NetEase Inc (NTES) 2013 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the NetEase Fourth Quarter 2013 Earnings Call (operator Instructions). This conference is being recorded today and at this time I'd like to turn the conference over to Brandi Piacente.

女士們、先生們，感謝你們的支持。歡迎參加網易2013年第四季業績電話會議（操作員說明）。今天會議正在錄製中，現在我想將會議交給 Brandi Piacente。

Please go ahead ma'am.

女士，請繼續。

Thank you operator. Please note the discussions today will contain forward looking statements relating to the future performance of the Company and are intended to qualify for the Safe Harbor from liability as established by the US Department Securities Litigation Reform Act.

謝謝接線生。請注意，今天的討論將包含與公司未來業績有關的前瞻性陳述，並旨在符合美國證券訴訟改革法案所規定的免於承擔責任的安全港條款。

Past statements are not guaranteed for future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the Company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion.

過去的聲明並不能保證未來的表現，並且受某些風險和不確定性、假設和其他因素的影響。其中一些風險超出了公司的控制範圍，可能導致實際結果與今天的新聞稿和討論中提到的結果大不相同。

A general discussion of the risk factors that could affect NetEase's business and financial results is included in certain filings of the Company with the Securities and Exchange Commission, including its annual report on Form 20-F.

有關可能影響網易業務和財務業績的風險因素的一般性討論包含在公司向美國證券交易委員會提交的某些文件中，包括其 20-F 表年度報告。

The Company does not undertake any allegation to update this forward looking information except as required by law. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on the NetEase corporate website at ir.netease.com.

除法律要求外，本公司不承擔更新此前瞻性資訊的任何指控。提醒一下，本次會議正在錄製中。此外，本次電話會議的網路直播將在網易公司網站ir.netease.com上提供。

I will now turn the conference call over to Mr Onward Choi, Acting Chief Financial Officer, who will read (inaudible) on behalf of Mr William Ding, Chief Executive Officer of NetEase.

現在，我將電話會議交給代理財務長蔡安華先生，他將代表網易執行長丁磊先生宣讀（聽不清楚）。

Okay, thank you Brandi. Before I begin, please note that for the purposes of this discussion all percentages are based on RMB. 2013 was another dynamic year of growth for NetEase. Through the year we made a number of advancements that diversify and expand our range amongst China's thriving internet community.

好的，謝謝你，布蘭迪。在我開始之前，請注意，為了本次討論的目的，所有百分比均基於人民幣。2013年對網易來說又是蓬勃發展的一年。在這一年中，我們取得了許多進步，使我們在中國蓬勃發展的網路社群中的業務範圍更加多樣化和擴大。

Our dedication to quality and innovations continue to play a critical role in our success. During the year we introduced a host of outstanding new games, content and services to our loyal and growing community, whilst simultaneously strengthening our financial position. Our total revenue increased by 16.6% in 2013, led by a 14% increase in online game revenues and 28.8% growth in advertising services revenue. We completed the year with strong financial results, with total fourth revenues growing by 11.1% year-over-year and 2.8% quarter-over-quarter.

我們對品質和創新的執著繼續在我們的成功中發揮關鍵作用。在這一年中，我們向我們忠誠且不斷成長的社群推出了一系列出色的新遊戲、內容和服務，同時增強了我們的財務狀況。2013年，我們的總收入成長了16.6%，其中線上遊戲收入成長了14%，廣告服務收入成長了28.8%。我們以強勁的財務表現結束了這一年度，第四季總收入年增 11.1%，季增 2.8%。

During the year we introduced comprehensive upgrades for some of our most popular games, namely Fantasy Westward Journey, Westward Journey Online II and Ghost. We also launched several online games in new genres to further diversify our portfolio. In addition we broadened our reach among China's rapidly growing mobile population by entering the mobile gaming and social networking markets.

年內，我們對幾款最受歡迎的遊戲《夢幻西遊》、《大話西遊Online II》和《倩女幽魂》進行了全面升級。我們也推出了幾款新型態的線上遊戲，進一步豐富我們的產品組合。此外，我們也透過進入手機遊戲和社群網路市場，擴大了對中國快速成長的手機用戶的覆蓋範圍。

Taking a look at our online game portfolio, Kung Fu Master, New Westward Journey Online II, Heroes of Tang Dynasty II and Ghost II all delivered standout performances in 2013. Our games are known for their ability to withstand the tests of time. Much of this success can be attributed to our advanced technology, R&D process and our ability to continually optimize of our products and services.

綜觀我們的網路遊戲產品組合，《功夫大師》、《新西遊記Online II》、《大唐英雄傳II》和《倩女幽魂II》在 2013 年均表現突出。我們的遊戲以經得起時間考驗而聞名。這項成功很大程度上歸功於我們先進的技術、研發流程以及不斷優化產品和服務的能力。

During the fourth quarter Fantasy Westward Journey II celebrated its 10th year anniversary. Since the exciting comprehensive upgrade of this game and the launch of the mobile version in July, both the mobile and PC versions have demonstrated outstanding performances that are indicative of the resilience of our self-developed games.

第四季度，夢幻西遊2迎來了十週年紀念。遊戲自7月全面升級並推出手遊版本以來，無論是手遊或PC端都展現出了優異的表現，充分展現了我們自主研發遊戲的韌性。

In the fourth quarter, we also launched new expansion packs for Kung Fu Master, Heroes of Tang Dynasty II, Tianxia III and Legend of Fairy. One of our newest game additions is Legend of Tibet. This game's performance has been in line with and Burst Sky in the fourth quarter was in-line with our expectations since its small scale commercial launch in November, and we plan to cultivate additional users in 2014.

第四季我們也推出了《功夫大師》、《大唐英雄傳2》、《天下三國》、《仙俠傳》等新資料片。我們最新加入的遊戲之一是《西藏傳奇》。自11月小規模商業發布以來，這款遊戲的表現一直符合我們的預期，第四季的Burst Sky也符合我們的預期，我們計劃在2014年培養更多用戶。

During the fourth quarter we also launched Burst Sky. This new game is a western fantasy style, side scrolling shooter game and we expect this game to be highly appealing to overseas players. We are currently are looking for opportunities to launch Burst Sky in overseas markets. At the same time, we will continue to grow the user pays for this game in mainland China.

第四季我們也推出了Burst Sky。這款新遊戲是一款西方奇幻風格的橫向捲軸射擊遊戲，我們預計這款遊戲將對海外玩家具有強大的吸引力。我們目前正在尋找機會在海外市場推出Burst Sky。同時，我們將繼續增加中國大陸地區該遊戲的用戶付費。

Growth in China's online gaming market continues to grow at a steady pace and our strategy to broaden and diversify our portfolio through new game introductions continues to attract new users to our self-developing games.

中國網路遊戲市場持續穩定成長，我們透過推出新遊戲來擴大和多樣化產品組合的策略繼續為我們的自主研發遊戲吸引新用戶。

Since the beginning of the year we have already introduced new expansion packs for Fantasy Western Journey II, new Fly for Fun and new Western Journey Online III. In addition we launched open beta testing in mainland China of Blizzard Entertainment's Hearthstone Heroes of Warcraft in January, and this free-to-play digital strategy card game has been highly popular with players.

自今年年初以來，我們已經推出了《夢幻西遊II》、《新飛翔樂趣》和《新西遊Online III》的新資料片。此外，我們於1月份在中國大陸啟動了暴雪娛樂《爐石戰記：魔獸英雄傳》的公開測試，這款免費數位策略卡牌遊戲受到了玩家的高度歡迎。

Players continue to show great enthusiasm for Tianxia III and Kung Fu Master. To capitalize on this popularity we plan to introduce new expansion packs for these two games in the first half of the 2014. We are particularly excited about two of our newer games under development. Crisis 2015, NetEase's premier first person shooter game, which we plan to release later this year, and Revelation, our 3-D epic fantasy MMORPG, which we expect to launch in an initial small-group testing later this year.

玩家們對《天下三》和《功夫大師》繼續展現極大的熱情。為了利用這一受歡迎程度，我們計劃在 2014 年上半年推出這兩款遊戲的新擴充包。我們對正在開發的兩款新遊戲感到特別興奮。網易的首款第一人稱射擊遊戲《危機2015》計劃於今年晚些時候發布，而我們的 3D 史詩奇幻 MMORPG《天諭》預計將於今年晚些時候在初步小規模測試中推出。

NetEase has long been a leader in China's online game market and we are pleased to be augmenting the success of our online games with our mobile initiatives. Having added a mobile games phase in 2013 we now have three mobile games on the market. As the year progresses we expect to launch a number of new mobile games. In addition to new games we plan to introduce mobile versions of our existing and more popular online games so that our users can enjoy our top quality games through both PC and mobile platforms.

網易長期以來一直是中國網路遊戲市場的領導者，我們很高興能夠透過行動遊戲計畫來擴大我們的網路遊戲的成功。自 2013 年增加手機遊戲階段以來，我們目前在市場上有三款手機遊戲。隨著時間的推移，我們預計將推出一些新的手機遊戲。除了新遊戲外，我們還計劃推出現有且更受歡迎的線上遊戲的行動版本，以便我們的用戶可以透過 PC 和行動平台享受我們的頂級遊戲。

Turning to our advertising services, we are supporting our advancement in advertising services with a strong pipeline of mobile applications that augment our comprehensive and growing mobile portfolio.

談到我們的廣告服務，我們透過強大的行動應用程式管道支援我們在廣告服務方面的進步，這些應用程式增強了我們全面且不斷增長的行動產品組合。

Our current applications are doing well and as of December 31, 2013 we have more than 200 million installations of our leading Mobile News application. To further build on the success of our mobile initiatives, we are planning to introduce several new mobile applications later this year that further extend our mobile range.

我們目前的應用程式運作良好，截至 2013 年 12 月 31 日，我們領先的行動新聞應用程式的安裝量已超過 2 億次。為了進一步鞏固我們行動計劃的成功，我們計劃在今年稍後推出幾款新的行動應用程序，以進一步擴展我們的行動範圍。

The success of our mobile applications is creating an additional draw for our advertisers and for the fourth quarter our advertising services revenue increased by 19.9% quarter-over-quarter and 38% year-over-year, primarily driven by the automobile, internet services, financial services and real estate sectors.

我們的行動應用程式的成功為我們的廣告商創造了額外的吸引力，第四季度我們的廣告服務收入環比增長 19.9%，同比增長 38%，主要受到汽車、互聯網服務、金融服務和房地產行業的推動。

The introduction of YiChat has also been an exciting new endeavor for NetEase. YiChat marks our entry into the mobile networking space and we are making substantial inroads with users. This application continues to gain traction in China's social networking market and we are reviewing areas in which we can further improve this product for our users, to make it even more attractive and fully optimize its capability.

易信的推出對於網易來說也是一個令人興奮的新嘗試。易信標誌著我們進入行動網路領域，我們正在大力發展用戶。該應用程式在中國社交網路市場上持續受到關注，我們正在審查可以進一步為用戶改進該產品的領域，以使其更具吸引力並充分優化其功能。

We are satisfied with the ongoing popularity of YiChat and we expect to continue to grow this user base as we add new features, such as games and payment solutions.

我們對易信持續受到歡迎感到滿意，並期望隨著我們添加遊戲和支付解決方案等新功能，繼續擴大用戶群。

During the fourth quarter, we made a number of enhancements to optimize the features of our popular mobile applications and email services with a positive response from our community. For example, we integrated our email services with YiChat with each step that was taken to increase the quality and functionalities of our products and services, we are attracting more users and, as of December 31, 2013, we have approximately 620 million registered email users.

在第四季度，我們做出了許多改進，優化了我們流行的行動應用程式和電子郵件服務的功能，並得到了社區的積極回應。例如，我們將電子郵件服務與易信整合，隨著我們採取的每項措施來提高產品和服務的品質和功能，我們正在吸引更多的用戶，截至 2013 年 12 月 31 日，我們擁有約 6.2 億註冊電子郵件用戶。

Looking at the year ahead, we are off to a solid start. We plan to continue to diversify and optimize our gain and services across our PC and mobile offerings. This multiplatformed approach enables us to reach a broader audience. As we introduce new online and mobile games and contents across mainland China we will simultaneously continue developing our social networking platform and further enhance our global applications portfolio.

展望新的一年，我們已經有了一個好的開始。我們計劃繼續多樣化和優化我們的 PC 和行動產品的收益和服務。這種多平台方法使我們能夠接觸到更廣泛的受眾。當我們在中國大陸推出新的網路和手機遊戲和內容時，我們將同時繼續開發我們的社交網路平台並進一步增強我們的全球應用程式組合。

Our international endeavors are also at the forefront of our growth. As we explore options in the overseas online game market we see opportunities to expand our geographical footprints. Through the combinations of these assets we can continue to deliver the highest quality content and service to our dedicated community while demonstrating additional growth across our traditional and mobile, internet business lines.

我們的國際化努力也處於成長的最前線。當我們探索海外網路遊戲市場的選擇時，我們看到了擴大地理覆蓋範圍的機會。透過這些資產的組合，我們可以繼續為我們忠實的社區提供最高品質的內容和服務，同時在我們的傳統和行動網路業務線上實現額外的成長。

In addition we are pleased to announce that our Board of Directors has approved an earning cash dividends of $1.41 per ADS. We are grateful for the support of our shareholders and our earnings dividend is one of the ways in which we can improve shareholders returns as we continue to increase the value of our Company. Also the Board has approved a new $100 million share repurchase program.

此外，我們很高興地宣布，我們的董事會已批准每股 ADS 1.41 美元的現金股利。我們感謝股東的支持，獲利股利是我們在不斷提高公司價值的同時提高股東回報的方式之一。董事會也批准了一項新的 1 億美元股票回購計畫。

This concludes the earning update. Now I will provide a review of our fourth quarter and fiscal year 2013 financial results. I will primarily focus on the discussions of margins and expense (inaudible) along with net profit.

收益更新到此結束。現在我將回顧我們2013年第四季和財年的財務表現。我將主要關注利潤和費用（聽不清楚）以及淨利潤的討論。

First we will look at the fourth quarter. Total sales tax for the fourth quarter of 2013 were RMB162.7 million or $26.9 million, compared to RMB157.7 million and RMB55.8 million for the preceding quarter and the fourth quarter of 2012, respectively. The year-over-year increase in sales taxes was mainly due to a change in the tax rules in China, which resulted in our online game revenues gradually becoming subject to value added tax instead of business tax during 2013.

首先我們來看看第四季。2013 年第四季銷售稅總額為 1.627 億元人民幣（2,690 萬美元），上一季和去年同期分別為 1.577 億元人民幣和 5,580 萬美元。銷售稅年成長主要是由於中國稅法的變化，導致我們的網路遊戲收入在 2013 年逐漸由營業稅變為增值稅。

This change in tax rules did not have a significant impact on gross profit from our online game services business segment as the increase in value added tax was substantially offset by a reduction in business taxes on intra-group revenues, which were previously recorded in cost of revenues.

此項稅收規則的變化並未對我們線上遊戲服務業務部門的毛利產生重大影響，因為增值稅的增加被集團內部收入的營業稅的減少所抵消，而這些營業稅此前已計入收入成本。

As a result, the year-over-year improvement in gross profit margin was primarily attributable to lower net revenue, due to the increased value-added tax in sales tax.

因此，毛利率年增率主要歸因於銷售稅中增值稅增加導致的淨收入下降。

Gross profit for the fourth quarter of 2013 was RMB1.73 million or $285.3 million, compared to RMB1.75 million and RMB1.61 million for the preceding quarter and the fourth quarter of 2012, respectively.

2013 年第四季毛利為 173 萬元人民幣（2.853 億美元），上一季及去年同期分別為 175 萬元人民幣及 161 萬元人民幣。

The year-over-year increase in gross profit was primarily attributable to increased gross profit from both the online games and advertising services businesses. The year-over-year increase in online game revenues was primarily driven by increased revenues from our self-developed games, primarily Fantasy Westward Journey II, New Westward Journey Online II, New Westward Journey Online III, Ghost II and Heroes of Tang Dynasty II, which was partially offset by a decline in revenue from World of Warcraft, the game licensed from Blizzard Entertainment.

毛利年成長主要由於線上遊戲和廣告服務業務毛利的增加。網路遊戲營收年增主要得益於我們自主研發遊戲收入的成長，主要包括《夢幻西遊Ⅱ》、《新西遊OnlineⅡ》、《新西遊OnlineⅢ》、《倩女幽魂Ⅱ》和《大唐獸英雄傳Ⅱ》，但這一增長被發雪娛樂授權遊戲《暴雪娛樂》授權遊戲的部分下降。

The year-over-year increase in advertising services revenues was primarily due to a rise in demand, mainly from the automobile, internet services and property sectors. The quarter-over-quarter decrease in gross profit was primarily attributable to decreased gross profit from online games, which was partially offset by a quarter-over-quarter increase in gross profit from advertising services, which was mainly due to a rise in demand from the automobile, financial services and real estate sectors.

廣告服務收入年增主要是由於需求增加，主要來自汽車、網路服務和房地產行業。毛利環比下降主要因為網路遊戲毛利下降，但被廣告服務毛利環比成長部分抵銷，廣告服務毛利成長主要由於汽車、金融服務和房地產行業需求增加。

The quarter-over-quarter decrease in gross profit from online games was primarily driven by a decline in revenues from our self-developed games due to seasonality, which was partially offset by an increase in revenues from games licensed from Blizzard Entertainment.

線上遊戲毛利環比下降，主要由於季節性因素導致自研遊戲收入下降，但暴雪娛樂授權遊戲收入增加部分抵銷了這一下降。

Gross profit margin for the online games business for the fourth quarter of 2013 was 77.7%, compared to 79.7% and 75.3% for the preceding quarter and the fourth quarter of 2012, respectively. The year-over-year increase in gross profit margin was mainly due to the changes in tax rules which I previously mentioned. The quarter-over-quarter decrease in gross profit margin was mainly due to increased revenue contributions from licensed games, which carry lower gross profit margins.

2013 年第四季線上遊戲業務的毛利率為 77.7%，上一季和去年同期分別為 79.7% 和 75.3%。毛利率年增主要是因為我之前提到的稅法變化。毛利率環比下降主要由於代理遊戲收入貢獻增加，而代理遊戲的毛利率較低。

Gross profit margins for the advertising services business for the fourth quarter of 2013 was 57.8%, compared to 59.4% and 54.3% for the preceding quarter and the fourth quarters of 2012, respectively. Gross loss margins for the E-mail, WVAS and other business for the fourth quarter of 2013 was 4.0%, compared to gross profit margins of 4.1% and 13.0% for the preceding quarter and the fourth quarter of 2012, respectively.

2013 年第四季廣告服務業務毛利率為 57.8%，上一季和去年同期分別為 59.4% 和 54.3%。2013 年第四季信箱、無線加值業務及其他業務的毛損率為 4.0%，上一季及去年同期的毛利率分別為 4.1% 及 13.0%。

The quarter-over-quarter decrease in gross profit margin was mainly due to one-time revenue contributions from sales of higher margin game accessories in the preceding quarter.

毛利率環比下降主要由於上一季高利潤遊戲配件銷售的一次性收入貢獻。

Total operating expenses for the fourth quarter of 2013 were RMB648.3 million or $107.1 million, compared to RMB635.2 million and RMB580.4 million for the preceding quarter and the fourth quarter of 2012, respectively. The year-over-year increase in operating expenses was mainly due to increased staff related costs resulting from an increase in the number of employees and average compensation, as well as higher research and development investments. The quarter-over-quarter increase in operating expenses was mainly due to increased selling and marketing expenses for our advertising services business.

2013 年第四季總營運費用為 6.483 億元人民幣（1.071 億美元），上一季和去年同期分別為 6.352 億元人民幣和 5.804 億元。營業費用年增主要由於員工數量和平均薪資增加導致的員工相關成本增加，以及研發投入增加。營業費用較上季成長主要是因為廣告服務業務的銷售和行銷費用增加。

This increase was partially offset by decreased general and administrative expenses caused by the reversal of bad debt provisions and decreased research and development expenses incurred in the fourth quarter following the commercial launch of certain new products.

這一增長被壞帳準備金沖銷導致的一般及行政開支減少以及第四季度某些新產品商業化推出後研發開支減少部分抵銷。

We recorded a net income tax charge of RMB49.4 million or $8.2 million for the fourth quarter of 2013, compared to RMB206.5 million and RMB184.2 million for the preceding quarter and the fourth quarter of 2012, respectively.

2013 年第四季淨所得稅費用為 4,940 萬元人民幣（約 820 萬美元），上一季和去年同期分別為 2.065 億元人民幣和 1.842 億元人民幣。

The effective tax rate for the fourth quarter of 2013 was 3.8%, compared to 16.5% and 15.4% for the preceding quarter and the fourth quarter of 2012, respectively.

2013 年第四季有效稅率為 3.8%，上一季和去年同期分別為 16.5% 和 15.4%。

(Inaudible) renewed their qualification as high and [new] technology enterprises in 2011 and enjoyed the preferential enterprise income tax rate of 15% from 2011 to 2013.

（聽不清楚）於2011年重新認定為高新技術企業，並從2011年至2013年享有15%的企業所得稅優惠稅率。

In addition, certain subsidiaries of our Company's were approved as Key Software Enterprises in the fourth quarter of 2013 and are subject to a preferential tax rate of 10% for fiscal years 2013 and 2014, which had the effect of reducing the effective tax rate in the fourth quarter of 2013.

此外，本公司旗下若干子公司於2013年第四季獲準為重點軟體企業，並於2013年及2014年財年享有10%的優惠稅率，這導致2013年第四季的實際稅率降低。

During the fourth quarter of 2013 we reported a net foreign exchange loss of RMB17.6 million or $2.9 million, compared to a net foreign exchange gain of RMB5.9 million and a net foreign exchange loss of RMB5.8 million for the preceding quarter and the fourth quarter of 2012, respectively.

2013 年第四季，公司錄得淨匯兌損失 1,760 萬元人民幣（折合 290 萬美元），而上一季和去年同期分別為淨匯兌收益 590 萬元人民幣和淨匯兌損失 580 萬元人民幣。

The quarter-over-quarter and year-over-year changes in foreign exchange gains and losses were mainly due to the unrealized exchange gains or losses arising from the our foreign currency denominated bank deposit and short-term loan balances as of December 31, 2013, as the exchange rate of the US dollar against the RMB fluctuated over the period.

匯兌損益的環比和同比變動主要由於本期美元兌人民幣匯率波動，導致本公司截至 2013 年 12 月 31 日的外幣銀行存款及短期貸款餘額產生了未實現的匯兌損益。

Net profits for the fourth quarter of 2013 totaled RMB1.2 billion or $204.3 million, compared to RMB1 billion for the preceding quarter and for the fourth quarter of 2012.

2013 年第四季淨利為 12 億元人民幣（2.043 億美元），上一季及 2012 年第四季淨利均為 10 億元。

We reported basic and diluted earnings per ADS of $1.57 each for the second quarter of 2013. Our basic and diluted earnings per ADS were $1.33 each for the preceding quarter and we reported basic and diluted earnings per ADS of $1.27 each for the fourth quarter of 2012.

我們報告 2013 年第二季每股 ADS 基本收益和攤薄收益為 1.57 美元。上一季我們的每股美國存託憑證基本收益和稀釋收益均為 1.33 美元，2012 年第四季我們報告的每股美國存託憑證基本收益和稀釋收益均為 1.27 美元。

Now for an overview of the 2013 fiscal year financial results. Gross profit for fiscal year 2013 was RMB6.7 billion or $1.1 billion compared to RMB5.6 billion for the preceding fiscal year. The increase the gross profit for fiscal year 2013 was primarily driven by increased revenues from online game services and advertising services.

現在來概述一下 2013 財年的財務表現。2013財年毛利為67億元人民幣（11億美元），而上一財年為56億元。2013財年毛利的成長主要得益於線上遊戲服務和廣告服務收入的成長。

The increase in online game services revenues in 2013 was primarily attributable to increased revenues from our self-developed games such as Fantasy Westward Journey II, Kung Fu Master, New Westward Journey Online II, Heroes of Tang Dynasty II and Ghost II which was partially offset by decreased revenues from games licensed from Blizzard Entertainments. The increase in advertising services revenues in 2013 was due to a rise in demand mainly from the internet services, automobile and food and beverage sectors.

2013年線上遊戲服務收入的成長主要得益於我們自主研發的遊戲（如《夢幻西遊II》、《功夫大師》、《新大話西遊Online II》、《大唐英雄傳II》和《倩女幽魂II》）收入的增長，但部分被暴雪娛樂授權遊戲收入的下降所抵銷。2013年廣告服務收入的成長主要歸因於網路服務、汽車和食品飲料產業的需求成長。

Total operating expenses for fiscal year 2013 were RMB2.4 billion or $390.7 million compared to RMB1.9 billion for the preceding fiscal year. The increase in operating expenses in 2013 was primarily due to increased research and development expenses resulting from increased headcount and increased sales and marketing expenses as a result of marketing and promotional activities for our advertising services and online games business.

2013財年總營運費用為24億元人民幣（3.907億美元），而上一財年為19億元。2013年營業費用的增加，主要由於員工人數增加導致研發費用增加，以及廣告服務和線上遊戲業務的行銷和促銷活動導致銷售和行銷費用增加。

For the full fiscal year we recorded a net income tax charge of RMB530.6 million or $87.7 million compared with RMB691.6 million for the fiscal year of 2012. The effective tax rate was 10.7% for fiscal year 2013 compared to 16.2% for fiscal year 2012. The change in the effective tax rates was mainly due to the fact that certain subsidiaries were approved as Key Software Enterprises for fiscal years 2013 and 2014 and enjoyed a preferential tax rate of 10% as I've previously mentioned.

整個財年，我們記錄的淨所得稅費用為人民幣 5.306 億元（即 8,770 萬美元），而 2012 財年為 6.916 億元。2013 財年的有效稅率為 10.7%，而 2012 財年的有效稅率為 16.2%。有效稅率的變化主要是因為某些子公司被批准為2013財年和2014財年的重點軟體企業，並享有10％的優惠稅率，正如我之前提到的。

Furthermore we obtained such preferential tax treatment with respect to fiscal years 2011 and 2012 in the first quarter of 2013 and recorded the related tax benefits in 2013. Net profit for fiscal year 2013 totaled RMB4.4 billion or $734.1 million compared to RMB3.6 billion for the preceding fiscal year.

此外，我們在 2013 年第一季獲得了針對 2011 年和 2012 年財年的優惠稅務待遇，並在 2013 年記錄了相關稅收優惠。2013財年淨利總計44億元人民幣（7.341億美元），而上一財年為36億元。

For fiscal year 2013 we reported a net foreign exchange loss of RMB15.3 billion or $2.5 million compared to a net foreign exchange loss of RMB0.6 million for the preceding fiscal year. The net foreign exchange loss in 2013 was mainly due to exchange losses arising from our US dollar denominated bank deposit and short term loan balances at the exchange of the US dollar against the RMB fluctuated over this period.

2013財年，我們報告的淨外匯損失為人民幣153億元或250萬美元，而上一財年的淨外匯損失為人民幣60萬元。2013 年度的淨匯兌損失主要由於本期間美元兌人民幣匯率波動導致本公司美元銀行存款及短期貸款餘額產生匯兌損失。

We reported basic and diluted earnings per ADS of $5.65 and $5.64 for fiscal year 2013 respectively. Our basic and diluted earnings per ADS were $4.58 and $4.57 for the preceding year respectively. As of December 31, 2013 our total cash and time deposits and short term investments balance were RMB19.5 billion or $3.2 billion compared to RMB16.3 billion as of December 31, 2012. Cash flow generated from operating activities was RMB5.2 billion or $864.9 million for fiscal year 2013 compared to RMB4.2 billion for the preceding fiscal year.

我們報告 2013 財年每股美國存託憑證基本收益和稀釋收益分別為 5.65 美元和 5.64 美元。上一年，我們的每股美國存託憑證基本收益和稀釋收益分別為 4.58 美元和 4.57 美元。截至 2013 年 12 月 31 日，我們的現金、定期存款和短期投資總額為人民幣 195 億元（32 億美元），而截至 2012 年 12 月 31 日為人民幣 163 億元。2013財年經營活動產生的現金流為52億元人民幣（8.649億美元），上一財年為42億元。

Before we open the call to your questions I would like to provide an update on the repurchase program and our cash dividend. Today our Board of Directors announced that our earning cash dividends for fiscal year 2013 would be in the amount of $0.0564 per ordinary shares which is the equivalent to $1.41 per ADS and is expected to be paid on March 2, 2014.

在我們開始回答您的問題之前，我想提供有關回購計劃和現金股利的最新情況。今天，我們的董事會宣布，2013 財年的獲利現金股利為每股普通股 0.0564 美元，相當於每股美國存託憑證 1.41 美元，預計將於 2014 年 3 月 2 日支付。

As a reminder each ADS represents 25 ordinary shares. The dividend will be payable to shareholders on record as of February 26, 2014. The total cash payment associated with this dividend will be approximately $183.3 million. Additionally prior to November 20, 2013 expiration date of our share repurchase program which commenced in November 2012 we repurchased 2.02 million ADSs for approximately $83 million under this program.

提醒一下，每份 ADS 代表 25 股普通股。該股將支付給截至2014年2月26日登記在冊的股東。與該股息相關的現金支付總額約為 1.833 億美元。此外，在我們於 2012 年 11 月開始的股票回購計畫於 2013 年 11 月 20 日到期之前，我們根據該計畫回購了 202 萬股 A​​DS，價值約 8,300 萬美元。

Our Board of Directors has approved a new share repurchase program of up to $100 million of our outstanding ADS for a period not to exceed 12 months. We plan to fund repurchases made under this program from our available working capital. Thank you for your attention, we would now like to open the call to your questions. Operator please go ahead.

我們的董事會已批准一項新的股票回購計劃，回購金額最高可達 1 億美元，期限不超過 12 個月。我們計劃利用可用的營運資金為該計劃下的回購提供資金。感謝您的關注，現在我們想開始回答您的問題。接線生請繼續。

Thank you sir. Ladies and gentlemen we will now begin the question and answer session (operator instructions). Our first question is from the line of Dick Wei with Credit Suisse, please go ahead.

謝謝您，先生。女士們、先生們，我們現在開始問答環節（操作員指示）。我們的第一個問題來自瑞士信貸的 Dick Wei，請繼續。

Hi, thank you for taking my questions. A few questions. My first question's on some of the key [performances] if you can comment on recent trends for Q4 for the existing games (inaudible) and my second question is on the margins trend (inaudible) margin trend? Do you expect that to continue to come down due to the investment in advertising. If (inaudible) thank you.

你好，謝謝你回答我的問題。幾個問題。我的第一個問題是關於一些關鍵的[表現]，您能否評論一下現有遊戲第四季度的近期趨勢（聽不清楚），我的第二個問題是關於利潤趨勢（聽不清楚）利潤趨勢？您是否預期由於廣告投資，這一數字會繼續下降？如果（聽不清楚）謝謝。

(Interpreted) Okay. So recapping your first question on the key performances of our (inaudible) games in the fourth quarter of 2013. Basically we are quite satisfied with their performances in the fourth quarter of 2013.

（翻譯）好的。那麼，讓我們回顧一下您關於 2013 年第四季我們的（聽不清楚）遊戲的主要表現的第一個問題。基本上我們對他們在2013年第四季的表現還是比較滿意的。

With regard to your second question on the potential trends on our operating margins trends (inaudible) I think basically we do view that we would still try to upkeep a relatively stable operating margin in the upcoming years but in view of the fact that there would be more intense competitions in the market and more amounts that we'll be spending in promoting our various products and services. We do see that there would be some compressions to our existing operating margins a little bit.

關於您關於營業利潤率趨勢的潛在趨勢的第二個問題（聽不清楚），我認為基本上我們確實認為我們仍將在未來幾年努力保持相對穩定的營業利潤率，但考慮到市場競爭會更加激烈，而且我們將在推廣各種產品和服務上投入更多資金。我們確實看到，我們現有的營業利潤率會受到一些壓縮。

Okay. Just a quick follow up (inaudible) in Q4 so that the gross margin comes down or was it more from the other promoted games? Thank you.

好的。只是快速跟進一下（聽不清楚），第四季的毛利率是下降了還是更多地來自其他推廣遊戲？謝謝。

Hey Dick can you just repeat that one more time, we just have a slightly bad connection.

嘿，迪克，你能再說一遍嗎，我們的連接有點不太好。

Sure. So far the Q4 gross margin is a little bit down sequentially. Was it because of World of Warcraft performance better than other games or was it for some of the other (inaudible) mobile game investments? Thank you.

當然。到目前為止，第四季的毛利率比去年同期略有下降。是因為《魔獸世界》的表現優於其他遊戲，還是因為對其他一些（聽不清楚）手機遊戲的投資？謝謝。

I think basically the gross margins -- the fall would be because we have more costs being spent for our self-developed games in this quarter but at the same time you will see that we have also got an increase in the revenues contributed from our licensed games in this quarter.

我認為毛利率下降的根本原因是本季我們在自主研發遊戲上花費了更多成本，但同時，你會看到本季我們授權遊戲的收入也有所增加。

Got it, thank you.

知道了，謝謝。

Thank you. Your next question is from the line of Alicia Yap with Barclays, please go ahead.

謝謝。您的下一個問題來自巴克萊銀行的 Alicia Yap，請繼續。

Hi, good morning William and Onward, thanks for taking my questions. My first question is on advertising. So since your year-on-year and sequential growth is very strong this quarter and the sequential improvement is actually much better than previous year so I wanted to know what are some of the reasons for the strong growth and what are some of the main contributing areas and is there any -- how much of the mobile actually contributes for the total [app] revenues? Also with that if the trend will continue in your view and what is your overall expectation for the advertising demand environment for 2014 given that we also have some popular [sport events] this year?

大家好，William 和 Onward，早安，感謝你們回答我的問題。我的第一個問題是關於廣告的。由於本季度的同比和環比增長都非常強勁，而且環比改善實際上比去年要好得多，所以我想知道強勁增長的一些原因以及主要的貢獻領域是什麼，以及移動端對總[應用]收入的貢獻有多少？此外，您認為這種趨勢是否會持續下去？考慮到今年我們也有一些熱門的[體育賽事]，您對 2014 年的廣告需求環境的整體預期是什麼？

(Interpreted) So Alicia, regarding your questions on the increased contributions from our advertising business on a sequential basis, basically we do view that in terms of the mobile contributions at this point of time it is still not very significant.

（翻譯）艾莉西亞，關於你提到的我們廣告業務貢獻連續增加的問題，基本上我們認為，就目前的移動貢獻而言，它仍然不是十分顯著。

But we do see that from our various mobile initiatives like the Mobile News applications, our (inaudible), our News Reader and other applications (inaudible) they are having a very nice growing trend in building up the users. At the moment we do see that the main contributions have been coming from our [traditional portals] and also the [blogs] and things like that.

但我們確實看到，從我們的各種行動計劃（例如行動新聞應用程式、我們的（聽不清楚）、我們的新聞閱讀器和其他應用程式（聽不清楚））來看，它們在用戶成長方面呈現出非常好的成長趨勢。目前我們確實看到主要貢獻來自我們的[傳統入口網站]以及[部落格]等等。

But just to follow up on that is that -- will these have the 38% year-on-year growth momentum can continue into 2014?

但接下來的問題是——38% 的年成長動能能否持續到 2014 年？

This is what we are expecting, yes.

是的，這正是我們所期待的。

Sure, sure and then my second question quickly is on the update on the mobile games. So I know that you will be launching a number of new mobile games this year. Is there any particular games that management would think will be more meaningful or potentially a good hit and then would that be any games that will come from the games studios that you have invested?

當然，當然，我的第二個問題是關於手機遊戲的更新。所以我知道你們今年將會推出一些新的手機遊戲。管理階層是否認為某些遊戲更有意義或可能更受歡迎？這些遊戲是否來自您所投資的遊戲工作室？

(Interpreted) Okay so basically with regard to NetEase's mobile game strategies we can date it back in 2011 is when we first started on this part of the business market. We focused on two ways. The first would be ourselves develop mobile games and the other way would be investing on some outside studios or some teams that we consider that would be of good quality.

(口譯) 好的，關於網易的手機遊戲策略，我們可以追溯到 2011 年，當時我們剛開始涉足這一業務市場。我們重點關注兩種方式。第一種是我們自己開發手機遊戲，另一種是投資一些我們認為品質不錯的外部工作室或團隊。

Another philosophy that we always focus on is the professions or the highest qualities of the game products that we're going to roll out to the market. Unlike other peers that would just roll numerous games to the market without pursuing a very good quality. We always strive to make sure that the qualities of our products would be of the highest before we actually put them through to the market.

我們始終關注的另一個理念是我們將要向市場推出的遊戲產品的專業或最高品質。與其他同行不同，他們只是向市場推出大量遊戲，而不追求非常好的品質。在將產品真正投入市場之前，我們始終努力確保產品的品質達到最高水準。

(Interpreted) One more point that William would like supplemented here is that at the moment we have already licensed two more new games that are going to rollout to the China market and they're now in the process of getting the localizations. At the same time going back to what we have done so far in 2013 by far we have got a number of new mobile games in the market like the pocket versions of our Fantasy Westward Journey and the other one would be our mini Westward Journey.

（口譯）威廉想補充的另一點是，目前我們已經獲得另外兩款新遊戲的授權，它們將在中國市場推出，現在正在進行本地化。同時，回顧我們在2013年迄今所做的事情，到目前為止，我們已經在市場上推出了一些新的手機遊戲，例如《夢幻西遊》的袖珍版，另一個是我們的迷你西遊。

We also expect that progressively in 2014 that we would have got more new games to rollout in [the market] and one of those would be a [card] games type mobile games that we are expecting.

我們也預計，2014 年我們將逐步在 [市場] 推出更多新遊戲，其中之一就是我們期待的 [卡牌] 遊戲類型的手機遊戲。

Okay just quickly a follow-up on William's comment on the two overseas mobile games. So that is in addition to this Heartstone, Warcraft mobile versions that a beta will be launching, right so this and in addition to that you have two more overseas mobile games right?

好的，我來快速跟進 William 對兩款海外手機遊戲的評論。那麼除了《爐石戰記》之外，《魔獸爭霸》的手機版也將推出測試版，對嗎？除此之外，您還有另外兩款海外手機遊戲，對嗎？

Yes, yes. (Spoken in foreign language).

是的，是的。（用外語說）。

(Spoken in foreign language).

（用外語說）。

Okay thank you very much.

好的，非常感謝。

(Interpreted) So what William was supplementing is that currently for the Heartstone it in fact technically speaking is not a mobile game by itself. What we have done is actually licensed two new games that will be categorized as the mobile games that are going to rollout to the market soon.

（翻譯）所以威廉補充的是，目前《爐石戰記》實際上從技術上來說本身並不是一款手機遊戲。我們所做的實際上是授權了兩款新遊戲，它們將被歸類為即將推出市場的手機遊戲。

Okay thank you Onward, thank you William.

好的，謝謝你，Onward，謝謝你，William。

Thank you. Your next question comes from the line of Jiong Shao with Macquarie. Please go ahead.

謝謝。您的下一個問題來自麥格理的邵炯。請繼續。

Good morning. Thank you for taking my questions. I have two questions for William if I may. The first question is about mobile games again and some of your peers in both PC game and mobile game developer industry are launching their mobile game center or publisher business. I was just wondering what are your thoughts on longer term whether or not NetEase is heading towards that version as well?

早安.感謝您回答我的問題。如果可以的話，我有兩個問題要問威廉。第一個問題再次是關於手機遊戲的，PC 遊戲和手機遊戲開發商行業的一些同行正在推出他們的手機遊戲中心或發行業務。我只是想知道，從長遠來看，您對網易是否也會推出該版本有何看法？

Related to that many of the developers now are spending quite a bit of money marketing their new wares -- new games -- where we are -- what are we thinking about potentially spending -- how we control the spending to promote these games? That is my first but long question sorry.

與此相關的是，許多開發商現在花費大量資金來行銷他們的新產品——新遊戲——我們在哪裡——我們在考慮潛在的支出是多少——我們如何控制支出來推廣這些遊戲？這是我的第一個問題，但問題很長，抱歉。

(Interpreted) So basically with regard to your first question about our (inaudible) on how we are going to cooperate with the various developers externally basically we will hold an open ended (inaudible) and we are always welcome to some co-development projects and a kind of cooperation with other studios and things like that.

（口譯）所以基本上關於你的第一個問題關於我們（聽不清）我們將如何與外部的各種開發商合作，基本上我們將舉行一個開放式的（聽不清）並且我們總是歡迎一些聯合開發項目和與其他工作室的某種合作等等。

With regard to our own studios we are quite different and unique to what our external counterparts doing because we have our own platforms, our own media and our own marketing channels and things like that. Basically our potential users that need to spend on procuring our various products will be much lower. We do see that our studios have got this own competitive edge in this respect.

就我們自己的工作室而言，我們與外部同行的做法有很大不同，而且很獨特，因為我們有自己的平台、自己的媒體、自己的行銷管道等等。基本上我們的潛在用戶在採購我們各種產品上需要花費的錢會少很多。我們確實看到我們的工作室在這方面擁有自己的競爭優勢。

Okay great thanks. My second question is that among your few -- quite a few interesting mobile properties we noticed that you have a lottery app as well. Could you comment a bit on your thoughts and your outlook for this particular segment and any kind of regulatory risk in your view? Thank you.

好的，非常感謝。我的第二個問題是，在你們為數不多的有趣的行動產品中，我們注意到你們也有一個彩票應用程式。您能否就您對這一特定領域的想法和展望以及您認為的任何監管風險發表一些評論？謝謝。

(Interpreted) So basically with regard to our strategies in certain apps our mobile businesses basically we will have a very expensive and comprehensive assessment before we are doing so. At the moment we have quite a number of applications already in place on the mobile area and we have our own -- in the news category we have our mobile use applications and for the two (inaudible) category we have our mobile dictionaries and also the [cloud notes] and for the information categories we have our [cloud music] and also the newsreader. In terms of social category we have our YiChat and also another (inaudible) called the (inaudible). Basically we have our own logic behind in bringing up our various categories.

（翻譯）所以基本上，就我們在某些​​應用程式和行動業務中的策略而言，我們在這樣做之前基本上會進行非常昂貴和全面的評估。目前，我們在移動領域已經部署了相當多的應用程序，我們有自己的新聞類別應用程序，在兩個（聽不清）類別中，我們有移動詞典和[雲筆記]，在信息類別中，我們有[雲音樂]和新聞閱讀器。在社交類別方面，我們有 YiChat，還有另一個（聽不清楚）稱為（聽不清楚）。基本上，我們提出各種類別都有自己的邏輯。

With regards to our business on the lottery ticket sales -- the mobile applications regarding the lottery ticket sales basically we have a very good payment platforms and also fine experiences on offer to our users. To quote one month ago we have got a user that has (inaudible) a RMB200 million prices which is the highest ever in this area of selling the lottery tickets on behalf of the service provider.

關於我們的彩票銷售業務——彩票銷售的行動應用程式基本上為我們的用戶提供了非常好的支付平台和良好的體驗。舉個例子，一個月前我們有一位用戶（聽不清楚）獲得了 2 億元人民幣的價格，這是代表服務提供者銷售彩票這一領域的最高價格。

One week ago we have also got another user that has (inaudible) of RMB5.32 million as well. We do see that a discount of selling on behalf our business models is very good to our potential users and we do see that the application these apps do offer a very good user's business to them.

一週前，我們還獲得了另一位用戶，擁有（聽不清楚）532萬元。我們確實看到，代表我們的商業模式銷售的折扣對我們的潛在用戶來說非常好，我們確實看到這些應用程式確實為他們提供了非常好的用戶業務。

Alright RMB200 million jackpot I guess I better make a bet right now. Thank you. Thank you William and Onward.

好吧，2 億元的大獎，我想我最好現在就下注。謝謝。感謝 William 和 Onward。

Okay.

好的。

Your next question is from the line of Tian Hou with T.H. Capital. Please go ahead.

您的下一個問題來自 T.H. Capital 的 Tian Hoo。請繼續。

Morning everyone. I have a question related to your overseas [exports]. So I wonder what are some games that you plan to rollout in the overseas market and what the potential revenue contribution could be in 2014? So that's the first question. William (spoken in foreign language).

大家早安。我有一個與你們的海外[出口]有關的問題。所以我想知道您計劃在海外市場推出哪些遊戲以及 2014 年潛在的收入貢獻是多少？這是第一個問題。威廉（用外語講話）。

(Spoken in foreign language).

（用外語說）。

Just one second Tian for the translation.

請田先生稍等片刻，進行翻譯。

(Interpreted) Yes okay. So with regard to Tian's first question about how our open business expansion plan would be for own self-developed games. Physically at the moment we have (inaudible). One would be the Ghost that is already in operations in Vietnam. The other one would be the Heroes of Three Kingdoms which is a mobile type game that we are working on to operate in Vietnam and also Thailand. We are expecting that those games will hopefully be launched in the first quarter of 2014. With regard to your second question about the potential revenue contributions from those overseas games at the moment we do not expect that the contributions will be very significant.

（翻譯）是的，好的。那麼關於田的第一個問題，關於我們對於自主研發遊戲的開放業務擴展計畫是怎樣的。從物理上講，目前我們已經（聽不清楚）。其中之一就是已經在越南投入使用的「幽靈」直升機。另一款遊戲是《三國群英傳》，這是一款手機遊戲，我們正在努力在越南和泰國運作。我們預計這些遊戲預計在 2014 年第一季推出。關於您的第二個問題，關於海外遊戲的潛在收入貢獻，目前我們預計貢獻不會很大。

Thank you and the second question is regarding your 2014 game pipelines. I wonder how many games in the MMORPG area are you going to plan to launch and also what game and also how many mobile games in total are you planning to launch? William (spoken in foreign language).

謝謝，第二個問題是關於您 2014 年的遊戲頻道。我想知道您計劃在 MMORPG 領域推出多少款遊戲，以及您計劃推出什麼遊戲以及總共推出多少款手機遊戲？威廉（用外語講話）。

(Spoken in foreign language).

（用外語說）。

(Spoken in foreign language).

（用外語說）。

(Spoken in foreign language).

（用外語說）。

(Spoken in foreign language) Okay.

（用外語說）好的。

(Interpreted) So basically with regards to Tian's second question about the Company's game pipelines in 2014 for the MMORPG we do plan to have about four new games coming out to the market in 2014 and no new [more] games will be coming out and for mobile games somewhere around five or more.

(口譯) 所以基本上關於田先生關於公司 2014 年遊戲管道的第二個問題，對於 MMORPG 來說，我們計劃在 2014 年向市場推出大約四款新遊戲，不會再推出新遊戲，對於手機遊戲來說，大約有五款或更多。

So to supplement on what William first commented earlier the previous number does not include our licensed game. We also take the license game into account. We do expect that the total number of new games that we are going to roll out in the market for MMORPG will be somewhere around 5% and for the mobile games by taking into account the licensed mobile games as well this would be somewhere more than 10%.

因此，為了補充威廉先前的評論，先前的數字並不包括我們授權的遊戲。我們也考慮了許可證遊戲。我們確實預計，我們在 MMORPG 市場上推出的新遊戲總數將佔 5% 左右，而對於手機遊戲而言，如果考慮到授權的手機遊戲，這一比例將超過 10%。

Okay that's very helpful. So the last question is related to the [YiChat]. So I wonder how many total registered users do you have now and is it possible to also give us an active user either daily or monthly? William (spoken in a foreign language).

好的，這非常有幫助。最後一個問題與[YiChat]有關。所以我想知道您現在總共有多少註冊用戶，是否可以提供我們每日或每月的活躍用戶數？威廉（用外語講話）。

(Spoken in foreign language).

（用外語說）。

Okay (spoken in a foreign language).

好的（用外語說）。

(Interpreted) Okay because of the unique features of our (inaudible) products because all the users would present with new identities and so we do not have any numbers to disclose for the moment but we would perhaps give more updates as we come to a more appropriate timing.

（口譯）好的，由於我們（聽不清楚）產品的獨特功能，因為所有用戶都會以新身份呈現，因此我們目前沒有任何數字可以披露，但我們可能會在更合適的時機提供更多更新。

So basically for using (inaudible) this is a very important strategic (inaudible) services for NetEase. We will continue our commitments to our [buyers] in this area, in order to make this to be a very successful flagship of our product and services in the social networking area and on the mobile area.

因此基本上對於使用（聽不清楚）這對網易來說是一項非常重要的策略（聽不清楚）服務。我們將繼續履行對這一領域的[買家]的承諾，以使其成為我們在社交網路領域和行動領域的產品和服務的非常成功的旗艦。

Thank you William, and thank you Onward. That's all my questions.

謝謝威廉，也謝謝《Onward》。這就是我所有的問題。

Okay.

好的。

Thank you. Your next question comes from the line of Thomas Chong with the Bank of China International. Please go ahead.

謝謝。您的下一個問題來自中國銀行國際部的 Thomas Chong。請繼續。

Hi, good morning. I have two questions. My first question is relating to your overseas strategy. Can management comments about -- in terms of the user behavior and their preferences, how is it different from the China market? My second question is regarding the first quarter games performance. Given right now we are in the middle of the quarter, can management comment about the performance of your self-developed game titles, as well as World of Warcraft? Thanks.

嗨，早安。我有兩個問題。我的第一個問題是關於你們的海外策略。管理層能否評論一下——就用戶行為和偏好而言，它與中國市場有何不同？我的第二個問題是關於第一節比賽的表現。鑑於現在正處於本季中期，管理層能否評論一下你們自主研發的遊戲以及《魔獸世界》的表現？謝謝。

(Interpreted) Basically with regard to the questions about -- on the user behavior of the users in overseas versus those in China, I think basically first of all NetEase has been a very good company that is capable and experienced on self-developed games. By going outside, overseas expansions is -- would be our aim and our goal going forward. Through the co-operations with some overseas counterparts we would be able to learn some new experiences as well.

(口譯) 基本上關於海外用戶和中國用戶的用戶行為的問題，我認為首先網易是一家非常優秀的公司，有能力和經驗開發自主開發的遊戲。透過走出去，海外擴張將是我們未來的目標。透過與一些海外同行的合作，我們也能學到一些新的經驗。

After over 16 years of business operations in the market, this is also one of the aims that we are always striving for. We are also, through the overseas expansion, we do also look forward to further improve the qualities of our products, so that this can give a better experience to our users. To quote for one example on our overseas expansion in Vietnam, by licensing our Ghost products there we do learn one thing, that the ARPU versus the GDP, we've got somehow a relationship there.

經過16年多的市場經營，這也是我們一直努力追求的目標之一。我們也希望透過海外擴張進一步提高我們的產品質量，從而為用戶帶來更好的體驗。舉一個我們在越南的海外擴張的例子，透過在那裡授權我們的 Ghost 產品，我們確實學到了一件事，那就是 ARPU 與 GDP 之間存在某種關係。

Thanks. My question -- my second question relates to the first quarter performance for the self-developed games and World of Warcraft given we are in the middle of the first quarter? Thanks.

謝謝。我的第二個問題是關於第一季自主研發遊戲和魔獸世界的表現，因為我們正處於第一季中期？謝謝。

(Interpreted) Basically we are still very confident and quite satisfied with all the (inaudible) games, whether they are the self-developed or licensed games so far in the first quarter of 2014.

（翻譯）基本上，我們對 2014 年第一季迄今為止的所有（聽不清楚）遊戲仍然非常有信心並且相當滿意，無論是自主研發的遊戲還是授權的遊戲。

Got it, thanks. Thanks William, thanks Onward.

明白了，謝謝。謝謝威廉，謝謝 Onward。

Thank you. At this time I'd like to turn the conference back to management for any closing remarks.

謝謝。現在，我想將會議交還給管理階層，請他們發表結束語。

Thank you everyone once again for joining us today. If you have further questions please feel free to contact Cassia Curran, NetEase's IR Manager based in Hangzhou or the Piacente Group, Investor Relations. Have a wonderful day.

再次感謝大家今天的參加。如果您還有其他問題，請隨時聯絡網易杭州投資者關係經理 Cassia Curran 或 Piacente 集團投資者關係部門。祝您有美好的一天。

Thank you ladies and gentlemen (operator instructions). This does conclude the NetEase Incorporated Fourth Quarter 2013 Earnings. Call. Thank you very much for your participation. You may now disconnect.

謝謝女士們、先生們（操作員指示）。網易公司 2013 年第四季財報到此結束。稱呼。非常感謝您的參與。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.

本記錄中標記（翻譯）的部分是由現場通話中的翻譯人員說的。翻譯由贊助本次活動的公司提供。