iQIYI Inc (IQ) 2024 Q1 法說會逐字稿

Thank you for standing by, and welcome to the iQIYI First Quarter 2024 Earnings Conference Call. (Operator Instructions) I would now like to hand the conference over to Ms. Chang Yu, IR Director of the company. Please go ahead.

感謝您的耐心等待，歡迎參加愛奇藝 2024 年第一季財報電話會議。 （操作員指示） 現在我將會議交給公司IR總監常宇女士。請繼續。

Thank you, operator. Hello, everyone, and thank you for joining iQIYI's First Quarter 2024 Earnings Conference Call. The company's results were released earlier today and available on the company's Investor Relations website at ir.iqiyi.com. On the call today are Mr. Yu Gong, our Founder, Director and CEO; Mr. Jun Wang, our CFO; Mr. Xiangjun Wang, our CCO, Chief Content Officer; Mr. Wenfeng Liu, our CTO, Chief Technology Officer; Mr. Youqiao Duan, Senior Vice President of our Membership Business; Mr. San Ha Yang, Senior Vice President of Moelis and Overseas Business; and Mr. Fan Liu, Senior Vice President of Brand Advertising Business.

謝謝你，接線生。大家好，感謝您參加愛奇藝2024年第一季財報電話會議。該公司的業績於今天稍早發布，並可在該公司的投資者關係網站 ir.iqiyi.com 上查閱。今天參加電話會議的是我們的創辦人、董事兼執行長龔宇先生；王軍先生，我們的財務長；王向軍先生，我們的CCO、首席內容官；劉文峰先生，我們的CTO、技術長；段友橋先生，會員業務資深副總裁； Moelis及海外業務資深副總裁San Ha Yang先生；劉帆先生，品牌廣告業務資深副總裁。

Mr. Gong will give a brief overview of the company's business operations and highlights, followed by Jun, who will go through the financials. After the prepared remarks, the management team will participate in the Q&A session.

龔先生將簡要介紹公司的業務運作和亮點，隨後由君介紹財務狀況。在準備好的發言後，管理團隊將參加問答環節。

Before we proceed, please note that the discussion today 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 are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but not are limited to, those outlined in our public filings with the SEC.

在我們繼續之前，請注意，今天的討論將包含根據1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。所不同與我們目前的預期相差很大。潛在風險和不確定性包括但不限於我們向 SEC 公開提交的文件中概述的風險和不確定性。

iQIYI does not undertake any obligation to update any forward-looking statements, except as required under applicable law.

除適用法律要求外，愛奇藝不承擔更新任何前瞻性聲明的義務。

I will now pass the floor to Mr. Gong. Please go ahead.

現在請龔先生發言。請繼續。

Hello, everyone. Thank you for joining us today. We kicked off the year with a strong first quarter as we continue to execute our high-quality growth strategy and achieved multiple historical highs, in key financials and operational results. The non-GAAP operating income and its corresponding margin both reached a record high with income and RMB 1.1 billion and margin at 14%.

大家好。感謝您今天加入我們。我們以強勁的第一季度拉開了今年的序幕，我們繼續執行高品質成長策略，並在關鍵財務和營運業績方面創下了多項歷史新高。非美國通用會計準則營業收入及其相應利潤率均創下歷史新高，收入為人民幣11億元，利潤率為14%。

The expanding margin is a natural result of high-quality growth. For our Membership Services business, the monthly ARM growth to an all-time high, which is the sixth consecutive quarter of sequential growth, we are satisfied with the program and continue to believe that ARM remains one of the key drivers for unleashing the long-term value of Membership Services.

利潤率的擴大是高品質成長的自然結果。對於我們的會員服務業務，ARM 月成長創歷史新高，這是連續第六個季度實現環比增長，我們對該計劃感到滿意，並繼續相信 ARM 仍然是釋放長期增長的關鍵驅動力之一。的期限價值。

In our Advertising Services, revenue from the performance has achieved double-digit annual growth and is historical high in Q1. We anticipate the momentum to continue as, it directly benefited from the growing adoption of generative AI, which is expected to yield greater returns on investment for advertisers.

廣告服務方面，第一季業績收入實現了兩位數的年增長，創歷史新高。我們預計這一勢頭將持續下去，因為它直接受益於生成式人工智慧的日益普及，預計將為廣告商帶來更大的投資回報。

Content distribution revenue hit historical high as well reached RMB 928 million and grew 27% annually. This clear illustrates that our growing content production capabilities are creating more high-quality content that is recognized by television stations and other buyers.

內容發行收入創歷史新高，達9.28億元人民幣，年增27%。這清楚地表明，我們不斷增長的內容製作能力正在創造更多受到電視台和其他買家認可的高品質內容。

While we delivered impressive financial performance in the quarter, we maintained dominance in content. Data from Enlightent shows that our total viewership across major content categories, such as dramas and movies maintained the top spot in the market in Q1. Notably, in the crucial drama general category, we have held the #1 position for viewership share for 9 straight quarters. Aside from our domestic achievements, we are also excited by the amplified reach and the influence of our content and the brand in the overseas markets.

雖然我們在本季度取得了令人印象深刻的財務業績，但我們在內容方面保持了主導地位。來自Enlightent的數據顯示，第一季我們的電視劇、電影等主要內容類別的總觀看量持續保持在市場第一。值得注意的是，在關鍵的電視劇類別中，我們連續 9 個季度保持收視率第一的位置。除了國內取得的成績外，我們的內容和品牌在海外市場的影響力和影響力的擴大也讓我們感到興奮。

Now let's dive deeper into the performance of core business segments. Starting with Membership Services, we are committed to offering our users superior content, the finest user experience and enhanced number of privileges and benefits, which we believe will fuel the sustainable long-term growth of our Membership Services revenue. Our focus extends beyond merely the quarterly subscriber numbers, as the revenue result ultimately reflect all the collective component contributing to that performance. With that, we believe the way we share the development of our membership business should be aligned as well. Starting in Q1 of this year, we will stop reporting the quarterly average subscriber numbers and ARM. We will provide updates on key milestones related to subscriber growth and ARM as they are achieved.

現在讓我們更深入地了解核心業務部門的表現。從會員服務開始，我們致力於為用戶提供優質的內容、最佳的用戶體驗以及更多的特權和福利，我們相信這將推動我們的會員服務收入的可持續長期增長。我們的重點不僅僅是季度用戶數量，因為收入結果最終反映了對業績做出貢獻的所有集體組成部分。因此，我們相信我們分享會員業務發展的方式也應該保持一致。從今年第一季開始，我們將停止報告季度平均用戶數量和 ARM。我們將提供與用戶成長和 ARM 相關的關鍵里程碑的最新進展。

In the first quarter, we delivered membership revenue of RMB 4.8 billion, flat sequentially and down 13% from a year earlier. The year-over-year fluctuation was primarily due to the high base effects created last year with the relief of our mega hit, "The Knockout". The surge in travel and offline entertainment during the very first Chinese New Year holiday of this year post-COVID also partially diluted the online activities.

一季度，我們實現會員收入48億元人民幣，環比持平，年減13%。年比波動主要是因為去年我們的熱門歌曲《淘汰賽》帶來的高基數效應。疫情後的第一個農曆新年假期期間，旅遊和線下娛樂活動的激增也部分稀釋了線上活動。

Currently, among the various factors contributing to the revenue performance, we are intently focusing on enhancing the ARM and extending the lifespan of each membership, which serves as our principal areas of focus. We remain highly confident in the long-term growth potential of our membership business. Our confidence is supported by the success of our ARM strategy, which reflects 6 consecutive quarters of sequential growth. This strong performance is driven by our ongoing efforts to improve operations, enrich product offerings, and enhance membership benefits, all of which have bolstered the value proposition of our members. Given that our membership fees are affordable and the effective ARM remains modest, we have the opportunity to further refine our pricing strategy emphasizing the exceptional value of our premium content and services.

目前，在影響收入表現的各種因素中，我們專注於增強 ARM 並延長每位會員的壽命，這是我們主要的關注領域。我們對會員業務的長期成長潛力仍然充滿信心。 ARM 策略的成功支撐了我們的信心，該策略反映了連續 6 個季度的環比成長。這種強勁的業績得益於我們不斷努力改善營運、豐富產品供應和增強會員福利，所有這些都增強了我們會員的價值主張。鑑於我們的會員費是可以負擔的，並且有效的 ARM 仍然適度，我們有機會進一步完善我們的定價策略，強調我們優質內容和服務的非凡價值。

We have been working on improving ARM by introducing exciting services that add substantial value. Take the Express Package for example: cash purchase for the drama. Lonely Warrior (foreign language) reached a new high. The Express Package, not only brought in more revenue, but it also increased the popularity of the title. In fact, just one day after we launched this package, the drama hit its peak on iQIYI popularity index score. We are making good progress in bringing additional value to our members while concurrently driving revenue and popularity.

我們一直致力於透過引入可增加大量價值的令人興奮的服務來改進 ARM。以快遞套餐為例：現金購買劇。 《孤獨的戰士》（外語）達到了新的高度。特快包不僅帶來了更多的收入，也提高了遊戲的知名度。事實上，就在我們推出這個套餐的第二天，該劇在愛奇藝的熱度指數就達到了頂峰。我們在為會員帶來額外價值方面取得了良好進展，同時增加了收入和知名度。

In summary, our strategy for our membership business involves consistently delivering premium content and streaming -- streamlining operations and making efforts to attract and engage users. We also intend to adapt our membership offering to suit diverse user preference and bolster our loyalty program to motivate commitment to long-term premium subscriptions. Such initiatives are designed to foster loyalty and enhance customer lifetime value.

總之，我們的會員業務策略包括持續提供優質內容和串流媒體——簡化營運並努力吸引和吸引用戶。我們還打算調整我們的會員服務，以適應不同的用戶偏好，並加強我們的忠誠度計劃，以激勵對長期高級訂閱的承諾。此類措施旨在培養忠誠度並提高客戶終身價值。

Moving on to Content. Maintaining market leadership in key content genres has reinforced our reputation as a diversified and high-quality premium content powerhouse. For 9 consecutive quarters, our drama viewership shares have topped to the industry. The quarter's newly released title highlighted the extensive range and depth of our offering. We achieved meaningful advancements in the realistic genres, distinguishing ourselves from competitors through quality dramas infused with varied creative elements. This strategy has successfully broadened our content creation expertise.

繼續內容。在關鍵內容類型上保持市場領先地位鞏固了我們作為多元化、高品質優質內容巨頭的聲譽。電視劇收視份額連續9個季度位居行業第一。本季度新發布的標題凸顯了我們產品的廣泛範圍和深度。我們在現實類型片上取得了有意義的進步，透過注入各種創意元素的優質電視劇從競爭對手中脫穎而出。這項策略成功地拓寬了我們的內容創作專業知識。

Original programming remains the cornerstone of our content strategy. iQIYI Originals accounted for over 70% of our key new dramas launched in the first quarter, covering diversified themes.

原創節目仍然是我們內容策略的基石。在第一季推出的重點新劇中，愛奇藝原創作品佔超過70%，主題多元化。

In particular, War of Faith (foreign language) emerged as the first drama in this year and 13th in history to surpass iQIYI popularity index score of 10,000. Setting it apart from other war-themed shows. War of Faith, historical period of setting with financial intrigue, suspense and other creative elements. This demonstrates our commitment to innovation as we continue to push genre boundary and introduce unique storytelling perspective.

其中，《信仰之戰》（外語）成為今年第一部、也是史上第13部愛奇藝人氣指數破萬的電視劇。使其與其他戰爭主題節目區分開來。信仰之戰，以歷史時期為背景，融入金融陰謀、懸疑等創意元素。這表明了我們對創新的承諾，我們不斷突破類型界限並引入獨特的敘事視角。

The well-received drama, Always on the Move (foreign language), which was released during the Chinese New Year holiday, recorded viewership share of over 27% at its peaked according to Enlightent. It also set a new record for drama viewership on CCTV-8 and its iQIYI popularity index score was 9,959, just shy of 10,000 landmark.

根據啟蒙網報道，春節假期期間上映的熱門電視劇《永遠在路上》收視率最高時突破27%。該劇也刷新了CCTV-8的劇集收視新紀錄，愛奇藝人氣指數為9959分，距離破萬僅一步之遙。

After establishing our industrial leadership in the suspense genre with Light On Theater, we have continued to thrive in the comedy genre introducing 3 new titles under the Laugh On Theater brand this quarter. This includes Our Parallel Universes (foreign language) and The Great Nobody (foreign language), both of which are drama spin-offs of our hit variety show. Additionally, the new released, A Soldier's Story (foreign language) has broken iQIYI records for the highest popularity index score, highest revenue and the best ROI for Laugh On Theater production.

在《Light On Theater》確立了我們在懸疑類型領域的行業領導地位後，我們在喜劇類型領域繼續蓬勃發展，本季度推出了 Laugh On Theater 品牌的 3 部新作品。其中包括《我們的平行宇宙》（外語）和《偉大的無名小卒》（外語），這兩部作品都是我們熱門綜藝節目的衍生劇。此外，新上映的《士兵的故事》（外語）打破了愛奇藝笑劇製作最高人氣指數、最高收入和最佳投資回報率記錄。

During the quarter, we also released a collection of diverse high-quality dramas, such as Burning Flames (foreign language), Born to Run (foreign language), Detective Chinatown 2 (foreign language). For the quarter, our movie viewership outperformed competitors as reported by Enlightent. We released 24 major films across genres like crime, suspense and action including top-grossing theatrical releases on our movie channel. Meanwhile, 32 movies debuted on Cloud Cinema channel to positive audience reception. We also observed encouraging early responses to our new action Action Master Season (foreign language) and Art Films Cinema (foreign language) brand releases.

本季度，我們也推出了《烈火野心》（外語）、《天生就會跑》（外語）、《唐人街探案2》（外語）等多部優質影集。根據 Enlightent 報導，本季我們的電影收視率優於競爭對手。我們發行了 24 部主要電影，涵蓋犯罪、懸疑和行動等類型，其中包括在我們的電影頻道上票房最高的院線電影。同時，雲端影院頻道共有32部電影首映，觀眾反應良好。我們還觀察到，我們的新動作動作大師季（外語）和藝術電影影院（外語）品牌發布的早期反應令人鼓舞。

For variety shows, we made solid progress in both new releases and established IPs. Become a Farmer 2 (foreign language), leveraged the strong buzz of the first season, it achieved not only a notable boost in popularity and revenue, but also spurred a resurgence in viewership for the first season. In addition, HAHAHAHAHA 4 had a powerful season. With a high level of interaction among guests, its popularity index surpassed 8,400 at its peak.

綜藝方面，無論是新作品或舊IP，我們都取得了紮實的進展。 《當農夫2》（外語）憑藉第一季的強勁熱度，不僅在熱度和收入上取得了顯著提升，還帶動了第一季的收視回升。另外，哈哈哈哈哈哈4這一季也很給力。嘉賓互動度高，人氣指數最高時突破8400。

For animations, we got better at what we do and users responded well. Our original works, The Great Ruler (foreign language) and Against the Gods (foreign language) achieved the best performance for Domestic animations on our platform.

對於動畫，我們做得更好，用戶反應也很好。我們的原創作品《大主宰》（外語）、《逆天》（外語）取得了平台國產動畫最佳表現。

Our upcoming dramas feature standout titles such as Fox Spirit Matchmaker (foreign language), Follow Your Heart (foreign language) and As Husband as Wife (foreign language). And our slate of recent releases, including In the Name of the Brother (foreign language) and others, have bolstered our reputation For delivering high-quality, diverse content with great audience appeal. Notably, City of the City became the highest-rated show during prime time on CCTV-1 this year. In particular To the Wonder (foreign language) exemplifies our success in blending artistic merit with commercial success. The series, adapted from literary prose and spiced up with light comedy elements supports our pioneering eXave standard and offers a cinematic experience that sets a new industry

我們即將推出的電視劇包括《狐妖紅娘》（外語）、《隨心所欲》（外語）和《為夫為妻》（外語）等優秀作品。我們最近發布的一系列內容，包括《以兄弟之名》（外語）等，增強了我們提供高品質、多樣化內容和巨大觀眾吸引力的聲譽。值得注意的是，《都市之城》成為今年CCTV-1黃金時段收視率最高的節目。特別是《To the Wonder》（外語）體現了我們將藝術價值與商業成功結合的成功。該劇集改編自文學散文，並加入輕喜劇元素，支持我們開創性的 eXave 標準，並提供引領新行業的電影體驗

Benchmark.

基準。

Additionally, this series is the first to utilize our in-house developed cloud-based on-set production management system, enabling instant collaboration on daily shooting footage, remotely and largely boosting production efficiency. To the Wonder has achieved profitability while garnered domestic and international acclaim. It topped the ratings on Douban this year, became the first 8-episode mini-series to air during CCTV-1’s prime-time slot, and was the first Chinese drama to be selected for the prestigious Long Form Competition at CANNESERIES.

此外，該系列劇首次採用了我們自主開發的基於雲端的片場製作管理系統，可以實現日常拍攝片段的即時協作，遠端協作，大大提高了製作效率。 To the Wonder已實現盈利，同時贏得國內外讚譽。該劇今年在豆瓣收視率上名列前茅，成為第一部在CCTV-1黃金時段播出的八集迷你劇，也是第一部入選坎城影展長篇競賽的中國電視劇。

The Light On Theater is set to introduce 6 titles in 2022, with notable ones such as the already released Tell No One (foreign language) and the upcoming Lost in the Shadows (foreign language) and Interlaced Scenes (foreign language). In addition, we're broadening our genre focused theater Mode with 2 new brands: Microcosm Theater (foreign language) which focuses on premium mini-series that explore the nuances of everyday life, with To the Wonder being its first title. The Masterpiece Theater (foreign language) on the other hand, offers adaptations of esteemed literary works. We believe the theater mode will further enhance content performance and commercial value.

燈光劇場計畫於 2022 年推出 6 部作品，其中著名作品包括已發行的《告訴誰》（外語）以及即將上映的《迷失在陰影》（外語）和《交錯場景》（外語）。此外，我們還透過 2 個新品牌擴大了以類型為中心的戲劇模式：Microcosm Theater（外語），專注於探索日常生活細微差別的優質迷你劇，《To the Wonder》是其首部作品。另一方面，傑作劇場（外語）則提供受人尊敬的文學作品的改編作品。我們相信戲院模式將進一步提升內容表現力和商業價值。

Our Q2 movie offer -- offerings include socially relevant titles like Pegasus (foreign language) and The Pig, The Snake, and The Pigeon (foreign language). Cloud Cinema will showcase YOLO (foreign language) a hit from The Chinese New Year release window, along with renowned director Zhang Yimou's Article 20 (foreign language) and the action-packed Suspect (foreign language). Additionally, we are eager for the May 17 Theater release of Hovering Blade (foreign language) based on Keigo Higashino’s esteemed novel.

我們第二季的電影產品－產品包括與社會相關的影片，如《飛馬座》（外語）和《豬、蛇與鴿子》（外語）。雲端影院將放映賀歲檔大片《YOLO》（外語片），以及著名導演張藝謀的《二十條》（外語片）和動作片《嫌疑犯》（外語片）。此外，我們也期待 5 月 17 日根據東野圭吾備受推崇的小說改編的《懸浮之刃》（外語）上映。

With our variety shows, we have seen a strong return on our established IPs including The Detectives’ Adventures Season 4 and The Rap of China 2024. We Are also exploring new IPs in the reality shows genre with I Play Basketball in Hengdian and Wonderland (foreign language).

透過我們的綜藝節目，我們看到了《偵探奇遇記》第四季和《中國新說唱2024》等成熟IP的強勁回報 我們還在真人秀類型中探索新的IP，如《我在橫店打籃球》和《仙境》（外語）。

Our original production capabilities for animations continue to improve. We expect the number of Kids’ animation titles we release next quarter to increase. In addition to sequels from existing series We will launch new IPs such as Fantastic Around (foreign language). We also pressed forward with sequels of new animation IPs like Phoenix Guardians: The Golden Court Crisis (foreign language) and I'm The Blade Master (foreign language) in the martial arts and fantasy genres.

我們的動畫原創製作能力不斷提升。我們預計下個季度發布的兒童動畫作品數量將會增加。除了現有系列的續集之外，我們還將推出新IP，例如《Fantastic around》（外語）。我們也全力推動武俠奇幻題材的《鳳凰衛士金庭危機》（外文）、《我是刀劍聖》（外文）等新動畫IP續集。

We recognize that the core strength of the long-form video industry lies on consistently delivering High-quality content that strikes a balance between creative value and economic success. Our edge in this industry is secured by combining elite talent and industry resources, rigorous content evaluation and management, sophisticated business intelligence, and innovative technology.

我們認識到，長視頻行業的核心優勢在於始終如一地提供高品質內容，在創意價值​​和經濟成功之間取得平衡。我們在這個行業的優勢是透過結合精英人才和行業資源、嚴格的內容評估和管理、先進的商業智慧和創新技術來確保的。

As we progress through 2024, our approach will focus on crafting top-tier, diverse content that leverages our leadership in the drama category, while exploring advancements in other genres. We will also refine our release strategy to align with the evolving tastes of our audience.

隨著 2024 年的進展，我們的方法將專注於打造頂級、多樣化的內容，並利用我們在戲劇類別中的領導地位，同時探索其他類型的進步。我們還將完善我們的發布策略，以適應觀眾不斷變化的品味。

Moving on to the Advertising Business. In the first quarter, ad revenue reached RMB 1.5 billion, up 6% annually, which was driven mainly by the growth of performance ads. Performance ads are the highlight of the quarter, the record high revenue was propelled by the growing adoption of generative AI which in turn improves ROI for advertisers. In fact, we have successfully integrated generative AI tools into our IT advertising platform allowing advertisers to promptly create advertising materials on their own. These tools can be effectively reducing production costs while improving ad quality and boosting ROI. For gaming and the short drama advertisers, ads created with generative AI tools have seen an increase in ROI by over 40% -- 50%. With the role of generative AI rapidly expanding, we are leveraging its broader potential to transform the world of advertising.

轉向廣告業務。第一季廣告收入達人民幣15億元，較去年成長6%，主要是效果廣告成長拉動。效果廣告是本季的亮點，創紀錄的高收入得益於生成式人工智慧的日益普及，進而提高了廣告商的投資報酬率。事實上，我們已經成功地將生成式人工智慧工具整合到我們的IT廣告平台中，使廣告主能夠迅速自行製作廣告素材。這些工具可以有效降低生產成本，同時提高廣告品質並提高投資報酬率。對於遊戲和短劇廣告商來說，使用生成式 AI 工具製作的廣告的投資報酬率提高了 40% 至 50% 以上。隨著生成式人工智慧的角色迅速擴大，我們正在利用其更廣泛的潛力來改變廣告世界。

On brand ad business side, our premium content continues to attract brand advertisers, with over half of the revenue stemming from content-targeted ads. A great example to this trend is the drama Always on the Move (foreign language), which achieved exceptional ad sales performance. Additionally, the variety show Become a Farmer (foreign language), which debuted in 2023 has seen a notable 80% increase in revenue this year.

在品牌廣告業務方面，我們的優質內容持續吸引品牌廣告商，超過一半的收入來自內容導向廣告。這一趨勢的一個很好的例子是電視劇《永遠在路上》（外語），它取得了出色的廣告銷售表現。此外，2023年開播的綜藝節目《當農民》（外語）今年營收大幅成長80%。

By industries, the food and beverage sector stood out with solid increases in ad spending both annually and sequentially. The medical services and the communications sectors also registered substantial growth in ad revenue exceeding 20% on both annual and sequential business.

按行業劃分，食品和飲料行業表現突出，廣告支出每年和環比均穩步增長。醫療服務和通訊行業的廣告收入也大幅成長，年度和環比業務均超過 20%。

Looking ahead, we set to see our resurgence in brand ad spending as second quarter as our traditional high season for brand ad business, and we have a strong lineup of variety shows, although we remain cautiously optimistic regarding the brand advertisement market for this year. We anticipate domestic brands to show faster recovery than their international peers.

展望未來，我們預計第二季度品牌廣告支出將會復甦，成為品牌廣告業務的傳統旺季，而且我們擁有強大的綜藝節目陣容，但我們對今年的品牌廣告市場仍持謹慎樂觀態度。我們預計國內品牌的復甦速度將快於國際同業。

Moving on to our Technology and Products, our dedication to advancing technology innovation remains steadfast as it plays a crucial role in driving the industrialization of content production, improving user experience and boosting operational efficiency. We look forward to the abundant opportunities that AI presents across our business. We have been resonating the revolutionary impacts that the rest of AI technology is having on the evolving entertainment ecosystem. Other than the performance as discussed earlier, we also see the substantial benefits from integrating generative AI into the process of production and operations. While, we are still at the initial stage of fully unleashing the potential of generative AI, it has meaningfully enhanced the industrialization of content production, contributing to the content quality improvements and cost saving.

在科技和產品方面，我們始終不渝地致力於推進技術創新，這對於推動內容生產產業化、改善使用者體驗、提升營運效率發揮著至關重要的作用。我們期待人工智慧為我們的業務帶來大量機會。我們一直在共鳴其他人工智慧技術對不斷發展的娛樂生態系統所產生的革命性影響。除了前面討論的效能之外，我們還看到將生成式人工智慧整合到生產和營運過程中所帶來的實質好處。雖然我們仍處於充分釋放生成式人工智慧潛力的初級階段，但它有意義地促進了內容生產的工業化，有助於提高內容品質和節省成本。

For example, we utilized our in-house developed data-driven platform, the iQIYI Content Production Management System, to meaningfully improve the hit ratio while enhancing content production and operational efficiency. Our latest upgrades have expanded its scope from dramas to include variety shows, animation and movies and it is continuously refined to improve production and management capabilities.

例如，我們利用自主開發的數據驅動平台——愛奇藝內容生產管理系統，在提高內容生產和營運效率的同時，顯著提高命中率。我們最新的升級，從電視劇擴展到綜藝、動漫、電影，並不斷精進，提升製作和管理能力。

In addition, we have incorporated our broader range of AI tools into the system, streamlining everything from content selection to promotion. Our new AI features not only can summarize novels and scripts but they also -- but they can also assist in crafting story outlines and character profiles, increasing producers' reading efficiency by several times. Additionally, our system skillfully handles voice restoration for actors in post-production, which has been implemented in major projects. Beyond production, our marketing and the distribution efforts have been upgraded as well. We are now better equipped to produce compelling promotional materials, under our smart video search function offers more accurate content recommendations by effectively responding to plot-oriented searches and the conversational commands.

此外，我們還將更廣泛的人工智慧工具納入系統中，簡化了從內容選擇到推廣的一切。我們新推出的AI功能不僅可以總結小說和劇本，還可以協助製作故事梗概和人物簡介，使製作者的閱讀效率提高數倍。此外，我們的系統還巧妙地處理了演員在後期製作中的聲音恢復，並已在大型項目中得到應用。除了生產之外，我們的行銷和分銷工作也得到了升級。我們現在更有能力製作引人注目的宣傳資料，在我們的智慧影片搜尋功能下，透過有效回應面向情節的搜尋和對話指令，提供更準確的內容推薦。

On the user product front, we take great pride in our continuous commitment to improving the user experience, the introduction of Kids Mode on our Smart TV app, designed to collect content suitable for children has resulted in increased parental trust and the user engagement time.

在用戶產品方面，我們為不斷致力於改善用戶體驗而感到自豪，在我們的智慧電視應用程式上引入兒童模式，旨在收集適合兒童的內容，從而增加了家長的信任和用戶的參與時間。

Last but not least, for our business performance in regions outside of Mainland China. We achieved solid annual revenue growth in the first quarter. Membership revenue grew both annually and sequentially with nearly 80% annual increase in markets such as Hong Kong and the U.K. We continue to amplify the reach and influence of our content and the brand in the overseas markets.

最後但並非最不重要的一點是我們在中國大陸以外地區的業務表現。我們在第一季實現了穩健的年度收入成長。會員收入逐年環比成長，其中香港、英國等市場的年增長率接近80%。

iQIYI Originals continued to gain traction among overseas audience, the overall viewership of Sword and Fairy 4 (foreign language) ranked first in all regions and categories on our overseas platform, topped popularity charts in Thailand, Vietnam, and Indonesia. The second season of our Malaysian original Rampas Cintaku 2 continued its success over the first season boosted both traffic and membership revenue growth on our Malaysian site.

愛奇藝原創海外收視持續升溫，《仙劍4》（外語）整體收視率位列海外平台各地區各類別第一，泰國、越南、印尼收視率位列前茅。我們的馬來西亞原創 Rampas Cintaku 2 第二季延續了第一季的成功，推動了我們馬來西亞網站的流量和會員收入成長。

Leveraging our premium content, we develop local partnerships to boost global penetration and monetization. We have strengthened ties with telecom companies and tourism authorities in Hong Kong and Thailand and launched iQIYI C-drama slot on selected local TV station in Thailand.

利用我們的優質內容，我們發展本地合作夥伴關係，以提高全球滲透率和貨幣化。我們加強了與香港和泰國電信公司和旅遊部門的聯繫，並在泰國選定的當地電視台推出了愛奇藝電視劇。

Looking ahead, we aim to provide a steady slate of premium C-pop content to keep overseas market and accelerate the production of original premium content for local audiences. Meanwhile, we will persist in our efforts to promote C-pop and local content through partnership with Southeast Asian TV stations as we have our brand presence in key markets, we are also committed to exploring a variety of IP monetization opportunities.

展望未來，我們的目標是提供穩定的優質華語流行內容，以保住海外市場，並加快為當地觀眾製作原創優質內容。同時，我們將繼續透過與東南亞電視台的合作來推廣中國流行音樂和本土內容，因為我們在主要市場的品牌影響力，我們也致力於探索各種IP變現機會。

In summary, the strong performance in the first quarter demonstrated the successful execution of our high-quality growth strategy. We recently celebrated our 14th anniversary. As we step boldly into the future, we are seeing more exciting opportunities ahead, especially when we assess the power of generative AI, which could potentially transform the entire landscape of entertainment. With this in mind, we are committed to leveraging the pioneering technologies to further enhance our ability to continuously provide high-quality content and extend our lead in the industry.

綜上所述，第一季的強勁表現體現了我們高品質成長策略的成功執行。我們最近慶祝了成立 14 週年。當我們大膽邁向未來時，我們會看到更多令人興奮的機會，特別是當我們評估生成式人工智慧的力量時，它可能會改變整個娛樂業的格局。考慮到這一點，我們致力於利用領先技術，進一步增強我們持續提供高品質內容的能力，擴大我們在業界的領先地位。

Now let me pass on to Jun Wang for our financial performance.

現在讓我向王軍報告我們的財務表現。

Thanks, Mr. Gong, and hello, everyone. We delivered a strong Q1 results with a record high operating profit and corresponding margins include cash flow and a healthier balance sheet. We believe we can utilize more tools to enhance shareholder value over time.

謝謝宮總，大家好。我們第一季業績強勁，營業利潤創歷史新高，相應的利潤率包括現金流量和更健康的資產負債表。我們相信，隨著時間的推移，我們可以利用更多工具來提高股東價值。

Now let me walk you through the key numbers. In Q1, the total revenues were RMB 7.9 billion. Membership services revenue reached RMB 4.8 billion, remained stable sequentially and decreased 13% annually. The annual decrease as previously explained, was primarily due to the high base effect from the same period last year. For online advertising, revenue grew by 6% annually to RMB 1.5 billion. The increase was primarily driven by the growth of performance and revenue, which achieved double-digit annual growth and hit the historical high in Q1, even compared with a high base from the last year. Content distribution revenue also hit all-time high reached RMB 928 million and grew 27% annually.

現在讓我帶您了解關鍵數字。第一季總收入為79億元。會員服務收入達人民幣48億元，較上季穩定，較去年同期下降13%。如前所述，年度下降主要是由於去年同期的高基數效應。網路廣告收入每年增長 6%，達到 15 億元。這一成長主要是由業績和收入成長推動的，儘管去年基數較高，但第一季業績和收入實現了兩位數的同比增長，創歷史新高。內容發行收入也創歷史新高，達9.28億元人民幣，年增27%。

Moving on to cost and expenses. Content cost was RMB 4 billion, down 5% annually driven by our improvement in content strategy and operating efficiency. Total operating expenses was RMB 1.4 billion, down 12% annually primarily due to our discipline in the marketing spending and the reversal of allowance for credit losses.

繼續討論成本和費用。內容成本為人民幣40億元，由於內容策略和營運效率的改善，較去年同期下降5%。總營業費用為 14 億元，年減 12%，主要是由於我們在行銷支出方面的紀律和信貸損失準備金的轉回。

Turning to profit and cash flow. Our non-GAAP operating income was RMB 1.1 billion and its corresponding margin is 14%, reaching historical high. Furthermore, the operating cash flow totaled RMB 938 million, remaining positive for 8 consecutive quarters, reflecting the continuous improvement of our balance sheet.

轉向利潤和現金流。我們的非美國通用會計準則營業收入為人民幣11億元，相應利潤率為14%，達到歷史最高水準。此外，經營現金流總計9.38億元，連續8個季度保持正值，反映了我們資產負債表的持續改善。

At the end of Q1, we had cash, cash equivalents, short-term investments and long-term restricted cash included in the prepayments and other assets of RMB 7.3 billion in total.

第一季末，預付款項及其他資產所包含的現金、現金等價物、短期投資及長期限制性現金合計73億元。

Moving forward, we remain committed to creating long-term value for our stakeholders. We aim to continue to generate sustainable profit and cash flow and to further strengthen our balance sheet.

展望未來，我們將繼續致力於為利害關係人創造長期價值。我們的目標是繼續產生可持續的利潤和現金流，並進一步加強我們的資產負債表。

For detailed financial data, please refer to our press release on our IR website.

有關詳細財務數據，請參閱我們在 IR 網站上的新聞稿。

With that, I will now open the floor for Q&A.

現在我將開始問答環節。

(Operator Instructions) Your first question comes from Xueqing Zhang in from CICC.

（操作員指示） 你的第一個問題來自中金公司的張學清。

(foreign language) Congratulations on the strong results. My question is about the membership business. The company did not disclose the subscriber numbers this quarter. What's the reason for that? And how should we think about the outlook for the membership business in the longer-term?

（外語）恭喜取得優異成績。我的問題是關於會員業務的。該公司並未透露本季的訂戶數量。這是什麼原因呢？我們該如何看待會員業務的長期前景？

(foreign language)

（外語）

[Interpreted] The CEO, Mr. Gong just explained why we didn't disclose the sub numbers and ARM because this only partially indicates the progress of our entire business. So disposing the numbers too much in detail, probably would disturb some of the development of our overall business. So for the details, we'll invite Mr. Duan in charge of the membership business to explain further.

【解讀】CEO龔先生剛才解釋了為什麼我們沒有透露子數字和ARM，因為這只能部分地表明我們整個業務的進展。因此，將數字處理得過於詳細，可能會擾亂我們整體業務的一些發展。那麼具體的，我們就請負責會員業務的段先生來進一步講解。

(foreign language)

（外語）

[Interpreted] After serious consideration, we decided no longer to disclose the subscriber and ARM data starting this quarter. At the same time, we believe many of you have already noted that there is overseas streaming platform, which will soon cease the disclosure of these data as well.

【解讀】經過認真考慮，我們決定從本季開始不再揭露使用者和ARM資料。同時，相信許多人也已經注意到，有海外的直播平台也將很快停止揭露這些數據。

(foreign language)

（外語）

[Interpreted] Our reasoning is in part similar due to the different rights and pricing associated with various membership products and tiers each user contributes a different economic value, and therefore, to merely reflect business and financial progress, there is a number of subscribers at a specific point in time or over a period is actually incomplete and lacks objectivity.

[解釋]我們的推理部分相似，因為與各種會員產品和級別相關的不同權利和定價，每個用戶貢獻不同的經濟價值，因此，為了僅僅反映業務和財務進展，有許多訂閱者俱體的時間點或一段時期其實是不完整的，缺乏客觀性。

(foreign language)

（外語）

[Interpreted] Since the beginning of 2022, we have always emphasized that the core goal of our membership business is to maximize long-term membership revenue and in the current stage of development of our membership business, the indicators for evaluating its growth in health are not limited to the performance of subscriber count. So therefore, the 3 drivers to revenue growth, namely ARM, membership lifetime and subscriber scale will ultimately be reflected in the revenue performance.

【解讀】2022年以來，我們始終強調會員業務的核心目標是長期會員收入最大化，而在會員業務發展的現階段，評價其健康增長的指標是不限於訂閱者數量的表現。因此，營收成長的三大驅動因素，即ARM、會員生命週期和使用者規模最終將反映在營收表現中。

So overall, we believe using membership revenue as the core indicator is the best way to help investors understand the business progress.

所以總的來說，我們認為以會員收入作為核心指標是幫助投資者了解業務進展的最佳方式。

(foreign language)

（外語）

[Interpreted] In terms of the content performance, aside from revenue, actually, there are other external real-time indicators that can help investors understand our business performance for example, and including iQIYI's popularity index and third-party data.

【解讀】就內容表現而言，除了收入之外，其實還有其他外部即時指標可以幫助投資人了解我們的經營業績，例如愛奇藝的人氣指數和第三方數據。

(foreign language)

（外語）

[Interpreted] We remain confident in the long-term growth prospects of our membership business. In the future, we will continue to drive the long-term healthy growth of our membership business through measures such as improving content quality and diversity, more optimized membership products and services and also better penetrate both user groups that are not fully served for example, the elderly and youth.

【解讀】我們對會員業務的長期成長前景依然充滿信心。未來，我們將繼續透過提升內容品質和多樣性、更加優化會員產品和服務、更好地滲透尚未充分服務的用戶群等措施，推動會員業務的長期健康增長，老年人和青少年。

(foreign language)

（外語）

[Interpreted] And last but not least, I wanted to remind everyone that for each company, actually, the way we track subscriber number is -- or the disclosure measures are a little bit different also.

[解讀]最後但並非最不重要的一點是，我想提醒大家，實際上，對於每家公司來說，我們追蹤用戶數量的方式——或者說披露措施也有點不同。

Your next question comes from Maggie Ye from CLSA.

您的下一個問題來自里昂證券的 Maggie Ye。

(foreign language)

（外語）

[Interpreted] I will translate myself. My question is related to our recently released iQIYI Original premium mini series To the Wonder which is very well rated on Douban currently with 8.8 score and myself is a big fan of it. So I noticed that this drama series represents very outstanding artistic qualities and is very different from traditional commercial productions. I'm just wondering, what's the investment return look like for this type of similar projects? And is this indicative of the new direction for iQIYI's future content strategy?

【翻譯】我自己翻譯。我的問題與我們最近發布的愛奇藝原創精品迷你劇有關，該劇目前在豆瓣上評分很高，評分為8.8，我自己也是它的忠實粉絲。所以我注意到這部劇代表了非常優秀的藝術品質，與傳統的商業製作有很大的不同。我只是想知道，這類類似項目的投資報酬率如何？這是否預示著愛奇藝未來內容策略的新方向？

Thank you, Maggie. We'll invite our CCO, Chief Content Officer, Mr. Xiaohui Wang to answer this question.

謝謝你，瑪吉。我們將邀請我們的CCO、首席內容長王曉輝先生來回答這個問題。

(foreign language)

（外語）

[Interpreted] To the Wonder actually has been a very much resounding success. We think it cannot be simply categorized as our drama or commercial drama, rather it also represent a new direction of our innovation and actually fully affirming our belief in emphasizing both content quality and commercial success. Indeed, we received the highest rating on Douban this year for domestic drama series, scoring as high as 8.8, and it also represented a Chinese language series internationally for the very first time at the CANNESERIES, setting a very good excellent start for iQIYI's new macrocosm theaters.

[解讀]《To the Wonder》其實取得了巨大的成功。我們認為它不能簡單地歸類為我們的電視劇或商業劇，它也代表了我們創新的一個新方向，實際上充分肯定了我們注重內容品質和商業成功的信念。確實，我們在豆瓣上獲得了今年國產劇的最高評分，高達8.8分，而且也是華語劇首次在戛納電影節上代表國際，為愛奇藝的新宏觀世界打下了一個非常好的開端。

(foreign language)

（外語）

[Interpreted] In terms of content and innovation, we adapted the story from a little release pros and spiked up with light (inaudible) elements. Actually, this brings new energy and rhythm to the drama with -- for a relatively strong (inaudible) of quality.

[解讀]在內容和創新方面，我們改編了一些發行專業人士的故事，並加入了輕量（聽不清楚）的元素。事實上，這為戲劇帶來了新的活力和節奏——品質相對較強（聽不清楚）。

(foreign language)

（外語）

[Interpreted] What's more impressive, actually, is that from a commercial perspective, this drama actually achieved profitability through diverse revenue streams proving that the high-quality content yield not only strong social influence but also substantial commercial potential.

【解讀】其實更令人印象深刻的是，從商業角度來看，這部劇竟然透過多元化的收入實現了盈利，證明優質的內容不僅具有強大的社會影響力，而且具有巨大的商業潛力。

(foreign language)

（外語）

[Interpreted] Coming back to our content strategy, we will continue to balance content quality with commercial value, consistently producing high-quality, diverse and commercially valuable content. We aim to solidify our core competitive advantage in the drama sector while seeking more breakthroughs in other content dramas.

【解讀】回到我們的內容策略，我們將繼續平衡內容品質和商業價值，持續生產高品質、多樣化、有商業價值的內容。我們的目標是鞏固戲劇領域的核心競爭優勢，同時在其他內容劇中尋求更多突破。

(foreign language)

（外語）

[Interpreted] Regarding our drama strategy, we will continue to consolidate our advantages in the realistic strong and strengthening our reserve of high-quality ancient costume dramas. We are committed to cultivating high-quality diverse content with the aim of gaining the broadest possible recognition from our audience.

【解讀】在劇集策略上，我們將繼續鞏固現實強勢優勢，加強精品古裝劇儲備。我們致力於培育高品質的多元化內容，以期獲得觀眾最廣泛的認可。

(foreign language)

（外語）

[Interpreted] Our CEO, Mr. Gong just added, actually, content strategies, cost control is very, very important and just namely to the one that actually had a very good cost control. So that's why commercial aspect, it performed very well in this.

【解讀】剛才我們的CEO龔先生補充道，其實內容策略、成本控制非常非常重要，就是要真正控制得很好。所以這就是為什麼商業方面它在這方面表現得很好。

Your next question comes from Thomas Chong from Jefferies.

您的下一個問題來自 Jefferies 的 Thomas Chong。

(foreign language)

（外語）

[Interpreted] My question is about online advertising. Can management comment about the advertising outlook in 2024, in particular, performance-based advertising. On the other hand, can management comment about how AI benefits our advertising business?

[解讀]我的問題是關於網路廣告的。管理階層能否評論 2024 年的廣告前景，特別是基於效果的廣告。另一方面，管理層能否評論人工智慧如何使我們的廣告業務受益？

Thank you, Thomas. We will invite our CTO, to answer this question related to Performance Act.

謝謝你，托馬斯。我們將邀請我們的CTO來回答這個與績效法相關的問題。

(foreign language)

（外語）

[Interpreted] Performance ad has indeed achieved considerable growth in the first quarter. Actually, in the first quarter, the ad revenue reached an all-time high contributing to over 40% of the total advertising revenue, and we expect to continue to see strong annual revenue growth in Q2 and also throughout this year. And also, we found that the application of generative AI has effectively driven the growth of our performance ad business compared to brand advertising, the impact of generative AI on performance ad actually is more significant and still puts tremendous potential to drive future ad revenue growth for us. And this is actually reflected in a few -- several ad (inaudible).

【解讀】效果廣告第一季確實取得了可觀的成長。事實上，第一季廣告收入達到歷史最高水平，佔廣告總收入的比例超過40%，我們預計第二季甚至今年全年營收將持續強勁成長。而且，我們發現，生成式人工智慧的應用有效地帶動了我們效果廣告業務的成長，相較於品牌廣告，生成式人工智慧對效果廣告的影響實際上更加顯著，仍然有巨大的潛力來推動未來廣告收入的成長。這其實反映在一些廣告中（聽不清楚）。

(foreign language)

（外語）

[Interpreted] Wenfeng actually mentioned the 3 aspects. First, in terms of ad material production efficiency, advertisers can use this AI to independently and automatically generate a wide range of image and video ad materials, increasing production efficiency and lowering cost for advertisers.

【解讀】文峰其實提到了3個面向。首先，在廣告素材製作效率方面，廣告主可以利用人工智慧自主、自動產生豐富的圖片、影片廣告素材，為廣告主提高製作效率、降低成本。

And second, regarding the quality of material production, generative AI helps industries to create high-quality materials that coincide with high-quality video content on our platform, making apps more native and resulting in better campaign performance.

其次，在素材製作的品質方面，生成式人工智慧幫助產業創建與我們平台上的高品質影片內容相符的高品質素材，使應用程式更加原生，從而獲得更好的行銷效果。

And third, in ad placement by relying on upgraded model architecture and evolving ad placement strategies, we can optimize ad performance to make ad placement more precise and personalized helping advertisers achieve better results while enhancing the monetization efficiency of user traffic.

第三，在廣告投放方面，透過升級的模型架構和不斷演進的廣告投放策略，我們可以優化廣告效果，使廣告投放更加精準、個人化，幫助廣告主取得更好的效果，同時提高用戶流量的變現效率。

(foreign language)

（外語）

[Interpreted] Moving forward, we will continue to leverage generative AI capabilities to help advertisers to track high-quality users, achieved on top [earning] delivery synergy and also reinforce the valuable exposure and enhance the advertising effectiveness. And looking at the performance by industries for Q2, we are optimistic about the development of sectors, including e-commerce, online services, gaming industry and the fast-growing sectors such as for dramas, which we believe will bring more opportunities for performance ad.

【解讀】未來，我們將持續運用生成式AI能力，幫助廣告主追蹤優質用戶，實現頂級投放協同，強化有價值的曝光，提升廣告效果。從第二季的產業表現來看，我們看好產業的發展，包括電子商務、線上服務、遊戲產業以及電視劇等快速成長的產業，我們認為這將為效果廣告帶來更多機會。

(foreign language)

（外語）

[Interpreted] We will invite Mr. Wu Gang, who is the Senior Vice President of Brand ad business to add on the performance for the brand ad.

【解讀】我們將邀請品牌廣告業務資深副總裁吳剛先生為品牌廣告加分。

(foreign language)

（外語）

[Interpreted] Okay. For Q2, Q2 actually is the peak season for brand advertising. And with the enhanced supply of variety shows in the quarter, we anticipate a recovery in brand advertising, both sequentially and annually. And for this full year's outlook, we remain cautiously optimistic attitude towards the brand advertising business for the entire year. And looking at the industry's perspective, we are bullish on the food and beverage, medical services and telecommunications industries. We -- in general, we believe the future growth in brand advertising will still revive on the development of domestic brand advertisers.

[解釋]好的。對Q2來說，Q2其實是品牌廣告的旺季。隨著本季綜藝節目供應的增加，我們預計品牌廣告將環比和年度復甦。而對於全年的展望，我們對全年的品牌廣告業務保持謹慎樂觀的態度。而從產業角度來看，我們看好食品飲料、醫療服務和電信業。總的來說，我們相信未來品牌廣告的成長仍將依靠國內品牌廣告商的發展而復甦。

(foreign language)

（外語）

[Interpreted] We think the rapid increase in Smart TV penetration rates will bring more opportunities to the advertising -- the brand advertising business, helping advertisers to deeply engage with the highly commercially valuable home scenarios. And currently, actually, we have industry-leading user coverage on the large screen.

【解讀】我們認為智慧電視滲透率的快速提升將為廣告業－品牌廣告業務帶來更多機會，幫助廣告主深入參與極具商業價值的家庭場景。事實上，目前我們在大螢幕上的用戶覆蓋率是業界領先的。

Your next question comes from Lincoln Kong from Goldman Sachs.

你們的下一個問題來自高盛的 Lincoln Kong。

(foreign language) [Interpreted] So my question is pretty straightforward to ask about our future strategy, especially what are the areas the management are focusing on for this year and for longer-term.

（外語）[翻譯]所以我的問題很簡單，是關於我們未來的策略，特別是管理階層今年和長期關注的領域是什麼。

(foreign language)

（外語）

[Interpreted] our CEO, Mr. Gong is answering this question. So in the short-term, actually, we will continue to improve our business operational efficiency to enhance team capabilities and including strengthening the business fundamentals and also for the financial perspective to improve the profits and cash flows.

【解讀】我們的CEO龔先生正在回答這個問題。所以短期來說，實際上我們會繼續提高我們的業務營運效率，以增強團隊能力，包括加強業務基礎，也從財務角度來提高利潤和現金流。

(foreign language)

（外語）

[Interpreted] So from the mid- to long-term perspective, the very first one is to consistently enhance the quality and diversity and supply of stability of our premium content.

【解讀】所以從中長期來看，第一名是不斷提升我們優質內容的品質、多樣性和供給穩定性。

(foreign language)

（外語）

[Interpreted] And second, for generative AI, we will apply more broadly and more deeply and into contemplation and operations to increase our efficiency.

【解讀】第二，對於生成式人工智慧，我們會更廣泛、更深入地應用在思考和營運中，提高我們的效率。

(foreign language)

（外語）

[Interpreted] Third is to utilize all means to fight piracy.

【解讀】三是採取一切手段打擊盜版。

(foreign language)

（外語）

[Interpreted] The fourth one is to improve the quality of our domestic market operations. And in terms of overseas business, we'll invest, I will say carefully and then to properly invest into those markets.

【解讀】第四個是提升國內市場經營品質。在海外業務方面，我們會投資，我會謹慎地說，然後適當地投資這些市場。

(foreign language)

（外語）

[Interpreted] In terms of future growth, actually beyond our relative [mature] businesses, for example, the membership business and also the advertising business, we will utilize the generative AI and virtual reality. These innovative technologies to explain to new business opportunities, such as franchise staff, including also both online and offline.

【解讀】就未來的成長而言，實際上超越我們相對【成熟】的業務，例如會員業務、廣告業務，我們會利用生成式AI和虛擬實境。這些創新技術解釋了新的商機，例如特許經營人員，也包括線上和線下。

(foreign language)

（外語）

[Interpreted] And in the future, we will also both better serve to demographics. For example, the elderly and the children by adopting products design and content production to meet the needs, also to enhance their viewing experiences and very niche content preferences. For example, for elderly to increase their accessibility to content viewing and also for kids content to provide them more safe and reliable content.

【解讀】而未來，我們雙方也會更好地為人口服務。例如，透過產品設計和內容製作來滿足老年人和兒童的需求，也提升他們的觀看體驗和非常小眾的內容偏好。例如，為老年人增加內容觀看的可近性，為兒童內容提供更安全可靠的內容。

There are no further questions at this time. I'll now hand back to management for closing remarks.

目前沒有其他問題。我現在將請管理階層作結束語。

Thank you, everyone, for joining the call today. And then if you have any questions, feel free to reach out to the IR team. Thank you.

謝謝大家今天加入電話會議。如果您有任何疑問，請隨時聯繫 IR 團隊。謝謝。

Thank you. Bye-bye.

謝謝。再見。

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

謝謝。我們今天的會議到此結束。感謝您的參與。您現在可以斷開連線。