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。 （操作員指示） 現在我將會議交給公司IR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.

謝謝你，接線生。大家好，感謝您參加愛奇藝2024年第二季財報電話會議。該公司的業績於今天稍早發布，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；王曉輝先生，我們的 CCO、首席內容長；會員業務資深副總裁段友橋先生及電影及海外業務資深副總裁楊向華先生。

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 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。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向 SEC 公開提交的文件中概述的風險和不確定性。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。現在我就請龔先生介紹一下。

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，感謝您今天加入我們。在第二季度，我們看到了頂級內容的激烈競爭。雖然我們播出了一系列多元化的優質內容，但某些節目未能達到我們的高期望，對我們的財務表現造成壓力。經過大量的努力，我們已經克服了內容表現的短期波動。

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的激烈競爭具有建設性，這增強了其相對於其他娛樂形式的吸引力。它也為我們提供了一個寶貴的機會來審查和完善我們的策略。它幫助我們更好地了解用戶偏好，並改善我們的業務以實現未來的成長。

We firmly believe that ultimately, success in the long-form video business depends on the stable supply of premium content under 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，以及能否在內容品質和商業利益之間取得平衡。考慮到這一點，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, (spoken in foreign language) 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勢頭。 《交錯的場景》、《唐詩怪談第二季》（外語版）等廣受好評的作品的推出，提升了我們的主要運營指標，使我們在主要電視劇類別的市場份額方面重回領先地位。 Enlightent 的數據，七月。

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.

值得關注的是，《唐詩異傳》第二季成為我國第14部人氣指數破萬的電視劇。對於愛奇藝來說，除了提供高品質的內容外，提供良好的使用者體驗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.

在我們致力於提升會員權益的同時，我們也正在完善內容分發演算法，為免費用戶帶來卓越的觀看體驗，同時平衡商業績效。展望未來，我們將在多個領域進行投資，以推動公司的長期、永續成長。

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，我們將進一步做強國內業務，同時拓展更廣大的海外市場。第三，我們正在利用愛奇藝的內容影響力及其IP組合來探索會員和廣告以外的收入機會，例如IP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意最大化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表現，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.

我們會員服務的主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。第二季度，會員收入年減 9%，主要是由於我們的內容表現波動導致熱門遊戲驅動的會員流失，以及去年大熱門《The Knockout》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。這在一定程度上是由我們嚴格的定價策略推動的，因為我們縮減了整體促銷和折扣。我們增強的會員福利也發揮了重要作用，有效地鼓勵了會員註冊更高級別的計劃。

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。值得注意的是，我們在第二季推出了10部劇的快遞套餐，並獲得了最高的現金購買數量。繼電視劇類別的成功之後，我們計劃將快遞套餐擴展到綜藝、動漫等其他內容類別。

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仍然充滿信心，這得到了幾個關鍵因素的支持。首先，我們成功地建立了忠誠、黏性會員的堅實基礎。其次，內容仍然是我們會員成長的主要驅動力，我們正在引入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，我們致力於加強我們的營運策略，以提高會員的獲取和保留。舉措包括，第一，透過擴大我們的銷售管道和利用病毒式社交行銷來覆蓋更廣泛的人口群體；二是推出與當季熱門內容直接掛鉤的行銷舉措，如IP會員套餐、特快套餐、禮遇體驗計劃等，提高轉換率；第三是為長期、高級別套餐訂戶提供物有所值的服務，例如獨家線下活動。

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，並得到了會員的正面回饋。繼去年強勁的用戶反應之後，我們的年度線下旗艦活動「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 July 1 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 1 日的第 17 屆愛奇藝會員節進一步放大了會員的感知價值。透過這次活動，我們提供了極具吸引力的會員折扣，並舉辦了 7 小時的直播來推廣我們內容管道中的 130 多部作品。超過40位明星參與直播活動，觀看次數超過3000萬次。

In the future, that July, the 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，第十七屆愛奇藝會員節將成為愛奇藝會員專屬的年度活動。這是一個發現有吸引力的優惠並享受令人興奮的活動的活動。這個節日不僅將強調我們為會員提供的巨大價值，而且將成為提升我們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.

繼續內容。我們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，在內容創作上，我們將打造更多、更高品質、滿足主流觀眾胃口的內容。特別是，我們計劃透過特別吸引女性受眾的產品來擴大我們的產品組合。

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.

為了保持我們在不斷發展的內容創作領域的優勢，我們的目標是進一步增強我們利用流行社會趨勢的能力，從而製作與觀眾建立更深層次聯繫的內容。我們將在選角和劇本選擇過程中採取更具創新性的立場，旨在超越傳統講故事的限制。

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，在內容調度方面，我們將密切關注用戶趨勢，並採取以用戶參與度和保留率為指導的動態調度策略。這種方法確保我們的內容推出處於最佳時機，以符合觀眾的喜好和觀看習慣。第三，在管理我們的內部工作室方面，我們致力於提高創意流程各個關鍵階段的營運效率和效果。

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.

我們的目標是在人才中培養更積極主動的文化，確保他們有足夠的自由來充分發揮他們的藝術技能，並創造一個讓創造力蓬勃發展的環境。接下來是第二季的詳細內容表現。就戲劇而言，我們在現實和懸疑類型中的領先地位仍然沒有受到挑戰。

Our original drama, To the Wonder (spoken in foreign language), perfectly demonstrated our success in blending artistic merits and the commercial benefits, generated 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.

我們的原創戲劇《To the Wonder》（外語）完美地展示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出色的表現。更令人印象深刻的是該劇顯著的長尾效應，其影響力遠遠超出了網路領域，帶動了新疆拍攝地的旅遊業。

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.

為了有效延長IP的生命力，我們與主創團隊合作，於7月份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和旅遊局的廣泛好評。此外，我們也透過在 Light On Theater 品牌下推出電視劇《告訴沒有人》（外語）和《迷失在陰影》（外語），進一步鞏固了我們作為懸疑類型首選平台的地位。

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 Enlightent 的收視率份額數據，在電影方面，我們的表現持續優於同業。第二季度，我們在電影頻道共推出15部主打影片，包括《二十條》（外語）、《飛馬2》（外語）等多部票房熱門影片。

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).

在雲端戲院，我們推出了21部影片，涵蓋了票房第一的《YOLO》（外語片）等最新、最熱門的院線影片。原創電影方面，我們推出了災難喜劇《前途無量》（外語）、懸疑犯罪《嫌疑犯》（外語）等多種類型。

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《神探奇遇記第四季》（外語版）和《中國新說唱2024》（外語版）攜新一季回歸，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.

《中國新說唱2024》也產生了可觀的會員收入。動畫方面，我們繼續投資中國原創動畫，隨著自主製作能力的增強，我們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.

《你敢嗎》（外語）就是一個很好的例子，它創下了愛奇藝原創動畫的多項紀錄。這是我們第一部人氣指數突破5000的原創動畫，營收和新用戶獲取也再創新高。

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.

隨著夏季假期的到來，這是線上影片平台的關鍵播出窗口，我們很高興我們的優質內容幫助我們重新獲得了市場領導地位。我們推出了古代和現代類型的優質內容，以吸引廣泛的觀眾，特別關注年輕觀眾，他們在假期中有更多的空閒時間來享受我們的產品。

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.

目前，《聊齋誌異》第二季（外文版）、《英雄行》（外語版）都受到觀眾好評。此外，在懸疑類型中，電視劇《交錯的場景》（外語）和《致年輕人》（外語）均表現出強大的用戶參與。

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.

值得注意的是，《唐詩異傳》第二季回歸，品質不凡，愛奇藝人氣指數破萬。此系列廣受好評，展現出明顯的長尾效應。

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.

第二季大幅增加了第一季的用戶花費時間和會員收入，分別增加了約六倍和十倍。這部劇也是我們IP開發系列化方法的一個很好的例子。

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.

受到前兩季成功的鼓舞，第三季的製作即將開始。此外，IP開始產生多樣化的收入來源，其影響力現已擴展到線下領域，包括娛樂、旅遊和消費品。

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.

為了利用這項成功，我們採取了策略性舉措，在北京、深圳和西安等主要城市推出了基於IP的VR影院。這項措施旨在擴大我們原創內容的影響力和存在感，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.

除了戲劇之外，我們的創造力正在擴展到新的類別。愛奇藝全新原創綜藝IP《天天》以其創新的形式贏得了用戶的好評，愛奇藝人氣指數峰值突破7000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，《單口喜劇之王》（外文版）也是愛奇藝在單口喜劇領域的首次探索。該劇收到了令人鼓舞的初步回饋，在今年夏天的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.

繼續我們的內容管道。對於電視劇而言，我們預期優質內容供應的穩定性將顯著增強。同時，我們正在加快針對女性觀眾的古裝偶像劇和現代偶像劇的製作。

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).

備受期待的這類作品包括《向東》（外語）、《一瞬間但永遠》（外語）、《冬日情歌》（外語）、《雪夜永恆的愛》（外語） ）、幸運之牙（外語）、月之擁抱（外語）、神樹之戀（外語）。

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).

真人懸疑類內容豐富，包括《天生為一》（外語）、《北上》（外語）、《霍元甲第二季》（外語）、《正當防衛》等（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).

電影方面，我們將在平台上推出更多元化的院線作品。此外，愛奇藝自製原創電影《皮膚》（外語片）、《冰雪奇緣》（外語片）等也預計在院線上映。

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.

對於我們的綜藝節目陣容，我們計劃在下半年推出比上半年更多的節目。借助《天日》和《單口喜劇之王》的勢頭，我們正準備推出更多創新節目，包括將於本月晚些時候推出的《月亮照耀》（外語）。

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.

轉向動畫，我們預計下半年動畫作品數量將激增，類型更加多樣化。與上半年相比，我們計劃額外推出8至14季的重點原創作品。除了《你敢不敢》之外，我們還推出了奇幻劇《天君傳》（外語版），以及與即將上映的同名電視劇共享IP的《天長地久》。

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.

動感十足的動畫《超級立方體：非凡之章》（外文版）也即將上映。另一方面，憑藉著原創內容的增強，愛奇藝已成為傳統電視媒體的主要內容來源之一，涵蓋央視、衛視、地方電視台等管道。

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部劇集，強化了優質內容的長尾效應。透過探索多元化的變現管道，我們的IP價值得到進一步釋放。例如，外語劇《狐妖紅娘之紅月約》特許經營收入創下愛奇藝原創劇的特許收入新高。

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

我們也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.

轉向廣告業務。第二季廣告總收入為人民幣15億元，較去年同期下降2%。效果廣告仍然是本季的亮點，逐年以健康的速度成長。電子商務、網路服務等重點部門表現穩健，6月18日購物節電商營收年增80%，網路服務營收年均成長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.

效果廣告的紮實成果也清楚地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，我們進一步提升了流量變現效率和客戶投資報酬率。

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，我們的人工智慧工具現已覆蓋更廣泛的行業，從而實現更有效率的廣告製作，並使人工智慧驅動的廣告收入環比增長 150%。品牌廣告收入逐年下降，主要是因為推出的綜藝節目減少。

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，我們的優質內容仍持續吸引品牌廣告商，59% 的收入來自內容定位廣告。特別是，我們的主要電視劇收入每年實現兩位數的顯著增長。 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.

轉向技術和產品。我們仍然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，我們的虛擬製作技術過去僅限於奇幻類型。

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.

本季取得了令人興奮的突破，我們成功地將其應用擴展到新領域，首次部署在現實主題電視劇中。我們的內部預視覺化技術也取得了有意義的進展。

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.

該工具允許在實際拍攝開始之前快速設計和視覺化場景和鏡頭。我們已經在多個旗艦專案中應用了這項技術，生產效率得到了大幅提升。我們內部開發的平台繼續展示其力量。

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.

我們內部的愛奇藝內容管理系統已經運作了兩年多。這個成熟的數據驅動系統為管理團隊和製作人的專案管理提供了強大的支持，有效提升了內容品質和成功率。現在這個管理體系已經涵蓋了我們所有的戲劇、電影、動畫專案。

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，廣泛應用於生產人員的各種現場任務，為他們配備了一線生產工具和生產管理能力。光是第二季就有21部劇採用了該系統。

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.

截至目前，該系統已在67部愛奇藝劇集中使用，其有效性得到了廣泛認可。此外，我們也將人工智慧的運用擴展到各個方面，包括專案評估、創意、行銷和發行。

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.

這種擴大的應用程式極大地提高了內容製作和營運效率。例如，人工智慧在專案開發初期支援收入預測和決策。

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.

人工智慧也推動我們的廣告創新。在《狐妖紅娘：紅月之約》中，我們將虛擬角色和場景融入廣告素材中，大幅提升了廣告效果。這種新的廣告形式受到了廣告商的歡迎，並開啟了廣闊的可能性。

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AI多模態模型分析劇情訊息，產生行銷要點，提升行銷效率。最後，就我們在中國大陸以外地區的業務表現而言，第二季度，我們的海外業務繼續保持穩健的表現，總收入和會員收入均繼續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.

國劇和愛奇藝原創內容的影響力持續增強，本季熱門國劇會員營收年增30%。我們的在地化嘗試也開始取得成果。我們原創的泰劇《我的替身》（外語）累積觀看量在美國、加拿大、英國等多個市場排名第一。

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.

我們在動畫方面也取得了紮實的進展。 《你敢不敢》在海外網站的收視率和收入都創下了愛奇藝原創中國動畫的歷史新高，甚至在多個國家超越了日本頂級動畫。

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.

利用我們的優質內容，我們擴大了當地合作夥伴關係，以提高全球滲透率和貨幣化。我們的努力包括深化與海外市場電信業者的合作，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 上傳輸愛奇藝的內容。此次合作將進一步提升韓劇在亞洲市場以外的影響力。

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，我們將持續在重點市場以優質華語內容提升愛奇藝品牌海外影響力，加速本土內容製作，探索多元化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.

總之，展望未來，我們致力於以永續的方式追求長期成長。我們將推出更多元化、精品化的內容，更廣泛地應用創新技術，不斷提升團隊的創造力和執行力。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，讓我向 Jun 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。讓我帶您了解關鍵數字。第二季總收入為人民幣74億元，較去年同期下降5%。如前所述，會員服務收入達到 45 億元，年減 9%，主要是由於內容表現的波動。

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 is 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，而這又是由於我們本季綜藝節目的減少所致。這被效果廣告業務的健康成長部分抵消。內容發行收入達人民幣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，部分是由於人才經紀服務及第三方合作收入的成長所致。

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.

繼續討論成本和費用。內容成本為人民幣41億元，較去年同期下降2%。總營業費用為人民幣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%.

轉向利潤和現金流。非美國通用會計準則營業收入為人民幣5.01億元，相應利潤率為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.

經營現金流總計人民幣4.11億元，連續九季維持正值。截至第二季末，預付款項及其他資產所包含的現金、現金等價物、短期投資、長期限制性現金合計86億元。我們審慎管理財務資源，並努力改善業務整體健康狀況，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年可轉換票據的回購權要約。有關詳細財務數據，請參閱我們在 IR 網站上的新聞稿。我現在開始問答環節。

(Operator Instructions) Xueqing Zhang, CICC.

（操作員指示）張學清，CICC。

(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.

感謝管理層回答我的問題。我的問題是關於競爭格局。我們注意到了另一個。平台這裡有一些重磅炸彈，我們這幾年取得的市佔率也有波動。管理階層如何看待目前長影片的競爭格局？謝謝。

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

（譯）我們將邀請我們的CCO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, our content, enhancing the competitiveness of the long form video sector compared to other forms of entertainment such as we often mentioned short-form video.

（解讀）產業內的激烈競爭一直存在，這種競爭實際上有助於我們提高產業、內容的整體品質和豐富度，增強長影片產業相對於其他娛樂形式的競爭力例如我們經常提到的短影片.

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，也激勵我們未來不斷提升內容品質。我們一直強調，長視頻競賽的最終目標是維持高品質、多元化的內容供應，實現內容、品質和商業利益的共贏。

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

從我們長期的市佔率表現來看，愛奇藝其實在電視劇和電影四大品類中長期保持領先。

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.

雖然第二季我們的電視劇市佔率出現了一些波動，但經過徹底的審視和針對性的優化，我們克服了短期的困難，重新回到了電視劇類別市場份額第一的位置。

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，愛奇藝的表現繼續領先，電視劇《奇葩說》和《聊齋誌異》第二季就是很好的例子，我們相信這種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.

未來，我們將繼續致力於打造針對主流和女性觀眾的優質內容，增強社會洞察力和創新能力，優化內容編排策略，加強內部工作室的各個方面的管理。我們相信這些措施都是為了提高我們高品質多元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.

我們現有的劇集儲備滿足了主流觀眾的觀看需求。針對女性觀眾的古裝劇核心類型，以及懸疑懸疑、現實題材劇，我們有比較充足的儲備。

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 the Skin will also launch their second seasons and The Ingenious One Season 2 is also in preparation. Thank you.

我們也將持續加強IP序列化開發能力。例如，第二季上線的《奇葩說》第二季就是系列化內容開發的成功案例，第三季也即將投入製作。未來，《天師》、《皮囊》等深受觀眾喜愛的劇集也將推出第二季，《巧匠》第二季也在籌備中。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.

謝謝管理層回答我的問題。我關於會員業務的問題。我們該如何看待未來會員成長的前景，特別是訂閱用戶以及[ARPU]成長？謝謝。

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

（解說）我們邀請會員業務高級副總裁段又巧來回答這個問題。

(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 counter offerings have positively influenced the return of these hit driven users and retention of long standing members.

（解讀）從會員架構來看，我們的基石會員代表了我們穩定的訂戶基礎，一直保持穩定。波動其實主要來自於被新的、流行的內容所吸引的會員。隨著夏季的到來，我們的還價產品對這些熱門用戶的回歸和長期會員的保留產生了積極的影響。

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）較去年同期保持穩健成長。目前ARM的水平為我們提供了操作策略方面的靈活性。在不久的將來，我們的重點將是擴大會員規模，但最終目標仍然是會員收入最大化。

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

未來，我們還將計劃採取更積極的措施來優化帳戶共享和壓縮隱私，從而支持會員業務的長期健康成長。我們將把具體計劃與每一項所取得的進展分享。謝謝。

Maggie Ye, CLSA.

葉瑪姬，里昂證券。

(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，感謝您給我提問的機會。就我們的海外業務而言，除了優質普通話內容的發行之外，我們在過去幾個季度中還透過高品質的本地製作實現了非常可觀的收入成長。在愛奇藝國際站慶祝成立五週年之際，管理階層能否分享您對業務策略和海外業務規劃的最新想法？謝謝。

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

（解說）我們請我們負責海外業務的高級副總裁楊向華來回答這個問題。

(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. Even a 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 maintain healthy year over year and also quarter-over-quarter growth.

（解讀）我們從2019年開始拓展海外市場，到2023年已初見成效，海外業務實際已實現全年營運。 2024 年的目標是促進收入成長，同時繼續增加利潤。今年第二季度，海外總收入和會員收入均維持年比和季比健康成長。

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，我們的目標是透過不同的措施進一步增加內容供給。

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，中文內容在海外的熱度大幅提升，成為我們海外平台熱門內容的主要來源。

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

事實上，過去三年，愛奇藝海外最受歡迎的20部節目中，有超過一半是中國劇，其中大部分是愛奇藝中國劇。這體現了中文內容的影響力和我們原創產品的實力。

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 the 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作為海外內容的基礎，並積極探索增加本地或區域內容製作的機會。而且從技術的角度來看，我們將利用科技賦能長影片產業的各個方面，提高愛奇藝在海外的在地化原創內容的生產效率。

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.

在當地合作方面，我們已經與部分地區的當地電信業者建立了深度的聯繫與合作。展望未來，我們的目標是將我們的合作夥伴關係擴大到更多國家的電信營運商，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 iQIYI monetization models.

我們相信這些將提升我們的品牌知名度和海外內容影響力。我們的長期目標是讓愛奇藝的海外平台成為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，並繼續探索愛奇藝多元化的變現模式。

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.

我們的財務長王軍也補充道，到2023年，我們的海外業務實際上達到了全年營運損益平衡。這是基於從管理會計角度來看的事實。

And this is based on iQIYI's management account.

而且這是基於愛奇藝的管理帳戶。

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

（解釋）正確，正確。這是過去一年中發展起來的非常健康的趨勢。謝謝。

Thomas Chong, Jefferies.

托馬斯莊，杰弗里斯。

(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.

嗨，晚上好。感謝管理層回答我的問題。由於愛奇藝擁有許多好的IP，管理階層能否分享一下你們在會員和廣告以外的其他領域釋放IP潛力的策略？謝謝。

(spoken in foreign language)

（用外語說）

Our CEO is answering this question. He mentioned that content IP poor asset of our company promoting the monetization of content IP in various forms including offering 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，我們公司的內容IP貧乏資產，以包括提供業務在內的多種形式推動內容IP變現，是一項重要且持續的努力，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.

我們實際上用一個比喻來形容這種基於IP的商業模式，稱為“多種方式吃魚”，這實際上強調了我們將每個內容IP轉化為無數收入前景的能力。因此，我們相信這將在不同市場和平台上最大化其價值。

(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 have accounted for over half of our quarterly new release, key dramas and this proportion now has stabilized at around 70% and also leading high quality, high 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.

（解讀）我們多年來專注於原創內容，實際上我們公司的IP資產價值已經大幅成長。例如兩年前的2022年第二季度，我們的原創劇已經占到季度新播、重點劇的一半以上，現在這個比例穩定在70%左右，而且引領的高品質、高原創劇不僅取得了成功在播出初期，也展現了可持續的長尾效應，在很長一段時間內保持了受歡迎程度。

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.

我們其實希望線下體驗業務成為我們未來的第二條成長曲線，我們也注意到國內線下商業和文化旅遊領域消費者行為的變化。

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, IP's actually serve as our core strength in this area.

優質內容 IP 實際上在創造引人入勝的體驗方面發揮著越來越重要的作用，例如我們龐大的高品質視訊內容庫，IP 實際上是我們在該領域的核心優勢。

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 younger demographic, further extending the iQIYI's reach and impact.

例如，我們利用最近熱門的電視劇《聊齋誌異》中的 IP，超越其線上呈現，成功引入了沉浸式 VR 體驗。北京、西安等城市是中國的重點城市。此外，我們也開發了卡牌遊戲等新的衍生產品，旨在吸引年輕族群，進一步擴大愛奇藝的影響力。

And for the operational model, actually we actually 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.

而對於營運模式來說，其實我們更傾向於輕資產的方式，這種方式在有限的成本下實現增量收入是有前景的。事實上，根據我們的經驗，這個方法實際上已經透過線下體驗得到了驗證，而這個模式現在已經可以複製和擴展。

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 (inaudible), 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，我們還在探索圍繞我們的IP的進一步舉措。例如我們的（聽不清楚），就是IP商品店，現在也是氣泡泡樂園，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合作開發的，類似於我剛才提到的，我們的輕資產方法，目的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。我現在將請管理階層作結束語。

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

感謝大家參與此次通話。如果你有的話。如有其他問題，請隨時與我們聯絡。謝謝。

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

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。

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.

此文字記錄中標記（翻譯）的部分是由現場通話中的口譯員說出的。口譯員由贊助本次活動的公司提供。