Tencent Music Entertainment Group (TME) 2024 Q3 法說會逐字稿

Good evening.

晚安.

Good morning.

早安.

And welcome to Tencent Music Entertainment Group's third-quarter 2024 earnings conference call.

歡迎參加騰訊音樂娛樂集團2024年第三季財報電話會議。

I'm Millicent Tu, Head of IR.

我是 IR 主管 Millicent Tu。

We announced our quarterly financial results earlier today before the US market opened.

今天早些時候，我們在美國市場開盤前公佈了季度財務業績。

The earnings release is now available on our IR website and via newswire services.

收益報告現已在我們的投資者關係網站和新聞專線服務上發布。

During today's call, you will hear from Mr. Cussion Pang, our Executive Chairman; and Mr. Ross Liang, our CEO, who will share an overview of our company strategies and business updates.

在今天的電話會議中，您將聽到我們的執行主席彭嘉信先生的演講；我們的執行長梁羅斯先生將分享我們公司策略和業務動態的概述。

Then, Ms. Shirley Hu, our CFO, will discuss our financial results before we open the call for questions.

然後，我們的財務長胡雪莉女士將在我們開始提問之前討論我們的財務表現。

Before we continue, I refer you to the safe harbor statement in our earnings release, which applies to this call as we'll make forward-looking statements.

在我們繼續之前，我請您參閱我們的收益發布中的安全港聲明，該聲明適用於本次電話會議，因為我們將做出前瞻性聲明。

Please note that we'll discuss non-IFRS measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under IFRS in our earnings release and filings with the SEC.

請注意，我們今天將討論非 IFRS 衡量標準，這些衡量標準將與我們在收益發布和向 SEC 提交的文件中根據 IFRS 報告的最具可比性的衡量標準進行更徹底的解釋和協調。

(Events Instructions) Please to be advised that today's call is being recorded.

（活動說明）請注意，今天的通話正在錄音。

With that, I'm very pleased to turn the call over to Cussion, Executive Chairman of TME.

至此，我很高興將電話轉給 TME 執行主席 Cussion。

Cussion, please?

請客氣一下？

Thank you, Millicent.

謝謝你，米利森特。

Hello, everyone, and thank you for joining our call today.

大家好，感謝您今天加入我們的電話會議。

The solid third-quarter performance once again showcases our ability to deliver high-quality growth.

第三季的穩健表現再次證明了我們實現高品質成長的能力。

Our fast approach continues to drive both subscriber-based expansion and ARPPU growth.

我們的快速方法繼續推動基於用戶的擴張和 ARPPU 的成長。

Online music services revenue grew by 20% year over year contributing significantly to a 29% year-over-year increase in adjusted net profit.

線上音樂服務收入年增 20%，對調整後淨利潤年增 29% 做出了巨大貢獻。

During the quarter, we prioritized the deepening integrations across different products.

本季度，我們優先考慮不同產品之間的深化整合。

It's evident that the synergies between our dual engines on platform and widen content ecosystem has become a powerful force, enabling us to unlock more value to users.

顯然，我們平台上的雙引擎和廣闊的內容生態之間的協同效應已經成為強大的力量，使我們能夠為用戶釋放更多價值。

Let me give you some examples.

讓我舉一些例子。

First, our ongoing efforts to strengthen partnerships with domestic and international record labels have continued to bear fruit, enhancing our music offerings and diversifying our content.

首先，我們不斷努力加強與國內外唱片公司的合作關係，不斷取得成果，增強了我們的音樂產品並使我們的內容多樣化。

Recently, we renewed the contract with top Chinese labels like YH Entertainment Group and Image Music Group, including early access for new song releases from popular artists such as Silence Wang, Wang Sulong.

最近，我們與YH Entertainment Group和Image Music Group等中國頂級唱片公司續簽了合同，包括搶先體驗王靜、汪蘇瀧等熱門藝人的新歌。

Additionally, we formed a strategic cooperation with Galaxy Corporation, home to the global music sensation, G-Dragon, to bring new more international music content, digital albums, and merchandise to our platform.

此外，我們也與全球音樂巨星 G-Dragon 的故鄉 Galaxy Corporation 建立了策略合作，為我們的平台帶來更多新的國際音樂內容、數位專輯和商品。

Our scale and unique value proposition have enabled us to become the multi-year proprietary partner for G-Dragon's upcoming tour concerts in Asia and other regions.

我們的規模和獨特的價值主張使我們能夠成為 G-Dragon 即將在亞洲和其他地區舉行的巡迴演唱會的多年專有合作夥伴。

As our influence in the industry grows, an increasing number of record labels are working with us to launch innovative artist-fan interaction events, focusing on new song releases such as voice-based interactions, song guessing games, and music challenges.

隨著我們在行業影響力的不斷增強，越來越多的唱片公司與我們合作推出創新的藝人互動活動，重點關注新歌發布，如語音互動、猜歌遊戲、音樂挑戰等。

Second, we have been partnering with A-listed artists and rising indie musicians to hold offline music experiences and concerts, connecting them with their fans in creative ways.

其次，我們一直與一線藝術家和新興獨立音樂人合作，舉辦線下音樂體驗和音樂會，以創造性的方式將他們與粉絲聯繫起來。

Two recent events demonstrated our success in this space.

最近的兩件事證明了我們在這個領域的成功。

In September, we hosted TME's Zebra Music Festival in Anhui, featuring a stellar lineup of artists including Chen Chusheng, Joker Xue, and Zhang Yuan, as well as Tencent musicians and other popular artists, Leon Liu, Zhao Lei, and Suede

9月，我們在安徽舉辦了TME斑馬音樂節，雲集了陳楚生、薛之謙、張遠等明星藝人，以及騰訊音樂人和劉立昂、趙雷、Suede等人氣藝人。

This event attracted an impressive 65,000 fans over two days, earning widespread acclaim and impact.

這場活動兩天內吸引了65,000名粉絲，贏得了廣泛的好評和影響力。

We also organized an offline concert for singer and songwriter, Yu Jiayun, marking his first-ever ticket show with over 10,000 attendees.

我們也為歌手兼詞曲作家於嘉雲舉辦了一場線下演唱會，標誌著他首次售票演出，觀眾人數超過一萬人。

Third, leveraging Tencent's powerful network and ecosystem, we continue to nurture our music content community that inspires interactive engagement.

第三，利用騰訊強大的網路和生態系統，我們持續培育激發互動參與的音樂內容社群。

In the third quarter, we collaborated with celebrities Karry Wang, Wang Junkai; and Esther Yu, Yu Shuxin to produce theme songs titled The Hero (inaudible) and Breaking News (inaudible) for popular games League of Legends: Wild Rift and Peacekeeper Elite.

第三季我們和明星王俊凱、王俊凱合作；和於書欣、虞書欣為熱門遊戲《英雄聯盟：狂野裂谷》和《和平精英》製作主題曲《英雄》（聽不清楚）和《突發新聞》（聽不清楚）。

These cross promotions with Tencent Games combined with distinct in-game item redemptions have led to impressive results.

這些與騰訊遊戲的交叉促銷與獨特的遊戲內物品兌換相結合，取得了令人印象深刻的成果。

The popularity of these theme songs, which hit our top trending songs chart (inaudible) and Chinese songs charts (inaudible) has increased the user engagement, effectively reaching the music and gaming communities across platforms.

這些主題曲的流行，登上了我們的熱門歌曲排行榜（聽不清楚）和中文歌曲排行榜（聽不清楚），提高了用戶參與度，有效地覆蓋了跨平台的音樂和遊戲社群。

We recognize that different users cohorts have distinct music consumption needs and preferences.

我們認識到不同的使用者群體有不同的音樂消費需求和偏好。

To address this, we are actively expanding unique benefits to our premium members for.

為了解決這個問題，我們正在積極向我們的高級會員提供獨特的福利。

Our super VIP members, we introduced priority access to extensive iconic digital albums from renowned artists such as (inaudible), with new additions of multiple K-pop singers in the third quarter.

我們的超級 VIP 會員，我們推出了優先訪問來自著名藝術家（聽不清楚）的大量標誌性數位專輯的服務，並在第三季度新增了多位韓國流行歌手。

We also enhanced SVIP privileges to include unique concerts and fan activities, such as presales for tickets to shows by G.E.M., Tang Tsz-Kei; Mariah Carey; and Tia Ray, Yuan Ya Wei.

我們也增強了 SVIP 特權，包括獨特的音樂會和粉絲活動，例如預售 G.E.M.、鄧紫棋的演出門票；瑪麗亞凱莉；還有蒂亞雷、袁婭維。

These enhanced privileges have effectively driven growth in our SVIP memberships, and we will continue to unlock new opportunities for both music labels and artists.

這些增強的特權有效地推動了我們 SVIP 會員的成長，我們將繼續為音樂廠牌和藝術家釋放新的機會。

Last but not least, we published our inaugural ESG report in the third quarter, providing a comprehensive overview of our ESG practice and achievements.

最後但並非最不重要的一點是，我們在第三季發布了首份 ESG 報告，全面概述了我們的 ESG 實踐和成就。

This is just the beginning of our sustainability journey.

這只是我們永續發展之旅的開始。

I'm also delighted to share that the Tencent musician platform was recently recognized as one of China's first model cases for the national copyright powerhouse strategy, honoring our contributions to safeguarding music copyrights.

我還很高興地告訴大家，騰訊音樂人平台最近被認定為中國首批國家版權強國戰略示範案例之一，表彰我們為維護音樂版權所做的貢獻。

This recognition will further motivate and propel us to promote the music industry healthy and sustainable development.

這種認可將進一步激勵和推動我們推動音樂產業健康永續發展。

In summary, our sustainable and long-term approach to achieving high-quality growth will carry us far and beyond what we have achieved so far.

總而言之，我們實現高品質成長的可持續和長期方針將使我們遠遠超越迄今為止所取得的成就。

We remain dedicated to fostering a compassionate, inclusive, and thriving music and ecosystem that benefits music labels, artists, users, and the broad industry.

我們仍然致力於培育富有同情心、包容性和蓬勃發展的音樂和生態系統，使音樂唱片公司、藝術家、用戶和整個行業受益。

Now, I would like to turn the call over to Ross for more details on our overall platform development.

現在，我想將電話轉給羅斯，以了解有關我們整體平台開發的更多詳細資訊。

Ross, please go ahead.

羅斯，請繼續。

Thank you.

謝謝。

Thank you, Cussion.

謝謝你，卡森。

Hello, everyone.

大家好。

Alongside our content and user insights, our years of operational expertise have been a key driver in strengthening our industry position and differentiating our value proposed position in a dynamic environment.

除了我們的內容和用戶洞察之外，我們多年的營運專業知識一直是加強我們的行業地位並在動態環境中區分我們的價值定位的關鍵驅動力。

Our third-quarter results once again demonstrated our ability to execute on strategies that return users, attract the new paying subscribers, and upgrade more members to premium services.

我們第三季的業績再次證明了我們執行回歸用戶、吸引新付費用戶以及將更多會員升級到優質服務的策略的能力。

These results boiled down to our commitment to innovation and our increasing ability to meet users' (inaudible) music consumption preference.

這些結果歸結為我們對創新的承諾以及我們滿足用戶（聽不清楚）音樂消費偏好的能力不斷增強。

Let me start by sharing some progress on our product upgrades in the third quarter, which have been well received by our large use case.

首先分享我們第三季產品升級的一些進展，這些進展得到了我們大型用例的好評。

First, our deep understanding in users' needs enables us to further innovate our product features, bringing fresh experiences.

首先，對使用者需求的深刻理解使我們能夠進一步創新產品功能，帶來新鮮體驗。

For example, recently, we launched the industry first player interface, featuring horizontal screen as well as real-time interactive comments feature, promoting a deeper sense of community belonging.

例如，最近我們推出了業界首個播放器介面，具有橫螢幕功能以及即時互動評論功能，促進了更深層的社群歸屬感。

We also upgraded the top trending songs chart (inaudible) with active features, attracting millions of participants.

我們也對熱門歌曲排行榜（聽不清楚）進行了升級，增加了活躍功能，吸引了數百萬參與者。

This has helped increase the task influence.

這有助於增加任務影響力。

Second, we continue to explore new technologies to enhance user experiences.

其次，我們不斷探索新技術，提升使用者體驗。

For example, we have leveraged large language models to streaming line content production, further improving both efficiency and quality.

例如，我們利用大語言模型來簡化線路內容生產，進一步提高效率和品質。

Notably, in the third quarter, we deployed AI technology to create single (inaudible) which quickly went viral on short-video platforms.

值得注意的是，在第三季度，我們部署了人工智慧技術來創作單曲（聽不清楚），並在短視頻平台上迅速走紅。

Our text-to-speech TTS technology also helped us create tens of thousands of audio books on our platform.

我們的文字轉語音 TTS 技術也幫助我們在平台上創建了數萬本有聲書。

Turning to our efforts to expand our subscriber base, first, we optimized our operational and marketing efforts to drive a new subscriber acquisition across various environments.

談到擴大用戶群的努力，首先，我們優化了營運和行銷工作，以推動在各種環境中獲取新用戶。

For example, centered on the Mid-Autumn Festivals event, when we rewarded the new users with subscription benefits through unique interactive features.

例如，圍繞中秋節活動，我們透過獨特的互動功能獎勵新用戶訂閱福利。

This has positively contributed to paying user methods.

這對付費用戶方法做出了積極貢獻。

Second, we continue to improve our recommendation algorithm.

其次，我們不斷改進我們的推薦演算法。

One example is enhancing the novelty of tailored content suggestions, making it easier for users to discover music.

一個例子是增強客製化內容建議的新穎性，使用戶更容易發現音樂。

This led to high recommendation streaming share subsequently in the third quarter, which in turn improve paying user commission efficiency.

這導致隨後第三季的推薦串流份額較高，進而提高了付費用戶的佣金效率。

Third, we collaborated with iconic IPs like Black Myth: Crayon Shin-chan, and Disney allowing us to offer personalized interfaces that are attractive additional paying users.

第三，我們與《黑神話：蠟筆小新》和迪士尼等標誌性 IP 合作，使我們能夠提供吸引更多付費用戶的個人化介面。

In terms of SVIP, our highly engaged subscribers, we are pleased to report that at the end of the third quarter, we reached an important milestone by surpassing 10 million.

就 SVIP（我們高度參與的訂戶）而言，我們很高興地報告，在第三季末，我們達到了一個重要的里程碑，突破了 1000 萬。

The unique benefits of our SVIP plans are gaining traction as shown by the higher ARPPU and a long time spend on our platform compared to other tiers of paying users.

與其他級別的付費用戶相比，我們的 SVIP 計劃的獨特優勢正在獲得越來越多的關注，具體表現為較高的 ARPPU 以及在我們平台上花費的時間較長。

Let me provide more details on this achievement.

讓我提供有關此成就的更多詳細資訊。

First, our proprietary self-developed audio quality features have enhanced the listening experience for SVIP members.

首先，我們自主研發的音質功能提升了SVIP會員的聆聽體驗。

Standout examples from this quarter are QQ Music's Premium Sound, DTS sound quality, and Kugou Music's Viper Ultra Sound, which bring clear, more immersive audio to our users.

本季的突出例子是QQ音樂的Premium Sound、DTS音質和酷狗音樂的Viper Ultra Sound，它們為我們的用戶帶來了清晰、更身臨其境的音訊。

Furthermore, we expanded our high-quality sound experience to in-car scenarios with Viper series audio quality designed for our SVIP membership during Xiaomi, Li Auto, and the NIO Vehicles.

此外，我們在小米、理想汽車和蔚來汽車期間，透過專為 SVIP 會員設計的 Viper 系列音訊質量，將高品質聲音體驗擴展到車內場景。

Second, our enhanced long -form audio offerings have also had a positive impact on user revenues to review their subscriptions.

其次，我們增強的長格式音訊產品也對用戶收入產生了積極影響，以審查他們的訂閱。

We expanded our audiobook content library with original content under popular IPs across various genres, including HTV dramas and films, comics, suspense, and the children's stories.

我們擴大了有聲書內容庫，提供各種類型的熱門 IP 下的原創內容，包括 HTV 戲劇和電影、漫畫、懸疑和兒童故事。

Third, these are just a few examples of the initial steps that we are taking to grow our SVIP memberships.

第三，這些只是我們為擴大 SVIP 會員數量而採取的初步步驟的幾個例子。

Coupled with the growing depth of our content ecosystem, as Cussion discussed, we have a solid foundation for delivering richer content benefits.

正如 Cussion 所討論的，加上我們的內容生態系統的深度不斷加深，我們為提供更豐富的內容優勢奠定了堅實的基礎。

Moving forward, we will continue to focus on both unique content and product offerings, meeting the needs of our users and delivering the delightful music experiences.

展望未來，我們將繼續專注於獨特的內容和產品，滿足用戶的需求並提供令人愉悅的音樂體驗。

With that, I would like to turn the call over to Shirley, our CFO, for a deep dive into our financials.

說到這裡，我想把電話轉給我們的財務長雪莉，讓她深入了解我們的財務狀況。

Thank you, Ross, and greetings to everyone.

謝謝你，羅斯，並向大家問好。

I will now turn to our financial results.

我現在談談我們的財務表現。

Our effective monetization of online music service and operational efficiency management continued to drive strong financial results in the third quarter of 2024.

我們線上音樂服務的有效貨幣化和營運效率管理繼續推動 2024 年第三季的強勁財務業績。

With strong performance in our music subscription and advertising business, we are pleased to see our revenue growth resume its growth trajectory on a year-over-year basis.

憑藉我們的音樂訂閱和廣告業務的強勁表現，我們很高興看到我們的營收成長恢復了同比成長軌跡。

IFRS net profit increased by 35% year over year to RMB1.7 billion and non-IFRS net profit rose by 29% year over year to RMB1.9 billion.

國際財務報告準則淨利潤年增35%至人民幣17億元，非國際財務報告準則淨利年增29%至人民幣19億元。

Total revenues in the third quarter of 2024 were RMB7 billion, up by 7% year over year.

2024年第三季總營收為人民幣70億元，較去年同期成長7%。

Online music revenues increased by 20% year over year to RMB5.5 billion.

線上音樂收入年增20%至人民幣55億元。

This increase was mainly driven by the strong expansion of our music subscription revenues, supplemented by growth in advertising revenues as well as growth in revenues from offline performances.

這項成長主要得益於音樂訂閱收入的強勁成長，輔以廣告收入的成長以及線下演出收入的成長。

Music subscription revenues in the third quarter of 2024 reached RMB3.8 billion, representing a 20% increase year over a year and the 3% rise sequentially.

2024年第三季音樂訂閱收入達人民幣38億元，較去年同期成長20%，較上季成長3%。

Monthly ARPPU was RMB10.8, up 5% from RMB10.3 in the same period last year.

每月ARPPU為人民幣10.8元，較去年同期的人民幣10.3元成長5%。

The number of online music paying users were 119 million, representing a 16% increase year over year with quarterly net ads of 2 million users with the goal of achieving growth in both subscribers and the monthly ARPPU.

線上音樂付費用戶數為1.19億，年增16%，季度淨廣告用戶數為200萬，目標實現用戶數和月度ARPPU雙增長。

We have strategically focused on SVIP membership program and enhanced membership benefits such as priority access to digital albums, presale for tickets to concerts and fan activities, and high-quality audio and sound effects for mobile and in-car users.

我們策略性地專注於 SVIP 會員計劃，並增強會員福利，例如優先獲取數位專輯、音樂會和粉絲活動門票預售，以及為行動和車內用戶提供高品質音訊和音效。

These benefits and the features have helped us achieve an important milestone of passing 10 million SVIP members this quarter.

這些優勢和功能幫助我們實現了本季 SVIP 會員數量突破 1000 萬的重要里程碑。

Advertising revenues also had a strong year-over-year growth, primarily due to the growth in ad-supported mode revenues.

廣告收入也出現了強勁的年成長，這主要是由於廣告支援模式收入的成長。

We continued to innovate and diversify our product offerings and advertising formats.

我們繼續創新並多樣化我們的產品和廣告形式。

The attractive interactive features and enriched benefits, we offered, helped improve entrance rate for our ad-supported advertising and enhanced user engagement and ECPM and attracted more advertisers this quarter.

我們提供的有吸引力的互動功能和豐富的福利，有助於提高廣告投放的進入率，增強用戶參與度和ECPM，並在本季度吸引了更多的廣告主。

Social entertainment services and other revenues were RMB1.5 billion, down by 24% year over year.

社交娛樂服務及其他收入為人民幣15億元，較去年同期下降24%。

For social entertainment services, our top priority is safety in operation and we will keep monitor marketing conditions and the competitive landscape.

對於社交娛樂服務，我們的首要任務是營運安​​全，我們將持續監控行銷狀況和競爭格局。

Meanwhile, we continue to innovate and build new products and features to drive quality growth in areas such as raising membership and advertising -- raising social entertainment.

同時，我們繼續創新和打造新產品和功能，以推動會員數量和廣告等領域的高品質成長——提高社交娛樂水平。

Our gross margin for Q3 reached 42.6%, representing an increase of 6.9 percentage points year over year due to a few factors.

第三季毛利率達42.6%，受多種因素影響，較去年同期成長6.9個百分點。

First, the expansion of our pay user base, the enhanced monthly ARPPU for online music, and the growth in advertising revenues have positively impacted our growth margin.

首先，我們付費用戶群的擴大、線上音樂每月 ARPPU 的提高以及廣告收入的成長對我們的利潤率產生了積極影響。

Second, we have been focused on ROCE as a key metric to manage our content and royalty costs.

其次，我們一直將 ROCE 作為管理內容和版稅成本的關鍵指標。

Third, the ramping up of our own content continue to help improve our gross margin.

第三，我們自己內容的增加繼續有助於提高我們的毛利率。

Lastly, the growth in raising memberships and advertising, raising social entertainment, also positively impact our gross margin.

最後，會員數量和廣告、社交娛樂的成長也對我們的毛利率產生了正面影響。

Going on to operating expenses, in the third quarter of 2024, they amounted to RMB1.2 billion, representing 17.4% of our total revenues compared with 19.3% in the same period of last year.

至於營運費用，2024年第三季營運費用為人民幣12億元，占我們總收入的17.4%，去年同期為19.3%。

Selling and marketing expenses were RMB220 million and remained relatively stable comparing with the same period of last year.

銷售及行銷費用為人民幣2.2億元，與去年同期相比保持相對穩定。

Our ROI-focused approach for promotion expenses, together with product appearance improvement, have contributed to the growth in online music MAUs.

我們以投資回報率為中心的促銷費用方法，加上產品外觀的改進，促進了線上音樂月活躍用戶的成長。

We will continue to invest in areas with long-term growth perspective, such as online music and content promotions.

我們將繼續投資具有長期成長前景的領域，例如線上音樂和內容推廣。

General and administrative expenses were RMB998 million, down by 5% year over year, primarily driven by lower employee-related expenses.

一般及管理費用為人民幣9.98億元，年減5%，主要是因為員工相關費用減少。

Our effective tax rate for Q3 was 17.7% compared to 12.2% in the same period of 2023.

我們第三季的有效稅率為 17.7%，而 2023 年同期為 12.2%。

This increase was primarily attributed to the approval of withholding tax of RMB113 million related to earnings to be remit by our PRC subsidiaries to offshore entities.

這一增長主要是由於批准了與我們的中國子公司向境外實體匯出的收益相關的人民幣1.13億元預扣稅。

For Q3 2024, our net profit and net profit attribute to equity holders of the company for RMB1.7 billion and RMB1.6 billion respectively.

2024年第三季度，我們的淨利潤和歸屬於公司股東的淨利潤分別為人民幣17億元和人民幣16億元。

Non-IFRS net profit and the non-IFRS net profit attributable to equity holders of the company for RMB1.9 billion and RMB1.8 billion respectively.

非國際財務報告準則淨利及歸屬於公司股東的非國際財務報告準則淨利分別為人民幣19億元及人民幣18億元。

The financial results for Q3 2024 have reflected an unrealized loss from foreign exchange due to the fluctuation of exchange rate between RMB and USD as of June and September 30, 2024.

2024年第三季的財務業績反映了截至2024年6月至9月30日人民幣兌美元匯率波動而產生的未實現外匯損失。

Our diluted earnings per ADS this quarter was RMB1.01, up 36% year over year.

本季我們每股ADS攤薄收益為人民幣1.01元，年增36%。

Non-IFRS diluted earnings per ADS include -- increased to RMB1.16, up 30% year over year.

非國際財務報告準則攤薄每股美國存託股收益包括－增至人民幣1.16元，較去年同期成長30%。

These results underscored our robust financial performance, enhanced operating efficiency, and the benefit from our share repurchase program.

這些結果凸顯了我們強勁的財務表現、提高的營運效率以及我們的股票回購計畫的好處。

Under the share repurchase program announced in March 2023, as of September 30, 2024, we have repurchased the 42.1 million ADS from the open market for total cash consideration of USD335.5 million, of which approximately USD100 million were repurchased in the third quarter of 2024.

根據2023年3月宣布的股票回購計劃，截至2024年9月30日，我們已從公開市場回購了4,210萬股ADS，總現金對價為3.355億美元，其中約1億美元是在2024年第三季回購的。

As of September 30, 2024, our combined balance of cash, cash equivalents, term deposits, and short-term investment were RMB36 billion as compared with RMB35 billion as of June 30, 2024.

截至2024年9月30日，我們的現金、現金等價物、定期存款及短期投資的合併餘額為人民幣360億元，而截至2024年6月30日為人民幣350億元。

This combined balance was also affected by changes in the exchange rate of RMB to USD at different balance sheet dates.

此合併餘額也受到不同資產負債表日人民幣兌美元匯率變動的影響。

Looking forward, we will continue to drive high-quality growth in our music business such as expanding SVIP memberships and advertising business as well as operational business improvement.

展望未來，我們將繼續推動音樂業務的高品質成長，例如擴大SVIP會員和廣告業務以及營運業務的改善。

We will also continue to invest in high-quality content, original content production as well as innovative technologies to further improve user engagement and enhance user experience.

我們也將持續投資優質內容、原創內容製作以及創新技術，進一步提升用戶參與度，提升用戶體驗。

We remain confident in the long-term healthy growth in music industry and our business and are dedicated to provide high-quality returns for our shareholders.

我們對音樂產業和業務的長期健康發展充滿信心，致力於為股東提供高品質的回報。

This concludes our prepared remarks.

我們準備好的演講到此結束。

We are now ready to take your questions.

我們現在準備好回答您的問題。

(Event Instructions) Liu Yang, Morgan Stanley.

（活動說明）劉洋，摩根士丹利。

(interpreted) Thank you very much.

（翻譯）非常感謝。

Thanks for the company for the presentation.

感謝公司的介紹。

I'd like to ask the first question.

我想問第一個問題。

First question is regarding the outlook for Q4 of this year and the Q1 next year.

第一個問題是關於今年第四季和明年第一季的展望。

From the presentation, I clearly noticed the Super VIP is progressing pretty well.

從演示中，我清楚地註意到超級 VIP 進展得相當不錯。

Especially based on the microeconomic condition and the competition, do you believe Super VIP is going to continue to boost our performance growth?

特別是基於微觀經濟狀況和競爭，您認為超級VIP會繼續推動我們的業績成長嗎？

Especially, what would be your outlook for Q4 of this year and the full year of next year?

特別是，您對今年第四季和明年全年的展望是什麼？

Thank you.

謝謝。

Okay.

好的。

Thanks for your questions.

感謝您的提問。

And I think this quarter's performance of TME once again testified the effectiveness of our high-quality growth strategy, which is shown by the balance of growth between our revenue and also the net profits as well as the subscribers and ARPPU.

我認為TME本季的表現再次證明了我們高品質成長策略的有效性，這體現在我們的收入和淨利潤以及用戶和ARPPU之間的成長平衡。

So for the midterm targets, I think, our key priority is to continue to expand our paying user base.

因此，對於中期目標，我認為我們的首要任務是繼續擴大我們的付費用戶群。

So at the same time, our commitment to grow the ARPPU is more than ever, which proven by the strong initial results of our Super VIP payer that you have mentioned.

因此，與此同時，我們對提高 ARPPU 的承諾比以往任何時候都更加堅定，您提到的我們的超級 VIP 付款人的強勁初步業績證明了這一點。

We have already recorded over 10 million subscribers as of the end of September 2024.

截至 2024 年 9 月底，我們的訂閱者數量已超過 1,000 萬。

As you may recall our business journey, I think our strategy evolution is basically transitioning from the pay downloads to streaming and also upgrading our basic membership to Green Diamond membership; has given us a lot of insights and also accumulated experience.

你可能還記得我們的商業歷程，我認為我們的策略演變基本上是從付費下載過渡到串流媒體，並將我們的基本會員升級為綠鑽會員；給了我們很多感悟，也累積了經驗。

We are now pushing the boundaries to explore more diverse music scenarios and add more high-quality content, product features, and also user privileges to our new Super VIP membership, which we strongly believe that it will help us to broaden our user base and deepen our user loyalty as well.

我們現在正在突破界限，探索更多樣化的音樂場景，為我們的新超級VIP會員添加更多優質內容、產品功能和用戶特權，我們堅信這將有助於我們擴大用戶基礎並深化我們的用戶忠誠度也是如此。

So it's going to be helping us to have a very healthy growth in the future.

因此，它將幫助我們在未來實現非常健康的成長。

Last but not least, I think that I would like to point out that we are now back on track to resume a positive revenue growth in 2024.

最後但並非最不重要的一點是，我想指出，我們現在已回到正軌，將在 2024 年恢復收入正成長。

And looking into 2025, we are optimistic about our growth prospects.

展望2025年，我們對我們的成長前景感到樂觀。

Assuming the external environment stays stable, we expect to see an acceleration in both the topline growth and mainly driven by the steady increase in the number of subscribers and ARPPU and also along with improved profits and profit margins.

假設外部環境保持穩定，我們預期營收成長將加速，這主要是由用戶數量和 ARPPU 的穩定成長以及利潤和利潤率的改善所推動的。

Lincoln Kong, Goldman Sachs.

林肯·孔，高盛。

Well, thank you management for taking my question.

好的，謝謝管理層回答我的問題。

Congrats on the pretty solid quarter.

恭喜這個季度的表現相當穩健。

So my question would be on the member side.

所以我的問題是在會員方面。

I think in the third quarter, we a new add up of 2 million new subscribers.

我認為在第三季度，我們新增了 200 萬訂戶。

That's actually better than we earlier expected or company's earlier target.

這實際上比我們之前的預期或公司之前的目標要好。

Could management share a bit more in terms of the reason behind it?

管理階層能否分享背後的原因？

And when we're thinking into fourth quarter, as we just passed the [Singles' Day], so could we have a bit more color in terms of the Singles' day promotion intensity?

當我們考慮到第四季度時，因為我們剛剛度過了雙11，那麼我們是否可以在雙11促銷強度方面有更多的色彩？

How should we think about the fourth-quarter new subscriber, as especially compared versus the third quarter?

我們該如何看待第四季的新用戶，特別是與第三季相比？

Any color in the user retention part will be great.

用戶保留部分的任何顏色都會很棒。

Thank you.

謝謝。

(interpreted) Thank you very much.

（翻譯）非常感謝。

Thanks for your question.

謝謝你的提問。

Yes, indeed, in Q3, the performance is better than expectation.

是的，確實，第三季的表現比預期要好。

I think it's mainly because of our strategies.

我認為這主要是因為我們的策略。

We still would like to keep a very stable operational strategy starting from this year to now.

從今年開始到現在，我們仍然希望維持非常穩定的營運策略。

And at the same time, we also pay much attention to the ever-extending privilege for the monthly subscribers.

同時，我們也非常注重包月訂閱者的不斷延伸的特權。

And we are also at the same time, continue to stabilize the growth of the product.

而我們也在同時，也持續穩定產品的成長。

At the same time in Q3, there are some festivals, especially the Mid-Autumn Festival.

同時Q3還有一些節日，尤其是中秋節。

We are also leveraging the campaign and the marketing strategies to make sure we grow our subscriber base in a very healthy way.

我們也利用該活動和行銷策略來確保我們以非常健康的方式擴大我們的用戶群。

Well, regarding the marketing strategies, and I think in Q4 of this year or Q1 of next year, we're still going to keep a very tight control over the marketing because we want to seek for healthy and steady growth of our business and rather retain the subscribers and the users within us.

那麼，關於行銷策略，我認為在今年第四季度或明年第一季度，我們仍然會對行銷保持非常嚴格的控制，因為我們想要尋求業務的健康穩定成長，而不是保留我們內部的訂戶和用戶。

And more importantly, we really want our users to know the true value of the subscription business, especially, the value of the content we provided to them.

更重要的是，我們確實希望我們的用戶了解訂閱業務的真正價值，特別是我們提供給他們的內容的價值。

In that way, the user will stay with us and still be active on our platform.

這樣，用戶將留在我們身邊並仍然活躍在我們的平台上。

In terms of the user or the subscriber privilege, in addition to the traditional content, and we were also trying to further improve the content quality.

在使用者或訂閱者特權方面，除了傳統的內容之外，我們也在努力進一步提高內容品質。

And besides the content, we also did a lot of job in order to improve the sound quality and the sound effect.

而除了內容之外，為了提升音質和音效，我們也做了很多工作。

For example, we continued our good cooperation with DTS.

例如，我們繼續與DTS保持良好的合作。

And at the same time, we also adopted the Audio 3D in order to provide more privilege to our users.

同時，我們也採用了Audio 3D，以便為我們的用戶提供更多的特權。

We also piloted some attempts in the in-car and the mobile end.

我們在車載端和移動端也進行了一些嘗試。

But at the same time, we do hope that we will provide the good service and functionalities and the privilege to better improve the service to the subscribers, and more importantly, to make them feel happy.

但同時，我們也希望能夠提供良好的服務和功能，以及更好地改善服務給訂閱者的特權，更重要的是讓他們感到高興。

Especially recently, we also provide when listening to the song and there are also some backing vocal privilege that has been provided to the user.

特別是最近，我們還提供了在聽歌曲時也有一些和聲特權已經提供給了用戶。

So overly speaking, regarding our operational strategy of the subscribers, we still would like to take the traditional standard measures plus SVIP as a combo therapy.

所以說過度的話，對於我們的使用者營運策略，我們還是願意採取傳統的標準措施加上SVIP作為組合療法。

In that way, we can continue to improve the monetization efficiency of our platform.

這樣，我們就可以持續提高平台的變現效率。

Regarding the basic users and what we are trying to do is still based upon the subscriber base.

關於基礎用戶，我們要做的仍然是基於用戶基礎。

We are going to continue to improve the size of the subscriber along with a very steady growth of the

我們將繼續擴大訂戶規模，同時保持穩定的成長

[ARRPU].

[ARPU]。

While at the same time, we also would like to emphasize on new user engagement and attention.

同時，我們也想強調新用戶的參與度和關注度。

And more importantly, for SVIP, we hope we can continue to promote the primary user from the subscriber to SVIP in order to further drive up the ARRPU.

更重要的是，對於SVIP，我們希望能夠繼續將主要用戶從訂閱者提升為SVIP，以進一步拉高ARRPU。

Because generally speaking, our SVIP size is still at a relatively low stage.

因為整體來說，我們的SVIP規模還處於比較低的階段。

So we hope it can go through for healthy and stable graphs in the near future that would also contribute to the future ARRPU improvement.

因此，我們希望它能夠在不久的將來呈現出健康穩定的圖表，這也將有助於未來 ARRPU 的改善。

Alicia Yap, Citi,

艾莉西亞葉 (Alicia Yap)，花旗銀行，

Thank you for taking my questions.

感謝您回答我的問題。

I have follow-up questions on

我有以下後續問題

--

--

Alicia, we can't hear you.

艾莉西亞，我們聽不到你的聲音。

Okay.

好的。

Sorry about the technical issue.

對於技術問題，我們深表歉意。

I think, Alicia, we'll go back to you later.

我想，艾莉西亞，我們稍後再聯絡你。

[Roger Duan], Barclays.

[Roger Duan]，巴克萊銀行。

Hi.

你好。

Thank you, management, for taking my question.

謝謝管理層回答我的問題。

So, thank you, management.

所以，謝謝你，管理階層。

So I have a follow-up also on SVIP program.

所以我也跟進了 SVIP 計劃。

So now we are over at 10 million as of third quarter.

截至第三季度，我們的銷量已超過 1,000 萬。

So just try to get a sense of how many of that was added during the quarter.

因此，請嘗試了解本季添加了多少。

And other than that, how many was converted from the regular VIP program or how many of that was from like new users?

除此之外，有多少是透過常規 VIP 計劃轉換的，或者有多少是來自新用戶？

Thank you.

謝謝。

(interpreted) Thank you very much.

（翻譯）非常感謝。

Thanks for your question.

謝謝你的提問。

According to the statistics, majority of our SVIP user are still be upgraded from the traditional or the basic SVIP.

根據統計，我們大部分的SVIP用戶仍是從傳統或基礎SVIP升級而來。

But we're also keeping an eye on the new customer engagement.

但我們也密切關注新客戶的參與。

But in that way, responding to your question, majority of the existing SVIP are still being promoted or upgraded from the basic VIP account.

但這樣一來，回答你的問題，現有的SVIP大部分還是從基礎VIP帳戶升級或升級的。

Interestingly speaking, according to the user profile SVIP, we noticed that many of them are young users.

有趣的是，根據SVIP的使用者畫像，我們注意到其中不少是年輕用戶。

This can also tell our service and the privilege we provided to the users are quite fit into their interest and needs.

這也可以說明我們的服務以及我們為使用者提供的特權是非常符合他們的興趣和需求的。

But at the same time, we also keep an eye on the user of the EV because we know that many of the EV user are indeed the young users.

但同時，我們也關注電動車的用戶，因為我們知道電動車的用戶中有很多確實是年輕用戶。

So we do want to further extend the cross-device privilege to our SVIP.

因此，我們確實希望進一步將跨裝置特權擴展到我們的 SVIP。

But at the same time, recently, we were also discussing combining SVIP with fence economy.

但同時，最近我們也在討論SVIP和柵欄經濟的結合。

And we were just wondering whether we can provide best VIP with the Starlight card in order to make sure they get the rewards and incentives from us.

我們只是想知道是否可以為最好的VIP提供星光卡，以確保他們從我們這裡獲得獎勵和激勵。

So that's the reason with true belief in the next few years, our SVIP sites still have empty room for further improvement, which will also contribute to the ever-increasing ARRPU.

所以這就是真正相信在未來幾年裡，我們的SVIP網站仍然有進一步改進的空間，這也將有助於不斷增長的ARRPU。

Thank you.

謝謝。

Zhang Lei, Bank of America.

張磊，美國銀行。

(interpreted) Thank you very much.

（翻譯）非常感謝。

Thanks for the management team.

感謝管理團隊。

I also have a follow up question regarding SVIP and ARRPU.

我還有一個關於 SVIP 和 ARRPU 的後續問題。

And first of all, we do see that SVIP size continue to grow, reaching 10 million within this quarter, which is better than what expected.

首先，我們確實看到 SVIP 規模持續成長，本季達到 1,000 萬，這比預期要好。

But it seems that ARRPU is not performing that well, especially been reflected in a single month of Q3.

但ARRPU 的表現似乎不太好，尤其是在第三季的單月中反映出來。

You might to kindly work us through the reason and how you're going to balance the user size growth along with the ARRPU growth.

請您告訴我們原因以及如何平衡用戶規模成長和 ARRPU 成長。

And to the management team, how are you going to expect the ARRPU growth in the near future?

對於管理團隊來說，您預期近期的 ARRPU 成長情況如何？

When it's going to see a very good response from the ARRPU?

什麼時候會看到 ARRPU 的好反應？

(interpreted) Thank you very much.

（翻譯）非常感謝。

Thanks for the question.

謝謝你的提問。

I have to say that our SVIP size is not coming to 10 million over just one night.

不得不說，我們的SVIP規模不是一晚就能達到1000萬的。

We will deep dive there for close to one year.

我們將在那裡深入研究近一年。

We start everything from scratch.

我們一切從頭開始。

So it is indeed a result of the startup efforts, where -- nowadays, we already reached 10 million SVIP user.

所以這確實是新創公司努力的成果，如今，我們已經擁有 1,000 萬個 SVIP 用戶。

But regarding the ARRPU, the ARRPU has been accumulated and being performed in a continuous approach.

但就ARRPU而言，ARRPU已經以連續的方式累積和執行。

But just now in my response to the previous questions I have already mentioned in our existing model and majority of the SVIP customer are still the traditional subscribers.

但剛才我在回答前面的問題時已經提到了，在我們現有的模式下，SVIP客戶大部分仍然是傳統訂閱者。

To respond to your question, at least from the model perspective, we believe when SVIP size reach 20 million to 30 million, then you're going to see more response from ARRPU.

回答你的問題，至少從模型的角度來看，我們相信當SVIP規模達到2000萬到3000萬時，你會看到更多來自ARRPU的回應。

In other words, it's going to be in line with the ever-increasing SVIP size graphs.

換句話說，它將與不斷增加的 SVIP 規模圖表保持一致。

And that means that when the SVIP penetration continue to improve, it also going to contribute more to ARRPU.

這意味著當 SVIP 滲透率持續提高時，它也將為 ARRPU 做出更大貢獻。

But here now, I think what you need to say is how the ARRPY graph is going to continue.

但現在，我認為你需要說的是 ARRPY 圖將如何繼續。

But we can't take ARRPU as an independent factor and assess it on the quarterly basis.

但我們不能將ARPU作為一個獨立的因素，按季度對其進行評估。

Just one more comment, and especially within our 10 million SVIP, I have to say its ARRPU higher than our basic subscriber account.

再多說一句，尤其是在我們的 1000 萬 SVIP 中，我不得不說它的 ARRPU 高於我們的基本訂閱者帳戶。

Fang Wei, Mizuho.

方偉，瑞穗。

Thank you taking my question.

謝謝你回答我的問題。

Just want to double click on the 10 million Super VIP milestone.

只想雙擊1000萬超級VIP里程碑。

By the way, congrats on the 10 million milestone.

順便說一句，恭喜您突破 1000 萬的里程碑。

Can you help share any color on the Super VIP kind of profile?

您能幫忙分享超級 VIP 類型的個人資料上的任何顏色嗎？

You mentioned, they tend to be more young users, right?

您提到，他們往往是年輕用戶，對吧？

What about by app, like we're seeing -- like QQ versus the Kugou apps, right?

那麼按應用程式呢，就像我們看到的那樣——例如 QQ 與酷狗應用程序，對吧？

And you also highlighted some of the key drivers, for example, premium audio quality, right, the long-form audio offering.

您還強調了一些關鍵驅動因素，例如優質音訊質量，對的，長格式音訊產品。

Just curious if there is a way to rank them by effectiveness this quarter?

只是好奇是否有辦法以本季的效率對它們進行排名？

And then which area do you plan to focus on going forward to continue to drive the conversion?

那麼您計劃未來重點關注哪個領域來繼續推動轉型？

Thank you.

謝謝。

(interpreted) Thank you very much.

（翻譯）非常感謝。

Responding to the first part of your question, at least from our operations, around that 10 million SVIP, half are coming from QQ Music and half from Kugou.

回答你問題的第一部分，至少從我們的營運來看，那1000萬個SVIP左右，一半來自QQ音樂，一半來自酷狗。

It is still in line with our high-value user operation strategy.

還是符合我們高價值用戶的營運策略。

As I mentioned in my presentation, and actually, we do provide the full privilege to SVIP user, including the long-form audio and the high-quality sound effect and sound quality and the first enjoyment of the digital album as well as the user experience for cross devices, recent experience.

正如我在演講中提到的，實際上，我們確實為SVIP用戶提供了充分的特權，包括長格式音頻和高品質的音效和音質以及數位專輯的首次享受以及用戶體驗對於跨設備，最近的經驗。

Well, regarding additional privilege, as I have already mentioned, we do provide the backing vocals.

嗯，關於額外的特權，正如我已經提到的，我們確實提供和聲。

But at the same time, we also provide the ringtone editing at the Kugou app.

但同時，我們也在酷狗APP上提供了鈴聲編輯功能。

But at the same time, we're also considering of providing some physical material privilege.

但同時，我們也在考慮提供一些物質上的特權。

For example, if you are SVIP with us, we can surely provide you some (inaudible) for example, like the calendars of the songs and we're also planning the SVIP family package or the family membership package because family membership package proved to be successful on the video website.

例如，如果您是我們的 SVIP，我們絕對可以為您提供一些（聽不清楚），例如歌曲日曆，我們還計劃 SVIP 家庭套餐或家庭會員套餐，因為家庭會員套餐被證明是在視訊網站上成功。

So we are also considering of referring this good practice to our SVIP business.

所以我們也在考慮將這個好的做法借鏡到我們的SVIP業務。

Wei Xiong, UBS.

熊偉，瑞銀。

(interpreted) Thank you very much.

（翻譯）非常感謝。

Thanks for the management team.

感謝管理團隊。

I have a question regarding social and entertainment business.

我有一個關於社交和娛樂業務的問題。

For social and entertainment business, in Q3 of this year, the revenue actually stood better than what expected.

社交娛樂業務方面，今年第三季的營收其實比預期好。

The revenue decrease also been narrowed down.

收入降幅也有所收窄。

Is it possible for the management team to elaborate on the reasons?

管理團隊能否詳細說明一下原因？

Is there any specific measure you take in order to continue to improve the business?

為了持續改善業務，您採取了哪些具體措施？

And especially, how we're going to take a look at the Q4 and the next year of social and entertainment business?

特別是，我們將如何看待第四季和明年的社交和娛樂業務？

How the growth rate might be?

成長率可能如何？

And what would be its contribution to the total revenue?

它對總收入的貢獻是多少？

Thank you.

謝謝。

(interpreted) Thank you very much.

（翻譯）非常感謝。

Thanks for your question.

謝謝你的提問。

Regarding social entertainment business, there are two platforms

社交娛樂業務有兩個平台

I think a good growth that has been identified are coming from WeSing.

我認為已經確定的良好成長來自全民唱歌。

On WeSing, besides live streaming business, and we also provide the other business, for example, advertisement business on WeSing and especially its subscription business and the VIP business are all performing than -- better than what we expected.

在全民K歌上，除了直播業務，我們還提供其他業務，例如全民K歌上的廣告業務，特別是訂閱業務和VIP業務，表現都比我們預期的要好。

So generally speaking, the better-than-expected WeSing performance continued to contribute to the revenue for social entertainment business compared with last year.

因此整體而言，優於預期的全民K歌表現持續為社交娛樂業務的收入貢獻較去年同期的貢獻。

The second one is on Kugou.

第二個是酷狗。

And on Kugou, especially on Kugou live and live streaming, we did a very good design over the interactive games.

而在酷狗上，特別是在酷狗直播和直播上，我們在互動遊戲方面做了非常好的設計。

It is more like a card collection mechanism and play, and which can help us to further implant the innovative play into the live streaming performance.

它更像是一種卡牌收集機制和玩法，可以幫助我們進一步將創新玩法植入到直播表演中。

So that's the reason we believe its revenue was better than what we expected.

這就是我們相信其收入優於我們預期的原因。

And I also believe that, that is also the reason its total contribution to the revenue growth is better than what we expected.

我也相信，這也是它對營收成長的總貢獻好於我們預期的原因。

As we continue to solidify our middle desk for the live streaming service and also register a very stable performance, in order to make sure more functionalities could be swapped from one platform to another, so in that way, I believe in the near future, the social and entertainment business still going to have very stable drops.

隨著我們不斷鞏固直播服務的中台，並取得非常穩定的性能，以確保更多的功能可以從一個平台切換到另一個平台，因此，我相信在不久的將來，社交和娛樂業務仍將出現非常穩定的下降。

Maggie Ye, CLSA.

葉瑪姬，里昂證券。

Thank you for taking my question.

感謝您回答我的問題。

Our MAU seems to have stabilized around RMB570 million in the past four quarters and they actually added RMB5 million in 3Q.

我們的每月活躍用戶數在過去四個季度似乎穩定在人民幣 5.7 億元左右，第三季實際上增加了 500 萬元人民幣。

So could management share with us the priority in your latest MAU strategy?

那麼管理階層能否與我們分享你們最新的月活躍用戶策略中的優先事項？

Shall we actually expect MAU to return to any growth at some point?

我們真的應該期望每月活躍用戶數在某個時候恢復成長嗎？

And how shall we think about future opportunities from deeper integration into Weixin ecosystem?

我們又該如何思考未來深度融入微信生態的機會？

Thank you.

謝謝。

(interpreted) Thank you very much.

（翻譯）非常感謝。

Thanks for the question.

謝謝你的提問。

Regarding our MAU strategy and growth, I think the key is still rest with the content, especially our self-commissioned content and unique content continue to drive up the MAU.

關於我們的MAU策略和成長，我認為關鍵還是內容，特別是我們的自營內容和獨特內容繼續拉動MAU。

And especially, today, I mentioned while working with celebrities and artists of launching the album, but at the same time, the content is played on different terminals.

特別是今天，我提到在與名人和藝術家合作推出專輯時，但同時內容在不同的終端上播放。

And in that way, we also have the self-made hits.

這樣一來，我們也有了自製的熱門作品。

Most importantly, those high-quality content continue to drive up MAU.

最重要的是，這些高品質的內容繼續推高月活躍用戶數。

That is the strategy for us to continue to improve MAU growth.

這是我們持續提高每月活躍用戶成長的策略。

From the product functionality perspective, for the past one year, we continue to optimize the play experience and provide more innovative actions of the interactive with the users.

從產品功能來看，這一年來，我們不斷優化遊戲體驗，提供更多與使用者互動的創新動作。

That can help us to further retain the users and continue to grow the MAU.

這可以幫助我們進一步留住用戶並繼續增加每月活躍用戶數。

And especially.

尤其是。

I was mentioning that MAU on the terminal end, the growth has been pretty helpful.

我提到終端月活躍用戶數的成長非常有幫助。

But at the same time, on QQ Music, on this platform and we find out the promotion and marketing over ROCE really works and it proved to be physical.

但同時，在QQ音樂這個平台上，我們發現ROCE上的推廣和行銷確實有效，而且被證明是實體的。

So that's the reason it can also help to drive up the MAU.

這就是它也有助於提高每月活躍用戶數的原因。

And that's the reason we also would like to copy the successful story to Kugou.

這就是我們也想將這個成功故事複製到酷狗的原因。

But at the same time, I also would like to say that in-car DAU and IoT is still going to be a great growth driver in the near future, especially for the in-car business.

但同時，我也想說，車載DAU和物聯網在不久的將來仍然將是一個巨大的成長動力，尤其是對於車載業務而言。

And I think, a great opportunity was there.

我認為，這是一個很好的機會。

And besides Kugou and the concept version and [Kuwo] app, we hope that we're going to keep an eye on new apps in order to further contribute to the growing MAU.

除了酷狗、概念版和[酷我]應用程式之外，我們希望我們能夠關注新的應用程序，以便進一步為不斷增長的每月活躍用戶做出貢獻。

And regarding the second part of question, how we're going to keep an eye on, listen to WeChat.

關於問題的第二部分，我們將如何關注、傾聽微信。

We do believe listen to WeChat is a great platform with very good growth.

我們確實相信聽微信是一個很棒的平台，並且有很好的成長。

But strategically speaking, we're also going to help listen to WeChat to gain a better growth.

但從策略上來說，我們也會幫助聽微信獲得更好的成長。

I think its business size looks okay and hope in the near future, it could also be an active platform and continue to lay a solid foundation for our self-commissioned content in the near future.

我覺得它的業務規模看起來還可以，希望在不久的將來，它也能成為一個活躍的平台，繼續為我們在不久的將來自製內容打下堅實的基礎。

Thomas Chong, Jefferies.

托馬斯莊，杰弗里斯。

Hi.

你好。

Good evening.

晚安.

Thanks, management, for taking my question.

謝謝管理層回答我的問題。

My question is about operating expenses as well as a margin trend.

我的問題是關於營運費用以及利潤率趨勢。

Given that we already exceed 40% in terms of our GP margin, I just want to get some more color regarding our 2025 and our long-term profit trend and margin trend.

鑑於我們的毛利率已經超過 40%，我只想了解更多有關 2025 年以及長期利潤趨勢和利潤趨勢的資訊。

What are the key areas that we can get a further coverage in in our cost side?

我們在成本方面可以進一步涵蓋哪些關鍵領域？

And on OpEx side, how should we think about S&M expenses going forward and our loan IFRS earnings growth, going forward?

在營運支出方面，我們應該如何考慮未來的 S&M 費用以及我們的貸款 IFRS 收益成長？

Thank you.

謝謝。

(interpreted) Thank you very much.

（翻譯）非常感謝。

Let me talk about the GP margin first.

我先說一下GP利潤率。

In Q3, our GP margins stood at 42.6%.

第三季度，我們的毛利率為 42.6%。

We registered continued growth for a few quarters.

我們連續幾個季度實現了持續成長。

I'm talking about a few drivers.

我說的是幾個司機。

The first driver is the ever-increasing revenue from the music business and also the growing of our user base.

第一個驅動因素是音樂業務收入的不斷增加以及我們用戶群的不斷增長。

ARRPU of the user and also the rapid growth from the advertisement business, all positively contribute to the GP margin.

用戶的 ARRPU 以及廣告業務的快速成長都對 GP 利潤率做出了積極貢獻。

The second reason is because we adopt ROC in managing the cost.

第二個原因是因為我們採用ROC來管理成本。

So that's the reason the cost on the copyrighted content, and especially, the content cost growth is actually lower than our music revenue growth.

這就是版權內容的價值，尤其是內容成本成長實際上低於我們的音樂收入成長的原因。

And the third driver is because that we have a more contribution from the self-commissioned content and the co-created content that also going to positively contribute to the GP margin.

第三個驅動因素是因為我們從自我委託內容和共同創建的內容中獲得了更多貢獻，這也將為 GP 利潤做出積極貢獻。

But regarding the social business, and you can say we also took some better strategies, and we continue to reduce the percentage of the live streaming share.

但是在社交業務方面，可以說我們也採取了一些更好的策略，我們不斷降低直播的份額。

But at the same time, we see SVIP revenue growth and advertisement growth also contribute a lot to our social revenue margin improvement.

但同時，我們看到 SVIP 收入成長和廣告成長也為我們社交收入利潤率的提高做出了很大貢獻。

So look into Q4 of this year and 2025 and I do believe the factors mentioned above still going to play very important roles.

因此，展望今年第四季和2025年，我相信上述因素仍將扮演非常重要的角色。

But regarding the GP margin, besides a good improvement, I think in 2025, the growth rate might lower than what we saw in 2024.

但就毛利率而言，除了有很好的改善外，我認為2025年的成長率可能會低於我們在2024年看到的水平。

We're talking about the operating expenses.

我們正在談論營運費用。

We foresee that in 2025 S&M expenses and the G&A expenses going to grow slightly, but its growth rate would be much lower than our revenue growth rate.

我們預計2025年S&M費用和G&A費用將小幅成長，但其成長率將遠低於我們的收入成長率。

So I do believe that in 2025, the adjusted net profit and the adjusted net profit rate still going to have a good growth momentum.

所以我相信2025年調整後的淨利潤和調整後的淨利潤率仍然會有很好的成長動能。

You also asked about effective tax rate.

您也詢問了有效稅率。

And at least from the operational perspective, we do believe effective tax rate is going to remain unchanged.

至少從營運角度來看，我們確實相信有效稅率將保持不變。

But for this year and because we have many of the dividend that has been sent from the onshore companies to the offshore, so that's the reason it generates many withholding tax, which makes our effective tax rate looks higher.

但今年，因為我們有很多股息從境內公司發送到境外，所以這就是產生許多預扣稅的原因，這使得我們的有效稅率看起來更高。

We are -- looking to next year, we may still have similar dividend programs and we are also going to have the measures in place.

展望明年，我們可能仍然有類似的股息計劃，並且我們也將採取措施。

But regarding the total size of the dividend, that has not yet been confirmed.

但關於股利的總規模，尚未得到證實。

Okay.

好的。

Thank you everyone for joining us today.

感謝大家今天加入我們。

If you have any further questions, please feel free to contact our IR team.

如果您還有任何疑問，請隨時聯絡我們的 IR 團隊。

And this concludes today's call.

今天的電話會議到此結束。

And thank you again and look forward to speaking to you next quarter.

再次感謝您，並期待下個季度與您交談。

Thank you very much.

非常感謝。

Thank you.

謝謝。

Thank you.

謝謝。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call.

此文字記錄中標記（翻譯）的部分是由現場通話中的口譯員說出的。

The interpreter was provided by the company sponsoring this event.

口譯員由贊助本次活動的公司提供。