HUYA Inc.

Q2 2023 Earnings Conference Call

8/15/2023

spk10: hello ladies and gentlemen thank you for standing by for the second quarter 2023 earnings conference call for hoya inc at this time all participants are in a listen only mode today's conference call is being recorded i will now turn the call over to miss hanyu leo company investor relations please go ahead
spk06: Hello everyone and welcome to HUYA's second quarter 2023 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. Song Taolin, Chairman of Huya, Mr. Junhong Huang, Acting Co-CEO and Senior Vice President of Huya, and Ms. Ashley Wu, Acting Co-CEO and 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 note that WHOYA's earnings press release and this conference call include discussions of unaudited gap financial information as well as unaudited non-gap financial measures. WHOYA's press release contains a reconciliation of the unaudited non-gap measures to the unaudited most directly comparable gas measures. I will now turn the call over to our chairman, Mr. Song Haolin. Please go ahead.
spk01: Hello, everyone. Thank you for joining our conference call today. It's my pleasure to participate in WHOYA's earning call for the first time and to speak with all of you. Boyard celebrated its seventh anniversary last week, a remarkable milestone in this industry. Since I assumed my role as Boyard's chairman in May, I have conducted a comprehensive review of the communist business strategies with the company's management and business operations team. As a leading game live streaming platform, we have served a large number of game enthusiasts, content creators, and partners in the industry value chain since its inception. Now, we aim to build on Hoya's success and experience to expand the company's role in the game industry. We will be exploring more opportunities that complement Hoya's well-established user community and content ecosystem to drive long-term sustainable business development. We shared a brief strategy update with you earlier this month and we'd like to take the opportunity today to elaborate on our latest plans. Given we have proven track record in the game live streaming market and close collaboration with industry partners, we are We are well positioned to achieve this new goal as the company enters a new phase of development. I am confident that our upgraded vision will promote sustainable vitality and propel Huya's future growth. Now, I would like to turn the call over to our acting co-CEO and SVP, Junhong Huang, to discuss our strategies in greater detail. Thank you.
spk02: Okay. Thank you, Ms. Sterling. And hi, everyone. I'm glad to speak with you today. To expand on our chairman's remarks, let me share some specifics about WHOYA's current key objectives with respect to our new strategy. First, we plan to shift our commercialization focus going forward, exploring and increasing our users' value by integrating more game-related services into our platform. Since Huya's inception, we have largely monetized our user base through our live streaming service, which primarily generates revenue by commissioning users' visual gift pay to broadcasters. Converting regular users into paying users involves a relatively long process under our current core model. And conversion efficiency has yet to be improved. However, as most of you know, a significant part of our users are also gamers. And based on our surveys and insights, the active gamer user on Huya Live are willing to spend both on gameplay and related in-game purchase. Also, the proportion and amount of in-game spending by these gamer users tend to be higher than that of general gamers. Our rich game and export content offerings have already satisfied our gamer users' content consumption needs, and we believe we can further capture this user group's commercial value by meeting their broader game-related needs. with expensive service models such as game distribution, in-game item sales, and game advertising. Let's take in-game item sales as an example. We have previously held several successful in-game sales of game tools, but these were one-time events that functioned mainly as marketing and promotional activities for those games. Going forward, we plan to regularize in-game item sales and establish a recurrent cooperation mechanism with various games to meet users' ongoing demand for in-game purchase of skins, weapons, and other items, especially when users watch broadcasters utilize these items during live games played on Huya. In addition to boosting monetization for our platform, this new service offering will provide additional channels for game publishers to promote their in-game products and expand our broadcasters' income streams. We are currently discussing commercial terms for this type of cooperation with an array of game studios and are looking forward to future partnerships with additional games. Furthermore, the technical support required to implement this business is already in place. Earlier this month, we completed development of our in-game item mode function, which will be embedded into certain of our live channel's yellow shopping cart icons. Once game users find their game account with their Huya account, They can seamlessly buy in-game items when watching live streaming content for use in related games. According to our plan, we will implement the function on small scale soon. Another priority is to expand income streams for our content creators and optimize our content cost structure. At present, our broadcasters' income mainly consists of the sign-on fee we provide and their shared visual gift revenue. For many game broadcasters, the relatively fixed sign-on fee is a major source of income. As we explore and develop a wider range of game-related services, we will work to optimize our content creators' income structure by enabling them to earn a greater share of game-related service revenue, including revenues from in-game item sales, game distribution, and advertising, among other services. Diverse income streams will also increase Fuya's value proposition to content creators, attracting more broadcasters and their fan bases to our platform. We believe this adjustment to our content cost structure will boost the broadcaster's financial reward while better aligning our content cost with our revenue. To affect this transformation, we will first harness various technologies to upgrade the technical infrastructure required for our new service and product. As I mentioned above, Our in-game item mode function is already well underway. We also plan to upgrade interest tags across our live platform, which will allow users to early identify in-game items meeting their personalized needs, as well as to discover new games or other content catering to their interest. In embracing the latest tech trend, we plan to actively explore the application of AI technologies. including large language model and AIGC to capture user interest chance and help create more engaging interactive content and experiences. In addition, we will further enhance our compliance capabilities by continuously investing in advanced technologies, including an AI-powered content monitoring system. to minimize operational risk and sustain a healthy community atmosphere on our platform. We are proactively restructuring several aspects of our business for more targeted allocation of internal resource to advance our strategic transition towards a more balanced and sustainable development pathway. To that end, We are planning to scale back certain less cost effective live streaming features as well as financial incentives for live streaming revenue generating campaigns and the proportion of our fixed spend on broadcasters. Although this adjustment may result in fluctuation in our operational and financial metrics in the near term. We believe our market leading position and strong execution capabilities will support our pursuit of long term profitability improvement. Our primary goal is to increase our game related service revenues to approximately 30% of total net revenues within three years. creating a more balanced and diverse revenue to strengthen our foundation for long-term success. We are confident these transformation initiatives will empower our sustainable growth as we remain committed to serving the needs and interests of more users, content creators, and industry partners. With that, I will now turn the call over to our Acting Co-CEO and VP of Finance, S. Ashley Wu, to share more details on our second quarter results. Ashley, please go ahead.
spk05: Thank you, Junhong, and hello everyone. I'll provide some updates on our operating metrics and financials for the second quarter of 2023. On the user side, Huya Live mobile MAUs reached 82.9 million in the second quarter, compared with 82.1 million in the first quarter and 83.6 million for the same period last year. The slide sequential improvement was mainly attributable to the increased esports content and entertainment programs we offer in the quarter. recent new game launches also enrich the platform's game content. Meanwhile, users' and broadcasters' time spent on offline entertainment activities continue to affect us to some degree, especially given several short public holidays during the quarter. Overall, we maintain a stable user scale in the second quarter, with the app's next month's user retention rate staying above 70%. Now, the content side. In terms of licensed esports events, we broadcasted around 75 third-party professional esports tournaments in the second quarter of 2023, attracting a viewership 490 million. We broadcasted a higher number of events in Q2 than in Q1, as more tournaments were scheduled, but fewer events than in the same period of last year, as we continue to implement stricter content procurement policies. Domestic professional leagues for major game titles, such as the LPL Summer KPL Spring and CFPL Summer continue to deliver strong performances. Also, both the LOL Mid-Season Invitational and the CSGO Brass Paris Major proved very popular. In June, we broadcasted Water Rink Master Tokyo, a tournament featuring professional teams from China and around the world. Given the timing of this major event, just before the official China launch of Valorant in July, it attracted attention from our users and served as an engaging teaser for this new game on our platform. Currently, Valorant is gradually cultivating its streamers and co-audience on Huya, and we expect to offer more related content, including self-organized tournaments as its domestic esports league system develops. We also broadcasted more than 30 self-organized esports tournaments and entertainment PGC shows in the second quarter, with a total viewership of approximately 100 million. For self-produced content, we aim to create a metric of high-quality in-house IPs. The new seasons of our Huya-branded All-Star Cup for Peacekeeper Elite and Thunder Cup for Honor of Kings were among our most watched events during the quarter. After multiple seasons, the Thunder Series has become one of the most influential IPs for HOK tournaments. on our platform alongside the official KPL competitions. During the CSGO Brass Paris Major event, we conducted our commentary program, Hushua Major, live from a studio in Paris, winning rates from the tournament audience and increasing our user community interaction with the event. In addition, we held the eighth season of Huya Kung Fu Carnival during the quarter, extending this long-running program's popularity. It's also worth mentioning that we recently leveraged its success to launch a series of carnival-type programs, integrating both offline and online activities, such as Basketball Carnival and Billions Carnival. capitalizing on the growing demand for entertaining sports content. In line with our new strategies, we will continue to focus on developing our user community and enhancing our content ecosystem across user generated content, professional user generated content, as well as licensed and self-produced professional programs. We are confident that Our high quality content and superior user experience will continue to support our business transformation. In terms of financial performance, we achieved total net revenue of RMB 1.82 billion and non-GAAP net profit of RMB 115 million for the second quarter of 2023. Despite the year-over-year revenue decrease amid a challenging micro and regulatory environment, we continue to make progress in optimizing costs and expenses. In Q2, our growth margin improved both year-over-year and quarter-over-quarter, primarily driven by savings in content costs as we continue to scrutinize content-related spending, particularly content licensing and broadcaster-related costs. Along with the efficiency gains we maintain, we further narrow our operating loss with a non-GAAP operating loss of approximately RMB 2 million in the second quarter. Let's move on to our Q2 financial details. Our total net revenues were RMB 1.82 billion for Q2, a decline from RMB 2.28 billion for the same period last year. Livestreaming revenues were RMB 1.72 billion for Q2, compared with RMB 2.05 billion for the same period last year, primarily due to a decrease in the number of quarterly paying users on Huya Life to 4.6 million for the second quarter of 2023 from 5.6 million for the same period of 2022. The decline in the number of quarterly paying users was primarily attributable to the soft market and industry environment, as well as the increase in offline entertainment activities, which affected the time spent by long-tail users on our platform. Advertising and other revenues were RMB 106 million for Q2, compared with RMB 223 million for the same period last year. This was primarily due to a significant decrease in constant sublicensing revenues. if we exclude the impact of the reduction in content licensing revenue as a result of our amended licensing agreement for LOL metrics in January. The remaining portion of advertising and other revenues recorded single-digit growth year-over-year. Cost of revenues decreased by 25% year-over-year to RMB 1.55 billion for Q2, primarily due to decreased revenue sharing fees and content costs, as well as bandwidth costs. Revenue sharing fees and content costs decreased by 25% year-over-year to RMB 1.34 billion for Q2, primarily due to the decrease in revenue sharing fees associated with the decline in live streaming revenues and lower costs related to esports content as well as content creators. Bandwidth costs decreased by 34% year-over-year to RMB 101 million for Q2. This was primarily due to improved bandwidth cost management and continued technology enhancement efforts. Gross profit was RMB 273 million, and gross margin was 15% for Q2. Excluding share-based compensation expenses, non-GAAP gross profit was RMB 278 million, and non-GAAP gross margin was 15.3% for Q2. Research and development expenses decreased by 14% year-over-year to RMB $144 million for Q2, primarily due to decreased personnel related expenses. Sales and marketing expenses increased by 6% year-over-year to RMB $106 million for Q2, primarily due to increased promotional fees General and administrative expenses decreased by 9% year-over-year to RMB $75 million for Q2, primarily due to decreased personnel-related expenses and share-based compensation expenses. Other income was RMB $24 million for Q2, compared with RMB $16 million for the same period of primarily due to lower indirect tax refunds and government subsidies. As a result, operating loss was RMB 29 million for Q2, compared with RMB 81 million for the same period of 2022. Interest and short-term investment income was RMB 125 million for Q2, compared with RMB 66 million for the same period of 2022, primarily due to increased interest rates and improved management of deposit products. Net income attributable to Huya Inc. was RMB 24 million, 23 million for Q2, compared with a net loss attributable to Huya of RMB 19 million, for the same period of 2022. Excluding the share-based compensation expenses and impairment loss of investments, non-GAAP net income attributable to Huya Inc. was RMB $115 million for Q2 compared with RMB $6 million for the same period of 2022. Non-GAAP net income margin was 6.3% for Q2. Diluted net income per ADS was RMB 0.09 for Q2. Non-GAAP diluted net income per ADS was RMB 0.47 for Q2. As of June 30, 2023, the company had cash and cash equivalents, short-term deposits and long-term deposits of RMB 10.8 billion, compared with RMB 10.3 billion as of March 31st, 2023. Before we conclude, I'm pleased to announce that HUYA's Board of Directors has approved a share repurchase program under which the company may repurchase up to USD 100 million of its ASDs or ordinary shares over the next 12 months. I believe this move further deepens our commitment to building long-term value for our shareholders. With that, I would now like to open the call to your questions.
spk10: Thank you. If you wish to ask a question please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 and 1 again. For the benefit of all participants on today's call if you wish to ask your question to management in Chinese please immediately repeat your question in English.
spk09: We will take our first question. Your first question comes from the line of Thomas Chong from Jefferies.
spk10: Please go ahead. Your line is open.
spk00: 晚上好,謝謝管理層接受我的提問。 我的問題是關於我們新的一個戰略, 可不可以提供更多的details, 或者是一些階段性的一些target, 可以跟大家分享一下呢? Fence management, for taking my questions. My first question is about our new strategies. Can management give us more details about the implementation? And secondly, talking about the target for our new strategies, are there any short, medium, and long-term targets that we can share? Thank you.
spk02: OK, I'm Junhong. I'm going to answer Thomas' question. Regarding the company's new strategy, based on Huya's current user community and content ecology, we hope to further enhance the commercialization of game content, and strengthen industrial connectivity. We will also improve our long-term opportunities in the game streaming market and develop game value chains to bring new breakthroughs for Huya and promote long-term sustainable development of our business. Our main goals and plans include the following points.
spk07: Based on Huya's existing user community and content ecosystem, we hope to further enhance the commercialization of game content and strengthen the industrial linkage. bring new breakthroughs to Huya and improving our position in the game market, and develop long-term opportunities in the game value trend, and promote the long-term sustainable development of the business. And our main goals and plans include the following points.
spk02: First of all, the focus of commercialization will be on services related to games, such as game distribution, game props sale, and game ads, and so on. We will delve into the commercial value of game users. This direction is based on the basis of many game players and users. Although our users are willing and capable to consume on the game, but due to our previous commercial model, our game-related consumption on the Huya platform is very limited. Therefore, we plan to strengthen the cooperation with game manufacturers and link our streamers to provide more related game services. This not only satisfies game players and users to watch the game live, but also to purchase game props and discover new games and download them. It also brings additional revenue channels for game manufacturers and increases the source of income for streamers. This is beneficial for all aspects of the industry chain.
spk07: We shift the focus of commercialization towards game-related services, such as game distribution, game item sales, and game advertisements, so as to deeply explore the commercial value of game users. This is based on our significant gamer population. Although our users are willing and able to spend money on games, their related consumption on Huya platform has been very limited due to our previous business model. and therefore we plan to provide more game-related services by strengthening cooperation with the upstream game studios and broadcasters. This can not only meet the needs of the gamers to buy in-game items and discover and download new titles when watching live games, but also bring additional revenue channels for game manufacturers and increase the revenue stream for broadcasters, which is beneficial to all the parties in the industry chain.
spk02: At the same time, we will work hard to optimize the income structure of content creators on the platform, to expand the income source of the streamer in the virtual gift income division and contract fee, so that the streamer's income can get more income from game props sales, distribution, and advertising. This is also beneficial to strengthen the relationship between the cost of content and income, reduce the fixed contract cost, and improve the efficiency of content cost.
spk07: At the same time, we strive to optimize the income structure of content creators on our platform and expand the income sources for broadcasters other than virtual gift revenue sharing and sign-on fees and let the broadcasters get more income from the sales, distribution, and advertising of game items. This is also conducive to enhancing the relevance between Huya's content cost and income and reducing the fixed sign-on fee cost and improve the efficiency of the content cost we expand.
spk02: At the same time, we are also working with relevant game studios and publishers to draft business terms. At the beginning of this month, we basically completed the development of the function of selling game props. This year, we plan to run through the process of selling game props and distributing games, and achieve several game introductions. So this part of the business is expected to be relatively small in the 23-year income scale, but at the same time, we have also made some adjustments to the live live streaming business.
spk07: At this stage, we're mainly engaged in the infrastructure building for new business, including the creation of functions and products needed to provide game-related services, and also negotiating commercial terms with relevant game studios and publishers. Earlier this month, we basically completed the development of the function of in-game item South Mall, and plan to activate the process of in-game item sales and game distribution this year and make them available on several games. Therefore, this part of business is expected to have a relatively small scale of income in the year 2023. At the same time, we're also making some adjustments to the live broadcast monetization business to reduce some inefficient resource investment.
spk02: Next, we will cover more games to provide relevant services, including more mainstream games and existing online new games, and further polish the user experience. Our goal is to continue to increase the revenue ratio of the game-related services in the next three years. In 2025, the revenue ratio of game-related services will reach about 30% of the total revenue. to achieve a more balanced company revenue structure.
spk07: And next, we will expand game-related services to more games, including mainstream games and potential new titles, and further optimize the user experiences. And our goal is to continuously increase the revenue proportion of game-related services in the next three years and strive to achieve a more balanced income structure for the company as a whole by which we mean that we hope to make this part of GAN-related services income as about 30% of the total income.
spk06: Thank you. Let's have the next question, please.
spk09: Thank you. We will take our next question. Your next question comes from the line of Daniel Han from UBS. Please go ahead. Your line is open.
spk03: Let me translate myself. The company is going through a major strategic transformation. Given this, what is the outlook for the revenue and margins in the second half of this year? Thank you.
spk05: Okay, I will now answer the question about income and profit trend. In the process of our business transformation, in order to target the transportation and distribution of internal resources, we have already begun to make active adjustments to the various aspects of existing business. For example, we are reducing some of the lower-benefit live broadcast functions, adjusting the stimulation of live broadcast revenue and the ratio of live broadcast close to the contract fee. These adjustments may cause our operating and financial indicators to fluctuate in the short term, especially in the second half of this year when the scale of new business income is relatively limited. In order to mobilize and allocate internal resources in a more targeted manner, we have begun to actively adjust various aspects of our existing business.
spk07: For example, we're reducing some inefficient live broadcast functions, adjusting the incentives for live broadcaster activities, and the proportion of fixed sign-on fees. These adjustments may cause fluctuations in our operational and financial indicators in the short term, especially in the second half of this year, when the scale of the new business revenue is relatively small. And the year-over-year decline of live broadcast business revenue may be larger than that in the first half of this year due to the impact of resource rate allocation. So this will have a more obvious impact on the overall revenue.
spk05: For spending, we take more strict control, although there will be some new investments, such as product development and some people related to new business. However, the spending of market share and anchorage will continue to be more cautious. And in terms of operating costs, we will also be more cautious in terms of channel promotion. Therefore, from the point of view of profit, we still maintain an expectation of a year-round profit increase and non-debt loss of 22 years.
spk07: At the same time, we'll continue to promote measures to reduce the cost and increase efficiency and adopt stricter control over expenditures. Although there will be some new investments, such as further research and development and talent acquisition related to new businesses, we'll continue to be cautious about the content expenses, such as copyrights and broadcasters, and we'll be cautious about channel promotion in terms of operating expenses. And in terms of the profit, we still maintain the expectation that the gross profit margin will increase for the whole year and the non-GAAP net loss will be narrower than that in 2022. 从中长期来看,由于游戏相关业务的毛利率预计比现有直播业务更高。
spk05: In the medium and long term, the GP margin of the game-related business is expected to be higher than that of the existing live broadcast business.
spk07: With a bigger mix of high gross margin business revenue and because of the content cost related to broadcasters more closer to income, we expect the overall profit situation will be improved and be maintained sustainably. Thank you. Let's have the next question, please.
spk09: Thank you. We will take our next question. And the question comes from the line of Li Zhang from Bank of American Securities.
spk10: Please go ahead. Your line is open.
spk08: Thank you for taking my question. My first question is regarding the update on the recent regulatory enrollment and any impact to our business. Second delay, how should we look at the performance of Tencent's newly launched game, Valorant, in our platform? Thank you.
spk05: Okay, let me answer the question about the monitoring. Currently, the government department is working on monitoring the content, At present, the authority requirements on the content of a live broadcast platform, the behavior of broadcasters and users
spk07: and the protection of miners are becoming more and more standardized and systematic, and therefore the overall management trend is also relatively standard and strict. We believe that the purpose is to better promote the standardization of the industry and promote the benign and sustainable development.
spk05: Recently, we have also taken the initiative to upgrade and optimize some of the content and functions on the platform. We plan to implement strategies and improve efficiency to create a healthier platform environment. We will also continue to maintain a more standardized and healthy development model for the content on the platform. We will also continue to maintain a more standardized and healthy development model for the content on the platform. We will also continue to maintain a more standardized and healthy development model for the content on the platform.
spk07: As a leader in our industry, Huya has recently taken the initiative to upgrade and optimize the content and functions of our platform and refine the operation strategy and improve the efficiency and create a healthier platform environment. We will also continue to maintain a more standardized and healthy development model for the content on our platform to guide broadcasters and guilds to strengthen their compliance awareness and pay attention to improving the compliance capability on the platform through technical investment.
spk02: OK, let me answer the question about the new game. In terms of the new game, the live streaming performance of the game has been relatively stable. We also expect that as the game itself continues to be popular, it will attract more attention to live streaming and extension content. On the front of the new game, the live streaming performances of the new games is relatively stable as a whole, and we also expect that the game itself continues to be popular
spk07: It will attract more audiences of live and derivative content. Huya provides launch incentives and traffic support for the launch of the new games and will also organize activities and provide some prop products together with the game companies and with weighted supports according to the different game characteristics.
spk02: For example, Wuwei Contract. Currently, we have achieved the leading market share. For this popular e-sports game, we will focus on establishing its advantage in the content ecosystem. In addition to the official copyright event, we will cooperate with the development of its domestic e-sports system. For this game, we will launch more traditional e-sports events, including events for streamers and professional players, to further enhance the activity of this game.
spk07: For example, VALORANT, Wu Wei Qi Yue, we have achieved a leading market share, and for this popular esports game, we'll focus on establishing its advantages in the content ecology of events. And in addition to the official copyright events, we will launch more self-organized events for this game, including events attended by the broadcasters and professional players to further enhance the activity of this game sector.
spk06: Okay, thank you. Next question, please.
spk09: Thank you. We will take our next question. Your next question comes from the line of Yuanzhang from China Renaissance.
spk10: Please go ahead. Your line is open.
spk04: Thank you. So thanks for taking my question. So with our commercialization focus shifting, what's our view on content strategy? Is there any change we plan to make? Thank you.
spk02: Our new strategic plan and Huya's existing user community and content ecosystem are closely linked. The rich e-sports and game content on Huya helps attract and maintain active core game user groups.
spk07: Our new strategic plan is deeply embedded in HUYA's existing user groups and content ecology. The rich esports and game content on HUYA helps to attract and maintain active core game users, which will also help to support our goal of providing more game services.
spk02: The content of the live streamer will continue to be an important component of Huya platform content, especially our new commercialized form. For example, game distribution and prop selling will also be achieved through cooperation with the live streamer. We will provide a more detailed content operation for potential broadcasters by combining weather-related commentary with daily content, such as in-depth digging into game content, etc., to help create more welcoming content. We will also bring more technical support to the broadcasters, The broadcaster content will continue to be an important part of content on Huya's platform, especially our new commercial forms such as game distribution and prompt sales,
spk07: will also be achieved through cooperation with the broadcasters. We'll also provide more detailed content operations for potential and promising broadcasters and help create more popular content by combining event commentary with daily content and digging deep into the game content. We will also bring technical support of products such as bullet chatting, interactive games, live interactive functions, and virtual live broadcast technologies. At the same time, this will help us to improve the application of AIGC, which will also help to enhance the diversity of the content presentation.
spk02: We will continue to implement cost reduction measures. Based on the cost-effectiveness, we will cover the size of the heads of the mainstream games. In terms of the content, due to its relatively high ROI, we will give it more weight and create a high-quality content IP. As for the content of copyright exports, we will also continue to implement cost reduction measures and cover the top-tier events of major games on the basis of cost performance evaluation. As for the self-made content,
spk07: Due to its relatively high ROI, we will give more attention to self-made content and create a high-quality, self-organized IP matrix, such as Huya Thunder Series, Huya All-Star Cup, and Tianming Cup. Through our own events, we will also better absorb the user traffic from large-scale copyright events.
spk02: In addition, we'll continue to pay attention to the integration of live broadcast, video, game community, and other content forms, and continue to bring user quality experiences. Thank you. Thank you.
spk10: There seems to be no further questions. Now I'd like to turn the call back over to the company for closing remarks.
spk06: Thank you once again for joining us today. If you have further questions, please feel free to contact Huya Investor Relations through the contact information provided on our website or Pearson Pay Financial Communications.
spk10: This concludes this conference call. You may now disconnect your line. Thank you.
Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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