Cheer Holding Inc (CHR) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to Glory Star New Media Group Holdings Limited's Full Year 2020 Earnings Conference Call. (Operator Instructions) After the management's prepared remarks, we will have a question-and-answer session. Today's conference call is being recorded, and a webcast replay will be available at Glory Star's IR website.

女士們、先生們，感謝大家的支持，歡迎大家參加星耀新媒體集團控股有限公司2020年全年業績電話會議。 （操作員指示） 管理層準備好發言後，我們將進行問答環節。今天的電話會議正在錄製中，並且將在 Glory Star 的 IR 網站上提供網絡廣播重播。

Now I'd like to hand the conference over to your speaker host today, Mr. Yida Ye, Glory Star's Executive Assistant. Please go ahead, Mr. Ye.

現在我想把今天的會議交給你們的主持人，星耀集團行政助理葉一達先生。請葉先生繼續。

Thank you, Mike. Hello, everyone, and welcome to our earnings conference call for the full year of 2020. Our financial and operating results were released earlier and are currently available on both our IR website at ir.yaoshixinghui.com or ir.gsmg.co and Newswire.

謝謝你，邁克。大家好，歡迎參加我們的2020 年全年收益電話會議。我們的財務和經營業績已於早些時候發布，目前可在我們的IR 網站ir.yaoshixinghui.com 或ir.gsmg.co 和Newswire 上查看。

Before we continue, I would like to refer you to our safe harbor statement in our earnings press release, which also applies to this call as well, as we will be making forward-looking statements.

在我們繼續之前，我想請您參閱我們的收益新聞稿中的安全港聲明，該聲明也適用於本次電話會議，因為我們將做出前瞻性聲明。

Joining us today are our CEO, Mr. Bing Zhang; and CFO, Mr. Perry Lu. Mr. Zhang will start the call by providing an overview of the company's performance and operational highlights for the full year of 2020. Mr. Lu will then provide details on the financial results for the period before we open up the call for your questions.

今天加入我們的是我們的首席執行官張兵先生；和首席財務官盧佩里先生。張先生將在電話會議開始時概述公司 2020 年全年的業績和運營亮點。然後，在我們開始電話會議回答您的問題之前，盧先生將提供該期間財務業績的詳細信息。

I will now turn the call over to Mr. Zhang.

我現在將電話轉給張先生。

(foreign language)

（外語）

[Interpreted] Hello, everyone, and thank you for joining Glory Star's Earnings Call for the Full Year of 2020.

【解讀】大家好，感謝您參加星耀集團2020年全年財報電話會議。

(foreign language)

（外語）

[Interpreted] Despite the outbreak of COVID-19 and macroeconomic challenges, the government's effective control of epidemic has led to a strong economic recovery in China. As a result of the macroeconomic turnaround and our business resiliency, the sum total of the second, third and fourth quarter revenues in 2020 were higher than our total revenues for the full year of 2019. More broadly, our total revenues in 2020 increased by 88.2% year-over-year to USD 123.8 million, where net income attributable to Glory Star in 2020 reached a record high, increasing by 11.2% year-over-year to USD 29.3 million.

【解讀】儘管新型冠狀病毒肺炎（COVID-19）疫情爆發，宏觀經濟面臨挑戰，但政府對疫情的有效控制導致中國經濟強勁復甦。由於宏觀經濟好轉和我們的業務彈性，2020 年第二、第三和第四季度的收入總和高於我們 2019 年全年的總收入。更廣泛地說，我們 2020 年的總收入增長了 88.2%同比增長%至1.238億美元，其中2020年歸屬於星耀淨利潤創歷史新高，同比增長11.2%至2930萬美元。

(foreign language)

（外語）

[Interpreted] We achieved that outperformance by executing our visionary strategy during the period. For example, we developed a series of products in-house to further extend their use cases and refined our user experiences. We also accelerate our efforts to forge more partnerships with leading platforms to further enhance our use to value proposition and diversify our revenue stream. As such efforts and as of year-end, our CHEERS App downloads have increased by 98% year-over-year to 169 million. Daily average users had increased by 180% year-over-year to 5.4 million. And our gross merchandise value had increased by 581% year-over-year to USD 132 million.

[解讀]我們通過在此期間執行我們的遠見戰略實現了出色的業績。例如，我們內部開發了一系列產品，以進一步擴展其用例並完善我們的用戶體驗。我們還加快努力與領先平台建立更多合作夥伴關係，以進一步增強我們對價值主張的使用並使我們的收入來源多樣化。經過這些努力，截至年底，我們的 CHEERS 應用下載量同比增長 98%，達到 1.69 億次。日均用戶數同比增長 180% 至 540 萬。我們的商品總價值同比增長 581%，達到 1.32 億美元。

(foreign language)

（外語）

[Interpreted] Going forward, to fuel our growth momentum, we will continue to refine user experiences, expand product use cases and cover new consumption through quality content offerings and enhance user stickiness by introducing more proprietary technology products and establishing more collaboration with other leading businesses.

【解讀】未來，我們將繼續通過優質內容，完善用戶體驗，拓展產品使用場景，覆蓋新消費，通過引入更多自有技術產品、與其他領先企業建立更多合作，增強用戶粘性，增強用戶粘性。 。

(foreign language)

（外語）

[Interpreted] Now turning to our business update. During 2020, to broaden the range of our product use cases, we continued to invest in research and development, upgrade our products and enrich our catalog of high-quality content offering. As such, we unlocked a wider variety of product use cases for our users and thus enabled them to more easily access our premium shopping, live streaming, media and game content.

[解讀] 現在轉向我們的業務更新。 2020年，為了拓寬產品使用場景，我們繼續加大研發投入，升級產品，豐富優質內容。因此，我們為用戶解鎖了更廣泛的產品用例，使他們能夠更輕鬆地訪問我們的優質購物、直播、媒體和遊戲內容。

(foreign language)

（外語）

[Interpreted] We have remained determined to further extend product use cases in 2021. In February, for example, we announced our cooperation with Hangzhou Beiying, a subsidiary of the leading smart home entertainment solution developer and manufacturer, Dangbei Network. Through this partnership, we aim to expand our footprint in the Internet of Things and smart hardware market, which should also serve to provide our users with more immersive and interactive experiences.

【解讀】我們仍然決心在2021年進一步擴展產品用例。例如，2月份，我們宣布與領先的智能家庭娛樂解決方案開發商和製造商當貝網絡的子公司杭州北影合作。通過此次合作，我們的目標是擴大我們在物聯網和智能硬件市場的足跡，同時也為我們的用戶提供更加身臨其境的互動體驗。

(foreign language)

（外語）

[Interpreted] Additionally, we are also focused on launching new products with state-of-the-art technology. We are currently in the process of developing and testing Cheer Chat, which is the first voice-centric social networking product that we launch in the overseas market utilizing the convenience of mobile devices, 5G and related in speech recognition and AI technology. Cheer Chat creates a more personalized, entertaining and interactive experience for our users to socialize online.

[解讀]此外，我們還致力於推出採用最先進技術的新產品。我們目前正在開發和測試Cheer Chat，這是我們利用移動設備、5G以及相關語音識別和人工智能技術的便利性在海外市場推出的第一個以語音為中心的社交網絡產品。 Cheer Chat 為我們的用戶在線社交創造了更加個性化、娛樂性和互動性的體驗。

[Cheer Car], our in-vehicle audio and video content application for electric vehicles, has also entered its internal testing phase. Once launched, this product will enable both drivers and passengers to access our trademark content and service across all maintained systems.

我們的電動汽車車載音視頻內容應用【歡呼車】也已進入內測階段。一旦推出，該產品將使駕駛員和乘客能夠在所有維護的系統中訪問我們的商標內容和服務。

(foreign language)

（外語）

[Interpreted] Looking ahead, as the right 5G continues to accelerate, we plan to leverage 5G and AR technology to further refine our user experiences. In line with these efforts, we've increased number of AR applications across the platform including CHEERS video, CHEERS e-Mall, while also expanding these applications into other areas such as interactive content. Meanwhile, to further [accompany] the gradual expansion of our CHEERS video AR platform, we will work hand in hand with large-scale mobile operators such as China Telecom.

【解讀】展望未來，隨著5G的不斷加速，我們計劃利用5G和AR技術進一步完善我們的用戶體驗。為了配合這些努力，我們在整個平台上增加了 AR 應用程序的數量，包括 CHEERS 視頻、CHEERS e-Mall，同時還將這些應用程序擴展到互動內容等其他領域。同時，為了進一步配合我們CHEERS視頻AR平台的逐步拓展，我們將與中國電信等大型移動運營商攜手合作。

By integrating these cutting-edge 5G and AR technologies across our business, we will also promote the business applications of these technologies and enhance users' content consumption experiences and work to better satisfy users' increasing demand for diverse and personalized entertainment solutions.

通過將這些前沿的5G和AR技術融入到我們的業務中，我們還將推動這些技術的商業應用，提升用戶的內容消費體驗，更好地滿足用戶日益增長的多樣化、個性化娛樂解決方案的需求。

(foreign language)

（外語）

[Interpreted] Now turning to our progress on the partnership front. In 2020, we actively set out more cooperation opportunities with other leading businesses with a particular focus on leading platforms. Accordingly, we enhanced our user stickiness, enriched our lifestyle scenarios and diversified our revenue stream in May.

[解讀] 現在談談我們在夥伴關係方面的進展。 2020年，我們積極開拓更多與領先企業、特別是領先平台的合作機會。因此，我們在 5 月份增強了用戶粘性，豐富了我們的生活方式場景並多元化了我們的收入來源。

For example, we partnered with JD.com to unleash a new generation of content solutions capable of helping JD.com to better satisfy the need of their customers for premium lifestyle-oriented online content.

例如，我們與京東合作推出了新一代內容解決方案，能夠幫助京東更好地滿足客戶對優質生活方式導向的在線內容的需求。

Additionally, by the end of 2020, CHEERS e-Mall had completed -- has completed its launch of third-party platform services to cover all aspects of lifestyle services. This integration included a partnership with Taobao, which began in November. As a result of this partnership, users are now able to seamlessly access Taobao's merchandise through our CHEERS e-Mall platform, where CHEERS e-Mall SKUs have expanded to more than 100 million, in turn.

此外，截至2020年底，CHEERS e商城已完成第三方平台服務的上線，覆蓋生活服務的方方面面。此次整合包括與淘寶的合作，該合作於 11 月開始。通過此次合作，用戶現在可以通過我們的CHEERS e-Mall 平台無縫地訪問淘寶的商品，CHEERS e-Mall SKU 也已擴大到超過 1 億個。

(foreign language)

（外語）

[Interpreted] We remain focused on expanding our partnership base to increase our market share, refine our user value proposition and enhance our user stickiness. Earlier this year in March, for example, we signed a cooperation agreement with Toutiao, which is ByteDance's content platform for Chinese language news and information. Users can now browse Toutiao's graphic and video content in real time in our CHEERS video app.

[解讀]我們仍然專注於擴大我們的合作夥伴基礎，以增加我們的市場份額，完善我們的用戶價值主張並增強我們的用戶粘性。例如，今年三月初，我們與字節跳動的中文新聞和信息內容平台今日頭條簽署了合作協議。用戶現在可以在我們的CHEERS視頻應用中實時瀏覽今日頭條的圖文和視頻內容。

Going forward, we plan to explore more opportunities for innovation with Toutiao in other fields, including search and AI. We also plan to remain in active dialogue with potential new partners to drive business growth.

未來，我們計劃與今日頭條在其他領域探索更多創新機會，包括搜索和人工智能。我們還計劃與潛在的新合作夥伴保持積極對話，以推動業務增長。

(foreign language)

（外語）

[Interpreted] In summary, our efforts to introduce more in-house developed products, expand our product use cases and grow our partnership base continue to see our growth momentum. Looking ahead, we tend to remain true to our mission and are enriching people's lives. And therefore, we'll continue to enriching people's lives through our ongoing commitment to expanding our user base, upgrading our platform and strengthening our research and development capabilities.

[解讀]總而言之，我們不斷推出更多自主開發的產品，擴大產品用例，擴大合作夥伴基礎，繼續看到我們的增長動力。展望未來，我們將堅守我們的使命，不斷豐富人們的生活。因此，我們將通過不斷致力於擴大用戶群、升級平台和加強研發能力，繼續豐富人們的生活。

At the same time, we'll also aggressively open up our platform to more UGC content creation by extending our blueprint -- our business blueprint through more quality investment and merger and acquisition opportunities throughout the market for the new lifestyle consumption.

同時，我們也會積極開放我們的平台，讓更多的UGC內容創作，通過在新生活方式消費市場上提供更多優質的投資和併購機會來延伸我們的藍圖——我們的商業藍圖。

As the macro economy continues to recover, we remain well positioned to capitalize on lifestyle -- to capitalize on those development trends in the areas of new retail and e-commerce, premium content-driven e-commerce, enterprise software as a service, 5G and AR technologies, instant payments, AI voice, social networking platform, in-vehicle interactive audio and video content and more. We are confident that we have the right strategy in place to maximize our development opportunities in the future and thus create more long-lasting value for our shareholders and investors, in turn.

隨著宏觀經濟持續復甦，我們仍能充分利用生活方式——利用新零售和電子商務、優質內容驅動的電子商務、企業軟件即服務、5G等領域的發展趨勢AR技術、即時支付、AI語音、社交平台、車載互動音視頻內容等。我們相信，我們擁有正確的戰略，可以最大限度地提高未來的發展機會，從而為我們的股東和投資者創造更持久的價值。

(foreign language)

（外語）

[Interpreted] This concludes my prepared remarks for today. With that, I will now turn the call to Mr. Perry Lu, our CFO, who will provide an overview of our financial highlights.

[解讀]我今天準備好的發言就到此結束。現在，我將致電我們的首席財務官 Perry Lu 先生，他將概述我們的財務亮點。

All right. It's my turn now. And thank you, Mr. Zhang, and hello, everyone. This is Perry. I'm the Chief Financial Officer of the company.

好的。現在輪到我了。謝謝張總，大家好。這是佩里。我是公司的首席財務官。

Before explaining our financial details, please note, our numbers are in U.S. dollar terms unless otherwise stated.

在解釋我們的財務詳細信息之前，請注意，除非另有說明，否則我們的數字均以美元計算。

Despite the macro challenges, we achieved very strong results in 2020 during the year. As a result of China's economic recovery, our diversified business segment, leading R&D capabilities and the [active address] on consumer taste, we generate substantial growth in both our top line and bottom line with increased financial capability from our recent equity offering. We are confident we'll continue to capitalize on the emerging opportunities to further promote our rapid development in the post-pandemic world.

儘管面臨宏觀挑戰，我們在 2020 年取得了非常強勁的業績。由於中國經濟的複蘇、我們多元化的業務板塊、領先的研發能力以及對消費者品味的[積極關注]，我們的收入和利潤都實現了大幅增長，並且我們最近的股票發行增加了財務能力。我們有信心繼續抓住新機遇，進一步推動我們在後疫情時代的快速發展。

In the full year of 2020, we grew our revenue by 88.2% year-over-year to $123.8 million. By breaking these numbers down, revenues from our CHEERS App, the Internet business, increased by 195.3% year-over-year to $83.6 million, accounting for 67.5% of our total revenues. Importantly, revenue contribution from our Internet business ramped up significantly in the period mainly due to our continuous optimization of our online digital media and entertainment platform. Meanwhile, our Media business revenue increased by 7.2% year-over-year to $40.2 million. That is accounting for the remaining 32.5% of our total revenues.

2020 年全年，我們的收入同比增長 88.2%，達到 1.238 億美元。通過細分這些數字，我們的 CHEERS 應用（互聯網業務）收入同比增長 195.3%，達到 8360 萬美元，占我們總收入的 67.5%。重要的是，我們的互聯網業務收入貢獻於期內大幅上升，主要得益於我們對在線數字媒體和娛樂平台的持續優化。與此同時，我們的媒體業務收入同比增長 7.2% 至 4020 萬美元。這占我們總收入的剩餘 32.5%。

To -- just to break down our revenues further, our advertising revenue increased by 116.3% to $104.7 million in the full year of 2020 as we continued to improve our content offering on our CHEERS platform. That is including short videos, live shows, online games, network dramas and many others, which attract a significant number of active users and advertisers, in turn.

為了進一步細分我們的收入，隨著我們繼續改進 CHEERS 平台上的內容提供，我們的廣告收入在 2020 年全年增長了 116.3%，達到 1.047 億美元。其中包括短視頻、直播、網絡遊戲、網絡劇等，進而吸引了大量的活躍用戶和廣告商。

At the same time, CHEERS e-Mall market service revenue grew by 126.4% year-over-year to $1.5 million in the full year of 2020. That is mostly because we continue to optimize our service and merchandise offering of our e-Mall platform through cooperation with many business customers as the pandemic led to the restriction of outdoor activities, we meet strong demand for online entertainment and shopping. We also grew our customized content production revenue at 12.1% year-over-year to $10.2 million in the full year of 2020 as our [shopping and streaming] revenue continues to gain traction.

與此同時，2020 年全年，CHEERS e-Mall 市場服務收入同比增長 126.4% 至 150 萬美元。這主要是因為我們不斷優化 e-Mall 平台的服務和商品供應在疫情導致戶外活動受限的情況下，通過與眾多企業客戶的合作，滿足了在線娛樂和購物的旺盛需求。隨著我們的[購物和流媒體]收入持續增長，我們的定制內容製作收入在 2020 年全年同比增長 12.1% 至 1,020 萬美元。

Our cost of revenue increased by 20.6% year-over-year to $38.5 million. That is mainly in line with increase in our revenue and partially offset by improved cost management.

我們的收入成本同比增長 20.6%，達到 3850 萬美元。這主要與我們收入的增長一致，部分被成本管理的改善所抵消。

Within our operating expenses, selling and marketing expense increased to $43.8 million in the full year of 2020 compared to $3.2 million a year ago. That is primarily due to the increase in advertising fees as well as an increase in marketing and user acquisition activities to attract new customers for the company's CHEERS application and CHEERS e-Mall.

在我們的運營費用中，2020 年全年銷售和營銷費用增加至 4380 萬美元，而一年前為 320 萬美元。這主要是由於廣告費的增加以及營銷和用戶獲取活動的增加，以吸引公司的 CHEERS 應用程序和 CHEERS e-Mall 的新客戶。

And also, the general and admin expenses increased to $10.1 million in the full year of 2020 compared to $3.1 million a year ago. That is primarily due to increase in share-based compensation and other professional service fees related to company's business combination.

此外，2020 年全年的一般和管理費用增加至 1,010 萬美元，而一年前為 310 萬美元。這主要是由於與公司業務合併相關的股權激勵和其他專業服務費用的增加。

R&D expenses consist primarily salaries and benefits for our R&D department. R&D expenses for the year ended 31st 2019 and 2020 were $0.7 million and $0.7 million, respectively.

研發費用主要包括研發部門的工資和福利。截至2019年和2020年31日止年度的研發費用分別為70萬美元和70萬美元。

And the income from operations increased by 14.3% year-over-year to $30.7 million. And operating margin in full year of 2020 was 24.8% compared to 40.8% a year ago.

運營收入同比增長14.3%至3070萬美元。 2020 年全年營業利潤率為 24.8%，而去年同期為 40.8%。

Net income attributable to Glory shareholders increased by 11.2% year-over-year to $29.3 million. Net margin in the full year of 2020 was 24% compared to 40% a year ago.

歸屬於Glory股東的淨利潤同比增長11.2%至2930萬美元。 2020 年全年淨利潤率為 24%，而一年前為 40%。

Basic and diluted net income per share were $0.54 and $0.50, respectively, in the full year of 2020 compared to basic and diluted net income per share of $0.64 and $0.57, respectively, in the full year of 2019.

2020 年全年基本和稀釋每股淨利潤分別為 0.54 美元和 0.50 美元，而 2019 年全年基本和稀釋每股淨利潤分別為 0.64 美元和 0.57 美元。

As of December 31, 2020, cash and cash equivalents amounted to $17.7 million as compared to $6.9 million as of December 31, 2019. The increase in cash balance was primarily due to the cash generated from our operating activities and financing activities.

截至2020年12月31日，現金及現金等價物為1770萬美元，而截至2019年12月31日為690萬美元。現金餘額的增加主要是由於我們的經營活動和融資活動產生的現金。

Going forward, we're trying to use our significant liquidity to further enhance CHEERS apps and fuel our business development. This pretty much concludes our prepared remarks for today.

展望未來，我們正在嘗試利用我們大量的流動性來進一步增強 CHEERS 應用程序並推動我們的業務發展。我們今天準備的發言就到此結束了。

And operators, we are now ready to take questions. Thank you.

運營商，我們現在準備好回答問題。謝謝。

(Operator Instructions) And the first question we have will come from [Kwai Wu], investor.

（操作員說明）我們的第一個問題將來自投資者[Kwai Wu]。

I have a question for you. What is the company's strategic vision for its business model? Will the company's main business model be more focused on e-commerce or Internet media in the future?

我有一個問題問你。公司的商業模式的戰略願景是什麼？未來公司的主要業務模式是否會更加側重於電子商務或互聯網媒體？

Okay. (foreign language)

好的。 （外語）

(foreign language)

（外語）

[Interpreted] All right. To extend our coverage beyond our core mission of enriching people's life, we provide vibrant content and premium products and services that span across the online entertainment industry, that expand our product use cases and better satisfy users' demand for diverse and personalized entertainment solutions and content consumption.

[解釋] 好吧。為了將我們的覆蓋範圍擴大到豐富人們生活的核心使命之外，我們提供跨越在線娛樂行業的充滿活力的內容和優質產品和服務，擴大我們的產品用例，更好地滿足用戶對多樣化和個性化娛樂解決方案和內容的需求消耗。

(foreign language)

（外語）

[Interpreted] Throughout the years, we had invested on building a high-quality platform covering all lifestyle-related use cases for users, customers and merchants. This platform has all kinds of characteristics such as e-commerce, digital, media related and many more. Such characteristics enable us to enrich people's lives and meet their highly frequent demands in entertaining -- in entertainment, consumption and other related areas throughout their daily life. As of now, the entire CHEERS ecosystem is built up upon 2 core focuses of this video content media platform and content-driven e-commerce platform.

[解讀]多年來，我們一直致力於為用戶、客戶和商家打造涵蓋所有生活方式相關用例的高質量平台。該平台具有電子商務、數字化、媒體相關等各種特徵。這些特點使我們能夠豐富人們的生活，滿足人們日常生活中頻繁出現的娛樂、消費等相關領域的需求。截至目前，整個CHEERS生態系統建立在視頻內容媒體平台和內容驅動的電子商務平台兩大核心之上。

(foreign language)

（外語）

[Interpreted] We have several different products. First, in our CHEERS media app, which is a high-quality lifestyle content application platform. Second is our high-quality in-house developed content, which includes short-form video, interactive live streaming events, audio and video content, online variety shows, TV programs as well as Internet distribution capabilities. Third is [Cheer Car], which is currently in a testing phase and is our in-vehicle audio and video content application for electric vehicles. Fourth is Cheer Chat, which is currently being developed and tested and is our first voice-based social networking product to be launched in the overseas market. Fifth is our CHEERS e-Mall, which offers merchandise under its private-label, partnered brands and other products and services through a software-as-a-service service provider, partners -- I'm sorry, SaaS service provider, partners.

[解讀]我們有幾種不同的產品。首先是我們的CHEERS媒體應用，這是一個高品質的生活內容應用平台。其次是我們高質量的自研內容，包括短視頻、互動直播、音視頻內容、網絡綜藝、電視節目以及互聯網分發能力。第三個是【車啦】，目前處於測試階段，是我們針對電動汽車的車載音視頻內容應用。第四個是Cheer Chat，目前正在開發和測試中，是我們在海外市場推出的第一個基於語音的社交網絡產品。第五是我們的CHEERS電子商城，它通過軟件即服務服務提供商、合作夥伴——對不起，SaaS服務提供商、合作夥伴，提供自有品牌商品、合作品牌以及其他產品和服務。

The products on our digital content media platform and content-driven e-commerce portfolio will empower each other and form a closed loop within CHEERS App. As of now, these products have already gained sizable market share. In 2021, we will continue to increase our brand awareness through a number of new marketing initiatives and promotion methods as well as opening us to more user-generated content creation on our platform.

我們的數字內容媒體平台上的產品和內容驅動的電子商務組合將相互賦能，並在CHEERS App內形成閉環。截至目前，這些產品已經獲得了相當大的市場份額。 2021年，我們將繼續通過一系列新的營銷舉措和促銷方法來提高我們的品牌知名度，並在我們的平台上開放更多用戶生成的內容創作。

All right. That answers your question.

好的。這回答了你的問題。

(foreign language) All right. The second question would be, as there are other larger players in the industry also doing video e-commerce, how does the company plan to position and promote itself to survive in an environment monopolized by TikTok and [PUBG]? That question came from a shareholder of the company.

（外語）好的。第二個問題是，行業內還有其他較大的企業也在做視頻電商，在TikTok和PUBG壟斷的環境下，該公司打算如何定位和推廣自己以求生存？這個問題來自該公司的一位股東。

(foreign language)

（外語）

[Interpreted] First of all, as new entertainment company, we not only have strong Internet product and innovation capabilities, we also have top-tier content production personnel and equipment. We will continue to strengthen our high-quality lifestyle content offerings in the professionally generated content area. In 2021, we will open the platform to all users to create more content, varying from professionally generated content to a mix of professionally generated content, professionally -- professional-user-generated content and user-generated content. We will accelerate the expansion of our content offerings, enrich our product use cases and improve our user experiences, participation and belonging.

【解讀】首先，作為新文娛公司，我們不僅擁有強大的互聯網產品和創新能力，還擁有頂尖的內容製作人員和設備。我們將繼續在專業生成的內容領域加強我們的高質量生活方式內容產品。 2021年，我們將向所有用戶開放該平台，以創建更多內容，從專業生成的內容到專業生成的內容的混合，專業——專業用戶生成的內容和用戶生成的內容。我們將加速擴展我們的內容產品，豐富我們的產品用例並改善我們的用戶體驗、參與度和歸屬感。

(foreign language)

（外語）

[Interpreted] Secondly, in terms of business focus, we will focus on high-quality, lifestyle-related areas. We will provide the differentiated products in all lifestyle-related business verticals and enhance our leadership position in this area.

【解讀】其次，在業務重點上，我們會聚焦高品質、生活方式相關領域。我們將在所有與生活方式相關的垂直業務領域提供差異化​​產品，並增強我們在該領域的領導地位。

(foreign language)

（外語）

[Interpreted] Furthermore, in terms of corporate strategy, we will continue to improve our CHEERS e-Mall product matrix, enhance our strategic cooperation with Taobao and JD.com as well as enrich our private label. We will also extend our businesses in lower-tier cities, optimize our connections with SaaS service providers and other third-party service providers and accelerate the launch of Cheer Chat, [Cheer Pay], in-vehicle interactive audio and video content applications and other products in the media and e-commerce sectors.

【解讀】此外，在企業戰略上，我們將繼續完善CHEERS e商城產品矩陣，加強與淘寶、京東的戰略合作，豐富自有品牌。我們還將拓展低線城市業務，優化與SaaS服務商及其他第三方服務商的聯繫，加快推出啦啦聊、【啦啦支付】、車載互動音視頻內容應用等媒體和電子商務領域的產品。

(foreign language)

（外語）

[Interpreted] Last but not least, we will continue to enhance our competitive advantage in R&D, seek collaboration opportunities with the research institute of other companies and with universities and build a comprehensive headquarters with research, innovation and education all in the same place. As of now, for example, we are in the process of building our Cheers Academy in Wuxi.

【解讀】最後，我們將繼續增強研發競爭優勢，尋求與其他企業研究院、大學的合作機會，打造集研究、創新、教育於一體的綜合性總部。例如，目前我們正在無錫建設卓爾學院。

Okay. That concludes our answers.

好的。我們的回答到此結束。

Very well, thank you, sir. And as there are no further questions at this time, I would like to hand the conference back over to the management team for any closing remarks. Gentlemen?

很好，謝謝您，先生。由於目前沒有其他問題，我想將會議交還給管理團隊進行總結髮言。先生們？

Okay. Thank you again for joining our call. If you have any further questions, please feel free to contact us or request through our IR website or you send an e-mail. We look forward to speaking with everyone in our next earnings call. Have a good one.

好的。再次感謝您加入我們的通話。如果您還有任何其他問題，請隨時聯繫我們或通過我們的 IR 網站提出請求，或者發送電子郵件。我們期待在下一次財報電話會議上與大家交談。祝你有個好的一天。

(foreign language)

（外語）

Thank you.

謝謝。

(foreign language)

（外語）

And we thank everyone for your time also. The conference call has now concluded. At this time, you may disconnect your lines. Thank you, take care, and have a great day, everyone.

我們也感謝大家抽出時間。電話會議現已結束。此時，您可以斷開線路。謝謝大家，保重，祝大家有美好的一天。

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

[本文字記錄中標記為[已翻譯]的部分是由現場通話中的口譯員朗讀的。]