JOYY Inc.

Ladies and gentlemen, thank you for standing by and welcome to Joy Inks' first quarter 2022 earnings call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there'll be a question and answer session. I'd now like to hand the conference over to your host today, Jane Cheer, the company's Senior Manager of Investor Relations. Please go ahead, Jane.

Thank you, Operator. Hello, everyone. Welcome to Joy's first quarter 2022 earnings conference call. Joining us today are Mr. David Shelling Lee, Chairman and CEO of Joy, Ms. Ting Lee, our COO, and Mr. Alex Liu, the General Manager of Finance. For today's call, management will first provide a review of the quarter, and then we will conduct a Q&A session. The financial results and webcasts of this conference call are available at ir.joy.com. A replay of this call will also be available on our website in a few hours. Before we continue, I would like to remind you that we may make forward-looking statements, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risks and uncertainties, please refer to our latest annual report on Form 20F, and other documents filed with the FCC. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in U.S. dollars. I will now turn the call over to our Chairman and CEO, Mr. David Schilling. Please go ahead, sir.

Hello, everyone. Welcome to our first quarter 2022 earnings call. Let me start the call with an overview of our first quarter results. In line with our previous expectations as various parts of the world started to emerge from pandemic restrictions, a combination of faults, including macroeconomic weakness, seasonality, and unfavorable foreign exchange impact contributed to a drag on our top line growth during the first quarter. For the first quarter of 2022, our group's total revenue were 623.8 million, decreasing by 3% year over year, among which among which Beagle's revenue was $534.6 million, decreasing by 8% year over year. However, our global business has demonstrated resilience despite the challenging market environment and weak seasonality. Such resilience is mainly attributable to our sustainable growth model and further improvement to our operating efficiency. When compared to prior year period, we achieved steady improvement in profitability during the first quarter of 2022, excluding YY Live we recorded a non-GAAP net profit of 20.9 million and expanded our non-GAAP net margin to 3.3%, compared to a non-GAAP net loss margin of 3.7 in the prior year period. Because non-GAAP net profit grew to 59.9 million, where its non-GAAP net margin improved to 11.2%. In addition, our operation cash flow remained healthy and reached a positive 59.2 million in the first quarter. I talked last quarter about some of the increasing macro complexities facing our business. As a global company with worldwide operations, we are not immune to international microeconomic volatilities. During the initial outbreak of COVID-19 from early 2020 to mid-2021, we experienced an acceleration in business growth as the online social entertainment industry in general enjoyed a greater user engagement and activities amidst prevalent lockdowns. However, as the world implied into the post-pandemic era, The long-term effect of COVID lingered, and the global economy suffered from dynamic growth recovery and significant inflationary pressures. These adverse microchips damped global consumers' confidence. reduce their spending power and pose challenges for our business growth in the short run. However, from a medium and long-term perspective, global users' diversified individual demand of social entertainment remains high, and the long-term trend of transitioning social entertainment activities from offline to online is still irreversible. As we look further into our key operational regions include North America, Europe, Pacific East, the Middle East, and South Asia, our product penetration rates is still relatively low, which creates substantial headroom for us for further penetrate the market. On top of that, I want to share some thoughts on our operating philosophy. First, we remain committed to our globalization through localization strategy, which has been vital to the rapid growth in our global business over the past few years. Globalization and diversification help us minimize our single region exposure, cushioning the blow from cyclical fluctuations in certain regions. We will further localize our operation team by recruiting professionals with international backgrounds to drive our content localization, innovation, and integration. Second, we will grow our user community by offering diverse social entertainment services with rich local and premium content offerings. At the same time, by continuously upgrading our product and the user interface and experience innovation, we seek to further optimize the immersive in-space, the social networking experience of our users. With our reach and the direct content, efficiency content recommendation engine and product that better neutral users' social networking needs, we should be able to further expand our product reach and ultimately fuel our monetization growth. So, we will continue to execute our sustainable ROI-driven growth strategy. and a balance between growth and profitability in 2022. We believe that under the current market environment, maintaining a strong operating cash flow is crucial to safeguard our need for long-term growth. As a company established in 2005 and with 10 years of listing history, we have been constantly adapting to evolving marketing conditions and have achieved significant breakthroughs. We believe that with our established operation capacity, continuous iteration on our user centric products, persistence, execution on a sustainable growth model, and striving to maintain robust cash flows. We are in a stronger position to navigate the current microeconomic challenges and size emerging growth opportunities along the way. Now, let me dive deeper into the progress we made in each of our product lines. Let's start with BeagleLive. In the first quarter, BeagleLive's MAU grew by 8.8% year-over-year to 31.7 million. As I have just mentioned, impacted by global economic uncertainty, unsustainable seasonal weakness and multiple local currencies depreciating against the U.S. dollar. BeagleLive's live streaming revenue and paying users in the first quarter decreased by 9.6% and 1.5%. year over year respectively. Geographically speaking, our operation in Europe was less effective when compared with prior year periods. During the quarter, both our revenue and the number of paid users from Europe sustained their growth momentum and increased by 10.4% and 3.1% year over year respectively. During the first quarter, we continued to diversify our localized premier content offerings on BeagleLive, driving improvement in its user engagement. For example, we hosted the European Talent Camping League, inviting streamers from various countries to produce local themed interactive content for European users. In Malaysia, we partnered with WeTV to offer our users exclusive access to streaming television dramas and reality shows on WeTV Live. Thanks to our diversified premier content, our user engagement improved and As evidenced by the 9.9% and the 2.1% sequentially increase in the average duration of live streaming sessions and the average viewer time spent, respectively. BeagleLive has always been dedicated to fostering engaging and in Class C community, and it has been an important venue for global users to connect with others with similar backgrounds or interests. In March, we launched a community feature, which is a space enabling users, especially New Year users, establish and join different interest groups and quickly connect with like-minded people. Within each community, users can interact with friends' video posts and join their live sessions, thereby significantly improving the efficiency of social interaction. Since this feature launched, various interest-based communities have flourished with themes such as fitness, pop-downs, dining, and others that enhance the diversification of our user content production as well as promoting the consolidation of our real-time and non-real-time content polls. Next, let's turn to Leakey. Following our proactive adjustment of Leakey's marketing strategy, Leakey's MAU fluctuation continued in the first quarter and its MAU reached 61.8 million in the first quarter. Due to the proactive adjustment, coupled with vehicle uncertainty and seasonal fluctuations, like its live streaming revenue declined by 11.9% year-over-year. However, its live streaming revenue in the Middle East region turned out slightly better than that in other markets, recording a year-over-year increase by 29.4%. LIKEY continued to cultivate a diversified and vibrant content community by nurturing talented creators through our comprehensive support program. In the first quarter, LIKEY focused on equipping creators with additional interactive tools and localize the operational services. Following the introduction of Super Like and Super Follow features, we launched a personal voice chat feature in certain regions on Likey, encouraging additional real-time and direct interactions between creators and their fans group in southern Asia during the local wedding season. Like his local operations team launched a number of wedding related challenges to encouraging creators to showcase traditional wedding culture feature, local wedding dresses, makeups, and ceremonies. attracting millions of page views. Thanks to our comprehensive Creators Support Program, the number of likey certified creators increased by 8.4% sequentially in the first quarter. To meet users' diversified social interactions need, we also launched a trend feature to allow users to create their own private community groups and exclusively share their personal content with designated groups, enabling individualized social experience on Likey. We believe that the friend feature will help merge Likey users' offline and online social networks and reduce their psychological barriers to produce and share their own content online. During the first quarter, as Leakey continued the optimization of its short videos and live streaming features and enhanced integration between the two, user engagement with Leakey live streaming improved with average viewer time spent on live streaming growing by 45.6% and like his live streaming DAU penetration rate increasing by 10.9% sequentially. Next, on Hargo. During the first quarter, Hargo maintained its monetization growth trajectory as its live streaming revenue increased by 24.2%. Number of paying users grew by 40.5% year-over-year. Based on our product team's deep user insight, HAGO upgraded several product features to explore new innovations in multiplayer social interaction and further enhance user social experience. This quarter, Hargo launched a new feature called Hargo Space, allowing users to create their own 3D digital avatars and interact with virtual 3D screens. Users can engage in a variety of activities in their 3D avatar, including voice chat, casual gaming, and gifting. Shortly after the new feature was launched, we observed positive impact on users' social activities and features channel penetration. In the following quarter, HAGO plans to further enrich users' HAGOspace experience by introducing more 3D virtual screens, virtual items, and casual games. Finally, some updates on capital return. In the first quarter, we continue to enhance return to shareholders and protect their interest through sharing repurchase program. In the first quarter, we bought back accumulated 80.2 million of our shares. As of March 31st, we have repurchased in total 350.8 million of our shares out of the previous announced repurchase program of US dollar 1.2 billion. Taken together by capitalizing our diversified global product metrics and continuous operating efficiency improvements, our global business demonstrated resilience amidst the challenging external environment during the first quarter. We remain confident in the middle to long-term growth prospects of the global social entertainment market. We will continue to prioritize the cultivation of our content and social ecosystems and seek to maintain a strong cash flow while saving emerging business opportunities along the way. We remain committed to delivering long-term value to our shareholders. This concludes my presentation. prepared remarks, I will now turn the call to our General Manager of Finance, Alex Liu, for our financial updates.

Thanks David. Hello everyone. Now let me go through the details of our financial results. Please note the financial information and non-GAAP financial information disclosed in our earnings press release is presented on a continuing basis, unless advice specifically stated. As the sale of VavaLife was substantially completed on February 8, 2021, with certain customary matters to be completed in the future, we have ceased consolidation of VavaLife business since February 2021. During the first quarter of 2022, due to increased macroeconomic uncertainties, seasonality and some depreciation of certain currencies against US dollar, Our total net revenues for the first quarter decreased to USD 623.8 million from USD 643.1 million in the same period of 2021. In particular, our live streaming revenues for the first quarter was USD 590.1 million, and other revenues in the first quarter increased by 16.3% to USD 33.7 million. Cost of revenues for the first quarter decreased by 4.6% year over year to USD 422.6 million. Revenue sharing fees and content costs was USD 279.9 million. in their first quarter, compared with USD 282 million in the same period of 2021. Bandwidth costs decreased to USD 20.9 million from USD 29.5 million in the same period of 2021, primarily due to the company's improved efficiency in bandwidth usage partially offset by the increased bandwidth usage as a result of continued user-based expansion of Be Good Life. Gross profit increased to USD 201.2 million in the first quarter, with our gross margin improved to 32.2% from 31.1% in the same period of 2021. As we continued to enhance our operating leverage and execute a prudent marketing strategy, operating expenses for the first quarter decreased by 28.1% to USD 200.6 million, from USD 279 million in the same period of 2021. Among the operating expenses, Shares and marketing expenses decreased to USD 104.4 million from USD 137.4 million due to disciplined shares and marketing spending on certain products, including Lucky and Huggle. As a result, we continued to achieve a steady expansion in our gap and non-gap profitability for both Beagle segment and the entire group. Our gap operating income for the first quarter was USD 6.3 million compared to operating loss of USD 73 million in the same period of 2021. Operating income margin for the first quarter was 1%. compared to operating loss margin of 11.4% in the same period of 2021. Our non-GAAP operating income for the first quarter, which excludes share-based compensation expenses, a multiplication of intangible assets from business acquisitions, as well as impairment of goodwill and investment and gain on disposal of subsidiaries and business was USD 33.3 million in this quarter, compared to non-GAAP operating loss of USD 29.7 million in the same period of 2021. Our non-GAAP operating income margin for the first quarter was 5.3%, compared to non-GAAP operating loss margin of 4.6% in the prior year period. GAAP net loss from continuing operations attributable to controlling interest of Joy in the first quarter of 2022 was USD 27.5 million compared to net loss of USD 87.3 million in the same period of 2021. Net loss margin was 4.4% in the first quarter of 2022, compared to net loss margin of 13.6% in the corresponding period of 2021. Non-GAAP net income from continuing operations attributable to controlling interest of joy in the first quarter was USD 20.9 million. compared to non-GAAP net loss of USD 24.1 million in the same period of 2021. The group's non-GAAP net income margin was 3.3% in the first quarter of 2022, compared to non-GAAP net loss margin of 3.7% in the same period of 2021. Notably, Beagle's non-GAAP net income expanded to $59.9 million in the first quarter, with its non-GAAP net income margin improved to 11.2% from 1.6% in the prior year period. Together with our improving profitability, we have maintained a strong operating cash flow as well. for the first quarter of 2022. We booked net cash inflows from operating activities of USD 59.2 million. Importantly, we have continued to enhance returns to shareholders through dividends and share repurchase. In accordance with our previously announced quarterly dividends plans approved in August and November 2020, We will be distributing a dividend of USD 0.51 per ADS for the first quarter of 2022. This is expected to be paid on July 6, 2022, to shareholders of record as of the close of business on June 23, 2022. Additionally, in September and November 2021, our board of directors have authorized additional share repurchase plans under which the company may repurchase up to USD 1.2 billion of its shares in total. In the first quarter, the company had repurchased an additional USD 80.2 million of its shares under these programs. As of March 31, 2022, the company had in total repurchased approximately USD 315.2 million of its shares under this program. This effort demonstrates our confidence in the company's long-term growth and profitability prospects. We will continue to actively utilize share repurchase to create value for our shareholders and current market conditions. Going forward, as David just mentioned, while we prioritize investment into the cultivation of our content and the social ecosystems, we will continue to execute our sustainable ROI-driven growth strategy. We plan to continue to enhance our operating leverage improve returns for each of our products, and seek to maintain a strong operating cash flow, which we believe will provide us with greater financial flexibility to invest in our business and fundamental capabilities. For our business outlook, we have anticipated some negative impacts on user online social entertainment activities. from the gradual lift of pandemic-related lockdowns in certain countries. Macroeconomic environment volatilities and exchange rates fluctuations will also continue to pose uncertainties for our global business. We expect our net revenues for the second quarter of 2022 to be between USD $579 million and USD $600 million. We currently have limited visibility surrounding the macroeconomic environment, COVID-19 epidemic's long-term impact, and geopolitical uncertainties on 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. These are subject to change. That concludes our prepared remarks. Operator, we would now like to open up the call to questions. Thanks.

Thank you. We will now begin the question and answer session. If you'd like to ask a question, please press star 1 on your telephone and wait for your name to be announced. When asking a question, please state your question in Chinese first, then immediately repeat your question in English. Thank you. Our first question will come from Alex Poon at Morgan Stanley. Please go ahead.

We saw a slight decline in revenue in the first half of the year. I would like to ask the management team when will we start to see a turning point and return to a good growth? In addition, the management team also mentioned that the macroeconomic industry now has some challenges for our business. I would like to ask how we see the annual income growth. Thank you. The second question I would like to ask is, My first question is related to the post-COVID normalization and causing revenue weakness in first half. So can management share with us when do you expect revenue growth to return to positive year-over-year growth? And just now management also mentioned about the weaker macro environment impact on our business. How should we look at the full year 2022 revenue growth? My second question is related to TikTok. We recently have started a subscription business like Twitch. and also plan to start casual game business in Vietnam. Can management share with us on new monetization strategy? Do we have any new plans? Thank you.

Oh, thank you for your question. I think the first one is that since the second half of last year, as global users have basically started to recover offline travel, And then, the online social entertainment activities of users are actually reduced. And because of the epidemic, the economic problems of the post-pandemic are still continuing. During the epidemic, in each region, in fact, the world has adopted the policy of stimulating the economy, as well as the relaxed monetary policy. When these policies are gradually cancelled, the uncertainty and inflation pressures faced by global economic growth have affected the user's trust in the payment and their actual payment capabilities. The uncertainty of the current red line is indeed a challenge to our business growth. But I think this challenge is not only for our own company, In fact, all companies around the world are facing similar challenges. But I think opportunities are often accompanied by challenges. In fact, in the two years from 2020 to 2021, there have been various kinds of challenges. But we have also grasped some opportunities for growth. Through the opening up of the global market in the past few years, the accumulation of operating experience, our revenue scale is constantly expanding. From $900 million in 2019 to $2.6 billion in 2021, we have achieved global profit. We also have a healthy cash flow. All of this gives us more foundation to overcome the uncertain challenges and to grasp some opportunities for growth in the future. In 2022, our key word is growth and profits. Thank you, Alex. For your first question, as I just mentioned,

Since the second half of last year, as global users resume offline travel, there has been a negative impact on users' online social activities. Yet we have noticed that the long-term effects of the pandemic on the global economy actually are still continuing in 2022, especially as multiple regions have adopted financial stimulus plans during the pandemic, as well as a easing monetary policy. As these policies being gradually removed, we see increased uncertainty of the global economic growth and also the raising inflation affected consumers' consumption confidence and also their paying capability. So such adverse macro trends definitely pose uncertainties and challenges for our business growth in the short term. And these challenges are not for us alone. They actually apply to all of the companies with worldwide operation. But we also want to point out is that opportunities often come with challenges. So as you can see, in the past two years, between 20 and 21, we successfully navigated multiple uncertainties during the pandemic and capture growth opportunities. Through the years of market operation, our business has reached a meaningful scale. We grow our revenue from 900 million in the year 19 to 2.6 billion in the year of 21. And we have achieved non-GAAP profitability since 21. And also, we have managed to maintain a relatively healthy operating cash flow. So these experiences will all lay a solid foundation for us to navigate the current challenges posed by the macro environment and help us better see further growth opportunities. So for our 2022 outlook, our key word remains the same, which is to balance growth and profit. And given the rising uncertainties of the macro environment, we'll continue to act prudently and closely track market dynamics as we progress. We will continue to execute our sustainable, ally-oriented growth strategy and seek to maintain the resilience of our global business. Thank you.

Regarding the second question, I think we have been trying and exploring this new transformation model. In the past, we have done a lot of advertising services and membership services. Last quarter, like Likey, some functions such as Super Follow were also launched, which allows creators to publish their exclusive content and collect subscription fees from users. And recently, Hago has also launched the 3D Hago Space function, which will also involve some innovation in the mode of transformation. But I think these innovations are still in the early stage of functional replacement. More from the perspective of improving product quality and user experience. In the short term, I think the contribution to revenue will be relatively limited. For example, our non-streaming income is about $33.7 million, which is slightly higher than 5%. So we will continue to observe users' feedback on these new functions and new transformation modes, and will continue to explore this opportunity to promote the diversification of our income.

And on your second question about new monetization, actually if you notice that we have previously already tried, explored advertisement and also membership. And these have been introduced in the previous years. And recently we also have been actively exploring additional monetization tools. For example, like he launched a super follow feature last quarter. And this allows creators to publish exclusive content and charge a monthly subscription fee to their fan groups. And the new 3D HAGO space feature, recently introduced by HAGO, will also have some innovations in monetization. However, I would like to admit that at the current stage, these features are still in the early stage of development. And they are more targeted to improve product user experience. So their contribution to revenue in the short term would be relatively small. For example, in Q1, you can see that our non-live streaming revenue is about $33.7 million, accounting for slightly over 5% of our group's revenue. So we'll continue to observe user feedback on these new features. and we'll continue to explore opportunities to drive further diversification of our revenue stream. Thank you.

Our next question will come from Thomas Chong at Jefferies. Please go ahead.

Good morning. Thank you, Manager Chong, for accepting my question. My first question is about overseas Thanks management for taking my questions. My first question is about the competitive landscape across different regions, and how should we think about the second half business trend? And my second question is about the operating expenses side. How should we think about the expense outlook as well as the margin in 2022? Thank you.

Okay, thank you for your question. I think the change in the competitive structure, the current pressure is mainly from the public environment. Then, as I just said, as users gradually return to offline activities, the entertainment time for online activities, and the engagement time, the annuality, there will be some fluctuations. Then, the payment for users will also be affected. So all companies need to use better products and services to deal with wider online and offline service competition to win over users' activity and transformation. Therefore, I think we need to return to the original purpose of the user's use of the product and the essence of the product to think about the product strategy. In the future, we will continue to focus on the essence of the product, the content of the cloud and the social environment to improve the user's social experience and continuously promote the innovation of product functions. From a long-term perspective, I think the global social entertainment market is still very huge. Competition is a norm that needs to be invested in the cloud for a long time. In the case of an uncertain red-collar environment, controlling the risk to ensure long-term sustainable development is the most critical. Just like I just mentioned, through the accumulation of the past, our globalized business has reached a certain scale and has the ability to localize the global multi-market operation. And it has been turned black and white, with relatively healthy operating cash flow support. We are also relatively progressive in terms of controlling the risk and sticking to a sustainable growth model. This is one of our competitive advantages. I believe that with a lot of cash flow and a stable growth model, we will be able to grasp the opportunity to grow and further improve our market share and influence. Regarding the business trend in the second half of the year, the second quarter is usually a weaker quarter, which is the continued impact of the Middle East disaster and these flood environments. The uncertainty of growth. Thank you Thomas for your question. Regarding your question,

competitive landscape I think that the main pressure comes from the macro environment as I've just mentioned there would be a short-term fluctuation of users online activity time spent and thickness and at the same time on their paying capacity as well so this means that for all industry players we need to gain user engagement and monetization opportunity and by providing better products with better service and compete with a wider range of competitors, both online and offline. So that's why I believe that we should revisit the original intention of users, what drives them to use these products, and focus on the fundamentals when we are planning our product strategy. So we will continue to focus on the fundamentals of our products, cultivate our content and social ecosystem, and continuously innovate our products to improve users' social experience. I still believe that from a long-term perspective, the global social entertainment market has huge potentials. And competition will always be there. It will be a long-term marathon as compared to a short-term game. And in such time of increasing macro uncertainty, risk control, and ensuring long-term sustainable growth are more critical than ever. As I've just mentioned, through years of operation, our business have already reached a meaningful scale And we have established worldwide operational capacity and achieved non-debt profitability. And our cash flow remains to be relatively healthy as well. I believe that we have already gained additional competitive advantage by being proactive and forward-looking in terms of risk control and ensuring our sustainable growth model. We believe that with the support of our strong cash flow and also our prudent growth model, we'll be able to better grasp the growth opportunities and further increase our market share. Thank you.

Thomas, hello. Let me answer your second question. As mentioned, Deyi is a sustainable growth strategy based on ROI. At the same time, it continuously improves our operating efficiency. As you can see, in the first quarter, we achieved better performance than in the previous quarter. Beagle Segment achieved 11.2% non-GAAP performance. The entire Group achieved 3.3% non-GAAP performance. Compared to the first quarter of last year, our profit increased. The B-Go version is expected to remain stable. In addition, the operating rate will be further reduced under the premise of overall performance improvement. Therefore, the profit level of the non-GAAP version of the B-Go version will be further improved on the basis of 2021. The other versions of the Group, including the individual product line, are also in steady decline. The decline is expected to be greatly decreased in 2020. Therefore, the non-GAAP version of the Group will be further optimized.

As I've mentioned just now, thanks to our sustainable growth strategy and continuous enhanced operational efficiency, we have achieved steady improvement in both GAAP and non-GAAP profitability in the first quarter. Beagle segment achieved non-GAAP net margin of 11.2%, and the group achieved a non-GAAP net margin of 3.3%. So if you look at comparison between Q1 and the same period last year, both our gross margin was improved, and we saw cost saving happening across multiple non-GAAP operating expense items. So given the current macroeconomic uncertainty, we'll continue our sustainable ROI-driven growth strategy. and further enhance the overall operational efficiency and drive the further improvement at each of our product lines. And so for Beagle segment, we expect its gross margin will remain stable in the year 22, and cost savings would be achieved on various items due to further improved operating efficiency, and we expect BeagleSegments non-GAAP profitability for the full year to be further improved based on the full year level in the year 21. And for the other segments, we feel steadily proceeding narrowing losses on various product lines and also improved its operating efficiency. We're also expecting other segments to continue to narrow losses in the year 22. Thank you.

Our next question will come from Yu Wenzheng at China Renaissance. Please go ahead.

Good morning, Ms. Guo. Thank you for accepting my question. I have a question about the use of cash. We see that the company's account is very rich in cash. If we combine the company's strategy, how should we consider the advantage of cash use? Thanks for taking my question. So I have a question regarding cash usage. We know there's abundant cash on our balance sheet. How should we think about the usage priority? Namely, how do we balance business investments in overseas share repurchase or even dividend payout? Thank you.

Thank you. I think in terms of the use of funds, we will be more cautious and plan based on the long-term needs of the business. It should be a balance. We can maintain the abundance of cash and the health of cash reserves. We can also take care of the shareholder's interests. In terms of business, we will continue to maintain the investment in overseas business. But we will still insist on the growth of ROI as the basic strategy. Then in terms of the return on the shareholder, in order to thank the long-term support of investors, we have some active actions. In 2020, we announced a total of $500 million in dividend plans, which will be distributed in three years. As of the first quarter, we have accumulated a total of $2.6 billion. In the third quarter of 2021, we also added a $1.2 billion stock return plan. By the end of the first quarter, we have accumulated a return of $3.2 billion under the plan. We use the shareholder's return investment to account for the company's market value, which is actually very large.

Thank you for your question. In terms of cash usage, we will continue to be prudent and plan based on the long-term business development needs. I believe that based on our current cash position, we should be able to balance between keeping a sufficient cash flow for our own growth and also enhancing return for our shareholders. So in terms of our business, we will continue to invest in our global business to fuel organic growth and also continue to execute ROI-oriented growth strategy to create more value. And in the meantime, to reward our investors for their long-term support, we have been actively enhancing shareholder returns via dividends and share buybacks. In the year 2020, we have announced dividend plans with a total size of $500 million to be quarterly distributed in the following three years. And as of the end of the first quarter, we have already declared approximately $250 million of cash dividends under such dividend plans. And in the third quarter in the year 2021, we have expanded our share repurchase program by $1.2 billion. And by the end of the first quarter, we had repurchased approximately $320 million under these plans. So if you look at our overall capital return to shareholders as a percentage of our current market cap, that is a very sizable amount. We believe that our investors can see our sincerity from our actions as well. And that's the end of our call. Thank you for joining, and we look forward to speaking with everyone next quarter. Thank you.

Thank you very much. This does conclude the call today. Thank you all for joining. You may now disconnect.