David Xueling Li - Chairman Zhou Chen - Chief Executive Officer Eric He - Chief Financial Officer.

Unknown Analyst - Nomura Jialong Shi - Credit Suisse Ronnie Ho - CCBI Natalie Wu - CICC Alex Yao - JP Morgan Benny Wong - Merrill Lynch.

Good day everyone and welcome to YY’s Second Quarter 2016 Earnings conference call. At this time, all participants are in listen-only mode. With us today is Mr. David Xueling Li, Chairman of YY, and Mr. Zhou Chen, CEO of YY, Mr. Eric He, CFO of YY. Following management’s prepared remarks, we will conduct a Q&A session.

Before we begin, I’d refer you to the Safe Harbor statement in our earnings release, which also applies to our conference call today as we will make forward-looking statements. I will now turn the call over to the Chairman, Mr. David Li..

Thank you, Operator. Hello everyone. Welcome to our earnings call. We have many things to cover, so let me begin with what is at the top of everyone’s mind, the withdrawal of our privatization. As you know, I, along with Jun Lei, our former Chairman, had intended to take our company private up until recently.

Given the uncertainty surrounding China’s capital market policy, we believe that the U.S. capital markets are more suitable for YY’s growth over the long term, especially as we determine our international strategy. For now, we needed to get back to basics and focus on our respective growth frontiers and drive our business forward more aggressively.

That being said, the first step was the withdrawal of our privatization. The second step we took today with the resignation of Jun Lei as our Chairman as a member of YY’s board of directors, which will enable him to focus more on Xioami. As we mentioned in the press release, Mr.

Lei will remain a major investor, strategic partner and advisor of YY going forward. Additionally, I will take the position as Chairman of the company’s board and have resigned my CEO role. This move will enable me to focus more on our broader corporate strategy and the develop of new emerging applications and products.

The third step of our revamping includes the promotion of Mr. Zhou Chen to CEO. He has been the key executive who has run our online music business, our largest business segment for the past six years. Zhou Chen joined YY Inc. in 2007 and has built our online music and entertainment business from scratch.

Under his leadership, YY Online Music has grown organically by more than 16 times in terms of revenue over the past five years. This significant growth demonstrates Mr. Chen’s strong strategic thinking and execution capabilities, as well as his ability to quickly adapt to the ever-evolving market. Mr.

Chen is known to the board as a respected and a known adventurous leader who has been years ahead for our [indiscernible] in identifying and executing many of the entertainment business on the YY platform. We firmly believe he has all the qualities necessary to lead YY through our next stage of growth.

Lastly as part of strengthening our senior management team for this next phase of growth, we are promoting Mr. Rongjie Dong to be the new CEO of Huya Broadcasting, an independent online game broadcasting subsidiary of YY. Mr.

Dong has served as the Executive Vice President of YY since he joined YY in 2006, and over the past 10 years he’s earned much respect from our employees and the board for his strategic leadership and deep understanding of the market. Mr.

Dong will bring over 15 years of experience to his new role, and we have no doubt that this appointment will further deepen and broaden our management capabilities across YY’s executive team. Thank you for your support and interest in YY, and we look forward to helping grow our shareholder value with you together going forward.

With that, I will turn over to our new CEO, Zhou Chen..

Thank you, David, and hello everyone. It is a great honor for me to take the position as YY’s CEO. I have some big shoes to fill, having seen how David’s vision and leadership have built YY into a leading live streaming platform in China, and the opportunities that lie ahead of YY are significant.

Going forward, I will continue to leverage my knowledge and experience in order to accelerate the innovation of our content and service offering, as well as fully execute our expansion strategy to enhance YY’s platform and stay ahead of our competitors.

To begin with, we are glad to report a rather strong quarter with both top and bottom line growth across the board. Our growth and diversification continues unabated, and the recent popularity of live mobile broadcasting has helped popularize our platform and growth momentum.

This is exemplified by the fact that during the second quarter, our revenues increased by 46% year-over-year to 2 billion RMB. The growth momentum has primarily been driven by solid year-over-year user adoption of over 54.5% to 4.2 million end users and robust 48.7% year-over-year growth in IVAS revenue.

More importantly, we continued to see steady growth in our live MAU based on the YY platform to over 141.9 million users, a 16% year-over-year increase. In June 2016, we revamped our online music and entertainment branding to YY Live.

This rebranding effort is a key part of the company’s transition to a live broadcasting entertainment platform and a strategic focus on our core live broadcasting capability. With the new brand, we aim to further leverage the established YY brand and build an even deeper content ecosystem.

First, we will work on the development of PUGC, the professionally curated user generated content. We view this as YY’s most important content generation mode since it combines the advantage of PGC and UGC and hence is able to balance the content quantity and the cost of production.

Secondly on the PUGC side, YY Live will dive into more diversified market segments such as sports, movies, anime, etc. through cooperation with leading partners. We believe that with the joint effort of our partners, YY will be able to further enhance the live broadcasting interactivity with high quality and innovative content offerings overall.

With our revamped management structure, new branding, and the comprehensive content [indiscernible], we firmly believe YY is making solid progress in the transition to a broader entertainment platform while focusing on our core live broadcasting capability.

We are confident in our ability to stay ahead of our competitors and further fortify our competition mode as China’s leading interactive live streaming platform. Now I would like to turn the call over to our CFO, Mr. Eric He..

Thank you, Zhou Chen, and good morning and good evening everyone. As previously mentioned, we saw both top and bottom line growth across the board in the second quarter 2016 driven by the robust growth of our paid user and IVAS revenue, which leads me to discuss the performance of our business segments.

First in Huya, our online game broadcasting business, we are quite excited and proud of the success we have achieved from the strong line-up of hugely popular hosts, who have innovative and diversified content offerings as well as an improved monetization strategies we have implemented on mobile devices, all of which have resulted in significant growth.

To exemplify this, during the second quarter we saw revenue increase by 67.7% year-over-year to 143.1 million RMB, which was primarily fueled by a significant 111.6% year-over-year growth in the number of paid users to 1.1 million.

Moving on to our online music and entertainment business, as David and Zhou Chen mentioned, we have revamped our online music and entertainment branding to YY Live. In second quarter 2016, we maintained strong revenue growth of 50.3% year-over-year to 1.1 billion RMB.

The number of paid users further grew by 51.4% year-over-year to 2.8 million; meanwhile, our music entertainment business on mobile devices continued its robust growth with 96.7% year-over-year increase in revenue and 88.3% year-over-year increase in the number of paid users.

According to our internal analysis, our YY Live app was the most downloaded live broadcasting app in the Android arena in the second quarter. Going forward with a new brand, we will expand into a broader entertainment platform and strategically focus on our core live broadcasting capabilities.

We will continue to strengthen and invest into our content offerings, especially PUGC, to further expand our user communities and user stickiness on our platform.

For our online dating business, in the second quarter of 2016 revenue continued to grow by 72.3% year-over-year to 271.1 million RMB, mainly driven by a 35.6% year-over-year increase in the number of paid users to 316,000.

Going forward, we will continue to invest in and leverage our comprehensive content ecosystem and resources of our hosts, celebrities and industry partners to further expand our innovative content and service offerings across our business lines.

This strategy is one of our key differentiators as we strive to meet the evolving demands of our massive user base in China’s dynamic internet market. Overall, we remain confident in our market opportunities, especially with the new branding strategy aimed to fortify our position as the leading interactive live streaming platform in China.

Now I will turn to our quarterly financial details. Before I get started, I would like to clarify that all the financial numbers we are presenting today are in RMB terms. Percentage changes are year-over-year comparisons unless otherwise noted. Net revenue for second quarter 2016 increased by 45.9% to 1.98 billion.

This increase was primarily driven by an increase in IVAS revenues. IVAS revenues increased by 48.7% to 1.93 billion, which was mainly driven by a 54.5% year-over-year growth in number of paid users. Now let’s look at each of our IVAS business lines.

Revenue from online music and entertainment increased by 50.3% to 1.1 billion in the second quarter of 2016. The increase was driven by a year-over-year increase of 51.4% in the number of paid users to 2.8 million. In addition, the number of mobile users grew by 88.3% year-over-year to 1.8 million in the second quarter.

Revenue from online dating increased by 72.3% to 271.1 million RMB. This increase reflected a 35.6% year-over-year increase in the number of paid users to 316,000, and 27.1% year-over-year increase in ARPU to 858 RMB in the second quarter.

Revenue from online games was 188.3 million RMB as compared to 199.4 million RMB in the corresponding period of 2015.

This decline was primarily caused by a 29.2% year-over-year decrease in the number of paid users, which reflects the continuous softness in China’s web game market, but was partially offset by a 33.3% year-over-year increase in ARPU of online games. Other IVAS revenue increased by 76.6% to 375.3 million RMB in the second quarter of 2016.

This mainly includes revenue from Huya Broadcasting, which increased by 67.7% to 143.1 million, and revenue from PK Show which significantly increased in the second quarter of 2016.

Other revenues, mainly including revenue from our online education platform, Huanqiu Education Online, and online advertising revenues from Duowan.com were 47.8 million RMB in the second quarter of 2016 compared with 57.2 million in the corresponding period of 2015.

Cost of revenues increased by 45% to 1.2 billion, which was primarily attributable to an increase in revenue sharing fees and content costs to 893.3 million in the second quarter of 2016.

The increase in revenue sharing fees and content costs paid to performers, channel owners and content providers was in line with the increase in revenue and was primarily due to higher level of user engagement and spending driven by promotional activities, as well as the company’s investment in expanding the amount of new and innovative content to provide to our users.

In addition, bandwidth costs increased to 150.7 million in the second quarter of 2016, primarily reflecting the continued user expansion and the video quality improvements, but partially offset by our improved efficiency and pricing terms. Gross profit increased by 47.4% to 772.4 million in the second quarter of 2016.

Gross margin increased to 39% from 38.6% in the prior year period. Our non-GAAP operating income increased by 52% to 485.4 million in the second quarter of 2016. The non-GAAP operating margin increased to 24.5% from 23.5% in the prior year period. GAAP net income attributable to YY increased by 18.1% to 343.3 million RMB in the second quarter.

Net margin in the second quarter of 2016 was 17.3% compared to 21.4% in the corresponding period of 2015. Excluding a one-time non-operating expenses of 23.5 million RMB for the disposal of subsidiary of the company of YY, net income attributable to YY was 366.8 million RMB, representing an increase of 26.2% year-over-year.

Non-GAAP net income attributable to YY Inc. increased by 27.3% to 384.8 million from 302.3 million in the prior year period. Non-GAAP net margin was 19.4% in the second quarter of 2016 compared to 22.3% in the prior year period.

Diluted net income per ADS in the second quarter of 2016 increased by 17.1% to $5.97 RMB from $5.10 RMB in the prior year period. Non-GAAP diluted net income per ADS increased by 25.7% to $6.65 RMB from $5.29 RMB in the prior year period.

Finally, looking at our business outlook, for the third quarter 2016 the company expects its net revenue to be between 2 billion RMB to 2.1 billion RMB, representing a year-over-year growth of approximately 34% to 41%.

This forecast reflects the company’s current and preliminary view on the market and operational conditions, which are subject to change. Operator, this is the conclusion of our prepared remarks. We can go into the Q&A session..

[Operator instructions] Your first question comes from the line of [indiscernible] from Nomura. Please ask your question..

Hi, thanks for taking my call. [Chinese spoken] Eric. Good evening, and also congratulations to Zhou Chen for the new role. I have two questions. First, I think Zhou Chen has explained a little bit about this, but I still want to get some more color on the rationale to rebrand your YY Music to YY Live.

I just wonder if there are any differences in the content and services provided between YY Live versus YY Music. My second question is about the live broadcasting competitive landscape. The competition in China’s live broadcasting industry seems to be intensifying with a lot of live broadcasting start-ups.

I just wonder what are YY’s strategies or competitive advantages to defend your market share, especially your market share on the mobile. I will translate myself. [translates].

[translating] I think the reason for us to rebrand our YY Music to YY Live is it’s very clear that YY needs to have a strategy that we are going to even more focus on live streaming, live broadcasting.

On top of that broader corporate strategy, specifically on the music entertainment arena, we are going to execute or deliver an even more specific PUGC strategy, and also we are providing the channel partners strategies. Among those strategies, we are going to diversify our content. On the YY platform, the varieties of our content are numerous.

For example, we have singing, we have dancing, we have talk shows, we have a lot of performances on our platform, so those are the areas that we are going to further fortify, and this will be a key differentiator between YY and the rest of the competitors.

In the future, we are going to even add more different categories, such as sports, such as travelling, such as foods, culinary, and those are the areas that we are going to further to broaden our content horizon so that we can attract even more users in the future.

Now I’m going to answer the second part of the question with regard to the competition in the industry. In my opinion, there are several categories of so-called live broadcasting business in the industry. The first one is actually headed or represented by YY, which includes many different talents.

Second category is the one that’s being represented by our Huya business, it’s mainly the online game broadcasting area. The third one is the one that’s being exemplified by the so-called celebrity, and Weibo is a very good example.

The fourth one is the one that tries to peak into the personal life or the lifestyle type of live broadcasting, which is the very typical type--is Ingkee type of broadcasting. It also includes some other ones, like some in the verticals area, like ecommerce live broadcasting.

Among all those different categories, I would conclude that for the one that’s the variety of talent shows and the game broadcasting type are the ones that have very strong content and broadcasting capabilities, which is very different from the rest of the crowd.

The one that’s represented by Weibo, which is the celebrity type of the live broadcasting, is more towards so-called media pools, which because of the celebrity they will have lots of fans to be crowded in that services. But whether that’s going to be a long-lasting business model remains to be seen.

The fourth one, as I mentioned, is with regard to the lifestyle or peaking through some of the very personal life type of broadcasting, represented by Ingkee, mainly was driven by users’ curiosity But that curiosity seems to be plateauing in recent months, so we don’t know whether this curiosity can last how long.

So I think there’s a chance for those trends to go down another way. So for those celebrity and lifestyle type of live broadcasting, we’ll actually face some difficulties down the road, such as we would like to see how long and how fast it will go.

So we will see the future development of all those live broadcasting services, which is very different from YY. We have been in the marketplace for more than five years and we have shown that we have very strong capability of expanding our business and grow our business in the last five years. That’s my answer, thank you..

Thanks for the insights, Zhou Chen and Eric..

Your next question comes from the line of Jialong Shi from Credit Suisse. Please ask the question..

Hi management, thank you for taking my question. I have two questions. One is on the content strategy. As you just mentioned, we are going to expand our content categories as well as build more PUGC.

Just wondering, are we going to invest in those contents directly or more like via an open platform strategy? The second question is regarding Huya’s monetization. Can management give us a breakdown of revenue from gifting to gaming content versus the entertainment content, as well as the paying ratio? I’ll translate by myself. [translates].

[translated] I’m going to answer the first part of the questions. With regard to the PUGC questions and the content varieties, I think in my previous comments on PUGC and channel partners [indiscernible] answered part of the questions. I think YY is a platform which has very open--we’re very open to being cooperated with third parties partners.

In the previous time, our partners are mainly our broadcasters or the performers or our users in some instances, but in the future with the PUGC strategy, our partners will actually turn more and more into so-called institutions or the business who has lots of different professional content on their--under their management.

For the second part of the question, I think my answer is this. Our Huya broadcasting was primarily created through--by our online game broadcasting business.

Since the second half of last year and the first half of this year, we actually broadened their revenue base from the online game broadcasting to other entertainment business, as well as [indiscernible] we have not actually break down the revenue, because when we’re actually looking to the revenue of Huya, we would treat them as homogenous revenue, so it’s very difficult for us to break down every channel of our Huya business and telling us which is coming from entertainment, which is from game broadcasting.

So we don’t actually have the metrics on hand. With regard to the paying ratio, I think in recent quarters we have seen significant growth in the paying numbers. The paying ratio has been on the rise. In terms of the paying ratio on our platform, it ranges from 1% to 3%, depending on different business lines.

For Huya specifically, I think it’s somewhere in this range, but I don’t recall the specific ratio numbers. I will probably come back to the questions later on, and if you are still interested, we can provide that in a future call. Thank you..

Thank you, that’s very helpful..

Your next question comes from the line of Ronnie Ho from CCBI. Please ask your question..

Hi, and thanks management for the question time. This is Ronnie. I just have three questions.

Number one is actually how about the mobile contribution so far for YY Music and how other parts of the business saw second quarter, and how does it compare to last quarter and last year? My number two question will be can you give us more color about the growth of the paid user ahead, because so far the paid user growth is quite encouraging, like still 50, 60% over the few quarters, so I just want to get a sense how is it moving forward.

My last question on [indiscernible], can you give a bit more color about the online education? It seems like it’s ramping a little bit, but I just want to have more color about the second half of this year and 2017. [translates].

Okay, thank you, Ronnie, for your questions. Let me try to answer your questions. We all know that YY actually originated from a PC platform, but in recent years YY has very successfully transformed itself from a PC-type of company to a mobile-type of company in two ways.

So far, our mobile users, the number of our mobile users exceeded our PC user, both in music business and the Huya business. Secondly, I think from the revenue side, the same thing happens.

The revenue coming from the mobile devices actually already exceeded our PC revenues, so I would say that in the process of transforming into a mobile company, YY has done a lot. Obviously we will continue, try to even make it happen faster in the future quarters.

As far as I know, all the product upgrades and product new features will be conducted on mobile platforms only, so that’s our determination and our goal. Second question with regard to our paid user growth rate, currently our paid users are growing very, very fast. That means the conversion ratio has been very, very smoothly going up.

I think one of the reasons for this is our continuous growth of our mobile users, because in China within the last one year, we have seen a lot of the users are very used to using mobile devices to pay for or to buy virtual items.

We are seeing the trend happening, so that’s one of the reasons why our paid users in the music area and in the online game broadcasting area has been ramping up very, very strongly, and we expect this trend will continue for the rest of the year and 2017.

Number three, our online education business, as you know that YY is coming from gaming, from entertainment business in the past, however in 2014, in the end of 2014 we did actually acquire two teams of educations. One of the teams didn’t work out very well, we already wrote off last year in 2015.

The one that’s left, which we already disclosed on our earnings release, which has been doing quite well. In the first two quarters, they are growing very nicely on a sequential and year-over-year basis; however, their base is still very small, even with a very fast pace of growth.

Their revenue is not going to be very significant among our entire picture, so I would say that online education is one business that we think is very interesting and important, but because of the size of the business on our platform, it’s not going to be very significant or the core in the near future.

But we are seeing this team is doing well, it’s progressing very well and growing very fast..

Okay, thank you..

Your next question comes from the line of Natalie Wu from CICC. Please ask your question..

Hi, good evening management. Thanks for taking my question.

We have noted that YY always took a very conservative and efficient sales and marketing strategy in the past, so just wondering will there be any change regarding the sales and marketing spending style given the new launch of several new apps, such as ME live broadcasting, and also the rebrand which involves the broader content coverage and maybe different types of audience? I also have a follow-up question regarding the ME live broadcasting.

Can management share with us some extra color on the operational data, say latest MAU, ARPU, etc? What’s the ramping up pattern of ME in terms of monetization? Thank you. .

Natalie, do you want to translate your questions by yourself? I think that would more accurate..

Oh, sure. [translates].

[translated] Well, YY has a tradition of being very low key, so we actually have spent a very limited amount of marketing expenses up until 2014, so that’s why the YY Music entertainment, or YY Live now, or Huya has very lopsided influence compared with our market share, despite the fact that we have been a pioneer and a leader of this industry, but we have little influence in the marketplace.

.

With regard to the ME questions, I think we launched ME in February of this year. It has been a tremendous success for us. Again, this particular line of business, it’s more on the lifestyle type of broadcasting, which is very similar to Ingkee. It’s completely on the mobile part of it.

It will make the live streaming very easy, and it’s aiming at young people, boys and girls who are in their early 20s. You know, this has been our policy that the ME’s numbers in terms of metrics, in terms of revenue has been not--has not been disclosed in the past.

I don’t think at this moment we would like to break that, so we would like to keep those numbers or metrics within ourselves for a period of time when we will probably choose the appropriate time to disclose the ME metrics numbers in the near future. But so far, I think the ME line of business has been very successful.

Their revenue has been ramping up very strongly. It’s a line of business which is already past their breakeven point..

Great, so just one quick follow-up. You just mentioned that the sales and marketing expense will be increased in the future, so what kind of sales and marketing spending level should we be expecting? Can management give us some guidance on that? [translates].

Yes, let me answer your question, Natalie. I think what Zhou Chen means is that before 2014, sales and marketing expenses as a percentage of revenue at YY is less than 1%, so we had very negligible amount of dollars spent in the sales and marketing. But since then, our sales and marketing has steadily grown to 45% of total revenue.

In this quarter, second quarter, sales and marketing expenses as a percentage of total revenue is running at 4.4, 4.5% of total revenue. I think this level is adequate for the time being.

We will continue to spend those type of money to do our sales and marketing; however, we don’t have any specific targets for sales and marketing expenses for any particular time. It really depends on the development of our business.

If the business warrants, if business has the need to expand its reach and we think it makes sense, we will do so, but so far I think--at this point in time, we think that the current level of sales and marketing spending is adequate and appropriate..

Got it. Thank you Eric, and thank you Zhou Chen..

Your next question comes from the line of Alex Yao from JP Morgan. Please ask your question..

Hi, thank you for taking my question. Just wanted to follow up on Jialong’s previous question regarding the competition in the mobile live broadcasting market. Thank you, Zhou Chen, for giving us a very insightful discussion from content generation and [indiscernible] to consumer perspective. I’m just wondering from the addressable market, i.e.

the people who consume this content, are there big differences across the four major categories you just identified? Which model feeds the larger addressable market, and what is the trend in the market? [translates].

[translated] Obviously we did mention actually there are four different categories of live broadcasting. For all that user base for those different websites or streaming or broadcasting businesses, the differences are very, very clear and very obvious.

For example for the online game broadcasting business, represented by our Huya business, obviously if you are not a gamer, you don’t play certain games, it would be very difficult for you to watch, to use Huya online game broadcasting services, so that is virtually a vertical type of the business for those gamers.

Another example for Weibo, Weibo in fact as we all know, they are--Weibo is media. They are full of celebrities, of stars, so if you don’t care about those celebrities or the stars and you don’t use those media, the chances that you are going to be their user are slim.

We did mention actually we don’t know how long this type of media can last in terms of a live broadcasting format, because in our observation, we have seen a lot of Weibo-type of broadcasting is for celebrities to meet their audience or their fans, but the frequency of this type of application is not very frequent, it’s not on a daily basis, it’s not even on a weekly or even monthly basis.

So that’s why we will start to have some doubts how long actually this type of service will be consumed by their users or their fans. The last part of the category is what we call--represented by Ingkee is the lifestyle live broadcasting.

Those services are satisfying lots of so-called rural areas or Tier 3, Tier 4 users who like to see how those guys or those persons who live in the first tier cities or second tier cities, their lifestyle. There is a strong curiosity behind it, and this type of curiosity has its own period or cycle.

When those cycles or when that curiosity has been satisfied, we think these types of services will be consumed or required with less degree of desire, so that’s why we say the long-term development of this type of service will be questionable.

So when that happens, we think that those services will all turn to YY’s type of so-called talent or variety of shows type of broadcasting. .

I see, very helpful. Thank you very much. .

Your last question comes from the line of Benny Wong from Merrill Lynch. Please ask your question..

Hi management, thank you for taking my questions. I have two questions here. First is on the online music and entertainment business. If I look at the average quarterly ARPU, it’s around 392, 400 this quarter, so if I look at it on a Y-on-Y basis, it’s around flat.

Should we expect--and the trend is relatively about similar levels, except for fourth quarter last year was higher. So we should expect that our strategy here now is growing in terms of the number of users, growing for the breadth of the users rather than monetizing further, deeper into on a user basis? That’s my first question.

Then my second question is if management can help us understand more about the online broadcasting business. If you look at the interactive concert broadcasting services, [indiscernible], can management please share with us your thoughts on the online broadcasting, what are the key elements to maintain a sustainable monetization model? Thank you. .

Hi Benny, do you mind if you can translate on your own? I think that’s even more efficient..

Okay, yes sure. [translates].

[translated] On YY music and entertainment, we have spent tremendous efforts to increase our paid user base, and also we tried to expand our paying ratio. This has been pretty successful, that’s why you have seen that we are having our paid users increase very fast in recent quarters.

As the paid user base is growing bigger and bigger, the ARPU numbers tend to stay stagnant, it’s not going to increase very, very fast, and we also believe that if ARPU becomes very high, in fact it’s detrimental to the platform’s development and expansion.

So we don’t think we would like to see ARPU to increase very fast or getting bigger and bigger. As we are pretty successful in developing so-called low paying users, since they are new, they are paying lower amount of money to participate in YY service.

When those users start to mature, to grow, we believe that as long as we can provide the content they like, those so-called low paying users one day will become medium paying or high paying users, which will be very beneficial for the future growth of our platform..

[Chinese spoken].

[translated] For [indiscernible], one of the features that we provided on our platform for two seasons, but so far I think we have bumped into some sort of hiccups, and we actually have suspended its service until the first quarter of next year. So the current status of [indiscernible], it has been suspended.

Instead of [indiscernible], we replaced it with so-called specific 24x7 music channels. We have actually recruited some of the entertainers or the singers to perform in those channels. I think this effort has just started. As of now, those entertainers performing in those music channels have been very successfully monetize their services.

That will conclude this answer of this question..

Thank you..

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect..