Tencent Music Entertainment Group

Good evening, good morning, and welcome to Tencent Mix Entertainment Group's third quarter 2024 earnings conference call. I'm Nelson Tuho, head of IR. We announced our quarterly financial results earlier today before the U.S. market opened. The earnings release is now available on our IR website and via newswire services. During today's call, you'll hear from Mr. Khusheng Pang, our Executive Chairman, and Mr. Ross Leung, our CEO, who will share an overview of our company's strategies and business updates. Then Ms. Shirley Hu, our CFO, will discuss our financial results before we open the call for questions. Before we continue, I'll refer you to the Safe Harbor Statement in our earnings release, which applies to this call as we'll make forelooking statements. Please note that we'll discuss non-IFRS measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under IFRS and our earnest release and filings with the SEC. All participants are muted at this time. After management's remarks, there will be a Q&A session. And please be advised that today's call is being recorded. With that, I'll now turn over the call to Kassian, executive chairman of TME. Kassian, please.

Thank you, Madison. Hello, everyone, and thank you for joining our call today. The solid third quarter performance once again showcases our ability to deliver high-quality growth. Our faster approach continues to drive both subscriber-based expansion and ARPP growth. Online music services revenue grew by 20% year over year, contributing significantly to a 29% year over year increase in adjusted net profit. During the quarter, we prioritize the deepening integrations across different products. It's evident that the synergies between our dual engines of platform and ribbon content ecosystem have become a powerful force, enabling us to unlock more value to users. Let me give you some examples. First, our ongoing efforts to strengthen partnerships with domestic and international record labels have continued to bear fruit, enhancing our music offerings and diversifying our contents Recently, we renewed the contract with top Chinese labels like YH Entertainment Group, YueHua Music Group, and Image Music Group, Daxiang Music Group, including early access for new song releases from popular artists such as Silence Wang, Wang Sulong. Additionally, we formed a strategic cooperation with Galaxy Corporation, home to the global music sensation G-Dragon, to bring you more international music content, digital albums, and merchandise to our platform. Our scale and unique value proposition have enabled us to become the multi-year proprietary partner for G-Dragon's upcoming tour concerts in Asia and other regions. As our influence in the industry grows, an increasing number of record labels are working with us to launch innovative artist-fan interaction events focusing on new song releases, such as voice-based interactions, song guessing games, and music challenges. Second, we have been partnering with A-listed artists and rising indie musicians to host offline music experiences and concerts, connecting them with their fans in creative ways. Two recent events demonstrated our success in this space. In September, we hosted TME Seabird Music Festival in Anhui, featuring a stellar lineup of artists, including Chen Chusheng, Du Ke Xue, Xue Zixian, and Zhang Yuan, as well as Tencent musicians and other popular artists Leon Liu, Liu Shuang, Zhao Lei, and Su Li Zhang, Yang Pei, Yue Dei. This event attracted an impressive 65,000 fans over two days. earning widespread acclaim and impact. We also organized an offline concert for talented singer and songwriter, Yu Jia Yun, marking his first ever ticket show with over 10,000 attendees. Third, leveraging Tencent's powerful network and ecosystem, we continue to nurture our music content community that inspires interactive engagement. In the third quarter, we collaborated with celebrities Kerry Wang, Wang Junkai, and Esther Yu, Yu Shuxing to produce theme songs titled, The Hero, and Breaking News for popular games, League of Legends, Wild Rift and Peacemaker Elite. This cross promotions with Tencent Games combined with disdain in-game icon redemptions have lead to impressive results. The popularity of these theme songs, which hit our top trending songs chart, and Chinese song chart has increased the use engagement, effectively bridging the music and gaming communities across platforms. We recognize that different users cohorts have the same music consumption needs and preferences. To address this, we are actively expanding unique benefits to our premium members. For our super VIP members, we introduce priority access to extensive iconic digital albums from renowned artists such as Zhou Lincai, Cai Yiling, and Wang Yibo, with new additions of multiple K-pop singers in the third quarter. We also enhanced the SVIP privileges to include unique concerts and fan activities, such as pre-sales for tickets to shows by Jam, Deng Ziqi, Mariah Carey, and Tia Ray, Yuan Yawei. These enhanced privileges have effectively driven growth in our SVIP memberships, and we will continue to unlock new opportunities for both music labels and artists. Last but not least, we published our inaugural ESG report in the third quarter, providing a comprehensive overview of our ESG practice and achievements. This is just the beginning of our sustainability journey. I'm also delighted to share that the Tencent Musician platform was recently recognized as one of China's first model cases for the national copyright powerhouse strategy, honoring our contributions to safeguarding music copyrights. This recognition will further motivate and propel us to promote the music industry healthy and sustainable development. In summary, our sustainable and long-term approach to achieving high quality growth will carry us far and beyond what we have achieved so far. We remain dedicated to fostering a compassionate, inclusive, and thriving music and ecosystem that benefits music labels, artists, users, and the broader industry. Now, I would like to turn the call over to Ross for more details on our overall platform development. Ross, please go ahead. Thank you.

Thank you, Ka-hsuan. Hello, everyone. Alongside our content and user insights, our years of operational expertise have been a key driver in strengthening our industry position and differentiating our value proposition in a dynamic environment. Our third quarter results once again demonstrated our ability to execute on strategies that retain users, attract new paying subscribers, and upgrade more members to premium services. These results bowed down to our commitment to innovation and our increasing ability to meet users' involving building consumption preference. Let me start by sharing some progress on our product upgrades in the third quarter, which have been well received by our large use case. First, our deep understanding in users' needs enables us to further innovate our product features, bringing fresh experiences. For example, recently we launched the industry-first player interface, featuring a horizontal screen as well as real-time interactive comments feature, promoting a deeper sense of community belonging. We also upgraded the top-trending songs chart, Dian Feng Chao Liu Ba, with interactive features attracting millions of participants. This has helped increase the chart's influence. Second, we continue to explore new technologies to enhance users' experiences. For example, we have leveraged large language models to streaming line content production, further improving both efficiency and the quality. Notably, in the third quarter, we deployed AI scene technology to create single fairy town, Tonghua Zhen, which quickly went viral on short video platforms. Our text-to-speech TTS technology also helped us create tens of thousands of audio books on our platform. Take into our efforts to expand our subscriber base. First, we optimized our operational and marketing efforts to drive a new subscriber acquisition across viral environments. For example, central to other mid-autumn festivals' same event, we rewarded new users with subscription benefits through unique interactive features. This has positively contributed to paying users like us. Second, we continue to improve our recommendation algorithm. One example is enhancing the novelty of tailored content suggestions, making it easier for users to discover music. This led to higher recommendation streaming share sequentially in the third quarter, which in turn improved paying user commission efficiency. Third, we collaborated with iconic IPs like Black Myth Wukong, Hei Shen Hua Wukong, Crown Shin Chan, La Bi Xiao Xin, and Disney, allowing us to offer personalized interfaces that attract additional paying users. In terms of SVIP, our highly engaged subscribers We are pleased to report that as the end of the third quarter, we reached an important milestone by surpassing 10 million. The unique benefits of our SYIP plans are gaining traction as shown by the high ARPPU and the long time spent on our platform compared to other tiers of paying users. Let me provide more details on this achievement. First, Our proprietary self-developed audio quality features have enhanced the listening experience for SYIP members. Standout examples from this quarter are QQ Music's premium sound, DTS sound quality, and Kugoo Music's Viper Ultra sound, which bring clear, more immersive audio to our users. Furthermore, we expanded our high-quality sound experience to in-car scenarios with Viper series audio quality designed for our SAP membership during Xiaomi, the auto, and the new vehicles. Second, our enhanced long-form audio offerings have also had a positive impact on user willingness to review their subscriptions. We expanded our audiobook content library with original content and popular IPs across various genres, including hit TV dramas and films, comics, suspense, and children's stories. Third, These are just a few examples of the initial steps that we are taking to grow our SVIP memberships. Coupled with the growing depth of our content ecosystem, as Kashin discussed, we have a solid foundation for delivering richer content benefits. Moving forward, we will continue to focus on both unique content and product offerings. meeting the growing need of our users and delivering delightful music experiences. With that, I would like to turn the call over to Shirley, our CFO, for a deep dive into our financials.