Douyu International Holdings Ltd (DOYU) 2023 Q2 法說會逐字稿

Good morning and good evening, ladies and gentlemen. Thank you, and welcome to DouYu International Holdings Limited Second Quarter 2023 Earnings Conference Call. (Operator Instructions) I will now turn the call over to the first speaker today, Ms. Lingling Kong, IR Director at DouYu. Please go ahead, ma'am.

早安，晚上好，女士們先生們。謝謝，歡迎參加鬥魚國際控股有限公司2023年第二季財報電話會議。 （操作員指示）我現在將電話轉給今天的第一位發言者，鬥魚IR總監孔玲玲女士。請繼續，女士。

Thank you. Hello, everyone. Welcome to our second quarter 2023 earnings call. Joining us today are Mr. Shaojie Chen, Chairman and Chief Executive Officer; Mr. Mingming Su, Chief Strategy Officer; and Mr. Hao Cao, Vice President of Finance. You can refer to our second quarter 2023 financial results on our IR website at ir.douyu.com. You can also check a replay of this call when it becomes available in a few hours on our IR website. Before we start, please note that this call may contain forward-looking statements made pursuant to the safe harbor provision for the Private Securities Litigation Reform Act of 1995.

謝謝。大家好。歡迎參加我們的 2023 年第二季財報電話會議。今天加入我們的有董事長兼執行長陳少傑先生；蘇明明先生，首席策略長；曹浩先生，財務副總裁。您可以在我們的IR網站ir.douyu.com上參考我們2023年第二季的財務表現。您也可以在幾個小時後在我們的 IR 網站上查看此電話會議的重播。在我們開始之前，請注意，本次電話會議可能包含根據 1995 年《私人證券訴訟改革法案》的安全港條款做出的前瞻性陳述。

These forward-looking statements are based on management's current expectations and observations that involve known and unknown risks uncertainties and other factors not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or expectations implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statement, risk factors and details of the company's filings with the SEC. The company undertakes no duty to revise or update any forward-looking statements for selected events or circumstances after the date of this conference call.

這些前瞻性陳述是基於管理階層目前的預期和觀察，涉及已知和未知的風險不確定性以及其他不受公司控制的因素，可能導致公司的實際結果、績效或成就與結果、績效有重大差異。或這些前瞻性陳述所暗示的期望。所有前瞻性陳述均完全符合公司向 SEC 提交的文件中的警示性陳述、風險因素和詳細資訊。在本次電話會議日期之後，本公司不承擔修改或更新針對選定事件或情況的任何前瞻性陳述的責任。

I will now speak on behalf of our Chairman and CEO, Mr. Shaojie Chen.

現在我代表我們的董事長兼執行長陳少傑先生發言。

[Interpreted] In the second quarter of 2023, the company's top priority was to foster a healthy ecosystem across our game-centric community. We stepped up the production of premium content to diversify our content metrics and enrich interactions across the community. We also heightened the importance of content management and strengthened the content review procedures on our platform. By ensuring the health of our ecosystem, we have solidified the foundation for our strategic long-term sustainable growth.

【解讀】2023年第二季度，公司的首要任務是在以遊戲為中心的社區中培育健康的生態系統。我們加強了優質內容的製作，以使我們的內容指標多樣化並豐富整個社區的互動。我們也強調了內容管理的重要性，並加強了平台上的內容審核程序。透過確保生態系統的健康，我們為策略性長期永續成長奠定了基礎。

On the operations side, we placed heavy emphasis on improving the quality of our users. We actively refined our monetization and marketing strategies and deepened our cooperation with game developers, with a focus on refining how we promote new games and their operations. The combination of these adjustments supports the overall stability of our business operations, healthy user metrics, and promote our improved profitability. In the second quarter, our mobile MAUs were 50.3 million. Quarterly average paying users were 4 million. And our adjusted net income was RMB 61.4 million, surging 138% quarter-over-quarter.

在營運方面，我們非常重視提高用戶品質。我們積極完善變現和行銷策略，深化與遊戲開發商的合作，並專注於完善新遊戲的推廣和運作方式。這些調整的結合支持了我們業務運營的整體穩定性、健康的用戶指標，並促進了我們盈利能力的提高。第二季度，我們的行動月活躍用戶數為 5,030 萬人。季度平均付費用戶為 400 萬。調整後淨利為人民幣 6,140 萬元，季增 138%。

To begin with our user base. Our mobile MAUs for the quarter declined 9.8% year-over-year, but were on par with the last quarter. The main reasons for the year-over-year change includes: First, early this year, we refined our operating strategy to focus on improving user quality. This means that we have cut back on our low ROI marketing spend. As a result, our user acquisition expenses for the quarter significantly decreased year-over-year. The quality of our users has improved. However, the lack of user acquisition from promotional channels led to a year-over-year decline in quarterly MAUs.

首先從我們的用戶群開始。本季我們的行動月活躍用戶數年減 9.8%，但與上季持平。年比變化的主要原因包括：一是今年年初，我們精進了營運策略，聚焦提升用戶品質。這意味著我們削減了低投資報酬率的行銷支出。因此，我們本季的用戶獲取費用較去年同期大幅下降。我們的用戶素質有所提升。然而，促銷管道缺乏用戶獲取導致季度月活躍用戶數較去年同期下降。

Second, we adhered to our content-driven approach to user growth. We attracted and retained users through continuous investments in high-quality content. We expect the regular updates we make to revenue-generating products and deeper cooperation with game developers to drive organic and better-quality MAU growth over time. With our expanded entertainment content offerings, innovative membership services and the launch and the promotion of new games, we successfully attracted new users in the second quarter, which partially offset the year-over-year decrease in mobile MAUs resulting from the adjustments we made in our marketing strategy.

其次，我們堅持內容驅動的用戶成長方式。我們透過對優質內容的持續投資來吸引並留住用戶。我們期望對創收產品進行定期更新，並與遊戲開發商進行更深入的合作，以隨著時間的推移推動有機和更優質的每月活躍用戶成長。憑藉豐富的娛樂內容、創新的會員服務以及新遊戲的推出和推廣，我們在第二季度成功吸引了新用戶，部分抵消了我們去年調整帶來的行動端月活躍用戶數同比下降。我們的行銷策略。

Moving to our content ecosystem. In the second quarter, we also continued to refine our diversified tournament system. We broadcasted over 20 large-scale official events and organized almost 60 self-produced eSports tournaments. This included major worldwide official gaming events, such as the spring tournaments of LPL, King Pro League and the Peacekeeper Elite league, as well as CS:GO BLAST Major.

轉向我們的內容生態系統。第二季度，我們也持續完善多元化的賽事體系。轉播大型官方賽事20場，自辦電競賽事近60場。其中包括全球主要的官方遊戲賽事，例如LPL、King Pro League和Peacekeeper Elite聯賽的春季錦標賽，以及CS:GO BLAST Major。

As the peak season for mainstream eSports spring tournaments came to an end in the second quarter, we offered an array of premium self-produced tournaments for the off season, including the DouYu Honor of Kings National Challenge at 7, which has now been held for 7 consecutive seasons; the League of Legends Fuller Contest led by star streamers; and the Peacekeeper Elite (foreign language). With this reach and exciting off-season content offerings, we have kept users actively engaged on our platform.

隨著第二季主流電競春季賽事的旺季結束，我們在休賽期推出了一系列優質的自製賽事，其中包括7月7日舉行的鬥魚王者榮耀全國挑戰賽，該賽事現已舉辦連續7個賽季；由明星主播領銜的英雄聯盟富勒大賽；和和平衛士菁英（外語）。憑藉這種影響力和令人興奮的淡季內容產品，我們讓用戶積極參與我們的平台。

In addition to tournaments, in the second quarter, we rolled out more interactive entertainment content by leveraging our top-tier streamer resources. For example, we worked with top LOL streamers on fun club activities, such as singing competitions featuring streamers and users. Building upon the profound influence of top-tier streamers, a powerful effect was generated by fan club activities which attracted many streamers and users. We also adopted the buddy chat format to enrich our event scoring system. This format's addition greatly elevated user participation and the frequency of user interactions. The fun club activities got incredible visibility across and beyond our platform. Its success gained traction among both new and existing users, further increasing overall user engagement.

除了錦標賽之外，第二季我們利用頂級主播資源推出了更多互動娛樂內容。例如，我們與LOL頂級主播合作進行有趣的俱樂部活動，例如主播和用戶參加的歌唱比賽。依託一線主播的深厚影響力，粉絲俱樂部活動產生強大效應，吸引了許多主播和用戶。我們也採用了好友聊天的形式來豐富我們的賽事評分系統。這種格式的加入大大提高了使用者的參與度和使用者互動的頻率。有趣的俱樂部活動在我們的平台內外獲得了令人難以置信的關注度。它的成功贏得了新用戶和現有用戶的青睞，進一步提高了整體用戶參與度。

We continue to deepen our cooperation with game developers, particularly on the launch and the promotion of new games. Justice online, the launch at the end of June, is a major game that we are working on this year. We build momentum for it across our game segments and through multichannel promotions, capitalizing on our outstanding streamer resources, rich game-related content such as game news and game guides. We were pleased to see a good deal of downloads and game activations. The months that follows a game's launch is considered the golden season for game promotion.

我們不斷深化與遊戲開發商的合作，特別是在新遊戲的推出和推廣方面。 《正義OL》是我們今年6月底推出的一款重磅遊戲。我們利用優秀的實況主資源、遊戲新聞、遊戲指南等豐富的遊戲相關內容，透過多管道推廣，在遊戲細分領域打造動力。我們很高興看到大量的下載和遊戲啟動。遊戲發布後的幾個月被認為是遊戲推廣的黃金季節。

As such, we use this time to work with game developers to promote our diversified live streaming content, community discussions and activities, generating traffic and engagement across our platform. We also did a second round of promotions of select live streaming content on multiple external channels, driving traffic beyond our platform. Additionally, we work more closely with game developers on the development of customization tools, such as the game guide library and the character customizations, building a comprehensive game segment that incorporate multiple content formats.

因此，我們利用這段時間與遊戲開發人員合作，推廣我們多元化的直播內容、社群討論和活動，在我們的平台上產生流量和參與度。我們也在多個外部管道上對精選的直播內容進行了第二輪促銷，推動了我們平台以外的流量。此外，我們與遊戲開發人員更緊密地合作開發自訂工具，例如遊戲指南庫和角色定制，建立包含多種內容格式的綜合遊戲細分市場。

Furthermore, while we were promoting the new AGC game Honkai: Star Rail, we were deeply involved in the game developers' large-scale off-line activities. And we were the only live streaming platform invited to join the undertaking. Based on the game's product features, we tailored an array of game segment activities specifically for AGC users. Through online and off-line interactions and audience benefits, we successfully attracted more users to our platform.

此外，我們在推廣AGC新遊戲《崩壞：星軌》的同時，深度參與了遊戲開發商的大型線下活動。我們是唯一受邀加入專案的直播平台。根據遊戲的產品特點，我們專門為AGC用戶量身定制了一系列遊戲細分活動。透過線上與線下互動和受眾福利，我們成功吸引了更多用戶加入我們的平台。

In the second quarter of 2023, we optimized our content metrics while also enhancing our content management review and progress across the platform. First, we upgraded the review criteria, adding and refining over 30 items. Second, we applied innovative review technology improving technical features such as content monitoring, filtering and event-triggered handling. Third, we strengthened our management system and staff training and evaluated the awareness of content management and regulatory guidelines. We will further enhance the company's procedure and operational compliance programs to provide our users with better content and service offerings, improve user experience and continuously optimize the healthy system of our game-centric community.

2023 年第二季度，我們優化了內容指標，同時加強了整個平台的內容管理審核和進度。一是升級審核標準，新增細化30餘項。其次，我們應用創新的審核技術，改進了內容監控、過濾和事件觸發處理等技術功能。第三是加強管理系統和員工培訓，評估內容管理和監管指引意識。我們將進一步完善公司的流程和營運合規計劃，為使用者提供更好的內容和服務，改善使用者體驗，並不斷優化以遊戲為中心的社區健康體系。

Moving on to our monetization strategies. The number of quarterly paying average -- the number of quarterly average paying users in the second quarter was 4 million, with a quarterly ARPU of RMB 326. The reason for the change in the number of paying users are threefold. First, as we executed our strategy of fostering a healthy, sustainable game-centric community ecosystem, we reduced some of our revenue-generating activities to level up the platform, including canceling marketing activities aimed at attracting new paying users. Second, on the revenue side, we improved our operating efficiency by scaling down low-gross-margin operating activities.

繼續我們的獲利策略。季度平均付費用戶數－第二季平均付費用戶數為400萬，季ARPU為326元。付費用戶數變化的原因有三。首先，在我們執行培育健康、可持續的以遊戲為中心的社區生態系統的策略時，我們減少了一些創收活動以提昇平台水平，包括取消旨在吸引新付費用戶的行銷活動。其次，在收入方面，我們透過縮減低毛利率的經營活動來提高營運效率。

Third, the decrease in our overall user base was partially the result of reduced marketing spend. To some extent, these adjustments affected our users' willingness to pay, including both new users and price-sensitive users, resulting in an overall decline in paying users. Nevertheless, we shifted our focus to upgrading our revenue-generating products and maintaining our co-paying users. Internal data show that, in the second quarter, our co-paying users maintained stable spending habits, as reflected in our quarterly ARPU which rose both year-over-year and quarter-over-quarter.

第三，我們整體用戶群減少的部分是因為行銷支出減少所造成的。這些調整在一定程度上影響了我們用戶的付費意願，包括新用戶和價格敏感用戶，導致付費用戶整體下降。儘管如此，我們將重點轉向了升級我們的創收產品和維護我們的共同付費用戶。內部數據顯示，第二季度，我們的共同付費用戶維持穩定的消費習慣，季度ARPU值年比和季減。

In terms of traditional virtual gifting, we launched our brand-new user profiling system based on how much they spend. Any user that spends over a certain threshold is automatically entitled to exclusive user privileges such as identity marks and exclusive services. These identity-based privileges are automatically granted each month, which improved our paying users' experience and fortified their stickiness. Apart from virtual -- traditional virtual gifting, we continue to iterate and upgrade membership functions and benefits. Our membership business, which represents a sustainable source of revenue for us, is also on track towards steady growth. This added benefits to our members' testament to how much we care about our co-paying users as well as our sustainable relationships with them.

在傳統的虛擬禮物方面，我們根據用戶的消費金額推出了全新的用戶分析系統。任何消費超過一定閾值的用戶將自動獲得專屬用戶特權，例如身分標記和專屬服務。這些基於身分的特權每月自動授予，這改善了付費用戶的體驗並增強了他們的黏性。除了虛擬——傳統的虛擬禮物之外，我們不斷迭代升級會員功能和福利。我們的會員業務代表了我們可持續的收入來源，也正在穩步成長。這進一步證明了我們的會員對我們的共同付費用戶以及我們與他們的永續關係的關心程度。

Over the past quarters, we have developed a DouYu service system featuring platform-wide memberships and game-specific memberships. Based on our platform-wide membership service, in the second quarter, we offered additional cost sale membership benefits to users. Specifically, with each purchase of a platform-wide membership in certain game streamers', live streaming channels, users get certain in-game items and game-specific benefits for free. Owing to the complimentary benefits of our DouYu membership system, our users became more actively engaged and willing to pay. We also rolled out innovative privileged gifts such as gifts with sound effects customization, revamping our revenue-generating products to elevate user interaction with streamers and to maintain good vibes across our live streaming channels.

在過去的幾個季度裡，我們開發了一個以全平台會員和遊戲專用會員為特色的鬥魚服務體系。基於我們全平台的會員服務，第二季我們為用戶提供了額外的成本銷售會員福利。具體來說，每次在某些遊戲主播、直播頻道購買全平台會員資格後，用戶就可以免費獲得某些遊戲內物品和遊戲特定的福利。由於鬥魚會員系統的免費福利，我們的用戶變得更加積極參與並願意付費。我們也推出了創新的特權禮物，例如帶有音效定制的禮物，改進了我們的創收產品，以提升用戶與主播的互動，並在我們的直播頻道中保持良好的氛圍。

In general, our membership renewal rate has been steadily on the rise for several consecutive quarters, demonstrating our consistent optimization of the co-paying users ecosystem. In terms of our product R&D and functionality innovation, in the second quarter, we launched our all-new big data system for streamers analysis featuring real-time interaction, statistics and analysis of data on their live streaming content, hours, bullet chats, user traffic changes, et cetera. The system enabled our operations support team to provide timely measure of the streamers' performance against the various indicators so that we can better support our streamers with more precise feedback data.

整體而言，我們的會員續費率連續幾季穩定上升，反映了我們對共付用戶生態的持續優化。在產品研發和功能創新方面，第二季度我們推出了全新的主播分析大數據系統，對直播內容、時長、彈幕、用戶等數據進行即時互動、統計和分析。交通變化等。該系統使我們的營運支援團隊能夠根據各種指標及時衡量主播的表現，以便我們能夠透過更精確的回饋數據來更好地支援我們的主播。

The system's built-in algorithms enable visualization of the streamers' live streaming data from multiple perspectives, providing data support for operational decision-making. With the system, our operations support team can directly capture high-quality contents across videos, images and bullet chats from the streamers' live streaming channels, which helps us identify content that best appeals to audience, for more effective recreation, enhancing the visibility of high-quality contents.

系統內建演算法可以多角度視覺化主播直播數據，為營運決策提供數據支援。透過這個系統，我們的營運支援團隊可以直接從主播的直播頻道中抓取影片、圖片、彈幕等高品質內容，幫助我們辨識出最能吸引觀眾的內容，進行更有效的娛樂，提高直播的可見度。高品質的內容。

In conclusion. We remain committed to executing our core growth strategy of fostering a vibrant game-centric content ecosystem. Our key objective is long-term sustainable growth. As we work to enhance our ecosystem, we remain focused on maintaining the scale and quality of our core users, attracting more high-quality users to our diverse and growing content, fortifying user interaction and stickiness through innovative operations and stimulating community-wide interactions. Looking forward, we will continue to explore more commercialization channels and new growth avenues while maintaining our leading position in the domestic gaming content industry.

綜上所述。我們仍然致力於執行我們的核心成長策略，即培育充滿活力的以遊戲為中心的內容生態系統。我們的主要目標是長期可持續成長。在完善生態體系的同時，我們仍然注重保持核心用戶的規模和質量，吸引更多優質用戶使用我們豐富且不斷增長的內容，透過創新運營增強用戶互動和黏性，激發社群互動。展望未來，我們將在維持國內遊戲內容產業領先地位的同時，繼續探索更多的商業化管道和新的成長途徑。

With that, I'll now turn the call over to our Vice President Finance, Mr. Hao Cao to go through the details of our financial performance in the quarter.

現在，我將把電話轉給我們的財務副總裁曹浩先生，詳細介紹我們本季的財務表現。

Thank you, Lingling. Hello, everyone.

謝謝你，玲玲。大家好。

In the second quarter, we continued to implement our refined growth strategy aimed at ensuring a healthy and balanced business outlook. Emphasizing the development of healthy-margin business and optimizing operations, we continued to adjust our revenue-generating activities and streamlined operating efficiencies, including those that optimized content costs and further reduced marketing spending. As a result, despite some short-term impact to our revenue, we once again grew our adjusted net profit, showing a solid increase quarter-over-quarter. Let's now look at our financial performance in more detail.

第二季度，我們持續實施精細化成長策略，以確保健康平衡的業務前景。我們強調健康利潤業務的發展和優化運營，繼續調整創收活動並提高營運效率，包括優化內容成本和進一步減少行銷支出。因此，儘管我們的收入受到一些短期影響，但我們調整後的淨利潤再次增長，環比穩步增長。現在讓我們更詳細地看看我們的財務表現。

Total net revenues in the second quarter of 2023 decreased by 24.1% year-over-year to RMB 1.39 billion. Live streaming revenues were RMB 1.26 billion, a decrease of 28.8% from RMB 1.77 billion in the same period of 2022. The decrease was mainly attributable to ongoing operational adjustments in our live streaming business to promote a healthy and sustainable ecosystem in a more cost-effective manner, as well as the challenging macro environment. These adjustments impacted spending from new paying users and price-sensitive paying users, combined with a lower user base caused by scaled-back promotions, we saw a year-over-year decrease in the total number of paying users.

2023年第二季淨收入總額年減24.1%至13.9億元人民幣。直播收入為人民幣12.6億元，較2022年同期的人民幣17.7億元下降28.8%。下降的主要原因是直播業務持續進行營運調整，以更低成本促進健康可持續的生態系統。有效的方式，以及充滿挑戰的宏觀環境。這些調整影響了新付費用戶和價格敏感付費用戶的支出，再加上促銷活動規模縮小導致用戶基數下降，我們發現付費用戶總數較去年同期下降。

Amid changes, our core paying users exhibited relatively stable paying behavior, contributing to an 18.2% increase in ARPU to RMB 326 in the second quarter, up from RMB 276 in same period last year.

在變化中，我們的核心付費用戶表現出相對穩定的付費行為，帶動第二季ARPU成長18.2%至人民幣326元，高於去年同期的276元人民幣。

Advertising and other revenues were RMB 133.9 million, an increase of 106.5% from RMB 64.9 million in the same period of 2022. The year-over-year increase was primarily attributable to the increase in other revenues contributed by game-specific membership services. Cost of revenues in second quarter of 2023 was RMB 1.2 billion, a decrease of 21.1% compared with RMB 1.52 billion in the same period of 2022.

廣告及其他收入為人民幣1.339億元，較2022年同期的人民幣6,490萬元增長106.5%。同比增長主要由於遊戲專屬會員服務貢獻的其他收入增加。 2023年第二季營收成本為12億元人民幣，較2022年同期的15.2億元下降21.1%。

Revenue-sharing fees and content costs decreased by 25.4% to RMB 0.98 billion from RMB 1.31 billion in same period of 2022. The decline was primarily driven by a decrease in revenue-sharing fees, which were largely aligned with the decrease in live streaming revenues. The decrease was partially offset by an increase in copyright costs resulting from the purchase of LPL tournament copyright.

收入分成費用和內容成本從 2022 年同期的 13.1 億元下降 25.4% 至人民幣 9.8 億元。下降主要是由於收入分成費用的減少，這在很大程度上與直播收入的下降一致。這一下降被購買 LPL 賽事版權導致的版權成本增加部分抵消。

Bandwidth costs in the second quarter of 2023 decreased by 17.3% to RMB 118.8 million from RMB 143.7 million in same period of 2022. The decrease was mainly due to enhanced efficiency of peak bandwidth usage. Despite a year-over-year increase in peak bandwidth usage as a result of the rising tournament viewing demand, we managed to control bandwidth costs through dynamic bandwidth allocation strategies and other optimization measures.

2023年第二季頻寬成本從2022年同期的人民幣1.437億元下降17.3%至人民幣1.188億元。下降主要是由於尖峰頻寬使用效率提高。儘管由於錦標賽觀看需求的增加，峰值頻寬使用量逐年增加，但我們仍然透過動態頻寬分配策略和其他最佳化措施控制了頻寬成本。

Gross profit in second quarter of 2023 was RMB 188.9 million compared with RMB 309 million in same period of 2022. The decrease in gross profit was mainly attributable to decreased net revenues and increased other costs. Other costs include the costs of game-specific membership services, which grew largely in line with the increase in other revenues. Gross margin in second quarter of 2023 was 13.6%, compared with 16.9% in same period of 2022. The decrease in gross margin was mainly attributable to the increase in other costs as a percentage of revenues, which was partially offset by the decrease in percentage of revenues attributed to revenue-sharing fees.

2023年第二季毛利為人民幣1.889億元，而2022年同期毛利為人民幣3.09億元。毛利下降主要歸因於淨收入減少和其他成本增加。其他成本包括遊戲特定會員服務的成本，其成長很大程度上與其他收入的成長一致。 2023年第二季毛利率為13.6%，而2022年同期毛利率為16.9%。毛利率下降主要是由於其他成本佔收入的比例增加，但該比例被比例下降部分抵銷歸因於收入分享費的收入。

Sales and marketing expenses in second quarter of 2023 were RMB 87.1 million, a significant decrease of 48% from RMB 167.5 million in the same period of 2022. This was mainly attributable to a decrease in marketing expenses for user acquisition. Research and development expenses in second quarter of 2023 were RMB 71 million, representing a 30.2% decrease from RMB 101.9 million in the same period of 2022. This decrease was primarily due to a decrease in personnel-related expenses.

2023年第二季銷售及行銷費用為人民幣8,710萬元，較2022年同期的人民幣1.675億元大幅下降48%。這主要是由於獲客行銷費用減少所致。 2023年第二季研發費用為人民幣7,100萬元，較2022年同期的人民幣1.019億元下降30.2%。這一下降主要是由於人員相關費用減少所致。

General and administrative expenses in the second quarter of 2023 were RMB 46.9 million, a drop of 48.2% from RMB 90.7 million in the same period of 2022. The decrease was primarily due to decreased share-based compensation expenses, as the shares and our share incentive plans were fully vested.

2023年第二季的一般及管理費用為人民幣4,690萬元，較2022年同期的人民幣9,070萬元下降48.2%。減少的主要原因是股權激勵費用減少，因為股份和我們的股份激勵計劃已全部兌現。

Loss from operations significantly narrowed to RMB 7.5 million in second quarter of 2023 from RMB 30.6 million in same period of 2022. Net income in the second quarter of 2023 was RMB 6.8 million compared with a net loss of RMB 38.8 million in same period of 2022. Adjusted net income, which excludes share-based compensation expenses, the share of loss or income in equity-method investments and investment loss -- impairment loss of investments, was RMB 61.4 million in second quarter of 2023 compared with RMB 23.5 million in the same period of 2022.

營運虧損從2022年同期的人民幣3,060萬元大幅收窄至2023年第二季的人民幣750萬元。2023年第二季淨利為人民幣680萬元，而2022年同期淨虧損為人民幣3,880萬元. 2023 年第二季調整後淨利為人民幣6,140 萬元，不包括股權激勵費用、權益法投資損失或收益份額以及投資損失－投資減損損失，而上一季為人民幣2,350 萬元。2022年同期。

For the second quarter of 2023, basic and diluted net income per ADS were both RMB 0.02, while adjusted basic and diluted net income per ADS were both RMB 0.19.

2023年第二季度，每股美國存託憑證基本及稀釋淨利均為人民幣0.02元，調整後每股美國存託憑證基本及稀釋淨利均為人民幣0.19元。

As of June 30, 2023, the company had cash and cash equivalents, restricted cash and short-term and long-term bank deposits of RMB 7.06 billion compared with RMB 6.81 billion as of December 31, 2022.

截至2023年6月30日，本公司擁有現金及現金等價物、受限制現金以及短期及長期銀行存款為人民幣70.6億元，而截至2022年12月31日為人民幣68.1億元。

Going forward, we remain committed to stabilizing our core business operations while actively seeking opportunities to enhance our monetization capabilities and explore more commercialization channels. By improving revenue quality and maintaining a prudent cost management approach, we aim to support the long-term healthy development of our platform with sustainable profitability.

展望未來，我們將繼續致力於穩定核心業務運營，同時積極尋找機會增強我們的變現能力並探索更多商業化管道。透過提高收入品質和保持審慎的成本管理方法，我們旨在以可持續的盈利能力支持平台的長期健康發展。

This concludes our prepared remarks today. Operator, we are now ready to take questions.

我們今天準備好的演講到此結束。接線員，我們現在準備好回答問題。

(Operator Instructions) Today's first question comes from Lei Zhang with BofA Securities.

（操作員指令） 今天的第一個問題來自美銀證券張磊。

(foreign language) The question is on regulatory environment. We noticed that we have a regulator on-site review in May. Any updates on this? And how should we look at the current regulatory environment and the impact to our business?

（外文）問題是監理環境。我們注意到我們五月有監管機構現場審查。有這方面的更新嗎？我們應該如何看待當前的監管環境及其對我們業務的影響？

(foreign language)

（外語）

[Interpreted] During the 1-month on-site inspection by the Hubei Brew of China's Cyberspace Administration Working Group, the working group provided supervision and guidance on various matters. Our team was in complete cooperation and readily represented any company information that was requested, such as our policies and procedures for content review and our content approval review process. We also took this opportunity to continue to enhance the capabilities and skill sets of DouYu's content-related support team.

【解讀】國家網信辦湖北釀酒工作小組在為期1個月的現場檢查中，工作小組對各項事項進行了監督指導。我們的團隊完全合作，並隨時提供所要求的任何公司信息，例如我們的內容審查政策和程序以及我們的內容批准審查流程。我們也藉此機會持續增強鬥魚內容相關支援團隊的能力與技能。

During the inspection period, our business operations continued as [euro]. After the conclusion of the inspection, we have continued to make improvements to relevant rules and procedures across our platform. More specifically, as we discussed earlier, we improved our content management procedures, particularly on those related to content monitoring, review and approval. We are now back in our normal internal supervision mode, which has been strengthened by the continued improvements we have made to our internal progresses.

在檢查期間，我們的業務運作繼續為[歐元]。檢查結束後，我們持續完善平台相關規則與流程。更具體地說，正如我們之前討論的，我們改進了內容管理程序，特別是與內容監控、審查和批准相關的程序。我們現在又回到了正常的內部監督模式，透過不斷改進內部進度，這種模式得到了加強。

(foreign language)

（外語）

[Interpreted] In general, regulators have been strengthening and improving their supervision of the live streaming industry. Our goal is the long-term healthy development of our platform. We actively cooperate with regulatory authorities and are committed to fulfill regulatory responsibilities for the safe operation of our users, such as content monitoring across our platform. We have actively participated and examined multiple special remediation actions by regulators, including the nationwide (foreign language) campaign to purify the online environment, the fight against the cyber bullying and cyber rumormongering, the cyber protection initiative to provide a clean online environment for [players] and the remediation programs that flag streamers and associated accounts engaged in prohibited activities.

【解讀】整體來看，監理機關對直播業的監理不斷加強與改善。我們的目標是平台的長期健康發展。我們積極配合監理部門，致力於履行監管責任，並保障使用者的安全運營，例如平台內容監控。我們積] 以及標記參與禁止活動的主播和相關帳戶的補救計劃。

Our regular internal supervision mainly includes the review, approval and control content on a daily basis; as well as enacting special remediation actions, regular disclosure of typical cases; et cetera. Through the DouYu security center, we will regularly disclose the results of sections that were implemented and announced and update any special remediation actions that we've taken. We have also built compliance awareness across the platform through compliance training and DouYu classroom and anti-fraud lectures. And we are continually optimizing the cyber environment across our platform.

我們定期的內部監督主要包括日常的審核、審核和控制內容；制定專案整治行動，定期公開典型案例；等等。透過鬥魚安全中心，我們將定期揭露已實施和公佈的部分的結果，並更新我們已採取的任何特殊補救措施。我們也透過合規培訓、鬥魚課堂和反詐欺講座，建立了全平台的合規意識。我們不斷優化整個平台的網路環境。

(foreign language)

（外語）

[Interpreted] Going forward, we will continually strengthen our compliance programs and regulate our operation across the platform. We will also continue to optimize the content ecosystem and increase our investments in high-quality tournaments and programs that spread positive energy and other quality content. These combined efforts are aimed at fostering a harmonious and healthy live streaming environment.

【解讀】未來，我們將持續加強合規建設，規範全平台運作。我們也將持續優化內容生態，並增加對傳播正能量的優質賽事和節目等優質內容的投入。這些共同努力旨在創造和諧健康的直播環境。

Thank you.

謝謝。

And our next question comes from Thomas Chong at Jefferies.

我們的下一個問題來自 Jefferies 的 Thomas Chong。

(foreign language) My question is that there's a number of hit games coming online this year. I just want to get a sense about how these new games can drive our user growth as well as our revenue.

（外語）我的問題是，今年有很多熱門遊戲上線。我只是想了解這些新遊戲如何推動我們的用戶成長和收入。

Thank you for your question. Certainly this year, with the public testing, prelaunching, promotions and official launch of many new games, we saw more growth opportunities. New games bring not only great content to attract new users, but also provide more content choices for our existing users. New games are more aligned with current gamer demands and interest. They all provide us with more opportunities to harness content in diverse formats across different game channels. We expect the addition of new games will mainly benefit us in 2 ways. First, new games provides great opportunity for us in game promotion. For new games, we are actively involved in the earliest stages, from the selection of streamers and content buildup all the way through securing in-depth cooperation with game developers.

謝謝你的問題。當然，今年隨著許多新遊戲的公測、預發布、促銷和正式上線，我們看到了更多的成長機會。新遊戲不僅帶來了精彩的內容來吸引新用戶，也為我們現有的用戶提供了更多的內容選擇。新遊戲更符合當前玩家的需求和興趣。它們都為我們提供了更多機會來利用不同遊戲管道中不同格式的內容。我們預計新遊戲的增加將主要在兩個方面使我們受益。首先，新遊戲為我們的遊戲推廣提供了很好的機會。對於新遊戲，我們從主播選擇、內容建構到與遊戲開發商的深入合作，都積極參與早期階段。

We provide the content arrays that best fits the games. New game-exclusive benefits and various innovative operational solutions to effectively attract users early in process. Let's take Justice online as an example. We promoted Justice online through multiple channels, including joint promotion with star streamers, building momentum for the game through live streaming sessions, reviews, graphics such as gaming strategies as well as gamer community operation. We are pleased to see the positive effects on promotions.

我們提供最適合遊戲的內容陣列。全新遊戲專屬福利及各種創新營運方案，有效早期吸引用戶。我們以正義在線為例。我們透過多種管道在線上推廣《正義》，包括與明星主播共同推廣，透過直播、評論、圖文等遊戲策略以及玩家社群運作為遊戲造勢。我們很高興看到促銷活動的正面影響。

And second, new games have a positive effect on game operations. We have rolled out various activities based on the status of different games. Take [Eggy Party] as an example. With its strong social attributes leveraging key timing like gameplay updates, we launched the same day tournament activities and enhanced our community operations, keeping users active and engaged. For the operations of Honkai: Star Rail, we captured its ACG attributes and participated in [Ni Hao] anime event. Our combined online and off-line content operations help us attract more user addition.

其次，新遊戲對遊戲營運有正面影響。我們根據不同遊戲的情況推出了不同的活動。以【蛋蛋派對】為例。憑藉其強大的社交屬性，利用遊戲更新等關鍵時機，我們推出了當天的錦標賽活動並增強了社區運營，保持了用戶的活躍度和參與度。對於《崩壞星軌》的運營，我們抓住了它的ACG屬性，參與了【你好】動畫活動。我們在線上和線下結合的內容營運幫助我們吸引更多用戶的增加。

Looking ahead to the second half of the year. The domestic launch of Valorant and its official tournaments of -- are major operations project for us. As users typically enjoying watching competitive games, Valorant is a great fit for live streaming, empowered by our resources of high-quality streamers and (inaudible) tournament content, we were glad to see our remarkable search in both segment-specific traffic and viewing hours after the game's initial release.

展望下半年。 《Valorant》在國內的推出及其官方錦標賽——是我們的主要營運項目。由於用戶通常喜歡觀看競技比賽，《Valorant》非常適合直播，在我們的高品質主播資源和（聽不清楚）錦標賽內容的支持下，我們很高興看到我們在特定細分流量和觀看時間方面的出色搜尋遊戲首次發行後。

We have thoroughly assessed the new games that are scheduled to be released in the second half of the year and have operation plans in place to ensure proper allocation and rapid integration of our resources to support this new game launch. Our planned promotions and operational support for the new games place us in a strong position to capitalize on the game promotions going together to acquire more users. Thank you.

我們對下半年即將推出的新遊戲進行了充分的評估，並制定了營運計劃，確保資源的合理配置和快速整合，以支援新遊戲的推出。我們對新遊戲的計劃促銷和營運支援使我們處於有利地位，可以利用遊戲促銷來獲得更多用戶。謝謝。

And our next question comes from Henry Sun with JPMorgan.

我們的下一個問題來自摩根大通的孫亨利。

(foreign language) My question is about your operating strategies. Could management share the progress and the target of our operating strategy adjustments?

（外語）我的問題是關於你們的經營策略。管理階層可否分享我們經營策略調整的進度和目標？

(foreign language)

（外語）

[Interpreted] As I have mentioned in our previous earnings calls, considering the changing market dynamics across our industry in the past 2 years, we remain committed to our key objective of long-term sustainable health growth. For our traditional business, we ensured stable fundamentals, optimize our operating efficiency and successfully improved profitability. And for new business, we have been exploring potential areas for growth based on user needs. After 2 years of exploration and implementation of our operating strategy, we have made meaningful progress.

[解讀]正如我在先前的財報電話會議中提到的，考慮到過去兩年整個行業不斷變化的市場動態，我們仍然致力於實現長期可持續健康增長的關鍵目標。傳統業務基本盤穩定，經營效率優化，獲利能力成功提升。而對於新業務，我們一直根據使用者需求探索潛在的成長領域。經過兩年的經營策略探索和實施，我們取得了有意義的進展。

(foreign language)

（外語）

[Interpreted] First off, on user acquisitions, we transitioned from channel promotions that target growing market to a content-driven approach that attracts users in mature markets. We have been building a diverse product system since 2020. By strengthening our in-depth cooperation with game developers, we have evolved from a single-content live streaming format to a successfully developed multilayer content system that includes live streaming, videos, graphics and community interactions. And we continue to enrich our content to enhance our content operations. DouYu has gradually formed a positive cycle of content production and user growth. Based on the content system, we have directed more attention to maintaining our core users. In the first half of 2023, the average monthly viewing hours of mobile users showed an increase from the second half of 2022. This reflects the positive effects of our strategy to focus on improving user quality and the gradual optimization of our platform's ecosystem.

【解讀】首先，在用戶獲取上，我們從針對成長型市場的管道推廣轉向以內容驅動的方式吸引成熟市場的用戶。自2020年以來，我們一直在建立多元化的產品體系。透過加強與遊戲開發商的深度合作，我們已經從單一內容的直播形式發展到成功開發的包含直播、影片、圖文和社群的多層內容體系互動。我們不斷豐富我們的內容，以加強我們的內容營運。鬥魚逐漸形成了內容生產和使用者成長的良性循環。在內容體系的基礎上，我們更重視核心使用者的維護。 2023年上半年，行動用戶月均觀看時長較2022年下半年有所成長，體現了我們專注於提升用戶品質的策略和平台生態逐步優化的正面效果。

(foreign language)

（外語）

[Interpreted] Second, on the revenue front, to achieve our goal for the platform's long-term development, we have been making adjustments to our operating strategies for some time. We have reduced our operating activities that target revenue growth so that our streamers can concentrate on the production of high-quality content. As a result, our users found it easier to consume content and have become more willing to engage in paying behaviors, which has also invigorated our platform's ecosystem. We have also upgraded our revenue-generating products to help maintain our core paying users and keep our overall revenue stable. Additionally, to improve the company's revenue structure, we explored new potential sustainable revenue streams. By stabilizing our revenue scale, we were able to further reduce our low-ROI virtual gifting activities and improved the platform's overall operating efficiency by operating -- by optimizing our costs and expenses. We are glad to see progressive improvements in both gross margins and adjusted net margin as a result.

【解讀】第二，在收入方面，為了實現平台長遠發展的目標，一段時間以來我們一直在調整營運策略。我們減少了以收入成長為目標的營運活動，以便我們的主播可以專注於高品質內容的製作。結果，我們的用戶發現消費內容變得更容易，並且更願意參與付費行為，這也活躍了我們平台的生態系統。我們還升級了創收產品，以幫助維持我們的核心付費用戶並保持整體收入穩定。此外，為了改善公司的收入結構，我們探索了新的潛在永續收入來源。透過穩定收入規模，我們能夠進一步減少低投資回報率的虛擬禮物活動，並透過優化成本和費用來提高平台的整體營運效率。我們很高興看到毛利率和調整後淨利潤率因此逐步改善。

(foreign language)

（外語）

[Interpreted] In addition, over the second half of 2023, we plan to improve our gaming community ecosystem in various ways. This includes increasing our investment in algorithms used for content-based recommendations to provide more targeted content that better fit our users' diverse preferences, thereby improving the efficiency of content utilization. We will also prioritize operations that enhance community features through product updates, operational innovation, et cetera, to foster a positive community admixture for gamers across the platform, further enhancing user engagement and stickiness.

【解讀】此外，2023年下半年，我們計畫透過多種方式完善遊戲社群生態。這包括增加對基於內容的推薦演算法的投資，以提供更有針對性的內容，更好地適應用戶的多樣化偏好，從而提高內容利用效率。我們也將優先進行社群特色運營，透過產品更新、營運創新等方式，為全平台遊戲玩家營造正向的社群氛圍，進一步提升用戶參與度與黏性。

(foreign language)

（外語）

[Interpreted] Product updates, content investments and the exploration of new models all require time and patience to bear fruit. Through trial and error and subsequent improvement, we believe the effectiveness of our operational strategies will become more evident. Of course, adjustment to revenue and expenses have an immediate impact on our financial performance, especially amidst the current macro uncertainties. Against this backdrop, we expect our revenue to experience short-term pressure, but we are prepared for this. And we'll control costs and expenses to secure our long-term profitability.

【解讀】產品的更新、內容的投入、新模式的探索，都需要時間和耐心才能見效。透過反覆試驗和後續改進，我們相信我們的營運策略的有效性將會更加明顯。當然，收入和費用的調整對我們的財務表現有直接影響，特別是在當前宏觀不確定性的情況下。在此背景下，我們預計我們的收入將面臨短期壓力，但我們已經準備好了。我們將控製成本和費用，以確保我們的長期盈利能力。

Thank you.

謝謝。

And our next question today comes from Raphael Chen with BOCI Research.

今天我們的下一個問題來自中銀國際研究部的 Raphael Chen。

(foreign language) I have 2 main questions. Firstly, we have noticed recently a top host left the platform after his contract expired in end July. Could management share some latest updates on the stability of other hosts on the platform? Also, could we have more color on the measures that platform takes to motivate these hosts? My second question is related to MAU and paying user trend. Could management give some color regarding the MAU and paying user trend in the near to mid-term, given current visibility?

（外語）我有兩個主要問題。首先，我們注意到近期有一位頂級主播在7月底合約到期後離開了平台。管理階層能否分享一些有關平台上其他主機穩定性的最新更新？另外，我們能否對平台為激勵這些主機所採取的措施有更多的了解？我的第二個問題與每月活躍用戶和付費用戶趨勢有關。考慮到目前的可見性，管理階層能否就近期到中期的月活躍用戶數和付費用戶趨勢提供一些資訊？

Thank you. Let me answer your first question. With high-quality call streamers, we signed long-term exclusive cooperation agreements. The binding agreements are governed by law and supported by game developers and publishers. Therefore, streamer stability is secured during their contracts' period. For call streamers whose agreements are about to expire, we actively discuss renew with them ahead of time. We have been doing this for many years, and the nonrenewal rate is very low.

謝謝。讓我回答你的第一個問題。憑藉優質的主播，我們簽訂了長期獨家合作協議。這些具有約束力的協議受法律管轄，並得到遊戲開發商和發行商的支持。因此，在合約期間內流光穩定性得到保證。對於協議即將到期的主播，我們會積極提前與他們協商續約。我們已經這樣做很多年了，不續約率非常低。

Overall, DouYu has a robust and high-quality moat of streamers. As an established game content platform, we have worked with streamers on a win-win base for many years, building streamers' individual IP and enhancing DouYu's competitive edge. As our industry environment evolved and our users' game consumption needs became more diverse, we began introducing new innovative streamer cooperation models. Here are what we have been working on: First, under our overall stream operations strategy, we are strengthening streamer collaborations and depending our cooperation with game developers. We regularly roll out innovative high-quality content and operational activities to maintain and increase user activity in our game segment.

整體而言，鬥魚擁有強大且高品質的主播護城河。作為老牌遊戲內容平台，我們多年來與主播合作共贏，打造主播個人IP，提升鬥魚的競爭優勢。隨著產業環境的發展和用戶遊戲消費需求的多樣化，我們開始引入新的創新主播合作模式。我們一直在做的工作有：第一，在我們的整體直播營運策略下，我們正在加強主播合作，並依賴與遊戲開發商的合作。我們定期推出創新的高品質內容和營運活動，以維持和增加遊戲領域的用戶活躍度。

And the streamers have become more willing to go on live streaming sessions, with notably more new games launched in the first half of the year, we worked on an array of streamer recruitment recall and (technical difficulty).

而且主播直播的意願也越來越高，尤其是上半年新遊戲的推出，我們做了一系列的主播招募召回和（技術難度）。

Let me continue to answer your first question, about the streamer stability. With notably more new games launched in the first half of the year, we worked on an array of streamer recruitment recall and growth programs through operating activities supported by game developers. We have added new resources to the platform streamer pool, offering additional content for new games so that the streamers can grow and prosper in more diverse ways. As part of our normal course of operations, we launched more streamer -- streaming programs as well as various offline activities featuring streamers. We effectively promoted user interactions, made our streamers more popular and enhanced our live streaming sessions.

讓我繼續回答你的第一個問題，關於串流媒體穩定性。隨著上半年新遊戲的推出明顯增多，我們透過遊戲開發商支持的營運活動開展了一系列主播招募召回和成長計畫。我們為平台主播池添加了新的資源，為新遊戲提供額外的內容，以便主播能夠以更多樣化的方式成長和繁榮。作為我們正常營運過程的一部分，我們推出了更多主播直播節目以及以主播為特色的各種線下活動。我們有效地促進了用戶互動，使我們的主播更受歡迎，並增強了我們的直播會話。

Our second effort has been on the commercialization front. Through multi-dimensional products upgrades, we enhanced the interaction between streamers and users and further optimized our paying users ecosystem. For example, we added the gift collection and display functions such as gift collection display and gift photo book. Users giving gifts for the first time and the user who gives the most gifts are immediately centered on live streaming channels. And all the gift given to streamers are displayed on the user interface. We also upgraded our user profiling system in the second quarter, highlighting paying user privileges, and further improved paying user experience. These product upgrades facilitated better streamer-user interactions, expanding our monetization opportunities.

我們的第二個努力是在商業化方面。透過多維度的產品升級，增強主播與用戶的互動，進一步優化付費用戶生態。例如，我們增加了禮品收藏展示、禮品相簿等禮品收藏展示功能。第一次送禮物的用戶和送禮物次數最多的用戶立即集中在直播頻道。所有給予主播的禮物都會顯示在使用者介面上。第二季我們也升級了用戶畫像體系，突顯付費用戶特權，進一步提升付費用戶體驗。這些產品升級促進了更好的主播與用戶互動，擴大了我們的獲利機會。

Additionally, we provide streamers with more live streamings more than the management tools. Our content production tools help streamers improve their live streaming quality and efficiency. Our big data energy indices enabled us to better support our streamers with more precise and quick data feedback to optimize live streaming content and operations.

此外，我們也為主播提供比管理工具更多的直播。我們的內容製作工具可協助主播提高直播品質和效率。我們的大數據能源指數使我們能夠透過更精確、更快速的數據回饋來更好地支持我們的主播，以優化直播內容和營運。

Overall, streamers are the heart of our valuable high-quality content. We implemented a complete system for streamer recruitment, training, growth, management and cooperation, making sure that our streamers are actively engaged and well compensated. Our enhanced operations have also strengthened our relationships with streamers.

總的來說，主播是我們寶貴的高品質內容的核心。我們實施了完整的主播招募、培訓、成長、管理、合作體系，確保主播積極參與並獲得良好的報酬。我們增強的營運也加強了我們與主播的關係。

Let me answer the second question, about the user trend. Our operating strategy is focused on long-term sustainable growth across the platform. Regarding revenue, we reasonably adjusted our live streaming revenue-generating activities and reduced promotion frequency, which may squeeze out some users and some paying users in the short term. Let me explain this in more detail. First, the quarter-on-quarter decline in MAU was mainly the result of our significant reduction in marketing expenses for promotions and consequently the loss of some low-quality users. Our analysis indicates that most of the user attrition was from users who spend a short time on the platform. As a result, the changes in MAU will not significantly affect our platform's content operations and monetization efficiency.

我來回答第二個問題，關於使用者趨勢。我們的營運策略專注於整個平台的長期永續成長。在收入方面，我們合理地調整了直播創收活動，減少了促銷頻率，短期內可能會擠出部分用戶和部分付費用戶。讓我更詳細地解釋一下。首先，MAU月減主要是因為我們大幅削減促銷費用，導致部分低品質用戶流失。我們的分析表明，大部分用戶流失來自於在平台上停留時間較短的用戶。因此，每月活躍用戶數的變化不會對我們平台的內容營運和變現效率產生重大影響。

Looking at the second half of the year, we will continue to execute our prudent marketing strategy. As the impact of our upcoming product upgrades and user behavior is still unknown, we expect MAU to remain at current level in the second half of the year, with some degree of fluctuation.

展望下半年，我們將持續執行審慎的行銷策略。由於我們即將推出的產品升級和用戶行為的影響仍未知，我們預計下半年月活躍用戶數將維持在當前水平，並有一定程度的波動。

Second, regarding paying users. The number of paying users was influenced by both internal operations and external macro environment. According to our analysis, the change in paying users in the first half of the year was mainly attributable to our internal operational adjustments. These adjustments included reduced marketing expenses for customer acquisition and decreased purchasing from some users relying on low-ROI marketing activities that we canceled. These changes resulted in a decline in the overall number of users and paying users. We believe that the upgrades we have made to our revenue-generating products will enhance our ability to maintain our core paying user.

其次，關於付費用戶。付費用戶數量受到內部營運和外部宏觀環境的影響。根據我們的分析，上半年付費用戶的變化主要是由於我們內部營運調整。這些調整包括減少客戶獲取的行銷費用，以及減少一些用戶依賴我們取消的低投資報酬率行銷活動的購買。這些變化導致用戶總數和付費用戶總數下降。我們相信，我們對創收產品所做的升級將增強我們維持核心付費用戶的能力。

That being said, we have stabilized the number of paying users within a comfortable range. Looking into the second half of the year, we believe that the macro environment could further affect our paying user base. So far, there is still no sign of a strong macro recovery. Users purchase readiness has declined and users are more cautious about discretionary spending. Therefore, we anticipate that, in the second half of the year, macro uncertainties may lead to slight fluctuation in the number of paying users. As we said, based on operational adjustments, with a focus on investing in content which offers more sustainable growth. However, it may -- takes more time to see the benefit of these investments. Meanwhile, we will continue to closely track our operational adjustments progress, and we look forward to keeping you updated. Thank you.

話雖如此，我們已經將付費用戶數量穩定在一個舒適的範圍內。展望下半年，我們認為宏觀環境可能會進一步影響我們的付費用戶基礎。迄今為止，宏觀經濟仍沒有強勁復甦的跡象。用戶的購買意願下降，用戶對可自由支配的支出更加謹慎。因此，我們預期下半年宏觀不確定性可能會導致付費用戶數量出現小幅波動。正如我們所說，基於營運調整，重點投資於提供更永續成長的內容。然而，可能需要更多時間才能看到這些投資的好處。同時，我們將繼續密切追蹤營運調整進展，並期待向您通報最新情況。謝謝。

And our next question comes from Cathy Tang at Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Cathy Tang。

(foreign language) Could you suggest how the company could improve the profitability through operational adjustments? Also, could you share with us a profitability outlook for the second half this year?

（外語）您能否建議公司如何透過經營調整來提高獲利能力？另外，您能否與我們分享一下今年下半年的獲利前景？

I will answer this question. As we have constantly noted, the company's operating strategy targets long-term sustainable growth across our platform. To this end, we have continuously, fine-tuned our live streaming business, improved platform's ecosystem and fostered a healthy spending landscape. We have also significantly elevated the company's overall operating efficiency by investing in high-quality content, refining our business operations and improving our IR operations. With these meaningful operational adjustments underway, we have successfully achieved net income and adjusted net income for 2 consecutive quarters. Let me elaborate on the 2 primary areas where we have improved our operating efficiency.

我來回答這個問題。正如我們不斷指出的，公司的營運策略目標是整個平台的長期永續成長。為此，我們不斷調整直播業務，完善平台生態，培育健康消費格局。我們還透過投資高品質內容、完善業務運營和改善 IR 運營，顯著提高了公司的整體營運效率。隨著這些有意義的營運調整的進行，我們已連續兩季成功實現淨利和調整後淨利。讓我詳細介紹一下我們提高營運效率的兩個主要領域。

Regarding our cost of revenues, the offset increased copyright costs and the costs of our innovative business. We optimized the costs of our traditional businesses to effectively keep our overall cost stable. For revenue-sharing fees and content costs, we made array of adjustments to live streaming activities that help us maintain overall revenue-sharing ratio at current healthy level, facilitating the continued healthy development of our sustainable live streaming ecosystem. We also enhanced production efficiency and ROI of self-produced content; and manage to control payments to streamers, which reduced our related content costs year-over-year. Overall, we expect our total costs as a percentage of revenues to remain flat year-over-year in 2023.

關於我們的收入成本，抵銷了增加的版權成本和創新業務的成本。優化傳統業務成本，有效維持整體成本穩定。在收益分成費用和內容成本方面，我們對直播活動進行了一系列調整，幫助我們將整體收益分成比例維持在當前的健康水平，促進我們可持續的直播生態系統的持續健康發展。我們也提高了自製內容的生產效率和投資報酬率；並設法控制對主播的付款，逐年降低了我們的相關內容成本。整體而言，我們預計 2023 年總成本佔營收的百分比將與去年同期持平。

Regarding our operating expenses, we actively optimize each core expense and significantly reduced our channel-related user acquisition expenses. We also improved staff efficiency by optimizing the company's organizational structure, further boosting our operating efficiency. Our goal, of course, is to achieve sustainable adjusted net income. To summarize: We are managing the macro uncertainties by more effectively controlling our costs and expenses, and we plan to further stabilize and improve the profitability of our traditional live streaming business. We will also focus on identifying and developing new areas within our innovative business. We plan to work with game developers on all fronts, fully leveraging the traffic and content resource advantages we have accumulated within our traditional live streaming business to further diversify and empower our commercialization capabilities. These coordinated efforts are aimed at fostering long-term sustainable profitability and development across our platform. Thank you.

在營運費用方面，我們積極優化各項核心費用，大幅降低通路相關的用戶獲取費用。我們也透過優化公司組織架構，提高員工效率，進一步提升營運效率。當然，我們的目標是實現可持續的調整後淨利潤。總結一下：我們正在透過更有效地控製成本和費用來應對宏觀不確定性，並計劃進一步穩定和提高傳統直播業務的盈利能力。我們還將專注於識別和開發創新業務中的新領域。我們計劃與遊戲開發人員進行全方位合作，充分利用我們在傳統直播業務中累積的流量和內容資源優勢，進一步豐富和增強我們的商業化能力。這些協調一致的努力旨在促進我們平台的長期可持續盈利和發展。謝謝。

Thank you. And this is all the time we have for questions. I will now turn the call back over to management for closing remarks.

謝謝。這就是我們提問的時間。我現在將把電話轉回給管理層以供結束語。

On behalf of the management, thank you for joining our call. We look forward to speaking with everyone next quarter.

我謹代表管理層感謝您加入我們的電話會議。我們期待下個季度與大家交談。

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines. And have a wonderful day.

謝謝。今天的電話會議到此結束。我們感謝大家參加今天的演講。現在您可以斷開線路。祝你有美好的一天。