Good morning and thank you for standing by for Xunlei's Fourth Quarter and Full Year 2018 Earnings Conference Call. At this time, all participants are in listen-only mode. After management’s presentation there will be question-and-answer session. I would now like to turn the call over to your host today, Ms. Charlene Lu, [ph] IR Manager of Xunlei.

Thank you, Annie. Good morning and good evening and thank you all for joining us today. Welcome to Xunlei fourth quarter and full year's 2018 earnings conference call. I'm Charlene Lu, Investor Relations Manager at Xunlei. With me today on the call are Mr. Lei Chen, our CEO; and Mr. Eric Zhou, our CFO. After the presentation, we will be happy to take your questions and each questioner will be limited to two questions at a time, so that others can be given the opportunity to participate in the call. Today's conference call is being recorded, and a replay of the call will be available on our IR website following the call. Our earnings press release was distributed earlier today and is now also available on our IR website. Before we get started, please note that the discussions today will contain certain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to the risk and uncertainties that may cause actual results to differ materially from our current expectations. Please refer to our SEC filings for more detailed descriptions of the risk factors that may affect our results. We do not assume any obligations to update any forward-looking statements, except as required under applicable laws. During this call, we will refer to both GAAP and non-GAAP financial measures and the non-GAAP measures are reconciled to the comparable GAAP measures in the table attached to our earnings press release, which can also be found on our website. Please note that all numbers are in U.S. dollars, unless otherwise stated. With that let me hand it over to our CEO, Mr. Lei Chen for prepared remarks.

Good morning, and good meaning, everyone. Thank you all for joining us today. Let me start with a recap of the recent developments and the financial highlights of the fourth quarter and of the full year of 2018. Then Eric will provide more details on the financial results and take you through the guidance for the first quarter of 2019. 2018 was a year of transformation for Xunlei. We have transitioned from a traditional Internet company into an innovative technology provider, driven by the power of sharing economy and the potential of blockchain technology. Our shared cloud computing enables us to advance the mission of empowering individuals through technological innovation. As early as 2015, we initiated shared cloud computing solutions as we saw significant growth opportunities. The emergence of Internet of Things, AR, AI and big data. We transformed the users' idle bandwidth and storage to offer cloud computing services to our enterprise customers. With our shared cloud computing model, we help our enterprise customers to reduce cost and improve performance. Our cloud computing and IVAS business is our long-term growth driver and revenue grew 29.6% on a year-over-year basis and accounted for approximately 52.8% of our total revenue in the fiscal year of 2018. We substantially expanded scale of our network through innovative products, signed contracts with several well established Internet companies in China and our sold bandwidth reached its historical high in December, 2018. And we plan to continue to expand our bandwidth capacity in 2019. We believe shared cloud computing will be an important industry trend and a key driver for our long-term growth. We believe this trend will continue for a couple of reasons. First, with the deployment of 5G technology, we expect significant growth in the IoT space and other industries, which drives more demand…

Thank you, Lei. Hello, everyone. And once again, thank you for joining Xunlei's fourth quarter and full year 2018 conference call. And now I'd like to go through the details of our financial results. Our total revenues for the fourth quarter were $42.3 million and within our guidance, representing a decrease of 6.6% from the previous quarter. The decrease in total revenues on a sequential basis was mainly attributable to a decline in cloud computing and IVAS business and subscription business. Revenues from cloud computing and Internet value-added services were $18.1 million representing a decrease of 8.5% from the previous quarter, mainly due to a decline in sales of hardware. Revenues from subscriptions were $18.2 million, representing a decrease of 4.8% from the previous quarter. The sequential decrease in the subscription revenues was mainly due to a drop in average revenue per user during the period. The average revenue per subscriber for the fourth quarter of 2018 was RMB33.1 and a decrease from RMB38.5 as of September 30, 2018. The number of subscribers was 3.78 million as of December 31, 2018, increased from 3.4 million as of September 30, 2018. Revenues from online advertising were $6 million, representing a decrease of 6.3% from the previous quarter, mainly due to decreased demand from game advertisers. Cost of revenues were $23.2 million, representing 54.9% of our total revenues. The decreased amount of the cost of revenues was mainly due to reduced bandwidth costs. Bandwidth costs in the fourth quarter of 2018 were $9.3 million, representing 22% of our total revenues, compared with $10.2 million or 22.6% of the total revenues in the previous quarter. The decrease was mainly attributable to the increased use of the crowd-sourced bandwidth capacity. The remaining cost of revenues was largely the revenue sharing costs for our live…

Yes, thank you. Yes, we'll now begin our question-and-answer session. [Operator Instructions] We have our first question coming from the line of Steve Chan of -- please go ahead. Q –Steve Chan: Hello, Mr. Chen. I have a one question. What is the growth strategy for 2019? And which business lines will be your priority? [Foreign Language]

[Foreign Language] Xunlei has been dedicated to the distributed computing technologies for over 15 years and is recognized widely in the cloud accelerated products and services market in China. To consistently meet personal and enterprise users' changing needs we will continue to invest in the future and develop our competitive strengths around cloud acceleration, shared cloud computing, and blockchain technologies. In the meantime, we're seeing greater opportunities presented by the incoming era of 5G technology. It presents a critical trend for the IoT industry, leading to more demand for edge computing solutions. After years of investment, we have built a nationwide network of shared cloud computing nodes and provided edge computing solutions for commercial uses. We believe our head start and technological advantages position us well in capturing this great opportunity. Therefore in 2019, we will focus on the following priorities. We expect a continued growth in our shared cloud computing business by expanding the bandwidth capacity and our cloud computing services. We will continue to seek initiatives to improve the performance of our traditional business. As to blockchain technologies, we will continue to support the development of commercial blockchain use cases and keep building blockchain ecosystem. Thank you very much. That's the answer to your questions. Q –Steve Chan: Actually, I have a follow-up question regarding the blockchain business. So what's the latest developments? And any milestone you will see as will be tipping point for the blockchain business development? [Foreign Language]

[Foreign Language] Well, recently we have seen some practical use cases launched or in the progress of deployment on our ThunderChain Open Platform. We have entered into cooperation with business partners from different industries, such as media publishing, healthcare, food industry, financial services and IP protection. Our R&D also continued to make progress on some of the key issues facing blockchain technology and its applications. In 2018, we submitted dozens of patent applications and we believe we will be well-positioned to reap the benefits of our investments. I believe Xunlei is one of the few companies with dedicated resources and a strategic focus on blockchain technology, especially around its fundamental capabilities and the large scale applications. I believe our advantages in technical know-how and industry experience will make us well-positioned for growth as the market matures in the future. Thank you very much for the question. Q –Steve Chan: Thank you.

Thank you.

Thank you. Our next question is from [indiscernible]. Please go ahead.

[Foreign Language]

[Foreign Language] So, to answer your question, the bandwidth sold in our CDN business actually has increased and increased by a large margin as well. However, the CDN cost pricing of 2018 has significantly decreased the market pricing of CDN services due to heavy competition among the cloud computing businesses and even with some traditional CDN vendors. Our pricing has always been very competitive in the market, so we lowered our price as well. Thus, when -- even though our sold bandwidth has increased a lot, it doesn't significantly increase our CDN revenue. And again, thank you for the question.

[Foreign Language]

Well, so we currently don't disclose the specific numbers of our bandwidth sold and revenue our CDN specifically, but one thing I can share is that the sold bandwidth as of December 2018 is almost twice as much as the sold bandwidth as December of 2017. So we have sold a lot more bandwidth in 2018 especially in the late part of the 2018. We were not commenting on our other corporations in the same industry. So I cannot comment on Wangsu Technology specifically at this time. But there is tremendous demand of our cloud computing services in the market today. We have also transitioned a lot of our business from – we have significantly reduced our bandwidth acquired from IDC our traditional means of bandwidth acquirements. So today, we deliberately focused on selling bandwidth acquired through our cloud computing infrastructure – shared cloud computing infrastructure. So what we're facing now is perhaps a different problem different challenge, which is the acquired bandwidth from the sharing economy is not keeping – so it's near full capacity. So what we need to do is to further expand our ability to acquire more bandwidth through sharing economy, redundant capacities from people's homes. So by enlarge, we're very confident that our shared cloud computing services are very desirable in the market today, and we expect that business to grow, and I think we have a very strong advantage in our technical capability and the nodes acquired through the redundant computing and the bandwidth capacity of the homes. So in both aspects, we have a strong lead in the market today, even though we're seeing imitators that are following the approach that we're taking today. So hopefully that answers your questions.

Thank you [Operator Instructions] No question as of this time. Please continue.

All right. That's all for today. Thank you again for your kind attention. Please contact us, if you have any questions in the future. Have a good day.

Thank you very much.

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