Good morning and thank you for standing by for Xunlei's Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. We have a Q&A session after a few management's remarks. I will now turn the turn the call over to your host today, our IR manager, Ms. Charlene Lu. Please go ahead.

Thank you, Amy. Good morning and good evening and thank you all for joining us today. Welcome to Xunlei second quarter of 2019 earnings call. I'm Charlene Lu, Investor Relations Manager at Xunlei. With me today are Mr. Lei Chen, our CEO, and Mr. Eric Zhou, our CFO. We will be happy to take your questions after our presentations. Please be limited to two questions at a time, so others can get their questions in as well. Today's conference call is being recorded and a replay of the call will be available on our IR website afterwards. Our earnings press release was distributed earlier today and is now also available on our IR website. Before we get started, please know 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. Such statements are based on management's current expectations under current market conditions and are subject to the risk and uncertainties that are difficult to predict, which can cause actual results to differ materially from those made in the forward-looking statements. 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. A reconciliation of non-GAAP to comparable GAAP measures can be found in our earnings press release. Please know that all numbers are in U.S. dollars unless otherwise stated. With that, let me hand over to our CEO, Mr. Lei Chen, for prepared remarks.

Good morning and good evening, everyone. Thank you all for joining us today. Let me start with our recent corporate developments and the financial highlights of the second quarter of 2019. Then Eric will provide more details on the financial results and take you through the guidance for the third quarter of 2019. Our total revenue was approximately $47.8 million this quarter, which exceeded the top end of our earnings guidance as a result of revenue growth from our cloud computing and other internet value added services. Revenues from cloud computing and other Internet's value added services combined were $22.5 million representing an increase of 40.6% from the previous quarter. We are delighted to see organic growth in both demand for our shared cloud computing resources and our enterprise client base. Obtaining new clients such as Baidu, NetEase Games, and the Qutoutiao. During the second quarter, we made an equity investment in emerging IT products and services provider and expanded our cloud computing network capacities through aggregating idle computing resources from business cloud networking devices for our shared cloud computing business. We believe that the increased demand for our share cloud computing resources indicates a broad appreciation of our products and services and it will dirve our financial performance in future. We are deeply committed to our strategic initiatives for business development and transformation and we continue to advance our mission to empower individuals through technological innovation and development of a shared cloud computing and the blockchain based ecosystem. We are optimistic about our long-term growth prospects as we are backed by our strong technology capabilities and portfolio of product and services offerings. Now, I will briefly highlight our momentum and innovation across our businesses. We believe, shared cloud computing will be an important market for us that cannot be…

Thank you, Lei. Hello, everyone and thanks again for joining Xunleis's technology reporter 2019 conference call. And now let's go through the details of our financial results. Total revenues were $47.8 million up 15.7% from the previous quarter. Revenue from could computing and other - combined to $22.5 million representing an increase of 40.6% on a sequential basis. This increase was mainly due to a higher demand for our cloud computing services and client customers as well increase in our active live streaming user members and enhanced live streaming marketing activities held during the quarter. Revenues from subscribers were 21.4 million, up 9% from the previous quarter. The number of subscribers of course 4.3 million as of June 30, 2019 compared to a 4.57 million as of March 31, 2019. And the average revenue per subscriber was RMB33.9, compared with RMB33.1 in the previous quarter. Revenues from online advertising were US$3.9 million down 5.4% from the previous quarter. Cost of revenue was US$25.3 million representing 52.9% of our total revenues. Bandwidth costs in the second quarter of 2019 were at US$12.7 million, representing 26.6% of our total revenues, compared with US$10.8 million or 26% of the total revenues in the previous quarter. The remaining parts of revenues are mainly made up of live streaming revenue sharing costs and cloud computing costs. Gross profit for the second quarter was US$22.3 million up 5.5% from the first quarter driven by the improved cloud computing and live streaming business. Gross margin was 46.7% in the second quarter compared with 51.4% in Q1. The decrease in gross margin was mainly due to the lower margin associated with revenues from a seasonal live streaming campaign as well as the rapid expansion of our cloud computing network capacity. Research and development expenses for the second quarter…

Thank you. [Operator Instructions] We have a question from the line of [Steve Chan of Talib Partners] (Ph).

Thank you for taking that question. My first question is regarding your one-time gain. So you nooked approximately US$6.7 million one-time gains, is it a cash transaction?

It consists of both cash and non-cash gains. Approximately about RMB20 million were the result in cash proceeds and the rest was due to cancelation of future liabilities. Thank you.

Okay. So my second question is regarding your recent updates oversees structural projects in Thailand. So what is the significance of this project? Thank you.

About the project in Thailand, the project is designed to o facilitate accurate and efficient medical data and information sharing while ensuring patients privacy. Both patients and authorized healthcare providers will be able to access immutable clinical records to streamline diagnostic processes and improve treatment efficiency. The project will create a generic data access layer for the databases of his medical facilities to support database independent access of patient data and the break down the walls between different facilities to enable information sharing and interconnection. Healthcare providers in remote areas will be able to obtain patient data from higher level hospitals and to provide accurate analysis of the patient's conditions by leveraging equal access to information. Blockchains as a distributed and a treatable system will also ensure that a patient records not to be tampered with. In the event of a medical incident, this provides a credible chain of custody. In addition, when the patient record is being requested, the patient may authorize access using ThunderChain’s privacy protection technology to ensure that patient data is made available only to the authorized healthcare providers that is fully protecting data security. We believe this project may provide references for enhancing interconnection between health information systems in China as well and improving the quality of medical services for there are similar issues facing hospitals in China, especially in remote areas with limited resources. So that is the overview of the project. And thank you again for the question.

Thank you.

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

Alright. That is all for today. Thank you again for your kind attention. Please contact us, if you have any questions and have a good day. Operator.

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