Tencent Music Entertainment Group

Thank you, Operator. Hello, everyone, and thank you all for joining us on today's call. TME announced its quarterly financial results today after the market closed. An earnings release is now available on our IR website at ir.tintinmusic.com, as well as via Newswire Services. Today, you'll hear from Mr. Kashan Pang, our Executive Chairman, who will start the call with an overview of our recent updates. Next, Mr. Ross Liang, our CEO, and I, Tony Yip, as the CSO, will offer additional thoughts on our product strategies, operations, and business development. Finally, Ms. Shirley Hu, our CFO, will address our financial results before we open the call for questions. Please note that this call may contain forelooking statements made pursuant to the Safe Harbor provisions, of the Private Securities Litigation Reform Act of 1995. These four looking statements are based on management's current expectations and observations that involve known and unknown risks, uncertainties, and other factors not under the company's control, which may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or expectations implied by these four looking statements. All forelooking statements are expressly qualified in their entirety by the cautionary statements, risk factors, and details of the company's filings with the SEC. The company does not assume any obligation to revise or update any forelooking statements as a result of new information, future events, changes in market conditions, or otherwise, except as required by law. Please also note that the company will discuss non-IFRS measures today. which are more thoroughly explained and reconciled to the most comparable measures reported under the IFRS in the company's earnings release and filings with the SEC. You're reminded that such non-IFRS measures should not be viewed in isolation or as an alternative to the equivalent IFRS measure, or other non-IFRS measures are not uniformly defined by all companies, including those in the same industry. With that, I'm pleased to turn over the call to Cushion, Executive Chairman of TME. Cushion. Thank you, Tony.

Hello, everyone, and thank you for joining our call today. In the third quarter, we continue to implement our dual-engine content and platform strategy, which reinforces one and another, guided by our goal of becoming a leading provider of high-quality content we are working to expand our all-rounder capability in music creation, discovery, promotion, and monetization. While strengthening our platform's infrastructure and actively collaborating with the border Tencent ecosystem, these efforts will enable us to unlock greater potential in each component of the music industry value chain and continue to promote the healthy and sustainable development of the music industry in China. With respect to content, our accelerated expansion to music production has delivered promising results. We have designed an innovative and comprehensive process that leverages on our proprietary technology and deep understanding of music trends to systematically create, evaluate, and promote music. This process accentuates compounding benefits as we integrate, first, our comprehensive music composition library. Second, branded machine and manual analytics for artist and laboratory discovery. Third, a media platform that enables refined matching for artist collaboration. Fourth, a technical system to demo and evaluate trials to improve ROI. And fifth, flexible promotion channels and resources to enhance promotion efficiencies. By utilizing this process, we aim to produce better music, achieve a shortened creation cycle and better hit rate, and realize meaningful cost savings from economies of scale and composition tools. I want to share some recent examples that illustrate this point. First, in the third quarter, through our proprietary process of matching repertoire with suitable singers and producers, and promoting on multiple TME and external platforms. We produced, especially, Hulu, a hit song which reached the number one on multiple music charts, with streaming volume of over half billion within the three months of its launch. Secondly, we also produced the chart-topping theme song, The Penis King, by artist jam, for the popular game, Honor of Kings, The song was released for the Games 2021 annual competitions and the World Champion Cup and has been well received by both music and game lovers. Cultivating the original works and enriching the indie musician ecosystem through our Tencent Musician platform is another key source of our content differentiation. We empower our indie musicians with useful tools and collaborative opportunities to realize their full potential and create, grow, engage, and monetize their art and fan base. We do this in part by providing them access to valuable resources, including TME live performances, incentive plans, promotion channels, education platform, copyright support, and more. Our ongoing support to Indian musicians has been gaining traction By the end of the first quarter, the number of indie musicians on the Tencent Musician platform reached 260,000, expanding its growth with a double-digit year-over-year increase. Meanwhile, the streaming volume of their original works continues to record healthy growth. Following our December 2020 talent discovery plan, Bo Luo Ji Hua, We introduced our Riding on the Wind plan, Chengfeng Jihua, in August 2021 to inspire new music content creation by efficiently pairing musicians with top songwriters and directors. With this plan, we have also upgraded our platform artists and repertoire discovery and promotional capability to become a consistent source of hits. As a result, with just one month of its launch, The plan generated eight hits in multiple categories, such as Stars in My Dream, Xing Chen Ru Meng, by the virtual idol Hua Xiaoliu, Galaxy into the Sea, Xing He Ru Hai, by the internet influencer Ying Ximian, and Rubber Palms, Mei Shu, by the broadcasting celebrity Nightly Art, enabling these musicians to grow their fan base by 26%. Tencent Musician Platform has also established the sustainable and diverse monetization models for musicians and the industry which help indie musicians to earn a better living while they focus on honoring their craft. In the third quarter, we launched and upgraded 100 million yuan incentive plan, which incentivize legitimate musicians to collaborate with us in music creation. as well as provide comprehensive incentive mechanisms to help high quality content and artists gain exposure across our platforms. Within two weeks of the plan's launch, we discovered an original hit song, Mutual Deletion by Hit J. This is just one of our early successes, and we expect many more hits to follow. With awareness, exploration, and experimentation, Tencent Musician Platform will drive our success in the original music industry and continue to create benefits and opportunities for indie musicians, encouraging original music creation while unlocking the musician's potential. Expanding our licensed content library is also a crucial component of our content strategy. We are working to cement our leadership position in trendy categories like the Chinese-Asian style, as well as provide full coverage of top hip-hop variety shows such as Girls Like Us, Hip-Hop Nu Hai, and Shuo Chang Qing Wo De Dear Ji. With our presence in diverse genres catering to the younger generation, we are establishing our platform as a go-to place for enthusiasts in each genre, with branding such as QQ Music's Records Alliance and Kugel Music for New Hits. We prioritize copyright protection to protect musicians' rights and promote the healthy and sustainable development of the music industry. To this end, we leveraged our understanding of the industry copyright pain points and launched the TMU Music Cloud, Under this grant, in the third quarter, we introduced a SaaS-based music authorization service for the live streaming industry, which offers copyright licensing service, whereby live streaming platforms and live streaming performers can pay licensing fee to properly obtain legitimate music licenses for commercial use in the live streaming. In addition, we are helping music rights holders and musicians distribute their work and expand their influence worldwide by collaborating with Apple Music. Going forward, we plan to expand such copyright licensing service to other online applications that require legitimate music licensing for commercial use and continuously contribute to copyright protection in China by establishing a smart music copyright infrastructure. We are also optimizing our internal and external promotion channels to create a more comprehensive promotion system. We continue to embrace external resources like racing, QQ, and racing video accounts to create new social connections based on models for music promotion. And we are creatively combining music resources such as variety shows, films, videos, and performance events to strengthen our content influence. For example, Wang Jingwen, a rising musician we nurtured, entered the industry acclaimed singing competition show Sing China 2021 and won second place, propelling the popularity of the songs to a new record with a total of 1.9 billion streams on our platform in the third quarter. We began testing a new business model by commercializing some of our promotional capability to enable content providers to purchase promotional resources on our platform. We are also making substantial progress with promotional via external smart IoT devices. Last but not least, we are more confident than ever in the ability of TME Live to drive new online-merged offline music scenarios with immersive experience. In terms of its efforts online, TME Live held 26 diverse live performances in the third quarter, including the 2021 Tomorrowland. TME Live's series of mind-blowing electronic music performances sponsored by e-commerce, automotive, and other advertisers, helped brand owners dynamically resonate with users and maximize their brand's emotional impact while simultaneously fostering new business models. To satisfy younger users' booming demand for live performances as they seek new social outlets in the pandemic age, TME Live has expanded downstream. In the third quarter, TME Live collaborated with the Tencent Musician platform to showcase live performances in key cities via the 2021 Fourth Stage Plan, 原力舞台计划, offering talented musicians the chance to participate in nationwide tours to reach a broader audience both online and offline. We also rolled out a series of music festivals across multiple cities in the third quarter and pioneered an indoor music festival IP, Electronic Music Festival . The first event debuted in Chengdu, a cultural hotspot for music entertainment and home to a vibrant party scene for younger generations. Motivated by these trailblazing successes, we look forward to creating more events that will rock our users' lives. Having updated you with our progress in content, I would like to turn the call over to Ross, who will share more about our platform strategies. Ross, please go ahead.

Thank you, Kunshen. Hello, everyone. Moving on to our platform strategy. We are strengthening our platform's capability to enable music lovers to enjoy more video-based content. share their passion for music within our community, and have a more socially engaging experience. To inspire creation and innovation of video content on our platform, we continued to build shared middleware and infrastructure. First, QQMusic's short video type featuring immersive face and Google Music's embedded MVs on its streaming page achieved sequential increasing in their user penetration. Early indications of our video functionality are very positive. By the end of the third quarter, QQMusic's daily video views and daily unicorn visitors on our platform reached 100 million and 18 million, respectively, representing triple digital growth rates year-over-year. enthusiastic about its monetization potential via advertising and other avenues going forward as video will ramp up. Second, to better cooperate with Weixin Video Account, we are now supporting the one-click video publishing feature across Weixin Video Account, QQ Music, Google Music, Huo Music, and WeSing, making it easier to musicians to reach a broader audience. within 1.5 months of its launch. The one-click video publishing feature was adopted by more than 20,000 musicians on our platform. In addition, QQL Music's collaborative Indian musician live streaming initiative with a video account has 633 events and attracted over 10 million viewers in the third quarter. As we aspire to connect people through music, our social and community-building efforts focus on interactions among both strangers and friends. We are pleased to see increasing, vibrant social interactions on our platform as demonstrated by user utilization of Putong Planet and Google's new feature, Leap of Heart, Xindong Moshi. which allows users to swipe through visualized user profiles and interact with those who are listening to the theme song, as well as our upgraded Pied Synchronized Listening feature, which was originated in QQ and carried over to QQ Music. During the third quarter, average daily listening time spent by users of the synchronized listening feature was 80% higher than the average where penetration of young users of PlutonPlanet was over 10% higher than that of QQMusic. Our initiative of WeThink included the virtual live streaming room launched to provide an all-new interactive experience to users, targeting real-time virtual social networks as a new growth engine for user engagement. We strive to appear to diverse youth groups and their varying tastes with the broadened options and features. In the interest of the young generation, we launched the BoDian Music, BoDian YinYue, pioneering video-driven music listening experience in China and helping users better connect with the music with the right to sleep UI design. Well, for seniors, We launch a large fund in QQ Music to provide them an aging-use-friendly experience. For music fans seeking the ultimate sound quality, we upgrade QQ Music and Kugel Music's high-resolution audio library, including millions of musical works by popular artists and domestic and international musicians. This upgrade has proven very attractive to young users. In addition, QQ Music and Google Music both introduced automatic music score generation functions, which generate professional quality music scores at a user's fingertips. For those users who prefer a simple music listening experience, We now have QQ Music Live, QQ Music ,, which offers a call site of music streaming function with a minimalistic user-friendly UI design. These tailored products and the options allow us to improve the experience for our users and engage them in a more personalized way. Most importantly, we are on track to deepen our partnership with the broader Tencent ecosystem to create a new music entertainment experience. First, in September, QQ Music and Roblox China, a joint venture set up by Tencent and Roblox, collaborated to launch an immersive virtual music concert for an indie musician with exclusive special effects, fireworks, virtual gifts, and music mini-games in a 3D setting, giving offline audience and online viewers an intimate view of the action. It attracted more than 2 million views domestically and abroad with over 100,000 US dollars worth of in-event purchases, laying a solid groundwork for our future endeavors in creating transformative experiences. Secondly, Second, we are working with Tencent Video to enhance content distribution. Tencent Video users can now seamlessly discover and enjoy arranging song tracks and other music related to the video content they are watching. This function is currently available in multi-drama series. Third, As another step forward in promoting socialization through singing, users can now update their WeChat status when they sing or finish a recording on WeChat, sharing the experience with WeChat friends. We are also making strides with our long-form audio business as a complement to our music products and video. value-added to overall user engagement and activities on our platform. We have made continued efforts to expand and differentiate our long-form audio content and features. First, our heroic, fantastic radio drama Sword Snow Stride has become a self-produced content blockbuster. accumulating 140 million streams since its launch. Second, in the third quarter, QQ Music launched an open platform to improve podcast creation process and allow them to upload and share their content to TME and other platforms with simple clicks. Third, to bring users a more immersive, vivid, and smooth listening experience, We deployed the industry's first vocal emotion-enabled AI reading technology to produce audiobooks, contributing to 30 titles based on well-known literature IPs, such as Battles Through Heavens, Dou Po Cang Qiong. Fourth, we further enhanced our content library by offering the audio content from Rock and Roth, Tuo Kou Xiu Da Hui, Tencent Video's number one-rated variety show. This effort led to stronger growth of long-form audio MAUs, which exceeded 140 million in the third quarter, growing by 89% year-over-year. Long-form audio paying users reached 5 million by the end of the third quarter, growing by over 100% year-over-year. a majority of which are also online music paying users as they are attracted by the complimentary nature of an integrated music and audio streaming service. While it has been gratifying to see so much enthusiasm for this role throughout the quarter, it is important to remember that we are still in the early stages of long-term development of this business Finally, our pioneering digital collectible platform remains at the forefront of innovation. Our recent highlight was a vinyl album Monk by Tiger Hu. Hu Yanbin, a renowned Chinese singer and music producer. The lottery for this limited edition vinyl album with $2,001 copied price attracted an intense fan interest in limited editions of artists' works. Its success is a stronger endorsement of this cutting-edge collection format, and this is just one example of the substantial creative efforts underway. We are building on this early momentum, and we are engaging more artists by creating a diverse pipeline of collectible works in the upcoming quarters. That covers our platform's progress and innovative initiatives. Now I'd like to pass the call to Tony to discuss our business highlights. Tony, please go ahead.