Hello Group Inc (MOMO) 2023 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter and Fiscal Year 2023, Hello Group Inc. Earnings Conference Call. (Operator Instructions) Please note this conference is being recorded today. I would now like to hand the conference over to your first speaker today, Ms. Ashley Jing. Thank you. Please go ahead, ma'am.

女士們，先生們，感謝你們的支持，歡迎參加 Hello Group Inc. 2023 財年第四季和收益電話會議。 （操作員指示）請注意，今天正在錄製本次會議。現在，我想將會議交給今天的第一位演講者 Ashley Jing 女士。謝謝。請繼續，女士。

Good morning and good evening, everyone. Thank you for joining us today for Hello Group's Fourth Quarter and Fiscal 2023 Earnings Conference Call. The company's results were released earlier today and are available on the company's IR website. On the call today are Mr. Tang Yan, CEO of the company; Ms. Sichuan Zhang, COO of the company; and Ms. Peng Hui, CFO of the company who will discuss the company's business operations and highlights as well as the financials and guidance.

大家早安，晚上好。感謝您今天參加 Hello Group 的 2023 財年第四季和財報電話會議。該公司的業績已於今天早些時候公佈，並可在公司的 IR 網站上查閱。今天參加電話會議的有公司執行長唐岩先生；該公司首席營運長張四川女士；以及公司財務長彭暉女士將討論公司的業務運作和亮點以及財務狀況和指導。

We will all be available to answer your questions during the Q&A session that follows. Before we begin, I would like to remind you that this call may contain forward-looking statement made under the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements.

在接下來的問答環節中，我們將隨時回答您的問題。在我們開始之前，我想提醒您，本次電話會議可能包含根據《1995 年私人證券訴訟改革法》安全港條款所做的前瞻性聲明。

Further information regarding this and other risks, uncertainties and factors is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under law. I will now pass the call over to our COO, Mr. Zhang Sichuan.

有關此風險和其他風險、不確定性和因素的更多資​​訊包含在公司提交給美國證券交易委員會的文件中。除法律要求外，本公司不承擔因新資訊、未來事件或其他原因更新任何前瞻性聲明的義務。現在我將電話轉給我們的營運長張四川先生。

Hello, everyone. Thank you for joining our call. 2023 was a busy year. Despite many changes and challenges in the external environment, our team made steady progress in implementing our strategic priorities and achieve solid financial results. I'd like to walk you through the details of our work across business lines in the fourth quarter and fiscal year 2023, and then outline the strategic growth for fiscal 2024.

大家好。感謝您加入我們的電話會議。 2023年是忙碌的一年。儘管外部環境面臨諸多變化和挑戰，我們的團隊在實施策略重點方面取得了穩步進展，並取得了穩健的財務表現。我想向您介紹我們在 2023 財年第四季和年度各業務線的工作細節，然後概述 2024 財年的策略成長。

I will start with a brief overview of our financial performance. For the fourth quarter of 2023, total group revenue was RMB 3 billion, down 7% and year-over-year and 1% sequentially, which is at the high end of our guidance. Adjusted operating income was RMB 664 million, up significantly by 33% year-over-year. The profit margin was 22.1%, a significant improvement of 6.6 percentage points year-over-year. Total revenue from the Momo app and the standalone new apps was RMB 2.73 billion, down 5% year-over-year, and adjusted operating income was RMB 637 million, up 24% year-over-year, with a margin of 23.3%, up 5.4 percentage points year-over-year.

我將首先簡要介紹我們的財務表現。 2023 年第四季，集團總營收為人民幣 30 億元，年減 7%，季減 1%，處於我們預期的高位。調整後營業收入為人民幣6.64億元，較去年同期大幅成長33%。利潤率為22.1%，較去年同期大幅提升6.6個百分點。陌陌應用程式及獨立新應用程式的總收入為人民幣27.3億元，年減5%，調整後營業收入為人民幣6.37億元，較去年同期成長24%，利潤率為23.3%，較去年同期上升5.4個百分點。

The year-over-year improvement in profit margin was primarily due to our team's excellent cost management and improved efficiency in resource utilization over the past year. Total revenue from Tantan came in at RMB 272 million, down 21% year-over-year. Adjusted operating income was RMB 27.04 million, with a margin of 9.9% compared with an adjusting operating loss of RMB 15.17 million in the same period of previous year.

利潤率的年增率主要得益於我們團隊在過去一年中出色的成本管理和資源利用效率的提升。探探總營收為2.72億元，年減21%。調整後營業收入為2,704萬元，利潤率為9.9%，去年同期調整後營業虧損為1,517萬元。

For fiscal 2023, total group revenue was RMB 12 billion compared with RMB 12.7 billion in 2022. Adjusted operating income was RMB 2.57 billion, up significantly by 27% year-over-year with a margin of 21.4%, up significantly by 5.4 percentage points. The strong improvement in gross profit and margins despite lower revenue was mainly driven by our effective cost optimization and efficiency improvement initiatives across our businesses over the past year, which supported the stable productivity of the Momo cash cow business and make Tantan profitable.

2023財年，集團總收入為人民幣120億元，而2022年為人民幣127億元。儘管收入下降，毛利和利潤率仍強勁改善，主要得益於我們過去一年來在業務範圍內有效的成本優化和效率提升舉措，這些舉措支持了陌陌搖錢樹業務的穩定生產力並使探探實現盈利。

Total revenue from the Momo app and standalone new apps was RMB 10.8 billion, down 5% from 2022, mainly due to the decline in revenue from the Momo app resulting from spending softness amid the weak macro economy and our proactive product and operational investments to maintain a healthy economy ecosystem. Standalone new apps maintained rapid growth momentum driven by our overseas business. Adjusted operating income was RMB 2.5 billion, up 5% year-over-year, with a margin of 23.2%, up 3 percentage points from a year ago.

陌陌應用程式及獨立新應用程式的總收入為 108 億元，較 2022 年下降 5%，主要由於宏觀經濟疲軟導致支出疲軟導致陌陌應用程式的收入下降，以及我們為維持健康的經濟生態系統而進行的積極的產品和營運投資。獨立新應用在海外業務推動下保持快速成長動能。調整後營業收入為人民幣25億元，年增5%，利潤率為23.2%，較上年同期上升3個百分點。

At Tantan, we continued to implement cost optimization and efficiency improvement initiatives in the past year. We continued to reduce investment in low ROI channels and reallocated excess human resources. In addition, we continued to optimize paying experience to improve ARPU. As a result, with Tantan's revenue declined due to significantly reduced marketing spending, costs decreased more than revenue. Accordingly, we improved our cash use efficiencies, delivering four consecutive quarters of profitability.

在探探，我們在過去一年持續實施成本優化和效率提升措施。我們持續減少對投資報酬率低的管道的投入，並重新配置過剩的人力資源。此外，我們持續優化支付體驗，提升ARPU值。因此，由於探探的行銷費用大幅減少，導致其營收出現下滑，成本下降幅度大於收入下降幅度。因此，我們提高了現金使用效率，並連續四個季度獲利。

For fiscal 2023, Tantan's total revenue was RMB 1.2 billion, down 13% year-over-year, and adjusted operating income was RMB 101 million compared with a loss of RMB 330 million in 2022. While we're pleased with the team's execution in cost optimization and efficiency improvements, we must submit that we made a mistake in ecosystem management, which led to the outbreak of spamming activities in the first part of the year and negatively affect Tantan's user experience and retention.

2023財年，探探總營收為人民幣12億元，年減13%，調整後營業收入為人民幣1.01億元，而2022年則虧損人民幣3.3億元。

While the problem has been fully resolved through our efforts in the second half, it has also caused our various product and operational work to lag significantly behind expectations. As a result, we were unable to make any meaningful breakthroughs in new dating features. We remain committed to working hard towards this goal this year which I will discuss and explain in more detail later.

雖然透過下半年的努力，該問題已得到全面解決，但也導致我們的各項產品和營運工作明顯落後於預期。因此，我們無法在新的約會功能上取得任何有意義的突破。我們今年仍致力於努力實現這一目標，稍後我將更詳細地討論和解釋。

Now I'll walk you through the progress we made against our strategic priorities for Momo, Tantan and the new vendors, as well as the challenges we are facing and our plans to deal with them respectively. For the Momo app, this is the main goal for 2023 was to keep the user and revenue scale stable, continue to optimize cost structure and remain the productivity of the cash cow business. In the past year, despite the pressure from the macro economy and changes in regulatory policies, our team mitigated the external revenue pressures by continuously optimizing product operations and introducing new monetization features. Meanwhile, by improving cash unitization and staff efficiency, we increased operating profits and margins despite revenue pressures.

現在，我將向大家介紹我們在陌陌、探探和新供應商的策略重點方面取得的進展，以及我們所面臨的挑戰和應對計劃。對於陌陌應用程式來說，2023年的主要目標是維持用戶和收入規模穩定，並持續優化成本結構，維持搖錢樹業務的生產力。過去的一年，儘管面臨宏觀經濟壓力、監管政策變化等因素，我們的團隊透過不斷優化產品營運、引入新的變現功能，緩解了外部收入壓力。同時，透過提高現金單位化和員工效率，儘管收入面臨壓力，但我們仍增加了營業利潤和利潤率。

On the channel marketing front, we have focused on improving channel ROI to pursue profitable user growth rather than blindly pursuing unprofitable user acquisition. In fiscal year 2023, our unit acquisition cost decreased 25% year-over-year, and we acquired 20% more users while reducing channel investments by 10% year-over-year. The number of paying users remained stable in the first 9 months of 2023, thanks to our product and channel efforts. However, at the end of the year, the number of active users fell temporary due to the impact of an extraordinary cold wave and regulatory-driven product adjustments and community ecosystem optimization, which resulted in a short-term pressure on the number of long-term paying users. In the fourth quarter, the number of paying users of the Momo app was 7.4 million, a decrease of 400,000 compared with the previous quarter.

在通路行銷方面，我們專注於提高通路投資報酬率，以追求有利可圖的用戶成長，而不是盲目追求無利可圖的用戶獲取。 2023財年，我們的單位獲取成本較去年同期下降25%，用戶獲取量成長20%，同時通路投資較去年同期減少10%。由於我們在產品和通路的努力，2023 年前 9 個月的付費用戶數量保持穩定。但年末受超常寒流影響及監管驅動的產品調整、社群生態優化等導致活躍用戶數出現暫時性下滑，對長期付費用戶數造成短期壓力。第四季，陌陌App付費用戶數為740萬，較上一季減少40萬。

Now let's go through the productivity of our Momo cash cow business. In the fourth quarter, Momo's live streaming revenue was RMB 1.42 billion, down 9% year-over-year. For fiscal year 2023, Momo's live streaming revenue totaled RMB 5.57 billion, down 7% year-over-year. With the pandemic over in early 2023, Momo's live streaming delivered positive year-over-year revenue growth in quarter 2, a quarter earlier than we expected, thanks to the economy recovery and our product and operational efforts.

現在我們來看看陌陌這顆搖錢樹的生產力。第四季，陌陌直播收入為14.2億元，年減9%。 2023財年，陌陌直播收入總計55.7億元，年減7%。隨著 2023 年初疫情結束，得益於經濟復甦以及我們在產品和營運方面的努力，陌陌直播第二季的營收年增，比我們預期的早了一個季度。

However, as we enter the year's second half, the economy recovery became weaker than expected. At the same time, to better manage regulatory risk, our operational team proactively reduced revenue oriented competition events, resulting in a decline in revenue in the second half of the year compared with the same period of 2022. The combination of spending softness and decreased revenue from the competition events is the main reason for the decline in Momo live streaming revenue in 2023.

然而，進入下半年，經濟復甦動能弱於預期。同時，為更好地管理監管風險，我們的營運團隊主動減少了以收入為導向的賽事活動，導致下半年收入較2022年同期有所下降。

On the product front, our team continued to enrich interactive gamified features to improve paying conversion and ARPPU of users in different cohorts against the backdrop of spending softness, introducing new gamified features not only helped stabilize the engagement of live streaming users in the mid- and long-tail cohort, but also played a positive role on the supply side of live streaming.

產品端，在消費疲軟的背景下，團隊不斷豐富互動遊戲化功能，提升不同群體用戶的付費轉換率及ARPPU，新的遊戲化功能不僅有助於穩定中長尾群體直播用戶的參與度，也對直播的供給側起到了積極作用。

Regarding VAS, revenue from value-add services, excluding Tantan, totaled RMB 1.26 billion for the fourth quarter, flat year-over-year. VAS revenue from the Momo app totaled RMB 940 million, down 10% year-over-year. Revenue from the standalone apps was RMB 320 million, up 44% year-over-year. For fiscal year 2023, VAS revenue, excluding Tantan, totaled RMB 5.09 billion, down 2% year-over-year. VAS revenue from the Momo app was RMB 3.98 billion, down 10% year-over-year.

加值服務方面，第四季除探探以外的加值服務收入合計12.6億元，較去年同期持平。陌陌應用程式增值服務收入總計9.4億元人民幣，年減10%。獨立應用程式收入為人民幣3.2億元，年增44%。 2023財年，不含探探的增值服務收入總計人民幣50.9億元，較去年同期下降2%。陌陌應用增值服務收入為39.8億元，較去年同期下降10%。

VAS revenue from the standalone apps was RMB 1.11 billion, up 50% year-over-year. The incremental revenue contributed by standalone apps largely offset the revenue decrease from the Momo app. The rate of decline in VAS revenue from the Momo app was higher than we expected at the beginning of the year, mainly for 2 reasons. First, the economic recovery was weaker than expected, user spending remained soft. Second, the product adjustment to maintain a healthy community ecosystem in the year's second half resulted in a decline in paying users.

獨立應用增值服務收入為人民幣11.1億元，較去年同期成長50%。獨立應用程式貢獻的增量收入在很大程度上抵消了陌陌應用程式收入的下降。陌陌加值業務收入下滑的速度高於我們年初的預期，主要有兩個原因。一是經濟復甦弱於預期，用戶支出依然疲軟。其次，下半年為了維護健康的社區生態系統而進行的產品調整導致付費用戶數量下降。

On the product front integrating audio and video-based VAS experiences with the nonpaying features on the homepage, positively improved the efficiency of VAS monetization. On the operational front, we focused on user-oriented operational efforts to drive organic revenue growth, resulting in steady ARPPU improvement.

產品上，將影音類加值服務體驗與首頁非付費功能結合，積極提升加值服務變現效率。在營運方面，我們專注於以用戶為中心的營運工作，推動有機收入成長，從而實現 ARPPU 穩步提升。

Now moving to Tantan. Our strategic goal for Tantan was to achieve overall breakeven for the year and develop product and monetization models that are suitable for Asian dating culture to pursue sustainable growth on the back of the positive business cycle. Driven by our efforts on both product and channel front, Tantan hit the first milestone of its strategic goal at the beginning of this year, achieving operating breakeven and maintain a small profit throughout the year despite the pressure on revenue.

現在轉向探探。我們對探探的策略目標是實現全年整體盈虧平衡，並開發適合亞洲約會文化的產品和貨幣化模式，以在積極的商業週期中實現永續成長。在產品和通路雙管齊下的推動下，探訪今年初就邁出了戰略目標的第一個里程碑，在營收面臨壓力的情況下，全年實現經營盈虧平衡並保持微利。

The success of our cost optimization and efficiency improvement initiatives was primarily due to our continued improvement in channel efficiency and personnel cost optimization. However, as I mentioned at the beginning, due to some missteps in execution and insufficient innovation, Tantan has yet to make breakthroughs in achieving its strategic goal of sustainable growth. As the pandemic subsided at the beginning of 2023, our user base and engagement level quickly recovered from the trough around Chinese New Year holidays. However, due to the overly aggressive adjustments to our user screening standards, our platform experienced significant spammer attack starting at the spring, severely impacting our user experience and leading to a decline in user retention that threatened the health of our dating ecosystem.

我們的成本優化和效率提升措施的成功主要歸功於我們在通路效率和人員成本優化方面的持續改進。但正如我在開頭提到的，由於執行上存在一些失誤，創新不足，探探在實現永續成長的策略目標上還未取得突破。隨著2023年初疫情逐漸消退，我們的用戶群和參與度從農曆新年假期前後的低谷中迅速恢復。然而，由於我們對用戶篩選標準的調整過於激進，我們的平台從春季開始遭受到嚴重的垃圾郵件攻擊，嚴重影響了我們的用戶體驗並導致用戶留存率下降，威脅到我們約會生態系統的健康。

To improve the user experience and ensure the stable of our ecosystem, our team launched rigorous 6-month anti-spam campaign. However, the missteps I just mentioned, combined with our reduced investment in channels has a significantly negative impact on our user experience and retention, putting significant pressure on our user base. With further reduction in channel spending and the impact of the cold wave, our MAU in December was down 30% from December to (corrected by company after the call) 13.7 million. As of the end of the fourth quarter, Tantan had a 1.2 million paying users, a net decrease of 200,000 sequentially.

為了提高用戶體驗並確保我們生態系統的穩定，我們的團隊進行了為期六個月的嚴格的反垃圾郵件活動。但是，我剛才提到的失誤，加上我們在頻道方面的投入減少，對我們的用戶體驗和保留產生了明顯的負面影響，給我們的用戶群帶來了巨大的壓力。隨著通路開支的進一步減少以及寒流的影響，我們12月份的MAU比12月下降了30%，至1370萬（公司在電話會議後進行了更正）。截至第四季末，探探付費用戶數為120萬，季淨減少20萬。

Turning to Tantan's financials, total revenue for the fourth quarter was RMB 272 million, down 21% year-over-year and 8% sequentially. The decrease was solely attributable to a reduced number of paying users. For fiscal year 2023, total revenue was RMB 1.2 billion, down (corrected by company after the call) 13% year-over-year. The decrease was due to the decline in paying users that resulted from reduced channel investments, the anti-spam campaign and adjustment to subscription renewals.

探探的財務數據方面，第四季總營收為2.72億元人民幣，年減21%，季減8%。下降完全是由於付費用戶數量的減少。 2023財年總收入為人民幣12億元，較去年同期下降（電話會議後公司已更正）13%。下降的原因是由於通路投資減少、反垃圾郵件活動和訂閱續訂調整導致付費用戶減少。

In terms of business lines, VAS revenue was RMB 667 million, down 19% year-over-year. While live streaming revenue was RMB 505 million, down 7% year-over-year. Tantan's adjusted operating income for fiscal year 2023 was RMB 101 million compared to an adjusted operating loss of RMB 330 million in 2022. Tantan turned profitable despite the pressure on revenue, this was primarily driven by significant reduction in unproductive channel investments. As part of our cost optimization strategy and staff allocation optimization. Meanwhile, the continued improvement in ARPU resulted in revenue declining much less than the user count.

業務方面，增值服務收入為人民幣6.67億元，較去年同期下降19%。直播收入為5.05億元，較去年同期下降7%。探探2023財年調整後營業收入為人民幣1.01億元，而2022年調整後營業虧損為人民幣3.3億元。作為我們成本優化策略和員工配置優化的一部分。同時，ARPU值的持續提升，導致收入的降幅遠小於使用者數量的降幅。

Now I would like to walk you through the details of Tantan's progress on the channel and product front. First, on the channel front, our user acquisition team continued to reduce marketing expenses that couldn't generate positive ROI. And total channel investment declined by over 60% compared to 2022. We avoided the seasonal cost spikes caused by external competition by seasonally allocating budget ratios to different channels and flexibly adjusting marketing windows.

現在我來跟大家介紹探探在通路和產品方面的具體進展。首先，在通路方面，我們的用戶獲取團隊持續削減無法產生正投資報酬率的行銷費用。總通路投入較2022年下降超過60%，透過按季節將預算比例分配到不同管道，靈活調整行銷窗口，避免了外部競爭造成的季節性成本飆升。

By fiscal year 2023, our unit acquisition cost was significantly reduced by 45% compared to 2022. Although cost cutting was put pressure on the user base, reducing investments in channel with negative ROI is substantial for Tantan to remain profitable. On the product and operational side in 2023, our user product team mainly focused on product adjustments and strategy upgrade to fight against the spamming activities that broke out in this spring. Our commercial product team launched a variety of premium membership products and pay-as-you-go privileges on top of the basic membership services, which combined with appropriate guidance on paying experience, led to a significant sequential increase in VAS ARPPU in every single quarter of 2023.

到了2023財年，我們的單位獲取成本與2022年相比大幅降低45％。 2023年在產品和營運方面，我們的用戶產品團隊主要致力於產品調整和策略升級，以對抗今年春季爆發的垃圾郵件活動。我們的商業產品團隊在基礎會員服務基礎上，推出了多種高級會員產品及即用即付特權，結合適當的付費體驗引導，使得增值服務ARPPU在2023年每個季度均實現大幅環比增長。

To mitigate the impact of reduced user base and the Ministry of Industry and Information Technology regulations on service renewal, we improved the product experience for paying users which played a positive growth in the continuous and steady increase in paying ratio and ARPU throughout the year. By the end of 2023, spamming activities were under control and the dating ecosystem has also recovered. Beyond the dating centric value-added service, since live streaming and chatroom services are not the focus of the dating crowd, we began to de-emphasize live streaming in the second half of the year, and we allocated excess human resources to innovate projects.

為緩解用戶規模減少及工信部對續費規定等影響，我們提升了付費用戶的產品體驗，對全年付費比例及ARPU值的持續穩定提升起到了積極的增長作用。到 2023 年底，垃圾郵件活動得到控制，約會生態系統也得到恢復。除了以約會為中心的增值服務之外，由於直播和聊天室服務不是約會人群的重點，因此我們在下半年開始淡化直播業務，並分配了多餘的人力資源來創新項目。

Although Tantan achieved overall breakeven in 2023, thanks to our effective cost optimization and efficiency improvement initiatives as well as the continued improvement in ARPU, (corrected by company after the call) we failed to achieve the strategic growth of sustainable growth on the back of the positive business cycle, due to our missteps in ecosystem management and the lack of breakthrough in product innovation. Therefore, the biggest priority for Tantan in 2024 is to continue focusing on product innovation and improving the monetization experience to ultimately achieve profitable growth.

雖然探探在2023年憑藉有效的成本優化和效率提升舉措以及ARPU值的持續改善，實現了整體盈虧平衡（公司在電話會議後予以糾正），但由於生態管理的失誤以及產品創新的缺失，探探未能實現在商業正向週期下可持續增長的戰略增長。因此，探探2024年的首要任務是繼續專注於產品創新和改善貨幣化體驗，最終實現獲利成長。

Lastly, in terms of new endeavors, our goal is to enrich our product portfolio, expand beyond Momo and Tantan, and develop long-term growth engine. In the fourth quarter, the total revenue of the new apps, including social and game products, was RMB 328 million, up 43% year-over-year. For fiscal year 2023, revenue from the standalone app was RMB 1.12 billion, up 42% year-over-year Driven by rapid growth of our overseas business, standalone apps remain rapid growth momentum from a high base in 2022.

最後，在新的嘗試方面，我們的目標是豐富我們的產品組合，超越陌陌和探探，並開發長期成長引擎。第四季度，包括社交和遊戲產品在內的新應用總收入為人民幣3.28億元，較去年同期成長43%。 2023財年，獨立應用營收為人民幣11.2億元，年增42%。

As for the domestic app, given their relatively mature life cycle, our team's operational focus in 2023 was to control costs and expenses while continuing to tap monetization potential. As a result, the profit growth rate of the domestic app was higher than that of the revenues still should improve operating profit margins.

對於國內應用而言，鑑於其生命週期相對成熟，我們團隊在2023年的營運重點是控製成本和費用，同時繼續挖掘貨幣化潛力。因此，國內應用程式的利潤成長率高於收入成長速度，仍需提高營業利潤率。

Compared with domestic products, our overseas product is at a relatively early stage of its life cycle with broader market size, and the team has accumulated more experience for previous endeavors. Even though the overseas business was affected by negative factors, such as the earthquake in Turkey and the devaluation of currencies in several countries in 2023, its revenue still maintained rapid growth with the combined effort of our product and channel team.

相較於國內產品，我們的海外產品處於生命週期的早期，市場規模更為廣闊，團隊在先前的努力中累積了更多的經驗。儘管2023年海外業務受到土耳其地震、多國貨幣貶值等負面因素影響，但在產品及通路團隊的共同努力下，海外業務收入仍保持快速成長。

On the product front, we continued to enrich localized experiences and operations for users in different cohorts. On the channel front, our team focused on acquiring paying users, strictly adjusting channel investments according to changes in revenue and ROI. As a result, our product efforts, coupled with an increase in channel investment, have supported the continued improvement in ARPPU and the number of paying users. Operating profit margin significantly improved year-over-year, thanks to operating leverage. Our overseas business profit increased significantly from a few million RMB in 2022 to close to RMB 100 million in 2023.

在產品方面，我們不斷豐富不同群體使用者的在地化體驗和操作。在通路方面，我們的團隊專注於獲取付費用戶，嚴格根據收入和投資報酬率的變化調整通路投入。因此，我們的產品努力加上通路投入的增加，支持了ARPPU和付費用戶數量的持續改善。得益於經營槓桿的作用，經營利潤率較去年同期大幅提高。我們的海外業務利潤從2022年的數百萬元大幅增加到2023年的近1億元。

In addition to revenue and profit-oriented products, we have also made remarkable progress in exploring new opportunities in the social sector by leveraging technological product development. In 2023, we developed inSpaze, a brand-new social app for Apple Vision Pro. As one of the 600 native apps, it was launched simultaneously with Apple Vision Pro in February this year. The product is still in very early stage, and we will continue to enrich its use cases and game plays for social interaction and emotional connections.

除了營收和獲利性產品外，我們還利用科技產品開發，在社會領域探索新機會方面取得了顯著進展。 2023年，我們開發了inSpaze，一款針對Apple Vision Pro的全新社交應用程式。作為600個原生應用程式之一，它於今年2月與Apple Vision Pro同步上線。該產品還處於非常早期的階段，我們將繼續豐富它的用例和遊戲玩法，以實現社交互動和情感聯繫。

That's all about our business review. As this is the first call with our investors in 2024, I would like to spend some time talking about management's priorities for this year. First of all, our goal for the Momo app is to maintain the productivity of this cash cow business with a healthy social ecosystem. In order to maintain an excellent social ecosystem and limit radical monetization approaches adopted by broadcasters and agencies in order to obtain competition events related bonuses, we plan to further reduce revenue-oriented large-scale competition events. In fact, we will leverage Momo's social attributes to increase non-event driven revenue through new gamified features and user-oriented operational activities. We will use part of the event bonus savings to increase daily revenue sharing.

這就是我們業務回顧的全部內容。由於這是我們 2024 年與投資者的第一次電話會議，我想花一些時間談談管理層今年的優先事項。首先，我們對陌陌的目標是透過健康的社交生態，維持這顆搖錢樹業務的生產力。為了維持良好的社會生態，限制廣播公司和經紀公司為獲取賽事相關獎金而採取的激進的盈利方式，我們計劃進一步減少以收益為導向的大型賽事。事實上，我們將利用陌陌的社交屬性，透過新的遊戲化功能和用戶導向的營運活動來增加非事件驅動的收入。我們將利用活動獎金儲蓄的部分來增加每日收益分成。

As the decline in competition (corrected by company after the call) event-related revenue will put some pressure on our live streaming and VAS revenue. We will continue to look for ways to optimize our cost efficiency to mitigate the impact of lower revenue on our products. For Tantan, our strategic growth for Tantan this year is to improve the core dating experience, and on top of that build an efficient business model that drives profitable growth.

由於競爭的下降（電話會議後公司已予以糾正），活動相關收入將對我們的直播和增值服務收入帶來一些壓力。我們將繼續尋找優化成本效率的方法，以減輕收入下降對我們產品的影響。對探探來說，我們今年的策略成長是提升核心的約會體驗，並在此基礎上建立起推動獲利成長的高效商業模式。

Regarding our new endeavors, we plan to continue to enrich the brand portfolio, push the business boundaries beyond Momo and Tantan and build a long-term growth engine. Based on our experience in the MENA region over the past 3 years, we believe that the social and pan-entertainment industry still has a great room for growth in the overseas market. Hello Group has a unique advantage in social space and monetization built on the social ecosystem. We know how to help users find new friends and interact effectively with each other, and we know how to build value added services on top of that to create value for the company and our shareholders.

在新的嘗試方面，我們計劃持續豐富品牌組合，拓展陌陌和探探以外的業務邊界，打造長期成長引擎。基於我們過去3年在MENA地區的積累，我們認為社交及泛娛樂產業在海外市場仍有很大的成長空間。 Hello Group在社交空間以及依托社交生態建構的貨幣化方面有著得天獨厚的優勢。我們知道如何幫助用戶找到新朋友並彼此進行有效互動，我們也知道如何在此基礎上建立增值服務，為公司和股東創造價值。

We leverage and replicate our successful experience to explore new products not limited to Soulchill and new market beyond the MENA market. We believe that if we can do a good job in localization, we can succeed in the broader market with more diversified products. In 2024, we plan to invest more resources and take bigger strides to explore this area.

我們利用並複製我們的成功經驗來探索不僅限於 Soulchill 的新產品和中東和北非市場以外的新市場。我們相信，如果我們能做好在地化，我們就能以更多樣化的產品在更廣闊的市場中取得成功。 2024年，我們計劃投入更多資源，邁出更大步伐，探索這一領域。

Lastly, I would like to conclude by announcing that our Board has declared a special cash dividend in the amount of $0.54 per ADS, which will amount to a total cash payment of approximately USD 103 million or 1/3 of adjusted net income attributable to Hello Group Inc. in 2023. This is the sixth consecutive year that the company has paid a cash dividend, and together with the revised repurchase program, it demonstrates the management's confidence in fundamental of the business and our commitment to creating long-term value for shareholders.

最後，我想宣布，董事會已宣布派發每股美國存託憑證 0.54 美元的特別現金股息，總計約 1.03 億美元，或占 2023 年歸屬於 Hello Group Inc. 的調整後淨收入的 1/3。

Thank you for your confidence and trust in us. And now I will pass the call over to Cathy for the financial review.

感謝您對我們的信心與信任。現在我將把電話轉給 Cathy 進行財務審查。

Hello, everyone. Thank you for joining our conference call today. Now let me briefly take you through the financial review. Total revenue for the fourth quarter of 2023 was RMB 3.0 billion, down 7% year-on-year and 1% quarter-on-quarter. Non-GAAP net income attributable to the company was RMB 514.7 million, up 5% year-on-year but down 15% from the previous quarter. Net income continued to grow on a year-over-year basis despite lower revenue. This was mainly attributable to our effective cost optimization and efficiency improvement initiatives, which supported a stable activity of the Momo cash cow business and turned Tantan profitable.

大家好。感謝您參加我們今天的電話會議。現在讓我簡單向大家介紹一下財務回顧。 2023年第四季總營收為人民幣30億元，年減7%，季減1%。非美國通用會計準則下歸屬於本公司的淨利為人民幣5.147億元，較去年同期成長5%，但較上季下降15%。儘管收入下降，但淨收入仍同比增長。這主要歸功於我們有效的成本優化和效率提升舉措，支持了陌陌搖錢樹業務的穩定營運並使探探實現盈利。

Now let me walk you through the details. Looking into the key revenue line items for the quarter. Firstly, on live broadcasting. Total revenue from live broadcasting business for the fourth quarter of 2023 was RMB 1.52 billion, down 12% year-over-year but flat quarter-over-quarter. The year-over-year decrease was mainly due to 3 factors: #1, soft consumer sentiment in the current macro environment, #2, our proactive operational adjustments to reduce competition events related revenue in order to better manage regulatory risk, #3, Tantan pivoting away from the less dating-centric live streaming service.

現在讓我向您詳細介紹一下。查看本季的主要收入項目。第一，關於直播。 2023年第四季直播業務總收入為人民幣15.2億元，較去年同期下降12%，但較上季持平。年比下降主要由於三個因素：第一，當前宏觀環境下消費者信心疲軟；第二，我們主動進行營運調整，減少賽事相關收入，以更好地管理監管風險；第三，探探逐漸放棄不太以約會為中心的直播服務。

Momo application live broadcasting revenue totaled RMB 1.42 billion for the quarter, down 9% year-over-year, but up 1% quarter-over-quarter. Tantan's live broadcasting revenue amounted to RMB 100.2 million, down 39% year-over-year and 17% quarter-over-quarter. Revenue from the value-added service for the fourth quarter of 2023 was RMB 1.42 billion, down 2% from Q4 last year and 3% sequentially. Revenue from value-added service on an ex-Tantan basis was RMB 1.26 billion in the fourth quarter of 2023, same as Q4 last year, but down 3% from the previous quarter.

陌陌應用程式直播收入本季總計人民幣14.2億元，年減9%，但季增1%。探探直播收入為1.002億元，較去年同期下降39%，季減17%。 2023年第四季增值服務收入為人民幣14.2億元，較去年第四季下降2%，較上一季下降3%。 2023年第四季（不含探探）增值服務收入為人民幣12.6億元，與去年第四季持平，但比上一季下降3%。

Momo application value-added service revenue decreased both on a year-over-year basis and a quarter-over-quarter basis. This was due to a weak spending sentiment as well as our proactive product adjustments. On the other hand, revenue from the standalone new apps continue to show strong growth momentum, partially offsetting the revenue pressure from Momo value-added services. Tantan VAS revenue amounted to RMB 160.5 million, down 13% year-over-year and 5% sequentially. The decrease was due to a decline in paying users, which was in turn due to a reduction in channel investment, the anti-spam campaign and the adjustments to membership subscription renewal. However, the continued improvement in ARPU resulted in revenue declining much less than user accounts.

陌陌應用加值服務收入年比、季均有所下降。這是由於消費情緒疲軟以及我們主動的產品調整所造成的。另一方面，獨立新應用的營收持續呈現強勁成長勢頭，部分抵消了陌陌增值服務的營收壓力。探探增值服務收入為人民幣1.605億元，較去年同期下降13%，季減5%。下降的原因在於付費用戶數量的下降，而付費用戶數量的下降又是由於通路投資的減少、反垃圾郵件活動以及會員訂閱續訂的調整。不過，ARPU的持續提升導致收入的降幅遠小於用戶帳戶的降幅。

Now turning to cost and expenses. Non-GAAP cost of revenue for the fourth quarter of 2023 was RMB 1.77 billion compared to RMB 1.91 billion for the same period last year. Non-GAAP gross margin for the quarter was 41.1% up 0.7 percentage points from the year ago period, but down 0.7 percentage points from the last quarter. The year-over-year increase was due to an improvement in Tantan's margin that resulted from a shift in its revenue mix. The quarter-over-quarter decline was mainly due to incremental expenses in connection with various year-end events in live streaming. However, as you can notice, the sequential decrease in GP margin in this Q4 was much less than in previous years as we deemphasize revenue-oriented competition events to better manage regulatory risks.

現在來談談成本和費用。 2023年第四季非公認會計準則營收成本為人民幣17.7億元，去年同期為人民幣19.1億元。本季非公認會計準則毛利率為 41.1%，較去年同期上升 0.7 個百分點，但較上一季下降 0.7 個百分點。年比成長是由於探探收入結構的變化導致其利潤率提高。環比下降主要由於與各類直播年終活動相關的費用增加。不過，正如您所注意到的，由於我們不再強調以收入為導向的競爭事件，以更好地管理監管風險，本季度毛利率的環比降幅遠低於往年。

Non-GAAP R&D expenses for the fourth quarter was RMB 218.1 million compared to RMB 250.5 million for the same period last year or a 13% decrease year-over-year. The decrease was due to the continuous optimization and personnel costs. Non-GAAP R&D expenses as a percentage of revenue was 7% compared with 8% from the year ago period.

第四季非美國通用會計準則研發費用為人民幣 2.181 億元，去年同期為 2.505 億元，年減 13%。下降是由於持續優化和人員成本。非公認會計準則研發費用佔營收的百分比為 7%，去年同期為 8%。

We ended the quarter with 1,382 total employees, of which 301 are from Tantan, compared 1,705 total employees of which 459 from Tantan a year ago. The R&D personnel as a percentage of total employees for the group remained stable at 63% from Q4 last year.

截至本季度，我們共有 1,382 名員工，其中 301 名來自探探，而去年同期共有 1,705 名員工，其中 459 名來自探探。集團研發人員佔員工總數的比例與去年第四季相比保持穩定，為63%。

Non-GAAP sales and marketing expenses for the fourth quarter was RMB 296.0 million or 10% of total revenue compared to RMB 398.6 million or 12% of total revenue for the same period last year. The significant year-over-year decrease both in terms of absolute renminbi amount and as a percentage of revenue was primarily attributable to Momo's strategy to cut lower efficiency channel marketing spend and to a lesser degree, Tantan continuing to control costs and focus on channel ROI.

第四季非美國通用會計準則銷售及行銷費用為人民幣 2.96 億元，佔總營收的 10%，去年同期為人民幣 3.986 億元，佔總營收的 12%。無論是人民幣絕對金額還是佔收入的百分比，同比均大幅下降，主要歸因於陌陌削減效率較低的渠道營銷支出的策略，而探探繼續控製成本並專注於渠道投資回報率（在較小程度上）。

Non-GAAP G&A expenses were RMB 87.2 million for the fourth quarter 2023 compared to RMB 84.9 million for the same quarter last year, both representing 3% of their respective total revenues. Non-GAAP operating income was RMB 664.2 million an increase of 33% from Q4 2022, but down 2% from the previous quarter. Non-GAAP operating margin for the quarter was 22.1% up 6.6 percentage points from the same period last year, but slightly down 0.3 percentage points from the previous quarter. Non-GAAP operating expenses as a percentage of total revenue was 20%, a decrease from 23% from Q4 2022 and 21% from last quarter.

2023年第四季非公認會計準則一般及行政費用為人民幣8,720萬元，去年同期為人民幣8,490萬元，均佔各自總收入的3%。非公認會計準則營業收入為人民幣 6.642 億元，較 2022 年第四季成長 33%，但較上一季下降 2%。本季非美國通用會計準則營業利益率為22.1%，較去年同期上升6.6個百分點，但較上季略有下降0.3個百分點。非 GAAP 營業費用佔總收入的百分比為 20%，較 2022 年第四季的 23% 和上一季的 21% 下降。

Non-GAAP operating expenses on a year-on-year basis decreased 18%. The decrease in both absolute renminbi amount and as a percentage of revenue of OpEx was mainly due to a reduction in sales and marketing expenses and, to a lesser degree, optimization in personnel costs. Non-GAAP operating expenses decreased 5% sequentially. This is attributable to the decrease in marketing expenses, which offset the increase in seasonal expenses such as year-end bonus.

非美國通用會計準則營業費用較去年同期下降18%。營運支出絕對人民幣金額及佔收入比例的下降，主要是因為銷售及行銷費用的減少，以及人員成本的最佳化（較小程度）。非公認會計準則營業費用較上月下降 5%。這是由於行銷費用的減少，抵消了年終獎金等季節性費用的增加。

Now briefly on income tax expenses. Total income tax expenses was RMB 183.8 million for the quarter with an effective tax rate of 25%. In Q4, the company accrued withholding income tax of RMB 53.5 million, which is 10% of undistributed profits generated by our WOFE. Without a withholding tax, our estimated non-GAAP effective tax rate was around 18% in the fourth quarter.

現在簡單談談所得稅費用。本季總所得稅費用為人民幣1.838億元，有效稅率為25%。第四季度，公司預扣所得稅5,350萬元，占我公司外商獨資企業未分配利潤的10%。如果沒有預扣稅，我們估計第四季的非公認會計準則有效稅率約為 18%。

Now turning to balance sheet and cash flow items. As of December 31, 2023, Hello Group's cash, cash equivalents, short-term deposits, long-term deposits, short-term investments and restricted cash totaled RMB 13.48 billion compared to RMB 13.40 billion as of December 31, 2022. Net cash provided by operating activities in the fourth quarter 2023 was RMB 415.9 million.

現在轉向資產負債表和現金流量項目。截至2023年12月31日，哈嘍集團的現金、現金等價物、短期存款、長期存款、短期投資及受限現金總計人民幣134.8億元，而截至2022年12月31日為人民幣134.0億元。

Lastly, on business outlook. We estimated our first quarter revenue to come in the range from RMB 2.45 billion to RMB 2.55 billion, representing a decrease of 13.1% to 9.5% year-on-year or a decrease of 18.4% to 15.1% quarter-over-quarter.

最後，關於商業前景。我們預期第一季營業收入在人民幣24.5億元至人民幣25.5億元之間，年減13.1%至9.5%，季減18.4%至15.1%。

At segment level, for Q1 2024 on a year-over-year basis, we expect Momo revenue to decrease around 10% and due to our operational plan to further reduce revenue-oriented competition events in order to better manage regulatory risk and, to a lesser degree, the continuous macro headwind. On the Tantan side, we expect revenue to decrease mid-twenties due to our operational adjustment to deemphasize less dating-centric live streaming service and, to a lesser degree, VAS revenue decrease caused by decline in user base.

在細分市場層面，我們預計 2024 年第一季陌陌收入將年減 10% 左右，這是由於我們的營運計畫將進一步減少以收入為導向的競賽活動，以便更好地管理監管風險，並在較小程度上管理持續的宏觀逆風。就探探方面而言，我們預計收入將下降 25% 左右，原因是我們的營運調整不再強調以約會為中心的直播服務，而且由於用戶群下降導致增值服務收入下降（幅度較小）。

Please be mindful that this forecast represents the company's current and preliminary view on the market and operational conditions, operational conditions, which are subject to changes. That concluded our preparation of today's discussion. With that, let me turn the call back to Ashley to start Q&A.

請注意，此預測代表公司對市場和營運狀況的當前和初步看法，營運條件可能會發生變化。今天討論的準備工作到此結束。說完這些，讓我將電話轉回給 Ashley 開始問答環節。

(Operator Instructions) So operator, we're ready for questions.

(操作員指示) 操作員，我們已準備好回答問題。

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

(操作員指示)您的第一個問題來自中金公司的張學清。

(foreign language) My question is about overseas business. Could management share with us your overseas business key strategy and any financial guidance for the next 2 to 3 years?

（外語）我的問題是關於海外業務的。管理階層能否與我們分享您海外業務的關鍵策略以及未來 2 至 3 年的財務指引？

[interpreted] I think our team's main competitive advantage in the overseas market lies in the social space and value-added services based on social and pan-entertainment products. Our domestic team has very comprehensive capabilities in social product innovation, monetization and profitability. Soulchill is a good example of how these capabilities can be replicated overseas.

【解讀】我覺得我們團隊在海外市場的主要競爭優勢在於基於社交和泛娛樂產品的社交空間和加值服務。我們國內的團隊在社群產品創新、變現、獲利能力方面有非常全面的能力。 Soulchill 就是這些能力如何在海外複製的一個很好的例子。

At present, Soulchill still has a visible room for improvement in 3 aspects. Number one, tap deeper into the monetization potentials in its existing market; number two, add video-based social experiences; and number three, expand into new market. Based on the current trend, we believe Soulchill will continue to deliver decent revenue and profit growth this year.

目前，Soulchill在3個方面仍有明顯的進步空間。第一，深入挖掘現有市場的獲利潛力；第二，增加以視訊為基礎的社交體驗；第三，拓展新市場。根據目前的趨勢，我們相信 Soulchill 今年將繼續實現可觀的營收和利潤成長。

And the growth will come from several directions. First, considering we're not doing a very good job in terms of localization, especially compared to our peers who have been in the overseas pan-entertainment industry for many years, we're still far from good. Currently, we are accelerating our localization process, which is crucial for user experience and continued growth.

並且成長將來自多個方向。第一，我們在在地化方面做的還不是太好，特別是和在海外泛娛樂產業深耕多年的同行相比，我們還有很大的差距。目前，我們正在加快本地化進程，這對於用戶體驗和持續成長至關重要。

Second, with limited staff and other resources, Soulchill's entire growth in the past came from audio-based social experiences. However, Momo has strong capabilities in building video-based interactive features that can be replicated in overseas products, and we will invest more resources in this area this year.

其次，由於員工和其他資源有限，Soulchill 過去的整個成長都來自基於音訊的社交體驗。但陌陌在打造基於視訊的互動功能方面有很強的能力，可以在海外產品中複製，今年我們會在這個方面投入更多資源。

And third, we will expand our services to the GCC countries in the Middle East and other countries. And in addition to Soulchill, we also launched several new products in the past year, one of which is doing quite well. We will try to ramp up its investment in the second half of this year.

第三，我們將把服務拓展到中東海灣合作委員會國家及其他國家。除了Soulchill之外，我們在去年還推出了幾款新產品，其中有一款表現相當不錯。我們將爭取在今年下半年加強投資。

In addition, we believe that dating services have a lot of room for growth in Asia and overseas Chinese communities. In the past, we have been trying to explore effective ways to drive growth but encountered many pitfalls. We lack to sustain an effective resource investments, and most importantly, we didn't do much in terms of localization.

此外，我們認為約會服務在亞洲和海外華人社區還有很大的成長空間。過去，我們一直在探索推動成長的有效途徑，但遇到了許多陷阱。我們缺乏持續有效的資源投入，最重要的是我們在在地化方面做得不夠。

Nevertheless, Tantan is still a very mainstream and important dating product in Asia, especially in the Chinese communities. And Momo also has established a solid foundation among overseas Chinese. We should better make use of this asset to tap its growth potential. This year, we will step up our efforts in the dating space to enhance overseas user experience and increase our overseas market share.

儘管如此，探探在亞洲，尤其是在華人社區仍然是一款非常主流和重要的約會產品。而陌陌在海外華人中也建立了深厚的基礎。我們應該更好地利用這項資產，挖掘其成長潛力。今年我們會在交友領域加大力度，提升海外用戶體驗，擴大海外市場佔有率。

Regarding resource allocation for 2024, we plan to greatly tilt overseas in terms of human resources and capital allocation so as to accelerate localization. Around the end of last year, we adjusted staff in each business line and transferred some top product operations and technical talent to new endeavors in order to strengthen the support for overseas team, and the budget allocation was also tilted towards our overseas businesses. This approach will enable us to bear fruit in the Middle East market while accelerating our efforts to explore new regions and new products. As for the revenue and profit guidance, I will leave it to Cathy.

2024年的資源分配方面，我們計畫在人力資源、資金配置上，大幅向海外傾斜，加速在地化。去年年底左右，我們對各業務線進行了人員調整，將一些頂尖的產品運營和技術人才調往新的業務領域，加強對海外團隊的支持，預算分配也向海外業務傾斜。這項做法將使我們在中東市場取得成果，同時加快探索新地區和新產品的力道。至於收入和利潤預測，我將交給 Cathy 決定。

Okay. Revenue and profit expectations. I'll try to look at this both from a near-term perspective and a longer-term perspective. For -- if you look at the near term for 2024, as Tang Yan said, Soulchill is still going to be the primary driver of our overseas revenues and profit growth. If we do a decent job in the 3 areas that Tang Yan mentioned, namely beefing up local operations, expanding to video service and diversifying to other regions, we should be able to maintain similar growth rate as we saw in 2023 in terms of top line.

好的。收入和利潤預期。我將嘗試從近期和長期兩個角度來看待這個問題。如果你放眼 2024 年的短期前景，正如唐岩所說，Soulchill 仍將成為我們海外收入和利潤成長的主要驅動力。如果我們在唐岩提到的三個方面做得很好，即加強本地營運、擴展視訊服務和向其他地區多元化發展，我們應該能夠保持與 2023 年類似的營收成長率。

Profit wise, I think we're still going to be growing pretty meaningfully. However, because Soulchill is still at an early stage of development and we are currently seeing a lot of growth opportunities. So if its ROI makes sense, we're going to be very flexible in terms of how much of the incremental revenue we would invest back to pursue higher growth. In other words, I think we're going to continue to see steady growth at bottom line, but in terms of magnitude of the profit growth in 2024, it is secondary to top line and user growth.

從利潤方面來看，我認為我們仍將實現相當可觀的成長。然而，由於 Soulchill 仍處於發展初期，我們目前看到許多成長機會。因此，如果投資回報率合理，我們將非常靈活地決定將多少增量收入重新投資於追求更高的成長。換句話說，我認為我們將繼續看到利潤的穩定成長，但就 2024 年利潤成長的幅度而言，它是次於收入和用戶成長的。

Now for a more longer-term point of view, if we take a 3-year perspective, we have an internal goal that we would like overseas revenue to take up a very sizable portion of Hello Group's top line. Obviously, to get there, Soulchill needs to be able to continue to grow. That's needless to say. In addition to Soulchill, we have to achieve decent level of success in building other products and in other parts of the world.

現在從更長遠的角度來看，如果我們以 3 年為視角，我們的內部目標是希望海外收入佔據 Hello Group 營收的很大一部分。顯然，要實現這一目標，Soulchill 需要繼續發展。這是不用說的。除了 Soulchill 之外，我們還必須在其他產品的開發和世界其他地區取得相當大的成功。

Tang Yan, I think, already laid out a few areas we're going to be pushing very hard to grow organically. I would like to stress that over the past few years, we have also built up a very strong balance sheet. If we see good opportunities out there, we can certainly leverage our cash position to supplement the growth that we can achieve organically. So hopefully, that addresses your question.

我認為，唐岩已經列出了我們將大力推動有機成長的幾個領域。我想強調的是，在過去幾年裡，我們也建立了非常強勁的資產負債表。如果我們看到好的機會，我們當然可以利用我們的現金狀況來補充我們可以有機實現的成長。希望這能解答您的問題。

The next question is from Henry Sun from JPMorgan.

下一個問題來自摩根大通的 Henry Sun。

(foreign language) The question is about shareholder value in China. We noticed that the dividend payout ratio has decreased from 50% last year to around 30% this year despite the solid profit growth.

（外語）問題是關於中國的股東價值。我們注意到，儘管利潤成長穩健，但股息率已從去年的50%下降到今年的30%左右。

So could management shed some light on the rationale behind the dividend payout reduction? Is there any consideration for a regular dividend plan in the future? And lastly, could management share your perspective on the buyback execution plan moving forward?

那麼管理階層能否解釋一下減少股利支付背後的原因呢？未來有沒有考慮定期分紅計畫？最後，管理階層能否分享您對未來回購執行計畫的看法？

Okay. I guess that's the question. I will take that question. So first, on the payout ratio question. When we think about how much profit we're going to pay out, we compare our offshore cash reserves and the potential offshore capital demand. As Tang Yan I think mentioned earlier, the biggest investment area for the coming couple of years is overseas expansion.

好的。我想這就是問題所在。我將回答這個問題。首先，關於派息率的問題。當我們考慮要支付多少利潤時，我們會比較我們的離岸現金儲備和潛在的離岸資本需求。正如唐岩之前提到的，未來幾年最大的投資領域是海外擴張。

Whether we invest organically or through M&A, it might consume more offshore cash than the past few years. With the foreign exchange controls, I guess it makes more sense to try to be more conservative in terms of returning cash to shareholders through dividend payments. So that's the first reason.

無論我們是透過有機投資還是透過併購投資，它都可能消耗比過去幾年更多的海外現金。由於外匯管制，我認為在透過股利支付向股東返還現金方面採取更保守的做法更有意義。這是第一個原因。

The other factor that led to the decision to lower the payout ratio a little bit this year is that we considered our stock significantly undervalued at this point. With the stock trading below the net cash value, I believe it's more efficient to buyback versus paying cash dividend. So that's my response to payout ratio.

今年導致決定略微降低派息率的另一個因素是，我們認為我們的股票目前被嚴重低估了。當股票交易價格低於淨現金價值時，我認為回購比支付現金股利更有效率。這就是我對派息率的回應。

Is there a question about why not pay a revenue dividend or why not? Your regular dividend -- so, why not a regular dividend plan? We've been paying cash dividend for, I guess, the past 6 or 7 years in a row. We've said many times that if we continue to generate more excess cash than what we can effectively deploy, we will continue to return them to the shareholders, either through dividend or share repurchase.

有沒有疑問為什麼不支付收入股息或為什麼不支付？您的定期股息—那麼，為什麼不制定定期股息計劃呢？我想，我們已經連續 6 年或 7 年派發現金股息了。我們已多次表示，如果我們產生的剩餘現金繼續超過我們能夠有效部署的量，我們將繼續透過股利或股票回購的方式將其返還給股東。

So whether or not we have a more regular plan or not, we've already get the expectation right. At the same time, we're still seeing -- like we said before, we are still seeing many growth opportunities and investment areas. And without 100% flexibility in foreign exchange, it may not be too wise to be pinned down by a regular dividend payout ratio every year.

因此，無論我們是否有更常規的計劃，我們都已經正確地了解預期。同時，正如我們之前所說，我們仍然看到許多成長機會和投資領域。而且，如果外匯沒有 100% 的彈性，那麼每年受制於固定的股息支付率可能不是明智之舉。

I think I heard a question on how we plan to manage the repurchase program. I think from today's earnings release, you can see that we announced an extension of the share repurchase plan. That extension of the plan would allow us to purchase up to 200 million for the 2 years period from now onwards.

我想我聽到了一個關於我們計劃如何管理回購計劃的問題。我想從今天的收益報告中，你可以看到我們宣布了延長股票回購計畫。該計劃的延長將使我們能夠從現在起的兩年內購買最多 2 億支股票。

So like I said, we consider our stock at this point significantly undervalued and trading at net cash value. We're going to utilize that cash and take the opportunity to create more shareholder value, that's for sure. Hopefully that answers your question.

所以就像我說的，我們認為我們的股票目前被嚴重低估並且以淨現金價值交易。我們將利用這些現金並藉此機會創造更多的股東價值，這是肯定的。希望這能回答你的問題。

The next question is from Leo Chiang from Deutsche Bank.

下一個問題來自德意志銀行的 Leo Chiang。

(foreign language) My question is about core Momo. Could management share the business outlook of core Momo on both live broadcasting and VAS in 2024, how the current macro environment has impacted the spending for core users, and lastly, how to view the profit stability of the core Momo in 2024?

（外語）我的問題是關於核心Momo的。管理層能否分享 2024 年核心陌陌在直播和增值業務方面的業務前景，當前宏觀環境如何影響核心用戶的支出，以及最後，如何看待 2024 年核心陌陌的利潤穩定性？

[interpreted] As Sic mentioned earlier, our goal for the Momo app is to maintain the productivity of the cash cow business within a healthy social ecosystem. Given the uncertainties in the current market environment and consumer spending sentiment, in order to ensure users' social experience and prevent broadcasters and agencies from adopting a radical modernization approach to obtain competition event-related bonuses, we plan to reduce the scale of bonuses to deemphasize our large-scale competition events in live streaming and value-added services that may lead to periodic revenue surge.

[解釋] 正如 Sic 之前提到的，我們對陌陌應用程式的目標是在健康的社會生態系統中保持搖錢樹業務的生產力。鑑於目前市場環境及消費者支出情緒的不確定性，為確保用戶的社交體驗，並防止廣播公司和代理商採取激進的現代化方式獲取與賽事相關的獎金，我們計劃減少獎金規模，以淡化我們在直播和增值服務中可能導致階段性收入激增的大型賽事。

Such an arrangement will undoubtedly cause a decline in competition-related revenue, but we believe it will play a positive role in ensuring the social experience, engagement and retention of paying users, especially of those high-paying users. On the product and operation front, we will better leverage monetization opportunities brought by Momo's social attributes, and enrich gamified features and interactive tools for the top and middle cohort users to drive organic revenue growth.

這樣的安排無疑會造成賽事相關收入的下滑，但我們相信對於保障付費用戶，特別是高付費用戶的社交體驗、參與度和留存會起到積極的作用。在產品和營運方面，我們將更能利用陌陌社交屬性帶來的獲利機會，並豐富針對中高階用戶群的遊戲化功能和互動工具，以推動有機收入成長。

Momo is a mature brand with a 12-year history, but our product team has always been passionate about product innovation. As a result, over the past few years, Momo has demonstrated outstanding stability in terms of user traffic and profitability. Although the challenges in the current external environment are still tough, we believe that as long as we stabilize our basic social fundamentals and continue to make efforts to progress with time, Momo will continue to be a healthy and stable cash cow for the foreseeable future, providing a solid foundation for the group's future expansion. As for the specific financial-related guidance for '24, Cathy will answer that.

Momo是一個擁有12年歷史的成熟品牌，但我們的產品團隊一直對產品創新充滿熱情。因此，過去幾年來，陌陌在用戶流量和獲利能力方面表現出了出色的穩定性。雖然目前外圍環境挑戰依然嚴峻，但我們相信，只要穩住社會基本面，繼續努力、與時俱進，陌陌在可見的未來仍將是集團健康穩定的搖錢樹，為集團未來拓展提供堅實基礎。至於 2024 年的具體財務相關指導，Cathy 會回答。

Okay. I guess, in her prepared remarks, Sic has already spelled out the priorities on management's agenda for 2024. Let me try to translate them into the impact on financials. When we say Momo segments, that segment actually includes the cash cow business of the old Momo app and also the revenue generated by the new applications, mainly Soulchill.

好的。我想，Sic 在她準備好的演講中已經闡述了管理層 2024 年議程的優先事項。當我們說到陌陌細分市場時，該細分市場實際上包括舊陌陌應用的搖錢樹業務以及新應用程式（主要是 Soulchill）產生的收入。

For the cash cow business, one of the key themes is to -- this year is significantly deemphasized on the promotional events and the competition for regulatory reasons. And that would involve changing the operational strategies and bonus structure for both live streaming and value-added service business. And that could significantly lower the event and competition-driven tipping revenues. However, the nonevent and more organic part of the revenue will increase.

對於搖錢樹業務來說，關鍵主題之一是——由於監管原因，今年顯然不再強調促銷活動和競爭。這將涉及改變直播和增值服務業務的營運策略和獎金結構。這可能會大幅降低活動和比賽帶來的小費收入。然而，收入中非事件性和更有機的部分將會增加。

In the near term, though, it's difficult for the organic part to make up for the event-driven revenue that we're going to lose. So I guess the top line for the cash cow business will continue to see some pressure on a Y-o-Y basis for the coming few quarters because of that operational -- that strategy changing operational policies. With regards to Soulchill and other new applications, we continue to see pretty strong growth momentum, which is going to partially offset the decline of the cash cow business.

不過，在短期內，有機部分很難彌補我們將要損失的事件驅動收入。因此，我猜測，由於這項營運策略改變了營運政策，未來幾個季度，搖錢樹業務的營收將繼續面臨同比壓力。關於Soulchill和其他新應用程序，我們繼續看到相當強勁的成長勢頭，這將部分抵消搖錢樹業務的下滑。

So if you put the different pieces together and try to get a more quantitative outlook, this is probably what I can say at this point. We've already given our Q1 guidance. As you can see, at midpoint, we're seeing somewhere around 10% year-over-year decrease for Momo segment. In it, I guess, the cash cow is declining mid-teens percentage, offset by a 40-something percent Y-o-Y growth from the new applications.

因此，如果你將不同的部分放在一起並嘗試獲得更定量的視角，這可能是我現在能說的。我們已經給了第一季的指引。如你所見，在中點，我們看到陌陌部門的同比下降約為 10%。我猜，其中的搖錢樹的百分比正在下降百分之十幾，但新應用程式帶來的 40% 以上的同比增長抵消了這一下降。

I don't have enough visibility to pin down the rest of the year with very reliable numbers, but I guess we can use Q1 as a good basis for the projection into the rest few quarters of the year. And how do we move from Q1 will heavily hinge upon several factors, namely the macro, the regulatory environment and how well we execute our overseas strategy. So I guess that's what I can say at this point, and we'll keep you updated as the year progresses.

我沒有足夠的洞察力來用非常可靠的數字來預測今年剩餘時間的情況，但我想我們可以將第一季作為預測今年剩餘幾季的良好基礎。而我們如何從第一季開始發展將在很大程度上取決於幾個因素，即宏觀、監管環境以及我們如何執行我們的海外策略。所以我想這就是我現在能說的，我們會隨著時間的推移向您通報最新情況。

The final question is from Raphael Chen from BOCI Research.

最後一個問題來自中銀國際研究部的Raphael Chen。

(foreign language) I have 2 questions. First one is regarding Tantan. Could management share the latest user trend, marketing and the monetization strategies in 2024? And any guidance on its revenue and profit this year.

（外語）我有 2 個問題。第一個是關於探探的。管理階層能否分享 2024 年的最新用戶趨勢、行銷和貨幣化策略？以及對其今年收入和利潤的任何預測。

Secondly, could management mention -- I see management mentioned new products related to Apple Vision Pro in the prepared remarks. Could we have more insights on the product details? Also considering company plans to ramp up exploring new business opportunities, how do we evaluate the margin trend in 2024?

其次，管理層能否提一下——我看到管理層在準備好的評論中提到了與 Apple Vision Pro 相關的新產品。我們能否對產品細節有更多了解？此外，考慮到公司計劃加強探索新商機的力度，我們如何評估 2024 年的利潤趨勢？

[interpreted] At the beginning of this year, our user base continued to be under pressure from factors such as the cold wave, further reduction in channel investment and the Chinese New Year holiday. And after the holiday, as the external negative factors subsided, Tantan's new user engagement and new user paying ratio started to bottom out and stabilize.

[解讀]今年開始，受到寒流來襲、通路投入進一步減少、春節假期等因素影響，我們的用戶規模持續承壓。而假期過後，隨著外在負面因素的消退，探探的新增用戶參與度和新增用戶付費率開始觸底穩定。

Our goal for Tantan this year is to improve the core dating experience. And on top of that, build an effective and efficient business model that drives some profitable growth. In order to improve the core dating experience, we need to constantly innovate use cases and explore dating scenarios around the core dating theme, provide more tailor-made services for users in different markets, and maintain a healthy, stable ecosystem.

我們對探探今年的目標是改善核心的約會體驗。最重要的是，建立有效且高效的商業模式，推動獲利成長。為了提升核心約會體驗，我們需要圍繞核心約會主題不斷創新用例、探索約會場景，為不同市場的用戶提供更多客製化服務，維護健康、穩定的生態系統。

Achieving profitable growth depends on business model innovation and channel ROI improvement. Last year, we achieved good results in reducing unit acquisition costs. And this year, we will continue to improve our monetization capability based on the core dating experience.

實現獲利成長有賴商業模式創新和通路ROI的提升。去年我們在降低單位採購成本方面取得了良好的成績。今年，我們也將基於核心約會體驗繼續提升我們的獲利能力。

For example, around the Chinese New Year holiday, we launched a pilot campaign for our membership product that is higher than the Black Gold membership. I received a very positive feedback from the first batch of high-paying users. Through this new premium membership, we hope to, first, unleash the spending power of the existing high-end members; and second, capture the dating needs of the top cohort paying users from live streaming.

例如在春節前後，我們針對黑金會員以上的會員產品進行了試點活動。我收到了第一批高付費用戶的非常正面的回饋。透過這個新的高級會員，我們希望第一，釋放現有高端會員的消費能力；二是透過直播捕捉付費用戶的頭部群體約會需求。

Meanwhile, we will also leverage algorithm to improve the basic member experience and drive paying ratio growth. If, through these efforts, ARPU can continue to improve without compromising user experience and retention, we will truly realize a positive business cycle and achieve profitable growth by increasing marketing investment. For other financial-related questions, Cathy will answer them.

同時，我們也將利用演算法改善基礎會員體驗，推動付費率成長。如果透過這些努力，ARPU能夠持續提升，並且不會損害用戶體驗和留存率，那麼我們將真正實現業務的正循環，並透過加大行銷投入實現獲利成長。對於其他與財務相關的問題，Cathy 將會進行解答。

So as Sic and Tang Yan mentioned, the focus of Tantan this year can be really broken down into 2 priorities. One is to continue to improve the core dating experience. In the past couple of years, we try to diversify into live streaming and the more community-driven entertainment experience, such as chat room experience.

所以正如Sic和唐岩所提到的，探探今年的重點其實可以分成兩個重點。一是繼續提升核心約會體驗。在過去幾年裡，我們嘗試向直播和更多社群驅動的娛樂體驗（例如聊天室體驗）進行多元化發展。

Now we can conclude that although these efforts did contribute meaningfully to ARPU, they are not very compatible to dating experience at this point, and therefore, we will increasingly pivot away from these more entertainment-oriented experiences. And the other focus for Tantan this year is, of course, to continue to improve paying user experience so we can drive a higher ARPU.

現在我們可以得出結論，雖然這些努力確實對 ARPU 做出了有意義的貢獻，但它們與目前的約會體驗還不是很兼容，因此，我們將逐漸遠離這些更以娛樂為導向的體驗。當然，探探今年的另一個重點是繼續改善付費用戶體驗，以提高我們的 ARPU。

If ARPU and user retention continue to improve to the point where ROI turns positive, we will definitely ramp up marketing to drive user and top line growth. That's when we are going to see what we call a profitable growth cycle. However, before we hit that tipping point, it's possible that we will continue to see top line trending either flat or slightly under a bit of pressure as we continue to scale back from live streaming and the chat room experience.

如果 ARPU 和用戶保留率持續提高，且 ROI 變成正值，我們肯定會加強行銷力度，以推動用戶和營收成長。那時我們將看到所謂的獲利成長週期。然而，在達到這個臨界點之前，由於我們繼續減少直播和聊天室體驗，我們可能會繼續看到營收趨勢持平或略微承壓。

However, if we are successful in reaching that tipping point and enter into a positive business cycle, as we described, we can see growth in both top line and bottom line. At this point, I would say investors probably still need to have more patience as we work our way to get there.

然而，如果我們成功達到那個臨界點並進入一個積極的商業週期，正如我們所描述的，我們就能看到營收和利潤都成長。在這一點上，我想說投資者可能仍需要更加耐心，我們正在努力實現這一目標。

[interpreted] With the continuous iteration of XR hardware, more and more new users are joining the XR virtual space. The development of hardware has broken through the limitations of social models in the mobile Internet era and has also brought new opportunity to us who are dedicated to the social space for the past decade.

[解讀]隨著XR硬體的不斷迭代，越來越多的新用戶加入XR虛擬空間。硬體的發展突破了行動互聯網時代社交模式的限制，也為十年來深耕社交領域的我們帶來了新的契機。

inSpaze users can create their own avatars and personalized space and invite Apple Vision Pro users around the world to have parties, play chess and have fun together. And inSpaze's built-in real-time translation function allows users of 12 major languages to communicate without barriers. Chatting over social or dinner party games makes getting together more fun for acquaintances who are thousands of miles apart, and it also helps break the ice for strangers in the open social space.

inSpaze用戶可以創造自己的個人資料和個人化空間，並邀請世界各地的Apple Vision Pro用戶一起聚會、下棋、玩樂。而inSpaze內建的即時翻譯功能可以讓12種主要語言的使用者無障礙地溝通。透過社交或聚餐遊戲聊天可以讓遠隔千里的熟人聚在一起變得更有趣，同時也有助於在開放的社交空間中打破陌生人之間的僵局。

We plan to roll out more use cases and gamified features based on localized users preference in different regions, and to make better use of technological innovation to break through the traditional social experience. For the investment budget for new endeavors and our overall margin trend, I will leave them to Cathy. Cathy, please.

我們計劃根據不同地區的在地化用戶偏好推出更多的用例和遊戲化功能，並更好地利用技術創新來突破傳統的社交體驗。對於新業務的投資預算和我們的整體利潤趨勢，我將交給 Cathy 決定。請叫我凱西。

Investment budget for new endeavors. Internally, we do have a budget for new endeavors, but at this point, we hesitate -- we will probably defer until later to answer that question with a more definite number because we want to keep the budget flexible at this point of time. If we see really good opportunities, we will invest a little bit more. If the ROI doesn't trend good, we will probably invest a little bit less. So it's really a quite flexible number that we're trying to put in there at the beginning of the year.

新事業的投資預算。在內部，我們確實有用於新項目的預算，但目前我們猶豫了——我們可能會推遲到以後再用更明確的數字來回答這個問題，因為我們希望在此時保持預算的靈活性。如果我們看到確實好的機會，我們就會增加投資。如果投資報酬率趨勢不太好，我們可能會少投資一點。因此，這實際上是一個相當靈活的數字，我們會在年初將其輸入其中。

On the margin question, I guess, this is a question about -- at a whole group level, I think for gross margin, it has remained relatively stable throughout 2023. With the largest cost driver, which is the payout ratio being stable, I'm currently not seeing any factor that could potentially change that trend one way or another in a very meaningful way.

關於利潤率問題，我想，這是一個關於——在整個集團層面的問題，我認為就毛利率而言，它在 2023 年一直保持相對穩定。

But there is this one thing that I would like to call out here, which might cause the margin to fluctuate a little bit. And that is that as revenue decreases, there could be some negative leverage on the infrastructure cost and also the personnel cost charging to the cost of sales line, which is going to pressure the gross margin a little bit, but we do not expect that to be very significant. So that's what we're seeing on the gross margin line.

但我想在這裡指出一件事，這可能會導致利潤率出現小幅波動。隨著收入的減少，基礎設施成本和人員成本可能會對銷售成本產生一些負面影響，這將對毛利率造成一定壓力，但我們預計這種影響不會很大。這就是我們在毛利率上看到的。

Operating expenses-wise, although we plan to substantially increase our investment in the new business, part of the increase will come at the expense of the old business, which won't be consuming as much resources.

就營運費用而言，雖然我們計劃大幅增加對新業務的投資，但部分成長將以犧牲舊業務為代價，因為舊業務不會消耗太多資源。

Now if we try to think about the operating margin on an ex Tantan basis, last year, I believe we delivered close to 23% adjusted operating margin. In Q1, the ex Tantan part is going to see a 9% to 10% year-over-year decrease at top line. And that level of top line decrease is obviously going to pressure the operating margin a little bit. But I would say from 19% to 20% is still a quite achievable range of adjusted operating margin for the ex Tantan part of the business.

現在，如果我們嘗試以探探為基礎來考慮營業利潤率，我相信去年我們實現了接近 23% 的調整後營業利潤率。第一季度，除探探之外的業務營收預計將年減 9% 至 10%。而這種程度的營業收入下降顯然會對營業利益率帶來一定壓力。但我想說，對於探探以外的業務而言，19%到20%的調整後營業利潤率仍然是相當可以實現的範圍。

I do not really have a margin number for the whole year. because of that flexibility that we talk about that we would like to maintain, especially for the new business. But in terms of how the operating margin is going to trend from Q1 onwards, I would say there are several factors to consider here. One is the overall top line improvement from Q1 onwards. Of course, that is heavily dependent on the overall macro and regulatory environment.

我實際上並沒有全年的利潤數字。因為我們談論的靈活性，我們希望保持這種靈活性，特別是對於新業務。但就第一季以來營業利潤率的趨勢而言，我認為有幾個因素需要考慮。一是從第一季開始整體營收有所改善。當然，這在很大程度上取決於整體的宏觀和監管環境。

And the second factor is how aggressive we are to cut down on cost. At this point, I do see some headroom to continue to cut on the old business part, but we do want to, like I said, maintain the flexibility to move the spending to new business if we see good ROI. So basically, that's my current thought on how the margin may play out for the whole year. I think, with that, handing back to Ashley for closing.

第二個因素是我們削減成本的力道有多大。在這一點上，我確實看到繼續削減舊業務部分的一些空間，但就像我說的那樣，如果我們看到良好的投資回報率，我們確實希望保持靈活性，將支出轉移到新業務上。所以基本上，這就是我目前對全年利潤率可能如何變化的想法。我想，就這樣把事情交還給 Ashley 來做結案。

I think that's it for today. Operator, we're ready to close.

我想今天就到此為止。接線員，我們準備結束通話了。

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了。感謝您的參與。您現在可以斷開連線。