Welcome to JOYY Inc. Q3 2020 earnings call. At this time, all participants are in a listen only mode. After the management's prepared remarks, we will have a question and answer session. Please note this event is being recorded. I'd now like to hand the conference over to your speaker host today, Ms. Jane Xie, the company Senior Investor Relations Manager. Please go ahead, ma'am.
Thank you, operator. Good morning and good evening, everyone. Welcome to JOYY's Q3 2020 earnings conference call. Joining us today are Mr. David Xueling Li, Chairman and CEO of JOYY, CFO Mr. Bing Jin, and COO Ms. Ting Li. For today's call, management will first provide a review of the quarter, and then we will conduct a Q&A section. The Q3 2020 financial results and webcast of this conference call are available at ir.yy.com. A replay of this call will also be available on our website in a few hours. Before we continue, I refer you to our safe harbor statement in our earnings press release, which apply to this call as we will make forward-looking statements. Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB. I will now turn the call over to our Chairman and CEO, Mr. David Xueling Li.
Please go ahead, sir.
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Hello, everyone. Welcome to our Q3 2020 earnings call today. Before updating everyone on our business progress for this quarter, I would like to take a moment to elaborate on the recent development in our domestic business. As disclosed in the press release we issued earlier on November 16, we have entered into a definitive binding agreement with Baidu, pursuant to which Baidu will acquire JOYY's video-based entertainment live streaming business in China, YY Live. The closing of this transaction is subject to certain conditions and is currently expected to occur in the first half of 2021. As a pioneer in China's live streaming industry, JOYY has been deeply engaged in the live streaming industry for many years. As a result of our years of hard work and experiences, we have built YY Live into what is now a leading video-based entertainment live streaming platform in China.
Today, YY Live possesses not only a comprehensive system of operational procedures, but also domain expertise related to the development of live streaming ecosystem and innovation of live streaming technologies, content operations, monetization features, as well as host incubation and host development systems. As a leading integrated information and knowledge-focused internet service provider in China, Baidu has built an extensive mobile internet ecosystem covering over 1 billion monthly active users, including over 200 million daily active mobile users on its Baidu App alone. As a result of this transaction, YY Live will be able to access Baidu's massive user traffic, boost its business growth, and enhance its ecosystem monetization capabilities to unleash greater value in Baidu's massive business ecosystem.
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As a true win-win arrangement, this deal will also bolster our own growth prospects.
Going forward, we plan to leverage the resources obtained through this transaction to further accelerate our global dual-engine growth strategy, establish a foothold in the industrial AI internet sector, and explore new business opportunities in e-commerce as well as other areas.
Beyond investing into our operations, we will also actively focus on exploring other ways to return value to our shareholders and delivering maximum shareholder value, including but not limited to the potential additional disbursement of dividends, for example.
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Now turning to our business updates for the third quarter. 2020 has been a year of challenges and opportunities. As the COVID-19 pandemic reemerged and regional geopolitical risks drive uncertainty throughout the global economy, video, as one of the most effective tools for communication, has become a crucial medium for consumer entertainment and social networking. As such, video is occupying an increasingly significant portion of users time. During the third quarter of 2020, our platforms continued to gain user attraction, usage, and engagement. Despite Indian government's measures to block certain Chinese-owned apps in its local market and other geopolitical risks, we achieved rapid growth in other regions and our global MAUs remained relatively stable, sliding only slightly by 4% year-over-year to 390.1 million. Such accomplishment is a result of our unwavering commitment towards globalization, proactive penetration into multiple overseas markets, and reduced reliance on any single market.
By overcoming geopolitical challenges, we have not only validated our business model's resilience, but also laid a solid foundation for the continued implementation of our global dual-engine growth strategy driven by live streaming and short-form video.
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BIGO LIVE also remained focused on its business development efforts in several key markets during the quarter, including North America, Europe, the Middle East, and regions of the Eastern Pacific, further diversifying its geographic coverage and thus reducing its reliance on any single market. Consequently, BIGO's live streaming revenues increased by 131% year-over-year to RMB 3.28 billion, which is $483 million.
More specifically, on a year-over-year basis, BIGO's live streaming revenues from developed markets grew by 272%. European markets grew by 270%, and Eastern Pacific regions grew by 231% year-over-year.
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Our long-term commitment to localizing our overseas operations and team building has been instrumental to the success of BIGO LIVE. As the pandemic situation continued to evolve rapidly around the world, our internationally distributed team and extensive experience in multicultural and multilingual cross-regional operations enable us to quickly adapt to the changes in market dynamics and user needs. These efforts also allowed us to further strengthen BIGO LIVE's geographic expansion and launch highly localized campaigns during the pandemic. In Turkey, for example, BIGO LIVE introduced a large number of local KOLs, key opinion leaders, on this platform during the stay-at-home period, enriching its content, invigorating the interactions between Turkish users and their favorite KOLs during live streaming sessions, and significantly boosting social engagement on its platform. As a result, BIGO LIVE's user base in Turkey expanded significantly within a very short period of time.
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Secondly, we implemented a series of product upgrades and marketing tactics to boost our user engagement continuously. During the third quarter, for example, we released a number of product upgrades and optimization designed to satisfy users' need for online social networking, significantly boosting the number of users hosting live streaming sessions or posting content. Additionally, we continue to see high levels of user engagement across the platform, with the percentage of total users who actively posted content consistently exceeding 10% in the period, and the number of user interactions, as measured by likes and comments, achieving high single-digit growth on a sequential basis.
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Our short-form video platform Likee also accelerated its global user base expansion in the third quarter. Despite Indian government's measures to block certain Chinese-owned apps in its local market and the resulting short-term impact on our operations, Likee maintained its solid user growth as its MAUs outside of India grew to 97 million, representing an increase of 147% year-over-year and 15.5% quarter-over-quarter. More specifically, Likee's MAUs in the Middle East, North America, and Europe all achieved significant growth in the third quarter, further diversifying and optimizing the platform's global user base structure and laying a solid foundation for its future growth on the monetization front.
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As the world starts to recover from the pandemic, we have also noticed that many of the more traditional offline entertainment industries are actively taking measures to bring their services online, helping to better cultivate consumers' entertainment habits and increase the amount of time consumers spend using online entertainment services. In line with this trend, we forged partnerships with many of these offline entertainment businesses, helping us to further expand our user base and enhance our brand influence in turn. In September, for example, we launched the Likee Music Billboard in Russia, wherein we organized the exclusive debut of new songs from top musical celebrities. As part of this initiative, we also introduced new product features, which enticed more fans to cheer for and interact with their favorite Russian musicians, and thus attracted a significant number of new fans to the platform.
Our persistence in localizing Likee's content and improving its product functionality through innovation over the long run has been the driving force behind the platform's achievement in Russia. Such efforts have also resulted in the continuous diversification of our core user demographics, which will help to accelerate both our live streaming business in Russia as well as our short-form video monetization capabilities across a broader range of international markets.
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Beyond increasing its global market share and advancing its regional localization, Likee also introduced new product features to better meet the diverse needs of its users. During the third quarter, to further empower content creators, Likee upgraded multiple functions for its video production tools and developed an innovative customizer function, enabling its users to easily create and share animated videos with their friends. In addition, Likee also continued to augment the social nature of this platform, introducing a slew of novel social features with dynamic communities and thematic functionalities, such as matchmaking brands and direct dialogues. Consequently, the daily average number of Likee users outside of India that hosted live streaming sessions increased by more than 90% quarter-over-quarter, with the platform's percentage of monthly content creators reaching approximately 18% in the third quarter of 2020.
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As for Hago during the third quarter, we quickly adjusted Hago's expansion plans in the period, entering into a number of emerging markets, including the Middle East and South America. As a result, Hago grew its MAUs by 20% year-over-year, when excluding India. Hago also made good progress in terms of monetization, with its live streaming revenues increasing by 42.4% year-over-year. Looking ahead, we currently expect Hago to achieve break even for a single month in the fourth quarter of 2020.
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In summary, our global business delivered strong results in the third quarter of 2020. Going forward, we will continue to upgrade our platform functionalities, strengthen our localization capabilities, enhance our platform's social nature, and execute our dual engine growth strategy.
Despite the uncertainties caused by the resurgence of COVID-19 and geopolitical uncertainties, we believe that our global market coverage will help to steadily bolster both the flexibility and resilience of our business model. In addition, we remain confident that the combination of our technological advantages and stable user base will keep us on the right growth trajectory. Looking ahead, we remain focused on perfecting our ecosystem for live streaming and short-form videos, as well as establishing and solidifying our foothold in core regional markets around the world. With an innovative vision and a pioneer's foresight, we plan to continue expanding across the entire globe, bridging communications between individuals from all corners of the world and delivering joyful and useful experiences to all people.
That concludes David's prepared remarks. Now as JOYY's CFO, I will talk about the financial results.
Please be noted that the financial information and non-GAAP financial information disclosed in our third quarter earnings press release is presented on a continuing operational basis, unless otherwise specifically stated. After the deconsolidation of HUYA, the company accounts for our investment in HUYA as an equity method investment and applied the equity method accounting one quarter in arrears to enable us to provide financial disclosures independent of the reporting schedule of HUYA. During the third quarter of 2020, we maintained our strong momentum and delivered robust financial and operating results. Our total net revenues for the third quarter increased by 36.1% year-over-year to RMB 6.29 billion, exceeding both the high end of our previous guidance range and Street Consensus. In particular, our live streaming revenues for the third quarter increased by 40.1% year-over-year to RMB 6.05 billion, driven by live streaming revenues growth from BIGO's segment.
Other revenues in the third quarter decreased by 20.8% to RMB237.3 million, primarily due to the decrease in other revenues in YY segment. Cost of revenues for the third quarter increased by 38.8% year-over-year to RMB3.96 billion. Revenue sharing fees and content costs increased to RMB2.84 billion in the third quarter from RMB1.95 billion in the same period of 2019, which was in line with the increase in live streaming revenues. Bandwidth costs decreased to RMB236.9 million from RMB286.3 million in the same period of 2019, primarily related to the termination of service and effect to users in India after government's measures to block certain Chinese-owned apps in late June. Gross profit for the third quarter increased by 31.9% year-over-year to RMB2.32 billion. Gross margin in the third quarter of 2020 decreased to 37% from 38.2% in the same period of 2019.
The gross margin contraction was primarily caused by the fact that BIGO segment had lower gross margin, but contributed significantly greater portion of net revenues in the third quarter of 2020 compared to the corresponding period of 2019. Operating expenses for the third quarter increased to RMB 2 billion from RMB 1.81 billion in the same period of 2019. Sales marketing expenses increased to RMB 1.08 billion in the period, from RMB 957.3 million in the same period of 2019, primarily due to the company's increased efforts in sales marketing initiatives in overseas markets. Our R&D expenses for the third quarter increased to RMB 636 million from RMB 538.1 million in the same period of 2019. Mostly due to the increase in headcount and investment in talent recruitment as part of the company's efforts to enhance its research and development capabilities.
Our GAAP operating income for the third quarter was RMB 466.6 million, compared to RMB 96.4 million in the same period of 2019. Operating margin for the third quarter increased 7.4% from 2.1% in this prior year period, primarily due to narrowing operation loss of BIGO segment. Our non-GAAP operating income for the third quarter, which excludes share-based compensation expenses, amortization of intangible assets from business acquisitions, as well as impairment of goodwill and investments and gain on disposal of subsidiaries and business, increased by 77.8% to RMB 825.8 million from RMB 464.4 million in the same period of 2019. Our non-GAAP operating margin for the third quarter was 13.1%, compared to 10.1% in the same period of 2019. GAAP net income from continuing operations attributable to controlling interest of JOYY Inc. for the third quarter of 2020 was RMB 2.3 billion, compared to RMB 61.8 million in the same period of 2019.
Net margin was 36.6% in the third quarter of 2020 compared to 1.3% in the corresponding period of 2019, mainly due to the gain from partial disposal of investment in HUYA. Non-GAAP net income from continuing operations attributable to controlling interest of JOYY Inc. increased by 64% to RMB 809.4 million from RMB 493.4 million in the same period of 2019. Non-GAAP net margin increased to 12.9% in the third quarter of 2020 from 10.7% in the same period of 2019. Diluted net income from continuing operations per ADS in the third quarter of 2020 was RMB 25.92, compared to RMB 0.56 in the same period of 2019. Non-GAAP diluted net income from continuing operations per ADS increased by 58.8% to RMB 8.89 from RMB 5.6 in the same period of 2019.
In addition, in accordance with our quarterly dividend plan approved on August 11, 2020, we will be distributing a dividend of $0.31 per ADS for the third quarter of 2020, which is expected to be paid on December 23rd, 2020 to shareholders of record as of the close of business on December 11, 2020. As we remain in abundant cash position after recent transaction with Baidu, we will continue to invest in business development efforts to further expand our global market reach and cultivate new business to enhance our service offerings. We will also actively explore other ways to return value to our shareholders to maximize shareholder value. Due to the above-mentioned transaction, the company will not provide any revenue guidance for the fourth quarter of 2020. That concludes our prepared remarks. Operator, we would now like to open up the call to questions.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. If you wish to cancel the request, please press the pound or the hash key. For the convenience of everyone on the call, please ask one question at a time. If you wish to ask more questions, please rejoin the queue. Also, when asking a question, please state your question in Chinese first, then immediately repeat your question in English. Thank you. Your first question comes from the line of Jialong Shi of Nomura. Please ask your question.
Good morning, management. Congratulations on a very solid quarter.
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I have two questions. The first question is about BIGO, just wonder what is the latest market split by revenue for BIGO LIVE business in the third quarter? We saw BIGO achieved very strong revenue growth and also turned profitable in Q3, just wonder how we should look at the trend for BIGO's revenue and margin in Q4 as well as next year. The second question is about the investment. I think management mentioned in the earlier remark, JOYY will continue to explore opportunities in China's internet industries, such as the AI related industries. After the sale of the YY Live business, just wonder if management can elaborate a little bit, what are the areas JOYY will likely look to enter or invest in China in the future? Thank you.
Thank you. I'll answer the first question, and maybe Xueling Li can answer the second one. For the BIGO LIVE growth trajectory. Since we cannot provide these numbers, I just give you some colors. In the third quarter, you can see on a year-on-year basis and also sequential basis, BIGO LIVE continue to give a very strong result. The main regional composition are developed worlds, Middle East and Southeast Asia. If you look at the composition from developed markets, it's already well over 40%. The key components in developed markets are North America, European countries and also Japan, Korea, New Zealand, Australia. These three subregions on the developed markets continue to drive a lot of the growth for BIGO LIVE. Middle East is still around 1/3 of the total revenue for BIGO LIVE. Again, that is a very established market with our clear leading position.
We expect we will continue to drive additional revenue from Middle East. Southeast Asia and other parts of the world accounts for roughly, I would say 25%-30% of the total revenue for BIGO LIVE. We still think that we will continue to establish our leading position in Southeast Asia and also explore other emerging markets as well. I think in general, for the fourth quarter 2020 and also going forward to 2021, the main driver for BIGO LIVE will come from the developed markets with higher paying amounts and also higher ARPU. I would say that's the answer to your question.
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Thank you for your question. First of all, this transaction does not mean that JOYY will abandon our domestic business. Actually, we will continue to explore new businesses in China, and continue to execute or implement our long-term strategy, which is to continue to bring those areas that Chinese companies have competitive advantages, and to replicate these experiences and competitive advantages across the globe. We have seen that Chinese companies have technology resources over overseas companies, and we have witnessed the successful replication of business models in overseas markets. You will also notice that China has a lot of industrial chain advantages, especially in the manufacturing side. Historically speaking, Chinese companies have advantages as a manufacturing company on taking the OEM mode, which is without our own brand nor our own channel, simply taking orders to manufacture other brands' products.
In the future, we believe that more Chinese companies will be able to establish their own brands, establish their own channel, and also build up a new innovative business model. This is the future trend and opportunity that JOYY foresees. Actually since last year, JOYY has actually began to explore certain new businesses in terms of overseas e-commerce. Going forward, we'll continue to be focused in our long-term strategy that continuously bring the successful experiences, technology advantages, and business models in China, and replicate these experiences to generate more growth across the globe.
[Non-English Content] I think you also asked about the margin trend. Let me also give you some color.
Yeah thanks.
Margin profile for BIGO in the third quarter on the non-GAAP operating margin level is already breakeven, is already positive. That is thanks to the enhancement of the gross margin first, with the saving of the bandwidth cost, and also with the leverage of economy, we have also reduced the percentage our spending on the sales marketing as a percentage of revenue. That result in a positive non-GAAP OP margin. I think that trend will continue in the fourth quarter and also next year. Even though if you ask me about the balance between user growth and margin, we still want to continue to invest in our business to attract more users around the world, because we do think that global wise, the short form video and live streaming have massive potential. Again, as we have demonstrated our capability to generate positive margin, I think that will give a lot of confidence for investors as well.
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Your next question comes from the line of Alex Liu of Morgan Stanley. Please ask your question.
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My question is related to Likee. Could management please help to share with us some of the monetization progress and the monetization user growth and investments targets for next year?
In terms of monetization, for example, for live streaming, how is it compared with the engagement metrics with BIGO LIVE and short videos in China? Apart from live streaming, are we seeing any progress on advertising, maybe even e-commerce? Thank you very much.
Thank you, Alex. Let me address that question. For the monetization of the Likee business, as I cannot disclose certain numbers, in general, it's going very well. As I explained in the first half of this year, it's still in a relatively, I would say, early stage, but we have sped up the monetization effort from the third quarter and continuing through the fourth quarter. We are confident to achieve the level of live streaming monetization for Likee as we communicate with investors before. I think overseas, as I mentioned, users tend to have more social interactions. As I explained in the prepared remarks, we have incubated more functionalities to allow more users to create content and upload to Likee's ecosystem and to share and comment on each other's content. The engagement and interaction between users within Likee is very healthy.
Even though we have encountered the Indian government's ban of Chinese app that result in quarter-by-quarter MAU decline. If you ask India, you can see Likee's user base on a year-on-year basis and on a sequential basis, all achieve very high user growth. We are confident that the additional users from other parts of the world will provide additional traffic funnel to monetization. In terms of the different formats of monetization, I think overseas market is still relatively early compared with China. Everything happening in China will be replicated global as well. It's just matter of time. In the initial days, as I said, this year and next year, we will be focusing on converting user traffic funnel to live streaming because live streaming is a perfect twin brother with short-form video, because they all share similar characteristics.
We utilize BIGO LIVE's back-end operation expertise to monetize the user in short-form video Likee ecosystem. The paying ratio and ARPU will gradually trend up to the similar level of BIGO LIVE, which will take some time. After we realize a handsome portion of the user conversion to live streaming, then we will continue to explore advertising and e-commerce. As I explained to investors before, advertising is a very natural monetization for short-form video as well, because we can explore native ads as a way for user engagement as well as monetization for Likee. For e-commerce, David has claimed that we have established relevant e-commerce capabilities for cross-border transactions. We'll also utilize Likee's massive user base to feed into this ecosystem, utilize Chinese supply chain, and then to maximize the user value.
I think advertising and e-commerce at the meaningful revenue contribution will come at a later stage than live streaming. Thanks.
Thank you v ery much.
Your next question comes from the line of Yiwen Zhang of Citi. Please ask your question.
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Thanks management for taking my question. Can I ask your view on live streaming model in the future? YY pioneered with the PC showroom a decade ago, and it then evolved into mobile showroom and then incubated the game live streaming, and it also has exposure in the short video sidebar market here overseas. What's your view of the live streaming model in the future? Apart from this model I mentioned, what are the opportunities you see, and what role will YY play in the future? Thank you.
Thank you. Let me address that question. I think interestingly, live streaming is not, I would say, a business model per se. It can be integrated with many different business model. That's the beauty of live streaming, right? For example, a social networking platform can use live streaming for monetization. A music app can use live streaming as a monetization. And that's the reason why we have sold our domestic video-based YY Live to Baidu, because Baidu does have a lot of traffic from its different apps, and those traffic can feed into live streaming and help Baidu to build a bigger ecosystem with better monetization. Also help YY Live to expand its capability of monetization in that big ecosystem. So I think in China, live streaming will continue to grow. It will further expand to different categories of industry and different business formats.
Global wise, it's the same thing. We think global wise, there'll be more opportunity for live streaming, not only as a way for monetization with the competition of short-form video, but also the live streaming, as I explained before, has two very unique features overseas. One is that, in general, the entry barrier for live streaming is low overseas. That's why the participation rate from host in overseas market is much higher than in China. Secondly, the social interaction between users, among users, among hosts, are also more prevalent in overseas market, resulting in higher engagement and also high paying amount per users. In short, I would say live streaming has massive potential both in China and overseas. We will make sure that we continue to invest in our overseas operation and create more opportunities down the road, yeah.
Thank you.
Your next question comes from the line of Daniel Chen of JP Morgan. Please ask your question.
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I will translate myself. First question is on the YY Live China business. This quarter we see there is a substantial improvement in the margin. What is the driver behind? The second one is on BIGO. All the market segment, which market do we think has the biggest potential in both user and monetization in the next three to four years? Thank you.
Thank you, Daniel. Let me address the question. If you look at the YY Live segment, it has two components. One is YY Live streaming in China domestic, and the other is Hago and other business. In terms of YY domestic licensing business, we have achieved better and better operation margin, as you can see from the past few quarters. One is on the gross margin side, we tend to do some of the campaigns in the quarter, resulting in a low, I would say, revenue sharing ratio in the third quarter. In terms of the sales marketing, we have also paid more attention to the ROI, so we have achieved better, I would say, sales marketing leverage as a percentage of revenue. We have also paid close attention to the R&D and generally personnel spending. That's the reason why we have maintained a healthy and healthier margin profile for YY domestic live streaming business.
For other parts on the YY Live segment, including Hago, as I explained in the prepared remarks, Hago is on the well track to be becoming breakeven in some of the key regions. The better margin profile for Hago also help with the enhancement of the YY Live segment margin expansion. Second question is regarding the biggest potential area for overseas market. I think in general it would fall under developed markets. As I said, it's well over 40% of the revenue contribution for BIGO now. Within developed markets, we think that North America, particularly U.S. market, will be one of the big markets. Secondly is the Japan, Korea, New Zealand, Australia, which I call the Pan Pacific region or Eastern Pacific regions. Third one is more on the Western Europe regions. Those regions share several key common characteristics. One is bigger population base, second is high disposable income, third is a very high propensity for social engagement and social interaction, resulting in a high paying ARPU within live streaming scenarios. Thanks.
Thank you.
Thank you. Your next question comes from the line of Lei Zhang of BofA. Please ask your question.
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Thanks management for taking my question, and congrats on the deal and strong results. My first question regarding the competition in short video in overseas market, especially after the potential geopolitical change after the US election. And secondly, about the YY Live deal. Previously, we have some synergy in terms of data and R&D with YY Live domestic business. So do we continue to share those data or those stuff?
Any change we can see after the deal? Thank you.
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This is David. Let me answer your question. As for the short-form video competition landscape overseas, I think our long term strategy will be consistent. Number one is that we'll continue to wait for the right time. Secondly, we will make sure that our business stay on a healthy and balanced track. That is what distinguishes us from other competitors. As for our data storage and operations, ever since the establishment of BIGO in 2014, BIGO's operation has been fully separated from YY Live. All of our data of overseas and PRC operations are separately being stored and operated. Thank you.
Thank you.
Our final question is from Tian Hou of T.H. Capital. Please ask your question.
Thank you, management. Congratulations for the great quarter. After you sell YY to Baidu, I guess the focus is going to be on your overseas business, like BIGO and Hago. David .
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After sale of YY domestic to Baidu, I guess the company's focus is going to be your overseas business, including Likee, BIGO, imo, and Hago. I wonder, in terms of live streaming, the business operation, is it going to be similar to YY domestically, which is union-driven? That's number one. Also, among different apps, what is the strategic plan for each of them? Which one is the traffic generator? Which one is the revenue or profit generator? What's your plan? That's the first question. The second question is domestic. As the management said, you guys are going to get into the new business.
Last quarter, I remember Xueling mentioned that you guys are going to enter into a community fresh produce purchasing program. It is a very high, how to say, momentum area. I wonder which companies' new business are going to be, and some of the new business you already started, what is the current status? That's my question. Thank you.
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As for our growth in the overseas sector, for BIGO, we've seen obvious growth both in our revenue and user base. BIGO's business model has been relatively healthy. As for Likee, at the current stage, our current focus is mainly on the growth of user base. We have started to kick off the monetization of Likee since mid-2020, and we foresee and expect to see more improvements in 2021. As for our domestic business in terms of community fresh produce purchase business, we did invest in a company focused in this area in this June. Our investment in the e-commerce sector does not mean that we intend to enter into this sector by ourselves, but it shows our interest in this area.
Our long-term focus is to continuously replicate or bring the advantages of Chinese firms in terms of product, technology, and business model, and try to replicate these advantages overseas. Thank you.
Okay. Thank you, David.
Thank you. At this time, I would now like to hand the call back to the management for a short closing remark.
I think that's the end of the call. Thank you, everybody, for joining the call. We look forward to speaking with everyone next quarter. Thank you.
Thank you very much.
Ladies and gentlemen, that does conclude our conference for today. Thank you for participating, and you may now all disconnect.