Tencent Music Entertainment Group

Ladies and gentlemen, good evening and good morning, and thank you for standing by. Welcome to the Tencent Music Entertainment Group fourth quarter and full year 2021 earnings conference call. Today, you will hear discussions from the management team of Tencent Music Entertainment Group, followed by a question and answer session. Please be advised that this conference is being recorded today. Now, I will turn the conference over to your speaker, host today, Chief Strategy Officer, Mr. Tony Yip. Please go ahead, sir.

Thank you, Operator. Hello, everyone, and thank you all for joining us on the call today. T&E announced financial results today after the market closed. An earnings release is now available on our IR website at ir.tensormusic.com, as well as via Newswire Services. Today, you'll hear from Mr. Kushan 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, a CSO, we offer additional thoughts on our product strategies, operations, and business developments. 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 four looking 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 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 measure not uniformly defined by all companies, including those in the same industry. With that, I'm pleased to turn over the call to Khushan, Executive Chairman of TME. Khushan. Thank you, Tony.

Hello, everyone, and thank you for joining our call today. We conclude 2021 with resolute execution of our mutually reinforcing fuel engine content, and platform strategy. As we strengthened our Penn Entertainment content ecosystem and enhanced our content production and promotion capabilities throughout the year, we further diversified our business model, grew our market influence, and most importantly, kept on attracting and engaging users and holistically adjusting the needs of our music stakeholders. We are also committed to continuous product innovation, through which we optimize users' experience across our four pillars of music entertainment. Listen, watch, sing, and play. Ultimately, these initiative skills help both of our company and the music industry to achieve healthy development and prosperity. Empowered by our content strategy and compelling original content production, list licensing, operation, promotion, and monetization, we are expanding our efforts in augmenting the scale and fortifying the quality and competitiveness of our music catalog. To cultivate high-quality artists and songs and promote a flourishing original content ecosystem, we have been focusing on building a more effective set of original content production capabilities. We have led the industry in original content production and promotion by developing and implementing a host of advanced tools and technologies. Examples include our 5Sing platform, which provides an online community for narrators, songwriters, and musicians to pair, communicate, and trade. During the demo stage, our proprietary predictive model enables forecasting and data mining for songs with blockbuster potential by determining intricate user preferences and analyzing melody, lyrics, voice, and rhythms, which in turn makes original song production more cost-effective. Furthermore, we have developed a number of content promotion tools which integrate our internal and external promotion resources, providing a one-stop service to musicians. These advanced tools and technologies allow us to effectively identify and increase support for potential hits. Notable standouts include Lonely City, Gu Cheng, which stood for the number one spot in the charts within the Chinese ancient style category upon release. triggering a tremendous wave of buzz on social media with nearly 1 billion streams in the fourth quarter, as well as multiple songs pushing over 100 million streams in the same quarter, such as Painting String, Hua Lixian, Perfect Couple, 金玉良缘, Pretend I Had Been Married to Her, 当我娶过她, and I'm Not Andy Lau, 我不是刘德华, Deepening interaction with IPs in the broader Tencent ecosystem has also increased the influence of our original music. In 2021, TME joined the hands with 46 IPs in the Tencent and entertainment ecosystem across gaming, animation, literature, variety shows, film and television and more to produce and release 117 original songs. In the fourth quarter, we teamed up with the League of Legends to launch the industry's first e-sports music production bootcamp, ushering in the beginning of our long-term original content production cooperation with TJ Sports. Water crossover collaborations also produced a hit such as the film song from the acclaimed romance film B for Busy, Ai Qing Shan Hua, sung by Mao Bu Yi, which topped the various charts, and the theme song for the game House of Grimm, Mo Jin Wu Yu, sung by Angela Zhang, Zhang Shao Han. We also empower indie musicians by creating a spiritual home for them via our Tencent Musician platform. As of the end of the fourth quarter, the number of indie musicians on our Tencent Musician platform reached 300,000. With the ongoing improvement of our end-to-end services from song production and domestic and overseas promotion, all the way to artist and repertoire development, incentive plans, performance resources, copyright protection, and career training, our Tencent Musician platform has become the platform of choice for many Indian musicians, especially young ones, further promoting the variety and diversity of our musicians' ecosystem. First, Tencent Musician Platform leverages powerful internal and external resources to provide musicians with a rich variety of artistic inspiration and creation scenarios. For example, in the fourth quarter, We cooperate with the Mercedes-Benz Music Creation Initiative She's Mercedes to encourage the use of music to record her stories. 340 groups of participating musicians composed 1,290 original songs through the Tencent Musician platform, highlighting female creativity in music. With multi-dimensional promotional capabilities, both on and offline, Tencent Musician platform has become a hotbed for hit songs. With the enthusiastically shared release of QQ Music's 2021 year-end music review, Fu Yi's song, Time Never Forgets, Shi Guang Tai Yang, for which we managed the entire production, release, and promotion process, achieved over 20 million first-day streams, setting a streaming debut record within the indie musician's category. We also recommend Flowers All The Way by Wen Yixing to multiple offline New Year's Eve performances hosted by influential TV channels, where it earned widespread accolades among listeners with its authentic story and inspirational theme. and topped the major music charts in the fourth quarter. Notably, daily streams exceed 15 million directly following these performances. Going forward, our Tencent Musician platform will carry on harnessing these advantages and ecosystem resources to foster a richer repertoire of original music and support more indie musicians. Alongside our music production initiatives, We have been enriching our content library to safeguard our comprehensive content offerings. Google has made Chinese ancient style a breeding ground for massive hits for its IP, new ancient rap, , by organizing singing competitions of music galas, launching music charts, and other on and offline activities in the fourth quarter. Hip-hop has become another value booster for our platform, and we are proud to have built a reputation among users and in the industry as a go-to destination to discover hip-hop music. Our QQ Music Records Alliance brand is deep in collaborations with hip-hop celebrities and record labels, which we augment with music contests, national live tours, and other events. In 2021, we helped the Chinese-English style and hip-hop artists and songs to reach a board-centered fan base, with more than 4,000 songs in these two genres combined to making their way onto various music charts. Turning to our live events offerings, in 2021, we upgraded TME Live to become an increasingly comprehensive performance platform. reinforcing our overall online and offline content ecosystem. For 2021, TME Live further strengthened its brand and escalated its industry influence by hosting a total of 56 live performances with captivating interactive and virtual experience. In fourth quarter, we organized online shows featuring a rich lineup of domestic and global , such as and Adele. Among these, was particularly innovative and rewarding, giving its embedded online payment and artist merchandise options. TME Live has also extended downstream to support the diverse development of our musicians. such as the fourth page, which has attracted approximately 10,000 Indian musicians, applicants, and has been widely followed on social media. We've helped our artists gain significant growth in streaming volume and fan base. By the end of the fourth quarter, 25 of our musicians had performed over 120 original works on TME Live, various offline stages. In the future, we expected to extend more offline events and festivals to up-and-coming musicians, expanding their influence and efficiency, promoting talent through high-frequency performances. As the leading music and audio entertainment platform in China, we have created trend-setting award ceremonies, such as the Tencent Music Entertainment Awards, TMEA, to present and reward the industry's best and brightest artists and their era-defining work. On December 11th, 2021, we hosted the third Stars Through the TMEA in Macau, featuring 46 groups of artists, including Jay Chou, Zhou Jialun, Mayday, Wu Yutian, Reni Liu, Liu Ruoyin, Cai Shikun, Teens in Time, Xu Laichao Lantuan, and Zhuge Xie, Xie Jichen, as well as a successive play of 58 hits. By combining our promotion powers with other Tencent resources, we set an audience record with over 10 million views, far more than the previous two TMEAs. With that, I conclude the update on our progress with content. Now I would like to turn the call over to Ross, who will share more about our platform strategy. Ross, please go ahead.