Tencent Music Entertainment Group (TME) Q1 2019 Earnings Report, Transcript and Summary

Ladies and gentlemen, good evening and good morning and thank you for standing by. Welcome to the Tencent Music Entertainment Group First Quarter 2019 Earnings Conference Call. At this time all participants are in listen-only mode. Today you'll 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, Ms. Millicent T. Please go ahead, ma'am.

Thank you, operator. Hello, everyone, and thank you all for joining us on today's call. Tencent Music has announced its quarterly financial results today after the market close. An earnings release is now available on our IR website at ir.tencentmusic.com as well as on the newswire services. Today you will hear from our Mr. Kar Shun Pang, our CEO, who will start the call with an overview of our recent achievements and our growth strategies. He will be followed by Mr. Tony Yip, our CSO, who will offer more details on our recent business developments. Lastly Ms. Shirley Hu, our CFO, will address our financial results before we open the call for questions. Before we proceed, please note that this call may contain forward-looking statements made pursuant to the safe harbor provisions for the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations that involve known and unknown risks, uncertainties and other factors not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or expectations implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statements, risk factors and details of the company's filings with the SEC. The company does not assume any obligation to revise or update any forward-looking statements as a result of new information, future events, changes in market conditions or otherwise except as required by law. Please also note that the company will discuss non-IFRS measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under the International Financial Reporting Standards, in the company's earnings release and filings with the SEC. You are reminded that such non-IFRS measures should not be viewed in isolation or as an alternative to the equivalent IFRS measure and that non-IFRS measures are not uniformly defined by all companies, including those in the same industry. With that, I'm now very pleased to turn over the call to Mr. Kar Shun Pang, CEO of Tencent Music. Kar Shun?

Thank you, Millicent. Hello, everyone. Thank you all for joining our call today. We started the year of 2019 with solid first quarter results. Our revenue grew by 39% year-over-year, driven by healthfully growth on both our online music and social entertainment services. Most notably, paying users for both online music and social entertainment services increased by double-digit percentages year-over-year during the first quarter of 2019.

Thank you, Kar Shun. During the first quarter of 2019, both our online music and social entertainment services grew healthily. In online music services, we grew paying users by 27% year-on-year to $28.4 million. This was accomplished by our continued focus in three areas, content diversity, strengthening promotional capabilities, and technology advancements. First, we continue to implement a multi-pronged strategy to enrich content, we have further strengthened our collaboration with upstream partners. In January, we establish a partnership with SM Entertainment, a premier music label in Asia, posting one of the largest songs depository in South Korea. During the first quarter, we also successfully released and promoted songs to Liquid State, a music joint venture label specializing in Electronic Dance Music that we jointly launched with Sony Music in 2018. In this partnership, we have utilized our industry leading distribution and promotional capability to popularize new songs successfully. For example, the top selling song in Chinese called Sue was played several hundred million times in the first quarter. In addition, we continue to broaden unique content in our library. During the first quarter, we successfully obtained the master license to the original music soundtrack of a very popular TV drama title The Story of Minglan. One of the main theme songs was played approximately 1 billion times in the first quarter. Our content diversification strategy has yielded good results. As of March 2019, the total number of songs available on our platform increased to over 35 million. Beyond the number of songs, we also added more music related videos, talk shows and audio books to our content offering. As we increase the number of long form content on our platform, the average play time for such content grew substantially. For example, our I Do Read series featuring book reading by role model artists and top celebrities, recorded a double-digit percentage increase in total playing time for its second season, compared to its first season.

Thank you, Tony. Hello, everyone. For the first quarter of 2019, our revenues increased by 39% year-over-year to RMB5.7 billion. The increase was driven by the solid growth in both our online music and social entertainment business. Revenues from online music services increased by 28% year-over-year to RMB1.6 billion. This growth was mainly due to increase in subscription revenue and licensing revenue to other companies, including third party music platforms and Tencent Group. There were also higher digital music album sales in the quarter. Sales of subscription packages contributed RMB710 million in revenue, up from RMB565 million year-over-year. In Q1, we continue to offer promotional deals for long-term subscribers, including automatical renew and annual pack to subscribers. On the other hand premium membership subscriptions gained more weight in our total subscription base. But there was a slight decrease in our ARPPU from R&D8.4 in Q1 2018 to RMB8.3 in Q1 2019. We can also see a steady improvement in subscriber retention rate over the past five quarters. The improvement of the subscriber retention rate will continue to be our focus in 2019. Revenues from social entertainment services increased by 44% year-over-year to RMB4.1 billion, primarily driven by revenue growth in our online karaoke and live streaming services. Our ARPPU in social entertainment services increased by 30% to RMB129 year-over-year, while end user potential rate also improved from 4.3% to 4.8%. WeSing a new caliber was not only successful in revenue generation and ARPPU expansion during the quarter, but also increased the user presentation, and provided a stage for artists to improve their performances. Cost of revenues increased by 52% year-over-year to RMB3.7 billion. The increase was attributable to higher content and revenue sharing fees. The increase in content fees was mainly attributable to increased market price and amount of music content licensed from music labels and other content partners, as well as increased measurement in the production of high quality, original music content. The increase in revenue sharing fees reflect growth in our social entertainment services ended the higher percentage of revenue contributed from professionally generated content providers. Our gross margin was 35.4% in Q1 2019. We are in the process of ramping up our in house production and many of the shows was built in the proprietary stage during Q1. Now, let's turn to our operating expenses. Our total operational expenses increased by 28% year-over-year to RMB1 billion. Sales and marketing expenses for Q1 2019 were RMB437 million, representing the increase of 20% year-over-year. The increase was primarily due to increased spending on branding and promotion of our content. General and administrative expenses increased by 35% year-over-year to RMB602 million in Q1 2019. The increase was mainly due to the higher employee benefit expenses as we continue to invest in our workforce. There has been a gradual increase in size and the pay scale of our personnel in the past quarter. We have seen improvement in operating leverage on a year-over-year basis. Operating expenses as a percentage of revenue decreased to 18% in Q1 2019 from 20% in Q1 2018. Our effective tax rate was 12.4% in Q1 2019, compared to 9.2% in Q1 2018. The increase was mainly due to change in the preferential tax rate of certain subsidiaries. As a result of foregoing, our net profit attributable to equity holders of the company increased by 70% year-over-year to RMB987 million and our non-IFRS net profit attributable to equity holders of the company increased by 15% year-over-year to RMB1.2 billion. Our non-IFRS net profit margin was 20.9% in Q1 2019. As of March 31, 2019, our combined balance of cash and cash equivalents and term deposit amounted to RMB18.1 billion, an increase of RMB748 million compared to RMB17.4 billion as of December 31, 2018. The increase in balance was primarily due to cash flow generated from operations of RMB926 million. Our cash and cash equivalent balance was also affected by change in the exchange rate of RMB to USD as differential balance sheet dates. The exchange rate 6.7 to 1 on March 29, 2019 and 6.9 to 1 on December 31, 2018. With our strong profitability and cash flow, we will continue to invest in our products and the content offerings. This investment we help to expand our user base and improve user engagement, both of which are crucial to our sustainable revenue growth in long-term. We are confident that such efforts will create long-term shareholder value, as well as increase return on capital for investors. This concludes our prepared remarks. Operator, we are ready to open the call for questions.

Yes, ma'am. Thank you. Our first question comes from Eddie Leung with Bank of America Merrill Lynch. Please go ahead.

Hi, good morning, guys. Just two quick questions, mainly on the user side. Just curious, number one, as we moved more content under the payroll, for example, recently Jay Zhou's songs under the payroll as well. Could you comment on the paying user ratio under the music business going forward? As I remember, both Tencent and Tony mentioned about encouraging users are paying for streaming? And then the second question is on the MAU of your social entertainment business, any color on the trend between and WeSing in the first quarter. Because we pay attentions to the overall social entertainment MAU your growth, not very strong in the quarter. So wondering how's any or is there any difference between WeSing and general live podcasts? Thanks.

Okay, sure. Hi, Eddie, it's Tony, let me address both of your questions. With respect to the music paying users, I want to reiterate that 27% year-over-year growth for our music paying user is a very healthy pace. And with the mobile data cost declining, the paying user conversion driven by pay for download is facing some headwinds, while the paying users are driven by pay-for-stream is actually enjoying a lot of headwind as Kar Shun mentioned in his speech. And however, because the pay for stream user base is relatively small, because we only started implementing the pay-for-stream model in Q1, it will require some time for that to ramp up. So this is a particular quarter where you see that impact between the netting of the headwinds and the tailwinds, playing out the most. Over time into the next quarter and beyond, we expect the paying user growth to improve. And now in addition to growing the paying users, we've also made a lot of progress on improving the subscriber retention rate over the last several quarters as Kar Shun mentioned. And that's driven by our continued investment in enriching the content offering, as well as some of our promotional campaigns on auto renewal program. So our focus is not only on the quantity of paying users, but also on the quality of the paying users. On the pay-for-stream development specifically, we have made - we started implementation of pay-for-stream on transition model with a small selection of content in Q1. While the amount of content being put behind the pay-for-stream paywall accounts for only a very small percentage of our total. This is just the beginning and we'll continue to gradually add more content over time. The current focus is on making sure the user experience remain good despite that transition, and it will take some time for us to promote a broader user adoption. We are seeing encouraging results so far, which gives us the confidence that this is the right strategy that can generate significant value for the company over the long-term. So that's on the music side. And then on the social entertainment side, I also want to stress that while the MAU growth is seem slow, the overall social entertainment grew at a very healthy pace at 45% year-over-year. And we recognize that MAU growth has slowed. But I think one also has to recognize that our MAU base is already very sizable. Now, historically, our focus was more on the core karaoke users with relatively higher user frequency and as a result we have been very successful in mapping a large group of such core karaoke users. And hence we are reaching a high level of penetration within that core user group now. But we already have a well-defined plan to address this and to propel the user growth going forward. We will execute a number of initiatives focused on expanding the user coverage beyond the traditional user group. Some of the examples I've already mentioned earlier on the call, for example, we will continue to leverage the WeChat Mini program that offer a more simplified singing feature it capture more users within a larger social networks within WeChat. We continue to expand target users through the lite version of our app with more simplified product experience tackling fewer singing features, we will lower the karaoke usage barrier by allowing user to sing only part of the song such as the chorus, instead of the full song, and combine that with the one click sound correction feature that we mentioned in the last quarter will both help reduce the usage barrier. And finally we'll continue to invest in innovative product features to continue to deliver a fun and engaging user experience, such as the multi-mic singing room we mentioned in last quarter that is starting to bear fruit, and also the Grab the Mic, new feature that we launched in this quarter. So combining all of that being said we're very confident our user growth plans will start to drive better user growth in Q2.

Eddie, this is Kar Shun. I would like to add one more point regarding the online music, part. As I mentioned before, I think that the focus of us is besides driving the paying users, I think it's more - it is very important for us to improve the total number of payment users, rather than driving the higher ARPU at this moment. So since as every one of us may knowing that pay-for-streaming is more expensive than pay per downloads, since that download is just like a one-off charge, the streaming is more like a monthly recurring charge. So what we are doing is we will be prudent in handling this education process and make sure that we are going to have the best content and adding more free pages to our services as well to make sure that our users will be adopting to the new business model in a greater manner. So as we smoothly execute a transition over from time to time, while we expected that we are not driving just the number of user base, but the ARPPU will also grow as well. So I think that is going to create very healthy future for us in our business model on the online music side.

Thank you.

Our next question comes from Wang Chen with Goldman Sachs. Please go ahead.

Thanks management for taking my question. So one quick question is about our cost of revenue and the margin trend. So we mentioned that we're moving some song behind the paywall, and I hadn't seen a very healthy trend on the paying ratio side. So I'm just wondering whether this such move will kind of like change our cost structure as well in terms of our agreement with the label company? Thanks very much.

About music content costs, this quarter our music content costs increased compared to the net of Q1 in 2018 and is come from market price increase and we sign more contracts with labels and content provider partners. And we also continued in - in our self-made content such as music centrical shows and self-made songs. We can see - we get some improvements in this area. This quarter we have a self-made song named Please Say Hello singed by a popular pop artists ranked in top 20 - among top 20 in our most played song chart. So, we can see - we can we get more from our self-made content. And in 2019, we expect our music - our online revenues will continue increase and it will allow our expectation before budget, just like Kar Shun mentioned, we will focus on our subscriber increase and use the initiatives to encourage paying user retention rates and put more pay streaming content in paying window. So our subscribers will increase very much, but ARPPU is not now first we are important focus. So we estimate that ARPPU you will be steady compared to the last year. And the other very important point. Generally speaking, our license revenue will be not difficult to forecast because it's not will only by our offer and it is confirmed by the further music platform, the purchasing strategy and the natural resources. From the marketing information now maybe some business platform will give up some content. So our license revenue will be decreased in Q2.

Okay.

Okay.

So thank you, Shirley. So next question please.

Our next question is from Alex Yao with JP Morgan. Please go ahead.

Hi, good morning management and thank you for taking my call. I would like to follow-up with a previous question regarding the paying ratio for music streaming business. Can you elaborate a little bit more on what exactly is the content strategy that you introduced recently, which make the subscription relatively more attractive or more appealing to the streaming user and the relatively less attractive to the download users? Also, can you give us a rough breakdown in terms of the split within your paying user, between users that are driven by download behavior and the users that are driven by streaming behavior? And lastly, given the current dynamic content strategy, et cetera, et cetera, how should we think about the paying ratio increase pace over the coming quarters? Thank you.

Yes. Thank you for your question. So in terms of the music paying user, I want to clarify one point. The subscription package is one subscription package there it doesn't differentiate between download or streaming. However, within that one subscription package, the reason that thrive user to convert to be from a free user to a subscriber, there are different reasons. Some users are driven by the need to download the song, while other users may be driven by the need to stream the song even without the download. What drives that depends on what content they encounter. So for example, if they're listening to - if they want to listen to a song that is sitting behind the pay-for-streaming paywall, where you could only listen to it after being a subscriber, we consider that conversion to be driven by pay-for-streaming. Whereas if a user wanting to download a song that is only available behind the pay for download paywall, and that user is driven from a free to be a subscriber. We consider that conversion to be driven by people pay for download. So what we were trying to explain is because of the mobile data cost coming down, gradually over time. The convert - the number of conversions that are driven by downloads are slowing. Whereas on the flip side, the number of conversions that are driven by streaming is actually increasing quite quickly. But because the shared volume of a number of users that are driven by streaming are still relatively small compared to the pay for download driven users. You're not yet really seeing the positive benefit of that is not yet so obvious in the paying user growth. And so we expect as that scale of pay-for-streaming user base to increase. Now we expect the music paying user growth to show more meaningful and more obvious benefits starting in Q2 and beyond. Now, we don't - obviously, we don't provide specific breakdowns into numbers. But I think with the directional comment that we're providing, one should have a reasonable understanding that, this is in - with respect to our music paying users Q1 is a particular quarter. Starting in Q2 and beyond, we expect the growth rate to improve.

Okay. Next question, please, operator.

Absolutely. Our next question is from John Egbert with Stifel. Please go ahead.

Great, thanks for taking my question. In March, we saw that IGE started sharing VIP membership benefits with Google users. And the deal reminded us of Spotify's partnership with Hulu in the U.S. that's been widely viewed as a win-win deal. So I'm wondering if you can share any additional information about the partnership in terms of how the economics might work, how it might show up in your reported metrics, if at all. And what you're hoping to achieve with it? And is this may be the start of many different partnerships to try to increase your paid conversion rate. Thanks.

Yes, I think we mentioned maybe in the last quarter as well, is that the bundling campaign is something that is ordinary course of business for us. We do bundle with other online video platforms, we also bundle with mobile data cards, we bundle with a number of different other subscription services. I think from our perspective, it is a marketing campaign that help us cross sell our subscription plan into new user base of other platforms. And so it's a win-win for both. When that happens, we do count the subscribers on to our numbers as well. But I want to bear in mind that, this is more a marketing campaign that we implement from time to time. It is not a forever joint bundling initiative. So this quarter, you may see us partnering with one particular platform and next quarter, you may see us partnering with others. And that's part of our strategy to make sure that we optimize which partner that we partner with. So far, we are seeing good results from such bundling, and it's ordinary course of business.

That's helpful. Thank you.

Okay. Next question, please.

Yes. Our next question is from Han Joon Kim with Deutsche Bank. Please go ahead.

Great, thank you for the time to ask a question. I want to follow up on the user shifting from pay to download to pay to streaming. Do you see any peripheral kind of difference in user behavior perhaps in relation to digital album sales or the amount of songs being streamed or whatnot, that leads to enhanced kind of lifetime value of the user for paid to stream versus paid to download? Thank you.

Han, do you mind repeating the question we had trouble hearing you.

Sure. I'm trying to understand whether, as you observe the pay to stream user versus the pay to download user, whether you see any other kind of behavioral changes to the data stream user in the sense that maybe they consume digital albums more, or they happen to listen to songs more anything that would allude to that the lifetime value of a paid to stream user is higher than the paid to download users?

Sure, well, I think, one very helpful fact pattern there we observing is that the pay per stream user tend to consume more content, through our recommendation, because they are streaming more, they are listening less to songs that they've downloaded in their personal asset list or the personal folder. So as a result, it actually gives our platform more opportunity to help them discover new music. And with more opportunity for us to help them discover new music, it actually strengthen our ability to promote new songs, and increases the chance of us to promote other songs that may be sitting behind the pay-for-streaming paywall. And so, I think that's a key differentiation between users that typically listen to the download a song in their personal folder versus user who stream more.

Exactly. And all these streaming users is more active. And in terms of time spent on our platform is also higher when compared to the others original users who is listening to the download the song. So I actually agreeing that once we are going to try and have this transition done, our more and more users going to be listening to streaming music through our platform. They will be more active and also they will be have an open mind and willing to accept more new songs that was recommended by us according to their preferences.

Thank you, Kar Shun. Next question please.

Certainly, our next question comes from Wendy Huang with Macquarie. Please go ahead.

Thank you just a few housekeeping questions. First, can you maybe share the paying user breakdown between the WeSing and also live streaming Kugou? And secondly, just wanted to that pay-for-streaming business model. So do you expect data to cannibalize your paying subscriptions in the near-term, if so for how long or that's probably expectation? Thank you.

Wendy, do you mind repeating the first part of your question?

Yes. The first question is want to get some breakdown of the paying user between the karaoke app WeSing and also live streaming app Kugou Live?

Okay. Yes. So we don't provide specific breakdowns, but I think it's fair to say that the paying user growth for both live streaming and karaoke are growing. And in terms of your second question, whether there's any cannibalization in between pay-for-streaming and pay for download, it's certainly no. Because it is addition for us, as we mentioned, the pace of the paying users that are driven by pay-for-stream is actually enjoying a lot of tailwind, right. With the major trend of mobile data cost coming down, a lot more users are consuming music through online streaming. And as a result, we're actually enjoying the benefit of increasing conversion from a free user to a pay user by catching them with content that is only available to stream behind the paywall. So we are actually seeing that as a positive for us, that helps us grow our music paying users overtime.

Okay. Next question please.

Absolutely, our next question is from Binnie Wong with HSBC. Please go ahead.

Hi, good morning management. Thank you for taking my questions. My question is actually - two questions here, one is on the margin trend. Recall earlier in the year, we talked about, like the investments into content and also, of course, into the pay-for-streaming. And we also see the collaborations, a company has been with other platforms. So can you remind us in terms of basically in following in the rest of the year, because if we look at the 1Q 2019 we see that gross margin still relatively hold actually higher end of the range we talked about earlier in the year. So can you remind us in terms of our content investment, how that should be impact the margin trend? And then second, is that a follow-up question, basically, on the online music playing user growth side. As you mentioned about that, in March 2019, to pay-for-streaming, pay for like . So how do we see that this strategy will be impacting us going forward and what is the results? You have missed it because I think that has been launched in March, right. So how do you see that this strategy will be impacting going forward and what is the result we have received because that has been launched in March. So by now about like two months already. How have you been seeing the paying user growth affecting, like confidence impact to the user growth? And how does that impact our gross margins basically as well? Thank you.

Sure. Let me start to the first part, the second part of the question about adding more content behind the pay-for-streaming model paywall. And then I'll let surely answer your question about the margin. As I mentioned, we've implemented the pay-for-streaming monetization model in Q1 by selectively putting some of the content behind the pay-for-streaming paywall. We're actually seeing very encouraging results so far in terms of driving more and more conversion from free to pay. But, as I want to keep stressing, this is early stage, we've just begun that transition in Q1. But the early results give us a lot of confidence that this is the right strategy that we will continue to implement and would generate a lot of value for the company over the long run. And that's the reason why, we think, starting in Q2 and onwards the music paying user growth should be better than Q1, it's precisely because of the encouraging results that we are seeing.

About margin, this quarter, our margin is in line with our expectations. And in the future, coming quarters, we expect the sub-license revenue will be decreased and I have just said that that will the third party music platform will receive social content from our platform. So that will be some slightly impact on our margin in whole year. And for the - especially for the Q2, the sub-license revenue will be decreased from this quarter and our revenue expectation will be lower - this quarter will be lower of the whole year expectation. So this will be impacted the gross margin in Q2. But in our top line, those rates will be reaccelerated in the second half of year. So we think our gross margin will be recovered and go to our estimate of whole year. So that's for the gross margin.

Yes, let me just add, we do not provide specific guidance in terms of the numbers, because we want to stay very focused on growing the company over the long-term, rather than being distracted by short-term fluctuations. However, I think directionally as Shirley mentioned, we expect the Q2 to show better growth in terms of operating data, especially with respect to social entertainment MAU, driven by the execution of our user growth plan that I've outlined. In terms of total revenue, we expect Q2 to be - we expect Q2 growth rate to be slightly softer than Q1 growth rate before the growth rate we accelerate again, in Q3 and beyond. And that's mainly driven by like what Shirley mentioned; some of the third party music platforms may reduce the amount of content they sub-license from us. And so while this put pressure on this of sub-licensing revenue in the short-term in Q2, specifically, it actually is very positive for our platform in the long-term. Because our content leadership is becoming even more obvious.

I think it's very important for us to emphasize the point that in order to ensure the long-term success of TME, we have to keep investing in the content enhancement, even though we have the largest content library available in the market right now. And additionally, we also need to put more resources investing in our product innovation as well. So it will give us more competitive advantage in the future, so we are not focusing on that quarter-to-quarter performance, but instead we are focusing on a more long-term value generation for the company.

Okay, in the interest of time we'll take our last question operator.

Yes. Our last question is from Hans Chung with KeyBanc Capital Markets. Please go ahead.

Good morning management team. Thank you for taking my question. So I have two quick question, one, just following on the paying ratio question. So given the initial results what's our observation about the churn rate for the online music, the paying subscriber. And then second question is, it seems like we may have the strong growth acceleration in social entertainment, MAU and then - but given the high base and since like that we have seen a slowdown in the overall user base. So just beyond like, even beyond second quarter, how should we think about the user growth in social entertainment? I mean, at least . Thank you.

Yeah. Okay. Thanks for the questions. And I take the first part of the question regarding the online music side. And then I'll let Tony to talk about the social networking, the social entertainment. First of all, I think we are confident and keen to drive and achieve a healthy music subscribe count by providing the best content outstanding for experience for our users. As I have mentioned before through the ongoing and hard work of our team, we have already achieved a very good result. And there has been significantly steady improvement on our subscription retention rate over the last five quarters, actually. The actual frequency is around 60% of retention rate in the quarter four of 2017. And right now we are around 70% in Q1 2019. So I think that we are doing a really good job in terms of user retentions, especially for the online music services. And Tony, maybe you can talk about social entertainment side.

Sure. I think, as I briefly outlined, in the past our focus with social entertainment has more been on the core karaoke users with high usage frequency. And obviously, that puts a limit on how high the penetration rates could go, because there's only so many people who needs this sing karaoke lot every day. But, we've already had a well-defined plan to address this. And we've already started executing on some of the steps and we expect to see some of the positive results filtering through starting in next quarter. I won't repeat the additional initiatives again, but I think those initiatives will be more than sufficient to help drive the user growth going forward not just a single quarter. I think overall, the theme is that we want to broaden our user coverage beyond the high frequency user into the less traditional users, perhaps even to the casual users through a series of measure that lower the usage barrier that enables them to find it more convenient to sing, to enjoy content, to improve content, as well as share with friends.

Okay. Thank you, everyone, for joining us today. If you have any questions, please feel free to reach out to us through our IR website at ir.tencentmusic.com. This concludes the call and we look forward to speaking with you again next quarter. Thank you and goodbye.

This conference has now concluded. Thank you for attending today's presentation. You may disconnect.