Earnings Call: Q2 2020

Aug 18, 2020

Ladies and gentlemen, thank you for standing by, and welcome to the Q2 2020 Kingsoft Corporation Earnings Conference Call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone keypad. Kindly ask your questions in both English and Mandarin. Please be advised that today's call is being recorded. I would now like to hand the conference over to our first speaker today, Francie Lu. Please go ahead. Thank you. Ladies and gentlemen, good evening and good morning. I would like to welcome everyone to our 2020 second quarter and interim results earnings call. I'm Francie Lu, the IR director of Kingsoft. I would like to start by reminding you that some information provided during the earnings call may include forward-looking statements, which may not be relied upon in the future for various reasons. These forward-looking statements are based on our own information and information from other sources, which we believe to be reliable. Please refer to the other publicly disclosed documents for detailed discussion on risk factors which may affect our business and operations. Having said that, please allow me to introduce our management team who join us today. Mr. Zou Tao, our executive director and CEO, and Mr. Francis Ng, our executive director and CFO. Now I'm turning the call to Mr. Zhou. Thank you. Okay, I'll translate for Mr. Zhou. We saw strong growth in the second quarter, driven by continued demand for subscription and licensing services of Kingsoft Office Group, coupled with excellent performance by core online games. Kingsoft Office Group focus on product development, product rollout, and exploration into complementary verticals to build its core competitiveness. In the online game sector, we continue to improve our ability to develop and offer premium games while expanding into new game categories. On May 8, 2020, Kingsoft Cloud Holdings Limited was successfully listed on the NASDAQ. As the largest shareholder of Kingsoft Cloud, we have full confidence in its future performance. Our revenue in the second quarter of 2020 was RMB 1,420 million, up 49% year-on-year and 21% quarter-on-quarter. Our revenue in the first half of 2020 was RMB 2,591 million, up 41% year-on-year. In the second quarter of the year, our online game business recorded a year-on-year growth of 53%, and office software and services and other businesses grew 43% year-on-year respectively. Now I will turn the call to Francis, our CFO. Francis. Hi. Thank you, Francie Lu. Hello, everyone. Let me start with the second quarter 2020. Kingsoft Office, as a beneficiary of the increased demand in remote working, maintained stable and healthy development. Kingsoft Office Group's office software licensing business maintained its rapid growth. We continue to promote the cloud office migration to our leading customer, further strengthening our market leadership in document and information processing. In the first half of 2020, Kingsoft Office Group launched a new edition of WPS Office, such as integrated edition, business edition, and graphics edition, while establishing an open application program interface with developer partner in our ecosystem. As of June 2020, we have completed product adaptation with 190 development partners, achieving integration in areas such as work collaboration, input method, mail, voice recognition, handwriting, pad, and tablet. In addition, over thousands of thousands of micro, small and medium enterprises have used WPS Cloud office service during the period. Kingsoft Group's personal subscription services continue to show robust growth due to innovative content, rich features, as well as improved user outreach and experience, wide innovative channels such as live streaming sales. In addition to online document editing, WPS Docs provide collaborative work products such as spreadsheet, calendar, to-do list, and meeting, enabling user to work together seamlessly via Kingsoft Office Group cloud platform. We continue to expand our partnership with brand awareness. During this period, Kingsoft Office has become the official supplier of Beijing 2022 Winter Olympics. In addition, Kingsoft entered a strategic cooperation with the International Centre for Higher Education Innovation under auspices of United Nations Educational, Scientific and Cultural Organization, providing WPS Office related online courses to this global education resources platform. Forging ahead, we continue to adhere to our philosophy of technological empowerment, focusing our effort on technological innovation, product optimization, and continue to innovate the organization structure and strengthen the R&D center. In the second quarter, revenue from online game achieved significant year-on-year growth. Revenue and average daily active users of our flagship JX Online 3 PC game recorded year-on-year growth of 120% and 39%, respectively, reflecting our track record in developing and operating blockbuster online games. In June, we launched a beta test for our JX Online 3 mobile game and received positive player responses. In the same month, we also started the pre-registration for War of the Visions: Final Fantasy Brave Exvius. Meanwhile, the cloud version of JX Online 3 PC game has officially launched its testing version in July, becoming one of the first cloud game in China. We further strengthened our cooperation with Tencent and launched JX Online 2 mobile game on all platforms in August, which was ranked number 1 in the iOS top free chart on its debut. In the coming quarters, we will continue to focus on new product development and operation optimization. We will celebrate the 11th anniversary of JX Online 3 PC game and launch a new expansion pack to further strengthen the longevity and vitality of a core IP. During the year, JX Online 1 mobile game will be renamed as JX Online 1: Yuan Qi Wang You with all new games appearances and experience for our gamer. Douluo Dalu 2 will also be launched later this year. I will now discuss the Q2 and first half of 2020 operation and financial results. Let me start with the Q2 using CNY as the currency. Revenue increased 49% year-over-year and 21% quarter-over-quarter to CNY 1,420 million. The revenue split was 61% for online games and 39% for our office software and services and others. Revenue for online game business increased 53% year-over-year and 11% quarter-over-quarter to CNY 869 million. The increases were mainly attributable to the impressive robust revenue growth from flagship game JX Online 3, which was resulted from the frequent content updates and operational innovation, partially offset by decreased revenue from certain existing mobile game as the natural declining life cycles. Revenue from the office software and services and others increased 43% year-over-year and 41% quarter-over-quarter to CNY 551 million. The increases were largely due to the sustainable growth from subscription services and licensing business of Kingsoft Office Group, driven by the increased paid user resulting from the continuous improved products and services. Cost of revenue increased 90% year-over-year and 8% year-over-year to CNY 218 million. The increases were mainly due to higher server and bandwidth services fee associated with the increased user traffic, as well as greater content cost associated with the increased personal subscription service of Kingsoft Office Group. Gross profit increased 55% year-over-year and 24% quarter-over-quarter to CNY 1,202 million. The group's gross profit margin increased by four percentage points year-over-year and two percentage points quarter-over-quarter to 85%. The increases of the group's gross profit margin were mainly due to the greater revenue contribution from the self-developed games in this quarter, which has relatively high gross profit margin as well as improved gross profit margin of subscription service of Kingsoft Office Group. Our net research and development expenses increased 4% year-over-year and 10% quarter-over-quarter to CNY 390 million. The increases were mainly attributable to the increased headcount, as well as personnel-related expenses, as we consistently focus on improving R&D capability and further developing and enhancing our product and services. Selling and distribution expenses increased 8% year-over-year and 31% quarter-over-quarter to CNY 193 million. The year-over-year increase was largely due to the increased channel cost of Kingsoft Office Group aiming to expand and better serve government and enterprises. The quarter-over-quarter increase were primarily due to the higher marketing expenses for online games. Administrative expenses increased 35% year-over-year and 9% quarter-over-quarter to CNY 101 million. The year-over-year increase was primarily due to the increased staff-related costs and professional service fee. To accommodate for the rapid growth of our business, we moved into new office building in Beijing, which led to the increased rental expenses. Share-based compensation cost increased 5% year-over-year and 18% quarter-over-quarter to CNY 37 million. The increases primarily affected the new grant of awarded shares to selected employees. Operating loss, excluding the impact of eShop, increased 193% year-over-year and 41% quarter-over-quarter to CNY 585 million. Finance costs were CNY 28 million, compared with finance costs of CNY 5 million and CNY 6 million for the second quarter of 2019 and first quarter of 2020. The increases were primarily due to the new issue convertible bond with the interest rate of the equivalent market interest rate for similar bond in the accounting treatment, which would not be something cashflow, instead, we accounted the actual yield to maturity. Net other losses were CNY 105 million, compared with losses CNY 1,288 million in the corresponding period last year, and a gain of CNY 3 million in the first quarter of 2020. The losses in the second quarter of 2020 were primarily due to the loss of a deemed disposal of an associate, an impairment provision of certain investing company. The losses in the second quarter of 2019 were primarily due to the provision for the impairment on carrying value of the investment in Cheetah Mobile. We recorded a share of loss of associate of CNY 173 million, compared with share of losses of CNY 85 million for the second quarter 2019, and a share of losses of CNY 54 million for the first quarter 2020. The losses in the second quarter 2020 were mainly due to the losses recognized in Kingsoft Cloud, as it was changed from subsidiary to the associate and recognized share of profit and losses using the equity method since May 8, 2020. Which was partially offset by profit recognized in Cheetah Mobile as it disposed shares to certain investing company in this quarter. The losses in the second quarter 2019 and the first quarter 2020 were mainly due to the loss recognized in the Cheetah Mobile in this quarter. Income tax expenses for the second quarter 2020 and the second quarter of 2019 and the first quarter 2020 was RMB 83 million, RMB 5 million, and RMB 64 million respectively. Profit and loss for the period from a discontinued operation reflected the combination of gain on deemed disposal gain and the losses from Kingsoft Cloud, which was the profit of RMB 8,927 million, compared with losses of RMB 418 million for the second quarter 2019, and the losses of RMB 481 million for the first quarter 2020. The gain on deemed disposal of Kingsoft Cloud was RMB 9,096 million, recognized in the second quarter 2020, which arose from the spin-off and separate listing of Kingsoft Cloud. As a result, profit attributable to the shareholders of parent, including debt from the continued and a discontinued operation, was RMB 9,151 million. A loss of RMB 1,450 million and a profit of RMB 6 million for the three month ended June 30, 2020, June 30, 2019, and March 31, 2020 respectively. Profit to the owner of parent, excluding eShop, including debt from a continuing operation and a discontinued operation, was RMB 9,194 million. A loss of RMB 1,372 million and a profit of RMB 55 million for the three month ended June 30, 2020, June 30, 2019, and March 31, 2020 respectively. The net profit on loss margin, excluding eShop, was 500%, negative 73% and 2% for the three months ended June 30, 2020, June 30, 2019, and March 31, 2020, respectively. Now on the first half of 2020. Revenue increased 41% year-over-year to RMB 2,591 million. Online game make up of 64%, an increase 61% year-over-year to RMB 1,650 million. Office software and services and others make up another 36% and increases 40% year-over-year to RMB 942 million. Gross profit margin increased by 3 percentage points year-over-year to 84%. As a result of the recent discussion about, the profit attributable to the owner of parent, including that from a continuing operation and a discontinued operation, was RMB 9,158 million, and a loss of RMB 1,483 million for the six month period ended June 30, 2020, June 30, 2019, respectively. Profit attributable to the owner of parent, excluding eShop, including that from the continuing operation and the discontinued operation, was CNY 9,249 million, compared to a loss of CNY 1,406 million in the prior year period. The net profit margin, excluding eShop costs, was 211%, negative 39% for the six-month period ended June 30th, 2020 and June 30th, 2019, respectively. Statement of financial position. We have a cash and bank deposit of CNY 50 billion at June 30th, 2020. Net cash from operating activity was CNY 1,308 million and CNY 244 million for the six month ended June 30th, 2020, and June 30th, 2019, respectively. Cash used for capital expenditure was CNY 404 million and CNY 604 million for the six month ended June 30th, 2020 and June 30th, 2019, respectively. Our results were robust in the first half 2020, despite the impact of COVID-19. Going forward, we remain confident in the resilience of our business model and the pace of the development. We will continue to focus on optimizing our organization structure, technological innovation and product enhancement, so as to reward customer with advanced user experiences. We strive to deliver sustainable business growth and bring solid return to our shareholders and partners. On behalf of Kingsoft, I would like to extend our appreciation to our Kingsoft customer, shareholders, employees, partners, and you for supporting us. I am now turning back to Paul to question and answer. Thank you. Hi, operator. We are ready for the Q&A session. Thank you. Ladies and gentlemen, we will now begin the Q&A session. If you wish to ask a question, please press star one on your telephone keypads and wait for your name to be announced. If you wish to cancel your request, you can press the pound or hash key. We have the first question coming from the line of Thomas Chung from Jefferies. Please go ahead. Thanks, management, for taking my questions and congratulations on a very strong set of results. I have two questions relating to the gaming and the WPS segment. Given our strong performance for the online game segment, in particular the PC games, how should we think about the second half outlook? On WPS, how should we think about the growth momentum in the second half and next year? I would also like to ask about the full year guidance, if there is any revision, given the strong first half result. Thank you. 一些国产替代，以及线上的游戏，online entertainment，都有一个非常好的正面的提升。这是一个非常好的2020年的开始。我是觉得这个趋势将会延续下去的下半年，以及接下来的几年我们也是非常乐观，我们会把我们年初的概念都要提升。在整个的游戏方面，其实我们年初的时候，感觉到给一个比较保守的指引。因为往往大家知道，我们游戏有一些挺多的不确定的因素，所以给的指引比较保守。所以年初的时候，我记得我们可能全年是一个low teen的展望。那现在我估计，按照Q2以及我们的趋势，肯定不是teen了，一个growth了。可能我现在的预期是将会有翻倍，比起我们年初指引的low teen的翻倍，毫无疑问是超过30%了，这是全年的增长。第二个你问到我们的办公方面。其实办公方面可以这样说，其实两方面，一个方面你可以看到我们的会员的一些人数的活跃数，就是MAU，现在到达了454 million。我们的累计的付费用户也比我们年初的时候增加了40%，达到1680万。这些数据都是支撑我们的非常好的业务的增长跟前景。大家要记住，我们有一些数据其实没有马上转化为我们的收入，而且为我们未来的长远的增长奠下一个非常重要的基础。所以这个部分的话，单从收入方面，我也可以跟你讲一下，我们办公下半年依然会延续上半年的一个良好的趋势。全年的收入，尽管线下的所谓的licensing的业务，大家知道这个是没办法，因为确实是需要去碰头、去下单的，所以这个部分是有一点我们所谓的信创，有一点退网。但是这个信创我很高兴地跟大家讲，我也鼓励大家去听听明天的办公的part。我们有一个很重要的目标跟指标，就是在信创巨大的空间底下，巨大的机会底下，我们依然保持在90%以上的market share，遥遥领先于所有其他的对手、家种。所以我是觉得办公也是非常乐观，它全年的收入依然是保持30%以上的增长，然后我们也进一步预期它的经营利润率也是比我们年初的预测要提高，比去年应该有好几个percentage point increase。谢谢你，Thomas。谢谢。 Hi, I will translate for Francis. Thanks, Thomas, for your question. We are also very excited for the strong performance for the first half of 2020. Under the COVID-19 and also the U.S.-China tension, Kingsoft performed very strong in the first half. Both game and WPS business, they are not only unaffected by the COVID-19. Both were actually sped up during its digital transformation and also the localization of the software and also the online game businesses. We believe that the strong momentum will continue into the second half of 2020. We are very optimistic about the full year guidance for Kingsoft. We also upgraded our full year guidance from what we gave to the market from early initial in this year. Early in this year, we gave a conservative guidance on the game's performance due to the unpredictable factors for the game businesses. Based on the strong second quarter performance, we are now upgrading our full year game guidance. Initially, we gave a low teen guidance for the game business, but now we believe that the full year game will increase over 30% for the top line. For the WPS, now the MAU is 454 million, and also the accumulated paid user increased 40% from early this year to close to 17 million. Both these numbers show the strong support for our business growth and also laid a very strong foundation for the long-term growth of WPS going forward. We believe that for the second half of the year, WPS growth [Foreign language] keep the strong momentum from the first half. Although the licensing business are slightly affected by the COVID situation. We are still very strong about the Xinchuang project, which we believe that we will have 90% of the market share. We also encourage you to listen to the WPS earnings call for their detailed information. For the full year for the WPS, we believe that the top line growth will be 30% and up, and also the OP margin will be a few percentage points improved from last year. Thank you. Thank you. We have our next question coming from the line of Elsie Cheng from Goldman Sachs. Please go ahead. 管理层晚上好，谢谢接受我的提问。首先也恭喜公司强劲的业绩表现。我这边可能想再围绕游戏follow up一下，想请教一下周涛总和Francis总，剑网3的收入这个季度三位数的增长的主要驱动力，除了我们这39个点的DAU的增长以外，我们在用户时长或者游戏运营方面，能不能跟我们分享一下一些具体的情况？然后PC游戏这边，如果我们看明年的话，由于我们持续运营方法的一个改善，是不是也可以期待一个比较sustained的一个增长趋势？另外第二个小问题就是刚刚30个点的全年游戏指引，我想问一下下半年对手游方面的预期大概是什么样一个情况？谢谢。Congratulations again on a strong quarter. I have follow-up questions on the gaming side. The first one is on the JX Online 3. We have triple digit growth against the quarter, and just want to understand a bit more in terms of the growth driver. Apart from the 39% year-on-year growth in DAU, what are we observing in terms of user time spent or it is more operationally related? Going ahead into next year, for example, can we expect sustained growth? The second follow-up is really just on the 30% of the updated guidance that you have on the gaming side. I want to ask management, what is your expectation for the mobile game into the second half? Thank you. 数字性的，我来回答吧。有些数字性的东西，我来分析一下。我觉得剑网3其实最核心的应该是从去年秋季的新资料片开始吧，包括今年五月份发布的家园这个资料片，我觉得连续这两个资料片发的，我们自己的评估都超过了我们自己的预期。当然上半年肯定游戏这个行业受疫情影响了，不上班也是有影响的。但主要核心原因，尤其是我们看到了最近这几个月，疫情已经过去三四个月了，大面积过去的，基本上过去三四个月的我们数据看，所以我自己是认为还是主要归功于从去年新门派资料片，包括五月份这个家园资料片。所以总体来讲，我觉得是应该说自18年以来，我们从这版换引擎以来，我就逐渐恢复到了我们18年之前的那种节奏。所以我觉得这是最核心的原因吧。然后下半年手游这块，说实在的，应该说最近几年对于没有上线、没有实际数据支撑的游戏，我们一般是不会去做太多的指引。只能说我们下半年几乎每个月可能都会有新产品或者类似的资料片会陆续上线。具体的情况等我们基本上有了首月数据之后，我们才会做出更精准的一些指引。Francis看有什么补充一下。好，我就补充周总讲一下，尽管我们不对下半年的手游做出了一个明确的数字性的指引，但经于周总刚才所讲，其实我们真的是每月都有新产品，打破我们上半年比较沉默的手游推出的节奏。所以大家可以有一个比较好的预期。因为我举个例子，就是说9月份我们现在计划当中有《风云决2》，10月份我们有的FFBE，10月份我们也有剑3的指尖对弈新的组队游戏，12月份有《卧龙吟》和一个《剑侠世界3》。这个节奏可以说是非常强大的阵容，也前所未有的手游。我觉得手游应该是进入一个进行循环的姿态上面，我希望也对这个抱有信心跟乐观的态度。 OK. I will translate for Mr. Zhou and Francis. So for the JX3 performance, we believe that the core growth driver is due to the strong performance from the expansion pack from last year in the fourth quarter, and also the expansion pack we released in May this year. Both expansion packs' performance exceeded our expectations. Also in the first half of the year, due to the COVID-19, the overall gaming industry also performed well. But in the recent three to four months, while the COVID-19 gradually recover in China, we believe that the key growth driver are still due to the performance of the expansion packs. We think that the overall performance of the JX Online 3 PC game now is performing momentum, is similar to what we had before 2018. The revamped version, the growth of the new revamped version now is back on track to a really strong growth momentum. For the mobile games, we usually do not give out specific guidance for each mobile game before they are launched. But what we would like to share is that for the upcoming quarters, basically every month we have either a new mobile game or a new expansion pack. So that is something that we are looking forward to. Also, Francis added that although we do not give out explicit guidance for the game business, for the mobile game, but we do have a new product every month. So the expectation is very good. For example, we have the 魔域2, the mobile game to be launched in September. Also we have a new game for the JX3 in October, 指尖对弈 in October, and also we have Wulong Yun and also JX World 3 in December. So we have a good expectation for the second half of this year on mobile games. Okay, I will translate for Francis. Francis also added, for the JX3 PC game, we launched the revamped version in 2018. So our game had a slight low season in 2018. But for this year, after our strong performance, our 家园 expansion pack in the fourth quarter last year and also in May this year, in the second quarter, the independent IP accounts increased 39% year on year. This is very important, and that reflected on the year on year of 120% revenue growth for JX3 PC game. The JX3 PC game reached its peak revenue performance in 2017, but in 2020 we believe that our revenue will be higher than what we had in 2017. So this is a very good expectation for the JX3 PC game in the long term. Thank you. Thank you. The next question comes from the line of Pia Zhao from Haitong International. Please go ahead. I will translate for myself. Thank you for taking my question. I have two questions. The first is about WPS. We noted a very strong growth with the WPS personal business. I also would like to follow up on the 授权 business. Do you see any recovery of the 授权 business? Can you give us some color on the Xinchuang project? Second about the strong cash position. Could you please give us some color on the M&A progress? Thank you. 这个其实你也可以看到，刚才我们所讲的那个付费人数的累计的增长，也是有同样的强劲的趋势。在售前业务方面，一季度是淡季，所以二季度我们当然是有一个比较好的收入。但是整个上半年的话，其实可以说疫情的影响，比我们原来的节奏要稍稍慢一点。在下半年的话，不影响我们的一个中长期的趋势。因为我们开始所讲的话，也讲到两个方面。一个方面你也提到，其实这个我刚才也不好意思在会上自己提出来，你讲到的话，就是中美贸易的关系。其实这个我们看着也就是打打停停，也不可能在短期之内，中美会在重大的竞赛方面，包括核心技术的一些领域方面不会让步。所以这个所谓的信创的概念，其实只会越来越强。所以我们对这个巨大的板块，其实我们是充满极大的信心。因为随着七八月份政府一些采购就开标、竞标，那我们其实都非常兴奋的，有很多地方我们都百分百中标。那么整体里面来讲，我们是非常充满信心。在这个国产信创的市场，我们会拿到90%以上的那一个market share。大家知道，我们之前也讲过，这也不重复讲了，这个都是一个非常巨大的机会，那我们保持着巨大的market share。所以这个是我觉得为什么A股里面的股价，可能大家要是有关注的话，也看到可能会比较，要是不熟悉的话也比较奇怪，因为它有个将近CNY 2,100的，比我们金山的要翻了30倍。其实可能这个还是大家要可能多去了解一下这方面的机会。 Okay, I will translate for Francis. For the WPS business, for the consumer section, we had a very strong performance in the first half. In the second quarter, our revenue is CNY 313 million. That is 73% year-on-year growth. This is very strong. Also for the licensing section, we had a low season in the first quarter, and in the second quarter, the licensing businesses recovered gradually. Due to the whole COVID-19 situation, the first half performance is slightly slower than our original expectations. We think that in the second half of this year, the business will be back on track. For the China-U.S. tension, this has been going on and off for the past quarters. We believe that they may not be able to reach certain agreements on the core technological aspects. We think we are very positive on the Xinchuang project. The Xinchuang project is now going backwards. As we see in July and August, they already started government purchasing. In some regions, WPS has got 100% of the government contracts. Overall in China, we believe that WPS will get 90% and up for the Xinchuang project. This is a very big scale opportunity, like we said in the past, and we are going to get a very large market share in this project. This is also the reason behind the strong performance of the A-share market value for WPS, which is around CNY 200 billion for WPS. We encourage you to have a detailed look on the business. Thank you. 谢谢。然后我第二个问题是关于我们M&A的进展。 M&A 我讲一下，其实我们现在讲的话，现在金山账上的 cash，现金储备也是一个比较高的水平。我跟大家讲的话，这个 cash 我们最主要也是集中在我们看好的领域方面，包括了信创市场，包括云、AI 方面，我们是在寻找一些机会，跟我们自身的一些研发中心的一些投入。所以这个方向依然没变，但是有一些在进行当中，我也不好跟，应该不是这样讲吧，就是说我们在寻找当中吧。那么应该今天晚上你也看到，其实在办公方面也有一些 announcement，大家可以留意一下，好吧。 [Foreign language] Okay, I will translate for Francis. For the M&A opportunities, we have a good level of cash on hand, and our core use of the cash is still focused on in the areas that we are focusing, that includes the cloud, AI, and also some of the R&D development. We are still in search for the M&A opportunities, and later tonight, WPS, they will also make some announcements regarding this topic. Thank you. Hi Operator, we are ready for the last question. Thank you. All right. We have the last question coming from Lin Yang from GF Securities. Please go ahead. 好的，管理层好。我想有两个小问题想问一下，一个是关于刚才我们也提到，我们现在账上现金也非常地充裕，那除了M&A以外，会不会有分红？有没有考虑？然后另外就是，我们游戏这边，还有WPS，还有云这边，有没有一个大概的一个指引，就是今年年的一个情况。 I will translate myself. The first question is about the bonus. Do you consider to have some bonus because our cash is very big. The second question is, could you give us some guidance about games and WPS and the cloud for this year? Thank you. 谢谢你的问题。你提到关于我们分红的哪一些政策，其实这个在我们的董事会当中也是有非常注意关注在讨论这个东西，一些细节方面的话，不在未来的话为大家公告。但是一个方向性方面的话，可以跟大家讲一下，一方面除了我们现金充足以外，公司随着云的业务的分拆的话，WPS跟游戏刚才看到了，对非常强的现金流的业务。而且我们从猎豹，从办公，从游戏上面的话，都有一个非常丰厚的分红。这些分红的话，我们也在机灵机巧当中，会把它转发到我们公司层面上面，具体的细节的话，我们后面再跟大家去谈。除了这个分红以外的话，其实公司也会考虑，在我们满足了我们自然在我们看见的领域方面的organic growth，跟并购的机会以外的话，我们也会积极考虑通过回购的方法去壮大我们的股东的回报。但是这个详细情况的话，我们会在晚一点时间再跟大家去介绍。这是第一个部分。第二个关于指引方面，刚才我也讲过了，对于游戏方面的，年初的时候，我们是在一个全年的routine growth。那么现在的话，我讲这个可能要翻倍了，应该我们是看would guide 30%以上，这是游戏的growth。那么因为游戏收入的增长的话，其实它的利润方面的增长，operating增长的话，会比top line为高的，这个我就提醒一下。我们现在目前只讲到revenue growth。利润方面我们没有讲的，就是说有一个非常大的积极的作用，在我们profit上面。第二个就办公方面的话，我要讲的就是说，对于我们的subscription，就是个人业务的强劲的增长，这个会弥补了一下，我们在上半年在licensing方面的有一些被COVID的滞后。但整体里面来讲的话，全年我们还是预期在30%以上，这个你也可以明天去详细情况听一听办公的业务。在我们利润方面的话，WPS也是预期利润率会比去年有数个百分点的上升。云方面的话，我也建议大家看看它明天的利润的发布。但是我从他们内部的销售方面的数据方面看到，他们其实增长方面还保持一个非常强劲60%多的全年的增长，而且它的gross margin其实从去年的第三个季度已经一直保持了数个季度的正。然后我看他们EBITDA margin也是on track，在今年年底的话会转正了，所以这个也是令到我们非常兴奋的，在云的进展方面，好吧？Francis请帮我翻一下。好, OK, I'll translate for Francis. For the dividend policy, we have been discussing this in the board meeting, so some of the details will be announced in the future announcements when we have the details ready. We do have a good cash level on hand, and after the cloud business becomes separately listed, both WPS and game business are cash positive, and we also get dividend from Cheetah Mobile, so these will all reflect to the dividend policy on the group level. Other than the dividend policy, and other than the organic growth and also the M&A opportunities, we will also consider share repurchase. Some of these details will also be announced in the future announcements once they're ready. For the guidance for each business, for the game business, as I said earlier this year we gave a conservative guidance, which is low teens. Now we believe that the guidance will double, and we believe that there will be a 30%-and-up revenue growth for the game business in this year. Also, the profitability level will also improve higher in the game business. That's also something that you should notice. Also for the WPS business, due to the strong growth for the subscription business, which offset some of the delays on the licensing business due to the COVID-19, we believe that the full-year growth rate will be over 30%. Also, we encourage you to listen to the WPS earnings call later as well. We think that the profitability will also improve a few percentage points for WPS business this year from last year. For the cloud business, we will also have a separate earnings release later. Based on my discussion with the team, the top line growth is still very strong, over 50% this year. The gross margin already turned positive in last year's third quarter, and it has remained positive for the quarters afterwards. The EBITDA performance is still on track. We think that the EBITDA will turn positive by the end of this year, and we are very excited about the performance for the cloud business. Thank you. Thank you. We do not have any further questions at this moment. I would like to hand the conference back to you. Please take over, Matt. Oh, Okay. Hi, this will conclude the conference call for today. Thank you all for your attendance. Thank you. Thank you. Ladies and gentlemen, that concludes our conference for today. Thank you all for your participation. You may disconnect your lines now. Thank you.