Tencent Music Entertainment Group

Good evening, good morning, and welcome to Tencent Music Entertainment Group's second quarter 2025 earnings conference call. I'm Millicent Tu, 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 will hear from Mr. Kushan Pang, our executive chairman, and Mr. Ross Liang, our CEO, who will share an overview of our company strategies and business updates. Then Ms. Shelley Hu, our CFO, will address our financial results before we open the call for questions. Before we continue, I refer you to the safe harbor statements in our earnings release, which applies to this call as we made four looking statements. Please note that we will discuss non-IFRS measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under IFRS in 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'm very pleased to turn the call over to Kushan, Executive Chairman of TME. Kushan, please.

Thank you, Melissa. Hello, everyone, and thank you for joining our call today. We delivered high-quality growth in the second quarter, with solid year-over-year increases in both revenue and profitability. On one hand, our music subscription business remains a core growth driver and continues to gain traction. On the other hand, we are also seeing impressive results from our expanding suite of music-related services. Key initiatives like advertising, concerts, and artist merchandise all achieved rapid growth in the second quarter. And that strong momentum is carrying into the third quarter. By constantly enhancing our content ecosystem, expanding our offerings, and fostering new ways for artist-fans engagement, we are shaping a vibrant all-in-one music service platform. Now, let me share some of the key highlights on the content business. First, we began cooperating with well-known Korean labels, The Black Label and H-Music for the first time. further strengthened and differentiated our K-pop offerings, we also extended collaboration with renowned Chinese artist Wang Feng, offering both of his classics and latest work on our platform. Secondly, we continue to focus on co-creation and original content production to further enrich and diversifying our content offerings. From concept, originations, creations, to production and promotion, we are actively involved in every stage to build a more dynamic and innovative music ecosystem. A prime example is our recent collaboration with SM Entertainment on NCT's Cheng Le, Zhong Cheng Le, Chinese special EP, Lucid, Chan. Our integrated promotions across music festivals, debut concerts and variety shows attract a large audience. 10,000 music lovers participated in a sing-along at the music festival and variety show. Clips generated over one million likes, highlighting the power of the end-to-end industry collaboration across borders and cultural exchange through music. We also work closely with artists to develop original pieces, like the theme song for the acclaimed film, The Light Tree Roll, Chang An De Li Zhi with Chen Chu Sheng. This song topped the multiple music charts and garnered extensive praise from national media. Additionally, our strategic partnership with Zhejiang Satellite TV, Zhejiang Weishi, has further supplemented our music copyright portfolio of popular variety shows, such as The Treasured Voice, Tianqi de Shengying, and Shining Summer, San Guang de Xia Tian, and opened new opportunities for collaboration in content co-creation, musician promotion, and more. We have also shown strong capabilities in staging artists and connect them with the users through other music related service offerings. These efforts have further energized our ecosystem, boosted user loyalty and cultivated content creation, all together reinforcing our platform unique position in the evolving music industry. A few examples. First, we successfully hosted leading Korean artists, G-Dragon's first major tour since 2017 in Macau, which attracted over 36,000 attendees to immerse in the cultivative atmosphere and the events merchandise was quickly sold out. This marked our first large scale international concert production. significantly pushing our industry reputation. Following a strong kickoff, we are scheduled to expand the tool into other regions this year. Additionally, we organized a series of stadium concerts for Fiona Seed, Shui Kai Qi, Tia Ray, Yuan Ya Wei, and rapper Gai, helping them to reach a broader, younger audience. Due to the overwhelming demand, we quickly responded and worked with Tia Ray to schedule additional shows to accommodate fan interest. Second, we have become an important partner for staging and creating live performances for emerging talents. In the first half of the year, we leveraged our proprietary IPs, City Live and Buff Live, to host over 300 offline shows for nearly 100 Tencent musicians. Our cross-platform promotions also boost a number of works into trending hits, connecting them with a broader audience of music lovers, For instance, after we promoted Xiang Cici's first, Why Not Wait For The Wind, Bu Ru Jiu Deng Feng Lai, on soft video platforms, it quickly went viral, sparkling a wave of users generated contents on social media and surpassing 20 million streams on our platform. Third, we created more opportunities for music lovers to meet and interact with artists, both online and offline. For example, buyers of Jason Zhang Jie's physical album, Not Bad, Yao De, could win opportunities to attend his offline signing events. Such privileges not only deepened the fan's engagement, but also helped drive the album's outstanding performance. In late June, we partnered with DLU, a global fan communication platform company, to launch the interactive community Bubble on QQ Music. Bubble enables users to engage directly with hundreds of K-pop artists from labels such as SM, JYP, and Cube Entertainment, providing artists an avenue to share members-only content. To cater to a wider audience, we also plan to invite some popular Chinese artists to the community, allowing them to foster a deeper and more personal connections with their fans. Finally, reflecting our commitment to serving the music industry and supporting its healthy growth, we host the Third Wave Music Awards, which was designed to honor the most outstanding Chinese music work of 2024. 15 top tier music creators, including Gu Jianfen, Li Haiying, and Xiao Ke, presented the awards. The chart's professionalism earned industry-wide acclaim and endorsement, amassing over 200 million social media views. This quarter, we also cooperated with professional institutions, music labels and artists, leveraging AI technology to unlock the social value and hearing power of music. For example, we launched the Hearing Guizhou project, featuring natural soundscapes to enhance sleep quality. In summary, our dedication to diversifying music services and delivering well-rounded music entertainment has set the stage for long-term sustainability growth. With a strong foundation in place, we will continue to enhance our content and platform ecosystem, offer richer experiences and unlock greater opportunities for both music lovers and stakeholders across the music value chain. 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, Kaishen. Hello, everyone. In the second quarter, our platform demonstrated robust growth driven by our commitment to continuous product improvement and operational excellence. Online music recorded stronger performance, supported by a sustained expression in both our subscriber base and ARPPU. This positive trajectory was underpinned by our innovations across product features, artist merchandise, and artist-fan interactions, which has further strengthened or appeared among SVIP members. Overall user average time span reached a record high and SYP subscribers exceeded 15 million, a new milestone that reflects the deep trust and the loyalty within our user community. To enhance the SYP experience, we introduced a range of new and upgraded features during this quarter. Here are some key highlights. First, high quality sound quality remains the most popular SVIP membership benefits. This is effective in fulfilling users' robust demand for more premium and immersive listening experiences. In the second quarter, Kugoo Music pioneered Viper Hi-Fi sound quality and a one-click audio enhancement 2.0. By delivering superior audio fidelity and louder speaker volumes, we let users easily transform their smartphones into portable speakers. We also upgraded voice extraction technologies with the industry-first AI chorus function. Users can now plug in a live concert, sing along, experience anytime and anywhere without the user fuss. Second, to further drive SYIP adoption, artist-centric privileges became increasingly effective. Such achievements are powered by our deeper collaborations with libraries and artists that unlock a wide range of compelling benefits for our users. Digital albums are a great example. Recently, we premiered JJ Lin, Lin Junjie, and Lin's new digital single, Hold Me Close. We also launched Zhaolin Cai, Cai Yilin's new album, Pleasure, by integrating these albums as SYP sign-up privileges. We significantly boosted SYP conversions. Another example is priority access to concert tickets for in-demand events. This quarter, SYP users had the opportunities to secure tickets for G-Dragon and Blackpink's concert tours in advance on our platform, sparking significant buzz among music fans. We also cooperated with both domestic and international artists, including JCT, Tan Jianci, Silence One, Wang Sulong, and Icefire to release Marker Star Cards series. These initiatives successfully met users' growing demand for collectibles. Third, we elevated the user's engagement by introducing new ways for artists and the fans to connect. For example, beyond launching Bubble in May, we partnered with TF Entertainment, Shidai Feng Jun, to live stream teens in time, Shidai Shao Nian Tuan, and the Transform Project, Top Deng Lu Shao Nian Zu He, two concerts. This event garnered over 33 million viewers, with SYP members enjoying dedicated access to solo camera angles, bringing fans even closer to the artists. We also upgraded our virtual fan community, Penguin Ireland, introducing special avatar outfits and gestures for SYP members to make online meetups more personalized. During last Huang Zi Hong Fan's birthday and song releases, we hosted a fun team building activities and a live voice call with him, attracting over 100,000 users to his island page. Next, as our in-car music service gained recognition from SVIP members, we broadened our alliance with prominent automakers. For instance, this quarter, we formed a comprehensive partnership with Geely and collaborated with Xiaomi on its first SUV, the U7 model. This partnership integrated Dolby Atmos and the premium series sound effects, elevating users' music listening experience. We also built an AI-powered music cabine for Great Wall Moto, offering personalized on-demand features like AI vocal extraction and a healing music playlist to facilitate a more enjoyable journey. Alongside the success of our SAP offerings, the power of our platform and the innovative ad formats led to an accelerated advertising growth. both quarter over quarter and the year over year. In particular, we optimized the interactive and the tasks and the enriched reduction benefits, significantly boosting users engagement and the receiving positive feedback from advertisers. Lastly, our initial pilot on ad-based membership gained positive momentum. It gave us more room to provide tailored solutions to advertisers and users with various needs. Looking ahead, we see great potential in the music entertainment space and are committed to investing in new initiatives that create lasting value and impact on music creation and consumption. Along this journey, we will continue to push boundaries, innovate and enhance user experiences to deliver more premium and immersive experiences to all of our users. With that, I would like to turn the call over to Shirley, our CFO, for a deep dive into our financials.