Bilibili Inc (BILI) 2018 Q1 法說會逐字稿

Operator: Good day and welcome to the Bilibili 2018 First Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Juliet Yang, Senior Director of Investor Relations. Please go ahead.

接線員：美好的一天，歡迎來到 Bilibili 2018 年第一季度財報電話會議。今天的會議正在錄製中。此時，我想將會議轉交給投資者關係高級總監 Juliet Yang。請繼續。

Thank you, operator.

謝謝你，接線員。

Please note today's discussion will contain forward-looking statement statements, relating to the future performance of the company and are intended to qualify for the safe harbor from liability, as established by the U.S. Private Security Litigation Reform Act. Such statements are not guaranteed of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control, and could cause actual results to differ materially from those mentioned in today's press release and this discussion.

請注意，今天的討論將包含與公司未來業績相關的前瞻性陳述，旨在符合美國《私人證券訴訟改革法案》規定的免責安全港的條件。此類陳述不保證未來業績，並受某些風險和不確定性、假設和其他因素的影響。其中一些風險超出了公司的控制範圍，可能導致實際結果與今天的新聞稿和本次討論中提到的結果大不相同。

A general discussion of risk factors that could affect Bilibili's business and financial results as included in further filings of the company with the Security and exchange commission. The company does not undertake any obligation to update this forward-looking information, except as required by law.

對可能影響 Bilibili 業務和財務業績的風險因素的一般性討論，這些風險因素包含在公司向證券交易委員會提交的進一步文件中。除非法律要求，否則公司不承擔更新此前瞻性信息的任何義務。

During todays' call, management will also discuss certain non-GAAP financial measures for comparison purpose only. For our definition of non-GAAP financial measures and reconciliation of gap to non-GAAP financial results, please see the 2018 first quarter financial results news release issued earlier today.

在今天的電話會議中，管理層還將討論某些非公認會計準則財務指標，僅供比較。有關我們對非 GAAP 財務指標的定義以及與非 GAAP 財務業績之間的差距對賬，請參閱今天早些時候發布的 2018 年第一季度財務業績新聞稿。

As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the Bilibili Investor Relations website at ir.Bilibili.com.

提醒一下，本次會議正在錄製中。此外，投資者介紹和本次電話會議的網絡重播將在 Bilibili 投資者關係網站 ir.Bilibili.com 上提供。

Joining us today on the call from Bilibili's senior management are Mr. Rui Chen, Chairman of the Board and chief executive officer, Ms. Carly Lee, Vice Chairwoman of the Board and Chief Operating Officer, Mr. Sam Fan, Chief Financial Officer. And now, I will turn the call over to Mr. Fan who will read the prepared remarks on behalf of Mr. Chen.

今天應Bilibili高級管理層的電話加入我們的是董事會主席兼首席執行官陳睿先生，董事會副主席兼首席運營官Carly Lee女士，首席財務官Sam Fan先生。現在，我將把電話轉給范先生，范先生將代表陳先生宣讀準備好的發言。

Thank you, Juliet, and thank you, everyone for participating on our first earnings call as a public company. I'm pleased to deliver the opening remarks on Mr. Chen's behalf. Our successful IPO on March 28 was an exciting milestone for us. I would like to take this opportunity to thank our supporting shareholders, talented content creators, and loyal users and the employees that helped make this happen. We will continue to work tirelessly to fulfill our mission to enrich the everyday life of young generations in China.

謝謝朱麗葉，謝謝大家作為上市公司參加我們的第一次財報電話會議。我很高興代表陳先生致開幕詞。我們於 3 月 28 日成功的首次公開募股對我們來說是一個激動人心的里程碑。我想藉此機會感謝我們的支持股東、才華橫溢的內容創作者、忠實用戶和幫助實現這一目標的員工。我們將繼續為豐富中國年輕一代的日常生活而不懈努力。

I'm very pleased to report excellent operational and the financial results for the first quarter 2018, with total revenues of RMB868 million, this marks growth of 105% year-over-year driven by all three of our core business categories: games, advertising and live broadcasting and value-added services. Our community continues to expand with 77 million monthly active users, representing a 35% increase year-over-year. By providing high-quality content and unique user interconnectivity, user can find hours of enjoyment across a diverse set of interests, covering a wide numbers of content categories.In the first quarter, our top five viewed categories were lifestyle, games, entertainment, technology, and anime, taking over 70% of total video views.

我很高興地報告 2018 年第一季度出色的運營和財務業績，總收入為人民幣 8.68 億元，這標誌著我們所有三個核心業務類別（遊戲、廣告）的推動下同比增長 105%以及直播和增值服務。我們的社區繼續擴大，每月有 7700 萬活躍用戶，同比增長 35%。通過提供高質量的內容和獨特的用戶互聯性，用戶可以在各種興趣中找到數小時的樂趣，涵蓋廣泛的內容類別。第一季度，我們瀏覽量排名前五的類別是生活方式、遊戲、娛樂、科技和動漫，佔視頻總觀看量的 70% 以上。

Over the years, we have successfully developed a robust online entertainment ecosystem comprising talented content creators and a highly engaged user base. In the first quarter, 89% of our video viewers were contributed by Professional User Generated Video, PUGV. To further encourage our content creators, we initiated a cash incentive program in February of this year. Any content creator with over 1,000 fans is eligible for a cash bonus, for his or her original content submissions, which depend on various matrix including popularity as well as quality feedback from users. We believe this program will bolster our content ecosystem even further, reinforcing Bilibili as one of the largest PUGV platforms in China. The number of active content creator, and their content submission increased 96% and 154% year-over-year, respectively.

多年來，我們成功開發了一個強大的在線娛樂生態系統，其中包括才華橫溢的內容創作者和高度參與的用戶群。在第一季度，我們 89% 的視頻觀眾來自專業用戶生成視頻 PUGV。為了進一步鼓勵我們的內容創作者，我們在今年 2 月啟動了現金獎勵計劃。任何擁有超過 1,000 名粉絲的內容創建者都有資格獲得現金獎勵，因為他或她提交的原創內容取決於各種矩陣，包括受歡迎程度以及用戶的質量反饋。我們相信該計劃將進一步加強我們的內容生態系統，鞏固 Bilibili 作為中國最大的 PUGV 平台之一的地位。活躍內容創建者的數量及其提交的內容分別同比增長 96% 和 154%。

In addition to PUGV, we also provide users with licensed content in a number of verticals including: anime, documentary and variety shows. Our business model enables us not to be solely reliant on licensed content to attract users, but rather to use it as addition to enhance our content ecosystem and monetization capability. During the first quarter, we selected several new animation series to promote our premium membership program. Premium membership are entitled to watch these new series one week in advance compare to non-premium members. Our users responded with high enthusiasm-over 2 million orders were placed for this program in Q1. Through this initiative, we believe we can not only offer users better viewing experience, but also promote other value added services, including live broadcasting, as a package in the near future, once users are converted from non-paying to paying users. The early success gives us great confidence in our ongoing monetization effort.

除了 PUGV，我們還為用戶提供多個垂直領域的授權內容，包括：動漫、紀錄片和綜藝節目。我們的商業模式使我們能夠不僅僅依靠授權內容來吸引用戶，而是將其用作增強我們的內容生態系統和貨幣化能力的補充。在第一季度，我們選擇了幾個新的動畫系列來推廣我們的高級會員計劃。與非高級會員相比，高級會員有權提前一周觀看這些新系列。我們的用戶反應熱烈——第一季度該計劃的訂單量超過 200 萬份。通過這一舉措，我們相信在不久的將來，一旦用戶從非付費用戶轉變為付費用戶，我們不僅可以為用戶提供更好的觀看體驗，還可以將包括直播在內的其他增值服務打包推廣。早期的成功使我們對正在進行的貨幣化工作充滿信心。

Now, let's take a closer look at our core businesses: Revenue from our mobile games grew 97% year-over-year led primarily by the continued popularity of Fate/Grand Order or FGO. FGO remains one of China's top-grossing games, and it reached record high monthly grossing revenue in the first quarter. We expect this game to continue to produce stable revenue throughout the year. We are confident that we can replicate the success of FGO to further diversify our game revenue stream. We have a strong pipeline with several thrilling new games planned for launch in the second half of the year, including BanG Dream, a music/role playing game, and two Romance RPG targeted for female audiences: A3! and Wu Fa Chu Peng de Zhang Xin. All of these games boast strong track records in Japan, which we believe is a good indicator for how the games will perform in China. We also have several high quality mobile games in our exclusively-operated games pipeline which are produced by well-known domestic content developers. On the joint-operated game front, we look forward to bringing a member of highly anticipated ACG games including Shining Nikki, Arknights, as well as Crossing Void to our users.

現在，讓我們仔細看看我們的核心業務：我們的手機遊戲收入同比增長 97%，主要是由於 Fate/Grand Order 或 FGO 的持續流行。 FGO 仍然是中國最暢銷的遊戲之一，並且在第一季度達到了創紀錄的月度總收入。我們預計這款遊戲全年將繼續產生穩定的收入。我們有信心可以復制 FGO 的成功，進一步豐富我們的遊戲收入來源。我們有一個強大的管道，計劃在下半年推出幾款激動人心的新遊戲，包括音樂/角色扮演遊戲 BanG Dream，以及兩款針對女性觀眾的浪漫 RPG：A3！和吳發楚彭德張欣。所有這些遊戲都在日本擁有良好的記錄，我們認為這很好地表明了這些遊戲在中國的表現。我們亦有數款由國內知名內容開發商製作的獨家經營遊戲管線中的優質手機遊戲。在聯營遊戲方面，我們期待為我們的用戶帶來備受期待的 ACG 遊戲成員，包括 Shining Nikki、Arknights 以及 Crossing Void。

Our immersive new content, user interaction and a growing community supports our advertising revenue growth of 144% year-over-year in the first quarter. Generation Z is a golden cohort targeted for all major brands. With Bilibili's status as the leading platform for this highly valued demographic, we are the "go-to" platform for advertisers targeting this group of active users. Our users spend considerable time on our platform, averaging 76 minutes per day, generating over 267 million daily video views in the first quarter, an increase of 137% year-over-year. This not only provide us with a built-in audience for advertisers, but also provides us with deep insights into our users' profiles, enabling us to curate the right feed ads. As a result, we believe we have huge room to grow across various advertising solutions. We expect continued growth in brand advertising, as well as our performance-based advertising as we expand our customer base and optimize the algorithm. We believe we are still in early stages of monetization with our advertising business and it has great potential to grow.

我們身臨其境的新內容、用戶互動和不斷發展的社區支持我們第一季度的廣告收入同比增長 144%。 Z世代是針對所有主要品牌的黃金群體。憑藉 Bilibili 作為這一高價值人群的領先平台的地位，我們是針對這一活躍用戶群體的廣告商的“首選”平台。我們的用戶在我們的平台上花費了大量時間，平均每天 76 分鐘，第一季度每天產生超過 2.67 億次視頻觀看，同比增長 137%。這不僅為我們提供了面向廣告商的內置受眾，還為我們提供了對用戶個人資料的深入洞察，使我們能夠策劃正確的 Feed 廣告。因此，我們相信我們在各種廣告解決方案方面有巨大的發展空間。隨著我們擴大客戶群和優化算法，我們預計品牌廣告以及基於績效的廣告將繼續增長。我們相信，我們的廣告業務仍處於貨幣化的早期階段，並且具有巨大的增長潛力。

Notably, we experience exceptional growth on the number of paying users in the first quarter, demonstrating our heightened monetization potential. Our average monthly paying users reached 2.5 million, a 190% increase year-over-year. The majority of this growth was supported by our monetization progress with live broadcasting and the value-added services, particularly with our newly introduced hosts that fit Bilibili's users' preferences and premium membership program as mentioned earlier. We are encouraged to learn that our users responded well with our monetization initiatives and they have high willingness to pay for quality content and services. As a result, revenue from live broadcasting and VAS business increased by 151% year-over-year.

值得注意的是，我們在第一季度的付費用戶數量出現了驚人的增長，這證明了我們更高的貨幣化潛力。我們的平均每月付費用戶達到 250 萬，同比增長 190%。這一增長的大部分得益於我們在直播和增值服務方面的貨幣化進展，特別是我們新推出的符合 Bilibili 用戶偏好的主機和如前所述的高級會員計劃。我們很高興得知我們的用戶對我們的貨幣化舉措反應良好，並且他們非常願意為優質內容和服務付費。直播和增值業務收入同比增長151%。

As we move through 2018, we plan to continue to enrich our content offering, improve the user experience and enhance our technologies and infrastructure that thrill our growing community of young minds. In April, we introduced a brand new Bilibili application for OTT platform, aiming to further expand our user reach. At the same time, we plan to strengthen our monetization capabilities by growing our user base and the number of paying users. In these ways that we can best support the expansion of our business while continuing to bring value to the content creators, our users, our community and all of our stakeholders.

隨著 2018 年的到來，我們計劃繼續豐富我們的內容產品、改善用戶體驗並增強我們的技術和基礎設施，以激發我們不斷壯大的年輕人群。 4 月，我們為 OTT 平台推出了全新的 Bilibili 應用程序，旨在進一步擴大我們的用戶範圍。同時，我們計劃通過擴大用戶群和付費用戶數量來加強我們的貨幣化能力。通過這些方式，我們可以最好地支持我們的業務擴展，同時繼續為內容創建者、我們的用戶、我們的社區和我們所有的利益相關者帶來價值。

This concludes Mr. Chen's comments. I will now provide a brief overview of our first quarter 2018 financial results.

陳先生的發言到此結束。我現在將簡要概述我們 2018 年第一季度的財務業績。

As Mr. Chen stated, our total net revenues increased by 105% to RMB868 million or $138 million year-over-year. With robust growth from all three primary business streams, our revenue further diversified.

正如陳先生所說，我們的總淨收入同比增長 105% 至人民幣 8.68 億元或 1.38 億美元。隨著所有三個主要業務流的強勁增長，我們的收入進一步多元化。

Our mobile games revenue increased by 97%, RMB688 million or $110 million year-over-year, representing 79% of total revenue. The increase was primarily due to the increasing popularity of mobile games such as FGO and Azur Lane.

我們的手機遊戲收入同比增長 97%，即人民幣 6.88 億元或 1.1 億美元，佔總收入的 79%。增長主要是由於 FGO 和 Azur Lane 等手機遊戲的日益普及。

Our Live Broadcasting and VAS revenues increased by 151% to RMB96 million or $15 million, year-over-year representing 11% of the total revenue, mainly attributable to our enhanced monetization efforts and promotion of our live broadcasting and the introduction of our premium membership program.

我們的直播和增值服務收入增長 151% 至人民幣 9,600 萬元或 1,500 萬美元，同比增長佔總收入的 11%，主要是由於我們加強貨幣化力度和推廣我們的直播以及引入我們的高級會員程序。

The advertising revenue increased by [144%] (corrected by company after the call) to RMB70 million or $11 million year-over-year representing 8% of the total revenue. The increase was driven by the robust growth of our advertising revenue from brand advertising and the launch of performance based advertising business in December 2017.

廣告收入同比增長[144%]（由公司在電話會議後更正）至人民幣7,000萬元或1,100萬美元，佔總收入的8%。這一增長是由於我們來自品牌廣告的廣告收入的強勁增長以及 2017 年 12 月推出的基於效果的廣告業務。

Our other revenues increased by 65% to RMB13 million or $2 million year-over-year representing 2% of the total revenue. Primarily attributable to an increase in the sales of products through our e-commerce platform.

我們的其他收入同比增長 65% 至人民幣 1,300 萬元或 200 萬美元，佔總收入的 2%。主要由於通過我們的電子商務平台銷售的產品增加。

Cost of revenue increased by 80% to RMB655 million or $104 million from the same period of 2017. Revenue-sharing cost, a primary driver of cost of revenues, was RMB335 million, or $53 million, representing a 120% increase year-over-year.

收入成本較 2017 年同期增長 80% 至人民幣 6.55 億元或 1.04 億美元。收入分成成本是收入成本的主要驅動因素，為人民幣 3.35 億元或 5300 萬美元，同比增長 120%。年。

Gross profit increased by 249% to RMB213 million or $34 million, from the same period of 2017.

毛利潤較 2017 年同期增長 249% 至人民幣 2.13 億元或 3400 萬美元。

Total operating expenses increased by 107% to RMB287 million or $46 million, from the same period of 2017.

總運營費用較 2017 年同期增長 107% 至人民幣 2.87 億元或 4600 萬美元。

Sales and marketing expenses were RMB79 million, or $13 million, representing a 93% increase year-over-year. The increase was primarily attributable to the increased channel and marketing expenses associated with our app, as well as promotional expenses for our online games.

銷售和營銷費用為人民幣 7,900 萬元或 1,300 萬美元，同比增長 93%。增長主要歸因於與我們的應用程序相關的渠道和營銷費用增加，以及我們的在線遊戲的促銷費用。

General and administrative expenses were RMB 103 million or $16 million representing a 140% increase year-over-year. The increase was primarily due to share-based compensation expenses with an IPO condition and an increase in professional service fees.

管理費用為 1.03 億元人民幣或 1600 萬美元，同比增長 140%。增加的主要原因是具有首次公開募股條件的股權補償費用和專業服務費用的增加。

Research and development expenses were RMB106 million or $17 million representing a 92% increase year-over-year. The increase was primarily due to increase headcount in research and development.

研發費用為人民幣1.06億元或1700萬美元，同比增長92%。增加的主要原因是研發人員增加。

Loss from operations was RMB74 million or $12 million compared with RMB78 million in the same period of 2017. Income tax expense was RMB3 million, or $0.5 million, compared with RMB2 million in the same period of 2017.

經營虧損為人民幣 7,400 萬元或 1,200 萬元，而 2017 年同期為人民幣 7,800 萬元。所得稅費用為人民幣 300 萬元或 50 萬元，而 2017 年同期為人民幣 200 萬元。

Net loss totaled RMB58 million or $9 million for the first quarter of this year, compared with RMB67 million in the same period of last year.

今年第一季度淨虧損總額為人民幣5800萬元或900萬美元，而去年同期為人民幣6700萬元。

Adjusted net loss which mainly excludes share-based compensation expenses and amortization expense relate to intangible assets acquired through business acquisition, improved by 95% to RMB3 million, or $0.5 million, from RMB60 million in the prior year period.

調整後的淨虧損（主要不包括股權補償費用和與通過業務收購獲得的無形資產相關的攤銷費用）從去年同期的人民幣 6,000 萬元減少 95% 至人民幣 300 萬元或 50 萬美元。

Basic and diluted net loss per share was RMB1.73. Non-GAAP basic and diluted loss per share were RMB0.94.

每股基本及攤薄淨虧損為人民幣1.73元。非美國通用會計準則每股基本及攤薄虧損為人民幣 0.94 元。

As of March 2018, we had cash and cash equivalents, as well as time deposits of RMB1 billion or $168 million compared with RMB 765 million as of December 31, 2017.

截至 2018 年 3 月，我們的現金和現金等價物以及定期存款為 10 億元人民幣或 1.68 億美元，而截至 2017 年 12 月 31 日為 7.65 億元人民幣。

Net cash provided by operating activities was RMB471 million, or $75 million, compared with RMB206 million in the same period of 2017.

經營活動提供的現金淨額為人民幣 4.71 億元，即 7500 萬美元，而 2017 年同期為人民幣 2.06 億元。

As we look ahead, our financial goals are to continue improving our operational efficiency while further growing our business. With that in mind, we are currently projecting net revenues for the second quarter to be between RMB970 million and RMB1 billion.

展望未來，我們的財務目標是繼續提高我們的運營效率，同時進一步發展我們的業務。考慮到這一點，我們目前預計第二季度的淨收入將在人民幣 9.7 億元至人民幣 10 億元之間。

Thank you for your attention. We would like now to open the call to your questions. Operator, please go ahead.

感謝您的關注。我們現在想打開您的問題的電話。接線員，請繼續。

Thank you. Ladies and gentlemen, if you wish to ask a question today, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key.

謝謝你。女士們，先生們，如果您今天想問一個問題，請在您的電話上按星號，等待您的名字被宣布。如果您想取消您的請求，請按井號或井號鍵。

For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

為了今天電話會議的所有參與者的利益，如果您想用中文向管理層提問，請立即用英文重複您的問題。

Once again, it is star one if you wish to ask a question today. Your first question comes from the line of Daniel Chen from JPMorgan. Please ask your question.

再一次，如果您今天想問一個問題，它是一星。您的第一個問題來自摩根大通的 Daniel Chen。請提出你的問題。

(Spoken in Foreign Language).

（用外語講）。

Hi. I will translate myself. First, the question is regarding our user acquisition strategy. Our MAUs had grown very decently sequentially on a year-over-year basis this quarter. Could the management provide some color on your strategies to further grow your user base in the Generation Z?

你好。我會自己翻譯。首先，問題是關於我們的用戶獲取策略。本季度，我們的 MAU 同比增長非常可觀。管理層能否為您的策略提供一些色彩，以進一步擴大 Z 世代的用戶群？

Second question is regarding our gaming revenue including live broadcasting, advertisement, and also membership. This actually grew very strong -- growing strong sequentially on a year-over-year basis. So, what's management view on our revenue breakdown in the three to five years? Are we expecting that this had to account for a much bigger -- much bigger portion?

第二個問題是關於我們的遊戲收入，包括直播、廣告和會員資格。這實際上增長得非常強勁——同比增長強勁。那麼，管理層對我們在三到五年內的收入細分有何看法？我們是否期望這必須佔更大 - 更大的部分？

The third question is regarding to our support to the content providers. So, we have a scheme to do the revenue sharing with all the content provider. So, could we have some update on this front? And what's our strategy to motivate all the content creators to create the valuable user-generated content on our platform?

第三個問題是關於我們對內容提供商的支持。因此，我們有一個與所有內容提供商進行收益分享的計劃。那麼，我們可以在這方面進行一些更新嗎？我們有什麼策略來激勵所有內容創建者在我們的平台上創建有價值的用戶生成內容？

Thank you.

謝謝你。

Thank you, Daniel.

謝謝你，丹尼爾。

(Spoken in Foreign Language).

（用外語講）。

Okay. I'll translate for [Mr. Li] for the first question. As you can see, our user growth is very healthy and on a stable rate and Mr. Chen concluded three reasons. One is our very healthy PUGV ecosystem that we have a very positive virtual cycle that we have more PUGV content creator, creating more content, attracting more users.

好的。我會為[Mr.李]第一個問題。如您所見，我們的用戶增長非常健康，而且速度穩定，陳先生總結了三個原因。一個是我們非常健康的 PUGV 生態系統，我們有一個非常積極的虛擬循環，我們有更多的 PUGV 內容創建者，創造更多的內容，吸引更多的用戶。

As we are focused on the depth of the categories, we're also expanding the content category. For example, in this quarter, the entertainment verticals are expanding not much faster than our traditional ACG content category as we expanded to more content vertical that will attract more content creators to create more high-quality contents. So, in that way, we don't actually have to spend a lot of money to stimulate the growth of users but rather to rely on our healthy ecosystem. That's the first point.

由於我們專注於類別的深度，我們也在擴展內容類別。例如，在本季度，娛樂垂直領域的擴張速度並不比我們傳統的 ACG 內容類別快多少，因為我們擴展到更多內容垂直領域，這將吸引更多內容創作者創作更多高質量的內容。所以，這樣一來，我們實際上不必花很多錢來刺激用戶的增長，而是依靠我們健康的生態系統。這是第一點。

The second point is we also focus on a lot of the new content that attracts young minds attention. For example, in the livestreaming category, we are actively searching for new mobile games that attract a lot of users' attention. We also invested in our own E-Sports team which we called BLG. All of these contents are also driving the growth of our MAUs.

第二點是我們也關注了很多吸引年輕人注意力的新內容。例如，在直播類，我們正在積極尋找吸引大量用戶關注的新手游。我們還投資了我們自己的電子競技團隊，我們稱之為 BLG。所有這些內容也在推動我們 MAU 的增長。

And third point, as you can see, we have an excellent long-term and short-term user retention number. At the same time, we're also actively expanding our channel acquisitions, for example, for pre-download, pre-installment or download on app stores through these three areas. That's how we achieved our sustainable user growth.

第三點，如您所見，我們擁有出色的長期和短期用戶留存率。同時，我們也在積極拓展我們的渠道獲取，例如通過這三個領域進行預下載、預安裝或在應用商店下載。這就是我們實現可持續用戶增長的方式。

(Spoken in Foreign Language).

（用外語講）。

Okay. I'll translate for Mr. Chen.

好的。我給陳先生翻譯。

Mr. Chen gave three reasons that's how we're going to help our content creator to better incentivize them. So, as all of you may know that 89% of our daily [BD] are contributed by our PUGV. The content creates the way that how we incentivize our content creators remains our top priority.

陳先生給出了三個原因，說明我們將如何幫助我們的內容創作者更好地激勵他們。所以，你們可能都知道，我們每天 89% 的 [BD] 都是由我們的 PUGV 貢獻的。內容創造了我們如何激勵我們的內容創作者仍然是我們的首要任務的方式。

So, the first point is we have a very comprehensive service system to support the content creation of our content creators that would supply them with full access of our backstage data, supply them with tools to analyze how their work has been viewed by different users and what's their feedback and how many of them were from which area by a number of matrix to help them to better analyze and help them to create better content. We also have a systematic training program to help to train newcomers to lead them on the way of becoming top content creators.

所以，第一點是我們有一個非常全面的服務系統來支持我們的內容創建者的內容創建，這將為他們提供對我們後台數據的完全訪問權限，為他們提供工具來分析他們的工作是如何被不同用戶查看的，以及他們的反饋是什麼，他們中有多少來自哪個領域，通過一些矩陣來幫助他們更好地分析並幫助他們創造更好的內容。我們還有一個系統的培訓計劃，幫助培訓新人，帶領他們成為頂級內容創作者。

And second, as the content creator incentivize program that we launched in February this year, as you may know, the top content creator can make decent income on our platform. But what we focus more is how do we bring the content creators that just started or in the middle area, to bring them to the top.

其次，作為我們今年2月推出的內容創作者激勵計劃，大家可能知道，頂級的內容創作者可以在我們的平台上獲得可觀的收入。但我們更關注的是如何把剛剛起步或者處於中間區域的內容創作者，帶到頂端。

As we mentioned during the conference call that we provide a cash incentivize program for the content creator with 1000 fans and the cash bonuses is based on the popularity as well as the positive user feedback from this video, not just directly linked with what kind of income that we can receive from this video.

正如我們在電話會議中提到的，我們為擁有 1000 名粉絲的內容創作者提供現金獎勵計劃，現金獎勵是基於該視頻的受歡迎程度以及用戶的積極反饋，而不僅僅是與什麼樣的收入直接相關我們可以從這個視頻中得到。

So, the effect of the incentivize programs were very clear in the Q1. The number of active content creator and their content submission number increased significantly year-over-year. And going forward will also supply some -- much more comprehensive incentivize programs that will support them from not just the cash basis but also provide them with marketing tools and help them to achieve better economic benefit based on various matrix. Not simply rely on the traffic income.

因此，激勵計劃的效果在第一季度非常明顯。活躍內容創建者的數量和他們的內容提交數量同比顯著增加。未來還將提供一些更全面的激勵計劃，不僅從現金基礎上為他們提供支持，還為他們提供營銷工具，並幫助他們基於各種矩陣獲得更好的經濟效益。不能單純靠流量收入。

Okay. I will take your question. If you take a look at revenue mix in 2017 that there were 82% of revenue from games, 7% from the live broadcasting and 7% from advertising revenue.

好的。我會回答你的問題。如果你看一下 2017 年的收入組合，82% 的收入來自遊戲，7% 來自直播，7% 來自廣告收入。

We are happy to see that we -- when we achieved the record-high mobile game revenue in the first quarter of this year, our revenue] further diversified because we have our user base that have high willingness to pay for quality content and services and we have great potential for advertising business as we mentioned in our press release.

我們很高興看到我們——當我們在今年第一季度實現創紀錄的移動遊戲收入時，我們的收入]進一步多元化，因為我們的用戶群對優質內容和服務的支付意願很高，並且正如我們在新聞稿中提到的那樣，我們在廣告業務方面具有巨大潛力。

Now, the revenue mix does contributions for live broadcasting. They are 11% and 8% from the advertising revenues. We proceeded after three to five years, about 50% of the total revenue on the online game and this is 30% from advertising and 20% on live broadcasting and value-added services. Does that answer your question?

現在，收入組合為直播做出了貢獻。它們分別來自廣告收入的 11% 和 8%。我們在三到五年後進行，大約 50% 的總收入來自網絡遊戲，其中 30% 來自廣告，20% 來自直播和增值服務。這是否回答你的問題？

Thank you. That's very helpful.

謝謝你。這很有幫助。

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

您今天的下一個問題來自摩根士丹利的 Alex Poon。請提出你的問題。

(Spoken in Foreign Language).

（用外語講）。

I'll translate my questions. First question is regarding MAU and content creator growth. I would like to understand the split of this MAU and content creator growth by age and also by geographical region.

我會翻譯我的問題。第一個問題是關於 MAU 和內容創作者的增長。我想了解按年齡和地理區域劃分的 MAU 和內容創作者增長情況。

And my second question is regarding the competitive landscapes on both the game side and the shared video side. PUBG ramped up very strongly in terms of DAU. Have you seen any impact from PUBG affecting your game user?

我的第二個問題是關於遊戲方面和共享視頻方面的競爭格局。 PUBG 在 DAU 方面增長非常強勁。您是否看到 PUBG 對您的遊戲用戶有任何影響？

And second is for shared video, the time spent in DAU growth is very strong for these platforms. Do you see any challenge from them taking your user time spent or will create pressure for your MAU growth in the future? Thank you very much.

其次是共享視頻，這些平台花費在 DAU 增長上的時間非常強勁。您是否認為他們會佔用您的用戶時間，或者會為您未來的 MAU 增長帶來壓力？非常感謝。

(Spoken in Foreign Language).

（用外語講）。

Okay. I'll translate the first question. So, as we further -- our business grow, in 2018, our daily average new user increase as actually accelerated compared to last year. And if we analyze the data in Q1, the new users, we see the portion that comes from above age 19 is increasing and we also see a clear penetration from lower tier city, more users from Tier 3 and Tier 4 city are coming in -- this is also in line with how the pop culture are penetrating from more developed area to less developed area.

好的。我將翻譯第一個問題。因此，隨著我們業務的進一步增長，2018 年，我們的日均新用戶增長實際上比去年加速了。如果我們分析第一季度的數據，新用戶，我們看到來自 19 歲以上的部分正在增加，我們也看到來自低線城市的明顯滲透，更多來自 3 線和 4 線城市的用戶進入 - - 這也符合流行文化從較發達地區向欠發達地區滲透的方式。

And [under interest scope], we noticed that a lot of our new user have more extended interest and how this compared to our old users and we can see that they have much wider habits and interest, for example, in entertainment and documentary, those verticals are growing very nicely, thanks to our new users that we've expanded in scope and that is also a good sign which means we're extending our content offering as well as our target audience.

[在興趣範圍內]，我們注意到我們的很多新用戶有更多的興趣，以及與我們的老用戶相比，我們可以看到他們有更廣泛的習慣和興趣，例如，在娛樂和紀錄片方面，那些垂直行業的增長非常好，這要歸功於我們擴大了範圍的新用戶，這也是一個好兆頭，這意味著我們正在擴展我們的內容提供以及我們的目標受眾。

And lastly is from the platforms, we also see the Android users are coming -- are increasing more than iOS users. This is also in line with how this is divided in China, where there's clearly more Android user entering the market.

最後是來自平台，我們還看到 Android 用戶正在到來——比 iOS 用戶增加更多。這也符合中國的劃分方式，顯然有更多的 Android 用戶進入市場。

(Spoken in Foreign Language).

（用外語講）。

Okay. So, on the competition landscape on game wise, clearly, there's no impact from the PUBG games with our games. It's obvious that even before PUBG, there's Honor of Kings and League of Legend and our game has been performed steadily with a very stable growth rate.

好的。因此，在遊戲方面的競爭格局上，很明顯，PUBG 遊戲對我們的遊戲沒有影響。很明顯，在絕地求生之前，有王者榮耀和英雄聯盟，我們的遊戲表現穩定，增長率非常穩定。

The logic behind our game of business is different from other regular game companies that is our business model is to -- is to find our existing massive user base interest and habits and find the right content, right game that fits their interests and recommend it to them.

我們的商業遊戲背後的邏輯不同於其他常規遊戲公司，我們的商業模式是——找到我們現有的海量用戶群興趣和習慣，找到合適的內容、適合他們興趣的遊戲並推薦給他們。

So, we will obviously continue to -- continue to bring new games and offer the games to our users' benefit, and there's very little impact from how these games evolve outside our ecosystem.

因此，我們顯然會繼續——繼續推出新遊戲並為我們的用戶提供遊戲，這些遊戲在我們的生態系統之外的發展方式幾乎沒有影響。

And from -- on the data point, you can see our users, our active game users, our income and their time spent are actually growing. This also supports our theory.

從數據點上，你可以看到我們的用戶，我們的活躍遊戲用戶，我們的收入和他們花費的時間實際上正在增長。這也支持了我們的理論。

(Spoken in Foreign Language).

（用外語講）。

Okay. On the contrary, actually, the emerging of new pop games, actually, has a positive impact on our PUGV system as well as our live broadcasting. As you may know, that game is our number two top viewed content category on our video platform and games live broadcasting is actually number one in terms of content category on our broadcasting vertical.

好的。相反，實際上，新的流行遊戲的出現，實際上對我們的PUGV系統以及我們的直播都有積極的影響。如您所知，該遊戲是我們視頻平台上觀看量排名第二的內容類別，而遊戲直播實際上是我們廣播垂直的內容類別中的第一名。

So, once there's a new emerging pop game that naturally will lead more content submission and more viewers viewing the live broadcasting. It actually has a much more positive impact on our business. And we'll welcome more popular games in the market.

所以，一旦有新出現的流行遊戲，自然會帶來更多的內容提交和更多的觀眾觀看直播。它實際上對我們的業務產生了更積極的影響。我們將歡迎市場上更多流行的遊戲。

(Spoken in Foreign Language).

（用外語講）。

Okay. on your third question on the impact of short video application whether they have impact our business, the answer clearly is no. From the data wise, we can see that no matter if the monthly active users, their time spent, our community retention rates, or the engagement level on our community, all of this data are growing very healthy.

好的。關於你的第三個問題，短視頻應用是否對我們的業務有影響，答案顯然是否定的。從數據來看，我們可以看到，無論是每月活躍用戶、他們花費的時間、我們的社區保留率，還是我們社區的參與度，所有這些數據都在非常健康地增長。

And the reasons why we are able to do that is we are self-sustaining ecosystem. All of this content is not produced by several editors. It's actually produced by our content creators, we believe there's no one who understand better than our users' need than the content creator themselves and they follow what's the most trendy and what's most interesting in the market and produce that content to attract our users. That's why we're always upkeep in the most interesting and popular content on our platform.

我們能夠做到這一點的原因是我們是自我維持的生態系統。所有這些內容都不是由幾位編輯製作的。它實際上是由我們的內容創建者製作的，我們相信沒有人比內容創建者自己更了解我們用戶的需求，他們遵循市場上最流行和最有趣的內容，並製作這些內容來吸引我們的用戶。這就是為什麼我們總是在我們的平台上維護最有趣和最受歡迎的內容。

And Bilibili have nine years operating history. This type of new trendy applications or new formats of media we've seen a dozen times and none of those have affected our business progress. Hope that answers your question.

而嗶哩嗶哩有九年的經營歷史。這種新潮的應用程序或新媒體格式我們見過十幾次，都沒有影響我們的業務進展。希望這能回答你的問題。

(Spoken in Foreign Language).

（用外語講）。

Once again, ladies and gentlemen, if you wish to ask a question today, it's star one on your telephone. Your next question today comes from the line of Eddie Leung from Merrill Lynch. Please ask your question.

再次重申，女士們，先生們，如果您今天想問一個問題，那就是您電話上的星號。您今天的下一個問題來自美林證券的 Eddie Leung。請提出你的問題。

Hi. Good morning. Thank you for taking my questions. (Spoken in Foreign Language).

你好。早上好。謝謝你接受我的問題。 （用外語講）。

So, I have two questions. The first one is a little bit about content. It seems like a lot of internet companies, whether they are short form or long form media companies or soft and large internet platforms, recently talking about investment in animations and comic content. So, I'm just wondering what's your thought in it.

所以，我有兩個問題。第一個是關於內容的。似乎很多互聯網公司，無論是短媒體公司還是長媒體公司，還是軟大的互聯網平台，最近都在談論對動漫和漫畫內容的投資。所以，我只是想知道你的想法是什麼。

And then secondly, just a small question about your game revenues. So, we know that the growth has been driven by self-operated games, so just wondering what's the trend of the jointly distributed games recently? Thank you.

其次，關於你的遊戲收入的一個小問題。那麼，我們知道增長一直是由自營遊戲帶動的，那麼請問最近聯合發行遊戲的趨勢是什麼？謝謝你。

(Spoken in Foreign Language).

（用外語講）。

Okay. The first -- for the first question, Mr Chen thinks the competition has always been there especially from all the major video platforms including Tencent IT , IQIYI and YouKu. There has been and will be investing in the anime or ACG area and we don't think that we'll change the competition landscape as more of an indication of how this industry has great growth potential and as it's likely to continue to grow.

好的。第一個——對於第一個問題，陳先生認為競爭一直存在，尤其是騰訊IT、愛奇藝、優酷等各大視頻平台。已經並且將會在動漫或 ACG 領域進行投資，我們認為我們不會改變競爭格局，因為這更多地表明該行業具有巨大的增長潛力以及它可能會繼續增長。

(Spoken in Foreign Language).

（用外語講）。

Okay. So, the reason you asked this question is probably you've heard some of the players are extending their purchase into some of the animation license content. Well, Mr. Chen wants to emphasize the reason we are still strong in the ACG area is not because we spend a lot -- the most -- [number one] amounts of money in terms of acquiring license content. The reason is because we are this ACG evolver community, we have this community first. Then we decided to expand by acquiring more licensed content.

好的。所以，你問這個問題的原因可能是你聽說一些玩家正在將他們的購買擴展到一些動畫許可內容。嗯，陳先生想強調我們在 ACG 領域仍然強大的原因並不是因為我們在獲取許可內容方面花費了很多 - 最多 - [第一] 金額。原因是因為我們是這個ACG進化者社區，我們首先擁有這個社區。然後我們決定通過獲取更多授權內容來進行擴展。

And we believe that ACG was the best -- the majority of ACG lover and ACG content creators are all based on Bilibili. They have interest community on our platform and this market position is not something that somebody can spend a little bit money on the content -- a licensed content can change it.

而且我們認為 ACG 是最好的——大多數 ACG 愛好者和 ACG 內容創作者都是基於 Bilibili 的。他們在我們的平台上有興趣社區，這個市場地位不是有人可以花一點錢在內容上的——許可內容可以改變它。

And to answer your second question. Currently, we have about 127 jointly operated games and they contribute about 11% of the total game revenue. So, the growth trend for the jointly operated game is also very well in the first quarter.

並回答你的第二個問題。目前，我們有約 127 款聯合運營的遊戲，它們貢獻了約 11% 的遊戲總收入。所以，聯營遊戲一季度的增長趨勢也非常好。

Thank you.

謝謝你。

Your next question today comes from the line of Thomas Chung from Credit Suisse. Please ask your question.

您今天的下一個問題來自瑞士信貸的 Thomas Chung。請提出你的問題。

(Spoken in Foreign Language).

（用外語講）。

Maybe I translate my questions into English. Good morning, management. I have two questions. The first question is our overseas strategies over the next couple of years. And my second question is about the number of advertisers in Q1 and what are the advertising categories? Thank you.

也許我把我的問題翻譯成英文。早上好，管理層。我有兩個問題。第一個問題是我們未來幾年的海外戰略。我的第二個問題是關於 Q1 的廣告客戶數量以及廣告類別是什麼？謝謝你。

(Spoken in Foreign Language).

（用外語講）。

Thanks, Thomas, for the question. Let me translate. On an overseas expansion strategy, from a long-term perspective, of course, we'll definitely focus on the international market as what Bilibili is doing as focused on the fan entertainment industry that attracts young mind from all over the world as long as they have their specific interests or habits.

謝謝，托馬斯，這個問題。讓我翻譯。在海外擴張戰略上，當然，從長遠來看，我們肯定會像 Bilibili 所做的那樣專注於國際市場，專注於吸引來自世界各地的年輕人的粉絲娛樂行業，只要他們有他們特定的興趣或習慣。

But in a short term, our main focus will definitely remain in Mainland China, as China being one of the largest single economy in the world and enjoys the highest economic growth rate. And we have been developing in [Mainland] for nine years and we have already established our leading position. In the short term, we'll definitely focus on the domestic market.

但在短期內，我們的主要重點肯定會留在中國大陸，因為中國是世界上最大的單一經濟體之一，並享有最高的經濟增長率。而我們在[大陸]發展已經九年了，我們已經確立了我們的領先地位。短期內，我們肯定會專注於國內市場。

And the second question, will be answered by --

第二個問題，將由——

Yes. To answer second question, currently, we don't have much advertising customers as we've just started to monetize our VAS and the top five or top two by that customer for the brand advertising are through the brokerage the international business and comics, and for VAS the education, e-commerce, Internet services.

是的。回答第二個問題，目前，我們的廣告客戶並不多，因為我們剛剛開始通過 VAS 貨幣化，而該客戶在品牌廣告方面的前五名或前兩名是通過經紀業務、國際業務和漫畫，以及適用於教育、電子商務、互聯網服務的VAS。

Thank you.

謝謝你。

Ladies and gentlemen, that concludes the question and answer session. I would now like to turn the conference back to management for any additional or closing remarks.

女士們，先生們，問答環節到此結束。我現在想將會議轉回管理層，以獲取任何補充或結束語。

Thank you, once again, for joining us today. If you have further questions, please contact Juliet Yang, Bilibili's Senior IR Director or TPG Investor relations. IR contact information in both China and the U.S. can be found on today's press release. Have a great day.

再次感謝您今天加入我們。如果您還有其他問題，請聯繫嗶哩嗶哩高級投資者關係總監或 TPG 投資者關係部的 Juliet Yang。中國和美國的 IR 聯繫信息可在今天的新聞稿中找到。祝你有美好的一天。