Q1 2025 Tencent Music Entertainment Group Earnings Call
Millicent T: We announced our quarterly financial results earlier today before the U.S. market opened.
Quarterly financial results earlier today before the U S market open.
Millicent T: The earnest release is now available on our AYA website and via Newswire service.
The earnings release is now available on our IR web site and via Newswire services.
Millicent T: During today's call, you'll hear from Mr. Ka Shing Pang, our Executive Chairman, and Mr. Rob Snell, our CEO, who will share an overview of our company's strategies and business updates. Then Shirley will step forward to discuss our financial results before we open the call for questions.
Speaker Change: During today's call you'll hear from us percussion, our executive chairman.
Speaker Change: And Mr. <unk>, our CEO, who will share an overview of our company's strategy and business updates.
Speaker Change: And then Shirley Hu, our CFO will discuss our financial results before we open the call for questions.
Millicent T: Before we continue, I refer you to the Safe Harbor Statement in our NSRB, which applies to this call as well as to our May forking statement.
Speaker Change: Before we continue I refer you to the Safe Harbor statement in the release, which applies to this call as we will make forward looking statements.
Millicent T: Please note that we discuss non-IFRS measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under IFRS in our earnest release and filings with the SEC.
Speaker Change: Please note that would discuss non <unk> measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under ifr ice in the earnings release and filings with the SEC.
Millicent T: All participants are muted at this time. After management's remarks, there will be a Q&A.
All participants on mute at this time after management's remarks, there'll be a Q&A session and please be advised that todays call would be that if being recorded with that I'm very pleased to turn the call over to cushion executive Chairman of G. M question.
Millicent T: And please be advised that today's call is being recorded.
Millicent T: With that, I'm very pleased to turn the call over to Kesheng, Executive Chairman of TME. Thank you, Millicent.
Melissa: Thank you Melissa welcome Hello, everyone and thank you for joining our call today.
Ka Shing Pang: Welcome, hello everyone, and thank you for joining our call today. We kicked off 2025 with a strong first quarter performance, demonstrating robust top-line growth and stronger profitability. This underscores the successful execution of our high-quality growth strategy With the solid foundation we have built, a thriving music ecosystem, and healthy financial position, we are well-equipped to navigate global uncertainties with confidence.
Kicked off 2025, with a strong first quarter performance, demonstrating robust topline growth and stronger profitability.
Melissa: This underscores the professional execution of our high quality growth strategy with the solid foundation, we have built a thriving music ecosystem and healthy financial position.
Melissa: Well equipped to navigate global uncertainties with confidence.
Ka Shing Pang: As music becomes more accessible and personalized, we see user preferences becoming increasingly diverse. Our platform is uniquely positioned to inspire deeper and broader music consumption through enriching our ecosystem and expanding suites of services.
Melissa: As music becomes more accessible and personal life, we see user preferences, becoming increasingly diverse.
Melissa: Our platform is uniquely positioned to inspire deeper and quarter news of consumption through enriching our ecosystem and expanding suite of services.
Ka Shing Pang: Let me share some of the key highlights. First, we strengthened our partnerships with record labels to further enrich our classic music library. Notably, we renewed the multi-year contract with Sony Music Entertainment, bringing 360 reality audio sound privileges to SVIP members. We also extended collaborations with Empire Entertainment Group and Rock Records, enhancing the listening experience with immersive Dolby Atmos sound. Also, we partnered with dream music group, Zhong Meng Yin Yue, to further broaden our selection of popular music rap, which has grown growing engagement and positive feedback from our users.
Melissa: Let me share some of the key highlights.
First we strengthened our partnerships with record labels to further enrich our classic music library.
Melissa: Notably, we renewed a multiyear contract with Sony Music Entertainment, bringing 360 reality audio sound privileges to SUV IP Memphis.
Melissa: We also extended collaborations with empower our entertainment group and rock records enhancing the listening experience with immersive Dolby Atmos sound.
Melissa: Also the policy with three musical so long in Europe to further broaden our selection of popular music lap, which has flown rolling engagement and positive feedback from our users.
Ka Shing Pang: Meanwhile, ourselves and co-producers' proprietary content is gaining increasing traction among music fans, offering a differentiated user experience that sets us apart from other music platforms. As for some highlights, in the first quarter, we partnered with CCTV News to produce The Time, 靜時光, for Zhou Shen, which ranked number one on the Kugou Mainland Chart and number four on the QQ Music Mainland Chart. We also produced One Thought to Eternity, 一念風生, the theme song for the popular Tencent game Crossfire, 穿越火箭, which quickly topped multiple charts and resonated with both music lovers and gamers.
Melissa: Meanwhile, our self and co produce our proprietary content is gaining increasing traction among music fans offering a differentiated user experience.
Melissa: Sets us apart from other music platforms as.
Melissa: Now for some highlights in the first quarter, we partnered with CCTV news to produce the time seems to Guam for chosen.
Melissa: Which ranked number one on the cocoa mainland chalk and number four on the QQ music that chart. We also produced one pot to Eternity Union function. The theme song for the popular Tencent game Crossfire triangle reports, yet, which quickly hopped in multiple chaff and resonated with both music logos.
Melissa: Gamers.
Ka Shing Pang: Second, through our insights on content and user-evolving purposes, we deepen and re-regulate content consumption across different genres. While Chinese songs remain the mainstream choice, we are seeing increasingly popularity of Korean, English, and Japanese tracks. In this regard, we renewed the contract with top-sell Korean labels Starship Entertainment and YG Entertainment, maintaining our leadership in Korean content while also launching merchandise collaborations, such as collectible star cards, our extended partnership with Japan's top ACG label Kadokawa Corporation. Added thousands of tracks, including popular anime theme songs, further expanding genre coverage for the fans.
Melissa: Second.
Melissa: Through our insights on content and user evolving preferences.
Melissa: Deepened and we work oriented content consumption across the finish line Ross.
Melissa: While Chinese phones remain the mainstream choice, we are seeing increasingly popularity of Korean English and Japanese tracks.
Melissa: In this regard we renewed contracts with top South Korean enables fashion entertainment and widely entertainment.
Maintaining our leadership in Korean content, while also launching merchandise collaborations such as collectibles stock costs, our extended partnership with Japan's top ACG label, Caddo, Colorado Corporation at.
Melissa: At one thousands of trucks, including popular and it may seem songs further expanding genre cafes for defense.
Ka Shing Pang: Third, we fulfill the users' demand for collectibles and providing them new ways to express their passion and appreciation of others. Recent highlights included the 10-day Head Start pre-sale of Beyond Euphobia 三重楼 by Teens in Time 时代少年团 which rose to number one on the 2025 physical album bestseller chart and number two on the all-time chart during this period. Another example is a physical album produced for Silent Swing, Wang Sulong's 100,000 Volts Shi Wan Fu Te, which quickly became a favorite among his dedicated fans. We also collaborated with K-pop icon G-Dragon to pre-sell official lightsticks and other products in mainland China.
Melissa: Third we fulfill our users' demand for collectibles, and providing them new ways to express that passion and the Pes station of others.
Melissa: Highlights included the 10 day Headstart PCL of beyond <unk>.
Melissa: <unk> low by TMC in times, she likes ion implant.
Melissa: Which rose to number one on the 'twenty to 'twenty five physical elbaum bestseller chalk and number two on the all time chart during this period and.
Speaker Change: Another example is a physical album producers for China's Wang Bongs whole loan.
Melissa: 101000, volt, Chuanfu talk which quickly became a favorite among.
Dedicate defense.
Melissa: We also collaborated with K pop icon G tracking to be sell off a show like steaks and other products in mainland China for fans, who purchase it is digital albums, we offered at the Prophage, Dubai, China Limited special edition merchandise, which achieved an impressive sales performance.
Ka Shing Pang: For fans who purchased his digital albums, we offered the privilege to buy China Limited Special Edition merchandise, which achieved an impressive sales performance.
Ka Shing Pang: Fourth, we offer the user more engaging and interactive music experience both online and offline. In the first quarter, we seated nearly 40 well-known artists and groups, including JCP, Tan Jianchi, world-ranked Wang Yuan, science-ranked Wang Sulong, and Legends of Phoenix, Fenghuang Chuanqi, in our annual Music for Passion, QQ音乐超级巅峰之夜, event in Chengdu, attracting tens of thousands of passionate fans. We debuted Asper's first-ever exhibition and Baby Monster's pop-up store in Mainland China, offering fans limited collectibles, interactive displays, and behind-the-scenes content to deepen fan connections with the artist. Online, we invite artists such as Xin Liu, Liu Yuxin, Sean Tan.
Melissa: Fourth we offer the user more engaging and interactive music experience, both online and offline in.
Melissa: In the first quarter, we see that nearly 40, well known artists and groups, including JCT tangential.
Melissa: While ram longer in silence, Wang Longsome alone and legends of Phoenix for longtime sheet in hour and new music for passion, QQ <unk>, Dan onto yet <unk>.
Melissa: The event in Chengdu attracting.
Melissa: Tens of thousands of passionate fans.
Melissa: We debuted our Aspen first ever exhibition and baby Monster pop up store in mainland China offering fans limited collectibles interactive displays and behind the scenes content to deepen fan connections to August.
Speaker Change: Online, we invite the artist such as seemingly you're seeing Sean Kang.
Ka Shing Pang: Tang Hanshao, and Zuo Yuan from Shi Ge Ting Tian to engage directly with fans in the comment section. sparkling waves of influence and enthusiasm among their fans' community.
Speaker Change: And so all you and farmer sugarcane tend to engage directly with fans in the common sections.
Speaker Change: Sparkling waves of import and was awesome among defense commodities.
Ka Shing Pang: Before I conclude, I also want to briefly touch on our ESG progress. In April, we released our 2024 ESG report to offer stakeholders enhanced transparencies and insights into our operations. The report details our practices and achievements in key areas, including intellectual property protection, user privacy, and data security.
Speaker Change: Before I conclude I also want to briefly touch on our ESG progress.
Speaker Change: In April we released our 2020 for ESG report to all of our stakeholders and handset transparency and insight into our operations.
Speaker Change: The report details our practices and achievements in key areas, including intellectual property protection.
Speaker Change: Use of privacy and data security.
Ka Shing Pang: Product Inclusion and Accessibility. and the fostering of diverse music communities. As we continue to unlock the potential of music and technology, we remain committed to advancing sustainable growth and creating social value.
Speaker Change: Product inclusion and accessibility.
Speaker Change: And the fostering of diverse music communities.
Speaker Change: As we continue to unlock the potential of music and technology, we remain committed to advancing sustainable globe and creating social value.
Ka Shing Pang: In summary, our sort of start to the year is a testament to the strength of our comprehensive content ecosystem and our operational excellence. These core capabilities, together with our strategic focus, ensure that we remain well positioned for sustainable growth in 2025 and into the future.
Speaker Change: In summary, our solid start to the year is a testament to the strength of our comprehensive content ecosystem and our operational excellence.
Speaker Change: This call capabilities together with our strategic focus and sure that we remain well positioned for sustainable growth in 2025 and into the future.
Ross: Now, I would like to turn the call over to Ross for more details on our overall platform development. Ross, please go ahead. Thank you.
Speaker Change: Now I would like to turn the call over to Ross for more details on our overall platform development Roth. Please go ahead. Thank you.
Ross: Thank you for your question.
Ross: Some people question Hello, everyone.
Ross: Hello, everyone. Our consistent focus on high-quality content and innovative product offerings has enabled us to build a dynamic music ecosystem that meets a wide range of user preferences. As a result, we have seen sustained enhancement in user engagement, illustrated by year-over-year growth in both paying user base and ARPPU in the first quarter. This positive trend was further supported by continual strength in SYP adoption, reflecting the increasing recognition and engagement of our valued members.
Ross: Our consistent focus on high quality content.
Ross: In our retail product offerings.
Ross: Enabled us to build our dynamic ecosystem that amidst a wide range of user preferences.
Ross: As a result, we're harvesting system placement and user engagement in Australia by year over year growth in boss paying user base and <unk> in the first quarter.
Ross: This positive we'll try and that was further supported by continued strength in <unk> adoption.
Ross: Reflecting the increasing recognition and the engagement of our members.
Ross: There are some highlights to share. Our premium sound quality and audio effect offerings remain a key attraction for SVIP members, penetrating about 15% of our SVIP user base.
Ross: There are some highlights to share.
Ross: First.
Ross: Our premium following the quality on the audio effects offerings remain a key attraction for ice VIP members penetrating about 15% of our eyes.
He also base.
Ross: To illustrate, Kugoo Music introduced the Industry First Viper External Amplification Enhancement Sound Effect, 魁首外放增强音效, which intelligently optimizes sound depth and clarity when using external speakers. We also launched a dedicated audio effect for iPods, enabling users to enjoy the advanced audio performance of the new models without upgrading devices.
In Australia <unk> introduced the industry's first Viper isothermal amplification enhancement is found in fact, Chris Shaw of iPhone from Italian shop, Greater intelligence optimize the songs apps on the cloud cloud PV. When you also external speakers.
Ross: We also launched our dedicated audio effects for ipod, enabling users to enjoy the other ones audio performance of the new models resolve upgrading.
Ross: <unk>.
Ross: Second. A range of unique perks have proven effective in driven SYP conversion. including unique album discounts, special budget.
Ross: Second.
Ross: A round of owning a car parks.
Ross: Rowan effective in driven <unk> e-commerce.
Ross: Including Unilever IRA bomb these calls cytosorb budgets.
Ross: Early Access to Merchandise and Live Events As an example, at our New Music for Passion event, SVIP members enjoyed special privileges such as priority ticket purchase. Moreover, those who bought tickets through this channel were also provided with exclusive services such as reception and transportation.
Ross: <unk> oxides to merchandise and allow events.
Ross: As an example, either over or Neil Neil take full patient event.
Ross: <unk> members enjoy the stifle villagers such as priority tick teekay to purchase.
Ross: <unk> lost whole bought tickets thorough this China were also provided with exclusive services such as reception on the transportation.
Ross: We also have Fiona Tse, Xue Kaiqi, staged her first 10,000-seat conference hall in mainland China. offering SVIPs early ticket access and fan meetings and great opportunities.
Ross: They also have their own assays Shanghai achieved stage.
Ross: First 10000 estate concert and Paul in mainland China.
Ross: Offerings ISO ashes early ticket <unk> and <unk> meeting and are great opportunities.
Ross: Additionally... We entrust our system, enabling SVIPs to unlock expanding rewards, deepening their sense of identity and community.
Ross: Additionally.
Ross: <unk> or <unk>, enabling <unk> to unlock expanding the doors deepening their sense of identity and the community.
Ross: Third, long-form audio content. particularly top IPs contributed to boosting SYP retention. In the first quarter, we created the audio drama The Grime Robbers Chronicles and co-developed it with original author Nanpai Sanshu, star voice actors, and top ten producers. Benefiting from interactive activities such as live streaming with the author and in-character voice commentary by the leading voice actors. It quickly gained popularity, surpassing tens of millions of streams within just 14 days.
Ross: Third long form audio content.
Ross: Particularly pulp ip's contributor posting <unk> retention.
Ross: In the first quarter.
Ross: Currently that the audio drama the <unk> chronicles tomo beauty.
Ross: Call developing it.
Ross: The original author Manpack essential a star wars actors on the top tier producers.
Ross: Benefiting from interactive activities, such as live streaming with the ulcer Annette incorrectly oils comment commentary by the leading wise actor.
Ross: These are quickly again.
Ross: Liberty.
Tens of millions upstream maintenance after 14 days.
Ross: On technology.
Ross: We continued to use AI to elevate user engagement.
Ross: By continuing to use AI to island with user engagement.
Ross: One example was introducing an interactive commentary feature that transforms music charts into conversations. Enhancing Fun Emotions Users can also personalize music effects switching between different vocals and instruments with one single click.
Ross: One example was introducing on integrating commentary commentary feature by the Transformers Music chart into conversations.
Ross: Fund emotion.
Ross: You also can also personalized music effects <unk> between different walkoff on the instruments with one single click.
Ross: In parallel, we adopted the DeepSeq LRM to help evaluate content quality and improve recommendation precision with user preferences.
Ross: In parallel with authoritative deep stake to have evaluate content the quality and the improved recommendation.
Ross: Inflation also provinces.
Ross: On the non-subscription side, advertising remains a key growth driver and continues to deliver solid year-over-year growth across the board.
Ross: On the non subscription side, our tightening remains a key growth driver and a continuous.
Ross: <unk> thought year over year growth across the board.
Ross: thanks to diversifying AD4 format. In particular, our innovative AD-supported model grew from strength to strength in the past quarter. We have also introduced a variety of interactive tasks for both paid and unpaid users, which saw an upward trend in engagement and adoption. Such positive trends provided us further confidence to continue to grow our advertising business as a whole. unlocking more potential in the future.
Ross: Thanks for that.
Ross: We're also fighting for mice.
Ross: In particular, our innovative AD supported model grow from strength to strength in the pasta pass the call to her.
<unk> also introduced.
Ross: Alrighty Av in the aggregate with task for both paid and unpaid users.
Ross: Upward trend in user engagement and adoption.
Ross: Sorry, the positive trends provided us further confidence to continue to grow our our <unk> business as a whole.
Ross: Unlocking more potential in the future.
Ross: Looking ahead, we remain committed to enhance, overcome competitiveness and pioneering new ways to inspire deeper and broader music engagement.
Ross: Looking at hydro.
Ross: We remain committed to enhance our competitiveness and our pioneering new ways to inspire deeper and broader engagement.
Ross: And.
Shirley: With that, I would like to turn the call over to Shirley, our CFO, for a deep dive into our financials. Thank you, Ross. Greetings to everyone.
journey: With that I would like to turn the call over towards journey, our CFO for a deeper dive into our financials.
Speaker Change: Thank you Ross.
Speaker Change: Teens to airlines now can we now turn to our financial results in Q1 of 2025 hour impacting monetization of online music services and operational management.
Shirley: Let me now turn to our financial results. In Q1 of 2025, our effective monetization of online music services and operational efficiency management continued to drive robust financial results with strong performance in our musical subscription and advertising business. Revenues continued to grow momentum and reach RMB 7.4 billion with a 9% year-over-year growth. Online music revenues increased by 16% year-over-year to RMB 5.8 billion. The increase was mainly driven by strong growth of our music subscription revenues and advertising revenues, supplemented by growth in revenues from artist-released merchandising and offline performance. Building subscription revenues in Q1 of 2025 reached RMB 4.2 billion, representing a 17% increase year-over-year and a 5% rise sequentially.
Speaker Change: Continue the trial.
The financial results.
Speaker Change: <unk> performance in our managed care subscription and advertising business.
Speaker Change: Revenues continued growth momentum and reached RMB seven 4 billion.
Speaker Change: 9% year over year growth.
Speaker Change: Milk as revenues increased by 16% year over year to RMB five eight inning the.
Speaker Change: The increase was mainly driven by strong growth of our music subscription revenues and other accounting revenues.
Speaker Change: Implementing a pie growth in revenues from August.
Speaker Change: And taxi and our client performance fees.
Speaker Change: Building subscription revenues in Q1 of 2025.
Speaker Change: Paul pointed to meeting.
Presenting a 17% increase year over year, and a 5% rise sequentially.
Shirley: Driven by continual expansion of the SYP membership program and reduced promotional activity, monthly up increased to RMB 11.4 this quarter, compared with RMB 10.6 in Q1 2024. To meet the evolving needs of our users, we keep enriching the rights and the privileges of our SRIP members, such as premium audio content, enhanced sound quality and effects, and early access to art related merchandise and live events. Advertising revenues also achieved a strong year-over-year growth, primarily due to the growth in AD-supported model revenues. With more interactive features and enriched benefits, we boosted the chance rate for AD-supported model advertising, enhanced the ECPM, and attracted more advertisers.
Speaker Change: Karen Bank continued expansion of the <unk> membership program and reduced promotional activity.
Speaker Change: <unk> App increased to RMB 9.4, this quarter compared with RMB 10, six in Q1 'twenty call.
Speaker Change: To meet the evolving needs of our users.
Speaker Change: Keep in reach the rights and privileges of our team members.
Speaker Change: Such as premium audio content enhance the sound quality and impact and early access to the nature of the merchant Bank and Atlanta.
Advertising revenues also achieved a strong year over year growth, primarily due to the growth in ADC pocket of motor revenues with more into acting through trust and.
Speaker Change: The benefits there.
Speaker Change: <unk>.
Speaker Change: Change in rate and is supported model advertising enhancing the ECP N and attracted more bite.
Speaker Change: But what has us means.
Shirley: Meanwhile, sponsorship advertising remains attractive to brand advisors. The success of our flagship music for passion, QQ音乐超级赠典之夜 event, was a great example to evidence this. Through offline event sponsorships, we would suggest advertiser partnerships while driving ecosystem monetization.
Speaker Change: Meanwhile, sponsorship, thereby passing remains attractive to ground myself.
Speaker Change: The success of our flagship newspaper passion, becoming conscious engines a year you went it was a good example to evidence base.
Speaker Change: Through offline Uinta sponsorships.
Jason: Jason what has the partnership's loud traveling ecosystem monetization.
Shirley: In addition to milk subscription and advertising, we have also made good progress on artist-related merchandise sales and offline performance. In Q1, we started shipping the physical album of Xiao Zhan released in Q4 2024 and the related revenues were recorded, resulting in a year-over-year revenue increase from artist-related merchandise sales. in addition with the increased opportunities in offline performance market. We've strengthened the partnership within the music industry and successfully hosted concerts featuring renowned artists leading to revenue growth this quarter.
Jason: In addition to milk subscription and advertising.
Jason: <unk> also made good progress.
Jason: T cell related the merchandise sales and top line performance.
Jason: In Q1, we started shipping the physical album of Showtime witnessed in Q4, 2024 and the related revenues.
Jason: Got it.
Jason: <unk> in a year over year revenue increase from 19, the merchandise sales.
Jason: In addition, with the increased opportunities in offline performance market.
Jason: Latest Janssen partnership leasing.
Jason: Industry and a successful.
Jason: Caused us build the node accurate leading to revenue growth this quarter.
Shirley: Social entertainment services and other revenues declined 12% year-over-year of RMB 1.6 billion.
Jason: So 10 minutes of ethics and other revenues declined.
Jason: 7% year over year of RMB, one 6 billion starting this quarter, we have ceased disclosing operating metrics for social and tend to be in this quarter.
Shirley: Starting this quarter, we have ceased disclosing operating metrics for social entertainment business on a quarterly basis. As we have shifted our strategic focus to our core music business, which has accounted for a growing dominant portion of our revenue, operating metrics for social entertainment business are no longer consistently the key drivers to our growth and prospects. Our growth margin improved to 44.1% and increased 3.2 percentage points year-over-year, driven by the following key factors. First, the strong growth of our subscription revenue driven by increased monthly ARTPU and advertising revenues has contributed to the growth of growth margin.
Jason: Positive phase.
Jason: We have shifted our strategic focus.
Jason: Our.
Jason: Music business, which has accounted for growing dominant portion of our revenue operating metrics for social entertainment business are no longer a concert slate of key drivers to our growth and that cost back.
Jason: Our gross margin improved to 44, 1% and increased us they've pointed to present take declined year over year driven.
Jason: Driven by the following key factors pasta.
Jason: <unk> growth of our subscription revenue driven by increased monthly Arpus and advertising revenues has contributed to the growth of gross margin.
Shirley: Revenue from raising membership and advertising in social entertainment services has also positively impacted our growth margin. Second, the scaling of our own content further improved our growth margin. Third, for social entertainment services, the decline in revenue-sharing fees outpaced the decrease in revenue. Fourth, with years of dedicated effort and investment, we have established a win-win relationship with labels and artists. This has enabled us to explore more partnership opportunities and monetization models with them and further improve our cost efficiency. On the operating efficiency side, we have maintained a strict financial discipline and ROI-focused promotional spending management, while directing investments toward long-term growth areas.
Jason: Revenues from leased in membership and advertising and social Entertainment services has also impacted our gross margin.
Jason: Second the scaling of our own content further improve our gross margin.
Jason: Our social entertainment services that decline revenue sharing fees.
Jason: The decrease in revenues.
Jason: Based on years of dedicated effort and the investment.
Jason: We have established the lingering limited shapes labels and artists.
Jason: This has enabled us to explore more partnership opportunities and monetization models with men and further improve our cost of interest rates.
Jason: On the operating EPS in fact, we have maintained a strict financial district in stapling, and I focused promotional spending manage and match now directing maximize towards long term growth areas.
Shirley: Operating expenses as a percentage of revenue decreased of 15.5% in Q1 2025, compared with 16.8% in the same period of last year. Our effective tax rate for Q1 2025 was 9.2% compared to 19.9% in the same period of 2024. The lower ETR was primarily due to the impact from gain on deemed disposal. We accrued withholding tax of RMB 118 million in Q1 of 2025. In Q1 2025, our net profit was RMB 4.4 billion, and the net profit attributable to equity holders of the company was RMB 4.3 billion. This quarter, we have received a 2% equity interest in UMG through a distribution income from an associate, which was designated as a financial asset.
Jason: Operating expenses as a percentage of revenue decreased.
Jason: 15, 5% in Q1 2025.
Jason: Comparatively.
Jason: Point to 8% in the same period of last year.
Jason: Our effective tax rate for Q1 2025.
Jason: Nine 2% compared to 19, 9% in S&P was up 2020 for the lower ETR was primarily due to the impact from gain on theme that is puzzle.
Jason: Accrued withholding tax of RMB 119, meaning in Q1 of 2025.
Jason: In Q1 2025, our net profit was RMB four point opening and the net profit attributable to equity holders of the company was RMB all playing the same feeling this.
Jason: This quarter, we have received 2% equity interest in <unk>.
Jason: So distribution in Canada.
Jason: Associate which was if I may take a financial asset.
Shirley: at a fair value to other comprehensive income and have recognized again of RMB 2.37 billion on deemed disposal of the associates. non-biased net profit increased by 23% to RMB 2.2 billion and the non-biased net profit attributable to active holders of the company increased by 25% to RMB 2.1 billion respectively. Our diluted earnings per ADS this quarter was RMB 2.77 and now our first diluted earnings per ADS was RMB 1.37 up by 26 year-over-year. This result underscored our effective monetization, enhanced operating efficiency, and the benefit from our share repurchase program.
Jason: And to feel value.
Jason: Other comprehensive income and have recognized again of RMB two according to.
Jason: <unk> 7 billion on theme that is cross sell up sell.
Jason: H.
Jason: Noncash networks increased by <unk> <unk>.
Jason: <unk>, 3% to RMB, two 2 billion and non <unk> net profit attributable to equity holders of the company increased by 25%.
Jason: Two 1 billion respectively.
Jason: Our diluted to earnings this.
Jason: This quarter was RMB two 9%.
Jason: David.
Jason: non-GAAP diluted earnings per ads was RMB.
Jason: 1030, <unk> up by 26.
Jason: Yeah.
Jason: This result, underscored our in fact through monetization enhanced operating basins and the benefit from our share repurchase program.
Shirley: as of March 3, 2025. I will combine the balance of cash cash equivalents and the short term for RMB $37.7 billion as compared with RMB $37.6 billion as of December 31st of 2024. This combined balance was also effected by the change in the exchange rate of RMB to USD, different balance sheet states.
Jason: As of March 31st.
Jason: But.
Jason: Our combined balance of cash cash equivalents.
Jason: And the short term.
Jason: RMB 37, 7 billion as compared with RMB 77, 6 billion as of December.
Jason: Empathetic burst of 2024.
Jason: This combined balance because honestly.
Jason: Change in exchange rate RMB to USD.
Jason: <unk> balance sheet.
Shirley: In March of 2025, we declared a cash dividend of US$0.09 per ordinary share, or US$0.18 per ADS, for the year ending December 31, 2024, and a cash payment for the dividend of US$275 million was made in April 2025.
Jason: In marketplace.
Jason: We planned our cash dividend.
Jason: On the other appointment as the owner.
Jason: Our ordinary shares.
Jason: The other point slide eight.
Jason: And at December 31 of 2024, and the cash payment for the dividend.
Jason: Yes.
Jason: 207, five meaning was made in April 2025.
Shirley: Looking ahead, we will prioritize high-quality growth in our music business by expanding SYIP memberships, growing our advertising business, and diversifying our offerings across the music value chain. We will continue to invest in original content production, high-quality content, and innovative technologies globally to further improve user engagement, user experience, and strengthen our ecosystem. We remain confident in the health growth prospects of the music industry that we are a part of and are committed to. delivering high-quality master music records for our shareholders.
Jason: Looking ahead, we will prioritize high quality growth in our mills to be nice, but expanding as viable memberships growing our advertising business and diversifying our offerings across the mills expanded chain.
Jason: We will continue to invest in Arlington accounting to production high quality content and innovative technologies globally.
Jason: <unk> improved user engagement and user experience and strengthen our ecosystem.
Jason: We remain confident in the house growth prospects of the music industry.
Jason: A part of and are committed to.
Jason: Given the high quality maximum returns for our shareholders.
Shirley: Let's conclude our prepared remarks.
Jason: This concludes our prepared remarks.
Millicent T: operator, we are ready to open the call for questions. Thank you, Shirley.
Jason: Operator, we are ready to open the call for questions.
Millicent T: If you are dialing in by phone, please press 5 to ask a question and then press 6 to unmute yourself.
Jason: Additionally, <unk> like to ask that question and then perhaps extend them yourself.
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Jason: And therefore from the Tencent meeting, although meet an application is create that reset button at the bottom left for the benefit of all participants on today's call. Please limit yourself to one question. If you have additional ones. Please re enter the queue.
Millicent T: For the benefit of all participants on today's call, please limit yourself to one question. If you have additional ones, please re-enter the queue.
Millicent T: If you ask your questions in Chinese, please repeat them in English.
Jason: A question in Chinese.
Lincoln Kong: And the first question comes to the line from Goldman Sachs, Lincoln. Lincoln, your line is open. Thank you, management, for taking my question. My question, well, congrats on that very solid first quarter performance.
Jason: Even English and the first question comes from.
Jason: From Goldman Sachs.
Nathan: Nathan Your line is open.
Nathan: Thank you management for taking my question.
Nathan: Question.
Nathan: Well congrats on a very solid first quarter performance.
Lincoln Kong: So can management share a bit more comment around the outlook for our top line profit growth for the next quarter, as well as for the full year 2025? Thank you. First of all, I would like to congratulate the management team for achieving a very bright and stable performance in the first quarter. My question is, in the next quarter, including the whole year of 2025, what is our outlook on revenue and profit? Thank you. Thank you, Lincoln, for your questions. Actually, we did a good job and achieved a strong result in Q1, which gives us confidence in the 2025 outlook.
Nathan: Okay merchant.
Nathan: Are there more come on or around the outlook for our top line and profit growth.
Nathan: Good quarter.
Nathan: For the full year 2025, thank you.
Nathan: And that can't keep declining.
Nathan: Shutdown with sequential anytime packages, which should actually come down yet and Linkedin and.
Nathan: Now we've already shipped.
Nathan: <unk> talked about adding our churn yet.
Nathan: Sure.
Yes.
Thank you Lincoln for your questions and actually we did a good job.
Nathan: A strong result in Q1, which gives us confidence in the 2025 outlook.
Ka Shing Pang: With our rich service offerings and also the compiling product experience, as well as our long-term commitment in participating in the value chain of the music industry, we expect the full-year, year-over-year growth rate to accelerate from last year, and we will continue to expand our margin as well. While the music subscription business remains our cornerstone with healthy growth, we continue to lead the way to encourage more music consumption, which has allowed users to engage with a wider range of music entertainment services. Our SVIP subscription program continues to inject new energy. And its unique offerings, such as the artist merchandise, non-form audio content, and concert, et cetera, will further enhance our user engagement and ARPPU expansion.
Nathan: With our risk service offerings and also the comparing product experience as well as our long term commitment and participating in the value chain of Mp's industry, we expect full year year over year growth rate to accelerate from last year, and we will continue to expand our margin as well.
Nathan: While the music subscriptions business remain our cornerstone with healthy growth, we continue to lead the way to encourage more music consumption, which has allowed users to engage with a wide range of music Entertainment services.
Our <unk> IP subscription program continues to inject new energy and is unique offerings such as the <unk> merchandise.
Nathan: <unk> audio content in concert et cetera, we will further enhance our user engagement and <unk> expansion.
Ka Shing Pang: So all these achievements reinforce our confidence in the long-term potential of the music industry and also our commitment to ongoing investment. So in conclusion, I think for the year 2025, for our subscription businesses, we will continue to deliver high-quality growth driven by both of the subscriber gains and the ARPPU expansion. And for the non-subscription businesses, improved advertising performance and product innovation will continue to drive the steady advertising revenue growth while deeper partnerships with music labels and artists will push the revenue for merchandise and concerts, et cetera. Thank you.
Nathan: All these achievements reinforce our confidence in the long term potential of the music industry and also our commitment to ongoing investment.
Nathan: So in conclusion I think for the years 2025 for our subscription businesses, we will continue to deliver high quality growth driven by both of the subscriber gains and <unk> expansion.
Nathan: And for the lawn subscription business improve the advertising performance and product innovation, we will continue to drive the steady advertising revenue grow while deeper partnerships with music labels and artists.
Nathan: The revenue fall merchandise and concepts et cetera. Thank you.
Speaker Change: Thank you and our next question comes from the line from Citigroup Alisha. Please proceed.
Alicia Yap: And the next question comes to the line from CD Group, Alicia. Please proceed. Hi, good evening, management. Thanks for taking my questions. Congrats on the solid results.
Nathan: Yeah.
Alisha: Hi, Good evening management, Thanks for taking my questions. Congrats on the solid results.
Alicia Yap: Questions is on how do management think about the growth opportunity of podcasts in China? Can you also share a little bit detail, the current, your long form audio user metrics and also revenue contribution? Thank you. Thank you very much, managers.
Speaker Change: Question is Hassan how do management think about the growth opportunity of pulp costs in China.
Alisha: Can you also share a little bit detail.
Speaker Change: Youre long form audio user metrics and also revenue contribution. Thank you.
Speaker Change: And our next Atlanta, Chicago, Atlanta, excellent English to Kieran.
Alicia Yap: Thank you very much for giving me the opportunity to ask this question. We have achieved a very solid and stable development in the first quarter.
Speaker Change: And each of those geographies are cash.
Speaker Change: Yes actually.
Alicia Yap: My question is this.
Alicia Yap: I would like to know about the growth opportunities of Pornhub in China in the future.
Speaker Change: Well the linkage again.
Speaker Change: Yep.
Speaker Change: Well wait a second.
Alicia Yap: Can you briefly introduce some of the relevant indicators of our current long-term audio users, including the overall income contribution to the company? Thank you.
Speaker Change: Nathan.
Speaker Change: Thank you Anna.
Speaker Change: <unk> sounds like it should be able to talk about their own selection to sugarcoat it.
Alicia Yap: In China, the form of Bokeh is divided into narrow and relatively wide Bokeh.
Speaker Change: It was warm.
Speaker Change: Sorry about that.
Speaker Change: <unk> by Samsung.
Speaker Change: Sorry go suddenly be alcohol population time.
Ka Shing Pang: Thank you very much. Thanks for the question. At least in domestic China market, when talking about podcast, it could be interpreted in narrow sense and the broader sense. If we talk about narrow sense, it's actually quite similar to American podcast. It's mainly in the form of a live broadcast, or a single-person conversation, or a multi-person conversation, to convey some personal opinions. This is actually very related to many opinion leaders. When interpreting the podcast from the network sense, actually, it's just like the normal podcast we mentioned. It can still be conducted in single-person live streaming or multi-people dialogue.
Speaker Change: Thank you very much. Thanks for the question at least in domestic China market when talking about us it could be interpreted in network test and the broadest sense.
John: John your share can.
Speaker Change: <unk> public costs that shipyard.
Speaker Change: So that's why I see corn share border each of one of the things you heard Taiwan, Thailand tariff on a voluntary hodosh impact buyer's huge one borgwarner is in Egypt, not only got you to chicken.
Speaker Change: <unk> two is going to fit on top.
Speaker Change: When interpreting the port cost from the network actually is just a normal course constantly mentioned a study conducted in single person lacks any amount people down market. It is a way to bring one of NPD. So it has everything to do with our Kols can you give us on that.
Ka Shing Pang: It is a way to voice one's own opinion. So it has everything to do with the KOLs. Although China's development is relatively slow in the U.S. and abroad, it still maintains a certain rate of growth. We are still paying attention to this part. Of course, its commercial value will still face a challenge. So we see that for podcast, in the rest of the world, especially in the US, it was developing very fast. But still in China, its coverage is quite limited, but still maintains some growth. So we continue to keep an eye on podcast business.
Speaker Change: All of our horizontal English I'll find out the Austrians without central Washington, I'm sure you've got Shanghai pharma Aprils on Hydro <unk> Hydro project, you can sell them, so they're going to take a chance if we're going to women.
Speaker Change: As you know control how the Cheniere.
Speaker Change: <unk> Shanghai chartered out of Chicago, where you thought you had held.
Speaker Change: Yeah.
Speaker Change: So we see that for podcast in the rest of the world, especially in U S. Inlets developing that is lost but its still in China is coverage quite limited, but still maintain some grants. So we continue to keep an eye on.
Ka Shing Pang: And for sure, regarding its commercial value, there will be some challenges.
Speaker Change: And for sure regarding its commercial study there will be some challenge.
Ka Shing Pang: So for us, we have been emphasizing that we will focus on the long audio business. This is similar to Spotify. We are more concerned with the audio industry itself. Actually, for our company, we're going to emphasize we prioritize the long-form audio business. Just like what has been done by Spoti, we really would like to continue to advance the long-form audio business. Actually, regarding the long-form audio, and we believe we continue to grow the user base. At the same time, it can also play a complementary role with our existing subscriber base. And most importantly, regarding the long-form audio business, we are more focused on listening to the books, online literature, and children-related content.
Michelle: <unk> Hello, Michelle you call them, it's only a quick one for <unk>.
Speaker Change: I'll take that you didnt fully.
Speaker Change: Spotify Lyft fulfill masuda, calling John question for you.
Speaker Change: Do women pension doesn't impinge on any lending.
Actually for our company welcoming to emphasize we prioritized the long form audio.
Like what has been done basketball team, we're ready with electric continued evidence the long form audio.
Speaker Change: So as the economy and Johnny we don't hit a woman she answer going back onto your two baking powder Hugo you want to weigh in Wuxi and I'm going to you know you are watching.
Speaker Change: You've got a whole hour mccombie, Angela high style Guangzhou or expansion.
Speaker Change: <unk> auto in Shanghai in an email.
Speaker Change: Battery regarding the long form audio and we believe we continue to grow the user base at the same time. He can also play a complementary about without representing that's quite okay.
Speaker Change: Not important data regarding the long form audio.
Speaker Change: We are more focused on listening to the books online literature and children related content.
Ka Shing Pang: So we think that the overall size of the users is relatively good. In our case, we have been able to get good results in terms of the number of users and the number of subscribers At the same time, it has become a driving force in the current SYP. So with our concerted efforts regarding the long-form audio user, no matter for the user base or the subscriber base, we indeed registered a very nice performance, and it has also become a key driver to advance our SBIP business. We believe that our music content and long-form audio content can be a way to complement each other, and at the same time, it can enhance the quality and quantity of our PME entire content library, and at the same time, provide a better service to our entire user base.
Speaker Change: So short term variable windmill, Shanghai should that you guys help me.
Speaker Change: How do you tell them.
Speaker Change: Louisiana onshore Woman-to-woman Jeremy's answer your.
Speaker Change: Question <unk>.
Speaker Change: I think it will weigh more high share.
Speaker Change: DNA will push a woman she brought on Ohio should have Johan <unk> post higher tongue away along with your iPhone IP demand Paydown question that you've got you've only.
Speaker Change: So with our concerted efforts regarding the long form audio use no matter, where the user base or the subsequent debates, we indeed registered a very nice performance.
Speaker Change: Also become a key trials that go against our SDI Keybanc.
Speaker Change: So on the Humana homegrown Tani, Pinot noir Tomer, your golf with young portfolio equal functional clumsy analogy southern Cal them Academy together, you're going to be on quota share downhaul slowdown cultural element so to them, it's I'm going to cheat ONEOK with humana or going out of the out of work.
Ka Shing Pang: So, in one word, we do believe our musical content and the long-form audio are going to play a complementary role to each other. It's also going to help to further enhance the quantity and quality of our entire TMP content library by providing our users a much better experience, even including the basic users.
Speaker Change: So inbound that we terminate our musical content and economic form audit financial play a complementary to each other it also going to help to further enhance the quantity and quality of our entire <unk> content library by providing our used at a much fedex damaged even including that basically is it.
Ellie: Okay, the next question comes to the line from Macquarie. Ellie, your line is open. Thank you, Millicent and management for taking my question.
Speaker Change: Okay.
Speaker Change: Question comes from the line from Macquarie Ellie Elliott lines Okay.
Speaker Change: Thank you Mellissa and management for taking my question I just have a question on Sdi's progress can management share some kind of operating matrix or a key kpis for SPX.
Ellie: I just have a question on SVIP progress. Can management share some kind of operating matrix or key KPIs for SVIP? What's the retention that we are seeing for the users that's being converted to the premium tier?
Speaker Change: What's the retention, yes, we are seeing for that that user assessment in order to choose the premium tier.
Ellie: And going forward, what would be kind of the ultimate kind of ceiling for the rPool extension?
Speaker Change: And going forward, what would be kind of the ultimate ultimate kind of ceiling for.
Speaker Change: Auto attention. Thank you.
Ellie: Thank you. Thank you very much.
Speaker Change: We got that chance and defining sounds like how we're going to generate in Lincolnshire, how Sci is assembling and thank you ladies and gentlemen, Thank you Joe as the more chance what kind of the sequencing of Kpis you ship is not for them over time as VIP on potential so I'm trying to ask FERC touch on prime yet.
Ellie: Thank you for answering my question.
Ellie: My question is related to SVIP. Can you please briefly share with us what are the key KPIs of SVIP? Including the current SVIP users, from the traditional SVIP to the primary end users, what is their specific memory rate?
Ellie: What is the future outlook? Especially what is the outlook of ARPBO? Thank you.
Speaker Change: Thank you.
Speaker Change: People love it.
Speaker Change: Okay.
Speaker Change: Yeah.
Ka Shing Pang: First of all, we are very satisfied with the overall progress of SYP. At the same time, we are also very happy to see that more and more brands, artists, and even other media platforms, including overseas, are starting to embrace such a new trend and start to do such a business as SYP. Thank you very much. Thanks for your question. Actually, for the management team, we are quite satisfied with SBIP business progress now. At the same time, we are pleased to see, at least from the content perspective, more labels and more artists, and even the live streaming platforms, including those ones from overseas markets, started to embrace the trend of SBIP.
Speaker Change: Oh, I'm, sorry, Anthony Porsche and I thought I saw actually the chunky Qingdao sure Donato.
Speaker Change: Either or.
Speaker Change: Total EMEA fit oncogenic <unk> wholly owned small dollar Tom either Union.
Speaker Change: Sure.
Johnny: Domains EBITDAR debacle highlights <unk>, Johnny I seem that you should go higher as you slow down as I've seen it on it yet.
Speaker Change: Thank you very much. Thanks for your question actually for the management team, we are quite satisfied with SAIC business progress now at the same time, we are pleased to see at least from the content of this vaccine.
Speaker Change: More labels and Milwaukee, and even the live streaming platform, including desktops samples at this market started to embrace the trend.
Ka Shing Pang: 这种高端的 Membership sets not only provide users with a diversified music and entertainment experience, but also allow artists to have more channels to interact with their fans, and at the same time increase their business opportunities. SCIP as a high-end membership package not only provides users with diversified music and entertainment experience, it also allows artists to access to their fans in multi-channels. It also increases opportunities for commercial value monetization. Currently, the penetration rate of SYP on the platform and ARP all show a very positive growth trend. So as we continue to improve our membership system, we will continue to launch more attractive exclusive rights and personalized services.
Speaker Change: On the.
Speaker Change: So I'm putting a.
Speaker Change: I'm going to hold him when he got harder.
Tony: Yes, Tony I don't know.
Tony: I'll go in order to get all of them were going to end up until June or don't Jose had some jostling of hanmi.
Tony: S. CIP at the high end membership package, not only provided <unk> with diversified and independent external.
Tony: It also about Audi to access without dense in multi channels. It also increased opportunity for commercial that is monetization.
Speaker Change: <unk> already done a bowtie changeover LNG doesn't timeshare. Please state owned lifestyle in Monaco and tissue penetration of faithful contribution neither essential Chinese gun goes off all pointing me Appalachia homebuilder youre, starting with renal failure oil, let me sounds, yes, but actually the financial going off of that so I don't want to hear that I saw an article actually left.
Ka Shing Pang: At the same time, we will also combine a more effective operating strategy. We believe that the payment number of SYP and ARP is... I mean, now, the payment number of SYP and ARP have achieved a steady growth in this quarter. So as nowadays, you can see for SVIP penetration ratio and ARPPU all demonstrate very strong growth momentum. We will continue to improve and polish our membership system, where at the same time, we are also going to launch more attractive perverted and tailor-made service to our users. But always our very effective operational strategy, we believe our SVIP paying user and ARPPU will continue to grow.
Tony: And it will go out, but those <unk> that we get from that.
Tony: And nowadays you can see for <unk> penetration ratio and AIP teu or demonstrate that a strong balance momentum, we will continue to improve and our membership system. While at the same time with us going to launch more attractive privilege and payer mix that is to I'll use them at all the ways how is that effecting.
<unk> strategy, we've made our SDI keep paying users and <unk> we're.
Tony: We're continuing to ground.
Ka Shing Pang: At least for this quarter, our paying user and ARPPU all demonstrate very good sequential growth.
Tony: Four days, our paying users and <unk>.
Tony: All demonstrate that occurred a sequential grafts.
Ka Shing Pang: So this is actually related to our strategic direction. In fact, one of the core goals of our Twitter SYP is to increase the value of our big disk. So from a practical point of view, it has already begun to show its pull on our up, and it is slightly faster than our previous expectations. Actually, rolling out SVIP business is strategically aligned with our overall strategy. When we launched SVIP, a key reason is because we really want to leverage SVIP to continue to improve the AR-PPU of our overall business. So from this perspective, SVIP started to play a driver role in demonstrating great results, and the growth is even faster than what we expected.
Tony: Not only a function of a sound one element sorry, it's all three.
Tony: So actually it's your question.
Tony: Ego mobile usage genome and Bob on the arbitrary not all of them at home strategy that John So, although I can't hardly any of them offered a lot of what you're getting Chrysler shallow RJ you acquire you won't see it.
Tony: Actually rolling out at the IP business is strategically aligned with our overall strategy when we launched <unk> a key rate in it because we really want to leverage the IP to continue to improve the arpus of our overall business. So from this is that Teva as VIP started to play a driver.
In demonstrating quite regarding ended around is even faster than what we expected.
Ka Shing Pang: So in 2025, we will continue to grow our SVIP business and keep a positive attitude. At the same time, we will continue to invest in high-value membership services, and keep in-depth cooperation with brands and artists, to further enhance the attractiveness and user satisfaction of our SVIP. So look into 2025, and we believe for SVIT business, we still maintain a positive attitude for its future growth. We're at the same time, we're also going to increase investment for the high-value membership service, continue to forge in-depth cooperation with labels and artists, and continue to improve our product appeal and customer satisfaction.
Tony: The only element to it.
Tony: Let alone changing hydropower shipyard, although one of Taiwan's corridor.
Tony: So I called out to the Delaware what on total top line guidance, partially functional hustle titanium, which you don't Wanna ISIL Afghanistan, They've got you don't mind.
Tony: Now look into 2025 and the need for SAIC, we still maintain a positive attitude or if ctrip rats.
Tony: At the same time with the answer going into increased investment with hindsight is membership studies continue to forge in desktop pension with labels and artists and content.
Tony: Our product and customer satisfaction.
Speaker Change: Thank you. The next question comes from Morgan Stanley Yang Yang Your line is open.
Liu Yang: The next question comes from Morgan Stanley Liu Yang. Yang, your line is open. Thanks for the opportunity.
Yang Yang: Thanks for the opportunity.
Liu Yang: I would like to ask about the ARPPU growth. The 7.5% year-on-year growth looks pretty good. Could management comment on the contribution from Super VIP and also the contribution from the less promotion activities to the overall ARPPU year-on-year growth?
Speaker Change: I would like to ask about the Arpus growth the seven 5% year on year growth looks pretty good.
Speaker Change: Management comment on the contribution.
Speaker Change: From our Super VIP and also the contribution.
Speaker Change: From the less promotion activities to the overall arpus year on year.
Liu Yang: Thank you. Thank you very much.
Speaker Change: Thank you.
Liu Yang: Thank you for giving me the opportunity to ask questions.
Jeff: Hey, guys, Jeff take Atlantica, <unk> linkage of our activity on the same conflict of.
Liu Yang: My question is related to the growth of ARPPO. The annual growth rate of 7.5% seems to be very bright. Could you please briefly explain how much of this growth is from the growth contribution of SBIT and how much is from some of our promotion activities?
Speaker Change: I think just to downward.
Speaker Change: Thank you.
Jeff: On the anchor shipper.
Jeff: <unk> how much is lenny thank you enforcing that Jonathan touched on lookout for Nike and SDI P. Davidson.
Jeff: I know you blush option at geolocation switch upwards.
Jeff: So it's just really the food you want financial platform in Australia.
Ka Shing Pang: It's not convenient for us to talk about the specific data. But we know that QE is also our holiday. We have done a better operation for the holiday. So we have reduced the force of discount. From our actual results, it has led to an overall improvement of ARP.
Jeff: Thanks, a million fit on shingle <unk> chassis now EMEA.
Jeff: So your HRT enabled element James Johnson, Yada, Yada Yada Yada Yada Union. Please you, but I'll, let me a shuttle a social element, even when the so-called illegal.
Jeff: I don't know its honestly the deal what I've heard Dino omni opting in to use them.
Ka Shing Pang: Thank you very much. Thanks for the question.
Speaker Change: Thank you very much. Thanks for the question actually is not appropriate for us to provide the breakdown, but let me just tell you. We are very clear in Q1 of every year would be a seasonal festivals and holidays and we indeed continue to optimize our operations.
Ka Shing Pang: Actually, it's not appropriate for us to provide you the breakdowns. But let me just tell you, we are very clear. Q1 of every year would be a season with festivals and holidays. And we indeed continue to optimize our operations in Q1. But at the same time, we also downsized the discount we provided to the market. And from the actual result, it indeed helped to further improve the ARPP.
Jeff: At the same time, we also downsized the east constantly provided to the market and from the actual wins algae. Indeed help does that improve arpus.
Ka Shing Pang: So from a practical point of view, we are still looking forward to the growth of SVIP itself, which can play a more active role in our future upgrades. Because of the marketing strategy itself, we are now slowly reducing it, and continue to promote the improvement of our own basic membership upgrades. So from the actual result, you can see, as I have already mentioned, we are still expecting the indigenous growth of SVIP businesses that can play an even bigger driver role to our overall ARPPU. Well, for the marketing strategy itself, and we have already started to further reduce it and continue to improve the ARPPU for our basic members.
So <unk> got.
Speaker Change: On the younger woman she yeah, Hi, Sheila can you isolate pension, though you've got some got nonvolatile memory like Amazon should I going to use low pension, though generally in California. The Moshe as you know what I'm hearing is you can pay down my monitors of which my mother, she chunky life since you're not allowed to treat all embracing digital where I know you've got opportunity you've got to you're talking about.
Speaker Change: So from the actual result, and you can see as I have already mentioned, we are still expecting the indigenous bench of SAIC.
Speaker Change: That can play an even bigger class by about two hours ago Arpus, whereas for the marketing strategy itself and we have our back and starting to side of it is.
Speaker Change: And continue to improve the AARP new for our basic mandate.
Ka Shing Pang: So for me, we will still pay close attention to the user feedback and market environment changes. So in the end, we can ensure that while improving the ARPPU, we can also ensure a healthy growth in the user experience and member scale. So, in one word, we are still going to keep an eye on the feedback from the users and the dynamics of the market. Because ultimately, what we hope to achieve is to continue to grow the ARPPU, while at the same time guarantee the user experience and the subscriber size healthy growth.
Speaker Change: So anyway I saw him either way metered a bundle we don't want to find great guns should help on Panama. So on and so you don't see Shandong gold share of our diet is an offer that hoelscher.
Speaker Change: With our ambition to younger and when they go to 10 horizontal.
Speaker Change: So inbound back we'll certainly keep an eye on the feedback from the user and the dynamics of the market because ultimately what we hope to achieve is to continue to grow arpus, where at the same time 70 next year and the stocks.
Speaker Change: That spread that site household crashed.
Speaker Change: Okay. Thank you. The next question comes from Alex Yao from Jpmorgan Aleksey.
Alex Yao: The next question comes from Alex Yao from J.P. Morgan. Alex, please. Thank you, management, for taking my question, and congrats on a solid quarter.
Alex Yao: Thank you management for taking my question and congrats on a solid quarter.
Alex Yao: So my question is on the non-paying subscribers. So basically, as we shifted towards this high-quality growth strategy, we'll be, I think, at least increasingly de-emphasizing the price-sensitive consumers who often come just for a deep discount. And once we cut the discount, these price-sensitive users tend to be just churned out of the membership user base. So the question is, now we probably need to de-emphasize more of those price-sensitive consumers.
Speaker Change: So my question is on the non paying subscribers.
Speaker Change: Subscribers, so basically as we shifted towards this high quality growth strategy.
Speaker Change: It will be I think or at least to Empress deemphasizing the price sensitive consumers, who often come just for deep discount once we consummate. These countries. These are price sensitive users tend to be just out of the membership user base.
Speaker Change: So the question is.
Speaker Change: Now we are probably more neutral de-emphasis more of those.
Speaker Change: Price sensitive consumers what is the monetization strategy.
Alex Yao: So what is the monetization strategy on these non-paying users? In the past couple of years, we've talked about advertising. So any updates on monetization of these non-paying members on advertising? And then other than advertising, do we have any other strategy or thoughts to monetize these non-paying members?
Speaker Change: Non paying users in the past couple of years, we've talked about our pricing.
Speaker Change: So any updates on monetization.
Speaker Change: These are non paying members.
Speaker Change: And then other than advertising do we have any other strategy or thoughts to monetize these non paying members. Thank you.
Alex Yao: Thank you. Thank you very much. Thank you, Management Team.
Speaker Change: Yeah, Thanks, Sanjay plenty sounds like Daniel the Lancashire mentioned day, one the guys faithful translate yet Joe Buckley.
Alex Yao: I have a question here specifically for our non-payment members. Because we all know that for these non-payment members, in general, they are all users who are sensitive to price. When the discount rate is relatively high, they will come. But when our discount rate decreases, they may disappear.
Speaker Change: Merchandise ages and faithful play definitely Ashley. Thank you my financial automaton neutral EBITDAR Catherine indexes category.
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Speaker Change: Generally, though we also have transportation chemicals production and then Jason Calgon <unk> actual wawa tonnage.
Alex Yao: For these users who are sensitive to price, how should we consider them in the future? Especially for customers who are sensitive to price, what is the specific strategy for the future?
Speaker Change: Our entire real quick to <unk>.
Speaker Change: I mean should the economy back in a couple of actually when I think you can see I cannot tell you how the answer.
Alex Yao: Especially in the past few years, I heard that the company also mentioned advertising. So for these non-payment users, what level of monetization have they achieved in advertising so far? In addition to advertising, do we have any other ideas or methods to monetize these non-payment users who are relatively sensitive to price in a progressive way?
Speaker Change: And we're taking them within our own for yet.
Speaker Change: No matter you guys yesterday.
Speaker Change: What actual how does that sound like a 40% then we cannot also beyond that.
Speaker Change: And then my last one I ship a hierarchy.
Speaker Change: What is your pump nangle Chi Tak here and show them that natural gas demand.
Speaker Change: <unk> put against that.
Speaker Change: Okay.
Ka Shing Pang: This question is actually a relatively complicated one because our measures are quite diverse especially for free users.
Speaker Change: Or is it going to unleash it looks really good.
Speaker Change: Suddenly, we often I don't Wanna enrolment, but.
Speaker Change: Fortunately we.
Speaker Change: <unk>, although you did on Tuesday October.
Ka Shing Pang: Thank you very much. Thanks for your question. This question is indeed very complex because we do have some measures to those so-called free users or the non-paying users. To put it simply, we still want to turn free users into paid users. This is our greatest value and our top priority. At the same time, it also brings us a more loyal user group and a continuous growth in revenue. So from our operational perspective, our operational focus still hope to convert those non-paying users into the subscribers. This might demonstrate the great value of the and it is also the priority of the company because, indeed, by so doing, we will be able to build a loyal user group and continue to grow our revenue in a sustainable way.
Speaker Change: Thank you very much. Thanks for your question and this question is indeed very complex because we do have some magic to announce saltwater rain usage or the non paying users.
Speaker Change: And then I was looking at Walmart, Canada told me I am sorry.
Speaker Change: Tony I don't actually see on Biomethane onboard you talked about a woman.
Speaker Change: On the following quarters. So let me say that the charter days I mentioned Xeon D OEM.
Speaker Change: <unk>, yes, I wish I can surely agreement that I mentioned, a woman controls the auction easier women young solar electricity the dongguan.
Speaker Change: So from our operational perspective, our operational forecast up to come back to it as non paying users into the sub spreadex this might demonstrate the quake.
Speaker Change: And it is also the priority of the company. It was indeed quite frankly about the April debuted Mcdonnell user group and continue to grow our revenue in a sustainable way.
Ka Shing Pang: Yes, so for those users who are not willing to pay the monthly fee for their music, our current more important solution is through our own incentive advertising method. One is our free model, and the other is our website. We are currently using these two methods to help users. In fact, we can still get a relatively good advertising revenue growth So, for those non-paying users, what we're doing now is to leverage incentive-based advertisements. First of all, we may have some free to listen music models, but at the same time, we also have the online earning measures.
Speaker Change: And I'm wondering as you did the <unk> Mayo.
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Speaker Change: Well, they're not paying you.
Speaker Change: We're doing now is to leverage incentivize incentive based advertising festival, we may have some greater Liza music model, but at the same time. They also have the online.
Speaker Change: Earnings measures.
Ka Shing Pang: By the two measures, we will be able to make sure we still retain the non-paying users, but be able to have a good advertising revenue from them.
Speaker Change: The two measures, we will be able to make sure.
Speaker Change: That non paying users, but be able to have a good advertising revenue from that.
Ka Shing Pang: Another important part is the revenue of our channel related to the fans' experience. Whether it's digital albums, fans' surroundings, download and purchase of singles, they are all another way for us to solve the non-paid users' business transformation. At the same time, we also see other sources of revenue related to the fans' economy. For example, like digital albums, or the fans' merchandise, or the singles on download and purchase. These are also ways to help us to monetize over those non-paid users.
Speaker Change: Meanwhile, you probably also a lot of potential in the.
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Speaker Change: Italy might require formal strategic favorite <unk> hold on you guys on your pension accounting.
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Speaker Change: We are at the same time, we also see other source of the revenue May 19, two defense economy. For example, like digital album Defense merchandising or the singles and download and purchase data also ranks to help us in many types of non paid visits.
Speaker Change: First on the iPhone material tender you did oriented boy. It may all thank all of failure whole polyethylene mentality or Hong Kong.
Speaker Change: We're not sure yet how are hall and show them the.
Ka Shing Pang: Generally speaking, for those non-paid users, we do leverage the offline performance. For example, like concerts, like merchandise, like the play of the fans' economy, including the advertisement, to continue to generate good business opportunities from those non-paid users.
Speaker Change: So the Dolby and investing for ancillary jingjing.
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Speaker Change: So I tell you Hey, you want without you Todd alcoholic Guangdong function that they were trying to deal with.
Speaker Change: So generally speaking for those non paying users.
Speaker Change: Leverage.
Speaker Change: <unk> performance for example in that context like merchandise like the play of defense economy, including advertising to continue to generate good business opportunities from those non paid visits.
Wei Xiong: Okay, the next question comes from UBS Wei Xiong. Please proceed.
Speaker Change: Okay. The next question comes from gave me a ratio. Please proceed.
Speaker Change: Yeah.
Wei Xiong: Hi, good evening management. Thank you for taking my question and congrats on the solid results. My question is about margins.
Speaker Change: Hi, Good evening management.
Speaker Change: Thank you for taking my question and congrats on the solid results.
Speaker Change: My question is about margins.
Wei Xiong: So our gross margin continued to expand sequentially this quarter and management shared different drivers behind that in the prepared remarks.
Speaker Change: Our gross margin continued to expand sequentially this quarter and maximize share different drivers behind that in the prepared remarks. So just wondering out of these drivers which ones do we see have higher potential for future too.
Wei Xiong: So just wondering out of these drivers, which ones do we see have higher potential for future to further drive up the upside of gross margin going forward? And do we have a medium target for that?
Speaker Change: Further drive up the upside of gross margin going forward and do we have a medium term target for that and also related to that considering our efforts and cost discipline.
Wei Xiong: And also related to that, considering our efforts in cost discipline, could you please also talk about the plans for OPACs this year and how should we think about the net margin trend as well? Thank you. In these many drivers, which one or which one can further drive up the rise of gross margin in the future? And what is the medium-term target for the rise of gross margin?
Speaker Change: Would you. Please also talk about the plans for old tax this year and how should we think about the net margin trend as well. Thank you.
Speaker Change: Yeah. Thanks, Jason Your line is underway tanker Kieran.
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Shirley: Another question is that I would like to ask Ms. Huang, in terms of cost discipline, what are the measures and efforts taken by the company so far, and what is the plan for the entire OPACs this year, and what will be the future trend of net margin? Thank you. We have just talked about several driving factors for net margin. Of course, the most important driving factor is the growth of our income, especially our member income and advertising income. In terms of member income growth, the growth of SOIP will also have a better driving factor for our net margin in the future.
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Shirley: Thank you very much. Thanks for your question. Just now, in the prepared remarks, we have already mentioned a few drivers for the ever-improving GP margin. And I think the most important driver is still the growth of the revenue, where at the same time, we also see the revenue growth from the subscribers and the advertising. And especially in the growth of the subscribers, the FBIT growth would likely to be a key driver for our future business improvement. Another important factor is that in terms of cost management, the way we manage costs and methods are also critical.
Tim: Thank you very much. Thanks for your question just I know in the prepared remarks, we have already mentioned a few drivers for the ever improving J D market and I think the most important driver.
Tim: If the revenue were at the same time, we also see the revenue growth from <unk> subscribers and in advertising and especially in the transfer of the subsequent first.
Tim: <unk> VIP friendship with them likely to be a key driver for our future business improvement.
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Shirley: We have been using the ROC method to manage our content costs, which has also made the overall cost growth far lower than our income growth. Well, at the same time, another very important factor we have to consider is the cost initiative. We continue to well control the cost. And the cost management methodology is also the key. We continue to adopt ROC in managing our content cost. At the same time, we make sure the cost growth is always lower than the revenue growth. On the other hand, we have been deepening and investing in the music industry for so many years.
Tim: It will mean that you wanted I don't see the bounds to achieve when you want to go there but.
Tim: So my guess is they don't want uncertainty that's about 10 minutes. So your Indian what months ago. So.
Tim: To do that.
Tim: At the same time and that is that an important factor we have to consider is our cost initiatives. We continue to well control the cost and the cost management methodology is also the key will continue to adapt our upstate in managing our content cost at the same time, we make sure the cost of grass is always slower than the revenue.
Speaker Change: Okay, nothing Ranga finally enrollment.
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Tim: So I'm going to go back to the total.
Shirley: We have also established a win-win cooperation with the record company. We will gradually see that these investments will produce better results. Not only in terms of cost, but also in terms of cooperation with more record companies, there will be more ways to monetize, which can improve our overall cost efficiency. Another factor I have to mention is that we were deeply rooted in the music industry with huge investments being made. So at the same time, we forged a very strong win-win partnership with the IP holder or the copyright owner. So this investment has already generated very good yield.
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Speaker Change: Social as well going into the pension Boston San Nicols.
Speaker Change: I'm, a shareholder and I called out Houston.
Speaker Change: Another factor I have to mention here that we're deeply rooted in the music industry links huge investments <unk> made so at the same time, we forged a very strong win win partnership wins, the IPL jet for the copyright.
Speaker Change: This investment has already generated that equity out.
Shirley: Not only helping us to well control the cost, we will be able to forge a deep bond with labels and artists. And therefore, it can help us to leverage multiple ways of monetization, which will also help to further improve our cost efficiency. In the long run, we believe that the key elements we just talked about will continue to play a role in 2025. We also believe that there is still room for further improvement in Maolili. So look into 2025 for the whole year, or even the year beyond 2025. I believe the factors being mentioned in our prepared remarks will continue to play their due roles.
Speaker Change: Not only helping us well control the cost will not be able to afford a bond with labels and artists and therefore, it can help us to leverage multiple ways of monetization, which will also help to further improve our cost efficiency.
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Speaker Change: So look into 2025 for the whole year or even the year beyond the time to quantify that I believe the fact as we mentioned in our prepared remarks, we'll continue to play there do routes in other bets, we believe our GP margin lift there.
Shirley: In other words, we believe our GP margin will still have room to further grow.
Speaker Change: To further grow.
Shirley: In terms of operating costs, we will continue to invest in the acquisition of new users and the promotion of content this year. Well, for your second question regarding the operating expenses, for the year of 2025, to our planned sales expense, majority of them will still be made for the acquisition of the news users and promotion of the content. So we expect that our sales costs will be slightly increased, but the overall growth rate will be lower than our revenue growth rate. So, we foresee there will be a slight increase in our sales expenses, but its overall growth should be lower than the growth of our entire revenue.
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Speaker Change: For your second question regarding the operating expenses for the year of 2025, two hour can self extension majority of them left therapy made for the acquisition of the new users and promotion of the content.
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Speaker Change: So we foresee there will be a slight increase in our sales expenses, but it's also about grants should be lower and the growth of our entire revenue.
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Shirley: 管理费用基本上也会保持一个持平的状态吧 Well, for the management exams, it was going to maintain a flat growth. So our net profit and net profit rate should have a certain room to improve compared to last year. So, compared with last year, our net profit and net profit, which will have room for further improvement. Thank you.
Speaker Change: Well for the management expense and were going to maintain a flat rents. So when does it go.
Speaker Change: Me doing clutching you'll need the English under each scenario, leading accusing hold yet.
Speaker Change: Compared with last year, our net profit and net profit late where it has to do for further improvement.
Speaker Change: Thank you. The next question comes from Barclays and Roger Washing your line is open.
Rocha: The next question comes from Barclays Rocha.
Rocha: Rocha, your line is open. Thank you so much for joining us. Yes, sorry. Go ahead, please.
Speaker Change: Okay.
Speaker Change: Can you yes.
Speaker Change: Yes, sorry, it got it.
Rocha: Thank you so much for taking my question and congrats on a very solid quarter. So my question is on international opportunities, especially in Southeast Asia. We have a very small footprint there, the Music App, JOOX, and also we're going to host G-Dragon's Southeast Asia tour this year. So could management talk about your thoughts on the opportunities in the region? And would that be an area of investment you take a look at this or maybe next year? Thank you. Thank you very much, Management Team. Thank you for giving me the opportunity to ask such a question.
Speaker Change: Thank you so much for taking my question and congrats on a very solid quarter. So my question is on international opportunities, especially in South East Asia.
Speaker Change: We have a very small footprint there than music App Jukes and also we're going to hold true Dragons southeast Asia towards this year. So can management talk about.
Speaker Change: Your thoughts on the opportunities in the region and would that be an area of investment you take a look at this for maybe next year. Thank you.
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Rocha: Congratulations to the Management Team for achieving very stable results in the first quarter.
Rocha: My question is about the development of international business and the opportunity of the international market, especially the development opportunities in Southeast Asia. At present, the total volume of our business in Southeast Asia is relatively small, but in the entire Southeast Asian region, including the GD Dragon, so can you please briefly share with me what is our specific view on the Southeast Asian market? Will we consider making further investments in the Southeast Asian market this year, or will we wait until next year?
Yeah, So I'm going to try to just answer that just because I don't know happy chief architect.
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Ka Shing Pang: Thank you. The international market has always been a very important strategic target for us.
Speaker Change: Core tissue someday woman, Niton 82, or three times and we are the eclipse handler mobile.
Ka Shing Pang: Thank you very much. Thanks for your question. International market is always a very important part of our overall strategy. Based on the current 1.2 billion yuan of our group's funds, the overall content and the overall development of our platform, we will also apply such funds to the overseas market. As now, our group does have a very strong overall strategy, and the strategy includes the content as well as the platform development. We are going to adopt the same strategy for our international business. We are going to focus on the content creation and local performance business. Well, from the platform perspective, we will continue to advance the construction of our platform, and especially here now, we did a good performance in Southeast Asia market.
Thank you very much. Thanks for your question in connection of market is always a very important part of our overall strategy.
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Speaker Change: And now on a group that has a very strong overall strategy and the distractions, including the content as well as the platform you might imagine we are going to adopt the same strategy for our international business.
Speaker Change: As a minimum and so I think that is a minimum equity issue towards the woman took some neighbor pinnatipartite securitize antenna demand now that the shoe Hudson soda ash mango charter tourist that hunting them for with salamander isn't the tissue tissue only liner woman, who had homegrown needham's entitled Nickel Cogent controlled as hungry side why do you choose a needle they're trying again you would see.
Speaker Change: <unk>.
Speaker Change: From the platform perspective, we will continue to advance the construction of our platform and especially can now we did a good performance in South East Asia market, but besides the product in aesthetics in prevention will also contribute the content ecosystem and continue to engage in the content equation in the emphasis.
Ka Shing Pang: But besides the product and the service improvement, we're also going to build the content ecosystem and continue to engage in the content creation in the overseas market, along with the offline performance opportunities being captured. So on the one hand, we hope that by continuing to invest in the content ecosystem, we can bring more high-quality content to our overseas platforms. On the other hand, we also hope to participate more in the overall content of music, as well as in the management of music artists, etc. So, on one side, we continue to invest in our content ecosystem, which will help to deliver high-quality content to our overseas platform.
Speaker Change: Market, along with the slide cocomat opportunities being captured.
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So on one side, we continue to invest in our content ecosystem, and which will help to deliver high quality content to our overstitch platform, where at the same time. We also hope that we can engage in that music content and Eva artist management, especially as you all know <unk> 70, the pin 90 minute, meaning the tissue the T cell.
Ka Shing Pang: At the same time, we also hope that we can engage in the music content and even artist management. So, in the past few years, we have continued to improve the operation of JOOX platform and we will continue to increase our participation and investment in the overall overseas market. For the past few years, we continue to improve our operational capacity of the platform, and also make huge investment on content. We will continue to engage the international market and make continued investment.
Speaker Change: It will move that needle and then there was a rule, which usually it's a woman's ads on T that high white sheet argument is how you're going to.
Speaker Change: Therefore, the positive here, yes may continue to improve our operational capacity of the platform and also making investment on content. We will continue to engage the international market and make continued investments. Thank you.
Fang Wei: And the next question comes from Ms. Juho Fang Wei. Fang Wei, your line is open. Okay, thank you. Thanks for taking my question and congrats on a good point.
Speaker Change: Thank you and the next question comes from Mizuho off Highway Highway your line is open.
Speaker Change: Okay. Thank you. Thanks for taking my question and congrats on a good point.
Fang Wei: I got one on advertising. So if I look at the non-stop music segment, right, I recall last quarter, there was some timing impact from offline events. And now this quarter, we see a good acceleration, right? Of course, the macro condition has changed a lot.
Speaker Change: I got one on advertising so if I look at the non stop music segment right.
Speaker Change: So last quarter, there was some timing impacts from a flight bans and now this quarter, we should get acceleration by of course, the macro condition has changed a lot.
Fang Wei: I was wondering if management can share any thoughts on the outlook for your advertising and also the pipeline for offline events business for the rest of the year. It would be great if you can also comment on some of your initiatives in terms of expanding to, for example, newer advertising verticals and also optimizing your ad bidding system. Thank you very much. Thank you very much for giving me the opportunity to ask such a question.
Wondering if management can share any thoughts on the outlook for your advertising and also the pipeline for fly event business for the rest of the year.
Speaker Change: It will be great. If you could also comment on some of your initiatives in terms of expanding too for example, newer advertising verticals and also optimizing your AD spending shifted thank you very much.
Speaker Change: Yeah. Thanks, Andrew the planning time give or tanker Kieran acutely console anytime that digital too that I think are now here.
Fang Wei: Congratulations to the management team for achieving very good results in the first quarter. One of my questions is related to advertising. If I look at our previous developments, I remember that in the last quarter, our main development was actually affected by some offline performances and time window situations. Now we see that the development of the entire industry is accelerating. Of course, the current macro situation may have a more obvious change compared to the last quarter. Could you please briefly share with me what you think about the prospects of advertising business in the coming period of this year, including offline concerts and related activities?
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Fang Wei: At the same time, could you please give us some specific advice on advertising, such as whether we should consider expanding to a new advertising vertical and how we can improve the advertising pricing system? Thank you.
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Ka Shing Pang: 哎,這個問題又分為兩長二短的在這裡。 先分開來看恐怖分子的現場廣告這個部分。 因為剛剛地幾所講的所有的廣告的型態是包含了 從位置上來看 就是我們現在閃屏的廣告和我們目前的 reel娛樂的廣告有兩種模式 其實我們的公司的職法會審核不同的建設 Thank you very much. Thanks for your question. And let me first talk about the advertisement, especially online advertising. As I have already mentioned, we do cover a wide range of the advertising formats. For example, we do have the splash screen advertisement, as well as the incentive-based advertisement. So from our whole exploration in the past one or two years, and from our data, our advertising revenue has grown well year by year. This is mainly due to our innovative advertising form. In the past one to two years, our advertising revenue does register a very strong YY growth.
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Speaker Change: Thank you Max Thanks for your question and let me first talk about the advertisement, especially online advertising.
Speaker Change: I have already mentioned, we do cover a wide range of advertising format. For example, we do have the screen advertisement as well as incentive based advertising.
Speaker Change: So if home Energy Inc.
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Speaker Change: In the past one to two yes, our advertising revenue does represent a very strong wildlife brands is mainly attributed to our innovative incentive based advertising.
Ka Shing Pang: It's mainly attributed to our innovative, incentive-based advertising. We believe that the free-to-listen method has already achieved a good result in the past two or three years. We believe that the online platform that we launched this year has a larger user base and a stronger drive. At the same time, we also found that the online platform has achieved beyond our expectations in terms of advertising revenue. Well, for the past two to three years, we continue to roll out a greater listen to the music business, which registered a very nice achievement. Starting from this year, we also started to launch the online earning business model, and the online business earning business model can help us to access to the larger user base with very strong motivation from the beginning.
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Speaker Change: Well for the past two to three years continue to roll out with greater listen to the music business, which registered a fairly nice achievements starting from Acs and started to launch the on my earnings call and online.
Speaker Change: In defense model can help us to access to the larger user base with having strong motivation.
Ka Shing Pang: Then we find out the online earning model actually be able to continue to advance, which will help us to make sure advertising revenue continues to go beyond our expectation. Regarding the advertising system, we are still adopting the advertising system from Tencent Group. No matter from its bidding capacity or from the advertiser expansion or the AI enabling, we do see the Tencent advertising system is making the industrial leading performance. And this can also help us to further grow our advertising-related revenue. So we actually observed that with our macroeconomic relative... Actually, we think it's not bad. So our current online advertising system, whether from the QE or from the current operating situation, we are all optimistic.
Speaker Change: And we find out I'll, let Ernie model actually be able to continue to advance which will help us to make sure advertising revenue continues to go beyond our expectation.
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Regarding the advertising system adapting the advertising system from Tencent quick.
Speaker Change: No matter from a speed and capacity from the advertiser expansion or the AI in mobile app, enabling we do see the Tencent advertising system is making the industrial leading platforms and today's can also help after startup our advertisers they think about it.
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Ka Shing Pang: For us this year, we are still very optimistic about the growth of advertising revenue. So actually, we also observed that the microeconomic picture is still looking right. So for the online advertising business, no matter in Q1 this year or the full year, at least from the operational perspective, we still maintain a very positive attitude on the advertising revenue for the whole year.
Speaker Change: After they were also upset the macroeconomic picture is pretty much the same for the online advertising Betsy no matter in Q1 <unk>.
Speaker Change: For the full yet at least from the operational perspective, we still maintain a very positive attitude on the advertising revenue, but it hasnt yet.
Ka Shing Pang: As for the concert, we can see that it has been a very active development in the past two or three years. After your second part of the question regarding the Earthlight performance, especially the concert, for the past two to three years, we do see the Earthlight performance continue to thrive. We are with a very strong growth momentum for the Erka performance.
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Speaker Change: I'm sorry, your second part of the question regarding the lack of demand, especially the content for constituted three yes, we do see the us microphone that continue to thrive.
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Speaker Change: With a very strong growth momentum for the <unk> I think our priority for CME group is continue to influence our quality of our performance.
Ka Shing Pang: I think the priority for TME Group is to continue to improve the quality of our performance business. After the two or three years of accumulation, we are also very happy to see that many of our partners, whether they are our strategic partner artists, as well as different record companies and partners, have given us a lot of support. We are also very grateful to them. For the past two to three years, we are also very pleased to see many of our partners, including the strategic artists we're working with, as well as labels and partners. They supported us a lot.
Speaker Change: People go to London, and liquid Chile, well first on the scene.
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Speaker Change: For the past two to three yes. We are also very pleased to see many of our partners, including strategic audience, we're working with as well as Naples and partners.
Speaker Change: <unk> adoption, we also would like to say, thank you to all of that.
Ka Shing Pang: We also would like to say thank you to all of them.
Ka Shing Pang: So at the moment, the most important thing for us is to make sure that there are certain things that must be done. The first is the tour of top artists that we just mentioned, especially the tour of G-DRAGON that we just mentioned, as well as other artists who are working with us. We hope that we can have a better cooperation with them in all aspects, and at the same time, we can share a very good and high-quality concert with our fans. So, at this moment, I think we have a few things that we need to do right and good.
Speaker Change: So it is unclear what Missouri blanking. This issue on the OTT O I to the CPE LP showed saw how big of a schulman contracts and validated <unk>, yet, Quebec on Taiwan men get hit other T cell agonists Junior you cheat sheet, either he said, it's anecdotal even while the Luciano Jose.
Speaker Change: And then Joe.
Speaker Change: Hello, you've got Peter how the Eagle Ford So don't see Gen paid out more than then they go up and so youll human.
Speaker Change: Our ego based on how the culture and the Union.
Speaker Change: Great.
Speaker Change: So at this moment I think we have a few things that we need to do right anchors and the first one is a tour of our auto, especially you mentioned in your question that Jean Jacques Dragon exports as well as some of the audience. We have strategic partnership with <unk>, We hope that it will not be able to provide them good support but at the same time offering.
Ka Shing Pang: The first one is the tour of our artists. Especially, you mentioned in your question, the G-Dragon tours as well as some of the artists we have strategic partnership with. We hope that we will be able to provide them good support, but at the same time, offering the audience or the fans a good opportunity to appreciate high quality of life. In addition, in our basic IP, especially Tencent Music Entertainment Center and QQ Music's super-peak GE, etc., we hope to have a better level of three steps this year. But at the same time, for our indigenous IP events, for example, like QQ Music for Passion, we do hope that we will be able to improve its performance for this year.
Speaker Change: Audience was a good opportunity to appreciate the high quality of life cycle.
Speaker Change: Do you like that woman featured with IP the capacity suddenly the continuing duration.
Speaker Change: Yes <unk>.
Speaker Change: Woman legal QQ getting good that's how cheap dental Jia dumbed up windows to animal Kingdom.
Speaker Change: Saying that I feel that <unk> got.
Speaker Change: Shaping.
Speaker Change: At the same time for our indigenous IP in that example, like QQ music profession, we do hope that well be able to improve each supplement for sure.
Ka Shing Pang: We hope that through these offline events, we can give all our users a full-fledged experience of music, and at the same time, we can fully demonstrate our SVIP privileges, thereby boosting the growth of our SVIP members. We hope by organizing or help to sponsoring those Earthlight performances, we will be able to provide a comprehensive musical experience to all of our users. We are at the same time to play the trump card of the SVIP privilege. In that way, we will be able to help to grow the SVIP subscriber base. We hope that we can fully reflect the T&D's one-stop-two-billion strategy and create more value.
Speaker Change: So at the moment as she went towards this has changed how the whole Don if I may ask the color you gave a woman so you'll hear either constrained from the way that you can get it on P. F. Chang's Eugenia creep element S. VIP, the Scotia and controlling the decentralized solar sytem lateral woman chunk of Sci Peter Liguori under jumped up.
Speaker Change: They have agonizing or help to sponsoring a format, we will be able to provide a comprehensive musical experiments to all of our users.
Speaker Change: At the same time to play the crosswalk.
Speaker Change: The IP prevented in that rate will not be able to have to put out the S. The IP subscriber base.
Speaker Change: So as to enrollment in the 11th hour <unk> either in the gold standards within a decentralized, but it turns out with other gotcha.
Ka Shing Pang: So ultimately, we hope that the TME overarching strategy with one body, two roots will be fully demonstrated.
Speaker Change: Ultimately, we hope that <unk> overarching strategy for somebody to.
Speaker Change: <unk> demonstrated in that way will create a greater body to that mark.
Ka Shing Pang: In that way, we will create a greater value to the market and the society.
Speaker Change: And our society.
Speaker Change: Thank you Catherine and thank you everyone for joining us today in the interest.
Millicent T: And thank you everyone for joining us today.
Millicent T: In the interest of time, this concludes today's call. And if you have any further questions, please feel free to contact the IR team. Thanks again and look forward to speaking to you next call. Thank you.
Speaker Change: This concludes today's call and if you have any further questions. Please feel free to contact the IR team. Thanks, again and look forward to speaking to you next quarter.
Speaker Change: Okay. Thank you.
Millicent T: Bye.
Speaker Change: Thanks.
Speaker Change: Yeah.