Good morning and thank you for standing by for Xunlei's Second Quarter 2016 Earnings Conference Call. At this time, all participants are in listen-only-mode. After Management's prepared remarks, there will be a question-and-answer-session. Today's conference call is being recorded. I would now like to turn the call over to your host today, Ms. Zhang Dani, IR Manager of Xunlei. Please go ahead.

Thank you, operator. Good morning and good evening. Welcome to Xunlei's second quarter 2016 earnings call. I'm Dani Zhang, Investor Relations Manager at Xunlei. With me today on the call are Mr. Sean Zou, our Chairman and CEO; Mr. Lei Chen, our Co-CEO and Mr. Tom Wu, our CFO. Today's conference call is being broadcasted and a replay of the call will be available on our website following the call. Our earnings release was distributed yesterday, and it’s now available on our IR website as well as Newswire service. Before we get started, please note that the discussion today will contain certain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Please refer to our SEC filings for a more detailed description of the risk factors that may affect our results. We do not assume any obligations to update any forward-looking statement except as required under applicable law. During this call, we will be referring to both GAAP and non-GAAP financial measures, and the non-GAAP measures are reconciled to the most recent directly comparable to GAAP measures in the tables attached to our earnings release, which can be found again on our IR website. Please note that all numbers are in US dollars unless otherwise stated. I would now turn the call over to our Co-CEO, Lei Chen. Lei, please.

Good morning and good evening everyone. Thanks for joining us today for our earnings call for the second quarter of 2016. Let me start by briefly summarizing our top line, our total revenues for this quarter were $38.1 million, which represented 22.3% growth on year-over-year basis. Within our guidance range, revenue from subscription business is continuing to regain growth trajectory increasing 7.5% on a year-over-year basis. In addition, mobile internet also maintains a growth momentum, contributing significant revenues. It now accounts for 27% of our total revenues, up from 23% in the previous quarter. Tom will provide more details on the financial results in his section. Now let me first comment on our cloud computing business, one of the important and innovative product strategies for Xunlei. Our cloud computing is powered by a cloud sourcing, utilizing existing idle capacity, focusing primarily on streaming live or on demand. In the second quarter of 2016, revenue of cloud sourced bandwidth selling increased 19% sequentially. As I mentioned previously, we continued to focus our effort on the live video industry, which is one of the fastest growing internet usage in China. The technical aspect for this application is particularly demanding, and our conquest here is an early testament of our technology and value propositions in providing smooth live video feeds real time. The usage of Panda TV, a leading customer in the live video segment almost tripled on a sequential basis. Our overall revenues from live video customers also grew by 14% sequentially, despite difficult comparison given the quarter prior benefited from strong seasonality due to Chinese New Year. Total number of customers increased 84.2% sequentially, and our pipeline of new customers, which are in various stages of product testing, customizations and negotiations also look solid. Let me reiterate value propositions of our…

Thank you Lei. Good morning and good evening everyone. For the second quarter, total revenue were 38.9 million, which represented a 22.3% growth on a year-over-year basis. Increases in subscription, cloud computing business and mobile advertising revenues were the major contributors for the year-over-year basis growth. The total revenues on a sequential basis remained flat. Subscription revenues were 22.6 million, number of subscribers increased by about130,000 during the quarter and reached 5.26 million, which is approaching an historical high for Xunlei. ARPU also grew strongly to RMB28.2 compared to RMB25.4 in the corresponding period of last year. As Lei mentioned in a section, the key reasons for the growth were user demand, our improving customer care and continued importance of our mobility products. For our cloud computing business, Project Crystal, revenues for cloud sourced bandwidth increased 19% on a sequential basis. As Lei mentioned, the growth in the live video segment was particularly strong, contributing to the rise in revenues. Overall cloud computing revenues; however, were down slightly due to slower sale of our hardware devices Zhuanqianbao, as planned. We’re obviously very focused on executing this business, which is still generating losses. Online advertising revenues which included mobile advertising revenue this quarter were 3.8 million. Mobile advertising revenues grew 27.3% compared to the previous quarter, which we stated, we saw the demand price of mobile traffic in terms of advertising and sales in the fourth quarter of 2015. Traffic for our mobile apps continued to be strong. Cost of revenues was 18.6 million compared with 20.4 million in the first quarter of 2016. Gross profit increased 7.9% compared to that of the previous quarter. Gross margin was 50.6% up from 46.5% in the previous quarter. Total operating expenses were 24.1 million compared to 25.8 million in the previous quarter. Net loss from continuing operations for the quarter was 4 million compared with operating loss 5.4 million in the previous quarter. Non-GAAP net loss from continuing operations was $2 million. Turning to our balance sheet, we continue to have a very strong balance sheet. We ended the quarter with cash, cash equivalent and short term investment balance of 391 million. This is down from that of the previous quarter end. The decline was probably due to several strategic investments we made during the quarter, as well as our ongoing share repurchase program. Cash value per ADS at the end of the quarter was $5.86. Now let me finish by going over our guidance for the next quarter. We expect our revenues to be between $38 million to $42 million for the third quarter of 2016. The mid-point of this range represents a year-over-year increase of about 20% and we look forward to updating you soon. Operator?

[Operator Instructions]. Your first question comes from the line of [Kanan Gul] of [Asisi] Capital. Please ask your question.

The first question is, can you give us the outlook of your CDN service revenue, where its reached growth like 30% in the following quarters. And the second question is that, I noticed the degrees target of sales of volume of Zhuanqianbao, does it mean that currently the server - the Zhuanqianbao peer load is not enough. Can you give us some color over the ARPU generated per user?

I can take a stab at it and Sean and Lei may want to join after that. Now your first question on the outlook for CDN services, unfortunately we don’t provide specific guidance in terms of segments. But as we pointed out, we expect our revenue to grow by roughly about 20% on a year-over-year basis. However, we do expect revenue from our CDN cloud computing service to grow, given the momentum that we mentioned both in terms of the progress that we’re making on live videos as well as the number of customers that we have signed as paying customers, as well as the pipeline. But unfortunately we’re not going to provide a specific guidance in terms of that particular revenue segment. Your second question I believe was on our hardware device sale, which as we mentioned in our prepared remarks slowed in the second quarter. So first of all, yes, it was slower and that contributed to the overall cloud revenue decline a bit. But it was absolutely planned. We did not want to ramp out as much as the previous quarter, primarily because we wanted to make sure that we could better utilize what we have in terms of existing capacity. No, we don’t think it’s an indication of the demand side. As I pointed out we do expect growth in terms of our cloud computing revenues, particularly in the live videos section. And I wanted to make it very clear that the sale of hardware devices is on schedule, it was an unplanned, slow down and we expect to maintain similar momentum for the second half of this year. Let me pause and see if my colleagues would want to make any further comments. If not, we’ll go to next question. Operator?

[Operator Instructions]

I’m sorry, there was a part of the question I did not address earlier. ARPU, I suppose you were talking about how much our suppliers in terms of owner of our hardware devices were getting paid. It’s a wide partly it depends on how much they contribute in terms of bandwidth, but roughly about RMB60 per month. Sorry, I should have included that earlier.

Operator any other question?

No questions at this time. [Operator Instructions] Currently we don’t have any questions from the line. Please continue.

Thank you for your participation and you continued interest in our company. We look forward to updating you on our progress in the near future. Thank you, and good evening, and good morning.

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