HUYA Inc.

Hello, ladies and gentlemen. Thank you for standing by for the fourth quarter and fiscal year 2022 earnings conference call for Who We Are, Inc. At this time, all participants are in the listen-only mode. Today's conference call is being recorded. I'll now turn the call over to Ms. Han Yuleo, Company Investor Relations. Please go ahead.

Hello everyone and welcome to HUYA's fourth quarter and fiscal year 2022 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. Participants 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 these 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 note 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, mostly directly comparable gap measures. I will now turn the call over to our CEO, Mr. Rongjie Dong. Please go ahead.

Hello, everyone. Thank you for joining our conference call today. Amid ongoing macro headwinds, 2022 was a volatile year for us. While we delivered standard user growth for the year, our four-year revenues came in at IMB $9.2 billion, showing an annual decline and a net loss. Our focus has been on controlling the aspects of our business where we can make improvements to show up our solid foundation and prepare for growth. in a more favorable market environment ahead. In the meanwhile, we have honed our content and product offerings as well as improved our operational efficiency while fulfilling our commitment to corporate social responsibility. I would like to take the opportunity on Cisco today to share with you some of our progress and strategy moving forward. On the user side, we continued to bring high-quality esports tournaments and entertainment progress to our users. We also further enhanced the broadcaster and the viewer interactive experience by partnering with game studios. As a result, we were able to achieve stable user scale and a healthy user engagement level in the fourth quarter. At the same time, we adopted stringent policies for our marketing spend to keep our expenses down, lowering Q4 sales and the marketing expenses by 48% year-over-year. In the fourth quarter, Kuya Labs' mobile MLs reached $85.5 million, slightly up compared with the same period last year. On the annual basis, the mobile MLs were $84.3 million. growing by 4% from $88.9 million in 2021. We also maintained our Huya Life app's next month user retention rate above a 70% average for the full year. Next, let me share with you some highlights on our recent product updates and collaboration efforts with game companies. We have been expanding our portfolio of livestreaming interactive features. In addition to the popular Gift Droppers feature, we recently introduced an upgraded Treasure Digging feature. These additions further link broadcasters streaming behaviors with suitable audience and allow not only participating viewers to earn rewards, but also broadcasters to collect rewards for their activities. After a broadcaster completes a certain stream time or other streaming-related activities, odds will be released for users to play. Users can also obtain exclusive odds by participating in the treasure-digging live broadcast room via check-ins and posting comments. Odds can then be traded in for a variety of game properties provided by the relevant game company. This reward system has been proven highly effective with our users. Last December, together with popular broadcasters on our platform, we launched Riot Games carnival treasure digging activities for five major League of Legends IP games. The game studio offered 400,000 pieces of free game tools and cumulative 2.8 million users participated in the 10-day campaign, achieving a successful outcome from our innovative cooperation. Our collaboration is also a good representation of Goya's continuous effort to provide more services around the games and our ambition to diversify and increase our presence in the game industry value chain. In terms of our video business, our broadcasters continue to be the driving force of video content production. with more original creators joining our platform to enrich with supply of video content. It is also worth mentioning that our AI real-time editing function is being utilized more often by our creators. This tool facilitates the creation of live content. Through automatic editing and processing capabilities, we can improve production efficiency and motivate both users and broadcasters. Our efforts to support our creators drove the total number of video uploads in 2022 by nearly compared with the previous year. Meanwhile, we have been enhancing users' video viewing experience and video content consumption. We did this through both embedded videos in our game community and by introducing an immersive vertical video viewing format. With these enhancements, we achieved about 40% growth in total viewing time for on-demand videos on our mobile app in the first quarter, compared with the same period last year. As we build out a more comprehensive video content ecosystem, we believe we can increase user stickiness, and also drive community across our Huya platform. In terms of our corporate social responsibility initiatives, in 2022, we partnered with over 9,800 broadcasters and held more than 8,000 livestreaming sessions promoting positive social impact. Topics covered areas such as traditional culture preservation, environmental protection, and purifying the online environment from negative influence. During the year, we also joined forces with a few international NGOs to launch the Protect Our Home Platform campaign. This included several related public awareness activities featuring high-profile KOLs and our leading broadcasters. Additionally, We promoted the campaign by using a new virtual gallery digital format. Millions of tournament viewers also enjoyed this new format, which was integrated into our tailor-made virtual esports venue for the 2022 season for LOL World championship final in Q4. These efforts have not only enhanced Huya's brand influence, but also contributed to the healthy development of the live streaming industry. While we achieved healthy user scale expansion for the year, we were impacted by the relatively weak market environment in 2002, which contracted user spending power. Regularity policies introduced during the year have also placed added pressure on the industry by instituting higher compliance requirements for both gaming and live streaming sectors. Accordingly, we made prudent adjustment to our products and operations and will continue to strengthen our abilities to meet compliance regulations and ensure our sustainable development. The stampers we have taken in 2022 to optimize Our operations costs and expenses place us in a strong position to benefit once the market begins to recover. Although there are still some uncertainties in the market environment in the near term, we will continue to strengthen our services for users and the content creators and the provider high-quality content in 2023 and going forward. We will also advance our product development capabilities and implement innovative technology to further consolidate VR score competencies. In doing so, we can maximize our advantages and maintain our leading position in the game live streaming market in China. In the meanwhile, we will actively explore our opportunities to diversify our revenue streams and broaden our business ecosystem. With that overview, I will now turn the call over to our VP of Finance, Ashley Wu, to share more on our operating metrics and financials. Ashley, please go ahead.