Tencent Music Entertainment Group

Good evening, good morning, and welcome to Tencent News Entertainment Group's first quarter 2026 earnings conference call. I'm Milson 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'll hear from Mr. Kashan 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 refer you to the safe harbor statement in our earnings release, which applies to today's call as we made 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 in our earnest release and filings for 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 course be recorded. With that, I will now turn the call over to Kexin, Executive Chairman of TME. Kexin, please.

Thank you, Madison. Hello, everyone, and thank you for joining our call today. Despite an increasingly competitive landscape in the music streaming industry, we delivered a steady performance overall this quarter. Our growth is increasingly driven by diversified monetization across the music value chain. With the offline concert-related business achieving another quarter of triple-digit year-over-year growth, we will continue to accelerate the development of our multi-dimensional commercialization model, which is deeply rooted in our commitment to cultivating arrivals and legitimate music ecosystem. While AI is rapidly expanding the supply of content, it is also introducing significant market noise and new industry challenges. The profileration of unauthorized AI-generated content not only creates headwinds for our music subscription growth, but also undermines creators' rights and dilutes the long-term value of the music ecosystem as a whole. In response, we are working closely with creators, rights holders and regulators to lead and champagne robust copyright protection efforts. While the nature of these challenges is unique to the AI era, we have successfully navigated major copyright and IP transitions before and have consistently been at the forefront of those efforts. We remain confident in our ability to adapt, lead by example, and help shape the future framework for intellectual property protection in the age of AI. This commitment has further sharpened our focus on what truly drives long-term value and sustainable growth. Today, we are now convinced than ever that original human creativity and premium music IPs are the ultimate differentiators. That's why we are evolving beyond traditional streaming services into an integrated music ecosystem that further unlocks the value of every piece of IP. This holistic approach is designed to deepen engagement and expand user wallet share. Against this backdrop, we have further optimized our catalog, ensuring that our licensed and proprietary content offers valuable emotional responses that users qualify. Let me share two examples. First, we further enhanced our classic music catalog. Capitalizing on the enduring demand and extended life cycles of timeless hits, we recently renewed the contracts with label, including JVR Music, Linfair Records, and Mockabye Baby Music Limited, securing continued access to iconic catalogs from artists such as J. Chow, Zhou Zhilun, Karen Mock, Mo Wenwei, Harling Yu, Yu Chengqing, and Angela Zhang Xiaohan. Further, we are enforcing our leadership in premium copyrights. We also deepened our strategic partnership with TF Entertainment, providing users with a 30-day head start benefit for upcoming releases and exporting collaboration across physical products, live performances, and other IP-related opportunities. Second, the streaming share of our in-house new releases has seen a steady rise, reflecting our ongoing efforts to enhance production capabilities. A notable example is our collaboration with Sony Pictures on the Chinese film song, The Starfixes, for the scientific blockbuster, Project Hail Mary. Performed by Josen, the song granted strong traction upon release, quickly topping multiple charts across our platforms. Across our business, AI has become a key enabler, accelerating time to market, improving production efficiencies, and enhancing user experience. Importantly, it complements, not replaces, human creativity, and further reinforce the scarcity and value of premium IPs. Let me walk you through how we are actively embracing AI to further enhance our content ecosystem and in turn, unlock additional value from legacy IPs. First, we provide creators with tools to reshape every stage of the creative process. For instance, our one-stop AI music production tool, Venice, stimulates the full cycle songwriting process of professional musicians, from lyrics, compositions, and arrangement to vocal performance and mixing. This empowers creators to produce high-quality work more efficiently and at lower cost. Second, as we bring more legitimate AI-generated music onto our platform, we are pleased to see that high-quality AI works can, in turn, revitalize classic IPs and endure them to younger generations. Some AI covers of classic hits are often among the most popular tracks. By reimagining iconic songs with innovative styles and vocals, These reinterpretations sparked renewed interest, driving listeners back to the original versions and amplifying the visibility and commercial value of legacy IPs. As more premium IPs thrive on our platform, they serve as a powerful engine for our broader communicationization efforts. By building his top holistic Penn IP related music experiences, we continue to lead industry consumption and grow at scale. Whether through immersive live performances or innovative fan-based economy, we are elevating music's influence while deepening water share. Specifically, First, our highly loyal user ecosystem continues to attract leading artists and IPs seeking deeper collaboration. By strengthening strategic partnerships, we extend IP value chains through integrated virtual and physical offerings. A key example is our collaboration with Jay Chow on his digital album, Children of the Sun, where we launched a package that offerings combining the album, SVIP memberships, and physical collectibles. Supported by a nationwide offline campaign across 45 cities, the release achieved a strong viral traction, topped the major charts, surpassed 1,000 million renminbi in sales and drove meaningful SVIP conversions. We also deepened the partnership with leading artists including Cai Xu Kun and Roy Wang, Wang Yuan, whose recent releases delivered a strong fan engagement and commercial performances. Second, we also continue to strengthen cross-cultural reach through different offline partnership with leading domestic and international labels and artists. This quarter, we delivered multiple flagship concerts, which drawing over 10,000 attendees. maintaining a strong execution standard in live performances. Notably, Baby Monsters concert in Taiwan, China, and NCT Wish concerts in Hong Kong, China, attracted both core fans and border audience, expanding their reach. Third, we are cultivating a primary artist roses to amplify the global footprint of Chinese music. This is amplified by Silence Wang, Wang Sulong's debut world tour across Asia and North America, and Guy Zhou Yan's first large-scale show in Singapore. Domestically, concerts by Will Pan, Pan Weibo, TLA, Yuan Yawei, Angela Zhang, Zhang Shaohan, Jane Zhang, Zhang Liangying, and Zhang Yuan, further deepened the fans' engagement. Before concluding, I would like to share our ESG progress. In April, we published over our 2025 ESG report. Over the past years, we stepped up in created empowerment, product inclusively, and value chain sustainability. These efforts reinforce the long-term value and resilience of our ecosystem, as reflected in the ESG rating upgrades and external recognition. In closing, we are encouraged by the progress we have made and the challenges we are elevating the strategic priority and investment in copyright governance, taking a more resolute stance to safeguard the long-term health of the music industry. We remain committed to advancing the border creative economy, unlocking new opportunities and driving enduring long-term value. Now, I would like to hand the call over to Ross for an update on our overall platform development. Ross, please go ahead. Thank you.

Thank you, Ka-Shen. Hello, everyone. In our increasingly competitive landscape, we are building a more resilient platform powered by our content and a platform dual engine, during user differentiation, engagement, and the lifetime value. As we strengthen our competitive edge and further differentiate our offerings, we are transitioning to a membership-based model that goes beyond content subscriptions to deliver more immersive music experiences. I will share more details shortly. For today's call, I would like to primarily focus on two areas. user growth and monetization efficiency improvement resulting from better services. On the user front, Minting Health's top of the final remains our foundation. Let me share some updates. First, we are excited to further deepen our integration with the WeChat ecosystem to broaden reach and streamline user conversion. By embedding a pathway within video accounts, we facilitate a seamless transition from short video music discovery to full track playback on our platform. This also elevates musician's exposure, helping them convert casual short video viewers into allowing fan base on our platform. Second, for Google, well competitive pressure is a bit more acute. We allow the barriers to enter through more freemium and as memberships. Third, we leverage AI to drive engagement with improved recommendation system, efficient discovery enabled by AI agents, and easier playlist creation, growth in music access, boosted engagement. We also saw exponential growth in both AI-driven messaging and playback DAO. At the same time, Personalized features such as theme avatars, player innovations, and interactive tools led to a deeper sense of belonging on our platform. Turning to how we are unlocking greater IP value and increasing user lifetime value, we continue to execute existing tiered plans. As I mentioned earlier, we launched a new initiative to transition to a membership-based concept with enriched content and rights offerings. Although still in its early stages, we see strong long-term potential in IP-driven offerings through enhanced benefits and integrated rights. First, SYP membership continue to stay stronger adoption and the rotation thanks to our refund operations and the innovative benefits. For example, we are upon the CCT. Tan Jianci as our first cross-platform SYP family brand ambassador. This strategic partnership significantly enhances the perceived value and the public awareness of our premium offerings. In addition, to further differentiate our SYIP premium offerings, we continue to expand the fund-based benefit and audio privileges. On the content front, we introduced the China limited edition digital albums combined with physical collectible for leading K-pop artists such as Blackpink, Aesol, and Ivy. On the platform and the product front, we launched the TME Connect, enabling high fidelity audio transmission across multiple devices. Google Music launched Live House sound effects and QQ Music further deepened the collaboration with Doobie to become the first music platform in China to support Doobie SA4 audio format. We also extended this immersive experience to Doobie House, an offline audio experience space for artists like Charlie Puth, Silence Wang, Wang Sulong, and Blackpink. Second, we pioneered more IP-centric memberships to capture diverse user demands. A key milestone this quarter was the launch of our inaugural fan club, Romance Universe, with Silence One, Wang Sulong, offering priority ticket access, unique content, and artist-centric perks that resonate well with fans. At the same time, we continue to expand artists rich on Babel, welcomed Su Ruiqi as Babel's first Sony music artist, and enhanced product features such as in-chat search functionality with further strengthened user engagement and retention. Last but not least, we are unlocking incremental growth by scaling IP-driven offline offerings. particularly with artist merchandise. For instance, we sold as a sole distributor for Transform Project, top Denglong Shao Nian Zu He debut physical album and other sold out merchandise such as Yuqi Song Yuqi Skiggy New Year gift box and Hu Xia Plus collectibles. Beyond merchandise, we brought the idol city of synths, China. They built an exhibition to life in collaboration with Cube during a multi-dimensional immersive experience for fans. To conclude, our challenges remain. We are confident in our path forward. We will continue sharpening our competitive edge to strengthen our vibrant platform, one that attracts users, deepens engagement, and unlocks new monetization opportunities. With that, I would like to turn the call over to Shirley, our CFO for a deep dive into our financials.