HUYA Inc (HUYA) 2019 Q4 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for the Fourth Quarter 2019 Earnings Conference Call for HUYA Inc. (Operator Instructions) Today's conference is being recorded. I will now turn the call over to Ms. Dana Cheng, Company Investor Relations. Please go ahead.

Hello, everyone, and welcome to Huya's Fourth Quarter 2019 Earnings Conference. The company's financial and operational results were issued earlier today and are posted online.

You can also view the earnings press release by visiting the IR website at ir.huya.com. A replay of the call will be available on the IR website in a few hours.

Participants on today's call will be Mr. Rongjie Dong, Chief Executive Officer of Huya; and Ms. Catherine Liu, Chief Financial Officer. Management will begin with prepared remarks, and the call will conclude with a Q&A session.

Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.

Please also note that Huya's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures.

Huya's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.

I will now turn the call over to our CEO, Mr. Rongjie Dong. Please go ahead.

Hello, everyone. Thank you for joining our earnings call today. We are happy to speak with you today following the completion of a great year with a strong end. 2019 was a year where we further strengthened our leadership position and increased our market share in China's booming game live streaming industry by leveraging and strengthening our comprehensive and self-reinforcing ecosystem.

During this year, we continued to enrich and diversify our content offerings by progressively investing in high-quality broadcasters, expanding our e-sports tournaments coverage and creating new self-generated content.

As a result, our user community continued to expand. Our Huya Live MAUs increased by 28.8% year-over-year to 150.2 million in quarter 4, in line with our previous target.

Among our Huya Live users, mobile MAUs grew 21.5% year-over-year to 61.6 million, driven by our effective mobile strategy. There is seasonal volatility for our users as more mobile users come to our platform during the summer vacation in quarter 3 and the winter vacation in quarter 1, and more PC users come to our platform during the quarter with big e-sports tournaments.

In quarter 1 2020, our mobile MAUs are expected to reach historical high of over 70 million due to the winter vacation seasonality and the recent lockdown policies during the coronavirus outbreak.

Nonmobile MAUs increased 34.5% year-over-year, mainly due to the big e-sports tournaments in the quarter. The in-game pop-up streaming windows promoted by our game developer partners and the cooperation with off-line Internet cafes during the quarter.

Our monetization capabilities also continued to improve, resulting in better cooperation with our broadcasters and the talent agency partners. Our revenues grew by 64% year-over-year to approximately RMB 2.5 billion in the fourth quarter, which is the 7th consecutive quarter that we exceeded our management guidance since our IPO. 2019 full year revenues reached RMB 8.37 billion, an increase of 79.6% year-over-year. Our revenue growth also come along with gross margin and operating margin improvement, once again demonstrating our outstanding execution capabilities.

These accomplishments in 2019 position us for a strong start as we head into the new year of 2020. I'm very pleased with the achievements on all business fronts so far in 2020.

Our primary objectives for the year are to strengthen our leadership position in China and overseas. For the domestic market, we will continue to bring more high-quality content to our users and accelerate our new product and service development efforts.

Some of the new products will be embedded within our core Huya Live app, while some will become stand-alone apps separately. We will also continue to increase our influence in overseas markets.

Our strategic initiatives are designed to capture the tremendous growth potential we believe our platform can achieve. As we continued -- as we continue to improve and diversify our content, we expect to further grow our user base, improve our monetization and increase the value we bring to all of our constituents -- our company, our users, our partners and our investors.

In addition to the business achievements we made during the quarter, I'd like to take a moment to talk about the ongoing novel coronavirus outbreak. During the outbreak, we prioritized the health of our employees by taking necessary precaution measures and offering flexibility to work from home. So far, none of our employees was infected. In addition, we have always been committed to maintaining high standards of corporate social responsibility. We provided pro bono services for the public audience, including online tutorial streaming for coronavirus prevention, charity music shows and streaming services for education institutions, in addition to the donations made by our company and our broadcasters and the talent agency partners. Admittedly, the COVID-19 has increased our users' mobile usage. And as a result, our mobile MAUs reached record high in quarter 1. So did some mobile users' time spent, but we will continue to closely monitor the evolving situation and assess its impact accordingly. We believe that coronavirus outbreak will be overcome eventually, and our path toward future growth prospects will remain intact.

With that, I will now turn the call over to our new CFO, Catherine Liu, who has been with us for several months now. In that time, her swift and active engagement has been pretty impressive, and we deeply value her strategic insights and the extensive experience in the Chinese TMT sector. She will now provide you with operating metrics in more details and our assessment of the financials. So Catherine, please go ahead.

Thank you, Mr. Dong. I appreciate the warm welcome, and it has been a pleasure to join Huya's management team.

Now following Mr. Dong's remarks and moving specifically on to our content enrichment and diversification efforts, an important growth pillar that has supported our ability to meet the evolving preferences of our users. In the fourth quarter of 2019, our broadcasters live streamed 45.6 million hours of both game and other entertainment content on our platform, representing an increase of 37% from the same period last year. We will continue to partner with talent agencies and recruit more broadcasters to ensure we are providing high-quality content that remains relevant and interesting to our users.

As another important content source, e-sports tournaments remained vibrant and prosperous on our platform. During the fourth quarter, we broadcasted 117 third-party e-sports tournaments, including Worlds 2019, PGC, PEL, HoK Winter and KPL Fall.

In Q4, our e-sports viewership exceeded 530 million, representing more than a 30% year-over-year increase. For the full year of 2019, we broadcasted over 400 third-party e-sports tournaments, with total viewership of over 2 billion, representing a 25% year-over-year increase.

Here, we have some exciting updates about the LoL tournament's broadcasting rights for 2020. Following the strategic partnership that we signed with Riot Games and a 3-year exclusive Chinese broadcasting rights of LCK between 2020 and 2021 -- 22, we also locked down the exclusive broadcasting rights of LCS and LEC for 2020.

These exclusivities will make Huya the only live streaming platform for all 4 major LoL regional Leagues in China, as we also have broadcasting rights of LPL.

Huya also continued to proactively produce our self-organized e-sport tournaments that further complement the viewing experiences of game enthusiasts. During the fourth quarter, we successfully produced 30 Huya-branded tournaments, generating total viewership of over 70 million, representing an increase of more than 20% year-over-year.

In November 2019, Huya Live and NIMO TV cohosted Asia Influencer e-sports Festival with AfreecaTV in Korea, inviting gaming broadcasters from these 3 platforms to compete in PUBG and PUBG Mobile. This is the first time that the company has organized a multinational events abroad with an overseas partner, demonstrating Huya's deep immersion in the e-sports value chain and growing recognition on the global stage.

For the full year of 2019, we produced 120 Huya-branded tournaments, generating total viewership of over 280 million, representing a 79% year-over-year increase.

Content diversification is a long-term strategy for Huya. In addition to bringing more games and e-sports tournaments to our growing user base, we also cultivate nongaming content, such as anime and comics, outdoor and traditional sports, food, online theater and education. In the fourth quarter, over 55% of our users watched the nongaming content on our platform, and nongaming content generated around 45% of our streaming gross revenues. A series of initiatives to further enrich our nongaming content has been made to capture the growth opportunities.

Let me share with some -- with you some recent examples, such as Huya Electronic Night, an ACG event featured performances from virtual broadcasters, together with actual broadcasters and their digital figures, making a meaningful step toward our ACG aspirations.

On the outdoor and traditional sports content front, we organized the Huya Kungfu Carnival, a mixed martial arts competition that invited Huya's celebrity outdoor broadcasters to join the stage and compete with professional fighters. The live event generated even more viewership than the average daily viewership of LoL All-Stars.

All that being said, we continue to see tremendous opportunity to serve the gaming population with comprehensive coverage of different content categories, and we are on the right track to seize the rising potential.

Looking at the advertising side of Huya's business, 2019 was a landmark year for Huya's advertising and other business, with full year revenue growing at approximately 80.6%, despite the macro headwinds in advertising sector.

In 2019, we put up a more experienced team, expanded our advertiser portfolio, diversified our ad product offerings and launched an ad distribution platform. Reflecting on the work we have done, we have made great strides in gaining more recognition across advertisers of both gaming and nongaming brands.

Internationally, we have gained a significant overseas presence in less than 2 years with our overseas MAUs reaching approximately 20 million in the fourth quarter. Capitalizing on the growth opportunities in the emerging markets, our overseas presence will continue to serve as a core differentiator for us in the game live streaming landscape, and we will persist in our global expansion efforts as the year progresses.

In addition, investments in our technology capabilities was immediately evident and positively received by our growing user base. It improved the video quality of our live streaming content, enhanced the interaction between our users and broadcasters and increased the efficiency of our bandwidth usage. We believe our high-definition streaming capabilities on mobile devices and our cutting-edge AI technology are among the best in the industry.

In the fourth quarter, we signed a strategic partnership and established a joint innovative center with Huya to explore more opportunities in 5G, cloud services and game live streaming. We still believe 5G will serve as an inspiring catalyst for a thriving era of cloud gaming. This could especially be the case for driving live streaming to be more relevant in the game industry's upstream market, and we are continuously updating supporting technology to best prepare ourselves and leverage this exciting movement.

Now let me walk you through our financial highlights. Our fourth quarter financial results reflect Huya's focus on both driving user and revenue growth and improving operational efficiencies and margins. In the fourth quarter, our total net revenues grew by 64% year-over-year to RMB 2.47 billion. Our non-GAAP gross margin improved to 19.5% compared with 18.3% in Q3 2019 and 16.1% in Q4 2018. And our non-GAAP operating margin improved to 7.4% compared with 6.5% in Q3 2019 and 5.5% in Q4 2018.

Our live streaming revenues increased by 62.7% to RMB 2.3 billion in the fourth quarter of 2019. The increase was primarily due to the increase in average spending per paying user, i.e. ARPU, as well as a larger number of paying users on Huya Live. Our live streaming ARPU increased about 53% year-over-year and 13% quarter-over-quarter due to our year-end promotional activities as well as our enhanced content and user experience.

The year-end promotional activities were focused more on improving existing paying users' ARPU than acquiring new paying users. Correspondingly, the total number of paying users was 5.1 million, representing year-over-year growth of 5.9%, with some sequential fluctuation.

Here, I would like to ask that we typically look at these 2 metrics together, both the number of paying users and the ARPU, to determine the engagement level of our users, since the business team would take the strategic priority between the 2 measures depending on the quarterly lineup of activities they organized and in the seasonal circumstances they have. In the first quarter of 2020, driven by the strong mobile MAU growth resulted from school holidays and the recent lockdown policies, we expect the total paying users will reach a historical high of over 5.5 million.

Advertising and other revenues increased 92.1% to RMB 121.3 million in the fourth quarter of 2019, primarily due to higher demand for more advertisers, more diversity, our new advertising distribution platform that we launched in Q3 and the strengthened recognition of our brand name. As we continue our innovative product development to offer more diverse forms of advertisements on our platform, we can create more value for our advertisers.

Cost of revenues increased by 58% to RMB 2.0 billion in the fourth quarter. The increase was primarily attributable to the increase in revenue sharing fees and content costs, bandwidth costs and personnel-related costs.

Revenue sharing fees and content costs increased by 51% to RMB 1.6 billion in the fourth quarter. The increase was primarily due to the increase in virtual item revenue sharing fees in relation to higher live streaming revenues, continued spending in content creators and e-sports content in both domestic and overseas markets and was partially offset by benefits from economies of scale.

Bandwidth costs increased by 39.6% to RMB 225.6 million in the fourth quarter. The increase was primarily due to an increase in bandwidth usage as a result of our larger user base, and enhanced live streaming video quality, partially offset by improved efficiency in bandwidth utilization through continued technology enhancement efforts.

Gross profit increased by 95.5% to RMB 466.6 million in the fourth quarter. Gross margin increased to 18.9% in the fourth quarter from 15.9% in the same period of 2018.

Non-GAAP gross profit, which excludes share-based compensation expenses, increased by 98.7% to RMB 481.4 million in the fourth quarter, and non-GAAP gross margin increased to 19.5% in the fourth quarter from 16.1% in the same period of 2018.

Gross margin improvement was primarily due to economy of scale and improved efficiencies. R&D expenses increased by 125.4% to RMB 178.3 million for the fourth quarter, mainly attributable to increased personnel-related expenses.

Sales and marketing expenses increased by 97.6% to RMB 118.3 million for the fourth quarter. The increase was primarily attributable to the increased marketing expenses associated with the promotions of Huya's products and brand name in both domestic and overseas markets as well as increased personnel-related expenses.

General and administrative expenses increased by 4.5% to RMB 96.4 million for the fourth quarter, mainly due to increased personnel-related expenses. Operating income increased by 448.7% to RMB 101.6 million for the fourth quarter of '19. Operating margin increased to 4.1% in the fourth quarter from 1.2% in the same period of 2018.

Non-GAAP operating income, which excludes share-based compensation expenses, increased by 122.8% to RMB 183.8 million for the fourth quarter, and non-GAAP operating margin increased to 7.4% in the fourth quarter from 5.5% in the same period of 2018.

Operating margin improvement was primarily due to the improvement in gross margin.

Income tax expenses were RMB 27.6 million for the fourth quarter compared with income tax benefits of RMB 31.8 million in the same period of '18.

Net income attributable to Huya in the fourth quarter increased by 60.3% to RMB 159.7 million from RMB 99.6 million in the same period of 2018.

Non-GAAP net income attributable to Huya in the fourth quarter, which excludes share-based compensation expenses, increased by 44.9% to RMB 241.9 million.

Net income increase was primarily due to the increase in revenues, the improvement in gross margin and partially offset by income tax expenses.

Diluted net income per ADS was RMB 0.68 for the fourth quarter compared with RMB 0.45 for the same period of 2018.

Non-GAAP diluted net income per ADS was RMB 1.02 for the fourth quarter compared with RMB 0.76 for the same period of 2018.

Now turning to the full year of 2019. Our total net revenues grew by 79.6% to RMB 8.3 -- RMB 8.37 billion. Our live streaming revenues increased by 79.5% to RMB 8.0 billion, due to both the increase in ARPU and then the number of paying users.

Our advertising and other revenues increased by 80.6% to RMB 398.3 million, primarily driven by rising demand from an increasing number of advertisers, more diversity in advertising clients, the new advertising distribution platform and the further recognition of Huya's brand name in China's online advertising market.

And for the full year of 2019, our gross profit increased by 103.1% to RMB 1.48 billion, and gross margin increased to 17.7% in 2019 from 15.6% in 2018.

Our non-GAAP gross profit, which excludes share-based compensation expenses, increased by 104.5% to RMB 1.51 billion in 2019, and the non-GAAP gross margin increased to 18.1% in 2019 from 15.9% in 2018. Gross margin improvement was primarily driven to economy of scale and improved efficiencies.

In 2019, our operating income increased by 880.3% to RMB 261.4 million. Operating margin increased to 3.1% in 2019 from 0.6% in 2018. And the non-GAAP operating income, which excludes share-based compensation expenses, increased by 114.4% to RMB 543.1 million in 2019. And non-GAAP operating margin increased to 6.5% in '19 from 5.4% in '18. Operating margin improvement was primarily due to the improvement in gross margin and operation efficiencies.

Net income attributable to HUYA Inc. in '19 was RMB 468.2 million compared with a net loss of RMB 1.9 billion in 2018. Non-GAAP net income attributable to Huya in 2019, which excludes share-based compensation expenses, fair value loss on derivative liabilities and a gain on fair value change of investments and equity investee's investments, increased by 62.7% to RMB 749.9 million.

Diluted net income per ADS was RMB 2.02 in 2019 compared with diluted net loss per ADS of RMB 15.02 in 2018. Non-GAAP diluted net income per ADS was RMB 3.23 in 2019 compared with RMB 2.06 in 2018.

As of December 31, 2019, the company had cash and cash equivalents, short-term deposits and short-term investments of total RMB 10.1 billion compared with RMB 6.0 billion as of December 31, 2018. And net cash provided by operating activities was RMB 571.6 million for the fourth quarter compared with net cash provided by operating activities of RMB 191 million in the same period of 2018. For the full year of 2019, net cash provided by operating activities was RMB 1.9 billion compared with net cash provided by operating activities of RMB 717.5 million in 2018.

To be mindful of the length of our earnings call for the full -- for the other full year 2019 financial results, I will encourage listeners to refer to our earnings release for further details.

Turning to our guidance. For the first quarter of 2020, we currently expect total net revenues to be in the range of RMB 2,360 million to RMB 2,400 million, representing a year-over-year growth of between 44.7% and 47.1%.

This forecast considers the potential impact of COVID-19 outbreak and reflects our current -- our current and preliminary views on the market and operational conditions, which are subject to change, particularly as to the potential impact of the coronavirus on the economy in China and elsewhere.

With that, I would now turn -- open the call for your questions.

(Operator Instructions) Your first question comes from the line of Thomas Chong from Jefferies.

(foreign language) And my question is about the long-term strategies for Huya. First, can management comment about our strategies in cloud gaming distribution and opportunities that we are embracing? And secondly is about the long-game broadcasting strategies. And then my second question is about our investment plan in overseas expansion. Can management talk about our investment focus, our KPI as we go into overseas market?

(foreign language)

[Interpreted] All right. For your first question regarding the cloud gaming. Actually, we have been closely paying attention to this cloud gaming in the year for 2019. And earlier this year, we started to review the specific sector. And we have noticed that the revenue per user and as a cost per user, the gap between the revenue per user and the cost per user is actually narrowing down. And we think the economy of cloud gaming currently, we think it's probably ready. And we will take this time for us to enter this specific sector.

And as I said earlier, in previous calls, we were closely paying attention to this cloud gaming. But let's just say that it's still early stage for those -- for this whole industry to grow. So for the user growth influence, we wouldn't think -- at least for this year, we wouldn't think cloud gaming is going to impact a lot on the user growth. That's for your question for the cloud gaming.

For your question regarding the nongaming live streaming, as we disclosed previously, nongaming live streaming users is actually picking up to -- half of the users of the platform is actually watching the nongaming live streaming. And we think in the year of 2019, the growth rate of the nongaming streaming users is actually faster than the growth rate of the gaming users.

We see the rising content categories, such as ACG, outdoor, foodie and traditional sports, and these are the fastest-growing content categories. As we will keep our content, in general, specifically focused on the e-sports, as we always do, we will put nongame streaming as a strategic priority. And that strategic priority does not only include live streaming, but also to include videos. So for nongaming, we will just try and invest to explore more opportunities, whether in the form for live streaming and videos.

For your last question regarding the overseas business, we think the performance of overseas business is actually being within management expectation. As we said earlier, we've achieved 20 million MAU in the fourth quarter of '19. And we think we will capture that -- we will keep that growth momentum in the year of 2020 maybe to 50% year-over-year growth for our overseas MAU.

Your next question comes from the line of Lei Zhang from Bank of America.

(foreign language) I will translate it myself. First question is about user growth in 2020. What's our target? And do you see any trend around the coronavirus outbreak? Especially, we mentioned that we reached a historical user -- historical high in the first quarter, but we all do see any slowdown after people come back to work. And the second, I want to follow up on overseas strategy, what is our target country in 2020? Are we still focusing on the emerging markets or any plan to go to the developed market? And what is our plan in monetization of the overseas in 2020?

(foreign language)

[Interpreted] For your first question regarding the user growth, there are several dimensions to answer this question. I mean, firstly, is that we will keep on our growth efforts in the game live streaming sector, especially in expectation for the new blockbuster games coming in the year of 2020. For example, like Dungeon & Fighter's mobile version in the first half and League of Legends mobile version probably later this year. And we think blockbuster is actually -- will help Huya's user growth.

And the second growth driver could be the e-sports tournaments. As we have seen in the year of '19, game developers have been investing a lot to deploy the e-sports tournaments, and we think that will further help us to maintain our growth momentum in the users.

And the third one is on the product diversification. For the year of 2020, we have some product pipelines lining up. Like, for example, the first one is the e-sports community and secondly is the co-play stand-alone app.

And for -- apart from the live streaming business that we have always been doing, we will also spend some efforts in the realm of video services, especially in the entertainment sector. And although cloud gaming product will be another product diversification effort for this year, and we will closely monitor the industry involvement.

And for the fourth growth driver for the users is -- we have -- overall, we think there's great growth potential for the nongaming sector, whether in the form of live streaming or in the form of video services.

It's a greater market year, and it's going to be a strategic priority for us in the year of 2020. So that's the answer for your first question regarding the user growth.

And secondly, whether people are getting back to work, it will impact our growth after the lockdown policy and the extended holidays of people because of the COVID-19. And we think the impact is not so big based on the statistics that we saw. And because there's a group of users, especially the students, they are still getting classes at home, and we can consider the specific time of the year as similar to winter holidays or summer holidays. Historically, these 2 -- these 2 kinds of school holidays are the time that we experience user growth a lot.

And for your third question regarding our overseas strategy and whether we will only do the emerging markets, we think for the developed markets, Japan and Korea is going to be our next target as we see this low growth potential here.

And for the European countries and the United States, we don't really think these 2 regions will be the focus because it's going to be a long shot. So now for now -- for European countries and the United States. And monetization is going to be a focus for the company in the overseas market because only if we have a mature mechanism of monetization that we will keep our content ecosystem vibrant. So that's for now.

Your next question comes from the line of Daniel Chen from JPMorgan.

(foreign language) I will translate myself. My first question is a follow-up on the user growth. So could management talk a little bit on your user growth strategy, especially in lower-tier city? And the second one is on monetization front. So we have a very good run in revenue growth in 2019. So what's the key strategy to strengthen the monetization in both gaming and a nongaming segment in 2020?

(foreign language)

[Interpreted] For your first question regarding our deployment strategy in terms of the Tier 3 and Tier 4 users, we think -- as we observed that since Kuaishou had entered into the game live streaming sector and with their special penetration into the Tier 3 and Tier 4 cities, we have observed there is a positive impact on the unit growth on our end.

So in other words, because of the Kuaishou's entrants with these that we are penetrating deeper into the Tier 3 and the Tier 4 cities. And also another observation from the company side is that we think the students -- the type of the students users are taking a larger proportion of the overall user base. And these are -- so penetration into Tier 3 and Tier 4 cities and keep on to serve these rising user growth of students will be the 2 strategic focus for us in the year for 2020.

And for your second question of monetization, we think that first, we were still trying to attract more new users and then keep converting the new users and the existing users to pin users. And then second, to increase our ARPU, we will continue to, one is to improve our current product offerings, such as enriched and diversifying content. And also, we were trying to develop some innovative new products to offer to our users to help monetize. Thank you for your question.

Your next question comes from the line of Alex Liu from China Renaissance.

(foreign language) So I will translate myself. So on the new product side, what -- could the management share more color on the new product, for example Pei-Wan "play together" and the potential expansion into new verticals, what's our advantages on these new initiatives over existing platforms?

And the second question is on the cash allocation and usage. How does the management think about the current net cash balance?

So your first question, for our new product, Pei-Wan is one of the categories that we're growing pretty fast and it reached a pretty significant scale in terms of the growth billings.

So currently, we plan to have a stand-alone product that probably will be launched in the second quarter. We will have more metrics that we share with you the shareholders and the investors in probably second quarter.

And in terms of your second question of net cash, we will -- we are still actively looking at the opportunities of potential investment and acquisition targets and the cash were mainly reserved for the potential investments and acquisitions. We will update investors on the investments and all the acquisitions that we do when this happens. Thank you for your question.

Our last question comes from the line of Binnie Wong from HSBC.

(foreign language) I'll quickly translate myself. So the question here is on the revenue sharing fees and content costs, given that our competitors have been entering the market and they have also been emphasizing that in 2020, they will be lowering the revenue -- increasing the revenue sharing to make it more attractive to incentivize the streamers to go to on their platform. So into 2020, what is our expectations on our revenue sharing in terms of directionally? And then also whether there will be any changes in terms of competitive strategies to hopefully to gain better share?

(foreign language)

[Interpreted] Historically, we have been kept a tri-party structure, including the platform, which is Huya and also the talent agencies and the broadcasters. We have been captured that structure for long. So the revenue sharing among the 3 parties have been stable over the past few years. And we think in the long run, the main direction for the revenue sharing will be stable as well.

But since we have been keeping a median broadcaster strategy, we will be -- we have and we will be providing subsidies to those median up and coming broadcasters.

So as a conclusion, we will invest more in the -- keeping up the broadcaster content macro system, so that we can better serve the broadcasters and talent agencies to generate more quality content.

That's it. I think we're -- it's about time. Is there any further questions? No. Okay. Thank you. Thank you for joining today's conference call. And if you have further questions, please feel free to contact us at ir@huya.com, and we look forward to speaking with you in the next quarter. Thank you.

This concludes this conference call. You may now disconnect your lines. Thank you.