iQIYI Inc (IQ) 2024 Q2 法說會逐字稿

Thank you for standing by, and welcome to the iQIYI second quarter 2024 earnings conference call. (Operator Instructions) I would now like to hand over the conference to Ms. Cheng 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年第二季財報電話會議。（操作說明）現在我將會議交給公司投資者關係總監程宇女士。請繼續。

Thank you, operator. Hello everyone and thank you for joining iQIYI's second quarter 2024 earnings conference call. The company's results were released earlier today and are available on the Company's Investor Relations website at ir.iqiyi.com.

謝謝接線生。大家好，感謝各位參加愛奇藝2024年第二季財報電話會議。該公司今日稍早發布了業績報告，可在公司投資者關係網站ir.iqiyi.com上查閱。

On the call today are Mr. Yu Gong, our Founder, Director, and CEO; Mr. Jun Wang, our CFO; Mr. Xiaohui Wang, our CCO, Chief Content Officer; Mr. Youqiao Duan, Senior Vice President of our membership business, and Mr. Xianghua Yang, Senior Vice President of movies and overseas business.

今天參加電話會議的有：創辦人、董事兼執行長龔宇先生；首席財務官王俊先生；首席內容官王曉輝先生；會員業務高級副總裁段友橋先生；以及電影和海外業務高級副總裁楊祥華先生。

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.

龔先生將簡要概述公司的業務運作和亮點，隨後俊先生將介紹財務狀況。在準備好的發言結束後，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 US 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.

在繼續之前，請注意，今天的討論將包含前瞻性陳述，這些陳述是根據 1995 年美國私人證券訴訟改革法案的安全港條款作出的。前瞻性陳述存在風險和不確定性，可能導致實際結果與我們目前的預期有重大差異。

Potential risks and uncertainties include, but are not limited to those outlined in our public filings with the SEC. iQIYI does not undertake any obligation to update any forward-looking statement except as required under applicable law. I'll now pass on to Mr. Gong, please go ahead.

潛在風險和不確定性包括但不限於我們在向美國證券交易委員會提交的公開文件中列出的風險和不確定性。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。現在我將把麥克風交給龔先生，請開始吧。

Hello everyone, thank you for joining us today. In the second quarter, we saw intense competition for top content. While we aired a series of diversified premium content, certain titles did not meet our high expectations, putting pressure on our financial results. After a great deal of hard work, we have overcome the short-term fluctuations in our content slate performance.

大家好，感謝各位今天收看我們的節目。第二季度，我們看到對優質內容的競爭非常激烈。雖然我們播出了一系列多元化的優質內容，但某些節目並未達到我們的高預期，這給我們的財務表現帶來了壓力。經過大量的努力，我們已經克服了內容排期表現的短期波動。

As a matter of fact, we view the vibrant competition within the long-form video sector as constructive, which has enhanced its appeal over other entertainment formats. It also provided us a valuable opportunity to review and refine our tactics. It helped us gain a better understanding of user preference, and improved our business for future growth.

事實上，我們認為長影片領域內充滿活力的競爭是建設性的，這增強了長影片相對於其他娛樂形式的吸引力。這也為我們提供了一個寶貴的機會，讓我們能夠重新審視和改進我們的策略。它幫助我們更好地了解用戶偏好，並改善了我們的業務，以促進未來的成長。

We firmly believe that ultimately, success in the long-form video business depends on the stable supply of premium content and the ability to achieve balance in both content quality and commercial benefits. With this in mind, our goal is to further improve the overall success rate of our content portfolio, and more importantly, the stability of content performance.

我們堅信，長視頻業務的成功最終取決於優質內容的穩定供應，以及在內容品質和商業利益之間取得平衡的能力。有鑑於此，我們的目標是進一步提高內容組合的整體成功率，更重要的是，提高內容表現的穩定性。

In fact, as the summer season unfolds, our premium content has gained strong momentum. The release of acclaimed titles, such as Interlaced Scenes, Strange Tales of Tang Dynasty Season 2 and How Dare You, has boosted our key operating metrics and brought us back to the leading spot in terms of market share in the key drama category in July, according to Enlightent data.

事實上，隨著夏季的到來，我們的優質內容獲得了強勁的發展勢頭。根據啟迪科技的數據，《交錯的場景》、《唐朝奇談》第二季和《你竟敢》等備受好評的劇集的播出，提升了我們的關鍵運營指標，使我們在7月份重回關鍵電視劇類別市場份額的領先地位。

Notably, the second season of Strange Tales of Tang Dynasty became the 14th drama to break our popularity index score of 10,000. For iQIYI, in addition to delivering high quality content, providing great user experience stands as another cornerstone of our business.

值得一提的是，《唐朝奇談》第二季成為第 14 部人氣指數突破 10,000 分的電視劇。對於愛奇藝而言，除了提供高品質的內容外，提供良好的使用者體驗也是我們業務的另一個基石。

As we remain committed in enhancing member benefits, we are also refining our content distribution algorithm to bring free users superior viewing experience, while balancing commercial performance. Looking ahead, we are investing in multiple areas to drive the company's long-term, sustainable growth.

在致力於提升會員權益的同時，我們也不斷改進內容分發演算法，以期為免費用戶帶來更優質的觀看體驗，同時兼顧商業效益。展望未來，我們將在多個領域進行投資，以推動公司的長期永續發展。

Firstly, we are extensively applying AI to improve content creation, operational efficiency, and user experience. Secondly, we will further enhance our domestic business, while expanding our footprint in the broader overseas market. Thirdly, we are using iQIYI's content influence, and its IP portfolio to explore revenue opportunities beyond membership and advertisement, such as IP derivatives and offline experiences.

首先，我們正在廣泛應用人工智慧來提高內容創作、營運效率和使用者體驗。其次，我們將進一步強化國內業務，同時擴大在更廣大的海外市場的業務版圖。第三，我們正在利用愛奇藝的內容影響力及其智慧財產權組合，探索會員和廣告以外的收入機會，例如智慧財產權衍生品和線下體驗。

These initiatives align perfectly with our core value, which centers on maximizing our IP value through technical innovations and content creativity, setting the stage for an exciting future. Now let's move on to the performance of our core business segments, starting with membership services.

這些舉措與我們的核心價值完美契合，即透過技術創新和內容創作最大限度地發揮我們的智慧財產權價值，為令人興奮的未來奠定基礎。現在讓我們來看看我們核心業務部門的業績，首先是會員服務。

Our primary goal for membership services remains on driving sustainable long-term revenue growth through top-notch content and superior user experience. In the second quarter, membership revenue was down 9% annually, primarily due to fluctuation in our content slate performance causing the attrition of hit-title driven members, and the high base effect from last year's mega hit, The Knockout.

我們會員服務的首要目標仍然是透過一流的內容和卓越的用戶體驗，推動可持續的長期收入成長。第二季會員營收年減 9%，主因是我們的內容表現波動導致熱門作品驅動的會員流失，以及去年超級熱門作品《The Knockout》帶來的高基數效應。

ARM grew steadily year over year. This was partially fueled by our disciplined pricing strategy, as we scaled back on the overall promotions and discounts. Our enhanced member benefits also played a major role, effectively encouraged the members to sign up for higher-tier plans.

ARM 逐年穩定成長。這部分是由於我們採取了嚴格的定價策略，因為我們縮減了整體促銷和折扣力度。我們增強的會員福利也發揮了重要作用，有效地鼓勵會員註冊更高級別的套餐。

Furthermore, our innovative value-added services drove users' willingness to pay. Notably, we launched Express Package for 10 dramas in the second quarter and garnered the highest number of cash purchases. Following the success in drama category, we plan to expand Express Package to other content categories such as variety shows and animations.

此外，我們創新的加值服務提高了用戶的付費意願。值得一提的是，我們在第二季推出了 10 部電視劇的快速套餐，並獲得了最高的現金購買量。繼電視劇類節目取得成功後，我們計劃將「速遞套餐」擴展到其他內容類別，例如綜藝節目和動畫。

We remain confident in the long-term outlook of our membership business, which is supported by several key factors. Firstly, we have successfully built a solid foundation of loyal, sticky members. Secondly, content remains a primary driver of our membership growth, and we are in the middle of introducing more diversified premium content to engage broader user cohorts.

我們對會員業務的長期前景依然充滿信心，這得益於幾個關鍵因素。首先，我們已經成功建立了一群忠誠、黏性強的會員，為會員群體奠定了堅實的基礎。其次，內容仍然是我們會員成長的主要驅動力，我們正在推出更多樣化的優質內容，以吸引更廣泛的用戶群。

Furthermore, we are committed to enhancing our operational strategies to improve member acquisition and retention. Initiatives include, one, reaching broader demographic groups by expanding our sales channels and utilizing viral social marketing; two, improving conversion rates by launching marketing initiatives directly tied to popular content of the season, such as IP-based member packages, Express Package, and Courtesy Experience Program; three, providing value-for-money services to long-term and high-tier plan subscribers, such as exclusive offline events.

此外，我們致力於改善營運策略，以提高會員獲取和留存率。舉措包括：一、透過拓展銷售管道和利用病毒式社交行銷，覆蓋更廣泛的人口群體；二、透過推出與當季熱門內容直接相關的行銷舉措來提高轉換率，例如基於 IP 的會員套餐、快捷套餐和禮遇體驗計劃；三、為長期和高級套餐用戶提供物有所值的服務，例如專屬線下活動。

In the second quarter, we organized 17 offline events, and received positive member feedbacks. Building on the strong user reception from last year, our annual offline flagship event, The 2024 iQIYI Scream Night is set for its comeback on December 7 this year in Macau.

第二季度，我們組織了17場線下活動，並收到了會員的正面回饋。繼去年用戶反應熱烈之後，我們一年一度的線下旗艦活動－2024愛奇藝尖叫之夜將於今年12月7日在澳門回歸。

The perceived value of our members was even further amplified by our very first July 17th iQIYI Member Festival. Through this event, we offered appealing membership discounts, and hosted a seven-hour live broadcasting to promote over 130 titles in our content pipeline. More than 40 celebrities participated the live-streaming event, and generated over 30 million views.

7月17日舉辦的首屆愛奇藝會員節進一步提升了會員的感知價值。透過此次活動，我們提供了極具吸引力的會員折扣，並舉辦了長達七小時的直播，以推廣我們內容庫中的 130 多部作品。超過 40 位名人參與了此次直播活動，獲得了超過 3000 萬次的觀看次數。

In the future, the July 17th iQIYI Membership Festival is set to be an annual event exclusive to our members. It is an event to discover attractive deals and enjoy exciting activities. This festival will not only underscore the substantial value we provide to our members, but will also serve as a key opportunity to boost our brand's influence.

未來，7月17日的愛奇藝會員節將成為每年一度的會員專屬活動。這是一個可以發現誘人優惠和享受精彩活動的絕佳機會。本次活動不僅將凸顯我們為會員提供的巨大價值，也將成為提升品牌影響力的重要機會。

Moving on to content. We have overcome the short-term fluctuations in the content slate performance in Q2, and learned a lot from this short-term setback. Through the in-depth analysis of our projects, we have gained valuable insights that are set to guide our content creation and operation in the future.

接下來是內容部分。我們已經克服了第二季內容表現的短期波動，並從這次短期挫折中學到了很多。透過對專案的深入分析，我們獲得了寶貴的見解，這些見解將指導我們未來的內容創作和營運。

Firstly, with respect to content creation, we will craft more and higher-quality content that meet the appetite of mainstream audiences. In particular, we plan to broaden our portfolio with offerings that especially appeal to our female audience.

首先，在內容創作方面，我們將製作更多更高品質的內容，以滿足主流觀眾的需求。我們尤其計劃擴大產品組合，推出更多能吸引女性消費者的產品。

To maintain our edge in the constantly evolving field of content creation, we aim to further enhance our ability to tap into popular social trends, thereby producing content that establishes a deeper connection with our audiences. We will embrace a more innovative stance in our casting and script selection processes, aiming to transcend the limits of traditional storytelling.

為了在不斷發展的內容創作領域中保持領先地位，我們的目標是進一步提高我們掌握流行社會趨勢的能力，從而製作出與受眾建立更深層次聯繫的內容。我們將採取更具創新性的選角和劇本選擇方式，力求超越傳統敘事方式的限制。

Secondly, regarding content scheduling, we will closely monitor our user trends and adopt a dynamic scheduling strategy that is guided by user engagement and retention. This approach ensures that our content rollout is optimally timed to align with our audience's preferences and the viewing habits. Thirdly, in terms of managing our in-house studios, we are committed to enhancing the efficiency and effectiveness of our operations at each key stage of the creative process.

其次，關於內容排期，我們將密切關注用戶趨勢，並採取以用戶參與度和留存率為指導的動態排期策略。這種方法確保我們的內容發佈時間能夠與受眾的喜好和觀看習慣達到最佳契合度。第三，在管理我們內部工作室方面，我們致力於在創作過程的每個關鍵階段提高營運效率和效果。

Our aim is to cultivate a more proactive culture among our talent, ensure they have ample freedom to fully unleash their artistic skills, and foster an environment where creativity can thrive. Moving on to the detailed content performance in the second quarter. For dramas, our leadership in the reality and the suspense genres remains unchallenged.

我們的目標是培養人才的積極主動精神，確保他們有充分的自由來發揮藝術才能，並創造一個讓創造力蓬勃發展的環境。接下來詳細分析第二季的內容表現。在劇情類劇方面，我們在現實題材和懸疑類劇集領域的領先地位仍然無可撼動。

Our original drama, To the Wonder (spoken in foreign language), perfectly demonstrated our success in blending artistic merits and commercial benefits, garnered exceptional performance across all metrics. What's more impressive is the show's remarkable long-tail effect, with its influence extending well beyond the online domain as it boosts tourism to its filming location in Xinjiang.

我們的原創劇《通往奇蹟》（外語對白）完美地展現了我們在融合藝術價值和商業利益方面的成功，在所有指標上都取得了卓越的成績。更令人印象深刻的是該節目的顯著長尾效應，其影響力遠遠超出了網路領域，因為它促進了新疆拍攝地的旅遊業發展。

To effectively extend the vitality of the IP, we worked with the creative team to host an open field concert in Xinjiang in July, which was widely acclaimed by users, sponsors, and the local culture and tourism bureaus. In addition, we further solidified our position as the go-to platform for the suspense genre by launching dramas Tell No One (spoken in foreign language) and Lost in the Shadows (spoken in foreign language) under our Light On Theater brand.

為了有效延續該IP的活力，我們與創意團隊合作，於7月在新疆舉辦了一場露天音樂會，受到了用戶、贊助商以及當地文化旅遊部門的廣泛好評。此外，我們透過旗下「光之劇場」品牌推出外語影集《別告訴任何人》和外語影集《迷失在陰影中》，進一步鞏固了我們作為懸疑題材首選平台的地位。

With movies, we continued to outperform our peers according to Enlightent's viewership share data. In the second quarter, we launched a total of 15 key titles in our movie channel, including multiple box office hits such as Article 20 (spoken in foreign language) and Pegasus 2 (spoken in foreign language).

根據 Enlighten 的收視份額數據，我們在電影方面繼續超越同行。第二季度，我們在電影頻道共推出了 15 部重點影片，其中包括多部票房大片，如《第 20 條》（外語片）和《飛馬 2》（外語片）。

In our cloud cinema, we launched 21 titles, covering the latest and most popular theatrical releases such as the box office top-grossing YOLO (spoken in foreign language). For original movies, we released various genres, such as disaster comedy A Promising Future (spoken in foreign language) and suspense crime, Suspect (spoken in foreign language).

在我們的雲端影院中，我們推出了 21 部影片，涵蓋了最新和最受歡迎的院線電影，例如票房最高的《YOLO》（外語版）。對於原創電影，我們發行了各種類型，例如災難喜劇《美好的未來》（外語對白）和懸疑犯罪片《嫌疑犯》。（用外語說）

For variety shows, our two flagship shows returned with the new season, namely The Detectives Adventures Season 4 (spoken in foreign language) and The Rap of China 2024 (spoken in foreign language), both of which continued to be well recognized by advertisers.

綜藝節目方面，我們的兩檔旗艦節目《偵探冒險》第四季（外語版）和《中國說唱2024》（外語版）均推出了新一季，這兩檔節目都繼續受到廣告商的認可。

The Rap of China 2024 also generated considerable membership revenues. For animations, we continued to invest in original Chinese animations and began to see encouraging initial results with enhanced in-house production capabilities.

2024年中國說唱大賽也帶來了可觀的會員收入。在動畫方面，我們繼續投資原創中國動畫，並隨著內部製作能力的提升，開始看到令人鼓舞的初步成果。

How Dare You (spoken in foreign language) serves as a perfect example, as it hit multiple records for iQIYI original animations. It is our first original animation to break our popularity index of 5,000, its revenue and new user acquisition also reached new highs.

《你竟敢》（外文版）就是一個完美的例子，它打破了愛奇藝原創動畫的多項紀錄。這是我們第一部原創動畫，人氣指數突破了 5000，其收入和新用戶獲取量也達到了新高。

As we enter the summer vacation season, which is a critical broadcasting window for online video platforms, we are excited that our premium content has helped us regain market leadership. We rolled out premium content in both ancient and the modern genres, to appeal to a wide audience, with a particular focus on young viewers who have more free time to enjoy our offerings during their holiday.

隨著暑假臨近，對於線上影片平台而言，這是一個至關重要的播出窗口期。我們很高興看到，我們的優質內容幫助我們重新奪回了市場領導地位。我們推出了古代和現代主題的優質內容，以吸引廣泛的觀眾，特別關注那些在假期有更多空閒時間享受我們內容的年輕觀眾。

So far, Strange Tales of Tang Dynasty Season 2 (spoken in foreign language) and A Lonely Hero's Journey (spoken in foreign language) were all well-received by audiences. Additionally, in the suspense genre, the dramas Interlaced Scenes (spoken in foreign language) and For the Young Ones (spoken in foreign language) have both showcased strong user engagements.

到目前為止，《唐朝奇談》第二季（外語配音）和《孤膽英雄之旅》（外語配音）都受到了觀眾的好評。此外，在懸疑劇類型中，《交錯的場景》（外語對白）和《為了年輕人》（外語對白）都展現了強大的使用者參與。

Notably, Strange Tales of Tang Dynasty returned for its second season, showcasing remarkable quality that has led it to break iQIYI's popularity index score of 10,000. The acclaimed series has demonstrated a pronounced long-tail effect.

值得一提的是，《唐朝奇談》第二季回歸，展現了非凡的品質，使其在愛奇藝的人氣指數中突破了 10000 分大關。這部備受讚譽的劇集展現了明顯的長尾效應。

The second season substantially amplified the user time spent and the membership revenue generated by the first season, increasing them by about sixfold and tenfold, respectively. This drama also serves as an excellent example of our serialized approach to IP development.

第二季大幅提升了用戶花費的時間和會員收入，分別比第一季成長了約六倍和十倍。這部劇也很好地體現了我們對IP進行系列化開發的方法。

Encouraged by the success of the first two seasons, production for the third season is set to begin shortly. Additionally, the IP starts to generate diverse revenue streams, as its influence now expands into offline domains, including entertainment, tourism, and the consumer goods.

受前兩季成功播出的鼓舞，第三季的製作即將開始。此外，隨著智慧財產權的影響力擴展到包括娛樂、旅遊和消費品在內的線下領域，該智慧財產權開始產生多樣化的收入來源。

In a strategic move to capitalize on this success, we have launched IP-based VR theaters in key cities such as Beijing, Shenzhen, and Xi'an. This initiative aims to broaden the impact and the presence of our original content, extending beyond traditional screens.

為了充分利用這項成功，我們採取策略性舉措，在北京、深圳、西安等重點城市推出了基於 IP 的 VR 影院。這項措施旨在擴大我們原創內容的影響力和覆蓋範圍，使其超越傳統螢幕。

Beyond dramas, our creativity is expanding into new categories. Tenday, a brand-new original iQIYI variety show IP, has garnered users' praise for its innovative format, and recorded a peak iQIYI popularity index score of over 7,000.

除了電視劇之外，我們的創造力正在擴展到新的領域。《天天》是愛奇藝全新原創綜藝節目IP，憑藉其創新的形式贏得了用戶的好評，並在愛奇藝人氣指數上創下了超過7000的最高分。

Additionally, The King of Stand-up Comedy (spoken in foreign language) marked iQIYI's first exploration into stand-up comedy. The show has received encouraging initial feedbacks, standing out among the comedy variety offerings this summer.

此外，《脫口秀之王》（外文版）標誌著愛奇藝首次涉足脫口秀領域。該節目已收到令人鼓舞的初步回饋，在今年夏季的眾多喜劇綜藝節目中脫穎而出。

Moving on to our content pipeline. For dramas, we expect the stability of premium content supply to be meaningfully enhanced. Meanwhile, we are fast-tracking the productions of ancient costume idol dramas and modern idol dramas, both targeting female audiences.

接下來是我們的所有內容製作流程。對於電視劇而言，我們期望優質內容供應的穩定性能顯著提升。同時，我們正在加快製作以女性觀眾為目標受眾的古裝偶像劇和現代偶像劇。

Some of the much anticipated works in this genre include Go East (spoken in foreign language), A Moment But Forever (spoken in foreign language), Love Song in Winter (spoken in foreign language), Snowy Night Timeless Love (spoken in foreign language), Fangs of Fortune (spoken in foreign language), Moon Embracer (spoken in foreign language), and the Love of the Divine Tree (spoken in foreign language).

這類型作品中備受期待的作品包括《東行》（外語對白）、《一瞬永恆》（外語對白）、《冬日情歌》（外語對白）、《雪夜永恆之愛》（外語對白）、《命運之牙》（外語對白）、《月之擁抱者》（外語對白）以及《神樹之戀》。（用外語說）

In the reality and suspense category, audiences can anticipate a diversified content offerings, including Born to be the One (spoken in foreign language), Northward (spoken in foreign language), The Fearless season 2 (spoken in foreign language), and Justifiable Defense (spoken in foreign language).

在紀實懸疑類節目中，觀眾可以期待豐富多元的內容，包括《天生一對》（外語對白）、《北上》（外語對白）、《無畏者》第二季（外語對白）以及《正當防衛》。（用外語說）

For movies, we will release more diversified theatrical hits on our platform. Additionally, self-produced iQIYI original films are expected to be released in theaters, including Skin (spoken in foreign language), and A Frozen Rage (spoken in foreign language).

對於電影，我們將在我們的平台上發行更多不同類型的院線熱門影片。此外，愛奇藝自製作的原創電影預計也將在戲院上映，包括《皮膚》（外語片）和《冰封之怒》。（用外語說）

For our variety show lineup, we plan to release a greater number of titles in the second half of the year compared to the first. Building on the momentum of Tenday and The King of Stand-up Comedy, we are preparing to launch more innovative shows, including The Moon is Shining (spoken in foreign language), which is set to release later this month.

在綜藝節目方面，我們計劃在下半年推出比上半年更多的節目。繼《Tenday》和《單口喜劇之王》之後，我們正準備推出更多創新節目，包括本月稍後上映的《月亮在閃耀》（外語版）。

Moving on to animations, we expect to see a surge in titles during the second half of the year, with increased diversification in genre. We plan to launch 8 to 14 additional seasons of key original works compared to the first half. Alongside How Dare You, we have also launched the fantastical The Legend of Sky Lord (spoken in foreign language), and A Moment But Forever, which shares its IP with an upcoming drama series of the same name.

接下來談談動畫方面，我們預計下半年動畫作品數量將大幅成長，類型也將更加多元。與上半年相比，我們計劃額外推出 8 至 14 季重點原創作品。除了《你竟敢如此》之外，我們還推出了奇幻電影《天空之王傳說》（外語版）和《一瞬間，永恆》，後者與即將上映的同名電視劇共享IP。

The action-packed anime Super Cube: Extraordinary Chapter (spoken in foreign language) is also set to release soon. On a separate note, iQIYI has become one of the key content sources for traditional TV media, covering outlets such as CCTV, satellite TV, and regional TV stations, thanks to our enhanced offerings of original content.

動作動畫《超級立方體：非凡篇章》（外語對白）也即將上映。另外，愛奇藝以其不斷增強的原創內容，已成為傳統電視媒體（包括中央電視台、衛星電視和地方電視台等）的主要內容來源之一。

In just the first half of 2024 alone, we have distributed about 50 drama series, reinforcing the long-tail effect of premium content. The value of our IP has been even further unleashed by exploring diversified monetization streams. For example, franchising revenue from the drama Fox Spirit Matchmaker: Red-Moon Pact (spoken in foreign language) reached a new high for iQIYI original dramas.

光是 2024 年上半年，我們就發行了約 50 部電視劇，這進一步印證了優質內容的長尾效應。透過探索多元化的獲利模式，我們進一步釋放了智慧財產權的價值。例如，電視劇《狐妖紅娘：紅月契約》（外語版）的特許經營收入創下了愛奇藝原創影集的新高。

We have also worked with established toy brands for IP licensing, joint product customization, and marketing.

我們也曾與知名玩具品牌合作，進行智慧財產權授權、聯合產品客製化和行銷。

Moving on to the advertising business. In the second quarter, total ad revenue was RMB1.5 billion, down 2% year over year. Performance ads remained as the highlight of the quarter, growing at a healthy rate year over year. Key sectors such as e-commerce and internet services demonstrated solid performance, with e-commerce revenue from the June 18 shopping festival growing 80% annually, and revenue from Internet services growing 30% annually.

接下來談談廣告業。第二季廣告總收入為人民幣15億元，較去年同期下降2%。效果廣告依然是本季的亮點，較去年同期成長速度穩健。電子商務和網路服務等重點產業表現穩健，其中 6 月 18 日購物節的電子商務收入年增 80%，網路服務營收年增 30%。

The solid results in performance ads is also a clear reflection of our technical advancements. Through upgraded ad placement mechanism and reinforced smart bidding algorithms, we have further enhanced the monetization efficiency of traffic and the ROI for our clients.

效果廣告取得的顯著成效也清楚反映了我們的技術進步。透過升級廣告投放機制和強化智慧競價演算法，我們進一步提高了流量變現效率和客戶的投資報酬率。

Additionally, our AI tools now cover broader industries, enabling more efficient ad production and driving AI-powered ad revenue up by 150% sequentially. For brand ad, revenue was down annually, mainly due to fewer variety shows launched.

此外，我們的 AI 工具現在覆蓋更廣泛的行業，能夠更有效率地製作廣告，並使 AI 驅動的廣告收入環比增長 150%。品牌廣告收入較去年同期下降，主要原因是綜藝節目推出數量減少。

Despite that, our premier content continued to attract brand advertisers, with 59% of revenue stemming from content-targeted ads. In particular, our major dramas achieved notable double-digit annual growth in revenue. The performance of the June 18 shopping festival was also in line with our expectations.

儘管如此，我們的優質內容仍然吸引著品牌廣告商，59% 的收入來自內容導向廣告。尤其值得一提的是，我們的幾部主要劇集的年收入實現了兩位數的顯著增長。6月18日購物節的表現也符合我們的預期。

Moving on to technology and products. We remain committed in advancing technology innovation, as it's crucial in improving content production, user experience, and operational efficiency. For example, our virtual production technology used to be limited to fantasy genres.

接下來談談技術和產品。我們將繼續致力於推進技術創新，因為這對於提高內容製作、使用者體驗和營運效率至關重要。例如，我們過去的虛擬製作技術僅限於奇幻題材。

This quarter marked an exciting breakthrough as we successfully extended its application into new territory, deploying it within the reality-themed drama for the first time. We have also made meaningful progress with our in-house pre-visualization technology.

本季我們取得了令人興奮的突破，成功地將其應用擴展到了新的領域，首次將其應用於以現實為主題的電視劇中。我們在內部預視覺化技術方面也取得了實質進展。

This tool allows for the rapid design and visualization of scenes and shots before actual filming begins. We have applied this across multiple flagship projects, and it has led to a large increase in production efficiency. Our in-house developed platforms continued to demonstrate its power.

該工具可在實際拍攝開始前快速設計和視覺化場景和鏡頭。我們已將此方法應用於多個旗艦專案中，並大幅提高了生產效率。我們自主研發的平台持續展現強大的實力。

Our in-house iQIYI content management system, has been in operation for over two years. This sophisticated data-driven system provides substantial support to management team and producers in project managing, effectively elevates content quality and success rate. Now this management system has covered all our projects in drama, movies and animations.

我們自主研發的愛奇藝內容管理系統已經運作兩年多了。這套先進的數據驅動系統為管理團隊和製作人員在專案管理方面提供了實質的支持，有效提高了內容品質和成功率。現在這套管理系統已經涵蓋了我們所有的戲劇、電影和動畫項目。

Another highly efficient system is our intelligent production management system, which is widely used by production crews for diverse on-site tasks, equipping them with front-line production tools and production management capabilities. In the second quarter alone, 21 dramas adopted the system.

另一個高效的系統是我們的智慧生產管理系統，生產團隊廣泛使用該系統執行各種現場任務，為他們配備第一線生產工具和生產管理能力。光是第二季就有 21 部電視劇採用了該系統。

To date, this system has been used in 67 iQIYI dramas and gained widespread recognition for its effectiveness. In addition, we have expanded the use of AI across various aspects, covering project assessment, creativity, marketing, and distribution.

迄今為止，該系統已在 67 部愛奇藝電視劇中使用，並因其有效性而獲得廣泛認可。此外，我們已將人工智慧的應用擴展到各個方面，涵蓋專案評估、創意、行銷和分銷。

This broadened application has meaningfully enhanced content production and operational efficiencies. For example, AI has supported revenue forecasting and the decision-making during the initial phases of project development.

這項擴展應用顯著提高了內容製作和營運效率。例如，人工智慧已在專案開發的初始階段為收入預測和決策提供支援。

AI also drives our advertising innovation. For Fox Spirit Matchmaker: Red-Moon Pact, we integrated virtual characters and scenes into ad materials, substantially enhancing ad outcomes. This new ad format was welcomed by advertisers and opened up ample possibilities.

人工智慧也推動了我們的廣告創新。對於《狐妖媒婆：紅月契約》，我們將虛擬角色和場景融入廣告素材中，大大提升了廣告效果。這種新的廣告形式受到了廣告商的歡迎，並開闢了廣闊的前景。

For content marketing, we have employed AI multimodal models to analyze plot information and generate key marketing points to improve marketing efficiency. Finally, for our business performance in regions outside of Mainland China, over the second quarter, we sustained solid performance in our overseas business, with both total revenues and membership revenue continuing to grow annually and sequentially.

在內容行銷方面，我們採用了人工智慧多模態模型來分析劇情資訊並產生關鍵行銷點，以提高行銷效率。最後，就我們在中國大陸以外地區的業務表現而言，在第二季度，我們的海外業務保持了穩健的業績，總收入和會員收入均繼續實現同比增長和環比增長。

The influence from C-drama and iQIYI's original content continued to strengthen, evidenced by the 30% annual increase in membership revenue from top C-dramas during the quarter. Our localization attempts have also started to bear fruit. The accumulated number of views of our original Thai drama, My Stand-in (spoken in foreign language) ranked first in a number of markets including the US, Canada, and UK.

來自國產劇和愛奇藝原創內容的影響力持續增強，本季熱門國產劇的會員收入年增 30% 便是最好的證明。我們的在地化嘗試也開始取得成效。我們原創的泰劇《我的替身》（外語對白）累積觀看次數在包括美國、加拿大和英國在內的多個市場排名第一。

We have also made solid progress in animations. How Dare You has attained remarkable viewership and revenue on our overseas site, reached a historical high among all iQIYI original Chinese animations, and even outperformed top Japanese animations in several countries.

我們在動畫製作方面也取得了顯著進展。《你竟敢如此》在我們的海外網站上獲得了驚人的觀看量和收入，在所有愛奇藝原創中國動畫中創下了歷史新高，甚至在幾個國家超過了頂級日本動畫。

Leveraging our premium content, we have expanded local partnerships to boost global penetration and monetization. Our efforts include deepening collaboration with telecom operators in overseas markets to enrich, bundle products and strengthen promotional activities.

我們利用優質內容，擴大了在地合作夥伴關係，以提高全球滲透率和獲利能力。我們的努力包括深化與海外電信業者的合作，以豐富、捆綁產品並加強促銷活動。

For example, we have partnered with Etisalat, one of the largest telecom companies in the Middle Eastern and North Africa market, to stream iQIYI's content on their OTT platform StarzON. This partnership will further enhance the influence of C-drama beyond Asian market.

例如，我們與中東和北非市場最大的電信公司之一 Etisalat 合作，在其 OTT 平台 StarzON 上播放愛奇藝的內容。此次合作將進一步提升國產劇在亞洲以外市場的影響力。

In the future, we will continue to enhance the influence of the iQIYI brand overseas with premium C-pop content in key markets, accelerate production of local content, and explore diversified IP monetization opportunities.

未來，我們將繼續透過在重點市場推出優質華語流行音樂內容來提升愛奇藝品牌在海外的影響力，加速本土內容的製作，並探索多元化的IP變現機會。

In summary, looking ahead, we are dedicated to pursuing our long-term growth with a sustainable approach. We will roll out more diversified, premium content, apply innovative technologies more extensively, and continue to enhance our team's creativity and execution capabilities. With that, we believe the flywheel effect of iQIYI's content ecosystem will drive our long-term growth. Now, let me pass it on to Jun to go through our financial performance.

總而言之，展望未來，我們將致力於以永續發展的方式追求長期成長。我們將推出更多樣化、更優質的內容，更廣泛地應用創新技術，並持續提升團隊的創造力和執行能力。因此，我們相信愛奇藝內容生態系統的飛輪效應將推動我們的長期成長。現在，我把麥克風交給Jun，請他來介紹一下我們的財務表現。

Thanks Mr. Gong, and hello everyone. Let me walk you through the key numbers. In the second quarter, total revenues were RMB7.4 billion, down 5% annually. The membership services revenue reached RMB4.5 billion, down 9% annually, primarily due to fluctuations in the content slate performance, as previously discussed.

謝謝龔先生，大家好。讓我來為您介紹一下關鍵數字。第二季總收入為人民幣74億元，較去年同期下降5%。會員服務收入達人民幣45億元，年減9%，主要原因是內容表現波動，如前所述。

For online advertising, revenue decreased by 2% year over year to RMB1.5 billion. This was primarily due to the decrease in brand ad business, which again due to the decrease of the variety shows we had during the quarter. That was partially offset by the healthy growth of the performance ad businesses. Content distribution revenue reached RMB698 million and grew 2% annually.

網路廣告收入較去年同期下降2%至人民幣15億元。這主要是由於品牌廣告業務的減少，而品牌廣告業務的減少又是由於本季綜藝節目的減少所造成的。效果廣告業務的健康成長部分抵消了這一影響。內容分發收入達人民幣6.98億元，較去年成長2%。

Other revenues increased by 16% annually to RMB784 million, partially driven by the increase of revenue derived from talent agency services and the third-party cooperation.

其他收入年增 16% 至人民幣 7.84 億元，部分原因是人才經紀服務收入和第三方合作收入的成長。

Moving on to costs and expenses. Content cost was RMB4.1 billion, down 2% annually. Total operating expenses were RMB1.4 billion, flat annually. This was in line with our disciplined marketing spending strategy.

接下來是成本和費用。內容製作成本為人民幣41億元，較去年同期下降2%。營運總支出為人民幣14億元，與前一年持平。這符合我們嚴格的行銷支出策略。

Turning to profits and cash flows. The non-GAAP operating income was RMB501 million and its corresponding margin was 7%.

接下來談談獲利和現金流。非GAAP營業收入為人民幣5.01億元，相應的利潤率為7%。

The operating cash flow totaled RMB411 million has remained positive for nine consecutive quarters. As of the end of the second quarter, we had cash, cash equivalents, short-term investments, and long-term restricted cash included in prepayments and other assets of RMB8.6 billion. We have prudently managed our financial resources, striving to improve the overall health of our business and to optimize the financial leverage of our balance sheet.

經營活動產生的現金流量總額為人民幣4.11億元，已連續九季維持正值。截至第二季末，我們擁有現金、現金等價物、短期投資以及預付款和其他資產中包含的長期受限現金，總額為人民幣86億元。我們謹慎管理財務資源，努力改善公司整體健康狀況，並優化資產負債表的財務槓桿。

In August, we've completed the repurchase rights offer for our convertible notes in 2026. An aggregate principal amount of USD395 million was validly surrendered and repurchased, and only $157,000 aggregate principal amount of the notes remains outstanding. For detailed financial data, please refer to our press release on our IR website. I will now open the floor for Q&A.

8 月份，我們完成了 2026 年可轉換債券的回購權要約。總計 3.95 億美元的本金已合法交回和回購，目前僅剩 15.7 萬美元的票據本金尚未償還。有關詳細財務數據，請參閱我們投資者關係網站上的新聞稿。現在我將開放問答環節。

(Operator Instructions) Xueqing Zhang, CICC.

（操作說明）張雪晴，中金公司。

(spoken in foreign language)

（用外語說）

Thank you management for taking my question. My question is about competition landscape. We noticed that other platforms has some blockbusters here and our market share which has been made in recent years has also fluctuated. How does management view the current competition landscape for long videos and what's your strategy? Thank you.

感謝管理層抽空回答我的問題。我的問題是關於競爭格局的。我們注意到其他平台在這裡有一些熱門遊戲，而我們近年來取得的市場份額也出現了波動。管理階層如何看待目前長影片領域的競爭格局？你們的策略是什麼？謝謝。

(interpreted) We will invite our CCO, Xiaohui Wang, to answer this question.

（譯）我們將邀請首席商務官王曉輝來回答這個問題。

(interpreted) The intense competition within the industry has always been present, and this competition actually helps us to improve the overall quality and the richness of the industries’ content, enhancing the competitiveness of the long form video sector compared to other forms of entertainment such as we often mentioned short-form video.

（解釋）行業內的激烈競爭一直存在，而這種競爭實際上有助於我們提高行業整體質量和豐富性，增強長視頻行業相對於其他娛樂形式（例如我們經常提到的短視頻）的競爭力。

At the same time, it also motivates us to continually improve content quality in the future. We've always emphasized that the ultimate goal in the long-form video competition is to sustain a high quality, diverse content supply, and achieve a win-win situation between the content quality and the commercial benefits.

同時，這也激勵我們未來不斷提升內容品質。我們一直強調，長影片競爭的最終目標是維持高品質、多樣化的內容供應，並在內容品質和商業利益之間實現雙贏。

Looking at our long-term market share performance, iQIYI has actually maintained a leading position in the core categories of drama and film for a long period of time.

從長期市佔率表現來看，愛奇藝在電視劇和電影的核心類別中長期保持領先。

Although we experienced some fluctuation in our drama market share in Q2, but after a thorough review and a targeted optimization, we've overcome the short-term difficulties and returned to the number one position in drama category market share.

雖然我們在第二季度的電視劇市場份額出現了一些波動，但經過徹底的審查和有針對性的優化，我們克服了短期困難，重新回到了電視劇類別市場份額的第一名。

In balancing the content quality and commercial returns, iQIYI's performance continues to lead. The drama series To The Wonder and the Strange Tales of Tang Dynasty Season 2 are great examples and we believe this advantage will further enhance in the future.

在平衡內容品質和商業回報方面，愛奇藝的表現持續領先。《通往奇蹟》和《唐朝奇談》第二季都是很好的例子，我們相信這項優勢在未來會進一步增強。

Going forward, we will remain dedicated to creating high quality content tailored for mainstream and female audiences, enhancing our social insights and innovation, optimizing content scheduling strategies, and strengthening the management in every facet of our in-house studios. And we believe these initiatives are all aimed at improving the stability of our high quality diverse content supply.

展望未來，我們將繼續致力於為主流和女性觀眾創作高品質的內容，增強我們的社會洞察力和創新能力，優化內容排期策略，並加強我們內部工作室各個方面的管理。我們相信，這些措施都是為了提高我們高品質、多樣化內容供應的穩定性。

Our current drama reserve accommodates the viewing demand of the mainstream audience. We have a relatively ample reserve specifically for the core genre of ancient costume dramas aimed at female audiences as well as for the mystery suspense and the reality themed dramas.

我們目前的劇集儲備能夠滿足主流觀眾的觀看需求。我們擁有相對充足的儲備，專門用於面向女性觀眾的古代古裝劇核心類型，以及懸疑劇和現實主題劇。

We will also continue to strengthen our capabilities for IP serialization development. For example, the Strange Tale of Tang Dynasty Season 2, which launched in Q2, is a successful case of serialized content development and the third season will soon be in production. In the future, the well-loved series such as The Fearless and Under the Skin will also launch their second seasons and The Ingenious One Season 2 is also in preparation. Thank you.

我們將繼續加強我們在IP序列化開發方面的能力。例如，第二季推出的《唐朝奇談》第二季就是一個成功的系列內容開發案例，第三季也即將投入製作。未來，《無畏》和《皮囊之下》等備受喜愛的劇集也將推出第二季，《天才一號》第二季也正在籌備中。謝謝。

Lincoln Kong, Goldman Sachs.

林肯·孔，高盛。

(spoken in foreign language)

（用外語說）

So thank you, management for taking my questions. My questions about the membership business. How should we think about the prospects of membership growth in future, especially subscribers as well as the [ARPU] growth? Thank you.

謝謝管理層抽空回答我的問題。我有一些關於會員業務的問題。我們應該如何看待未來會員成長的前景，特別是訂閱用戶數量以及每位用戶平均收入 (ARPU) 的成長？謝謝。

(interpreted) We'll invite our Senior VP of membership business, Youqiao Duan to answer this question.

（翻譯）我們將邀請會員業務高級副總裁段友橋先生回答這個問題。

(interpreted) From the perspective of membership structure, our cornerstone members represent the stable base of our subscribers and have remained steady. Fluctuations actually mainly come from the members who are attracted by new and popular content. As the summer season arrived, our content offerings have positively influenced the return of these hit driven users and retention of long-standing members.

（解讀）從會員結構的角度來看，我們的核心會員代表了我們訂閱用戶的穩定基礎，並且一直保持穩定。實際上，會員數量的波動主要來自那些被新奇熱門內容吸引的會員。隨著夏季的到來，我們的內容供應對這些熱門用戶的回歸和老會員的留存產生了積極影響。

In Q2, our ARM, which is the average revenue per member, maintain a solid year-over-year growth. The current level of ARM provides us with flexibilities in terms of operational tactics. In the near future, our focus will be on expanding the scale of our membership, but the ultimate goal remains to maximize membership revenue.

第二季度，我們的 ARM（即每位會員的平均收入）保持了穩健的同比增長。目前的ARM水準為我們提供了作戰戰術方面的靈活性。在不久的將來，我們的重點將放在擴大會員規模上，但最終目標仍然是最大限度地提高會員收入。

In the future, we'll also plan to implement more proactive measures to optimize account sharing and combat piracy, thereby supporting the long term healthy growth of our membership business. We will share the specific plans with every one as the progress is made. Thank you.

未來，我們還將計劃實施更積極主動的措施，以優化帳戶共享和打擊盜版，從而支持會員業務的長期健康發展。隨著計劃的推進，我們會與大家分享具體方案。謝謝。

Maggie Ye, CLSA.

Maggie Ye，CLSA。

(spoken in foreign language)

（用外語說）

Good evening and thanks for the chance to ask questions. Regarding our overseas business, we've seen very decent revenue growth in past quarters by high quality local production in addition to distribution of our premium Mandarin content. As iQIYI International site celebrates its five year anniversary, can management share your latest thoughts on business strategy and plan for our overseas business? Thank you.

晚上好，感謝給我提問的機會。關於我們的海外業務，過去幾個季度，我們透過高品質的本地生產以及分銷我們的優質普通話內容，實現了非常可觀的收入成長。在這個愛奇藝國際網站成立五週年之際，管理階層能否分享您對海外業務策略和計畫的最新想法？謝謝。

(interpreted) We'll invite our Senior VP, Xianghua Yang, who is responsible for the overseas business to answer this question.

（譯）我們將邀請負責海外業務的高級副總裁楊祥華先生來回答這個問題。

(interpreted) We started expanding into the overseas market in 2019 and have achieved initial success. In 2023, our overseas operations actually reached full year operating breakeven. The goal for 2024 is to boost revenue growth, while continuing to increase profit. And for Q2 this year, the total revenues for overseas and also membership revenue both maintained healthy year over year and also quarter-over-quarter growth.

（翻譯）我們從2019年開始拓展海外市場，並且取得了初步成功。2023年，我們的海外業務實際上實現了全年營運損益平衡。2024 年的目標是在繼續提高利潤的同時，促進收入成長。今年第二季度，海外總收入和會員收入均維持了年比和季比的健康成長。

In terms of content, we have discovered an optimal content mix suitable for our overseas market and we aim to further increase content offerings through different measures.

在內容方面，我們已經找到了適合海外市場的最佳內容組合，我們計劃透過不同的措施進一步增加內容供應。

For example, the popularity for Chinese language content overseas has significantly increased, becoming a major source of our top content for our overseas platform.

例如，中文內容在海外的受歡迎程度顯著提高，成為我們海外平台優質內容的主要來源。

In fact, over the past three years, over half of the 20 most popular shows on iQIYI Overseas were Chinese dramas, most of which were iQIYI originals. This demonstrates the influence of Chinese language content and the strength of our original offerings.

事實上，在過去三年裡，愛奇藝海外版最受歡迎的 20 部劇集中，超過一半是中國電視劇，其中大部分是愛奇藝原創劇集。這體現了中文內容的影響力以及我們原創內容的實力。

And in the future, we will continue to use Chinese dramas as the foundation of our overseas content offerings and actively explore opportunities to increase production of local or regional content. And also from the technologies perspective, we will utilize AI technology to empower different aspects of the long-form video industry, enhancing the production efficiency of iQIYI's localized original content overseas.

未來，我們將繼續以中國電視劇為海外內容供應的基礎，並積極探索增加本地或區域內容製作的機會。此外，從技術角度來看，我們將利用人工智慧技術賦能長影片產業的各個方面，提高愛奇藝海外本土原創內容的製作效率。

Regarding our local partnerships, we have already established deep connection and cooperation with local telecom operators in certain regions. And going forward, we aim to expand our partnerships to telecom operators in additional countries and to increase our collaboration with local partners.

關於我們的本地合作夥伴關係，我們已經與某些地區的本地電信業者建立了深厚的聯繫與合作。展望未來，我們的目標是擴大與更多國家電信業者的合作關係，並加強與當地合作夥伴的合作。

And we believe these will enhance our brand awareness and the content influence overseas. And our long-term objective is to make iQIYI's overseas platform the home of beloved Asian content, expanding the influence of Chinese language content, while also increasing the coverage of local content and continue to explore diversified IP monetization models.

我們相信這些措施將提升我們的品牌知名度和海外內容影響力。我們的長期目標是將愛奇藝海外平台打造成為深受喜愛的亞洲內容的家園，擴大中文內容的影響力，同時增加本地內容的覆蓋範圍，並繼續探索多元化的IP變現模式。

And our CFO, Jun Wang, just added to this and he mentioned that in 2023, our overseas business actually reached full year operating break even. This is based on the fact that from the management accounting perspective.

我們的財務長王俊補充道，他提到，2023 年，我們的海外業務實際上實現了全年營運收支平衡。這是基於管理會計角度的事實。

And this is based on the BU management account.

這是基於業務單元管理帳戶的。

(interpreted) Correct, correct. And that this is a very healthy trend that has developed over the past year. Thank you.

（譯）正確，正確。而且，這是過去一年來形成的非常健康的趨勢。謝謝。

Thomas Chong, Jefferies.

Thomas Chong，傑富瑞集團。

(spoken in foreign language)

（用外語說）

Hi, good evening. Thanks management for taking my question. As iQIYI has a lot of good IP, can management share your strategy of unlocking the IP potential in different areas other than membership and advertising? Thank you.

您好，晚上好。感謝管理層解答我的問題。愛奇藝擁有大量優質IP，管理階層能否分享除了會員和廣告之外，如何在其他領域挖掘IP潛力？謝謝。

(spoken in foreign language)

（用外語說）

Our CEO is answering this question. He mentioned that content IP is the core asset of our company. Promoting the monetization of content IP in various forms including offline business is an important and sustained effort that is key to enhancing our long-term value and our competitiveness.

我們的執行長正在回答這個問題。他提到內容知識產權是我們公司的核心資產。以各種形式（包括線下業務）促進內容智慧財產權的貨幣化是一項重要且持續的努力，這是提升我們長期價值和競爭力的關鍵。

We actually describe this IP-based business model with a metaphor called eating a fish in multiple ways, which actually emphasize our ability to transform each piece of our content IP into numerous prospects for revenue. Thereby, we believe this will maximize its value across different markets and platforms.

我們實際上用「吃魚」這個比喻來描述這種基於智慧財產權的商業模式，這個比喻從多個方面強調了我們能夠將每一部分內容智慧財產權轉化為眾多收入來源的能力。因此，我們相信這將最大限度地發揮其在不同市場和平台上的價值。

(interpreted) With our many years of focus on producing original content, actually, the value of our company's IP assets has grown significantly. For instance, two years ago in Q2 2022, our original dramas accounted for over half of our quarterly new release key dramas, and this proportion now has stabilized at around 70% and also our high quality, original dramas have not only found success during their initial broadcasting period, but also have demonstrated a sustainable long tail effect, which maintained popularity over an extended period of time.

（譯文）事實上，由於我們多年來專注於製作原創內容，我們公司的智慧財產權資產價值已經顯著成長。例如，兩年前的 2022 年第二季度，我們的原創劇集佔季度新劇集的一半以上，而這一比例現在已穩定在 70% 左右。此外，我們高品質的原創劇集不僅在首播期間取得了成功，而且還展現出了可持續的長尾效應，在較長一段時間內保持了人氣。

We actually hope that the offline experience business will become our second growth curve in the future and we also notice the shift in consumer behavior change in domestic offline commerce and cultural tourism sectors.

我們真心希望線下體驗業務未來能成為我們的第二個成長點，我們也注意到國內線下商業和文化旅遊領域的消費者行為正在改變。

Where the premium content IP actually plays an increasingly important role in creating engaging experiences, for example, our vast library of high quality video content IPs actually serve as our core strength in this area.

例如，優質內容 IP 在創造引人入勝的體驗方面發揮著越來越重要的作用，而我們龐大的高品質視訊內容 IP 庫正是我們在這一領域的核心優勢。

For example, we leverage the IP from the recent hit drama title called The Strange Tale of Tang Dynasty, beyond its online presence, successfully introducing an immersive VR experience. In cities like Beijing and Xi'an, these are key cities in China. In addition, we've developed new derivative products such as card games designed to appeal to the taste of younger demographic, further extending the IP's reach and impact.

例如，我們利用近期熱門劇《唐朝奇談》的IP，除了其線上影響力之外，還成功推出了沉浸式VR體驗。北京和西安等城市是中國的重要城市。此外，我們還開發了新的衍生產品，例如旨在吸引年輕群體口味的卡牌遊戲，進一步擴大了該知識產權的影響範圍。

And for the operational model, actually we favor a light asset approach, which has a promising prospect for incremental revenue under limited cost. Actually, based on our experiences, this approach has actually been validated in terms of offline experiences, and this model is now being able to be replicated and scaling.

至於營運模式，我們實際上傾向於輕資產模式，這種模式在成本有限的情況下，有希望實現收入成長。實際上，根據我們的經驗，這種方法在離線體驗方面已經得到了驗證，並且這種模型現在可以複製和擴展。

In addition to what I just mentioned, the VR theater experiences that I mentioned earlier, we are also exploring further initiatives centered around our IPs. For example, our Qixiaobei, which is the IP merchandise stores, now also QiBubble Park, which is a theme park designed for children.

除了我剛才提到的VR影院體驗之外，我們還在探索以我們的智慧財產權為中心的其他舉措。例如，我們的七小北（IP週邊商品店）現在也開設了七泡泡樂園，這是一個專為兒童設計的主題樂園。

And these initiatives are actually developing in collaboration with our partners, similar to what I just mentioned, our light asset approach and the aim is to provide users with a very comprehensive and engaging entertainment experience. Thank you.

這些舉措實際上是與我們的合作夥伴共同開發的，類似於我剛才提到的輕資產方法，目標是為用戶提供非常全面且引人入勝的娛樂體驗。謝謝。

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

目前沒有其他問題了。現在我將把發言權交還給管理階層，請他們作總結發言。

Thank you everyone for participating in the call. And if you have further questions, please don't hesitate to contact us. Thank you.

感謝各位參與本次電話會議。如果您還有其他疑問，請隨時與我們聯繫。謝謝。

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

今天的會議就到此結束。感謝您的參與。您現在可以斷開連線了。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

本記錄中標有（已翻譯）的部分是由現場通話中的翻譯人員翻譯的。本次活動的翻譯人員由活動贊助公司提供。