HUYA Inc.

Good day and good evening, and thank you for standing by. Welcome to HUYA's first quarter 2024 earnings webinar. I am Hanyu Liu from HUYA's Investor Relations. At this time, all participants are in lesson-only mode. Please be advised that today's webinar is being recorded. 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 Iowa website in a few hours. Participants of management on today's call will be Mr. Junhong Huang, who is Acting Co-CEO and Senior Vice President, 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 on 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 Huya's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Huya's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. With that, I'm pleased to turn the call to our co-CEO and SVP, Mr. Huang. Please go ahead.

Okay. Thank you, Hanyu. Hello, everyone. Thank you for joining our earning conference today. We are pleased to deliver first quarter results featuring a healthy user base expansion, growth in game-related services, and a more stable overall revenue trend. We also improved our profitability with non-GAAP net income reaching approximately RMB 92 million. With 2024 off to a good start, I'd like to share some details about the year's key strategies and recent developments, including our strategic transformation and commercialization focus, content and platform ecology upgrades, and technology and product advancements. Let me start with an update on our strategic transformation. We are making encouraging progress in the commercialization of our game-related services Driven by the rapid growth of revenues from game distribution and advertising services as well as in-game item sales, our game-related services, advertising, and other revenues, formerly known as advertising and other revenues, reached RMB 244 million for the first quarter. representing growth of 137.6% year over year and 30.7% quarter over quarter. This growth reflects a strong and engaged base of high value gamer users on our platform and validates our new directions potential. In terms of game distributions, we are broadening our coverage to include more games both upcoming and existing titles. Our gamer users tend to have high commercial value potential, with users' average spending level through Huya's distribution channel performing well, particularly in the MMO and SLG categories. We are also refining our operations to capitalize on their value as we develop game distribution services. For in-game item sales, We offer a diverse range of popular game props for a growing number of games. Additionally, we are expanding our offering of broadcaster customized in-game virtual items to help strengthen connections between broadcasters and their fans. With regard to game advertising services, we are working with more game companies and carrying out innovative broadcaster promotion activities and campaigns. We are also actively preparing the upcoming launch of eagerly awaited DNF mobile game to seize related opportunities in game distribution and promotion. In addition to providing rich live streaming content and more comprehensive services related to this game for our users and the game studio, we will leverage this game to grow our game-related service revenues. In addition, I want to point out that we typically recognize revenues from game distribution and in-game item sales after revenue sharing with the game companies. That is on a net basis. That means game-related services' actual total transaction value is much higher than its revenue. Game Relative Services' strong and rapid growth this quarter reinforces our confidence that this business revenue will continue to scale. Also, as Game Relative Services tend to offer higher gross margins, this business should accelerate improvements in our overall gross margin and profitability as its contribution to total revenues increase. In the long term, This transformation will not only enhance our revenue mix, but also enhance our revenue scale and profit levels. Turning to content and platform ecology, strengthening our cooperation with various platforms and products to enhance our platform ecology is a key strategy for us in 2024. In the first quarter, we hosted the New Year's eSports All-Star event in cooperation with three other major game live streaming platforms. Featuring League of Legends, Honor of Kings, and Peacekeeper Elite competitions broadcast on multiple live streaming and content platforms. an array of celebrities and popular broadcasters from each platform participating. The event was well received by users during the Chinese New Year period and went viral beyond the esports audience. Its success also marked a major breakthrough for the game live streaming industry in terms of content co-creation. Through deep cooperation with our partners, We overcame platform barriers for the first time to mutually benefit from our complementary content. We believe this more open environment offers vast opportunities for HUYA to create win-win outcomes for platforms of all kinds. As an industry leader and barrier-breaking pioneer, our goal is to become a central hub within a more open content ecosystem. We are currently working with several live streaming platforms on professional generated content production, broadcaster cross-platform streaming, and commercialization. We're also embracing the short-form video sector by bringing our video and live streaming content to these platforms. In Edison, As we further enhance our cooperation with Tencent Group, our high-quality content is being featured on various product lines within the Tencent ecosystem, such as WeChat channels, Tencent Video, QQ, and array of game products, touching a wider range of users. Thus, initiatives like this, we believe we can better meet users' needs, increase the VR platform's influence, and create future opportunities. Strategically, we are building a third-tiered pyramid of esports tournaments and event content. At the top are licensed professional esports tournaments. Our extensive coverage of top-tier licensed tournaments showcases our content quality while helping us improve our event operations capabilities. The middle tier is our premium self-produced events and programs, leveraging our leading position in the esports market and our abundant broadcaster and professional player resource. We are offering more and more influential self-produced content. Finally, the bottom tier comprised esports events we recognize targeting massive participation from local communities, which also help to broaden the audience for esports content. Actually, we'll provide more details on our Q1 content activities later. In terms of technology and product advancements, we upgraded the Huya Live Mobile application to version 12 in February. This release features enhanced eSports information community content and game-related service functions, as well as new interactive features on game live channels. For example, a new dedicated event of esports categories and upgraded event live information reports. In the community section, we optimized the integration of game information and strategies for various games and added an esports encyclopedia tab with comprehensive data on events, teams, and players. All of these enhancements are designed to better meet users' needs for prevention professional game and esports content. On a related note, several new features we mentioned on our last call, including AI-powered customized commentary, real-time game status information, and intelligent editing for highlight replays, also became available with this iteration. We remain dedicated to technology and product advancement, leveraging Huya's strengths in game data and AI to bring users a unique, superior interactive experience in terms of real-time interaction. Watching while playing and deliberate content creation in turn leads differentiated experiences will deepen our competitive mode. In summary, we will continue to embrace changes in user demand and industry dynamics as the industry and market evolve. Through innovation across content, platform, ecology, technology, products, and commercialization, as well as deepened cooperation with industry partners and content creators, we aim to propel Huya's business growth. As we fortify our leading position in the game live streaming market and expand our presence in the game value chain, we will also drive the future development of the live streaming and game industries. With that, I will now turn the call over to our Acting Co-CEO and VP of Finance, Ashley Wu, to share more details on our results. Ashley, please go ahead.

Thank you, Vincent, and hello, everyone. I'll provide some updates on our operating metrics and financials. On the user side, we continue to solidify our user base despite the first quarter being the usual low season for live streaming activities. Upgrades to the Huya Live app and innovative cross-platform esports events and operational activities drove Huya Live's average mobile MAUs to 82.6 million for the first quarter, up from 82.1 million for the same period last year. Also, The expansion of our game-related services and users paying for in-game virtual items contributed to a slight sequential increase in paying users on Huya Live, reaching 4.4 million. Moving on to our professional content initiatives. On the licensed content front, we broadcasted over 65 licensed professional esports tournaments in the first quarter of 2024, with the spring speed of LPL, KPL, and CFPL attracting the most viewers. Major Copenhagen for Counter-Strike 2 and Masters Magic for Valorant also emerged as it hit on our platform. During the quarter, Our licensed tournaments spent over 20 titles, and the broad coverage of these popular esports games further enhanced our content competitiveness. In addition to licensed esports content, we broadcasted 14 self-organized esports tournaments and entertainment PGC shows during the quarter. Many of these performed quite well even though the first quarter is traditionally the off-season for large events. In addition to the cross-platform New Year's Esports All-Star event that we just mentioned, Oya Champions Cup for Crossfire Mobile and the commentary program for Major Copenhagen event also captured viewer attention. Furthermore, we hosted the second stop of our Village Game Series, the Youth Qijiang Village Games for Honor of Kings in Qijiang, Zhejiang Province. This event was a big success, advancing our efforts to expand the influence of esports content while also promoting local culture and village revitalization. In terms of our financial performance, revenues from game-related services, advertising and other businesses increased rapidly, partially offsetting a decline in live streaming revenues. The game-related services, advertising and other segments accounted for 16% of our total revenues in Q1, up from 12% last quarter and 5% a year ago. due to game-related services increasing contribution. As game-related services enjoy a high gross margin, their increased contribution to total revenues also contributed to our gross margin improvement this quarter, driven gross margin to 14.7% in combination with our cost optimization efforts. As this segment's revenue continues to grow, we expect our overall gross margin to benefit further. We also reduced total operating expenses by 17.8% year over year, with double-digit savings in all three OPEX line items. We were pleased to achieve a meaningful profitability improvement in the first quarter. Let's move on to our Q1 financial details. Our total net revenues were RMB 1.5 billion for Q1, compared with RMB 1.96 billion for the same period last year. Livestreaming revenues were RMB 1.26 billion for Q1, compared with RMB 1.86 billion for the same period last year. primarily due to the continuous soft microeconomic and industry environment, as well as our proactive business adjustments to support our strategic transformation and prudent operations. Game-related services, advertising and other revenues were RMB 244 million for Q1. compared with RMB 103 million for the same period last year, primarily due to increased revenues from game distribution and advertising services and in-game item sales. Cost of revenues decreased by 24% year-over-year to RMB 1.28 billion for Q1, 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 $1.12 billion for Q1, primarily due to the decrease in revenue sharing fees associated with the decline in live streaming revenues. as well as lower costs related to esports content. Bandwidth costs decreased by 36% year-over-year to $60 million for Q1. This was primarily due to improved bandwidth cost management, bearable pricing terms, and continued technology enhancement efforts. Gross profit was RMB 221 million and gross margin was 14.7% for Q1. Excluding share-based compensation expenses, non-GAAP gross profit was RMB 225 million and non-GAAP gross margin was 14.9% for Q1. Research and development expenses decreased by 12% year-over-year to RMB $135 million for Q1, primarily due to decreased share-based compensation expenses. Sales and marketing expenses decreased by 26% year-over-year to RMB $76 million for Q1, primarily due to decreased marketing and promotion fees as well as personnel-related expenses. General and administrative expenses decreased by 18% year-over-year to RMB 60 million for Q1, primarily due to decreased share-based compensation expenses. Other income was RMB 12 million for Q1, compared with RMB 4 million for the same period last year. primarily due to higher government subsidies. As a result, operating loss was RMB 39 million for Q1, compared with RMB 57 million for the same period last year. Interest income was RMB 117 million for Q1, compared with RMB 96 million for the same period last year. Net income attributable to Huya Inc. was RMB 71 million for Q1, compared with RMB 40 million for the same period last year. Excluding the share-based compensation expenses and amortization of intangible assets from business acquisition, net of income tax, Non-GAAP net income attributable to Huya Inc. was RMB 92 million for Q1, compared with RMB 85 million for the same period last year. Non-GAAP net margin was 6.1% for Q1. Diluted net income per ADS was RMB 0.3 for Q1, Non-GAAP-diluted net income per ADS was RMB 0.39 for Q1. As of March 31, 2024, the company had cash and cash equivalents, short-term deposits, short-term investments, and long-term deposits of RMB 9.4 billion, compared with RMB 9.9 billion. as of December 31, 2023. Finally, let me provide an update on our shareholder returns. Under our up to US$100 million share repurchase program that began in August 2023, we have repurchased 15.2 million Huya ADS with a total aggregate consideration of US$48.5 million as of the end of March 2024. We also announced a special cash dividend declaration totaling approximately US$150 million in March 2024. These initiatives are expected to return and aggregate value of nearly US$200 million to our shareholders. We will continue to focus on improving our financial and operational performance while building long-term shareholder value. With that, I would now like to open the call to your questions.

Thank you, Ashley. And hello, everyone. If you're dialing in by phone, please press five to ask a question and then press six to unmute yourself. If you're assessing the call from the Tencent meeting or both meeting applications, please click the raise hand button at the bottom left. For the benefit of all participants on today's call, if you wish to ask your question to the management in Chinese, please immediately repeat your question in English. Today's first question comes from Lei Zhang from Bank of America. Lei, your line is open. Please go ahead.

Thanks management for taking my question. My question is regarding the game-related business. Can you give us some updates here? And we also noticed some new games to launch, such as the DNF Mobile, and will this bring more opportunities to us? Thank you.

Okay. I'm Vincent. Let me answer the question mentioned by Lei Changgang. In August of last year, we started a strategic transformation focusing on the upgrade of commercialization to provide more game-related services. Currently, we have made very positive progress in the commercialization of game-related services. Through the distribution of games and advertising services, as well as the rapid growth of sales revenue of game props, in the first quarter, our game-related services, advertising, and other business blocks, the revenue reached NT$2.4 billion. The same growth was 137.6%. The return growth was 30.7%. We started our strategic transformation last August, focusing on commercialization upgrading and providing more game-related services. At present, we have made positive progress in the commercialization of game-related services.

Through the rapid growth of revenue from game distribution and advertising services and in-game item sales, the revenue of our game-related services, advertising, and other segments in Q1 reached $244 million, up by 137.6% year-on-year and 30.7% quarter-over-quarter. This growth not only reflects the high-quality gamer user base on Huya platform, but also validates the development potential of our new business direction.

Specifically, in terms of the distribution of games, we are also continuously expanding the scope of our games, including more new and existing games. This year, we have been involved in the distribution of popular games such as King's Glory and Star Wars, and the performance after the coverage is also very good. And the new players we participated in before, such as the mobile game of the new Dragon 8, and the star of the original dream, Huya's distribution channels have also achieved very good results, especially in the user game. The ranking in the number of people paid is also a relatively leading position. These prove that Huya platform users have a very high commercial value. Therefore, we are constantly improving our entire operating system to make better use of this advantage.

Specifically, in terms of game distribution, we are constantly expanding the coverage of games to include more new and existing titles. This year, we have covered the distribution of popular games, including Honor of King, Battle of Golden Spatula, and performed very well. For the new games we participated in before, such as Demigods and Semi-Devils 2 Mobile and Dream Star, Huya distribution channels have also achieved leading results, especially by our pool of users in the game, which proves that the gamer users on Huya platform have high commercial potential. In this regard, we are constantly optimizing our operations in order to make better use of this advantage.

In terms of the sales of game props, we provide a variety of new game props for more games. At present, we have covered dozens of games. At the same time, we also collaborate with the manufacturer to customize the props. to strengthen the connection between streamers and fans. For example, we had a streamer who created a sales of more than 10 million when he was selling his exclusive game skin. This shows the potential of this part of the business. In terms of game advertising services, we are also working with many different game manufacturers. to launch innovative anchorage activities to catch up with the demand for new oil and small game promotion in the market.

In terms of sales of game props, we provide a variety of popular props for more games, which have covered dozens of games at present. At the same time, we are also cooperating with the companies to customize props for broadcasters, which helps to strengthen the relationship between the broadcasters and fans. For example, one of our previous broadcasters achieved a transaction value of more than 10 million yuan when selling personal customized game skins in just one streaming session, reflecting the potential of this business model. In terms of advertising services, we are cooperating with more different game companies and carrying bring out innovative broadcast promotion activities to seize the opportunity of new games and minigames promotion in the market.

For example, we are now actively preparing for the upcoming D&F mobile games and cooperating closely with game studios. We are also recruiting live streamers and promoting them, as well as releasing exclusive props and gifts. We have also set up a special pre-order and download area in the game center section of Huya Live. Based on the large-scale audience of DF mobile games on the Huya platform for a long time, we hope that DF mobile games will also be welcomed on our platform and help the growth of game-related service revenue.

At present, the game license permits are released normally with more new titles appear in the market. This not only can bring more rich live game content, but also bring more opportunities for us to develop game related services. For example, we are now actively preparing for the upcoming DNF Mobile, working closely with the game studio. We are also recruiting broadcasters for live streaming and doing promotion work for the launch of exclusive prompts and gifts. We have also set up a special pre-download area in the Game Center section of Huya Live. Based on the long-term large-scale audience of DNS content in Huya platform, we hope that DNS mobile games will also be popular on our platform and help the growth of game-related services revenue.

Okay. Finally, I would like to point out that the income of our game distribution, props, sales, and finance is mostly determined by the income of the game manufacturers. In fact, it is based on the amount. Therefore, the scale of our game related services is actually larger and the growth is very rapid. In the first quarter of this year, the development of game-related services has further strengthened our confidence in the continued expansion of game-related income. At the same time, game-related services also have higher interest rates. As the total income contribution increases, it will also promote the improvement of our overall interest rate. From a long-term perspective, we believe that our business transformation will not only change the income structure of Huya, but also improve

Finally, in addition, I want to point out that we typically recognize revenues from game distribution and in-game item sales after revenue sharing with the game companies on a net basis. So that means game-related services' actual total transaction value is much higher than its revenue and growing more rapidly. Game-related services' strong and rapid growth in this quarter reinforces our confidence that this business revenue will continue to scale up. Also, as game-related services tend to offer higher growth margins, this business should accelerate the improvements in our overall growth margin and profitability as its contribution to total revenues increases. In the long term, this transformation will not only enhance our revenue mix, but also enhance our revenue scale and profit levels.

Thank you. And our next question comes from Yiwen Zhang from China Renaissance. Yiwen, please go ahead.

Thank you for taking my question. So this year is the second year of our three-year roadmap. Can you give us an update on 2024 revenue and profitability outlook? Thank you.

Okay, Yiwen, let me answer this question. In the first quarter of 2024, our total income was $1.5 billion. Game-related services, advertising, and other business income grew rapidly. That also partially mitigated the decline in live income. Therefore, even though Q1 has less large-scale competition activities, the impact of more vacation factors on the streamer during the Spring Festival is a sign of live broadcast business. Our total income fell only 1.7% compared to last year's Q4. The overall income trend is unstable. In terms of income structure, game-related services, advertising, and other businesses accounted for 16% of the total income in the first quarter.

In the first quarter, our total revenue was 1.5 billion yuan, and the rapid growth of revenue from game-related services, advertising, and others partially offset the decline in live broadcast revenue. Therefore, although Q1 is usually an off-season for live broadcast business due to the influence of less large-scale events and more holidays during the Spring Festival for broadcasters, our total revenue only decreased by 1.7%. compared with Q4 last year, and the overall revenue tends to be quite stable. In terms of revenue mix, game-related services, advertising, and others accounted for 16% of the total Q1, up from 12% in the previous quarter and 5% in the same period last year.

In terms of profits, due to game-related services, advertising and other business sections, the profit is relatively high. The increase in the total income contribution has also promoted the increase in the profit rate this quarter. In addition, we continue to work hard in terms of cost optimization. The QE profit rate increased from 13.7% in the same period last year to 14.7%. At the same time, we also reduced the total operating cost by 17.8%. three-way operating costs achieved a two-digit drop. Overall, the first quarter's profit level has been effectively improved, with GAAP's net profit increased by about 79%.

On a profit, due to the high gross margin of game-related services, advertising and other segments, the increase of their contribution to total revenue also pushed up gross margin in this quarter. With our continuous efforts in cost optimization, Q1's gross profit margin increased to 14.7% from 13.7% in the same period last year. We also reduced the total operating expenses by 17.8% year over year, and all the three OPEX line items achieved double-digit year-on-year decline. On the whole, the profit level in Q1 achieved an effective improvement, of which GAAP net profit increased by about 79%. 在今年的收入预期方面, As for this year's revenue, we expect that in Q1 life revenue from an year-over-year point of view will continue to be affected by last year's strategic transformation of internal resources allocation and more prudent operation. However, compared with the first quarter, the revenue level is expected to continue to be stable and more so in the following quarters. As for the game related services, everything and others, we expect that the following quarters of the year will see a relatively fast growth, which will lead to a gradual recovery of our overall revenues from the previous quarter.

As mentioned earlier, most of the game-related services are based on the amount divided by the company to determine financial income. So even though our business is growing rapidly, there is not much financial income to be determined. At the same time, the combination of business nature will also lead to higher interest rates. From the perspective of the whole year, due to the change in income structure caused by the growth of new businesses, the proportion of businesses with higher interest rates will gradually increase. At the same time, we will continue to promote further optimization of the content cost and broadcast cost of the market. Therefore, compared to 2023, we expect that the interest rate will continue to increase throughout the year. The interest rate level is also a indicator that we value more now.

As mentioned just now, most of the revenue from game-related services is recognized after revenue sharing with the game companies as the net revenue. So despite the rapid growth of our business scale, we recognized value not as that much. And at the same time, given the nature of the business, we think that it would lead to a higher level of gross profit margins. From a four-year perspective, due to the changes in revenue mix brought about by the new business growth, the proportion of higher gross margin business and total revenue will gradually increase. We will continue to optimize our event content costs and broadcasters costs. So compared to 2023, we expect the gross profit margin for the year will continue to improve. Gross margin is also an indicator that we are now placing greater emphasis on. On the operational side, we'll continue to be more prudent in our spending, particularly on selling expenses and labor costs. Overall, we'll continue to maintain our expectation of a four-year profitability in 2024 and profit growth over 2023.

Thank you. Our next question comes from Vichy Sun from HSBC. Ritchie, please go ahead.

Vincent, Ashley, 晚上好,谢谢你们接受我的提问。 我想问你一个关于现金使用的问题。 我们现在有大概1.3个,13个亿美金的现金, 然后回购也做到一半了。 Thank you, Matt. Thank you, Richard. Let me answer this question.

We announced a share repurchase program of up to $100 million in mid-August last year, and in the first quarter of this year, we repurchased nearly $20 million worth of our stock. As of the end of March,

we had repurchased a total of $48.5 million. And in March, we announced a special cash dividend totaling approximately $150 million. So in total, these initiatives have returned nearly $200 million to Huya's shareholders. 截至2024年3月底,

Huya holds a total of about $1.3 billion in cash and cash installments. This amount is called the change at the end of last December, mainly due to our stock repurchase expenses and some payment of business funds. After completing this $1.5 billion cash supply payment, it is expected that we will also have more than $1.1 billion in cash and installments and installments. The shareholder feedback is a major focus of the company management. We will continue to continue to promote shareholder feedback in accordance with the market and company operating conditions, in order to return the shareholder's support and improve the efficiency of the company's cash.

At the end of March 2024, the company held cash, cash equivalents, and deposits totaling approximately $1.3 billion. The change compared to the number at the end of last December is a result of share repurchase expenses and payments from operations. After the completion of the current cash dividend payment of $150 million, we expect to have over $1.1 billion in cash, cash equivalents, and deposits. Shareholder returns are a key focus of the management, and we will continue to carry out our shareholder return initiatives in a manner that aligns with the market conditions and the company's operations in order to reward the shareholders for their support and to enhance the company's efficient use of cash.

Thank you. Now we will take our last question today from Thomas Chong from Jefferies.

Thomas, please go ahead. Thomas, please unmute yourself.

Good evening. Thank you for accepting my question. My question is about the recent changes in the industry. How should we view the relationship between the live streaming platforms? What are the changes to the users and streamers on the Huya platform? Thanks, management, for taking my question. My question is about the live streaming industry trend. How should we think about the competitive landscape or the relationship among different live streaming platforms? And how should we think about these changes will affect Huya users as well as the host? Thank you.

OK, thanks for Thomas' question. Let me answer this question. In terms of the industry, the overall environment has become more open. We believe that the platforms are no longer separated from each other, or that it is simply a competitive relationship. At present, the gaming and live streaming industries have entered a new pattern of integration and development. In such a new market environment, we also think that it brings more wide-ranging opportunities. Between platforms, we can create more possibilities of cooperation and win-win through content and support. Therefore, Huya, as the leader of the industry, is also working hard to break the barrier of platforms, meet the needs of many users, and seize the opportunity of corresponding business and growth.

From the industry's point of view, the overall environment has become more open and we believe that the platforms are no longer isolated or purely competitive to each other. The game live broadcasting industry has entered into a new a paradigm of growth that features both cooperation and competition. In this new market environment, we also believe that it brings broader opportunities to platforms to complement one another and share content and resources, thus creating more win-win possibilities. Therefore, Huya as the leader in this industry is also striving to break down platform barriers and meet multiple needs of the users and seize business growing opportunities.

Enhance cooperation and collaboration with various platforms and products. Upgrading platform ecology is one of our most important strategies this year. On the other hand, we are working with some live broadcast platforms to produce professional content, broadcast live broadcasts, and commercialize cross-platform live broadcasts. We have just introduced Huya's All-Star Spring Festival held in February this year. This is our first All-Star Spring Festival to break through the barriers of the industry. This also indicates that the gaming live broadcast industry has made significant breakthroughs in content co-creation. Currently, we have multiple cross-platform events and activities in preparation and planning. In addition to the live broadcasts and signing of e-sports players on Huya platform, these events will also invite players from other platforms to participate in them to achieve deep cooperation on multiple platforms. For example, we will officially open the Heroes League Legend Cup, which will gather excellent players from all over the world, as well as current eSports players to compete. This kind of competition has caused the choice of players and the formation of teams to attract the attention of Heroes League players and the eSports audience on multiple platforms. The reaction is also very intense. It shows the brand influence of Huya and our unique advantage in terms of market production and operation.

Strengthening cooperation and linkage with various platforms and products and upgrading the platform ecology is one of our important strategies this year. On the one hand, we are cooperating more with some live broadcasting platforms in professional content production, cross-platform broadcasting, and commercialization. The New Year's Esports All-Star events hosted by Huya in February this year is the first All-Star events event for which we have broken down the industry barriers. It also marks a major breakthrough in content co-creation in the live game industry. At present, we have a number of cross-platform self-made events and activities in preparation. In addition to the broadcasters and signed esports players on Huya platform, these events will also invite players from other platforms to participate in them, so as to achieve in-depth cooperation on multiple platforms. For example, the upcoming Huya LOL Legend Cup will bring together outstanding retired players and active esports players from the whole network for competition. The players' selection and forming of teams have attracted widespread interest from League of Legends players and esports viewers on multiple platforms, and this response has been very enthusiastic, which demonstrates Fuya's brand influence as well as its strengths in tournament production and operation.

In addition, we are also actively embracing the field of short video. Based on the rich broadcasting resources and broadcasting operating experience of Huya, we will introduce our video and live content to these platforms to help streamers and Huya get more opportunities for commercial transformation. At the same time, as we further strengthen and deepen our cooperation with Tencent Group, we will send high-quality content to various product lines in Tencent's ecosystem, such as video number, Tencent Video, QQ, and many other game products, in order to attract more general users. At the ecosystem level of the platform, we also hope to become a more open ecosystem. by strengthening the collaboration between streaming platforms, video platforms, and game manufacturers to help promote the transformation of the gaming streaming industry.

In addition, we are also embracing the field of short video. Based on Huya's rich broadcaster's resources and broadcast operational experiences, we will introduce our video and live content into these platforms, helping the broadcasters in Huya to obtain more opportunities for commercialization. At the same time, with further strengthening our cooperation with Tencent Group, we are delivering high quality content to various product lines within the Tencent ecosystem, such as Tencent Video, QQ, and multiple game products, so as to reach a larger user groups. In terms of the platform ecology, we hope to become a more open ecological hub and promote a revolution in the industry by strengthening cooperation with live broadcasters and video platforms and game companies.

They will also get more and more exciting content, which is conducive to strengthening user sensitivity and activity. Moreover, we are also using Huya's advantage of technology products on game live broadcasts to create a differentiated user interaction experience on Huya platforms through game data and AI capabilities. Through our efforts to upgrade our platform, our streamers will also have the opportunity to expand their popularity and gain more income sources. At the same time, our collaboration with game manufacturers and innovative game-related services will also help streamers expand their income channels, thereby stabilizing the relationship between Huya and major streamers, and increasing Huya's attraction to streamers. Thank you.

Under the new business model, our service recipient will not only be limited to users on Huya Live, but also to the larger user group on more platforms throughout the wider network, so that we can also participate in a larger market. For existing users on Huya, they will get more exciting content, which is conducive to enhancing user loyalty and activity. In addition, we are taking advantage of Huya's technology and product advantages in live games and create a differentiated user interaction experience on Huya platform through game data capabilities and AI capabilities. Through our efforts in ecological upgrading, our broadcasters will also have the opportunity to expand their popularity and enjoy wider sources of revenue. Our more diversified cooperation with game companies and innovative game-related services initiatives will also help the broadcasters to expand their revenue channels, so as to cement the relationship between Huya and broadcasters community and enhance the attraction of Huya platform to broadcasters.

Thank you. Thank you once again for joining us today. If you have further questions, please feel free to contact Huya's investor relations through the contact information provided on our website or PS&A Financial Communications. This concludes today's call, and we look forward to speaking to you again next quarter. Thank you. Bye-bye.