Bilibili Inc (BILI) 2019 Q2 法說會逐字稿

Good day, and welcome to the Bilibili 2019 Second 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.

Thank you, operator.

Please note the discussion today will contain forward-looking statements relating to the company's future performances and are intended to qualify the safe harbor from liability, as established by the U.S. Private Securities Litigation Reform Act.

Such statements are not guarantees of future performances 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.

A general discussion of the risk factors that could affect Bilibili's business and financial results is included in the certain filing of the company with the Securities and Exchange Commission.

The company does not undertake any obligation to update this forward-looking information, except as required by law.

During today's call, management will also discuss certain non-GAAP financial measures for comparison purpose only.

For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the 2019 second quarter financial results news release issued earlier today.

As a reminder, this conference call is being recorded.

In addition, a investor presentation and a webcast replay of this conference call will be available on Bilibili Investor Relations website at ir.bilibili.com.

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; and Mr. Sam Fan, Chief Financial Officer.

And I will now turn the call over to Mr. Fan, who will read the prepared remarks on behalf of Mr. Chen.

Thank you, Juliet, and thank you, everyone, for participating in today's earnings call.

I'm pleased to deliver today's opening remarks on behalf of Mr. Chen.

I'm happy to report that on June 26, 2019, we celebrated Bilibili's 10-year anniversary.

Over the past decade, we have grown from a small personal site to a leading online entertainment platform, where over 100 million active users come together to find and share their interest.

We attribute our success to our constant focus on PUGV content ecosystem and community environment, which form the foundation for continued high-quality growth.

Looking at the next 10 years, we are charged with accelerating this growth.

We plan to achieve this in 2 ways, more proactive user growth and improved commercialization efforts.

We are proud to deliver another remarkable period of growth in both our user base and top line.

Importantly, our second quarter results demonstrate the type of high-quality user growth we are aiming to achieve.

We added 9 million MAUs to our community on a sequential quarter basis.

This is our highest in net adds since 2017, bringing our total MAUs to 110.4 million, increasing 30% year-on-year.

Within this group, our mobile MAUs once again grew faster than our MAUs and were up 35% year-on-year, reaching 96.2 million.

High-quality user growth has always been a key focus for Bilibili.

Beyond accelerated growth, we are continuously improving the activeness and engagement for our user community.

In the second quarter, our total DAUs outpaced our MAU growth rate and grew by 41% year-over-year, reaching a record 33.2 million.

Our users are also spending more time on our platform, averaging 78 minutes per day, up 3 minutes compared to the same period last year.

As we move into our peak summer season, we are seeing this healthy trend continue.

Therefore, we raised our MAU target from the range of 110 million to 120 million to the range of 120 million to 130 million for this year, and set up a new target of reaching 220 million MAUs by 2021.

The fast pace for our user growth paired with the quality of these users is fueling our top line expansion.

We continue to convert more visitors to paid users by offering premium content and the unique community experience.

In Q2, our average monthly paying users more than doubled compared with the same period last year, reaching over 6.3 million.

Revenue per MAUs increased by 15%, nongame revenue per MAUs increased by 102% year-over-year.

As a result, our revenue reached RMB 1.54 billion, beating the high end of our previous guidance projected at RMB 1.49 billion.

What's driving this remarkable growth of both user numbers and revenue comes back to the 3 pillars of our business: content, community and commercialization.

I'd like to touch on each of these areas, provide some insight into our growth strategy and talk about the performance within these metrics for the second quarter.

First and foremost, content.

Content is paramount to attracting users at a rapid pace and keeping them engaged.

We are strategically positioned on a less competitive track where we enjoyed a growing roster of high-quality content through our PUGV ecosystem at a relatively low cost.

Leveraging Bilibili's high-traffic platform and unique community environment, we continue to attract talented content creators and grow our content offering.

During the second quarter, we had an average of 854,000 active content creators uploading 2.4 million videos monthly.

This represents year-over-year increase of 144% and 107%, respectively.

To better support and motivate our content creators, we are continuously improving our products, tools and services to make content creation easier.

Our mobile content submission function allows our content creators to create content anytime, anywhere.

Our newly launched Interactive Video tool creates a brand-new fun way for storytelling and is very easy to use.

We are also actively promoting Video Blog-Vlog as one of the new content formats to express creative ideas.

So far, it is gaining great traction with both content creators and users.

In addition, our cash incentive program continues to encourage over 160,000 content creators by providing a monetary reward for their original and high-quality creations.

As a supplement to our vast PUGV content library, we continue to expand our OGV offerings by acquiring premium content and the important IP that can be monetized across the entertainment spectrum.

As an example of this, at the end of June, we acquired exclusive animation adoption rights to the award winning Sci-Fi, The Three-Body Problem, one of the most renowned Sci-Fi IPs in China.

We are thrilled to bring this exciting tale to life in a variety of entertainment forms, including animation, mobile games, comics and audio drama.

Through these adaptation plans, we aim to maximize the reach of the story and the return on our investment.

In the self-producing and co-producing department, we are delighted to see our self-produced and IP-owned titles gaining traction.

Our signature food documentary series, The Story of Chuan'er, welcomed its second season in July and was a smash hit.

Our co-produced talk show Informal Talks and self-produced and animal reality show, Animal Hospital, were also well received by our users.

Notably, the content verticals we choose enjoy relatively lower production costs while attracting a broader population of users.

They can also yield considerable revenue through advertising and various commercial opportunities.

Secondly, let's look at our community.

As we welcome more members in our community, we continue to see deep levels of engagement and interactions among our users.

In the second quarter, we had 586 million daily views, up 84% year-on-year.

On the engagement front, our users generated 1.8 billion interactions mostly through bullet chats, comments, likes and Bilibili Moment posts, up 180% compared with the same period last year.

In addition to engagement levels, the number of official members and their retention rates are also important data points that represent the quality of our user growth.

At the end of second quarter, we had 54 million official members who passed our 100 question exam up 40% year-over-year.

Their 12-month retention rate remains at about 80%.

These official members tend to be the most active and engaged with both our content and each other.

They are also more willing to pay for premium content.

We will continue to improve our product and content offerings to convert more official members to paying users.

Last but not least, commercialization.

Our Gen Z concentrated user base has a much stronger willingness to pay for online entertainment services than any other generation.

According to the latest QuestMobile report, around 60% to 80% of the paying users who pay for mobile games, live broadcasting and online videos in China are Gen Z. Our business model is designed to address entertainment and interaction needs of this important population.

Besides traffic, we can monetize our users' entertainment preference through mobile games, live broadcasting, advertising and other value-added services.

As we ramp our monetization efforts, we believe our user growth will fuel an even higher top line growth.

Now let us take a look at our game business.

Building on our massive base of game lovers and highly engaged community, we have become one of the largest game communities in China, covering PC, mobile, console and indie games.

We continue to add more games to our portfolio and improve our distribution efficiency.

In the second quarter of 2019, revenues from our mobile games grew 16% year-over-year to RMB 920 million, led primarily by Fate/Grand Order or FGO and the blockbuster ACG-themed mobile game, Arknights, which we released in May.

Being the exclusive joint operator of Arknights on Android channels in China, we helped attract over 3 million core ACG users to the game.

The success of Arknights also showed the market's increasing demand for ACG games.

More importantly, it is a strong testimony to Bilibili's robust distribution power for high-quality games.

On the exclusively licensed game front, we have released a number of new titles in recent months.

These include Japanese music RPG BanG Dream!

in May, an exciting domestic RPG, Final Gear, in July and a highly rated female romance RPG, Untouchable Palms, in August.

All 3 titles have gained great traction among different group of gamers.

Final Gear and Untouchable Palms ranked #1 on top free games and top paid download charts on China's iOS app store, shortly after their releases, respectively.

Looking at our content updates and new game pipeline, we're excited to be celebrating FGO's 3-year anniversary beginning at the end of August with a major content update and accompanying promotion activities.

We also have several titles that have acquired approvals and are scheduled to release in the coming months.

These include exclusively licensed Alternative Girls and jointly operated web game, The Legend of Heroes, and Tencent's highly anticipated ACG mobile game, Fox Sprite Matchmaker.

In addition, we look forward to expanding our game distribution outside Mainland China.

We plan to release a series of ACG titles in select Asian markets, including the Furious Yama, Final Gear, Girl Café Gun 2 and Dark Boom.

Looking at our live broadcasting and VAS line, revenues increased by 175% year-over-year to RMB 326 million in the second quarter of 2019, with contribution from both our live broadcasting business and premium membership.

Currently, games, VTuber, audio and ACG-related talent shows are the top categories gaining traffic and converting visitors to paying users.

We are also actively expanding our e-sports related live broadcasting, content offering by introducing top e-sports matches, including LPL, OWL, KPL and Ti.

These premium e-sports content are attracting tens of millions of viewers and converting our deep pool of game lovers to live broadcasting users.

Our premium membership program gives paying users access to advanced or exclusive content and continues to bring in new subscriptions.

By the end of June, we had recorded 5.3 million valid premium members, up 148% year-on-year.

On advertising business, we are beginning to see positive signs despite a challenging macroeconomic environment.

Revenue from advertising increased 75% year-over-year to RMB 168 million in the second quarter of 2019.

We are also improving advertising efficiencies, which helps increase our unit price.

The top 3 industry verticals for brand advertising in the second quarter were skincare and cosmetics, food and beverage and e-commerce.

And the top 3 verticals for performance-based advertising were games, education and e-commerce.

And finally, our e-commerce and others revenue stream also continued to grow, reaching RMB 124 million in the second quarter, an increase of 489% from the same period 2018, largely due to our expanding e-commerce platform product sales.

We have made several investments to scale our business over time, expand our revenue streams.

Our majority stake in Chaodian extends our reach in offline entertainment and adds a new revenue stream to our commercialization efforts.

We can now capitalize Chaodian's expertise in offline event planning as well as talented acquisition and measurement.

Similar to our investment in NetEase Comic and Maoer App, we believe these investments have great synergies with our existing business and will further expand our commercialization capabilities.

Our partnerships with other market leaders, such as Tencent and Alibaba, are also progressing and aiding our growth.

We continue to expand domestic animation copyright and collaborate on some of the A-list titles including new seasons of Quan Zhi Gao Shou.

On the games front, we now jointly operate a number of Tencent's highly-rated mobile games, including, Game of Thrones, Sprite Hunter and Ace Force Warrior.

With more games in the pipeline, we are also working closely with Tencent on the e-sports front.

We compete in and own the live broadcasting rights to Tencent's premium e-sports leagues, LPL and KPL.

On the Alibaba partnership front, we have expanded our partnership with new collaboration plans with Tmall in addition to Taobao.

We're testing a number of innovative functions to better adapt for e-commerce platforms.

We expect this ingenuity to continue to help to expand our advertising services and grow our paying user base.

As we move forward, we are focused on continued growth.

User growth is at all-time high, and we want to build on this momentum.

Our strategy calls for more proactive user acquisition as well as improved commercialization capability.

While we invest in the future, we will also focus on the quality of users by attending to retention rates and ROI of our marketing efforts.

We are confident about our user growth plan and believe it will form a great foundation for our sustainable growth and future success.

This concludes Mr. Chen's remarks.

I will now provide a brief overview of our financial results for the second quarter of 2019.

Our total net revenue increased by 50% year-over-year to RMB 1.5 billion.

Our nongame revenue accounted for 40% of total revenue in the second quarter, up from 23% in the second quarter of last year.

We are pleased with the progress of commercialization strategy and the average number of monthly paying users more than doubled year-over-year in the second quarter of 2019, reaching 6.3 million.

Cost of revenues increased by 66% to RMB 1.3 billion compared to RMB 776 million in the same period of 2018.

Revenue sharing costs, a key component of cost revenues, was RMB 573 million, representing an increase of 37% from the same period in 2018.

Gross profit was relatively flat at RMB 252 million for 2019 second quarter and RMB 251 million for the comparable period.

Our gross profit margin was 16.4% compared with 24.4% for the comparable period and improved from 13.8% for the first quarter this year.

This sequential margin improvement was mainly thanks to the increased revenue contribution from our high-margin game business.

Total operating expenses increased to RMB 597 million, representing an increase of 67% from the same period of 2018.

Selling and marketing expenses were RMB 240 million, representing an 88% increase year-over-year.

This increase was primarily attributable to the increased channel and marketing expenses associated with our app and the brand as well as promotional expense for our mobile games and increasing head count in sales and marketing personnel as well as the fulfilment costs for our e-commerce-related products.

R&D expenses were RMB 216 million, representing a 64% increase year-over-year.

The increase was primarily due to increased head count in R&D personnel and other increased research and development expenses for online games, app development and our virtual idol business.

G&A expenses were RMB 141 million, represents a 44% increase year-over-year.

The increase was primarily due to increased G&A personnel-related expenses and increased amortization expense related to intangible assets acquired through business acquisition, partially offset by a decrease in share-based compensation expenses.

Loss from operations was RMB 345 million compared with RMB 107 million in the same period of 2018.

Net loss was RMB 315 million for the second quarter of 2019 compared with RMB 70 million in the same period of 2018.

Adjusted net loss, which is a non-GAAP measure that excludes share-based compensation expenses and amortization expenses related to intangible assets acquired through the business acquisition, was RMB 256 million compared to RMB 19 million in the same period 2018.

Basic and diluted net loss per share were RMB 0.96.

Adjusted basic and diluted net loss per share were RMB 0.78.

As of June 30, 2019, the company had cash and cash equivalents, time deposits as well as short-term investments of RMB 8.6 billion.

In April, we completed an offering of the convertible senior notes due 2026 in aggregated principal amount of USD 500 million and the concurrent offering of approximately 14.2 million ADS and 6.5 million ADS from certain selling shareholders, the company received in combination of the notes and share offerings total approximately USD 733.9 million in net proceeds.

Looking ahead, our financial goals are to further grow our business and improve our operating efficiency.

With that in mind, we are currently projecting net revenues for the third quarter of 2019 to be between RMB 1.74 billion and RMB 1.77 billion.

Thank you for your attention.

We would now like to open the call to your questions.

Operator, please go ahead.

(Operator Instructions) Your first question comes from the line of Hillman Chan from Citi.

(foreign language)

(technical difficulty)

Excuse me.

Hillman, we can't hear you.

I'm sorry.

Hillman, you are breaking up.

(foreign language)

(foreign language)

(foreign language) Noting that the MAU growth accelerated in the quarter, could management share more on the user growth strategy?

Why are we trying to accelerate user growth right now in this quarter?

And also where are we acquiring the users from which particular channel and addressing which particular user demographics?

And how we should think about the related marketing expense and target for MAU by end of this year and next year?

And then my second question is on live streaming, could management share more on the strategy as to how we convert user from video viewers to live streaming, and how we step up the -- help the users to step up the paying behavior going forward?

(foreign language)

[Interpreted] Okay.

So I'll take the first question.

I'll discuss why we wanted to accelerate our user growth at this stage and how we're going to do it.

And Sam will explain a little bit more on the cost side.

So first of all, why we're doing so because we have made substantial growth on our content ecosystem.

We have made breakthrough on both quality and quantity of our content.

(foreign language)

[Interpreted] So first, for example, on the content side, we have seen substantial growth on the number of content newly submitted daily on our platform, and our video views also improved substantially.

How many user have participated in the interaction and how many searches per DAU per day, they have all grown substantially over the past few years.

(foreign language)

[Interpreted] So secondly, we have expanded to new content categories without doing massive subsidy on the content or finding massive new content creators.

For example, the new content submission in the Vlog session increased 81% sequentially in Q2.

And on the mobile content submission side, on average, in Q2 over -- about 47% of the content were submitted through mobile content submission function, and this ratio were even over 50% as we move into summer.

(foreign language)

[Interpreted] So when we look at our blockbuster hit new titles, new videos emerging in our -- on our platform, we see a lot of new content creators and new videos emerging in lifestyle, entertainment and technologies.

Those are the relatively more general emerging content categories that become more and more popular on our platform.

(foreign language)

[Interpreted] So based on the dense and depth of our content, we evaluated the overall content supply on our platform now can at least supply over -- or can support twice as much of our existing user base.

(foreign language)

[Interpreted] So second of all, also based on our internal data, as our content getting more massive and our users increasing faster than ever, the retention level and engagement level of our community also improved.

(foreign language)

[Interpreted] So for example, when we went for IPO into late 2017, the 12-month retention rate of our official members, those members who take the community exam test were about 80%.

And when we look at the data, right now, in second quarter 2019, the one who joined us in second quarter 2018, their 12-month retention rates were even above 80%.

(foreign language)

[Interpreted] So the long-term retention rate has been essential to the longevity and activeness of our community.

And from this data, it's suggesting the users' long-term satisfaction rate and to our community actually improved over time.

(foreign language)

[Interpreted] The third of all is, we have improved our monetization capabilities.

(foreign language)

[Interpreted] So for example, looking at the paying ratio, our -- the number of users who paid in the first half, who are also newly registered user, actually improved 60% year-on-year.

(foreign language)

[Interpreted] And that absolute number of paying user actually already surpassed the number of users who paid in 2017, who are also joined on 2017.

(foreign language)

[Interpreted] So this supports our theory that we have improved our ability to monetize new users.

(foreign language)

[Interpreted] And on our ability to monetize through nongame business, our nongame revenue per MAU actually improved 102% year-on-year in the second quarter.

(foreign language)

[Interpreted] And the money we spent on user acquisition actually only improved -- increased 70% year-on-year, much lesser than the revenue growth.

(foreign language)

[Interpreted] This means we are able to make much more money on the single new user compared to the money we spend on acquiring them.

(foreign language)

[Interpreted] And another data that we can provide is the paying ratio for user who joined in 2017, that -- their 2018 paying ratio actually doubled compared to 2017.

That means once the users are in our community, they tend to spend more over time.

(foreign language)

[Interpreted] So that concludes 3 points: 1) as we are able to attract a lot of high-quality user, and we are able to retain them.

And most importantly, we can better monetize those new users as our monetization progresses.

(foreign language)

[Interpreted] And we'd like to update our MAU target.

We've previously guided our MAU target for this year were 110 million to 120 million.

Now we raised that target to reach 120 million to 130 million by end of this year.

(foreign language)

[Interpreted] We also like to update our 3-year MAU target from 150 million to 220 million by 2021.

(foreign language)

[Interpreted] More importantly, to achieve this target, we did not just simply wanted to increase the number of users, we also wanted to maintain the quality of the user, and we can achieve that by leveraging the longevity, the power, the activeness of our content ecosystem.

(foreign language)

[Interpreted] And on how we are able to -- how we achieve that type of target is the same as we said in before.

Bilibili's user growth are not purely just rely on fine topic or making subsidies to our content creators.

It's relied on our substantial and rich content ecosystem.

We wanted to do constant optimization and upgrade on our content ecosystem, on improved engagement and activeness of our community and improve our product design and upgrade on our branding, on our marketing efforts, also improve our channel user acquisitions.

(foreign language)

[Interpreted] And I elaborate our strategy from 3 aspects first is on the branding side.

Over the past 10 years, we barely did any promotion and marketing on Bilibili brand.

Although a lot of youngsters know Bilibili very well, but from a wider demographic, age bracket or lower Tier city, and there are still some of the users do not know Bilibili, do not know what Bilibili can do.

So in this -- starting from the second half of this year, we are going to upgrade our branding campaign and starting to do more branding awareness and promotions to those users who do not know Bilibili.

(foreign language)

[Interpreted] This is one of the highest priority job in our to-do list.

(foreign language)

[Interpreted] Second of all is to optimize and improve on our product as well as our algorithms.

In the past, we have been very focused on the long-term retention of our users.

And now we wanted to also focus on the retention rate of our new users.

And this will definitely be very helpful on the user growth.

(foreign language)

[Interpreted] And third is to improve our ability to acquire users from various channels.

In the past, our investment in channel acquisitions actually is lower than industry average who are at around our similar scale with their product.

And in the future, we'll -- we are going to improve our ability to acquire users from various online and offline channels.

(foreign language)

[Interpreted] And above all else, we wanted to improve our conversion from our traffic to paid and increase revenue per MAU.

And I think in the past, we have proven our ability to monetize our traffic.

And as our user continue to grow, we should be able to grow our top line as we extend our user base.

(foreign language)

[Interpreted] Okay.

I'll take the answer in short.

As Chairman stated, we are at the right time to enter into this strategy.

And there are 2 keywords, all the spending will be controllable and measurable.

We will track all ROI for their spending.

We -- actually, as Chairman mentioned, we are not just to look at purely to acquire the new users through the marketing spending.

But if you look at marketing dollar we spend, we will make sure that we -- that all the marketing dollar we spend will be collected through the growth of the top line.

There are also

(technical difficulty)

be 2 or 3 quarters delay.

We should take time for our platform to monetize those user traffic.

But based on the other metrics we mentioned during our call as Chairman also mentioned that of conversion from our visitor to the paid users are quite good and their spending behavior are exceeding our expectations.

So we will take that very, very seriously.

And the second is, if you look -- want to know some guidance about the marketing dollar spending, actually, in Q3 last year, we spent about 18% of the total revenues for the selling and marketing expenses, and 16% marketing expenses in Q4.

We now guide that number in this year will be around 19% to 20% in Q3 and Q4.

So you can see, it's not a significantly increase of the marketing dollar spending.

By the way, I'm looking forward to a very strong MAU growth and the growth of the top line in next year.

(foreign language)

[Interpreted] So on your second question, regarding our live broadcasting, over the past few quarters, we can see the content ecosystem of our live broadcasting is also thriving.

And on the games front, we already have a edge in terms of game-related video content, and game-related live broadcasting is actually helping us to even elevating that competitive advantage.

You can see whenever we have -- when the market has new games, that will stimulate the growth of content on our live broadcasting content platform.

And also the popularity among e-sports is also starting to show positive effects on our platform.

(foreign language)

[Interpreted] So new emerging content category is gaining popularity on our video platform, the [new] live broadcasting content is also thriving, for example, lifestyle type of content.

We are seeing as the Vlog getting more and more popular, the lifestyle-related live broadcasting is also gaining attraction, similar with the studying live broadcasting.

Those are the emerging categories that we see on our live broadcasting platform.

(foreign language)

[Interpreted] We used to say live broadcasting is a natural extension of our live broadcasting -- of our video platform, and it's also a type of ability we have to acquire.

And over the past few quarters, we have proven that ability.

(foreign language)

[Interpreted] So in the past, we haven't spent big bucks to top host finding or big marketing campaigns.

However, from the performance of our live broadcasting market in the past few quarters, that also is a strong evidence that our live broadcasting is growing with our content ecosystem.

(foreign language)

[Interpreted] And on the monetization front, we can also see a lot of highlights that mirrors or echoes with our video platform ecosystem.

The uprising of VTuber live broadcasting is an evidence to show our dominant position in the ACG industry.

The number of VTuber hosts and number of viewers who watch VTuber content and number of users who pay for VTuber live broadcasting is increasing very fast, and we can also see the paying ratio for VTuber is much higher compared to other regular entertainment categories.

(foreign language)

[Interpreted] We are confident that we are able to become the leading player in the VTuber live broadcasting industry.

(foreign language)

[Interpreted] On Bilibili, there is a strong fan, host, emotional connection already established on our video platform, and we can leverage that fan connection on our live broadcasting platform.

The Dahanghai function is actually a tool to monetize the fan economy.

So to summarize, our -- the Bilibili live broadcasting advantages come on the games front, we have equivalent or even stronger capabilities to continue to grow our games-related live broadcasting content, given our massive gamers, user base and game video content.

And on Bilibili's strongest ACG area, we can also see some of the emerging new content categories, and we can also monetize our emotional connections from host and fans.

Your next question comes from the line of Thomas Chong from Jefferies.

(foreign language) Congratulations on the strong user growth this quarter.

I have a question about our live streaming and VAS.

Given the fact that the revenue per MAU is growing very nicely, how should we think about the revenue contribution from live streaming and VAS going forward over the next couple of years?

And should we consider it is more driven by revenue per MAU or paying ratio?

Thomas, let me take your question.

Currently, the live broadcasting and VAS contribute about 20% of the total revenue.

We foresee that number will going up in the short-term period.

But we also guided that our nongame revenues as a percentage of total revenue will ultimately contribute around 50% of the total revenues.

That includes advertising, live broadcasting, VAS and other revenues.

So we're quite looking forward to that.

And the growth driver for live broadcasting again is now many for their paying ratio as well as the total targeted growth of the MAU we converted through our total MAU to those live broadcasting business as well as our VAS business.

Hope that can answer your question?

And that concludes the question-and-answer session.

I would now like to turn the conference back to the management for any additional or closing comments.

Thank you once again for joining us today.

If you have any further questions, please contact myself, Juliet Yang, Bilibili's Senior IR Director or TPG Investor Relations.

Our contact information for IR, in both China and the U.S., can be found on today's press release.

Have a great day.

Ladies and gentlemen, that does conclude the conference for today.

Thank you for participating.

You may now all disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]