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's second quarter 2022 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, Mr. Tony Yip. Please go ahead, sir.

Thank you, Alfredo. Hello, everyone, and thank you all for joining us on today's call. TME announces quarterly financial results today after the market closed. An earnings release is now available on our IR website at ir.pensamusic.com, as well as via Newswire Services. Today, you'll hear from Mr. Kushan Pong, 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, will 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. Before we continue, I refer you to our safe harbor statement in our earnings press release, which applies to this call, as we will make forward-looking statements. The company will discuss non-IFRS measures today, which we believe are meaningful metrics for evaluating our performance. Please refer to our earnings release and SEC filings for reconciliation of these measures to the most comparable IFRS measures. With that, I'm pleased to turn over the call to Tushin, Executive Chairman of TME. Tushin? Thank you, Tony.

Hello, everyone, and thank you for joining our call today. In June 2020, In June 2022, we celebrated the first anniversary of launching our dual-engine content and platform strategy. Over the past year, TME has continuously innovated business models and improved our all-in-one music entertainment content and product capabilities to better serve our users and partners. Meanwhile, facing the compact and evolving industry landscape, we continue to explore music's intrinsic commercial and cultural value. As always, we try to nurture our music ecosystem and foster the sustained, healthy development of China's music industry. On the content side, we steadily enriched our original content production capabilities. To that end, we launched a new smart music assistant functionality in May, enabling creators to quickly make decisions through our proprietary PDM predictive model at key stages of the music production process, such as demo screening and market appeal potential evaluation. Each of our tools facilitates more efficient production of high-quality work, evidenced by thousands of original songs produced and streamed more than 100 million times in the second quarter. Notably, Blessing of the Three Lifetimes, San Sheng Shan Xin, a song by Hai Lai Ah Mu, dedicated to his beloved partner, was a blockbuster that we produced, promoted, and helped to enlist on the variety show The Treasure of the Void. It dominated major music charts and generated huge social media buzz, comprising over 2.5 billion views, and 350 million streams in the second quarter. Meanwhile, we continue to refine our original content catalog, focusing on key verticals such as gaming and hip-hop music. In the second quarter, we collaborated with popular game titles, including Honor of Kings, League of Legends Pro League, and Peacekeeper Elite, He Ping Jing Ying, among others, and worked with well-known artists including Angela Zhang, Zhang Shao Han, Jim Shao, Shao Jing Tang, and Xing to produce 15 chart-topping game songs, notably the theme song of the Honor of Kings game character, Shang Guan Er, sung by Yisa Yu, Yu Kewei. has achieved the highest number of first-week streams among all QQ Music game songs released in the first half of 2022. What's more, in the trendy hip-hop genre, we cooperated with the NBA on its 75th anniversary album, the title single, Time to Shine, Re Ai, performed by Chinese artist Lei Zhang, Zhang Yixing, and American pro basketball star Nick Young. became the first Chinese theme song to appear in the NBA Finals. Next, through Tencent Musician Platform, we spared no efforts to cultivate a vibrant community of indie musicians while creating a positive social impact. Tencent Musician Platform continues to empower musicians with a wealth of online and offline promotion capabilities and monetization avenues. In the second quarter, we introduced a new service for our musicians to easily master musical work globally to over 150 popular platforms such as Spotify and YouTube with a single click, which has already brought 190,000 songs by over 10,000 musicians to overseas audience as of the end of the second quarter. KUGO also now allows musicians to publish their songs easily on mobile phones and to self-host pay-per-view live events with merchandise sales and backers. For instance, we recently hosted a paid online birthday party for musician Yu Yan, with a rich pipeline of additional parties yet to be unveiled. What's more, as a long-term support program for musicians, our four-stage 2022 program launched the Open My series in April, which has already produced offline performances by over 70 groups of musicians across seven cities. Tencent Musician Platform also plays a pivotal role in exploring China's rich, deeply embedded social and cultural values through music works. Notable examples in the second quarter include First new trend in Chinese ancient style, 国风新潮, an album birthed by up-and-coming and top musicians who gathered to promote Chinese cultural food music. Second, My Girls, our music creation plan for female musicians designed to promote female independencies and self-awareness. Third, a Sino-French album, Music, 月色斑斓, a joint effort between our musicians, French musicians, and the French Embassy, which was showcased on the front page of Apple Music's recommendation list, further enhancing our musicians' international appeal. With our finger on the pulse of our users' preferences, we continue to zoom in on both trendy and time-honored music experiences to further enhance the quality and variety of music on our platform, as well as our reputation as the go-to destination for Q music verticals, such as classical, DJ, and hip-hop. They established strategic cooperative relationships with professional classical arts institutions, launched the KUWO's DJ for Everything plan, Wanwu DJ Ji Hua, and built up KUGO's new rap brand, Rap Tribalizes. Among other initiatives in the second quarter. One remarkable success was the 2022 hit single, She Can Do Magic, by DJ Little Fish, which dominated charts on many music platforms after its creator joined the DJ for Everything plan, achieving nearly 700 million streams by the end of the second quarter on TME's platform. Moving on to TME Live, our comprehensive online merged offline performances brand was presented 132 high-quality live music performances since its debut two years ago. In the second quarter, in addition to online live concerts for Void Rank, Wang Yuan, among others, TME Live was also proud to breathe new life into two legendary series of recorded concerts by household-name artists Leslie Zhang, Zhang Wuerong, and Jay Chou , supporting the ultra-high-definition visual and sound restorations enhanced by AI algorithms for selective events. These two huge hits went viral and dominated the top trending list, accumulating over 100 million unique viewers within the Tencent ecosystem. and social media buzz of 6 billion views. Jay Chou's concert also set a new record in viewership for online concerts in the industry, and his artist merchandise, including two action figures sold through our Putao Mall and Tencent channels, achieved close to 10 million RMB in GMV in the second quarter. GMV Live not only serves as an online stage for artists and musicians, but also demonstrate our game-changing creativity offline. Through our TME Live in-house, live house tour, we are providing participating artists and users with immersive, interactive experiences. Early-starter artists, including Young Jack, Man Shu Ke, Red Paper, Bai Pi Shu, and Cafe Hu, held live events in the second quarter, and tickets for some events were sold out in just two hours. In summary, what matters most to music lovers, music creators, and the broader music industry are the primary areas where we will continue to invest and drive innovation. Showcasing our ambition to support the sustained growth of the music ecosystem in China That concludes the process update on our growing content capabilities. Now, I would like to turn the call over to Ross, who will share more about our platform strategies. Ross, please go ahead.