HUYA Inc.

Hello, ladies and gentlemen. Thank you for standing by for the fourth quarter and fiscal year 2021 earnings conference call for Huya Inc. At this time, all participants are in the listen-only mode. Today's conference call is being recorded. Now turn the call over to Ms. Han Yu Liu, Company Investor Relations. Please go ahead.

Hello, everyone, and welcome to HUYA's fourth quarter and fiscal year 2021 earnings conference call. The company's financial and operational results were issued earlier today and are posted online. You can also view the earnings press release by visiting the IR website at ir.huya.com. A replay of the call will be available on the IR website in a few hours. Participant on today's call will be Mr. Rongjie Dong, Chief Executive Officer of HUYA, and Ms. Ashley Wu, Vice President of Finance. Management will begin with prepared remarks and the call will conclude with a Q&A session. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements. except as required under applicable law. Please also know that WHO-YAS earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. WHO-YAS press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I will now turn the call over to our CEO, Mr. Rongjia Dong. Please go ahead.

Hello, everyone. Thank you for joining our conference call today. 2021 was a solid year for Huya as we strive to fortify our leadership position in China's game live streaming market. Amid macro headwinds, related to the subsiding pandemic effects and the evolving regulatory landscape. We finished the fourth quarter with a record high mobile user base and net revenues of 2.8 billion RMB. For four year 2021, we performed overall, generating 11.4 billion RMB total net revenues and 454 million RMB non-GAAP net income. Throughout the year, we expanded our investments in licensed esports tournaments, self-produced content and content creators across our platform, and continued to advance technology and product development, launching innovative interactive features to further enhance user experience and boost user engagement. We also broadened our commitment to corporate social responsibility, fostering deeper bonds with our community of users and broadcasters as we promoted positive social values nationwide. First, let's look at our user growth driven by esports events and new game launches in Q4. Our user base sustained healthy growth, momentum, and well-life mobile MAUs reached 85.4 million during the quarter, up 7% year-over-year. On an annual basis, Guya Live's mobile emails were $88.9 million in 2021, compared with $76 million in 2020. As we remained focused on ramping up content investment and rolling out product innovations, we maintained our Huya Life Apps. Next month, user retention rate about 70% on average in 2021. Next, I would like to provide some updates on our recent efforts to advance technology and product development. Let's begin with our open platform for third-party application developers, which is growing rapidly and gaining popularity with users, broadcasters, and developers alike. By the end of December 2021, more than 310 Huya mini-tools had been created and offered by developers through this open platform, extensively diversifying and enriching our users' live streaming interactions with new formats. Furthermore, in the fourth quarter of 2021, the average number of broadcasters using mini-tools per day by approximately 160% year-over-year. And those tools engaged more than 5 million daily active users during the quarter, up over 240% year-over-year. One noteworthy example is Battle of Roads, A recently added mini-tool utilizing incremental game features to help streamers increase users' loyalty to their live broadcast rooms by enticing users with virtual rewards when they visit. Also, to build on the successful launch of a series of interactive games features including gift droppers and one-click to joint broadcasters gameplay. Earlier in 2021, we introduced more innovative features in the fourth quarter for the enhancing game live streaming experiences. For instance, In December, we joined forces with Peacekeeper Elite to roll out a three-day campaign featuring our live streaming sale for in-game virtual items, inviting a few popular streamers to promote in-game skins and other virtual items during their live broadcast sessions. Notably, the campaign generated a record growth billing for our live streaming sale on our platform, with users viewing this game title on our app during the week of the campaign growing by 60% sequentially. On top of our general live streaming e-commerce functions, which allow users to place orders directly during streaming sessions. The Peacekeeper Elite event included an inventive feature enabling users to receive virtual in-game purchases immediately in their game accounts by connecting their game ID with their Huya account. while greatly benefiting the game's operations. Events like this also support new live streaming content creation and increase streamers' engagement in the game value chain, thus potentially diversifying their income sources. Our initial success in this initial initiative also demonstrated the value of our enhanced cooperation with the Tencent ecosystem's game studios. In a concerted effort to prepare growth while delivering a better experience to our users and broadcasters, we also working to combine the above-mentioned Huya mini tools and the interactive features to enhance their mutual benefits. As the mini tools connect us with application developers and the interactive features link us with game companies we can leverage those synergies to integrate upstream and downstream partners, raising our platform's profile as an industry leader. As for corporate social responsibility, we have redoubled our efforts by upgrading our risk control and compliance system, expanding our Huya volunteer team and encouraging our broadcasters to create more content in pursuit of positive social impact. In 2021, over 9,600 broadcasters on our platform joined our campaign to promote a healthier and more positive social environment and performed approximately 83,000 hours of related live streaming covering a wide range of topics such as anti-fraud, education, volunteer social activities, and cultural heritage. We also made encouraging progress with our business diversification initiatives in the past year, providing game videos appealing to a wider range of audience demographics. Furthermore, our international product Nemo TV recorded further user expansion and significant revenue growth. Driven by Nemo's solid performance, international business is emerging as a growth driven for our company. Ashley will elaborate on these two topics in just a moment. Last but not least, Although our revenue growth slowed in the first quarter, primarily due to a soft macro environment, we sustained our strategic efforts in content investment to expand our offering and drive continued user growth that we believe is the key to our sustainable business development. This, however, caused higher costs and lower margins for the first quarter. Overall, we are proud of our accomplishments in 2021 and ready to embrace the challenges and opportunities the new year is likely to bring. As we enter 2022, macroeconomic uncertainties and regulatory changes continue to pose pressure for us. Thus, we are experiencing a softer start compared with previous years. Nevertheless, we remain confident in our business fundamentals and operational capabilities. Given our leadership position in the game streaming industry and our strong value proposition in the massive game and e-sports market, as the market events out and user sentiment returns to more favorable levels, we expect to see a recovery in our financials with our investments paying off. Looking ahead, in order to deliver long-term value to our stakeholders, we will strategically focus on enriching the quality and diversity of our content, cultivating content creators, and advancing technology and product innovations, as well as further improving operational efficiency and exploring new business opportunities as we strive to support a better, happier community. Given that esports titles are now included in the official mental programs of the Asia Games, we see tremendous opportunities to leverage our strengths in esports content to enhance Huya's brand image and promote overall industry development. With that overview, I will now turn the call over to our VP of Financial, Ashley Wu, to share more details on our operating metrics and financial assessments. Ashley, please go ahead.