JOYY Inc (YY) 2020 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to JOYY Inc.'s First Quarter 2020 Earnings Call.

(Operator Instructions) Please note, this event is being recorded.

I'd now like to hand the conference over to your host today, Mr. Matthew Zhao, General Manager of Investor Relations of the company.

Please go ahead.

Thank you, operator.

Good morning, and good evening, everyone.

Welcome to JOYY's First Quarter 2020 Earnings Conference Call.

Joining us today are Mr. David Xueling Li, Chairman and CEO of JOYY; 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 first quarter 2020 financial results and webcast of this conference call are available at ir.yy.com.

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.

(foreign language)

[Interpreted] Thank you, Matthew.

Hello, everyone.

Welcome to our first quarter 2020 earnings call today.

First of all, all of us at JOYY Inc.

hope you and your loved ones stay safe and healthy.

As the COVID-19 pandemic sweeps across the globe, we are experiencing unprecedented disruptions to our normal way of life.

To those who combat the pandemic on the front lines including doctors, nurses and volunteers, you are the unsung heroes of this extraordinary time.

We sing highly of your courage, compassion and dedication.

(foreign language)

I would also like to thank all of our own employees around the world.

You have demonstrated remarkable resilience and adaptability during this time of uncertainty and change.

Because of your hard work and ingenuity, we were able to continue delivering strong operating and financial results in the first quarter of 2020 despite the challenging macro environment.

As such, during the period, we grew our total revenues by 49.6% year-over-year to RMB 7.15 billion, thus validating our strategy in the 3 key areas: number one, supercharging our live streaming and short-form video dual growth engine; number two, boosting the social nature of our platform through the development of new product features; and number three, fortifying our leadership in the domestic entertainment live streaming industry via content innovation.

(foreign language)

First of all, I would like to share some updates regarding the remarkable progress we have made in implementing our globalization strategy.

As many of you have noticed, with a revenue contribution of over RMB 2.1 billion in the first quarter, BIGO is catching up to YY Live in terms of revenue generation.

Even more striking is that BIGO's revenue is increasing at a rate of 99.3% year over year.

This achievement is a result of our determined pursuit of our globalization strategy, which we set up several years ago.

We capitalized on the global trend of live streaming and short-form video, and established leadership position in both areas.

Meanwhile, this is also ushers in an even brighter future.

(foreign language)

In the first quarter, BIGO Live has witnessed impressive growth in both users and revenue.

On the user side, BIGO Live grew its mobile MAUs by 37.8% year over year and 15.9% sequentially to 26.7 million, reaching a historical high.

On the revenue side, thanks to the rapid growth of BIGO Live's revenue, BIGO's live streaming revenue increased by 92.4% year over year to RMB 1.97 billion.

In particular, its revenue contribution from developed markets such as North America, Europe, Japan and South Korea, increased to 33.9% during the quarter compared to 23.5% a year ago.

This demonstrates that BIGO Live's live streaming model can be replicated globally.

Meanwhile, as the live streaming penetration rate is still very low in many developed markets, we firmly believe that we have only just scratched the surface of our global growth potential.

On top of user and revenue growth, BIGO Live's profitability also continues to improve.

The non-GAAP net margin of BIGO Live was well over 25% in the first quarter of 2020.

What has contributed to BIGO Live's rapid global expansion is its strong localization capabilities that is definitely adapted to local languages, cultures and social values.

So far, we have established more than 30 regional operation centers around the world by working closely with local hosts to cultivate a diverse and engaging content ecosystem.

Going forward, we plan to further expand BIGO Live's presence throughout 4 key areas: North America, Europe, the Middle East, Japan, South Korea, Australia and New Zealand.

Taking into account of each market's user base and spending power, we think that every one of those markets has the potential of exceeding the revenue scale currently generated from our domestic live streaming business in China.

This lays a solid foundation of the rapid growth of our overseas live streaming revenues in the coming years.

(foreign language)

Beyond its robust revenue growth potential, overseas live streaming also embraces more social features.

For example, on average, 13% of BIGO Live's DAUs hosted live streaming sessions every day in the first quarter, a far higher percentage than its counterpart in China.

It is also higher than the voluntary upload ratio of many short-form platforms in China.

Such high level of user engagement validates the prevalence of live streaming as a form of entertainment and socialization around the world.

Catering to users urge to interact, we continue to refine various social features in BIGO Live.

For example, a sharing feature called BAR made it easier for users to share content through BIGO Live, and thus quickly invigorated the social interactions between users and users and between host and fans.

As a result, over 50% of BIGO Live users assessed the BAR feature in the first quarter.

As we further optimize BIGO Live's content sharing features going forward, we should be able to expand its user community and enhance its user engagement continuously.

(foreign language)

Beyond live streaming, we also made solid progress in our short-form video platform, Likee, which is the other component of our dual growth engine.

In the first quarter of 2020, Likee's total mobile MAUs increased by 121.9% year over year and 14.1% sequentially to 131.6 million, also a historical high.

Notably, we also accelerated Likee's user acquisition from developed markets, including North America, Europe and Japan.

Because the average user spending on online entertainment in those developed markets is greater than in emerging markets, Likee's expanding footprints in developed markets is paving a clear path towards enhancing monetization going forward.

(foreign language)

In addition to its rapid expansion in developed markets, Likee is also forging ahead and boosting its social features and social influence in developing countries, such as Russia and Indonesia.

After we launched a series of new innovative video recording features into the platform, Likee served as a much-needed channel for socialization and a prime source of entertainment as its users battled against boredom and isolation during the global pandemic.

It has also leveraged its market leadership to establish new partnerships with local media outlets, popular celebrities, charitable organizations and government associations.

In Russia, for example, we joined forces with a federal agency for youth affairs and popular celebrities to encourage users to share self-made videos about their life on the current time so as to incentivize young generation to take more precautionary measures.

In Indonesia, for example, we launched the live health clinic initiative to provide users with free online health consultations.

As part of this initiative, doctors and nurses were invited to join Likee's online challenges and create videos to teach viewers the most effective handwashing methods and how to best protect themselves against infections.

Leverage its global reach and local resources, Likee is making meaningful contribution to helping developing countries handle unexpected situations in a fun and informative manner.

(foreign language)

Now let's turn to HAGO.

During the first quarter, we assessed our operations and made the decision to take the long-term view prioritizing those user acquisition efforts that will deliver a high-quality ROI.

As such, HAGO's MAUs decreased to 31 million in the period from 33 million in the previous quarter.

Notably, by reducing our marketing initiatives and investment in India, we were able to generate more effective user traffic and refined the quality of HAGO's user base.

In line with our vision to maximize users' lifetime value, we continued to develop social features on HAGO to better connect users, stimulate social interactions and cultivate a vibrant, engaging community with more diverse content and high-quality content creators.

During the first quarter, for example, we began utilizing content based on users' lives, hobbies and personality types to better resonate with the younger generation.

Meanwhile, we refined the platform's recommendation algorithms and social media channels to augment its content distribution efficiency.

We also upgraded HAGO's user group functions, which were formed around shared interest, and thus have proven to be exceptionally fertile grounds for targeting our content distribution and enhancing the social connection between users.

In addition, we launched the party chat room, along with complementary monetization features.

Users were highly appreciative of this upgrade, as it provided them with a carefree digital environment through which they could communicate and socialize.

Following these upgrades, more than 60% of HAGO's users have engaged in chat room interactions on the platform, while their willingness to pay for social features has also accelerated in turn.

As the effectiveness of our value propositions continue to expand in the first quarter, HAGO's user retention rates, stickiness and average time spend all grew on a year-over-year basis.

Moving into the second quarter, HAGO's user expansion to date has exceeded our previous expectation.

With our increasingly complete monetization system in place, HAGO has entered into a new phase of growth, and the stage is being set for the platform to become extremely active, highly connected online community.

(foreign language)

On the domestic front, we continued to fortify our leadership in China's entertainment live streaming industry.

To ensure the diversity and high quality of our content library, we doubled down our commitment to producing premium live streaming content in the first quarter.

In March, for example, we launched Idol Friday, a weekly celebrity live streaming show, featuring celebrity vocal groups who interact with their fans during live streaming sessions.

The combination of musical talent and celebrity excitement has proven to be appealing to our audience, and we expect to develop similar broadcast going forward.

We also focus on expanding our live streaming offerings through the integration of virtual events to heighten user engagement.

In the first quarter, we launched a series of events referred to as Open at 10:00.

By incorporating our platform's entire collection of popular live streaming tools, these virtual events create an engaging and authentic music party atmosphere for our users.

Users love participating in these events as they are able to interact with each other on the virtual dance floor and exchange virtual gifts.

In the future, we will continue to leverage our state-of-the-art technical capability to both heighten the allure of our content and pioneer new innovative methods of stimulating user interactions and user engagement.

(foreign language)

Regarding the epidemic's impact, YY Live also benefited from the ripple effects of stay-at-home and social distancing practices with its active user base growing by 21.7% year over year to 45.1 million in the period.

A portion of these newly added users leveraged the platform for remote collaboration, attracted by its ease of use, high live streaming quality and suite of interactive features.

In addition, YY Live also developed a special live streaming program focused on combating the coronavirus and supporting the City of Wuhan during the epidemic.

Through this program, our special media teams produced and distributed an average of 7 to 12 hours of targeted live streaming content a day, curating over 150 live streaming channels in total for our users.

We also launched 72 live streaming sessions in partnership with medical institutions to provide users with virus prevention education and psychological consultations.

(foreign language)

In summary, we maintain a laser-sharp focus on cultivating our dual growth engines in the quarter.

While the global outbreak of the COVID-19 novel coronavirus has caused a significant amount of macroeconomic uncertainties in most markets, we remain relatively insulated from its negative impact as the demand for premium online entertainment content and authentic social engagement continues to grow.

Moreover, our continuous business growth further showcased the validity of our long-term strategy as well as the depth of our product ecosystem, localized operations and cutting-edge technology.

While the past decade was characterized by the growth and maturation of the domestic live streaming market, we believe that the coming decades will be known as a decade in which live streaming and short-form video platforms helped to better connect users around the world.

We will be at the forefront of this trend.

We will build the products, enable the users and lead the charge to bring joyful and youthful experiences to people around the world.

That concludes David's prepared remarks.

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

We maintain our strong momentum and deliver robust financial and operating metrics during the first quarter of 2020.

Our total net revenue for the first quarter increased by 49.6% year over year to RMB 7.15 billion, exceeding both the high end of our previous guidance range and Street consensus.

In particular, our live streaming revenues for the first quarter increased by 50.6% year-over-year to RMB 6.76 billion, driven by live streaming revenues growth from both Huya segments and BIGO segment.

Other revenue in the first quarter increased by 33% to RMB 393.2 million, mainly driven by higher advertising revenues from BIGO.

Cost of revenues for the first quarter increased by 56.5% year over year to RMB 4.95 billion.

Revenue sharing fees and content costs increased to RMB 3.55 billion in the first quarter from RMB 2.52 billion in the same period of 2019, which was in line with the increase in live streaming revenues.

Bandwidth cost increased to RMB 528.1 million from RMB 297.4 million in the same period of 2019, mainly reflecting the continued expansion of our overseas user base and time spent following the BIGO acquisition.

Gross profit for the first quarter increased by 36% year over year to RMB 2.2 billion.

Gross margin in the first quarter of 2020 decreased to 30.8% from 33.9% in the same period of 2019.

The decrease in gross margin was primarily caused by the fact that Huya and BIGO segments had lower gross margins, but contributed significantly greater portions of net revenues in the first quarter of 2020 compared to the corresponding period of 2019.

Operating expenses for the first quarter increased to RMB 2.05 billion from RMB 1.22 billion in the same period of 2019, primarily due to the increase in sales and marketing expenses, which reached RMB 1.04 billion in the period from RMB 534.2 million in the same period of 2019.

The increase in sales and marketing expenses was mainly attributable to our increased effort in sales marketing activities in overseas markets, as well as the impact of depreciation and amortization related to the consolidation of BIGO.

Our R&D expenses for the first quarter increased to RMB 722.2 million from RMB 404.7 million in the same period of 2019, mostly due to the increase in salaries caused primarily by the consolidation of BIGO.

Our GAAP operating income for the first quarter was RMB 186.4 million compared to RMB 473.6 million in the same period of 2019.

Operating margin for the first quarter decreased to 2.6% from 9.9% in the prior year period as a result of a lower gross margin, the impact of depreciation and amortization related to BIGO's consolidation and other overseas expansion initiatives.

Our non-GAAP operating income for the first 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 was RMB 613.2 million compared to RMB 717.3 million in the same period of 2019.

Our non-GAAP operating margin for the first quarter was 8.6% compared to 15% in the same period of 2019.

GAAP net income attributable to controlling interest of JOYY Inc.

for the first quarter of 2020 was RMB 386.7 million compared to RMB 3.12 billion in the same period of 2019.

The high GAAP net income in the first quarter of 2019 was mainly due to the remeasurement gain of the company's previously held interest in BIGO amounting to RMB 2.67 billion.

Net margin was 5.4% in the first quarter of 2020 compared to 65.3% in the corresponding period of 2019.

Non-GAAP net income attributable to controlling interest of JOYY Inc.

was RMB 428.9 million compared to RMB 653.5 million in the same period of 2019.

Non-GAAP net margin in the first quarter of 2020 was 6% compared to 13.7% in the same period of 2019.

Diluted net income per ADS in the first quarter of 2020 was RMB 4.49 compared to RMB 44.55 in the same period of 2019.

Non-GAAP diluted net income per ADS was RMB 4.8 compared to RMB 9.32 in the same period of 2019.

Looking forward to the second quarter of 2020, we are faced with the continuous challenge of the COVID-19 epidemic.

At the current stage, we expect our net revenues in the second quarter of 2020 to be between RMB 5 billion and RMB 5.15 billion, excluding the revenue contribution from Huya in the same period of last year, representing a year-over-year increase between 16.7% to 20.2% on a pro forma basis.

We currently have limited visibility surrounding the epidemic's long-term impacts on our business and the market 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.

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

(foreign language) Congratulations on the strong set of numbers for BIGO.

Given the strong Q1 in both top line and bottom line, how should we think about the full year KPI for BIGO in revenue as well as the bottom line in 2020?

And on the other hand, we have seen the geographical revenue contribution from developed market is also gaining traction.

May I ask about what we should expect by the end of this year in terms of our geographical revenue mix?

Thank you, Thomas.

Let me address those questions.

So first question is regarding the revenue and profitability for BIGO.

As you can see, in the first quarter, we did achieve very good growth in terms of user and revenue as well as profitability for BIGO.

So we expect that trend to continue.

So in total, I think the revenue forecast for BIGO will be higher than previously forecasted.

So I think we're looking somewhere around 65% year-on-year growth for BIGO in total for the revenue growth.

In terms of the profitability, as you can see, BIGO Live's profit is well above 25%.

I think in the next few quarters, we expect that profitability to continue or even to further optimize.

And then on the Likee side, as we grow the user base of Likee, we will also enhance the monetization of Likee through the live streaming as well as the advertising.

So we expect the total BIGO profitability will also be better than we previously guided market.

So I think that's very encouraging for the next few quarters.

In terms of the composition of the different markets, as you can see, in the first quarter, the developed markets contribution for BIGO's revenue is well over 33%.

We expect that trend to continue.

So if you look at by end of this year, we think the revenue from those developed market will be even higher.

It will be higher on a quarter-by-quarter basis.

So it definitely will be higher than the current rate.

And then we will also continue to expand in other markets, including the developed and emerging markets as well.

Thanks.

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

(foreign language) Congrats on a strong quarter, especially in overseas.

My 2 questions mainly about overseas.

First is about the users trend in the following quarter amid the global pandemic.

And also, could you give us any color on the growth trend in different countries in terms of user.

And secondly, it's being about competition.

Beside the competition with TikTok, do you see any new player or some potential player from the Chinese company that's going overseas may have a potential impact to our short-form video business in overseas?

Thank you, Lei.

Let me address the question.

So first one is about the user growth trend in overseas and impact from the COVID-19.

I think, in general, COVID-19 is positive for our global business because we see many countries that have implemented very strict indoor policy and solution policy.

So as a result, people tend to have longer time watching online entertainment content, including live streaming and short-form video.

As a result, we do see good user traffic, user time spent as well as the user retention rate across our live streaming and short-form video platform.

We are also seeing increasing percentage of iPhone penetration because, as I said, our key strategy for both BIGO Live and Likee focus on the new user growth for -- from developed markets.

So I think given the continuous COVID-19 situation, we will continue to benefit from that trend.

So as I said, in general, our user growth profile from developed markets will continue to be higher than the rest parts of the world.

That's the first question.

The second question, I will address first and see whether David has anything to add.

In terms of competition, I think apart from TikTok, we don't see any other major kind of competitor on the short-form video side.

There is some regional player that is coming from China.

But in terms of the user scale, in terms of absolute revenue scale, it is still much smaller than BIGO.

And then apart from short-form video, also for live streaming, BIGO Live has achieved tremendous growth, over 90% year-on-year growth.

We don't see any other competitor that is coming along even to the similar growth profile as BIGO Live.

So we're not afraid of the competition at all.

(foreign language)

(foreign language)

[Interpreted] This is David.

Let me add on based on Bing's comments.

So firstly, in terms of the overseas short-form video competition, I would like to say, after 2 years effort, actually, Likee's overall user scale has been growing very, very big.

Actually, the mobile MAU has been growing over 100 million users.

So in the future, we intended to have more differentiated approach in terms of the competition.

We will make a well healthy balance between all the investment into the short-form video business as well as the growth speed.

So in order to make a more healthy model to support more longer time or sustainable of the competition.

(foreign language)

[Interpreted] In terms of the live streaming business, we actually didn't see any of the established competitor outside of China.

After 4 years of the effort, BIGO already set up more than 30 offices in outside of China.

And in terms of those kind of scale of the business, as well as the operational expertise, we don't think other -- the local-based peers can compete with us.

(foreign language)

[Interpreted] In terms of the short-form video arena, we truly believe it really depends on competitive capabilities, including technical capabilities, operational capabilities, the user acquisition capabilities as well as other brand promotion capabilities.

So if you look at the global short-form video business market outside of China, only Likee and short-form -- and TikTok are 2 of the major established platforms.

So going forward, we don't think in terms of the short-form video business, we will see the very established competitor came out in the short-term period.

Thank you.

Our next question comes from Natalie Wu from CICC.

(foreign language) I will translate myself.

So I have 2 questions regarding BIGO.

The first one is we acquired BIGO early last year.

The aim was to create another YY in global market.

Now that the target has almost achieved and seems that BIGO revenue could surpass that of YY later this year at current run rate.

So just curious if there's a longer-term target that management can share with us regarding the overseas endeavor, say user or revenue, et cetera, in 2 years, both in terms of BIGO and -- BIGO Live and Likee, respectively.

And second one is regarding Likee.

Just curious how do you differentiate Likee versus other short-form video social platforms in overseas market like TikTok, let's say, in 2 to 3 years in terms of regions, position, user target, et cetera.

Thank you, Natalie.

Let me address the first question, and David can address the second one.

In terms of the overseas potential, we see enormous potential out there.

As I said in the script that we look at BIGO Live, first of all.

BIGO Live penetration into developed market is going very well.

And we think in each of those big 4 developed market area, including North America, Europe, Middle East and Japan, Korea, we think there's opportunity to create another similar scale of YY Live in each of those 4 areas in the next several years.

So when we put those together, that means they will be at least 4x of the current YY Live revenue scale in overseas market for BIGO Live.

So that's a very exciting market potential.

For Likee, we think Likee's users will continue to grow.

And as I said, we will convert those users to live streaming.

And also, going forward, we also implement advertising dollars.

So we think, given the market user potential and the spending power in those markets, Likee can generate another similar scale of BIGO Live, right?

So a short answer to you that we think there's multiple times opportunity in overseas.

And actually, we are at a turning point that you can see that the acceleration of BIGO Live's revenue demonstrate that.

Obviously, we can capture that enormous market opportunities.

(foreign language)

[Interpreted] Yes.

This is David.

Let me add on that.

So firstly, in terms of BIGO Live, as I said in my prepared remarks.

So going forward, we'll continue to focus on 4 key areas to continue to increase live streaming revenue.

And in each of the market, we were quite confident we can build up a revenue size, which is at least in the similar size as our China upstreaming business.

So generally speaking, in terms of the overseas live streaming business, we were quite optimistic on that.

And in terms of the short-form video business, Likee.

Since Likee starting from a short-form video editing tool apps, and we also continue being one of the best in terms of the short-form video editing capabilities, and that is why if you look at the Likee's daily usage upload rate for the short-form video actually has been continuously exceed over -- exceed 10%, which is much higher than other similar peers in the market.

So Likee has very obviously community features compared rest of the short-form video platform in the market.

And we truly believe in the future, we'll continue to focus on the -- to develop of the community features for Likee and to improve the user stickiness as well as the user interaction.

And after the Chinese New Year for this year, we started doing the Likee's monetization.

We truly believe approaching to the end of this year, definitely, Likee can build up sizable revenues for this year.

And next year, we'll continue to grow healthily.

Obviously, everybody knows we have a very strong competitor in this arena, right?

But since Likee will continue to focus on building up a more healthy business model in this year, so we are still quite confident we can continue being a very established competitor in the next 3 to 5 years for the short-form video competition.

Thank you.

Our next question comes from Tian Hou from T.H. Capital.

(foreign language) So as we expand our overseas practice rapidly, so the marketing dollar will also matching up.

So I want to get some clarification on the full year operating margin trends.

The second one is specifically regarding the split between the platform and the host overseas.

Is that similar to what we do in China?

Thank you, Tian.

Let me address those 2 questions.

First one regarding user acquisition.

In general, the overseas user acquisition cost in many markets are lower than in China.

That's the first point.

Secondly, given the coronavirus situation, some of those countries, the acquisition cost is actually even lower, so -- which is good for us.

But looking to second quarter, third quarter, if the coronavirus 19 situation getting better, then the user acquisition costs might increase a little bit, but still, in general, it's much lower than in China.

So if you look at the operating margin profile for BIGO, BIGO Live is hugely profitable.

As I said, it's well over 25%.

And then in the future, I think that margin can trend up as well given economy of scale and then the enhancement of the payment channels, et cetera.

For Likee, it's still burning money, but as David really mentioned that we focus on ROI.

We focus on self-sustained growth.

So we are expecting the breakeven for the total BIGO segment will come sooner than we previous guide.

So which means the operating margin, the net margin profile for the total BIGO will be better than expected before.

That's the first question.

Second one, for the revenue sharing percentage for the host.

In general, overseas, it's a lower percentage than in China.

China, typically, we're sharing 45% revenue with the host and the deals.

In overseas, because BIGO Live has no competitor, as we said, so its negotiation power is much stronger as a platform compared with individual hosts.

And then the deals are still very early stage in overseas market.

As a result, the host will earn more on the platform rather than the other way around.

That's why we share less revenue with the host.

Thanks.

Our final question will come from Daniel Chen from JPMorgan.

(foreign language) I will translate myself.

So my question is related to top spender behavior in overseas market.

So right now, the COVID is still very -- is still ongoing.

So I was wondering if the top spender in our top revenue contribution areas like Middle East, U.S., Europe is going to be impacted or if our revenue in the overseas market is more diversified, so more long-tail payers so it will be less impacted due to the pandemic.

Well, let me address the question.

(foreign language)

(foreign language)

[Interpreted] This is David.

Thank you for your question.

Let me address that.

So I mentioned BIGO Live during my prepared remarks, which is average 13% of BIGO Live's DAU actually host the live streaming sessions every day in the first quarter.

So this level actually is much higher than the percentage than its counterpart in China.

And even compared with the short-form video platform, in general speaking, even for the short-form video platform, they had a much lower ratio compared with us in terms of the host who open the live streaming sessions.

So that actually demonstrates the overseas live streaming ecosystem actually are quite different compared with the China live streaming ecosystem.

The host actually are more diversified.

It actually covers a different part of the live topics.

And also, the ecosystem is very different.

So based on that, we are still quite confident we will have a very limited impact from the other environment impacts such as COVID-19.

Yes.

Thank you.

I will now pass back to management for closing comments.

Yes.

Thank you, operator.

Thank you for joining our call.

Again, we wish everyone stay safe and sound.

We look forward to speaking with everyone next quarter.

Thank you.

Thank you.

Thank you.

(foreign language)

Ladies and gentlemen, that does conclude the call today.

Thank you so much for your attendance.

You may now disconnect.