JOYY Inc (YY) 2020 Q4 法說會逐字稿

完整原文

使用警語:中文譯文來源為 Google 翻譯,僅供參考,實際內容請以英文原文為主

  • Operator

  • Ladies and gentlemen, thank you for standing by, and welcome to the JOYY Inc's.

  • Fourth Quarter and Full Year 2020 Earnings Call.

  • (Operator Instructions)

  • I'd now like to hand the conference over to your host today, Jane Xie, the company's senior manager of Investor Relations.

  • Please go ahead, Jane.

  • Jane Xie

  • Thank you, operator.

  • Good morning and good evening, everyone.

  • Welcome to JOYY's Fourth Quarter and Full Year 2020 Earnings Conference Call.

  • Joining us today are Mr. David Xueling Li, Chairman and CEO of JOYY; our CFO, Mr. Bing Jin; and COO, Ms. Ting Li.

  • For today's call, management will first provide a review of the quarter, and then we will conduct a Q&A session.

  • The fourth quarter 2020 financial results and webcast of this conference call are available at ir.joyy.sg.

  • A replay of this call will also be available on our website in a few hours.

  • Before we continue, I refer you to our safe harbor statement in our earnings press release, which apply to this call as we will make forward-looking statements.

  • Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in renminbi.

  • I will now turn the call over to our Chairman and CEO, Mr. David Xueling Li.

  • Please go ahead, sir.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] Hello, everyone, and welcome to our fourth quarter 2020 earnings conference today.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] 2020 marks a turning point in our corporate development.

  • In 2010, when we originally launched YY Live, we had the vision of connecting people and enriching their lives through video.

  • Since then, our vision has led us to incubate, develop and capitalize on a number of growth initiatives, including YY Live, Huya, BIGO LIVE, Likee, Hago and more.

  • Today, excluding YY Live, JOYY serves over 350 million users worldwide through a diverse portfolio of online entertainment products in live streaming, short form video, casual games, instant messaging and audio-based social media.

  • After merely 5 years of development, our overseas business, BIGO, has already generated larger revenue than YY Live in 2020.

  • Our track record of success has validated not only our long-term growth strategy, but also our unique capability in leading continuous innovation and our commitment to generating impressive ROI for shareholders.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] Going forward, we will remain focused on fueling our live streaming and short-form video growth engines, accelerating our overseas expansion and building JOYY into an increasingly vibrant, diverse and engaging social entertainment ecosystem.

  • We firmly believe that BIGO LIVE has the potential to grow to at least 4x the scale of YY Live in terms of revenue.

  • We also foresee great monetization potential for Likee as it enjoys substantial competitive advantage in low-entry barrier for user content production, high user engagement and interactivity and intrinsic social features.

  • We plan to realize the potential of both platforms through combination of global footprints and localized operations.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] To further localize our product offerings and business operations, we will further strengthen our talent team with technology expertise, global vision and local knowledge.

  • As of December 2020, over 25% of BIGO staff were hired locally.

  • Armed with local language, cultural background and consumer insights, our employees are able to tailor our products to the unique user preferences in each target market and thus expand our local user base.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] Now turning to our quarterly performance.

  • As we prepare our next phase of growth in the post-pandemic world, we continue to witness a rise in demand for online entertainment and socialization, as evidenced by our solid financial and operational results in the fourth quarter.

  • BIGO's revenue increased by 87.9% year-over-year to RMB 3.4 billion in the fourth quarter, primarily driven by continued user base growth and improved monetization capabilities of several platforms.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] In the fourth quarter, BIGO LIVE's revenue increased by 100.4% year-over-year, while increasing its MAUs outside of India by 54.3% year-over-year to RMB 28.4 million.

  • Developed markets also continued to perform strongly in the quarter as BIGO LIVE's revenue in developed markets increased by 198.8% year-over-year, driven by a 68.3% year-over-year increase in MAUs and a 131.6% year-over-year increase in paying users.

  • Additionally, revenues in the Middle East grew by 87.4% year-over-year, driven by a 63% year-over-year increase in MAUs and 85.4% year-over-year increase in paying users.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] During the fourth quarter, in addition to fulfilling users' needs for pan-entertainment content, BIGO LIVE also augmented its user activity and engagement by continuously innovating its social interaction feature.

  • For example, our newly released features enabled users to seamlessly move between single and multi-user group chat rooms, empowering ordinary users to easily integrate live streaming into their regular social interactions.

  • As a result, on a sequential basis, our user base penetration rates increased by 10.9% for multiuser video chat rooms and 2.3% for multiuser audio chat rooms.

  • As we continue executing such product strategy, we are laying a solid foundation for our sustainable growth going forward.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] On the brand enhancement front, we hosted the second annual BIGO awards Gala in January, which featured a variety of live performances, including fire dances, DJ sets and K-Pop dancers by top streamers from around the world.

  • Although this year's gala was held entirely online due to travel and social gathering restrictions, BIGO's influential brand attracted approximately 4 million viewers globally and over 20 million viewers vote for their favorite performances.

  • To further boost BIGO's brand recognition, we placed billboards for our award-winning streamers at landmarks across 23 different countries, including NYC's Times Square Seoul Coex Convention center, Istanbul's Sapphire Tower and many others.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] We further expanded Likee's user base and accelerated its commercialization.

  • In the fourth quarter, Likee's MAUs outside India grew by [119%] year-over-year to [RMB 114 million].

  • In addition, its user base continued to expand rapidly in many regions, with MAUs ramping up by [55.3%] year-over-year in developed countries and 233.9% year-over-year in the Middle East.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] While maintaining its rapid global user base expansion, in the fourth quarter, Likee also made significant progress in monetization, mainly through live streaming.

  • Consequently, Likee's revenue increased by 407.5% year-over-year and 41.4% quarter-over-quarter, largely driven by growth in developed worlds and the Middle East.

  • Revenue from developed markets grew by 299% year-over-year, while revenue from the Middle East multiplied by 31x year-over-year.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] To help Likee's users further enhance the efficiency, effectiveness and quality of their content production, we continue to improve the platform's video capturing and image enhancement tools in the quarter.

  • Our upgrade of AI-powered music recommendation feature can automatically provide users with suitable background music options for their self-produced videos.

  • As a result, the average daily number of video uploads featuring our recommended song tracks increased by 300,000 in the quarter.

  • Moreover, by continuously optimizing our search engine algorithms, we were able to boost our user search satisfaction rate by 3% quarter-over-quarter.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] As the leading global short-form video platform, we prioritize the quality and availability of content at the core engine to drive Likee's sustainable growth.

  • As such, we seek to attract top-tier content creators, optimize content recommendation algorithms and refine our user experiences continuously.

  • In 2021, we plan to further localize Likee's content ecosystem and social community by reducing its entry to barriers to content production, boosting its content creators' enthusiasm and productivity and empowering content creators in all aspects.

  • With its social community DNA, user interaction propensity and accelerated monetization via live streaming, Likee enables the talented creators to reach large audience and gain more economic rewards, who, in turn, produce more quality content for Likee, thus forming a good virtuous cycle.

  • As a result, we believe that we are able to attract a broader range of content creators, further enrich our content offerings and ultimately bring new users to the platform.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] As HAGO increased its quarterly prepaid user count by 121.2%, its revenue grew by 69.4% year-over-year.

  • In line with our previous forecasts, HAGO achieved the first single breakeven month in the fourth quarter of 2020 and narrowed its quarterly loss as compared to the average of the first 3 quarters in 2020.

  • Product-wise, we introduced a game feature called Party so that multiple users can play casual games and interact with one another through our audio chat rooms at the same time, such update enhanced user interactions on the platform as the user base penetration rate for our feature channels improved by 51% year-over-year to 41.9%.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] In summary, during the fourth quarter, we achieved rapid user base growth and promising monetization progress for certain products.

  • Going forward, we will uphold our mission to connect people and we enrich their lives through video, expand our global footprint through localization and construct an increasingly diversified social and entertainment ecosystem.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] Beyond expanding our existing business, we also stay attuned to new opportunities in the industrial AI internet and cross-border e-commerce sectors.

  • In addition, leveraging on our established technical expertise in real-time audio and video interactions as well as our extensive social and entertainment applications.

  • We have already made preliminary exploration in cloud-based and enterprise services.

  • Looking ahead, we will continue to explore new business development opportunities and generate greater returns for our long-term shareholders.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] Before I turn the call to our CFO, Bing Jin, I would like to take a moment to thank him for his years of dedication and contributions to JOYY.

  • As previously disclosed in our SEC filing, Bing is pursuing a new job opportunity and will leave his position at the company's CFO at the end of April.

  • On behalf of all of our colleagues here at JOYY, I wish him the best in his future endeavors.

  • In the meantime, we have commenced a search process for a new CFO.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Bing Jin - CFO

  • [Interpreted] That concludes my prepared remarks.

  • I will now turn the call to Bing for a more detailed explanation of our quarterly financial results.

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • (technical difficulty)

  • Bing Jin - CFO

  • Thanks, David.

  • Hello, everyone.

  • As David noted, I will leave my current position as the company's CFO at the end of April, to pursue a new job opportunity.

  • I would like to start off by saying that it has been a true honor to serve as JOYY's CFO and grow together with the company over the past several years.

  • I will always cherish this experience and would like to thank David and all of my colleagues here for their guidance, support and friendship.

  • Looking ahead, I firmly believe that this company remains well positioned to continue developing its competitive advantage increasing its share of global social entertainment market and delivering outstanding results.

  • Now as JOYY's CFO, I will talk about the financial results.

  • Please note that the financial information and non-GAAP financial information disclosed in our fourth quarter earnings press release is presented on a continuing operation basis, unless otherwise specified, specifically stated.

  • After the deconsolidation of Huya, the company accounts for our investment in Huya as an equity method investment and applied the equity method accounting 1 quarter in arrears to enable us to provide financial disclosures independent of the reporting schedule of Huya.

  • Also, as the company entered into definitive agreements with Baidu on November 16, 2020, pursuant to which Baidu will acquire JOYY's domestic video-based entertainment live streaming business, YY Live.

  • And the sale of YY Live was substantially completed on February 8, 2021.

  • The historical financial results of YY Live are reflected in the company's consolidated financial statements as discontinued operations accordingly, starting from the fourth quarter of 2020.

  • During the fourth quarter of 2020, we maintained our strong momentum and delivered robust financial and operating metrics.

  • Our total net revenue for the fourth quarter increased by 77.5% year-over-year to RMB 3.78 billion from RMB 2.13 billion in the same period of 2019.

  • In particular, our live streaming revenues for the fourth quarter increased by 93.3% year-over-year to RMB 3.59 billion, driven by live streaming revenues growth from BIGO.

  • Other revenues in the fourth quarter decreased by 30.5% to RMB 189.6 million.

  • Cost of revenues for the fourth quarter increased by 76.6% year-over-year to RMB 2.67 billion.

  • Revenue sharing fees and content costs increased to RMB 1.69 billion in the fourth quarter from RMB 708.6 million in the same period of 2019, which was in line with the increase in live streaming revenues.

  • Bandwidth costs decreased to RMB 179.5 million from RMB 221.8 million in the same period of 2019, primarily related to the company's improved efficiency and the termination of bandwidth usage for users in India after its measures to block certain Chinese mobile apps in late June 2020, partially offset by the continued user base expansion outside India.

  • Gross profit increased by 79.6% year-over-year to RMB 1.11 billion.

  • Gross margin in the fourth quarter of 2020 improved to 29.3% from 29% in the same period of 2019.

  • Operating expenses for the fourth quarter increased to RMB 1.68 billion from RMB 1.58 billion in the same period of 2019.

  • Among the operating expenses, sales and marketing expenses increased to RMB 973.8 million in the period.

  • From RMB 782 million in the same period of 2019, primarily due to the company's increased efforts in sales and marketing activities in overseas markets.

  • Our general and administrative expenses for the fourth quarter decreased to RMB 236.3 million from RMB 319.8 million in the same period of 2019, mostly due to decrease in provision for loss allowances of receivables.

  • Our GAAP operating loss for the fourth quarter decreased to RMB 557.6 million from RMB 863.3 million in the same period of 2019.

  • Operating loss margin for the fourth quarter was narrowed to 14.7% compared to 40.5% in the same period of 2019, primarily due to narrowing operation loss of BIGO.

  • Our non-GAAP operating loss for the fourth quarter, which excludes share-based compensation expenses, amortization of intangible assets from business acquisitions as well as impairment of goodwill and investment and gain on disposal of subsidiaries and business, decreased by 60.7% to RMB 220.7 million compared to RMB 561.5 million in the same period of 2019.

  • Non-GAAP operating loss margin for the fourth quarter was narrowed to 5.8% from 26.3% in the prior year period.

  • Notably, BIGO has achieved a positive non-GAAP operating income for the second consecutive quarter of RMB 49.2 million, with non-GAAP operating margin improved to 1.5% from negative 11.3% in the prior year period.

  • GAAP net loss attributable to controlling interest of JOYY for the fourth quarter of 2020 was RMB 791.9 million compared to RMB 816.6 million in the same period of 2019.

  • Net loss margin was 20.9% in the fourth quarter of 2020 compared to 38.3% in the corresponding period of 2019.

  • Non-GAAP net loss attributable to controlling interest and common shareholders of JOYY was RMB 149.4 million from RMB 455.7 million in the same period of 2019.

  • Non-GAAP net loss margin was narrowed to 3.9% in the fourth quarter of 2020 from 21.4% in the same period of 2019.

  • Diluted net loss per ADS in the fourth quarter of 2020 was RMB 10.07 compared to RMB 10.43 in the same period of 2019.

  • Non-GAAP diluted net loss per ADS was narrowed to RMB 1.86 from RMB 5.7 in the same period of 2019.

  • Now turning to our results for the full year of 2020.

  • Our total net revenues increased by 112.1% year-over-year to RMB 13.23 billion, driven by the same factors that led to the quarterly increase.

  • Our net loss attributable to controlling interest of JOYY for the full year of 2020 decreased by 79.7% to RMB 105.1 million from RMB 516.7 million in 2019.

  • Our non-GAAP net loss attributable to controlling interest and common shareholders of JOYY for the full year of 2020 was RMB 1.14 billion compared to RMB 1.96 billion in 2019.

  • Non-GAAP net loss margin for the full year 2020 was improved to 8.6% compared to 31.5% in 2019.

  • Diluted net loss per ADS for the full year of 2021 narrowed by 71.6% year-over-year to RMB 2.14 from RMB 7.54 in 2019.

  • And non-GAAP diluted net loss per ADS for the full year was narrowed to RMB 14.28 compared to RMB 25.42 in 2019.

  • In addition, in accordance with our quarterly dividend plan approved on August 11, 2020, and on November 16, we will be distributing a dividend of USD 0.51 per ADS for the fourth quarter of 2020, which is expected to be paid on April 30, 2021, to shareholders of record as of the close of business on April 19, 2021.

  • Also, we would like to provide an update to our execution of the share repurchase program announced on May 2020, under which the company may repurchase up to [USD 300 million] of its shares to August 2021.

  • As of December 31, 2021, the company has repurchased approximately USD 139.5 million of its shares.

  • As mentioned in David's speech, we will continue to invest in business development initiatives to further expand our global market reach, cultivate our highly engaged user community and augment our high-quality content offerings.

  • We will also actively explore other ways to return value to our shareholders and maximize shareholder value, such as a potential dividend payout or share buyback programs.

  • For the first quarter of 2021, we expect our net revenue to be between USD 590 million and USD 605 million, representing a year-over-year increase between 72.5% to 76.9%, excluding the revenue contribution from Huya and YY Live in the same period of last year.

  • We currently have limited visibility surrounding the COVID-19 epidemic's long-term impacts and geopolitical uncertainties in our business and the markets in which we operate.

  • Therefore, this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change.

  • That concludes our prepared remarks.

  • Operator, we would now like to open up the call to questions.

  • Thank you.

  • Operator

  • (Operator Instructions) Our first question comes from Thomas Chong at Jefferies.

  • Thomas Chong - Equity Analyst

  • (foreign language) Congratulations on a strong set of results.

  • My question is about BIGO Live.

  • Can management share about the paying ratio as well as the ARPU at the moment?

  • And with regard to our 2020 revenue growth, what's the contribution coming from user paying ratio as well as ARPU?

  • Bing Jin - CFO

  • Thank you, Thomas.

  • Let me address those questions.

  • In terms of the current paying ratio and ARPU of BIGO LIVE.

  • Let's talk about the paying ratio first.

  • The paying ratio of BIGO LIVE is still lower than in China YY live, but we have seen a good ramp-up of the paying ratio for BIGO LIVE.

  • In particular, BIGO LIVE's strategy is penetrating in the developed markets.

  • Developed markets has revenue contribution to BIGO LIVE is over 43% already.

  • So as we have covered more developed markets, the paying behavior, the paying capability of those developed market users, obviously, is higher than the original emerging markets.

  • So we will continue to see a ramp-up of the paying ratio.

  • But it's still lower than in China at this stage.

  • We see a good future potential.

  • In terms of the ARPU, as we explained to the investors before and analysts before, the general ARPU of BIGO LIVE is around 3x of YY Live.

  • And as we penetrate to more developed markets, we will also see a future ramp-up of the ARPU level for BIGO LIVE in general.

  • In terms of the contribution for our revenue in 2020.

  • As you can see, we have achieved more than 110% year-on-year growth for revenue contribution.

  • I would say, roughly 1/3 is from the user expansion, mainly the MAU growth for BIGO LIVE, particularly driven by developed markets, as I mentioned; and 1/3 for paying ratio expansion and also 1/3 for ARPU expansion.

  • Operator

  • Our next question comes from Alex Poon at Morgan Stanley.

  • Chun Man Poon - Equity Analyst

  • (foreign language) My question is related to Likee.

  • Could management please share the user and revenue target in the next 1 to 2 years?

  • And in terms of the user engagement, revenue diversification, geographical distribution, how is it different from BIGO LIVE?

  • And in terms of user behavior, is there any notable difference between Likee and short video platforms in China?

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Jane Xie

  • [Interpreted] This is David.

  • Let me answer your question.

  • As I mentioned in the previous speech, like we just started modernization recently, and in the past 3 years of development, we have focused on user expansion and also community cultivation.

  • I believe that in the long run, we expect some changes to Likee's long-term strategy in the following aspects, especially in terms of (inaudible) understanding of the competitive landscape, we'd like to prioritize 2 features of our Likee.

  • First one is the social community and user interaction.

  • Second, it's our content creators.

  • I believe that if we continue to cultivate our social community, improve user interaction and continue to empower our content creators in all aspects, would be able to achieve a differentiated competitive advantage against our competitors, especially based on our understanding and our knowledge, we believe that a lot of our competitors are still having a very completely different ecosystem, whereby it's more like a media feature, whereby the KOLs are dominated platform.

  • While Likee is more content -- it's more a community, which emphasizes user interactions and also content creator-focused.

  • So I believe that based on such a long-term strategy, we'd be able to have a differentiated competitive advantage in the global industry and that would also help the company and Likee to achieve long-term sustainable growth.

  • Operator

  • Our next question comes from Yiwen Zhang from Citi.

  • Yiwen Zhang - Assistant VP & Analyst

  • (foreign language) So my question is on the overseas live streaming.

  • We entered in this market for 5 to 6 years, and we enter different markets in different time.

  • Can we discuss what stage of live streaming in each market is, the Middle East or North America and Europe?

  • Also, can you touch on any recent change you're seeing in live streaming industry in the overseas market?

  • Xueling Li - Co-Founder, Chairman & CEO

  • (foreign language)

  • Jane Xie

  • [Interpreted] This is David.

  • Let me take your question.

  • I'd love to clarify here is that if you look at our quarterly over quarter growth rate for BIGO in RMB, you might consider growth rate relatively flat with minor decrease.

  • But if you actually exclude the FX loss fluctuation and you look at it on a constant currency basis, in terms of U.S. dollar, we actually accomplished a quarterly over quarter increase of 4% and year-over-year increase of 82%.

  • So that actually proves our point that the overseas live streaming industry is actually growing at a very fast speed.

  • In terms of -- especially if you look at the scale of BIGO's revenue, right now, we have already surpassed RMB 10 billion in terms of revenue for the full year.

  • And the fact that we'll be able to still grow our revenue as such a rapid speed, at such scale, creates that -- the potential of the overseas live streaming industry.

  • And also, in the past, it was a tradition for the market to believe that the U.S. users does not actually have the habit of tipping on live streaming platforms.

  • Well, actually, in the past few years of business practice, we've actually witnessed a very strong growth in the live streaming sector in the U.S. market.

  • So it's not a China-specific business model.

  • It's already a well-established and well accepted business model to monetize your users.

  • And we believe that it's actually a quite -- not only mature, but a very user-friendly business model in a way that it does not interrupt users from enjoying the use of these applications, and it does not interrupt the user's user experience improvement while using their apps.

  • So it's actually a very good business model as compared to a lot of other monetization tools.

  • So if you look back, as we launched our audio live streaming and video live streaming in 2010, I think that we witnessed the growth process, the trajectory in the past 10 years.

  • And we've seen that today, it has come to a point in China that almost all Internet companies, small and big, have all included live streaming as a very essential and important or even main monetization tool.

  • So I think that it will be the same for U.S. and also the other overseas countries.

  • Especially in U.S. for platforms, such as YouTube, Instagram or Facebook.

  • I think it's very likely that they'll will all kick off monetization via live streaming soon.

  • So it's just a matter of time and the difference in terms of on the stage of developments between the PIC live streaming sector and the overseas sector.

  • We believe that such evolvement will continue to drive the market potential of the overseas live streaming sector to even larger.

  • And also, everyone will be able to contribute to the whole ecosystem.

  • In China, we have seen that even with the major -- the big conglomerate entering into live streaming sector, it actually does not affect those existing players' market share or their revenue scale.

  • It's because what we saw was that the market begin to recognize or increasingly recognize on the business model and the scale of the total market began to increase to a new level.

  • And I think that -- and also for the applications, it was previously mainly focused on entertainment live streaming.

  • And then throughout the development in several years, we began to see multiple applications via live streaming in areas such as education, e-commerce and also other abundant applications.

  • So I think that such trend is likely to replicate in the overseas sector, and we believe that we'll be able to see the potential of the whole market and be able to continue to capture such market potential.

  • Operator

  • Our next question comes from Lei Zhang at Bank of America.

  • Lei Zhang - Associate

  • (foreign language) Can you give us more color on the use of cash?

  • And the spending plan for BIGO's oversea markets?

  • And then how should we look at the marketing trend for BIGO in 2021?

  • Bing Jin - CFO

  • Thanks, Zhang.

  • Let me address those 2 questions.

  • First is regarding the use of proceeds.

  • We had a good cash balance right now.

  • And obviously, after Baidu's acquisition of YY Live is complete, we'll have additional users coming in.

  • And then we have several matters of utilize this cash.

  • One is, obviously, we still need to organic grow our business, particularly given the global overseas market's much bigger potential.

  • So we'll continue to invest in terms of sales, marketing, R&D, artificial intelligence, et cetera.

  • Secondly, we had a USD 1 billion convertible bond outstanding.

  • So at the right time, we will pay back that convertible bond.

  • So that's another USD 1 billion cash usage.

  • Thirdly, as we mentioned in the prepared remarks, we are thinking about a potential dividend or additional share buyback programs, obviously, depending on the share price of returning more value to shareholders.

  • So we'll keep flexible in terms of the cash usage.

  • We will not do big scale M&A at this stage.

  • So in general, we will make sure that we generate good value for the shareholders.

  • Secondly, in terms of the investment for BIGO, there are 2 parts.

  • One is BIGO LIVE.

  • BIGO LIVE already very profitable, over 20% margin profile.

  • So I think the margin of BIGO LIVE will continue to improve given that we will further enhance the overseas payment channel efficiency.

  • And then with the ramp in the revenue growth scale, we'll achieve more operating leverage on various expense and cost items.

  • For Likee, the strategy going forward will be a more balanced approach.

  • We will pay more attention to the ROI of the spending and focus on the key areas where Likee has very strong presence, and we will find a way of further monetizing the Likee's user base.

  • So as a result, I think the investment of Likee will also be further, I would say, monitored according to the ROI return.

  • So in general, if you combine these 2 together, the non-GAAP net margin for BIGO will obviously be positive.

  • As we said, we have already achieved breakeven for 2 consecutive quarters.

  • If you look at the full year 2021, I think we will be able to achieve kind of low single-digit margin profile for BIGO as a whole.

  • Hopefully, that answers your question.

  • Operator

  • That's all the time we have for questions, I will hand back to management for closing remarks.

  • Jane Xie

  • Thank you for joining our call.

  • We look forward to speaking with everyone next quarter.

  • Bing Jin - CFO

  • Thank you, everyone.

  • Xueling Li - Co-Founder, Chairman & CEO

  • Thank you.

  • Bye-bye.

  • Operator

  • Ladies and gentlemen, that does conclude our conference for today.

  • Thank you for your attendance.

  • You may now disconnect.