Bilibili Inc (BILI) 2023 Q2 法說會逐字稿

Good day, and welcome to Bilibili Second Quarter 2023 Financial Results and Business Update Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Juliet Yang, Executive Director of Investor Relations. Please go ahead.

大家好，歡迎參加嗶哩嗶哩2023年第二季財務業績及業務更新電話會議。今天的會議正在錄製中。現在，我想將會議交給投資者關係執行總監楊麗君。請開始。

Thank you, operator. During this call, we'll discuss business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties, including those mentioned in our most recent filing with the SEC and Hong Kong Stock Exchange.

謝謝接線生。在本次電話會議中，我們將討論業務前景並做出前瞻性陳述。這些評論是基於我們今天的預測和預期。由於一系列風險和不確定因素，包括我們最近提交給美國證券交易委員會和香港證券交易所的文件中提到的風險和不確定因素，實際事件或結果可能與今天的新聞稿和本次討論中提到的情況存在重大差異。

The non-GAAP financial measures we provide are for comparison purpose only. Definition of these measures and a reconciliation table are available in the news release we issued earlier today.

我們提供的非公認會計準則 (Non-GAAP) 財務指標僅供比較之用。這些指標的定義及對帳表請參閱我們今天稍早發布的新聞稿。

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 IR website at ir.bilibili.com.

溫馨提示：本次電話會議正在錄製中。此外，投資人簡報和本次電話會議的網路直播回放將在嗶哩嗶哩投資者關係網站 ir.bilibili.com 上提供。

Joining us today from Bilibili senior management are Mr. Rui Chen, Chairman of the Board and Chief Executive Officer; Ms. Carly Li, 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.

今天，嗶哩嗶哩的高階主管將與我們一同出席，包括董事會主席兼執行長陳睿先生、董事會副主席兼營運長李嘉莉女士以及財務長范志強先生。現在，我將把發言權交給范志強先生，他將代表陳睿先生宣讀準備好的演講稿。

Thank you, Juliet, and thank you, everyone for participating in our 2023 second quarter conference call to discuss our financial and operating results. I'm pleased to deliver today's opening remarks on behalf of Mr. Chen.

謝謝朱麗葉，也謝謝大家參加我們2023年第二季的電話會議，討論我們的財務和營運表現。我很高興代表陳先生致今天的開場白。

We set our sights on prioritizing profitability and DAU growth, and we have made solid steps towards these goals. In the second quarter, we meaningfully improved our gross profit and narrowed our losses while continuing to deliver healthy DAU growth and strong community metrics. I will share more color on both fronts.

我們優先考慮獲利能力和每日活躍用戶成長，並已朝著這些目標邁出了堅實的步伐。第二季度，我們的毛利顯著提升，虧損收窄，同時日活躍用戶持續保持健康成長，社群指標也保持強勁。我將在這兩個方面分享更多細節。

First of all, our path to profitability. In the second quarter, we further improved our commercialization efficiency, enabling us to convert our growing traffic to quality top-line growth. The momentum we see in our advertising and live broadcasting business is encouraging. In the second quarter, our ad revenues increased by 36% and live broadcasting revenues increased by 32% both year-over-year. Moreover, our gross profit increased significantly by 66% year-over-year, driving our gross profit margin to 23%, marking the fourth consecutive quarter of improvement.

首先，我們邁向獲利之路。第二季度，我們進一步提升了商業化效率，將不斷增長的流量轉化為高品質的營收成長。廣告和直播業務的勢頭令人鼓舞。第二季度，我們的廣告收入年增36%，直播營收年增32%。此外，我們的毛利年增66%，毛利率達到23%，連續第四個季度成長。

Meanwhile, we have continued to strengthen our expense controls. Our total operating expenses declined by 14%, including a 22% decrease in sales and marketing expenses, a 14% decrease in G&A expenses and a 7% decrease in R&D expenses or on a year-over-year basis. These margin enhancements and our effective cost management contributed to our bottom line improvement. We meaningfully reduced our non-GAAP net loss by 51% year-over-year.

同時，我們持續加強費用控制。總營運費用較去年同期下降14%，其中銷售及行銷費用下降22%，一般及行政費用下降14%，研發費用下降7%。利潤率的提升以及有效的成本管理促進了盈利的提升。非公認會計準則淨虧損年減51%。

Moving on to our community growth. Our DAUs increased by 15% year-over-year to 96.5 million in the second quarter, driving our DAU-to-MAU ratio up to 29.8%. Meanwhile, the users' average daily time spent on our platform reached 94 minutes in the second quarter, driving total time spent up by 22% year-on-year. We are pleased to see this strong DAU growth has continued in Q3.

接下來是社區成長。第二季度，我們的每日活躍用戶 (DAU) 年比成長 15%，達到 9,650 萬，DAU 與 MAU 比率提升至 29.8%。同時，用戶在第二季平均每日使用時長達 94 分鐘，總使用時長年增 22%。我們很高興看到 DAU 的強勁成長勢頭在第三季得以延續。

As we move into the second half of this year, our main tasks will be in three core areas. First, we aim to further enhance our traffic commercialization efficiency by increasing our ad revenues and the live broadcasting revenues. Additionally, we will bring more high-quality games to our users, including the highly anticipated game, Pretty Derby.

進入下半年，我們的重點工作將集中在三個核心領域。首先，我們將進一步提升流量商業化效率，提升廣告收入及直播收入。此外，我們將為用戶帶來更多優質遊戲，包括備受期待的《Pretty Derby》。

Secondly, we will continue to take a prudent financial approach with strict control of our cost and expenses and further narrow our losses. Finally, yet importantly, we are committed to achieving ongoing DAU growth and fostering an inspiring video community for young generations in China.

其次，我們將繼續採取審慎的財務策略，嚴格控製成本和支出，進一步縮小虧損。最後，同樣重要的是，我們致力於持續成長日活躍用戶，並為中國年輕一代打造一個鼓舞人心的影片社群。

With that overview of our progress, I'd now like to provide a brief update on our three core pillars of content, community and commercialization.

在概述了我們的進展之後，我現在想簡要介紹我們的三大核心支柱：內容、社群和商業化。

Starting with content. Content creators continue to be our ecosystem's most valuable asset. Supporting these talented content creators in their ability to amass large followings and to be able to earn more money are among our top tasks. As always, we continue to optimize our algorithms and products to facilitate high-quality content and enable creators to be recognized.

從內容開始。內容創作者始終是我們生態系統中最寶貴的資產。支持這些才華橫溢的內容創作者積累大量粉絲並賺取更多收益是我們的首要任務之一。我們將一如既往地持續優化演算法和產品，以促進高品質內容的產生，並讓創作者獲得認可。

In the second quarter, the number of daily active content creators on our platform and our monthly content submissions increased by 19% and 43% year-over-year, respectively. In the second half of this year, we plan to shift our video watching metric from video views to video time spent, which will help our users discover more high-quality content on Bilibili. We are also beta testing an AI-powered search feature in our community that enables relevant videos to be found more easily.

第二季度，我們平台上的每日活躍內容創作者數量和每月內容提交量分別較去年同期成長19%和43%。今年下半年，我們計劃將影片觀看指標從影片觀看次數調整為影片觀看時長，這將有助於用戶在嗶哩嗶哩上發現更多優質內容。我們也在社群中測試一項基於人工智慧的搜尋功能，讓用戶更輕鬆地找到相關影片。

Creator monetization on Bilibili increased as well in the second quarter. Over 1.58 million creators earned money through various Bilibili channels, showing a 40% increase year-over-year. In addition to our cash incentive program, more creators are earning income through advertising and the live broadcasting channels. For example, our video commerce ads have opened up new efficient, earning opportunities for content creators.

Bilibili 創作者在第二季度的變現也取得了成長。超過 158 萬創作者透過 Bilibili 的各種管道獲得了收益，年增 40%。除了我們的現金獎勵計劃外，越來越多的創作者透過廣告和直播管道獲得收入。例如，我們的視訊電商廣告為內容創作者開闢了新的高效獲利機會。

In the second quarter, the number of creators who earned money through video commerce grew by over 220% year-over-year.

第二季度，透過影片商務賺錢的創作者數量較去年同期成長超過220%。

Resonant content and multi-scenario products like Story Mode continue to drive platform traction. In the second quarter, our total daily video views were up 31% year-over-year to 4.1 billion, among which, Story Mode daily video views grew by 76% year-over-year. It has become one of the key video consumption scenarios for our users, contributing to our growth in DAUs and ad revenues.

引起共鳴的內容以及像「故事模式」這樣的多場景產品持續推動平台發展。第二季度，我們的每日影片總觀看量較去年同期成長31%，達到41億次，其中「故事模式」的每日影片觀看量較去年同期成長76%。它已成為我們用戶的主要影片消費場景之一，並推動了我們每日活躍用戶數和廣告收入的成長。

Turning to our community. Our users remain highly engaged and sticky. The user's average daily time spent on our platform was 94 minutes in the second quarter, reaching the highest second quarter level in our company's history. The monthly interactions reached nearly 15 billion in the second quarter, up 19% year-over-year.

談到我們的社區。我們的用戶仍然保持著高度的參與和黏性。第二季度，用戶在我們平台上的平均每日使用時間為94分鐘，達到了公司歷史上第二季度的最高水準。第二季月互動量達到近150億次，較去年同期成長19%。

Our core group of official members also increased by 26% year-over-year to 214 million with a solid 12-month retention rate of around 80%. Our signature offline events also bring our community together in person. This July, we hosted 2 exciting offline events, BilibiliWorld and Bilibili Macro Link in Shanghai. Over 200,000 tickets sold out almost immediately. The tremendous response highlights Bilibili's strong influence among young generations as well as users' willingness to pay for our unique community experiences.

我們的核心官方會員群體年增26%，達到2.14億，12個月留存率穩定在80%左右。我們標誌性的線下活動也讓我們的社區成員能夠面對面地相聚。今年7月，我們在上海舉辦了兩場精彩的線下活動－嗶哩嗶哩世界和嗶哩嗶哩宏鏈。超過20萬張門票幾乎立即售罄。巨大的反應凸顯了嗶哩嗶哩在年輕一代中的強大影響力，以及用戶願意為我們獨特的社群體驗付費。

Finally, let's look at our commercialization and financial progress. Total revenues for the second quarter increased by 8% year-over-year to RMB 5.3 billion. Specifically, revenue from our advertising and live broadcasting businesses increased by 36% and 32% year-over-year, respectively. Meanwhile, we continued to improve our gross profit and margin. Our gross profit in the second quarter grew by a notable 66% year-over-year, driving our gross profit margin up to 23% from 15% in the same period last year.

最後，我們來看看我們的商業化和財務進展。第二季總營收年增8%，達到人民幣53億元。其中，廣告業務和直播業務收入分別較去年同期成長36%和32%。同時，我們的毛利和毛利率持續提升。第二季毛利年增66%，毛利率從去年同期的15%上升至23%。

Looking at this in more detail. Revenues from our value-added services business grew 9% year-over-year to RMB 2.3 billion in the second quarter, primarily driven by increased revenues from our live broadcasting business, which grew by 32% year-over-year. As we further integrate live broadcasting within our video operations, we have opened up multiple opportunities to expand and diversify our live broadcasting content by converting content creators into live broadcasting hosts.

更詳細地來看，第二季我們增值服務業務的營收年增9%，達到人民幣23億元，這主要得益於直播業務收入的成長，該業務年增32%。隨著我們進一步將直播業務融入視訊運營，透過將內容創作者轉化為主播，我們開闢了多個機會來擴展和豐富我們的直播內容。

In the second quarter the number of monthly active live broadcasting hosts increased by 15% year-over-year. In addition, we are exploring new live broadcasting products to create more paying channels for our users, including live celebration events. We expect our ongoing integration activities to support our revenue growth in the second half of 2023.

第二季度，每月活躍主播數量較去年同期成長15%。此外，我們正在探索新的直播產品，為用戶創造更多付費管道，包括直播慶祝活動。我們預計，正在進行的整合活動將支持我們在2023年下半年的收入成長。

By the end of June, we had 20.5 million premium members, over 80% of whom are on an annual subscription or auto-renew package, highlighting our trust-based user relationships.

截至 6 月底，我們擁有 2,050 萬高級會員，其中超過 80％ 的用戶選擇年度訂閱或自動續訂套餐，這突顯了我們基於信任的用戶關係。

In Q3, we released several highly anticipated Chinese anime titles, including Fog Hill of the Five Elements, (foreign language), and our self-produced title Link Click Season 2, (foreign language), to bring more exclusive high-quality content to our premium members.

第三季度，我們推出了幾部備受期待的中國動漫作品，包括《五行霧山》（外語版）和我們自製的作品《靈動點擊第二季》（外語版），為我們的高級會員帶來更多獨家優質內容。

Turning to our advertising business. As we progress our initiative to integrate sales conversion with ad products, we believe we have found an effective way convert our high-quality traffic to advertising revenue growth. For the second quarter, our advertising revenues grew 36% year-over-year to RMB 1.6 billion, mainly led by our performance-based ad revenues growth, which increased by over 60% year-over-year, and revenues from our brand and Sparkle offerings also grew by a double-digit percentage year-over-year.

談到我們的廣告業務。隨著我們不斷推進銷售轉換與廣告產品的整合，我們相信已經找到了將優質流量轉化為廣告收入成長的有效方法。第二季度，我們的廣告收入年增36%，達到人民幣16億元，這主要得益於效果廣告收入同比增長超過60%，同時，我們品牌和Sparkle產品的收入也實現了兩位數的同比增長。

Our top 5 advertising verticals in the second quarter were: games, e-commerce, digital products and home appliances, skincare and cosmetics, and food and beverage.

我們第二季的前五名廣告垂直領域是：遊戲、電子商務、數位產品和家電、保養品和化妝品以及食品和飲料。

Our continuous improvements to our integrated industry ad solutions have also helped us gain more ad budget spend from industries such as games and e-commerce. Specifically, by introducing video commerce products, ad revenues from the e-commerce industry increased by 144% year-over-year in the second quarter. Meanwhile, content creators were able to benefit from more ad opportunities. The number of creators who earn income through video commerce grew over 220% year-over-year.

我們持續改善產業綜合廣告解決方案，也幫助我們在遊戲、電商等產業獲得了更多廣告預算支出。具體而言，透過推出視訊電商產品，第二季電商產業的廣告收入較去年同期成長144%。同時，內容創作者也獲得了更多廣告機會。透過視訊電商獲得收入的創作者數量較去年同期成長超過220%。

Moving forward, we will continue to build our commercial database, refine our algorithms as well as optimize our ad product offerings. We are confident that we can improve our ad revenues per DAU and achieve solid growth in the second half of 2023.

展望未來，我們將繼續建立商業資料庫，完善演算法，並優化廣告產品。我們有信心提升每日活躍用戶廣告收入，並在2023年下半年穩健成長。

As for our games business, our revenues were RMB 891 million for the second quarter, a 15% decline from the same period last year. The year-on-year decline was mainly due to a lack of new game launches in the second quarter and a growth in decline for certain titles. Our top 2 performing games, Azur Lane and FGO, remained stable. Particularly during Azur Lane's 6-year anniversary, the game reached a new peak in paying users and revenues. In addition, we have also successfully extended our exclusive license of Azur Lane for another 5 years.

遊戲業務方面，第二季營收為8.91億元，較去年同期下降15%。年比下降主要由於第二季缺乏新遊戲上線，以及部分遊戲銷售下滑。我們表現最好的兩款遊戲《碧藍航線》和《FGO》保持穩定。尤其是在《碧藍航線》發行六週年之際，該遊戲的付費用戶和收入都創下新高。此外，我們也成功將《碧藍航線》的獨家授權續約五年。

In July, we launched our first self-developed game in the female romance genre, Alkaidland Records, (foreign language). Welcomed by a host of female users, the game ranked #1 on the iOS free download chart shortly after its release. We are actively working on developing more games that users love. In the meantime, we have seven new titles that we plan to release in domestic and overseas markets in the second half of the year, including the highly anticipated game, Pretty Derby, (foreign language). Pretty Derby is scheduled to launch on August 30 and is now available for preregistration. Over 2 million players have already preregistered as of today.

7月，我們推出了首款自主研發的女性向戀愛類遊戲《Alkaidland Records》（外文版）。遊戲受到眾多女性用戶的歡迎，上線後不久便榮登iOS免費下載榜首。我們正積極開發更多用戶喜愛的遊戲。同時，我們計劃在下半年在國內外市場推出七款新遊戲，其中包括備受期待的遊戲《Pretty Derby》（外文版）。 《Pretty Derby》計劃於8月30日上線，現已開放事先報名。截至目前，已有超過200萬名玩家事前註冊。

Given said that, the launch of Pretty Derby as well as few self-developed titles were delayed by several months than we initially planned due to lower revenue contribution from games and other non-core businesses such as IP derivatives and others. We now expect the full year 2023 revenue to be between RMB 22.5 billion and RMB 23.5 billion.

有鑑於此，由於遊戲收入貢獻以及IP衍生品等非核心業務的收入貢獻下降，《Pretty Derby》以及幾款自主研發遊戲的發布比我們最初計劃推遲了幾個月。我們目前預計2023年全年收入將在人民幣225億元至人民幣235億元之間。

As I mentioned earlier, our key financial goal for this year is to improve our gross profit and narrow losses. We have delivered on this goal with 66% increase in gross profit and a 51% cut on adjusted net loss in the second quarter.

正如我之前提到的，我們今年的主要財務目標是提高毛利並減少虧損。第二季度，我們實現了這個目標，毛利成長了66%，調整後淨虧損減少了51%。

Look ahead, we are committed to further improve our gross profit and control our expenses and meaningfully cut down losses in the second half of this year and reach our breakeven target by 2024.

展望未來，我們致力於進一步提高毛利，控制開支，並在今年下半年大幅減少虧損，到2024年實現損益兩平的目標。

As we progress on achieving our financial targets, we will continue to lead the healthy growth across our platform and enrich the everyday life of young generation in China.

隨著我們逐步實現財務目標，我們將繼續引領整個平台的健康成長，豐富中國年輕一代的日常生活。

This concludes Mr. Chen's remarks. I will now provide a brief overview of our financial results for the second quarter of 2023.

陳總的發言到此結束。接下來，我將簡要介紹我們2023年第二季的財務表現。

As mentioned in Mr. Chen's remarks, our financials continue to improve. We are improving our margins and showing clear results in our bottom line with narrowed losses. Total net revenues for the second quarter were RMB 5.3 billion, up 8% compared with the same period last year. Our total net revenues breakdown by revenue stream was approximately 43% VAS, 30% advertising, 17% mobile games and the 10% from our IP derivatives and other businesses.

正如陳先生在演講中提到的，我們的財務狀況持續改善。我們的利潤率正在提高，獲利能力顯著提升，虧損收窄。第二季淨收入總額為人民幣53億元，較去年成長8%。依收入來源劃分，我們的淨收入約佔43%的增值服務收入、30%的廣告收入、17%的手機遊戲收入以及10%的IP衍生性商品及其他業務收入。

Our cost of revenues decreased by 2% year-over-year to RMB 4.1 billion, driving our gross profit to RMB 1.2 billion, up 66% year-over-year. Our gross margin was 23%, up from 15% in the same period last year. We expect gross margin to continue to improve throughout the back half of the year.

我們的營業成本較去年同期下降2%至人民幣41億元，帶動毛利潤年增66%至人民幣12億元。毛利率為23%，高於去年同期的15%。我們預計下半年毛利率將持續提升。

Our total operating expenses were down 14% year-over-year to RMB 2.5 billion. Tight control of our expenses is ongoing while we improve our monetization at the same time. We cut sales and marketing expenses by 22% year-over-year to RMB 918 million, while our DAUs grew by 15%. As a percent of total revenues, sales and marketing was 17% compared with 24% in the same period last year. G&A expenses were RMB 539.7 million, down 14% year-over-year. R&D expenses were RMB 1 billion, down 7% year-over-year.

我們的總營運費用年減14%至人民幣25億元。我們持續嚴格控制費用支出，同時提升獲利能力。銷售及行銷費用較去年同期下降22%至人民幣9.18億元，每日活躍用戶成長15%。銷售及行銷費用佔總營收的17%，去年同期為24%。一般及行政費用為人民幣5.397億元，較去年同期下降14%。研發費用為人民幣10億元，較去年同期下降7%。

Our net loss and adjusted net loss were RMB 1.5 billion and RMB 964.1 million, respectively, narrowing by 23% and 51% year-over-year, respectively. Our adjusted net loss ratio in the second quarter was 18%, improving from 40% for the same period a year ago.

我們的淨虧損和調整後淨虧損分別為人民幣15億元和人民幣9.641億元，年比分別收窄23%和51%。第二季我們的調整後淨虧損率為18%，低於去年同期的40%。

Turning to our capital allocation and liabilities management. In June 2023, we completed the repurchase right offer for our 2027 notes with a total principal amount of USD 746 million. As of the end of the second quarter, our outstanding convertible bonds totaled a principal amount of USD 876 million. As of June 30, 2023, we had cash and cash equivalents, time deposits and short-term investments of RMB 14.3 billion or USD 2 billion. We believe this amount is sufficient to cover all of our remaining convertible bonds and fund our future operations.

談到我們的資本配置和負債管理。 2023年6月，我們完成了2027年票據的回購權要約，本金總額為7.46億美元。截至第二季末，我們未償還的可轉債本金總額為8.76億美元。截至2023年6月30日，我們持有的現金及現金等價物、定期存款及短期投資為人民幣143億元（約20億美元）。我們相信，這些金額足以涵蓋我們所有剩餘的可轉債，並為未來的營運提供資金。

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

謝謝您的關注。現在我們開始回答您的問題。接線員，請繼續。

(Operator Instructions) And the first question, Xueqing Zhang from CICC.

（操作員指示）第一個問題，來自中金公司的張學慶。

(foreign language) Congrats on advancing towards profitability. My question is about user engagement. The DAU further increased in the second quarter, so what is the DAU trend going forward? And can management share more details on the user engagement during the recent summer holidays?

（外語）恭喜您邁向獲利。我的問題是關於用戶參與度。第二季的每日活躍用戶（DAU）進一步成長，那麼未來的DAU趨勢如何？管理階層能否分享更多關於最近暑假期間用戶參與度的細節？

(foreign language)

（外語）

[Interpreted] Last year, I have been emphasizing increasing our earnings power and achieve healthy and sustainable DAU growth are the top 2 priorities of our company, and we have been executing on that strategy.

[翻譯]去年，我一直在強調提高獲利能力和實現健康可持續的DAU成長是我們公司的兩大優先事項，我們也一直在執行這項策略。

In the second quarter, with sales and marketing down 22% year-on-year, we have grown our DAU by 15%, reaching 96.5 million and our daily user time spent reached 94 minutes. This is the record high of same period in our operating history. And our overall time spent of the entire community grew by 22% year-over-year, all of above metrics shows a very healthy and robust growth of the community.

第二季度，儘管銷售和行銷支出較去年同期下降22%，但我們的每日活躍用戶成長了15%，達到9,650萬，每日用戶使用時長達94分鐘。這創下了我們營運歷史上同期的最高紀錄。整個社區的總使用時長年增了22%，所有這些指標都顯示社區正在健康且強勁地成長。

The reason why we have been emphasizing on the healthy growth of our DAU is because we believe the healthy growth of DAU is the foundation and preliminary requirement for Bilibili to achieve sustainable profit. And we believe we have already discovered an effective way to convert our high-quality traffic into increasing top line through advertising and live broadcasting. And we believe with this effective route and methods, we can achieve DAU and top-line growth, and this will be a virtuous cycle.

我們一直強調DAU的健康成長，是因為我們相信DAU的健康成長是嗶哩嗶哩實現可持續獲利的基礎和前提。我們相信，我們已經找到了一種有效的方法，透過廣告和直播將優質流量轉化為營收成長。我們相信，透過這種有效的途徑和方法，我們能夠實現DAU和營收的成長，並形成良性循環。

In the second quarter, our ad revenue and live broadcasting revenue achieved 36% and 32% year-on-year growth, respectively, which exceeded the industry average growth a lot.

第二季度，我們的廣告收入和直播收入分別實現年增36%和32%，大幅超過業界平均增幅。

As for the outlook into the summer, given that we're in August in a period of the summer vacation, we have been witnessing and experiencing a strong DAU and daily user time spent growth. We do expect that in the third quarter, our DAU can surpass a very exciting milestone of 100 million. And we also expect our average daily time spent can reach a new historical high.

至於夏季的展望，考慮到8月份正值暑假，我們見證並經歷了強勁的每日活躍用戶和每日用戶使用時長增長。我們預計在第三季度，我們的每日活躍用戶將突破1億這個令人興奮的里程碑。我們也預計我們的平均每日使用時間將創下歷史新高。

We are very confident with tight control on sales and marketing expense. We can continue to attract our users with high-quality content and return our user with our engaging community and achieve DAU sustainable and healthy growth. And we also believe this high traffic can be effectively converted to our sustainable top-line growth.

我們非常有信心嚴格控制銷售和行銷費用。我們能夠繼續以高品質的內容吸引用戶，並透過我們活躍的社群回報用戶，實現每日活躍用戶（DAU）的持續健康成長。我們也相信，這種高流量可以有效轉化為我們可持續的收入成長。

And the next question from Lei Zhang from Bank of America Securities.

下一個問題來自美國銀行證券公司的張雷。

(foreign language) Congrats on the solid advertising growth. My question also relate to ad business. Can you share with us the major driver on also ad business, follow the strong base of second quarter? Also, can you give us some updates on the June 18 promotion ad growth on our platform? In addition, how should we look at the second half ad growth on Bilibili? And how should we think about the new business, e-commerce streaming development to our ad business?

（外語）祝賀廣告業務穩健成長。我的問題也與廣告業務有關。能否分享一下，在第二季強勁成長的基礎上，廣告業務的主要驅動力是什麼？另外，能否介紹一下我們平台6月18日促銷活動廣告成長的最新情況？此外，我們如何看待嗶哩嗶哩下半年的廣告成長？我們如何看待新業務－電商串流業務的發展？

(foreign language)

（外語）

[Interpreted] In the second quarter, our ad revenue grew by 36% year-on-year. And overall, for the first half of this year, our ad growth rate has exceeded the industry average. At the same time, if you look at the ad revenue as percentage of total revenue, it has increased from 25% same period last year to 30% in the second quarter, which directly leads to growth of our gross profit.

[解讀] 第二季度，我們的廣告收入年增36%。整體而言，今年上半年我們的廣告收入成長率已經超過了行業平均。同時，如果以廣告收入佔總收入的比例來看，第二季的廣告收入佔比從去年同期的25%提升到了30%，這直接帶動了我們毛利的成長。

The one horizontal, one vertical strategy we mentioned last quarter is beginning to pay off, and that's been driving our advertising revenue growth. The one horizontal is actually referring to the technology middle platform and the data capability. It includes optimizing the recommendation model, improving the advertising inventory and matching efficiency and the application of AIGC to improve overall ad efficiency.

我們上季提到的「一橫一縱」策略開始見效，並推動了我們的廣告收入成長。 「一橫」其實指的是技術中台和資料能力，包括優化推薦模型、提升廣告庫存和匹配效率，以及應用AIGC來提升整體廣告效率。

The one vertical is referring to the six customized industry ad models, including games, e-commerce, FMCG, automotive and Internet service, among which e-commerce and games starting to show very positive results. In the second quarter, ad revenue from e-commerce industry grew by over 140% year-on-year and advertising revenue from game industry grew by over 40% year-on-year.

一個垂直領域指的是遊戲、電商、快消品、汽車、網路服務等六大客製化產業廣告模式，其中電商和遊戲產業開始展現出非常正面的業績。第二季度，電商產業廣告收入較去年同期成長超過140%，遊戲產業廣告收入較去年同期成長超過40%。

The second reason is that since last year, we have sticked to the integration of content and commercialization and expand ad inventory in different scenes of the community on the basis of ensuring user experience. In the first half of this year, it has formed very good growth momentum and drove the accelerator at revenue growth.

第二個原因是，從去年以來，我們堅持內容與商業化的融合，在保證用戶體驗的基礎上拓展社區不同場景的廣告庫存，今年上半年形成了非常好的增長勢頭，帶動了收入增長的加速器。

Thirdly is that many of you probably already aware that we have established the trading ecosystem, the ecosystem center, to focus on building video e-commerce-related capability in the second quarter by integrating the transactional scenario into the advertising products to further boost the revenue growth. We expect the video e-commerce-related ads would generate about 10% to 15% of ad revenue this year. And in the next few months we also plan to upgrade the membership shopping (foreign language) on our main page to (foreign language) shopping tab and creating a new entrance for more commercial opportunities.

第三，大家可能已經知道，我們已經建立了交易生態系統，即生態系統中心，並將在第二季度專注於建立視訊電商相關能力，將交易場景整合到廣告產品中，以進一步提升收入成長。我們預計，今年視訊電商相關廣告將貢獻約10%至15%的廣告收入。此外，在接下來的幾個月裡，我們還計劃將主頁上的會員購物（外語）升級為購物（外語）標籤頁，為更多商業機會創造新的入口。

As for the June 18 period promotions, how we performed, through our in-depth data collaboration with e-commerce platform, the ad revenue from e-commerce industry, including transaction scenario during June 18 period, actually grew by 200% year-over-year. And we expect to achieve 50% to 60% ad revenue year-on-year increase from e-commerce industry during upcoming Double 11 festival. As for examples, we actually did a collaboration with Alibaba's Spark program AKA (foreign language) and the results exceeded our expectations.

至於618期間的推廣，透過與電商平台的深度數據合作，我們的表現如何？ 618期間，包括交易場景在內的電商產業廣告收入實際上比去年同期成長了200%。我們預計即將到來的雙十一期間，電商產業的廣告收入將年增50%至60%。例如，我們實際上與阿里巴巴的Spark程式AKA（外語）進行了合作，效果超出了我們的預期。

There are a few interesting data points I can introduce. About 70% of the users who entered Taobao through Bilibili were new customers, and this ratio reached even to 90% for certain industry. That shows that we have the effective ability to consistently convert user to advertisers. In addition, Bilibili user maintained a very high conversion value 15 days after the related video was posted. And during June 18th period, the ad revenue from (added by company after the call) cooperation with Alibaba actually increased by 300% year-over-year.

我可以介紹一些有趣的數據。透過嗶哩嗶哩進入淘寶的用戶中，大約70%是新用戶，在某些行業，這個比例甚至高達90%。這表明我們能夠有效地將用戶持續轉化為廣告主。此外，嗶哩嗶哩用戶在相關影片發布15天後仍保持著非常高的轉換率。在6月18日期間，與阿里巴巴合作的廣告收入（公司在電話會議後補充）實際上比去年同期成長了300%。

While many other content platforms choose to build their own e-commerce platforms, Bilibili, on the other hand, we choose to take an open approach, partnering with e-commerce players and brand owners to grow the sales volume together on Bilibili.

當許多其他內容平台選擇建立自己的電子商務平台時，Bilibili 則選擇採取開放的方式，與電子商務參與者和品牌所有者合作，共同增加 Bilibili 的銷售額。

First of all, cultivating users' consumption behavior and mind share on Bilibili is our top priority. We believe that the young generation has strong willing to consume, and building the mind share is very important as we unleash their consumption power on our platform. In the first half of this year, near 30 million users clicked on the shopping link on Bilibili's video commentary section, which leaded to a transaction-related behavior. As we unleashing our user consumption demand, the number of videos that carries product links increased by 8x in the first half of this year, and the number of live broadcasting e-commerce shows increased by 7x in the first half of this year.

首先，在嗶哩嗶哩平台上，培養使用者的消費行為和心智份額是我們的首要任務。我們相信年輕一代擁有強大的消費意願，在釋放他們的消費能力時，建立心智份額至關重要。今年上半年，近3000萬用戶點擊了嗶哩嗶哩視頻評論區的購物鏈接，並促成了交易。隨著我們釋放用戶消費需求，今年上半年帶有商品連結的影片數量增加了8倍，電商直播場次增加了7倍。

Secondly, we will continue to help our content creator to achieve sustainable operations through our video e-commerce initiatives. More content creator already started to try out Bilibili video e-commerce. This includes, but not limited to, many well-known content creators such as (foreign language) and et cetera. We are very delighted to find the model is very valid and successful, and this also broke the rumor that Bilibili's user have no consumption power. And actually, as a matter of fact, from the data that's shown that we have a lot of female user with consumption potential and power. Actually, 45% of Bilibili user are female. We do notice that they do have strong willingness to consume on Bilibili and they have strong purchasing powers.

其次，我們將繼續透過視訊電商平台，幫助內容創作者實現永續營運。越來越多的內容創作者已經開始嘗試嗶哩嗶哩視訊電商，這包括但不限於許多知名內容創作者，例如（外語）等等。我們很高興地看到，模式非常有效且成功，這也打破了嗶哩嗶哩用戶缺乏消費能力的謠言。事實上，數據顯示，我們擁有大量具有消費潛力和消費能力的女性用戶。實際上，嗶哩嗶哩用戶有45%是女性。我們確實注意到，她們在嗶哩嗶哩的消費意願很強，而且購買力很強。

Thirdly is that we intend to try more categories from our -- on top of our traditional strong verticals, in addition to the IP derivative AKA at our membership shopping, which is focused on the ACG preferential products and content. We intend to explore more categories such as food, beauty, 3C and digital products, home appliances and et cetera. And here is the example, in mid-April, Xiaomi launched a live broadcasting e-commerce show promoting its new cellphone. Based on the data that I have in hand, Bilibili ranked #1 in terms of GMV among all content platforms. It not only reflected that the strong word-of-mouth influence that we had among our young user group but also the strong consumption power our users had.

第三，除了我們傳統的強項垂直領域，以及會員購物平台的IP衍生性AKA，我們計劃嘗試更多品類，重點是ACG特惠商品和內容。我們計劃探索更多品類，例如食物、美妝、3C數碼、家電等等。舉個例子，4月中旬，小米推出了電商直播，推廣新款手機。根據我掌握的數據，嗶哩嗶哩的GMV在所有內容平台中排名第一。這不僅反映了我們在年輕用戶群中強大的口碑影響力，也反映了我們用戶強大的消費能力。

I think the Bilibili ad model has evolved from establishing brand perception and mind share to a true integrated ad solution, a full advertising chain of brand building, seeding and sales conversion.

我認為嗶哩嗶哩的廣告模式已經從建立品牌認知和心智份額發展成為真正的綜合廣告解決方案，即品牌建立、播種和銷售轉換的完整廣告鏈。

In the first half of this year, we have upgraded our industry ad solution for game and e-commerce and transactional strategy and is already starting to show positive results. In the second half, I personally plan to conduct additional upgrade for our leading ad industries such as FMCG, 3C and digital products. We believe as we deliver healthy and sustainable user growth, we are confident that we can achieve 25% to 30% ad revenue growth on a full year basis year-on-year.

今年上半年，我們升級了遊戲和電商產業的產業廣告解決方案以及交易策略，並已開始顯現積極成效。下半年，我個人計劃對快速消費品、3C和數位產品等主要廣告產業進行進一步升級。我們相信，隨著用戶健康、永續的成長，我們有信心實現全年廣告收入年增25%至30%。

Next question from Kenneth Fong from Credit Suisse.

下一個問題來自瑞士信貸的 Kenneth Fong。

(foreign language) We noticed that we lowered the full year revenue guidance. Can you share with us the key considerations behind? Are we still on track for narrowing losses for this year?

（外語）我們注意到我們下調了全年收入預期。能分享一下背後的主要考慮因素嗎？我們今年的虧損是否仍有望收窄？

(foreign language)

（外語）

[Interpreted] The reason for the guidance update is largely due to two reasons. Number one is a number of our games' launch plan was delayed. And secondly is certain non-core business such as our comics and the IP derivative and others business is in the period of adjustment of strategy, and its revenue is lower than expected.

[解讀] 此績效指引更新主要基於兩個原因。一是我們多款遊戲的上線計畫被延後。二是部分非核心業務，例如漫畫、IP衍生性商品等，正處於策略調整期，收入低於預期。

We believe the reason for the guidance update, the core is -- it's for a temporary phase change, and it's not a change of foundation. The core business actually remains intact. For example, the delay of games is just that we are recognizing the revenue a little bit later. For example, Pretty Derby has already been scheduled to be launched on August 30. And we will be releasing this game on that day. This is confirmed and certain.

我們認為，這次業績指引更新的核心原因在於──這只是暫時的階段性變化，而非基礎業務的改變。核心業務實際上保持不變。例如，遊戲的延遲只是因為我們確認收入的時間稍晚。例如，《Pretty Derby》已經預定8月30日上線。我們將在當天發布這款遊戲。這一點已經確認，毋庸置疑。

And our outlook and our confidence in the quality of the game and the revenue is unchanged.

我們對遊戲品質和收入的展望和信心沒有改變。

And as you may already see that in the second quarter, the core business, Bilibili live broadcasting and advertising has achieved very solid growth.

大家可能已經看到，第二季度，核心業務嗶哩嗶哩直播和廣告實現了非常穩健的成長。

We do expect that in the second half of this year and look forward to 2024, the advertising and live broadcasting business will sustain a very healthy and solid growth.

我們確實預計，今年下半年以及展望2024年，廣告和直播業務將保持非常健康和穩健的成長。

In the beginning of this year, we have set our financial target to increase gross profit and narrow our net losses. So as a financial requirement or KPIs to each department business line is to ensure the absolute dollar growth for its gross profit.

今年年初，我們設定的財務目標是提高毛利，並縮小淨虧損。因此，對各部門業務線的財務要求或KPI就是確保其毛利實現絕對美元成長。

Strategically, we have lowered the revenue contribution of low-margin business or loss-making business, even though some of the revenue growth rate has been impacted. However, the absolute dollar of our gross profit has sustained a very healthy and robust growth.

從策略上講，我們降低了低利潤業務或虧損業務的收入貢獻，儘管部分收入成長率受到了影響。然而，我們毛利的絕對金額仍然保持著非常健康強勁的成長。

In the second quarter, our gross profit grew by 66% year-on-year, and our gross margin has experienced four consecutive quarterly growth. And our adjusted net loss has narrowed by 51% year-on-year.

第二季度，我們的毛利年增66%，毛利率已連續四季成長；調整後淨虧損較去年同期收窄51%。

I'm confident to achieve our loss-cutting target for 2023 and achieve our breakeven target by 2024.

我有信心實現我們在 2023 年停損的目標，並在 2024 年實現損益兩平的目標。

This is Sam. I just want to add that on the loss reduction side, even though the revenue growth rate, as Mr. Chen already mentioned that, will be lower than expected. But we are still confident to achieve the loss-cutting target. We said in the beginning of this year, which is to cut our adjusted operation loss by RMB 3 billion, through the gross profit increase and expense control.

我是Sam。我想補充一下，在減虧方面，儘管正如陳先生之前提到的，收入成長率將低於預期。但我們仍有信心實現減虧目標。我們在今年年初就說過，要透過提高毛利和控制費用，調整後營運虧損減少30億元。

And notably, in the second quarter, our operating cash flow was close to breakeven. We think there are good chance that we can achieve operating cash flow positive in the fourth quarter this year.

值得注意的是，第二季我們的經營現金流接近損益兩平。我們認為今年第四季我們很有可能實現經營現金流為正。

Additionally, we are confident to continue to improve our gross profit margin in the second half of this year and achieve our breakeven target by 2024.

此外，我們有信心在今年下半年繼續提高毛利率，並在2024年實現盈虧平衡的目標。

Lastly, the updated full year guidance reflects our current projection of various potential outcome. We will try our best to ensure smooth product launch as well as achieve our goal of increasing the gross profit and narrowing losses.

最後，更新後的全年業績指引反映了我們目前對各種潛在結果的預測。我們將盡力確保產品順利上市，並實現毛利成長和虧損收窄的目標。

The next question from Yiwen Zhang from China Renaissance.

下一個問題來自華興資本的張一文。

(foreign language) My question is on our game business. Can you discuss on the pipeline and especially for the Pretty Derby? How should we think about your expectation? And also, can you talk about our self-developed game strategy and the direction?

（外語）我的問題是關於我們的遊戲業務的。您能談談我們的產品線，特別是《Pretty Derby》嗎？我們該如何看待您的期望？另外，可以談談我們自主研發遊戲的策略和方向嗎？

(foreign language)

（外語）

[Interpreted] In the second half of this year, we have seven titles in our pipeline ready to be launched domestically and internationally. Among those 7, 5 of them have already gained approval and ready to be launched in the domestic market. Two will be launched internationally.

[翻譯] 今年下半年，我們有七部影片準備在國內外發行。其中五部已獲批，準備在國內市場發行。另有兩部將在國際市場發行。

As for the highly anticipated game Pretty Derby, we have already scheduled the launch date to be August 30. And right now, within just 2 weeks of preregistration, over 2 million users are already preregistered for this game. This is a new record in our operating history for the preregistration amount.

至於備受期待的遊戲《Pretty Derby》，我們已經將上線日期定在8月30日了。目前，這款遊戲在開啟預註冊後的短短兩週內，預先註冊用戶已超過200萬人。這創下了我們營運歷史上的預註冊量新高。

Just because that it's such a highly anticipated game with a large fan base, we actually spent a lot of effort doing the localization work, making sure that our gamers will be having the very original Pretty Derby experience. That's actually one of the reasons why it has been delayed by several months.

正因為這是一款備受期待、粉絲眾多的遊戲，我們實際上在本地化工作上投入了大量精力，以確保我們的玩家能夠享受到原汁原味的《Pretty Derby》體驗。這實際上是它延期幾個月的原因之一。

We believe that Bilibili's game launch team is the best ACG game launch team in China, and they are very experienced and they will make sure a very smooth and successful launch of Pretty Derby. And we're confident Pretty Derby will be a very successful title and also have good user feedback and reputation.

我們相信B站的遊戲發行團隊是中國最優秀的ACG遊戲發行團隊，他們經驗豐富，一定能確保《Pretty Derby》的發行順利成功。我們堅信《Pretty Derby》一定會成為一款非常成功的遊戲，並獲得良好的用戶回饋和口碑。

As for our self-developed pipeline, we actually have two ACG card games to be launched in the second half of this year. This includes one game called Thrud (foreign language) which was already launched today, and there will be another game called Higan: EruthyLL (foreign language) This will be scheduled for launch in October.

至於我們的自主研發產品線，我們其實有兩款ACG卡牌遊戲將於今年下半年推出。其中一款名為《Thrud》（外語版），現已上線；另一款名為《Higan: EruthyLL》（外語版），預定10月上線。

As for our self-developed game strategy, as you may you are aware, there's been a very heavy competition among the game industry this year. As for our own self-developed game, the strategy will remain unchanged, which is focus on the genres that Bilibili has most advantage of. Me, personally, will be spending a lot of time to ensure a success rate as we have only started doing self-developed games, and we will be very down to earth and grounded to take a step-by-step approach to ensure every game that we launch will be high quality and will be successful. This is the target that I personally will spend a lot of time to ensure and also require our team to achieve.

至於我們的自研遊戲策略，正如你們所知，今年遊戲產業的競爭非常激烈。至於我們的自研遊戲，策略將保持不變，那就是專注於嗶哩嗶哩最有優勢的遊戲類型。我個人會投入大量時間來確保成功率，因為我們才剛開始自研遊戲，我們會腳踏實地、循序漸進地確保我們推出的每一款遊戲都是高品質的，並取得成功。這是我個人會投入大量時間確保的目標，也是我們團隊需要努力實現的目標。

Secondly, it's about the long-term operation of the game. I believe in the future, all the game will be a long-term operation cycle. Otherwise, it won't make any profit. So this is the requirement I have for our self-developed game. If the title from day one is not a long-term operation title, we won't allow it to be set up. As for the licensed game, if it's not a long life cycle game, we won't sign it, we won't license it. As for the game that's already online, the long life cycle management and operation also be one of the most important KPIs I have for the team.

其次，這關乎遊戲的長期運作。我相信未來所有的遊戲都會有長期營運週期。否則，它就不會獲利。所以，這就是我對我們自研遊戲的要求。如果遊戲從第一天起就不是長期運作的，我們就不會允許它上線。至於授權遊戲，如果它不是長生命週期的遊戲，我們就不會簽約，也不會授權。對於已經上線的遊戲，長生命週期的管理和營運也是我對團隊最重要的KPI之一。

As for Bilibili, we have very good track record on making sure a long life cycle operation. As a matter of fact, our Azur Lane just celebrated six years of anniversary. And FGO, just last week, we celebrated its seventh year anniversary. And all of the user data metrics remain very healthy for both of the games. As a matter of fact, during the sixth anniversary of FGO, its DAU even surpassed the 6 years anniversary's DAU. So we will stick on this route and making sure that all of our games will sustain a long life operation cycle.

至於嗶哩嗶哩，我們在確保長生命週期運作方面有著非常良好的記錄。事實上，我們的《碧藍航線》剛剛慶祝了六週年紀念日。而《FGO》就在上週慶祝了它的七週年紀念日。這兩款遊戲的所有用戶數據指標都保持著非常健康的狀態。事實上，在《FGO》六週年紀念日期間，它的日活躍用戶甚至超過了六週年紀念日的每日活躍用戶。因此，我們將堅持這條路線，確保我們所有的遊戲都能保持長生命週期運作。

The next question from Lincoln Kong from Goldman Sachs.

下一個問題來自高盛的林肯孔。

(foreign language) So my question is about AIGC's application to Bilibili. So from past Investor Day, we already seen some development or strategy showcase in terms of AIGC speeding up the production efficiency, the marketing promotion tools as well as this AI-integrated search. Could management elaborate more around how we think about AIGC could benefit Bilibili?

（外語）我的問題是關於AIGC在嗶哩嗶哩的應用。從先前的投資者日活動來看，我們已經看到了AIGC在提高生產效率、行銷推廣工具以及AI整合搜尋方面的一些發展或策略展示。管理階層能否更詳細地闡述我們認為AIGC將如何使嗶哩嗶哩受益？

(foreign language)

（外語）

[Interpreted] We believe this is a breakthrough technology that AIGC we can bring to the industry. The way we look at it, it equals to the mobile Internet that happened 10 years ago and this will not only benefit Bilibili. It will actually benefit everyone.

[解讀] 我們相信這是AIGC能為產業帶來的突破性技術。在我們看來，它相當於10年前的行動互聯網，這不僅會讓嗶哩嗶哩受益，實際上也會讓每個人受益。

So as for Bilibili, our core business is video and ACG, and it has been very clear that AIGC can enable an increased efficiency in a large amount on both fronts, for example, on content production as well as content recommendation. Also based on the LLM, we can increase a lot of the efficiency of managing our community by understanding what the text means, the content means within our community. And we believe this technology, AIGC, has multifaceted applications and scenarios to help us to improve all around user experience.

對於嗶哩嗶哩來說，我們的核心業務是影片和ACG，AIGC 顯然能夠在內容生產和內容推薦等兩個方面大幅提升效率。此外，基於 LLM，我們能夠理解社群中文本和內容的意義，從而大幅提高社群管理的效率。我們相信 AIGC 這項技術擁有多面向的應用和場景，能夠幫助我們全面提升使用者體驗。

As for the application scenario, actually, we have already conduct some extended research and development. And we believe there's a lot of scenarios that we can leverage. For example, the prepared remarks that spoken by Sam just now before this Q&A session, actually, it was not actually conducted by Sam. It's powered by our self-developed AI tool, text-to-speech, TTS tool. And similar products like this, we have already started to research, develop and apply it in our various scenarios.

至於應用場景，實際上我們已經進行了一些深入的研發。我們相信有很多場景可以利用。例如，剛才Sam在問答環節之前的準備發言，實際上並非Sam本人發表。它是由我們自主研發的AI工具－文字轉語音（TTS）工具所驅動的。類似的產品，我們已經開始在各種場景中進行研發和應用。

And there are other examples. For example, this year's Bilibili Macro Link, our live virtual host, 22 and 33, their voice was also generated by the same tool, TTS AI tool that Bilibili self-developed.

還有其他的例子，像是今年的嗶哩嗶哩宏觀環節，我們的22號和33號直播主播，他們的聲音也是用同一個工俱生成的，就是嗶哩嗶哩自己研發的TTS AI工具。

And another example would be knowledge-related video creation. As many knowledge content creators, they generally write the text and they record their voice. With the help of this AI tool, it can largely improve its production efficiency.

再比如知識類影片的創作。很多知識內容創作者，一般都是文字撰寫，聲音錄製。有了AI工具的幫助，可以大幅提升其製作效率。

As for the LLM, even though we haven't marketed quite aggressively, but actually, we have already started to apply LLM in various daily operations.

至於法學碩士（LLM），雖然我們還沒有大力推廣，但實際上，我們已經開始將LLM應用到各項日常營運中。

Another example would be on the content auditing side. In the past, we have to spend a lot of human resource and power in managing the content with the help of large language models because it can understand the voice, the text, the meaning and all of the implied meanings behind the text. It can drastically increase the efficiency of how our content audit team process the content.

另一個例子是內容審核方面。過去，我們必須花費大量的人力和精力來管理內容，而大型語言模型可以理解語音、文字、意義以及文字背後的所有隱含意義。這可以顯著提高我們內容審核團隊處理內容的效率。

And another application scenario would be enhanced search because Bilibili has a vast content library, and each videos carries a lot of scatter information and we can leverage the LLM to drastically enhance the search efficiency. We're actually beta testing a new enhanced search that by just typing question in our search box, our large language model can summarize and answer questions. A very valid example would be with the recent version upgrade of Genshin Impact, people can just simply ask which card is worth drawing and which character is worth spending time to improve. And the large language model can summarize the valid information and just provide it to the user versus in the past, they have to watch several videos to summarize that content information. Now with a just stroke of hand, they can get the correct and fast answer.

另一個應用場景是增強搜索，因為嗶哩嗶哩擁有龐大的內容庫，每個視頻都包含大量分散的信息，我們可以利用LLM大幅提升搜索效率。我們正在測試一種新的增強搜尋功能，只需在搜尋框中輸入問題，我們的大型語言模型就能總結並回答問題。一個非常有效的例子是《原神》最近的版本升級，玩家只需簡單地詢問哪張卡牌值得抽取，哪個角色值得花時間提升。大型語言模型可以總結有效資訊並直接提供給用戶，而過去，用戶需要觀看多個影片才能總結出這些內容資訊。現在，他們只需動動手指，就能快速獲得正確答案。

Another function upgrade that we are testing is AI assistance. This will accompany users when they are watching a video, help them to summarize and extract useful information. For example, in a MacBook review video, user can ask the AI assistant, what's the difference between M2 Pro chip and the M2 chip? What's the price difference? What's the efficiency difference? And the AI assistant can extract the exact information to help the user to get what they want. All of this will help to increase Bilibili user experience.

我們正在測試的另一項功能升級是AI助理。它將在用戶觀看影片時陪伴用戶，幫助他們總結和提取有用的信息。例如，在MacBook評測影片中，使用者可以向AI助理詢問M2 Pro晶片和M2晶片有什麼不同？價格差異是多少？效率差異是多少？ AI助理可以提取準確的訊息，幫助用戶找到他們想要的資訊。所有這些都將有助於提升嗶哩嗶哩的用戶體驗。

Internally, we really value the AIGC technology. We believe this is a once-in-a-lifetime opportunity. This will be similar to the invention of mobile Internet, which enables Bilibili's mobile user grow by tenfold. And we believe that with the AIGC technology matures, we can leverage this technology to largely enhance our user experience, our content creators' experience and productivity as well as increase our commercialization efficiency.

我們內部非常重視AIGC技術。我們相信這是一個千載難逢的機會。這將類似於行動互聯網的發明，它使B站的行動用戶成長了十倍。我們相信，隨著AIGC技術的成熟，我們可以利用這項技術大幅提升使用者體驗、內容創作者的體驗和生產力，並提高我們的商業化效率。

That concludes the questions. Operator, we can close the call today.

問題到此結束。接線員，今天的通話可以結束了。

And that concludes the question-and-answer session. Thank you once again for joining Bilibili's Second Quarter 2023 Financial Results and Business Update Conference Call today. If you have any further questions, please contact Juliet Yang, Bilibili Executive IR Director or Piacente Financial Communication. Contact information for IR in both China and U.S. site can be found on today's press release. Have a great day.

問答環節到此結束。再次感謝您參加嗶哩嗶哩2023年第二季財務業績及業務更新電話會議。如有任何疑問，請聯絡嗶哩嗶哩執行投資者關係總監Juliet Yang或Piacente Financial Communication。中國和美國投資者關係部門的聯絡方式可在今天的新聞稿中找到。祝您擁有美好的一天。

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

[本記錄中標記為 [已翻譯] 的部分由現場翻譯人員朗讀。 ]