific membership program in the league of Legends World.

Lingling Kong: This offering was crafted to meet the characteristics and needs of the users. Hunting the PU of our platform benefits exclusive game talks and game talk discounts. We promoted this initiative through multiple channels, of course, and beyond our platform, and attracted the participation of more users. For games already backed by our commercialization collaborations, we have been experimenting with diversified promotional strategies aligned with game updates, new games pop low-outs, and seasonal or holiday events to boost commercialization efficiency. Moving forward, we aim to broaden our collaboration with more game developers, diversifying, and I won't think game talk commercialization avenues tailored to different gaming journals.

Speaker Change: This offering was crafted to meet the characteristics and needs also uses.

Speaker Change: How do you think the appeal of our platform benefits exclusive game toy and game Corp. Discounts, we're promoting this initiative through multiple channels.

Speaker Change: Horton beyond our platform and attracted the participation of more users.

Speaker Change: For games already backed by our commercialization collaborations we have been experimenting with diversified promotional strategies aligned with game updates new game called Rollouts and the season or holiday events to boost to commercialization efficiency.

Speaker Change: Moving forward, we aim to broaden our cooperation with more game developers diversifying and I won't think input commercialization avenues tailored to different gaming tremors.

Lingling Kong: In the bleier segment, we leverage the momentum of this game's return to the domestic market by orchestrating engaging iron-cop gaming events. This sparked substantial enthusiasm among streamers and users alike. Our initiative boosted engagement across the community and enhanced streamer user discussions, facilitating deeper communication community-wide. In the door to segment, we capitalized on streamer's return impact to launch offline TGC variety shows that blended local scenes and cultural items. This innovative approach slowly showcased local culture, amplified the program's appeal, and fostered greater user engagement. In the moonlight bleie segment, we strategically aligned game-pop promotions with streamer content through targeted marketing campaigns and active streamer participation.

Lingling Kong: Moreover, we have been expanding our partnership channels for game promotion. Our game center's integration with popular mini-game platforms like QQ enabled us to refine our operations and promotions to better suit either interest while earning a decent share of in-game purchases and advertising revenue. We are pleased with the impressive growth momentum in user engagement and relevant revenue today since the debut of QQ mini-games on our platform.

Moreover, we have been expanding our partnership channels booking promotion.

Speaker Change: Our game centers integration with popular main game platforms like QQ.

Speaker Change: Anchored us to refine our operations and promotions to better suit user interest well, earning a decent share of in game purchases and advertising revenue.

Speaker Change: We are pleased with the impressive growth momentum in user engagement and relevant revenue since the debut of QQ mini games are a password.

Lingling Kong: In summary, during the second quarter, we have stayed the core. We refine streamer management and optimize content while certainly diversifying our revenue mix. Our achievements have confirmed that the effectiveness of our strategy enforcing a healthy game-centric content-like system. At least changing macro dynamics and industry shifts, we will keep our finger on the market post and adapt our operational strategies to maximize Douyu's core competitive edge. We believe that by optimizing resource allocation, given main collaborations with diverse stakeholders, and consistently investing in new ventures with promising growth process, we are well positioned to navigate short-term challenges and steadily advance our business, laying a solid foundation for the company's long-term sustainable growth.

Speaker Change: In summary during the second quarter, we have stayed the course.

Speaker Change: We refined streamer management and optimized content well steadily diversifying our revenue mix.

Speaker Change: Our achievements have confirmed that they've backed him nature of our strategy is fostering a healthy gain century content ecosystem.

Speaker Change: At least the changing macro dynamics and industry shifts.

Speaker Change: We will keep our finger on the market post and adapt our operational strategies to maximize don't use co competitive edge.

Speaker Change: We believe that by optimizing resource or location.

Speaker Change: Meaningful collaborations with Sterling powders and consistently investing in new ventures with promising growth horsepower.

Lingling Kong: Streamers are crucial to our content ecosystem. While enhancing the efficiency of streamer management, we launched a virus streamer recruitment initiative. First, we widen our recruitment scope to cover all gaming segments, increase stress homes, and added additional streaming rights and benefits. Second, we diversified our recruitment channels by conducting promotional activities on multiple external platforms, reaching a broader audience of game-in-series. Third, we include streaming incentives by accessing streamer performance across multiple megs. Such as streaming duration and efficiency. We also introduced a tiered incentive system to motivate our streamers and increase stream consistency. Overall, by increasing the content depth of top tier streamers and improving the stream frequency of mid-tier and long-tailed streamers, we significantly enriched our content law, laying a solid foundation for refining our game-centric content ecosystem.

Speaker Change: We're well positioned to navigate short term challenges and steadily advanced our bet on it.

Laying a solid foundation for the company's long term sustainable growth.

Lingling Kong: With that, as we now turn the call over to our Vice President, Fan Nang, Mr. Hao Tao, to go through the details of our financial performance in the quarter.

Speaker Change: With that I will now turn the call over to our Vice President of Finance, Mr. Hao Tao to go through the details of all of our financial performance in the quarter.

Hao Cao: Thank you, Rending.

Hao Tao: Thank you Fernando Hello, everyone.

Hao Cao: Hello, everyone. This quarter, we focused on strengthening new revenue streams and enhancing cost-control measures to advance our long-term development strategy, while also increasing shareholder returns. Despite the second quarter's top macro environment, our revenue diversification efforts have already begun to yield positive outcomes. Let's look at our financial performance for the second quarter in more detail.

This quarter, we felt.

Speaker Change: Our press release.

New revenue streams.

Speaker Change: Cost control measures to advance our long term development strategy.

Speaker Change: Also increasing shareholder returns.

Speaker Change: Despite this kind of caught us top macro environment, our revenue diversification efforts.

I have already begun to yield positive outcomes.

Let's look at our financial performance for the second quarter in more detail.

Hao Cao: Our total net revenues decreased by 25.9% every year in the second quarter to RMB 1.03 billion. Live streaming revenues were RMB 0.79 billion, down 37.2% from RMB 1.26 billion in the same period of 2023. Live streaming revenues were primarily impacted by challenging macroeconomic conditions, which prompted us to reduce promotional activities aimed at acquiring paying users and offer lower priced revenue products to encourage consistent spending among our existing paying users. Consequently, we saw a year-of-year reduction in both the total number of paying users and are quarterly up. which declined by 25.5% to R&B to 143 from R&B 300 and 26 in the same period last year.

Our total net revenues decreased by 25, 9% year over year from second quarter to RMB, one point, our three pillars.

Speaker Change: <unk> revenues were RMB seven.

Speaker Change: Seven 9 billion.

Speaker Change: 37, 2% from RMB 126 billion.

Speaker Change: Same here.

Speaker Change: Great.

Speaker Change: Lastly, let's screaming revenues were primarily impacted by challenging macroeconomic conditions, which prompted us to reduce promotional activities.

Speaker Change: Acquired paying users and offer a lower price revenue products to encourage conservation.

Speaker Change: Among our existing paying users.

Speaker Change: Consequently, we saw year over year reduction in both the total number of paying users.

Speaker Change: Quarterly up.

Speaker Change: Which declined by <unk>, 5% to RMB 243 from RMB 300.

Speaker Change: Six in the same period last year.

Hao Cao: Meanwhile, our accelerated exploration of a new revenue stream produced encouraging results. Innovative business advertising and other revenues formally known as advertising and other revenues increased significantly in the second quarter by 80.7% to R&B 142 million, up from R&B 133.9 million in the same period of 103. The year-to-year increase was primarily driven by increase in revenues generated throughout innovative businesses such as voice-based social networking service. Cost of revenues in the second quarter of 1024 decreased by 21.2% to R&B 0.95 billion compared with R&B 1.2 billion in the same period of 103. This cost reductions were largely due to 18.1% decrease in revenue shareholder fees and economic costs to R&B 0.8 billion from R&B 0.98 billion in the same period of 103.

Speaker Change: Meanwhile, I'll.

Speaker Change: Accelerated exploration up a new revenue stream produced encouraging results.

Speaker Change: Innovative business.

Speaker Change: And other revenues.

Speaker Change: No.

Speaker Change: And other revenues.

Chris: Chris significantly in the second quarter.

Chris: The point of 7% to RMB 242 million.

Speaker Change: Up from RMB 133, 9 million in the same period of time.

Chris: On the street.

Chris: The year over year increase was primarily driven by <unk>.

Chris: Increase in revenues generated.

Chris: Innovative businesses, such as voice based social networking service.

Cost of revenues in the second quarter of antennas.

Chris: <unk> decreased by 21, 2% to RMB <unk> 90.

Chris: <unk> 5 billion compared with RMB, one 2 billion in the same period.

Chris: Industry.

Chris: This cost reductions were largely due to 18 point a 1% decrease.

Chris: Revenue sharing fees and colon cost to RMB, one 8 billion from RMB one eight.

Chris: <unk> 8 billion in the same period of patent on the Street.

Hao Cao: Revenue shareholder fees reductions were largely due to decreased live streaming revenues, which was partially upset by the increase in revenue shareholder related to innovative business. Furthermore, the decrease in content costs primarily came from improved cost management in streamer payments and copyrighted content. By the way, costs in the second quarter of 1024 decreased by 33% to R&B 79.6 million from R&B 118.8 million in the same period of 103. Primarily due to year-to-year decrease in peak bandwidth usage cost, profit in the second quarter of 1024 was R&B 84.2 million compared with R&B 188.9 million in the same period of 103.

Chris: Revenue sharing fees reductions were largely due to decreased live streaming revenues.

Chris: Which was partially offset by the increase in revenue sharing fees related to innovative business.

Chris: Furthermore, the decrease in colon cost primarily came from improved cost management screamer payments.

Chris: Copyrighted content.

Chris: Yes.

Chris: Bundle with cost in the second quarter, and therefore decreased by 33% to RMB $79 6 million from RMB 118, 8 million in the same period of time industry.

Chris: Primarily due to <unk>.

Chris: Year over year decrease in peak bandwidth usage.

Chris: Gross profit in the second quarter.

Chris: 74 was RMB $84 2 million.

Chris: <unk> reached RMB 180.

Chris: Eight 9 million in the same period of time.

Hao Cao: The decline in cost profit was primarily due to decreased live streaming revenues or pacing the reduction in cost of revenues. As a result, the this proportionate decrease in revenue led to margin compression. Cost margin in the second quarter of 1024 was 8.2%, compared with 13.6% in the same period of 103. Sales and marketing expenses declined by 11.5% in the second quarter of 1024 to R&B 77 million from R&B 87 million in the same period of 103. The decrease was mainly attributable to a decrease in star-related expenses. Research and development expenses were reduced by 29.4% in the second quarter of 2024 to RMB 50.1 million from RMB 71 million in the same period of 2023.

Chris: The decline in gross profit was primarily due to decreased blood screening revenues are pacing a reduction in cost of revenues.

Chris: As a result, the disproportionate decrease in rescue led to margin compression.

Lingling Kong: At least changing macro dynamics and industry shifts, we will keep our finger on the market post and adapt our operational strategies to maximize Douyu's core competitive edge. We believe that by optimizing resource allocation, given main collaborations with diverse stakeholders, and consistently investing in new ventures with promising growth process, we are well positioned to navigate short-term challenges and steadily advance our business, laying a solid foundation for the company's long-term sustainable growth.

Margin in the second quarter of tenant default was eight 2% compared with 13, 6% the same period of time.

Chris: Sales and marketing expenses declined by 11, 5% in the second quarter of 'twenty.

Chris: For two RMB 77 million from RMB $87 million in the same period.

Chris: Sorry.

Chris: The decrease was mainly attributable.

Speaker Change: Chris is staff related expenses.

Speaker Change: Research and development expenses were reduced by 29, 4% in the second quarter of <unk> to RMB 51 million from RMB 71 million in the same period of <unk> III.

Hao Cao: With that, as we now turn the call over to our Vice President, Fan Nang, Mr. Hao Tao, to go through the details of our financial performance in the quarter. Thank you, Rending. Hello, everyone. This quarter, we focused on strengthening new revenue streams and enhancing cost-control measures to advance our long-term development strategy, while also increasing shareholder returns. Despite the second quarter's top macro environment, our revenue diversification efforts have already begun to yield positive outcomes.

The decrease was primarily attributable to a decrease in staff related expenses.

Speaker Change: General and administrative expenses increased by three 4%.

Speaker Change: Second quarter and the.

Dmitry: Fourth to RMB 48, 5 million from RMB $46 9 million in the same period of time Dmitry.

The increase was primarily due to increased expenses related employee streamlining initiatives.

Hao Cao: Let's look at our financial performance for the second quarter in more detail. Our total net revenues decreased by 25.9% every year in the second quarter to RMB 1.03 billion. Live streaming revenues were RMB 0.79 billion, down 37.2% from RMB 1.26 billion in the same period of 2023. Live streaming revenues were primarily impacted by challenging macroeconomic conditions, which prompted us to reduce promotional activities aimed at acquiring paying users and offer lower priced revenue products to encourage consistent spending among our existing paying users. Consequently, we saw a year-of-year reduction in both the total number of paying users and are quarterly up.

Hao Cao: Last from operations was RMB 119.6 million in the second quarter of 2024 compared with RMB 7.5 million in the same period of 2023. Next last for the second quarter of 2024 was RMB 49.2 million compared with net income of RMB 6.8 million in the same period of 2023. Adjusted net loss, which excludes shelf loss in equity method investments and impairment loss of investments, was RMB 45.5 million in the second quarter of 2024 compared with adjusted net income of RMB 61.4 million in the same period of 2023. For the second quarter of 2024, basic and diluted net loss per ADS rebels RMB 1.58.

Dmitry: Loss from operations was RMB 119, 6 million in the second quarter of 2024, compared with RMB seven 5 million in the same period of administration.

Dmitry: Yeah.

Dmitry: Net loss for the second quarter of 2004 was RMB 49 2 million.

Dmitry: With net income of RMB six in a minute in the same period of time in history.

Dmitry: Adjusted net loss reached F crews shelf loss Mercer investments.

Dmitry: The impairment loss of investments was RMB $45 5 million second quarter.

Speaker Change: For <unk>.

Speaker Change: Comparable risk adjusted net income of RMB 61, 4 million in the same period of time in history.

Speaker Change: For the second quarter of tenant default.

Speaker Change: Basic and diluted net loss per ads as proposed.

Speaker Change: Were both RMB 1.5 to eight.

Hao Cao: which declined by 25.5% to R&B to 143 from R&B 300 and 26 in the same period last year.

Hao Cao: Why adjusted basic and diluted net loss per ADS rebels RMB 1.46.

Adjusted basic and diluted net loss per ads.

Speaker Change: Repose RMB 1.46.

Hao Cao: As of June 30, 2024, the company had cash and cash equivalents, restricted cash, restricted cash in other non-correct assets, and short-term and long-term deposits of RMB 6.56 billion compared with RMB 68.6 billion as of December 31, 2023. Finally, I would like to update you on our commitment to share how it returns. At the end of last year, we announced our 2024 share repurchase program for up to US$20 million. As of June 30, 2024, we had repurchased an aggregate of US$11.2 million in ADS and its program. Additionally, we declared a special cash dividend of approximately US$300 million in early July.

Speaker Change: Two studies planetary before the company had cash and cash equivalents restrict restricted cash.

Hao Cao: Meanwhile, our accelerated exploration of a new revenue stream produced encouraging results. Innovative business, advertising and other revenues formally known as advertising and other revenues increased significantly in the second quarter by 80.7% to R&B to 142 million. Up from R&B, 133.9 million in the same period of 133. The year-of-year increase was primarily driven by an increase in revenues generated throughout innovative businesses such as voice-based social networking service. Costs of revenues in the second quarter of 1024 decreased by 21.2% to R&B 0.95 billion compared with R&B 1.2 billion in the same period of 103. This cost reductions were largely due to 18.1% decrease in revenue-sharing fees and economic costs to R&B 0.8 billion from R&B 0.98 billion in the same period of 103.

Speaker Change: Restricted cash and other non current assets as short term or long term bank deposits.

Speaker Change: RMB six 5 billion.

Speaker Change: <unk> was RMB 6868, 6 billion as of December 31st two independent story.

Speaker Change: Finally, I would like to update you our commitment to shareholder returns.

Speaker Change: At the end of last year.

Speaker Change: Our panel before share repurchase program for up to 20 minutes at opportune Thirtyish 74, we have repurchased an aggregate of U S dollar 11 points.

Speaker Change: To the mainland U S and there is program.

Speaker Change: Additionally, we declared a special cash dividend.

Speaker Change: Approximately yes.

Speaker Change: $300 million in early July.

Hao Cao: Moving forward, we will remain proactive amid macro-economic headwinds and the changing business environment, responding with innovative revenue diversification initiatives and tighter cost and expense controls to overcome short-term pressures of financial performance. By exploring new commercial pathways and strengthening of fundamentals, we aim to foster the long-term housing development of our platform and consistently create value for our stakeholders.

Speaker Change: Moving forward, we will remain proactive amid macroeconomic headwinds and challenging business environment, responding with innovative revenue diversification initiatives and tight cost and expense control.

Speaker Change: Short term crashes.

Speaker Change: Financial performance.

Hao Cao: Revenue-sharing fees reductions were largely due to decreased live streaming revenues, which was partially upset by the increase in revenue-sharing fees related to innovative business. Furthermore, the decrease in current costs primarily came from improved cost management in streamer payments and copyrighted content. Banner with cost in the second quarter of 1024 decreased by 33% to R&B 79.6 million from R&B 118.8 million in the same period of 103. Primarily due to year-of-year decrease in peak bandwidth usage. Costs profit in the second quarter of 1024 was R&B 84.2 million compared with R&B 188.9 million in the same period of 103.

Speaker Change: By exploring new commercial pathways and our strengthening fundamentals were aimed to foster long term housing development cloud platform and <unk>.

Speaker Change: Consistently create value for our stakeholders.

Hao Cao: This concludes our prepared remarks for today.

Speaker Change: This concludes our prepared remarks for today, operator, we're now ready to take questions.

Unknown Executive: Operator, we are now ready to take questions. Thank you. We will now begin the question and answer session. Do ask a question. You may press star than one on your touchtone phone. If you are using a speaker phone, please pick up your handsets before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

Speaker Change: Yeah.

Speaker Change: Thank you we will now begin the question and answer session.

Speaker Change: To ask a question you may.

Speaker Change: Press Star then one on your Touchtone phone.

Speaker Change: If you are using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Speaker Change: For the benefit of all participants on today's call. If you wish to ask your question to management in Chinese.

Speaker Change: Immediately repeat your question in English.

Unknown Executive: At this time, we will pause momentarily to assemble our roster.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Hao Cao: The decline in cost profit was primarily due to decreased live streaming revenues or pasting the reduction in cost of revenues. As a result, the disproportionate decrease in revenue led to margin compression. Cost margin in the second quarter of 1024 was 8.2%, compared with 13.6% in the same period of 103. Sales and marketing expenses declined by 11.5% in the second quarter of 1024 to R&B 77 million from R&B 87 million in the same period of 103. The decrease was mainly attributable to a decrease in star-related expenses. Research and development expenses were reduced by 29.4% in the second quarter of 2024 to RMB 50.1 million from RMB 71 million in the same period of 2023.

Ritchie Sun: The first question today comes from Richie Sun with HSBC. Please go ahead.

Speaker Change: The first question today comes from Richie Sun with HSBC. Please go ahead.

Richie Sun: Oh well you're.

As always I'll see if anybody does all the tier one.

Speaker Change: It leaves us plenty of time in Google Panda, Woodson homegrown johanns in Bihar.

Speaker Change: <unk> told me and by the other John.

Speaker Change: It's a whole new person, who just to tell John where you're going to the year, who I would totally himself.

Lingling Kong: Thank you for taking my question. How does management view the current macro challenges and changes and the impact on the operations? How would you assess these challenges in terms of the impact on our basis fundamentals as well as financials?

Speaker Change: Thank you management for taking my questions.

Speaker Change: How does management view, the current macro challenges and changes and the impact on the operations are how would you assess these challenges.

Speaker Change: In terms of the impact on fundamentals, that's what its financials. Thank you.

Lingling Kong: Thank you. Thank you for your question. At the end of the day, we have faced two primary challenges. Intense marketing, accommodation, and macroeconomic head of interest. Hi, it's a market accommodation. Particularly, the search of gaming content and services on short video game platforms has to draw users with short viewing hours and low speaker needs away from our platform. This pressured our every MAO in the short term. As reflected in the year-over-year and the sequential MAO decline in the second quarter. Nonetheless, our call user base continues to demonstrate the stability. Our long-term data monitoring and analysis revealed that our call user key metrics, like viewing hours and activity levels, remain stable.

Speaker Change: Thank you for your question.

Speaker Change: At branded Oasis, two primary terminus intense market competition.

Speaker Change: Macro economic headwinds.

Hao Cao: The decrease was primarily attributable to a decrease in star-related expenses. General and administrative expenses increased by 3.4% in the second quarter of 2024 to RMB 48.5 million from RMB 46.9 million in the same period of 2023. The increase was primarily due to increased expenses related to employee streamlining initiatives. Last from operations was RMB 119.6 million in the second quarter of 2024 compared with RMB 7.5 million in the same period of 2023. Next last for the second quarter of 2024 was RMB 49.2 million compared with net income of RMB 6.8 million in the same period of 2023.

Speaker Change: <unk> is in the market to competition, particularly that surge of gaming content and services to our short video platforms has to draw yogurt with a sharper viewing hover in the low speed needs away from our platform.

Speaker Change: This pressure to our every email in the short term.

Speaker Change: As reflected in the year over year on a sequential and a decline.

Decline in there.

Speaker Change: In the quarter.

Speaker Change: Nonetheless.

Speaker Change: Our core user base continued to demonstrate the ability of.

Speaker Change: Long term data monthly monitoring and analysis revealed that our car youre going to the key metrics like the viewing hours and the activity activity levels remain stable.

Lingling Kong: Thanks to our year-long strategy, folks are fostering a game-centric content ecosystem. So you're not only faced a variety of gaming content, but it has also Kettering to the wide-ranging performances of both mainstream gamers and niche gaming fans. Our particular significance is our loyal user base in the PC and console game segments, which remains highly engaged thanks to our foster cultivation efforts. To stay competitive in the market, we will prioritize our call users and maximize our platform's advantages, while also driven on growing content innovation and operational optimization. Other content fronts, we will continue to building our distinct and different content metrics.

Speaker Change: Since two our year long strategy to focus on.

Speaker Change: Fostering our game centric content ecosystem.

Oh, you're not the only theaters.

Speaker Change: A variety of gaming content that BARDA has also established a strong hold across diverse verticals.

Hao Cao: Adjusted net loss, which excludes shelf loss in equity method investments and impairment loss of investments, was RMB 45.5 million in the second quarter of 2024 compared with adjusted net income of RMB 61.4 million in the same period of 2023. For the second quarter of 2024, basic and diluted net loss per ADS rebels RMB 1.58. Why adjusted basic and diluted net loss per ADS rebels RMB 1.46. As of June 30, 2024, the company had cash and cash equivalence, restricted cash, restricted cash in other non-correct assets, and short term and long term deposits of RMB 6.56 billion compared with RMB 68.6 billion as of December 31, 2023.

Speaker Change: Catering to the wider ranging preferences of both main mainstream gamers on the niche gaming fans.

Speaker Change: Of particular significance is our lawyer loyal user base in the PC and console game segments.

Speaker Change: We should remain highly engaged and thanks to our focused or cultivation efforts.

Speaker Change: To stay competitive in the market.

Speaker Change: We will prioritize our call users and maximize our platform advantages, while also driven on <unk>.

Speaker Change: We hung tend to innovation and operational optimization.

Speaker Change: I'll, let contained the problems we will continue to building our these things to add to branded content content to matrix.

Lingling Kong: Optionally, we aim to offer a greater variety of gaming services to maintain the material cycle between call users' ability and a healthy content ecosystem. We have also, in activity, advancing cross-platformal content sharing collaborations, including increasing our streamer access for content co-creation, new game promotions, commercial partnerships, and game product marketing campaigns. This content and services offerings not only counter to existing users, the gaming engagement, but also draw in new users, so innovative business approaches. In terms of our second challenge, macroeconomic head vendors have noticeably affected our traditional upstreaming revenue, primarily due to the user consumer revenue to spend.

Speaker Change: Operationally, we aim to offer our read her a variety of gaming services, who maintains a mature side.

Hao Cao: Finally, I would like to update you on our commitment to share how it returns. At the end of last year, we announced our 2024 share repurchase program for up to US$20 million. As of June 30, 2024, we had repurchased an aggregate of US$11.2 million in ADS and its program. Additionally, we declared a special cash dividend of approximately US$300 million in early July.

Speaker Change: So between call you there Tepidity Idaho.

Healthy content ecosystem.

Speaker Change: We have also been actively.

Speaker Change: One thing Carl supply the far more container sharing collaborations including how are you seeing our STREAMWAY says fall contender co creation new game promotions.

Commercial partnership with <unk>.

Speaker Change: <unk> marketing campaign.

Speaker Change: Content and services offerings, not only because her to existing users depending engagement, but also draw in new users. So in our team and that's the.

Hao Cao: Moving forward, we will remain proactive amid macro-economic headwinds and the changing business environment, responding with innovative revenue diversification initiatives and tighter cost and expense controls to overcome short-term pressures of financial performance. Bikes to glory, new commercial pathways, and stressening of fundamentals will aim to foster the long-term housing development of our platform, and consistently create value for our stakeholders.

Speaker Change: Approach.

In terms of our second.

Speaker Change: Atlanta.

Speaker Change: Macro economic headwinds.

Speaker Change: But noticeably affected our traditional allowed streaming revenue.

Speaker Change: I'm already due to reduced or consumer when they need to spend.

Lingling Kong: Starting last year, we refined our revenue strategy by feeding out revenue-oriented initiatives and the low ROI revenue generation activities, which lead to the departure of some prize-sensitive users. This year, we further skilled back on initiatives designed to boost pin user numbers, resulting in a decline in pin users. In response, we wrote out a budget-friendly product to support the payment habits of call pin users. As this revenue surrender, it has mattered. The number of pin users has stabilized, remaining within a consistent schedule over the positive two quarters. To address the pressures of declining live streaming revenue, we actively diversified our revenue matrices, re-emptively handing gaming services.

Speaker Change: Last year, we refined our revenue was their entity by seething out to a revenue run to the initiatives and the low alloy revenue generation.

Unknown Executive: This concludes our prepared remarks for today. Operator, we are now ready to take questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one, on your touchtone phone. If you are using a speaker phone, please pick up your handsets before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

Speaker Change: It is rich.

Speaker Change: Originally the two the departure of some wise sensitive users.

Speaker Change: This year, we further secure the bags on initiatives designed to boost the paying user numbers.

Speaker Change: That decline in paying users.

Speaker Change: In response, we zeroed out the boundaries of friendly product. It's just a part of the payment habits I'll call paying users.

Speaker Change: Yeah.

Speaker Change: As these revenues rather there has mattered.

Speaker Change: Mobile paying user has stabilized our remaining with our within our country's tended randall over the past two quarters.

Unknown Executive: At this time, we will pause momentarily to assemble our roster.

Speaker Change: Jeff the pressures of declining livelihood roaming revenue.

Ritchie Sun: The first question today comes from Ritchie Sun with HSBC. Please go ahead. Thank you. Thank you, management, for taking my questions. How does management feel the current macro challenges and changes and the impact on the operations? How would you access these challenges in terms of the impact on our basis fundamentals as well as financials? Thank you.

Speaker Change: Actively diversified our revenue Megan Britt MTB empty really hangs in gaming services.

Lingling Kong: Thanks to our platform, the technical base of our area, the gamers, and the high alignment between the needs and our game-related services. We have made significant changes in the commercialization of game product. We are committed to actively promoting, diversify the revenue streams to enhance our overall business resilience to economic cycles. We have responded to macroeconomic dynamics by proactively and flexibly adjusting our operational renderings, consolidating our traditional business and expanding new areas to alleviate the revenue pressure. Initially, we have implemented a series of operational measures, including optimizing resources allocation and strengthening coastal control to ensure financial stability.

Speaker Change: Thanks to our platform and separate credential based on our areas of gamers and has a high alignment between the amines and our game related services. We have made significant strides in the commercialization of the game problem Province.

Speaker Change: We are committed to actively promoting diversify the revenue streams to enhance our overall business or are there other lines to economic cycles.

We have responded to macroeconomic or.

Speaker Change: That makes by proactively and flexibility.

Dusty our operational surrendered is comfortably.

Speaker Change: Comfortably, beating our treaties traditionally know opinions on the expanding new areas to Olivia to revenue pressure.

Lingling Kong: Thank you for your question.

Lingling Kong: At the end of the day, we have faced two primary challenges: intense marketing competition and macroeconomic ahead of English. Hi, it's the market competition. Particularly, the third of gaming content and services on short video game platforms has to draw users with short viewing hours and low speaking needs away from our platform. This pressured our every M.A.O. in the short term as reflected in the year-over-year and the sequential M.A.O. Decline in the second quarter. Nonetheless, our call user base continues to demonstrate the stability. Our long-term data monitoring and analysis revealed that our call user's key metrics, like viewing hours and activity levels, remain stable.

Well initially.

Speaker Change: We have implemented the theory that the Apple operational Meraz engraving already maybe result as a.

Speaker Change: Have you talked to that location and that's frenzy closer to control to ensure financial stability, we believe with that or some of the.

Lingling Kong: We believe creation and growth of new content and product models; we can concentrate on the platform for long-term development and identify opportunities for our secondary growth engine.

Arthur: There can do me Arthur <unk> and the growth of our new contained on the product. The models, we can concentrate on our platform for long term development and I'd identify.

Speaker Change: Opportunities for our secondary growth engine.

Lingling Kong: Thank you.

Speaker Change: You.

Unknown Executive: Operator, please.

Operator, Please next question.

Thomas Chong: Next question comes from Thomas Chong. Jeffrey, please go ahead. Thanks for joining us today. My question is about the environment of our economy, the development of the company's overall stability, and the future of the company's resources. So, thank you so much for taking my question.

Speaker Change: The next question comes from Thomas Chong of Jefferies. Please go ahead.

Speaker Change: Well. Thank you everyone, who can generally that's what pieces are you.

Speaker Change: He says I want them the kingdom funding.

Speaker Change: Boy that's number one.

Lingling Kong: Thanks to our year-long strategy, folks are fostering a game-centric content ecosystem. So, we've not only faced a variety of gaming content, but has also spectacular stronghold across diverse works. Kettering to the wide-ranging performances of both mainstream gamers and niche gaming fans. Our particular significance is our loyal user base in the PC and console game segments, which remains highly engaged thanks to our foster cultivation efforts.

Oh, well I said, one that wasn't even a problem that's hurting you.

Speaker Change: Hi, Chad and myself, Thanks management for taking my.

Speaker Change: Question, So based on current Acacia.

Thomas Chong: How does the ability of the streamers on our platform and any logging backman on streamer resources in future? Thanks.

Patient environment.

Speaker Change: How does a better job Seamus I O pipeline and interlocking backman on human resources.

Lingling Kong: Thank you for your question. So, at present, those overall streamer assets remain stable. Competition for top tier streamers in the live streaming industry is ongoing. As user demands evokes and the industry develops, we continuously adapt our streamer strategies to address the competition for top tier streamers. We maintain advantages in exclusive contracts, streamer training, and operations.

Speaker Change: Thank you for your question. So our present doses overall streamer assets remained stable competition for top tier streamers in the nitrogen industry is ongoing.

Speaker Change: Is there demand evolves and the industry develops we continuously adapt our streamer strategies to address the competition for top tier streamers, we maintained advantages in exclusive contracts streamer training and operations.

Lingling Kong: To stay competitive in the market, we will prioritize our call users and maximize our platformers' advantages, while also driven on growing content innovation and operational optimization. Other content fronts, we will continue to building our distinct and different content metrics. Optionally, we aim to offer a greater variety of gaming services to maintain the material cycle between call users' ability and a healthy content ecosystem. We have also, in activity, advancing cross-platformal content sharing collaborations, including increasing our streamer access for content co-creation, new game promotions, commercial partnerships, and game product marketing campaigns. This content and services offerings not only can't hurt two existing users, depending on the gaming environment, but also draw in new users, so innovative and innovative approaches.

Lingling Kong: First, given our many years of experience in content operation within the gaming industry, our platform has accumulated a substantial pool of streamers, ensuring stability during their contract period. We also enhance streamer content quality and efficiency through continuously refined operations. For streamers nearing the end of their contracts, we actively assess market conditions, operational strategies, signing costs, and operational efficiencies before negotiating and selectively renewing their contracts. Second, we place greater emphasized on streamers refined operations, especially in niche game segments. Though we have been growing alongside PC games, boosts deep streamer resources and a strong user base in evergreen game categories.

Speaker Change: First given our many years of experience in content operation within the gaming industry. Our platform has accumulated a substitution Paul Australia is showing stability during the contract period.

Speaker Change: We also enhanced stream, our content quality and efficiency through continuously refined operations.

Speaker Change: <unk> stream is nearing the end of their contract, we actively assess market conditions operational strategies, and signing cost and operational efficiencies before negotiating and selectively renewing the contract.

Speaker Change: Second we placed greater emphasize on stream as refined operations, especially in niche gaming segment.

Speaker Change: It has been growing alongside PC games, Bruce deep stream of resources and a strong user base in evergreen game categories by creating content and marketing activities tailored to E characteristics of these segments, we improved interactions between streamers and users.

Lingling Kong: By creating content and marketing activities tailored to the characteristics of these segments, we improved interactions between streamers and users, enhanced our community ecosystem, and increased the thickness of both streamers and users. In terms of streamer compensation, besides base compensation, we provided streamers with some resources and diverse income opportunities. We focused on game promotion and the cells of game props to provide streamers with more growth opportunities and earning potential. And this further solidified the stability of our top-tier streamers' resources in niche categories.

Speaker Change: Enhanced our community ecosystem and increase the thickness of both streamers and users.

Speaker Change: In terms of streamer compensation.

Speaker Change: <unk> based compensation, we provided extremists with some resources and diverse income opportunities.

Lingling Kong: In terms of our second challenge, macroeconomic head vendors have noticeably affected our traditional upstreaming revenue, primarily due to reduced consumer revenue to spend. Starting last year, we refined our revenue strategy by feeding out revenue-oriented initiatives and low ROI revenue generation activities, which lead to the departure of some prize-sensitive users. This year, we further skilled back on initiatives designed to boost pin user numbers, resulting in a decline in pin users. In response, we wrote out a budget-friendly product to support the payment habits of call pin users. As this revenue surrender, it has mattered. The number of pin users has stabilized, remaining within a consistent schedule over the positive two quarters.

We focus on game promotion and the sellers of game pumps to provide students with more growth opportunities and earning potential.

Speaker Change: And this further solidified the stability of our top tier streamers resources in niche category.

Lingling Kong: With the arrival of summer season, we also allocate more resources to streamer recruitment. Firstly, we revised our recruitment model, which previously focused on specific game categories. So now we no longer restrict streaming categories, that giving streamers more freedom to choose and experiment with different content. Second, we improved the reward mechanism, providing streamers with guaranteed income and resource support. By enhancing earnings and streaming experience, we aim to increase streamers' willingness to go live. Third, we established a clear streamer development path. Through a peer task system, we identified potential streamers and design growth paths for them using our platform resources.

Speaker Change: With the arrival of summer season, we also allocate.

More resources to streamer recruitment.

Speaker Change: We revised our recruitment model, which previously focused on specific game categories. So now we no longer restrict streaming categories, that's giving extreme as more freedom to choose and experiment with different content.

Speaker Change: We improved the reward mechanism, providing streamers with guaranteed income and resource support by enhancing earnings and streaming experience. We aim to increase generic willingness to go life.

Third we established a clear streamer development paths.

Speaker Change: A clear task system, we at any site potential streamers and define growth paths for them using our platform resources. The results for the first period of our updated us streamer recruitment to initiate as was quite positive and we will continuously refined a recruit.

Lingling Kong: To address the pressures of declining live streaming revenue, we actively diversified our revenue-makers and actively handing gaming services. Thanks to our platform, the technical base of our area, the gamers, and the high alignment between the needs and our game-related services, we have made significant changes in the commercialization of game-properties. We are committed to actively promoting, diversify the revenue streams to enhance our overall business resilience to economic cycles. We have responded to macroeconomic dynamics by proactively and flexibility adjusting our operational renderings, consolidating our traditional business and expanding new areas to alleviate the revenue pressure. Initially, we have implemented a series of operational measures, including optimizing resources allocation and strengthening coastal control, to ensure financial stability.

Lingling Kong: The results for the first series of our updated streamer recruitment initiatives was quite positive. And we will continuously refine our recruitment policies in the next series to attract more domain enthusiasts.

Speaker Change: And put us in the next series to attract more.

Speaker Change: Gaming enthusiasts.

Lingling Kong: Additionally, we are continuously upgrading our streaming technologies and support tools to provide streamers with a better user experience. Our streamer Big Data Analyzer system helped streamers accurately understand user needs and market trends, enabling them to optimize their streaming strategies. And thus, improving their live streaming qualities and efficiency. We also offered more convenient content production tools that support intelligent Addison based on streamer content, producing high quality videos, images and bulletchets. This enhanced streamer's content production efficiency and made content dissemination more effective. In the content industry, competition for streamer resources is long-term and continues. We believe that by leveraging our platform's core resources and adjusting our operational strategies, we will continue to maintain a leading position of streamers in the game live streaming industry.

Speaker Change: Additionally, we are continuously upgrading our streaming technologies and support tools to provide consumers with a.

Speaker Change: That's a user experience all assume a big data analyzer system helped streamers accurately understand user needs and market trends, enabling them to optimize their streaming strategist and thus improving their life's journey qualities and efficiency.

We also offered more convenient content production tools that support intelligent attitude based on stream, our content producing high quality videos images and bullet chats.

Speaker Change: This enhanced extremist content production efficiency and made content with limitations more effective.

Speaker Change: In the content industry competition for Streamer resources is long term and continues we believe that by leveraging our platforms core resources and adjusting our operational strategies, we will continue to maintain a leading position our streamers in game live streaming industry. Thank you.

Lingling Kong: Thank you.

Speaker Change: Yes.

Speaker Change: Okay.

LeGend: The next question comes from Legend with Bank of America. Please go ahead.

Speaker Change: The next question comes from Malaysia with Bank of America. Please go ahead.

Unknown Executive: Thank you. Operator, please.

Speaker Change: Oh, hi, Glenn as far as how hospitals and so all of that Sheila although when people ask me why you aren't going to the dogs.

Speaker Change #100: They'll come about in New York that down thank God, they hold or not.

I also feel I'm, not arguing Qualcomm mentioned yet.

LeGend: In the end, thank you very much for listening to my question. My question is mainly regarding Martin. Can you tell here the driver?

To your quarter GW undertaking Nokia, yes, all the bank yeah. Thanks management for taking my question. My question, mainly regarding mountain Oh can you hear the driver you can sell young as your final second quarter growth marketing and our house the way New Catholic school year growth margin and the overall margin.

Hao Cao: You can, the young is your son of second quarter growth margin. And how could we do that for a few years' growth margin and overall margin trend?

Thomas Chong: How does the ability of the streamers on our platform and any logging backman on streamer resources in future? Thanks.

Thank you.

Hao Cao: Thank you for your question. The second quarter of the year, of course, margin was mainly due to the decrease in life-streaming revenue. Although revenue-sharing fees have remained constant with the changes in life-streaming revenue, and our revenue generation has always stayed within a healthy range. The relatively fixed costs in life-streaming business, such as copyright costs, and based compensation for streamers did not decrease in line with the year of year decline in life-streaming revenue. Therefore, the decline in life-streaming revenue put pressure on gross margin. While we have implemented a series of measures to optimize content costs and streamers' payments, their positive impact on overall gross margin has been relatively limited.

Speaker Change #100: Thank you for your question.

Speaker Change #101: The second quarter's year over year decline in gross margin was mainly due to the decrease in live streaming revenue.

Speaker Change #102: Revenue sharing fees have remained constant with the changes in life in lab streaming revenue.

Speaker Change #102: And our revenue sharing ratio has always stayed within a healthy range.

Speaker Change #102: Relatively fixed costs in lapsed premium business, such as copyright costs.

Speaker Change #102: <unk> based compensation for streamers cannot decrease in line fees year over year decline in live streaming revenue, therefore, but decline livestream revenue put pressure on our gross margin.

While we have implemented a series of measures to optimize cotton costs and streamers payments.

Speaker Change #102: The positive impact of all gross margin has been relatively limited.

Hao Cao: In the face of macroeconomic and operating uncertainties, we have undertaken a series of measures to address the challenges posed by the decline in revenue while adjusting the revenue structure for 2024. On the cross-site, we aim to alleviate cost pressure, so copyright control costs, increasing the co-creation of self-produced content, enhancing production efficiency, and optimizing streamers' payments. On the expense side, we will continue to refine the company's organizational structure and optimize marketing strategies to strictly control operational expenses.

Speaker Change #102: In the face of macroeconomic and operating certainties.

Speaker Change #102: And have taken a series of measures to address the challenges posed by the decline in revenue.

Speaker Change #102: Adjusted the revenue structure for 2024.

Speaker Change #102: On the cost side.

Speaker Change #102: Aim to alleviate cost pressure, so copyright control costs.

Speaker Change #102: And crazy that call the Cocreation of self produced content and housing production efficiency and optimizing streamers payments.

Speaker Change #102: On the expense side.

Speaker Change #102: We will continue to refine the company's organizational structure and optimized marketing strategies to strictly control operational expenses.

Hao Cao: Additionally, interest income is expected to decrease in the second half of 2024 due to decrease cash balances following dividend distributions, which will also impact our profitability in the second half of the year. As a result, it will be challenging for us to achieve net level, but even for 2024. Looking forward, we will continue to refine our revenue structure, enhance operational efficiency, and control costs to gradually improve the company's financial profile.

Speaker Change #102: Additionally, interest income is expected to decrease in the second half of <unk> 24, due to decreased cash balances following dividend distributions.

Speaker Change #102: We're also impact our profitability in the second half of the year.

Speaker Change #102: As a result.

Speaker Change #102: The challenge for us to achieve net level breakeven for 2024.

Looking forward, we will continue to refine our revenue structure.

Speaker Change #103: Operational efficiency and control costs to gradually improve the companys financial profile. Thank you Nicole next question. Please operator.

Hao Cao: Thank you.

Raphael Chen: Next question, please, Operator. The next question comes from Raphael Chen with COCI.

The next question comes from Rafael Chen with T O B I. Please go ahead.

Raphael Chen: Please go ahead.

Speaker Change #103: 60, quantum transitional or pure Johnson, Chou jargon for Australia, and New York.

Rafael Chen: Did you go you know shrinking Xiang Jihua. Thanks management for taking my question. Just wondering do you estimate your cash balance by the end of this year and any cash usage pecking order pledges yourself. Thank you.

Hao Cao: Thank you for a question. As of the end of the second quarter, we have cash and cash equivalents with strategic cash and short-term and long-term deposits of RMB 6.56 billion. In the second quarter, we repurchased your $8.5 million in ADS, a significant increase compared to the US dollar 2.7 million in ADS. We repurchased in the first quarter, reflecting our enhanced shelf buyback efforts in the second quarter. To date, aside from normal business operations, large cash expenditures have primarily been used for shareholder returns, including a US dollar 10 million shelf repurchase plan and a special cash dividend of US dollars 300 million at the end of August.

Speaker Change #105: Thank you for your question.

Speaker Change #106: As of the end of second quarter, we had cash and cash equivalents restricted cash and short term and long term deposits of RMB 656 billion.

Speaker Change #105: In the second quarter.

Speaker Change #105: Purchased $1 $8 5 million.

A significant increase compared to the U S dollar 2.7 minutes.

Speaker Change #105: We repurchased in the first quarter, reflecting our in house shelf buyback efforts in the second quarter to date aside from normal business operations large cash expenditures have primarily being used for shareholder returns, including our U S dollar patent maintenance.

Speaker Change #105: Repurchase plants and a special cash dividend of USD <unk> 300 million at the end of August.

Hao Cao: This demonstrates the company's commitment to shareholder interests and our determination to provide reasonable returns to shareholders while ensuring the company's long-term development. Despite the aforementioned large cash expenditures, overall, cash balance remains healthy and is sufficient to support our business operations and development. We will continue to closely monitor market dynamics and business development trends, flexibly adjusting our strategies to ensure the effective use of our funds and a relating risk control.

Demonstrates the company's commitment to shareholder interest.

Speaker Change #105: <unk> determination to provide a reasonable return to shareholders.

Speaker Change #105: Ensure the Companys long term development.

Speaker Change #105: Despite the aforementioned large cash expenditures.

Speaker Change #107: Oh cash balance remain healthy.

Is sufficient to support our business operations and development.

Speaker Change #107: We will continue to closely monitor market dynamics and business development test flexibly adjusting our strategies to ensure the effective use of our funds and the related risk control.

Hao Cao: Meanwhile, we will continue to invest in our community's ecosystem and new businesses. These investments not only helped enhance user experience and strengthen our platform's competitiveness, but are also key to the company's long-term sustainable development. Through continuous technological innovation and service optimization, we remain committed to fostering a more vibrant and healthy community ecosystem and promoting the rapid growth of our businesses built by building the company's enduring momentum and long-term success.

Speaker Change #107: Meanwhile, we will continue to invest in our communities ecosystem at a new businesses.

Lingling Kong: Thank you.

Speaker Change #107: Investments not only help to enhance user experience.

LeGend: The next question comes from Legend with Bank of America. Please go ahead. In the end, thank you very much for listening to my question. My question is mainly regarding Martin. Can you tell here the driver? You can, the young is your son of second quarter growth margin. And how could we do that for a few years' growth margin and overall margin trend?

Speaker Change #107: Our platform's competitiveness, but also key to the company's long term sustainable development.

Speaker Change #107: Through continuous technological innovation and service optimization.

Speaker Change #107: We remain committed to fostering a more vibrant and healthy community ecosystem.

Speaker Change #107: The rapid growth of our business is built by building the company's enduring momentum and long term success.

Hao Cao: Thank you.

nelson chong: I'll pray to our next question, please. The next question comes from Nelson Chong with City Bank.

Speaker Change #107: You.

Speaker Change #108: Operator next question please.

Speaker Change #108: Yeah.

Speaker Change #109: The next question comes from Nelson Cheung with Citibank. Please go ahead.

nelson chong: Please go ahead. Thank you for your question, so we implemented a revenue diversification strategy in 2021.

Speaker Change #108: Okay.

Speaker Change #110: Uh huh.

Speaker Change #110: Okay.

Speaker Change #110: Yeah.

Speaker Change #110: So on your call.

Speaker Change #110: So I thought we'd be.

Speaker Change #111: Got it.

Speaker Change #112: So essentially that you cheated.

Unknown Executive: Let me try to take the question myself. Thank you, everyone, for taking the question.

Speaker Change #113: Let me translate the question myself.

Speaker Change #113: Thanks for taking my question whenever he is measuring case here.

nelson chong: One of my friends can share the latest development plan and go ahead regarding the co-operator's team's development and your expectation on the revenue growth. Thank you.

Speaker Change #113: He thought of them playing in.

Speaker Change #113: Regarding the cooperation with game developers and your expectation of the revenue cool. Thank you.

Lingling Kong: Nelson, thank you for your question. We implemented a revenue diversification strategy in 2022, including commercial collaborations with game developers based on our gamer's demand, recognizing streamers' substantial influence on gaming commercialization and the vast opportunities in this space. We continue to delve into new revenue generating avenues within the game content value chain and have established two primary forms of commercial collaborations. With game developers, last quarter, we share that game membership revenue from styles of game props contribute to our innovators' business revenue growth. Within the segment covered by our game membership business, we have boosted revenues by enriched game prop categories, enhancing platform benefits, and increasing market frequency.

Speaker Change #114: Hi, Nelson and thank you for your question.

Speaker Change #115: So we implemented our revenue diversification strategy in 2022, including commercial collaborations with game developers based on our gamers demand recognizing streamers substitutional influence on gaming commercialization and the vast opportunities in this space.

Speaker Change #115: We continue to doubting two new revenue generating avenues within the game content value chain and have established two primary forms of commercial collaborations.

Speaker Change #116: With game developers last quarter, we shared that game membership revenue from Dallas off game, probably contribute to our innovative business revenue growth within this segment, we think within the segment currently covered by our game membership business, we have boosted revenues by enrich.

Speaker Change #116: <unk> game category.

Speaker Change #116: Housing platform benefits and increasing market frequency.

Lingling Kong: In terms of expanding into new game segments, we launched game membership services in the League of Legends World Rift in mid-July. We promoted these new services in live streaming sessions by distributing limited edition props and platform benefits based on the current game theme. The real props props provided by game developers and promotions, both on and off our platform, attracted gamers' attention and interest, contributing additional revenue streams. In terms of the progress with our game developer corporations, the convenience of collaborative promotional channels allows us to quickly expand this business model. Although this model currently contributes only a very small proportion of revenue, we see gamers' strong demands for game prop sales and the growth potential for this business.

Speaker Change #116: In terms of expanding into new game segment, we launched game membership services in the league of legend well drift in mid July we promoted these new services in live streaming session by distributing limited edition drops and platform benefits based on the current game theme there.

Speaker Change #116: Perhaps provided by game developers and promotions, both on and off our platform attracted gamers attention and interest contributing additional revenue streams.

Speaker Change #116: In terms of the progression the progress with our game developer cooperation.

Speaker Change #116: Convenience of collaborators.

Speaker Change #116: Promotional channels allows us to quickly expand its business model. Although this model currently contributes only a very small proportion of revenue we see game nice strong demands for Gamestop salad.

Unknown Executive: Thank you.

Hao Cao: Next question, please, Operator. The next question comes from Raphael Chen with COCI. Please go ahead. Thank you for a question. As of the end of the second quarter, we have cash and cash equivalents with strategic cash and short-term and long-term deposits of RMB 6.56 billion. In the second quarter, we repurchased your $8.5 million in ADS, a significant increase compared to the US dollar 2.7 million in ADS. We repurchased in the first quarter, reflecting our enhanced shelf buyback efforts in the second quarter.

Speaker Change #116: And.

Speaker Change #116: The growth potential for this business for example.

Lingling Kong: For example, Moonlight Blade, a game launched in 2016, is one of the first games for which we initiate commercial cooperation on game props. Through virus forms of cooperation with game developers, we have updated our product offerings to enable users to place orders directly through the prop mall, optimizing the user's purchasing experience. And as a result, users' average prop consumption level through our channel is higher than that of other channels.

Speaker Change #116: One light played a game launched in 2016 is one of the first games for which we initiate commercial cooperation on game ops.

Speaker Change #116: So wireless forms of cooperation with game developers, we have updated our product offerings to enable users to place orders directly through the top mall optimizing their users purchasing experience.

Speaker Change #116: As a result users average pulp consumption level through our channel is higher than that of other channels.

Lingling Kong: In the PeaceKeep Elite Game segment, which features our deepest cooperation with game developers, we launched our exclusive PeaceKeep Elite boutique store in the first quarter of 2024. This event generated over 3 million user orders within three days during live streaming sessions. Furthermore, during the recent multi-platform boutique store campaign, Douyu shared the latest game we lead the industry, highlighting our operational advantages and commercialization efficiency in leveraging segment-specific content. Prop marketing has also enriched the gaming segment's content and activities, which further enhances their exposure and attractiveness. And in the future, we plan to expand our game prop sales to more game segments, customizing exclusive promotion plans based on the characteristics of different games and user needs.

Speaker Change #116: In the Peacekeeper elite game segment, which features our dishes cooperation with game developers, we launched our exclusive piece keep keep her elite boutique store it in the first quarter of 2024.

Speaker Change #116: This event generated over 3 million user orders within three days during live streaming sessions. Furthermore, during the recent multi platform boutiques door campaign don't you shared the story sure lofty related G. M. We lead the industry highlighting our operational advantage.

Hao Cao: To date, aside from normal business operations, large cash expenditures have primarily been used for shareholder returns, including a US dollar 10 million shelf repurchase plan and a special cash dividend of US dollars 300 million at the end of August. This demonstrates the company's commitment to shareholder interests and our determination to provide reasonable returns to shareholders while ensuring the company's long-term development. Despite the aforementioned large cash expenditures, overall, cash balance remains healthy and is sufficient to support our business operations and development. We will continue to closely monitor market dynamics and business development trends, flexibly adjusting our strategies to ensure the effective use of our funds and a relating risk control.

Speaker Change #116: <unk> and commercialization efficiency in leveraging segments specific content.

Speaker Change #116: Marketing has also enrich the gaming segments content and activities.

Speaker Change #116: Further enhancing their exposure and attractiveness.

And in the future we plan to expand our Gamecocks Dallas two more games segment.

Speaker Change #116: <unk> exclusive promotion plans based on the characteristics of different games and user needs.

Lingling Kong: These initiatives are designed to drive revenue growth in our innovative business and provide gamers with rich and more diverse game-related services. In addition to the commercial collaborations with game developers, our other innovative businesses are also progressing well and contributing to revenue. We are maintaining our year-over-year growth expectations for innovative businesses, advertising, and other revenue, which we expect to account for over 20% of our total net revenue in 2020.

Speaker Change #116: This is a taste are designed to drive revenue growth in our innovative business and provide gamer.

Speaker Change #116: Rich and more diverse game related services.

Speaker Change #116: In addition to the commercial collaborations with game developers our other innovative businesses are also progressing well and contributing to revenue.

We are maintaining our year over year growth expectation for it [noise] innovative businesses advertising and other revenue, which we expect to account for over 20% of our total net revenue in 2024.

Lingling Kong: Yes, I think that's it. Thank you.

Speaker Change #116: Yeah.

Speaker Change #118: Yes, I think that's it.

Speaker Change #118: Yeah.

Speaker Change #119: Thank you that's all the time, we have for questions today I will now turn the call back over to management for any closing remarks.

Unknown Executive: That's all the time we have for questions today.

Unknown Executive: I will now turn the call back over to management for any closing remarks. Thank you for joining our call. We look forward to speaking with everyone next quarter.

Speaker Change #118: Okay.

Speaker Change #120: Thank you for joining joining our call we look forward to speaking with everyone next quarter.

Unknown Executive: I'll pray to our next question, please. The next question comes from Nelson Chong with City Bank. Please go ahead. Thank you for your question, so we implemented a revenue diversification strategy in 2021.

Speaker Change #120: Okay.

Unknown Executive: The conference is now concluded. Thank you for attending.

Speaker Change #121: The conference has now concluded.

Unknown Executive: You may now disconnect.

Speaker Change #121: For attending you may now disconnect.

Speaker Change #121: Yeah.

Speaker Change #121: Yes.

Speaker Change #121: Yeah.

Speaker Change #121: [music].

Unknown Executive: Let me try to take the question myself. Thank you, everyone, for taking the question.

Unknown Executive: I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there, but I'm not sure if you're going to be there.

nelson chong: One of my friends can share the latest development plan and go ahead regarding the co-operator's team's development and your expectation on the revenue growth. Thank you.

Speaker Change #121: Yes.

Hao Cao: Nelson, thank you for your question. We implemented a revenue diversification strategy in 2022, including commercial collaborations with game developers based on our gamer's demand, recognizing streamers' substantial influence on gaming commercialization and the vast opportunities in this space. We continue to delve into new revenue generating avenues within the game content value chain and have established two primary forms of commercial collaborations. With game developers, last quarter, we share that game membership revenue from styles of game props contribute to our innovators' business revenue growth. Within the segment covered by our game membership business, we have boosted revenues by enriched game prop categories, enhancing platform benefits, and increasing market frequency.

Hao Cao: In terms of expanding into new game segments, we launched game membership services in the League of Legends World Rift in mid-July. We promoted these new services in live streaming sessions by distributing limited edition props and platform benefits based on the current game theme. The real props props provided by game developers and promotions, both on and off our platform, attracted gamers' attention and interest, contributing additional revenue streams. In terms of the progress with our game developer corporations, the convenience of collaborative promotional channels allows us to quickly expand this business model. Although this model currently contributes only a very small proportion of revenue, we see gamers' strong demands for game prop sales and the growth potential for this business.

Hao Cao: For example, Moonlight Blade, a game launched in 2016, is one of the first games for which we initiate commercial cooperation on game props. Through virus forms of cooperation with game developers, we have updated our product offerings to enable users to place orders directly through the prop mall, optimizing the user's purchasing experience. And as a result, users' average prop consumption level through our channel is higher than that of other channels.

Hao Cao: In the PeaceKeep Elite Game segment, which features our deepest cooperation with game developers, we launched our exclusive PeaceKeep Elite boutique store in the first quarter of 2024. This event generated over 3 million user orders within three days during live streaming sessions. Furthermore, during the recent multi-platform boutique store campaign, Douyu shared the latest game we lead the industry, highlighting our operational advantages and commercialization efficiency in leveraging segment-specific content. Prop marketing has also enriched the gaming segment's content and activities, which further enhances their exposure and attractiveness. And in the future, we plan to expand our game prop sales to more game segments, customizing exclusive promotion plans based on the characteristics of different games and user needs.

Hao Cao: These initiatives are designed to drive revenue growth in our innovative business and provide gamers with rich and more diverse game-related services. In addition to the commercial collaborations with game developers, our other innovative businesses are also progressing well and contributing to revenue. We are maintaining our year-over-year growth expectations for innovative businesses, advertising, and other revenue, which we expect to account for over 20% of our total net revenue in 2020.

Hao Cao: Yes, I think that's it. Thank you.

Unknown Executive: That's all the time we have for questions today.

Unknown Executive: I will now turn the call back over to management for any closing remarks. Thank you for joining our call. We look forward to speaking with everyone next quarter.

Unknown Executive: The conference is now concluded. Thank you for attending.

Unknown Executive: You may now disconnect.

Unknown Executive: Dapeng Gong, Unknown Executive, Thomas Chong, Dapeng Gong

Q2 2024 DouYu International Holdings Ltd Earnings Call

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