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Presentation

Operator: Thank you for standing by, and welcome to the iQIYI’s First Quarter 2025 Earnings Conference Call. All participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session. [Operator Instructions]. I would now like to hand the conference over to Ms. Chang You. Please go ahead.

Chang You: Thank you, operator. Hello, everyone, and thank you for joining iQIYI’s first quarter 2025 earnings conference call. The company’s results were released earlier today and available on the company’s Investor Relations website at ir.iqiyi.com. On the call today are Mr. Yu Gong, our Founder, Director and CEO; and Mr. Jun Wang, our CFO; Mr. Xiaohui Wang, our CCO, Chief Content Officer; Mr. Youqiao Duan, Senior Vice President of our Membership Business; and Mr. Xianghua Yang, Senior Vice President of Movies and Overseas Business; Moving on Mr. Chang Hu, Senior Vice President of Brand Advertising Business. Mr. Gong will give a brief overview of the company’s business operations and highlights, followed by Jun, who will go through the financials.

After the prepared remarks, the management team will participate in the Q&A session. Before we proceed, please note that, the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. iQIYI does not undertake any obligation to update any forward-looking statements, except as required under applicable law. I will now pass on to Mr. Gong. Please go ahead.

Yu Gong: Hello, everyone, and thank you for joining us today. We delivered a solid first quarter, gaining sequential growth in both total revenues and progress. This was built on a strong rebound in our long-term premium content and strategic investments in vertical format macro dramas. iQIYI expected cementing its position as a go-to platform for users, making seamless plans of long-form and short-form entertainment, creating exciting opportunities for future commercialization. This will strengthen our confidence and commitment to drive even deeper upgrades across our business model, and the content ecosystem in response to evolving market and user demand. For the core long-form video content, we are committed to delivering, engaging and soft after tariff as we left in our strong IR of top-tier drama, notably, drifting away from our flagship man-on-site brand surpassed the 10,000 IT popularity index score, where the Hunters drama will do 1 more slide mistakes, right?

Financial both achieved the score of over 9,600. Looking ahead, we are dedicated to focusing on premium content with a strong commercial value, while also upholding excellence. Additionally, we will further enhance our certain production mechanism to deliver stronger, faster test and more additive storytelling that rebounded strongly with audiences. Through the user-centric approach, we are confident in our ability to and reach our full creative potential and foster our work tools, content ecosystem for micro dramas. We made notable programs on HG Life micro dramas, now second in terms of daily time depend and first in the number of daily unique visitors. This shows the growing appeal in capital rating orders, reinforcing our confidence in further unlocking their full potential.

Moving forward, we are committed to expanding our macro drama portfolio, placing a strong appetite on premium micro dramas by enhancing original production and acquisition capabilities. At the same time, we aim to effectively monetize that are growing traffic on advertising and e-commerce. Beyond our content ecosystem, we are leveraging technical innovation to improve user experience. Standout even is a launch of our AI power in feature. We transform our users engaged with long-form videos with a simple swap up or down on their mobile screen, users can effortlessly escape between key highlights, each at without missing an exciting moment, delivering a user-centric my Alzheimer like experience tailored to the state willing habits. Highlight points are generated by AI best videos and personalized behaviors of each user.

As all investors are aware, the market is becoming increasingly unpredictable as it continues to evolve. However, in fact, volatile environment, the ability to create sustainable value is emerging as a realm and valuable asset with this in mind. We are wrapping up our investments in strategic areas such as enriching our content ecosystem and enhancing the user experience. While this investment may lead to short-term costs that are designed to deliver long-term benefits. Now let’s move on to the details of our core business segments. Starting with long-form videos, which serves as the conviction of our content ecosystem. We maintained leadership in the core drama category as the current top part in terms of total viewership market share during the quarter, accounting to enlightened data.

Our strong performance was highlighted by breakthrough in our Jacobs specific cellular note as we have now template 5 in Signature brands, each future on content genres. In the suspense general, our brand achieved a remarkable milestone with a release of drifting away is first title to surpass that 10,000 popularity in a score. It also generated the third heaviest single episode revenue in our history, just behind mega hit, The Snow Cloud on Hongmiao and My Heroic Husband, Pei Xu. in Roman general on Laban Delta Mianne Zhutang brand made notable progress in this quarter, expanding our portfolio of content appeals for female audiences with relief of 4 captivating titles. Notably, our in-house produced fantasy drama, Modern Life, Mystic. Baiyue Fanxin garnered an impressive popularity in-depth score of over 9,600.

Our modern romance drama, The Best of Sea, anime was not only a success in the domestic market, but also the best-performing modern drama, sea drama on our overseas platform drama and Chinese drama. From our masterpiece theater, [indiscernible] specializing in theater adaptation and realistic stories they build it first title North work. This summer adapted from a modern literature, a wide winning novel has further strengthened our reputation for popular drama. Lastly, our micro custom theater, [indiscernible] and the locked-on theater, Xiaozhou Yuchang, are focused on innovative drama series with fewer episodes and comedy respectively. Building on the success of past hits such as To the Wonder, without a Time and The Great Novel Day, I want to be a point of this brand are set to release an exciting line after this year.

Turning to movies. We continue to dominate the category during the quarter with the highest viewership market share according to investment. Premium content has a strong long-tail effect. In example, as the success of Ninja 2 during Chinese New Year. The firm boosted viewership of the original Ninja, making its most-watched movie on our platform this quarter. In addition, our original production, Bleed for past logo, achieved the strong revenue and viewership, especially among male users drawn to action and crime channels. We already showed during the first quarter our flagship multi-phased IP become a final season fleet, — made a strong comeback, sustaining strong traffic and positive word-of-mouth. Our brand-new IP, The Blooming Journey, — Fanhua, excelled with a peak popularity index score of over 8,000, attracting audiences in lower-tier cities and among older audiences beyond commercial variety show viewers.

In terms of animation, during the first quarter, we continue to improve our production capabilities. Key titles such as Super Cubed, Changli Huang and the Rufu: Season 2. Rofu generated positive user feedback during the quarter. Moving on to our content strategy and the pipeline. In our core drama category, our focus is on creating a well-balanced content mix that aligns commercial success with artist excellence. We are committed to three key genres: realistic, suspense and female-focused drama. To cater to the pace of viewing habits, we are enhancing our content creation strategies. This includes reducing the episode cost for long-form dramas and increasing the number of high-quality short dramas, with each episode lasting 5 minutes to 20 minutes.

This change will expand the value of diversity of our offering, enrich the user experience, and drive deeper audience engagement. Our drama pipeline features an exceptional lineup of top-tier content. We already released the Demand Hunter’s rawness and lobbying daily, while retouching, gathered widespread acclaim. Adding to the excitement, the highly anticipated field, — A Dream within a Dream, Shuyuan Yima, will be released soon. In the first general, our renowned Light on Celltrac brand recently debuted Breaking the Shadow, and Life for Life Generation, that can also look forward to upcoming release, including justifiable defense and the Born with Luck, each adapted from the renowned novel Low IQ Crime. Additionally, the new science fiction suspense drama, what a Wonderful World, Zaiyun Jian will be released shortly as well.

Our lineup of realistic drama includes highly anticipated titles, such as The Shrine, Slime, Shuanghu and Gaoxing among others. For movies, we are increasing investments in original production, focusing on geological releases with strong box office potential. Notably, our original production, Momo, has already achieved the box office revenue of over RMB 140 million. We have six more titles scheduled for theatrical release throughout the rest of the year, including The Shadow’s Edge — Additionally, we are boosting support for online movies with revenue-sharing models. Our diverse line-up includes eight original online movies, such as Ultimate Michelin, [Foreign Language] Martial Arts, covering comedy and action. For licensed theatrical movies, we launched several hits, including Legends of the Call Door Pharaoh and Detective Chinatown 1900, both of which have successfully the article ranks during the Chinese New Year and are now performing well on our platform.

So, variety of shows we will maintain our focus on producing top-quality programs while introducing exciting new content. This includes sequels to a beloved classic like HAHAHAHAHA 5 and The Lack of China 2025, alongside fresh IPs such as SING! ASIA, and the Reality Show is now as well as Wexiao, Yihaiwei, building on the success of The Blooming Journey. We also plan to launch a second season speaker in this year. For animation, we are dedicated to increasing revenue contribution from original productions, especially high-quality Chinese animation. We also aim to broaden our collection of enduring sales and optimize our operations to maximize iQIYI value. Major titles to be launched include animation over the Divine, Reals [Foreign Language] Ambrose.

Moreover, we are excited to announce that, the highly acclaimed Japanese animation, One Piece — has resumed airing for a dedicated fun day. For children’s content, we will concentrate on IP commercialization and developed a comprehensive IT ecosystem that spans the entire lifecycle, offering all age services tailored to parents, child audiences. Anticipated title includes Princess Doremi: Season 4, Belle Squad: Season 4. [indiscernible] Moving on to macro dramas, which have demonstrated the potential within our content ecosystem, harnessing this powerful momentum. We are poised to amplify our investments in micro drama content and strengthening user acquisition efforts. We have three key objectives, starting with assessing our user base and boosting business resilience by increasing micro dramas into our content ecosystem.

Secondly, we perceive micro dramas as a catalyst for attracting new users and driving membership revenue growth, especially in under the lower-tier cities and among older audience. Lastly, we are actively exploring monetization opportunities for our micro drama initiatives, such as advertising and commerce. We have successfully achieved the first objective by revamping our apps and rapidly expanding our micro drama portfolio to over 15,000 titles now. We have available for free, and the other half inclusive to members. We’ve backed us positioned differently in terms of design and targeted audience. The main iQIYI app focuses primarily on long-form videos and mainly uses a subscription model, with micro dramas serving as a complementary value add.

The iQIYI app, a primary focus on free micro dramas and monetize them soon advertising and e-commerce. This meaningful progress have driven impressive growth in both daily viewing time and unique data for micro dramas with substantial increases of over 300% and 110% respectively when comparing the April to December. In the future, iQIYI Live will be represented as iQIYI micro dramas, and we are confident that, this transformation will tap into its full potential. We pioneered the concept of dedicated Chinese New Year place for micro dramas, releasing 28 premium titles, hits like My Sweet Home [Foreign Language] and Please Come into My Heart, by consistently delivering premium content, we are reinforcing our position as the go-to platform for micro dramas.

As the micro drama industry continues to evolve, the growing user demand for premium titles aligns perfectly with our core strengths with expertize in premium content, a trusted brand and a loyal user base. We are uniquely positioned to capitalize on this trend. Coupled with our extensive resources, talent, teams and advanced technologies, we deliver unique value to the micro drama industry. To that end, we are continuously enhancing our ability to produce original micro drama, while exploring innovative genres to broaden our content offerings. These initiatives include notable projects such as adaption around 100 classic Hong Kong movies and producing an extensive series of legal educational content, all to be developed as micro dramas. Additionally, we are integrating technologies like AI and the workflow production to improve both efficiency and quality.

Building on this initial piece, we are collaborating with partners to foster our thriving industry ecosystem. In March, we hosted the first Micro Drama Delivering Light, a ceremony, bringing together hundreds of main actors, creators and industry professionals. The event sparked meaningful interest from attendees eager for future collaboration. As the first-ever ceremony dedicated to the micro drama industry. It not only enhanced our profile, but also reinforce our role as a key industry player. Moving on to membership services. Revenue regained growth momentum during the quarter, increasing 7% sequentially to RMB4.4 billion, which was healthy growth in subscriber base in Q1, supported by the strong performance of key titles such as DRIFTING AWAY, Moonlight, Nystic and Not War.

Average revenue per member remains healthy, thanks to our improved operating initiatives. Our strategy is focused on developing a membership business that caters to a broad audience, expands our subscriber base, delivers enhanced value and ultimately accelerate revenue growth. As the core of membership business is exceptional content, we strive to boost both member acquisition and retention by maintaining a consistent flow of premium long-form content and engaging macro dramas. We continue strengthening our membership plans, delivering value to our members, we are refining product position in collaboration to connect with our user base. The family-oriented premium ad diamond plan saw excellent growth after we introduced free unlimited express package, benefits.

Meanwhile, our ad-supported basic membership plan designed to offer exceptional value and a lower price, which are the historic adoption of high younger generation and users from low-tier cities with this and new members with many joining as first-time subscribers. We are focused on enhancing macro value soon initiatives that boost loyalty and drive upgrades. Long-term members now enjoy greater discounts while premium as the members receive free prize package to drive conversions with expanded options like Express package, counterfeit Express program, — who purchases gift cards and bundled membership plans with added benefits, these steps make all membership services more attractive and valuable, supporting steady revenue growth and strong membership community.

Moving on to the advertising business. Advertising revenue in the first quarter decreased sequentially to RMB1.3 billion, other than the macro pressure Q1 and typically low season compared to Q4. For brand ads, our top-tier dramas and the brand-new shows remain a strong draw for advertisers. With content-driven ads contributed over half of the revenue. Note that the sequel to our classic IP become a — suite lead advertising sales, while the new IP a growing journey and the fantasy platform more than likely to generate widespread positive feedback. Looking ahead, brand ads are showing encouraging signs of our potential rebound driven by premium content We plan to drive ourselves by leveraging premium dramas and the genre’s prolific sales repress.

For — shows, we have our focus on delivering high-impact projects and expanding vehicle opportunities for classic IP. Additionally, we aim to launch a mining type, media warranty show, micro dramas and customized advertising products, providing innovative and tailored advertising solutions. On a performance ad side, we captured budgets from new high-potential customers in the Internet services and the education sector, further diversifying our advertising service. In addition, incorporating API into advertising content creation has boosted ROI by over 20%, compared to apps developed with our AI. The future focus is on continuously enhancing our technologies and capabilities to drive revenue growth across Internet services, e-commerce, gaming and education.

Furthermore, we plan to seize growth opportunities in micro dramas and deepen the integration of AI, maximize monetization efficiency. Our commitment to enhancing ad efficiency is further demonstrated by the recent launch of our API driven — ad placement platform by integrating results from both our long-form and the micro genre drama ecosystem. This platform empowers both brands and performance us with sophisticated smart marketing solutions. Moving on to technology and products. We continue to advance video production through industrialization, enhancing cost efficiency and creativity. For example, by scaling up the reuse of digital assets in major original dramas like [Foreign Language]. Moreover, our interest is to reach dubbing solutions designed to convert emotions of same tier cities — have already been applied to the English language for both long form and macro dramas.

On the user front, we are hiring — AI will be define the unmet experience in addition to a newly junk measurement AI. They also used other AI products to enhance user engagement on AI part chatbot, launched last April, features around one from our AI from our popular IPs and have engaged with users of over 100 million. Recently, we introduced the more assistant within the prime form. The uses to discover content discuss plot and the control payback. Additionally, we launched our senior-most feature tailored for motor users, complementing on earlier call designed for younger audiences. Moving on to our business performance in regions outside of midlife China, we maintained strong growth momentum in the first quarter. We saw revenues increasing by over 30% year-over-year on the average daily number of subscribing members, reaching a new high.

Moreover, we are thrilled to see dramas, gaining traction with our wider global audiences according to Google Trend Data worldwide search for the drama recently reached a 5-year high even surpassing first for Korean drama. Our original production has planned a key role in this growing international appeal, with four of the top 10 overseas dramas in the past 6 months, coming from IT or modern drama, the best team that wears on our international platform is publishing a new revenue benchmark for this general. Additionally, our original Chinese animation Super also achieved the highest single-day revenue for Chinese animation within the first week of over 6 release. The influence of our premium content from advertising revenues by 48% year-over-year on original time drama, gained as potential traction from brand advertisers, while our Chinese show become a farmer also to interest from overseas clients.

Looking ahead, we are focused on expanding our investment in original production to create high-quality content tailored to international audiences while integrating micro dramas into our global portfolio. At the same time, we aim to deepen collaboration with local partners and further enhance our brand improvement across key markets. Last but not least, achieved consistently pushed the rate of business innovation as evidenced by our pursuit of new opportunities and exploration of untapped relevance. We are leveraging part digital technologies to think lastly integrate of our IPs, extending their life cycle and unlocking greater commercial potential. We recently expanded our footprint to off-line experience park, the first IT land is set to open in Hangzhou another with a second project underway in addition of VR immersive shelters are expanding rapidly, future popular IPs such as lower young, are now available in over 50 stores of near 30 cities.

We believe this immersive entertainment insurances will deepen user engagement with our content and IPs. On the e-commerce front, the breadth of new content formats such as micro dramas, combined with construction the vertical content, has used significant opportunity in the extra to on these opportunities, we have launched trail operations from IT e-commerce by leveraging our rebound IT portfolio, intensive artist resources and a high-quality member banks. We hold distinct advantage in this space this year. We are concentrating on building for foundation from content-driven e-commerce with a goal of driving accelerated growth and in the year ahead. In summary, as a vital entertainment industry continues to involve, we remain committed to investing in our content ecosystem and elevating the user experience.

This is a strategic effort will enable us to accelerate our content flywheel will strengthen resilience, an afore foundation for sustainable growth and deliver long-term value to our stakeholders. So, let me part on Jun for our financial performance.

Jun Wang: Thank you, Mr. Gong, and hello, everyone. Now let’s take a look at the Q1 key numbers. In the first quarter, total revenues were RMB7.2 billion, up 9% sequentially. Membership services revenue reached RMB4.4 billion, up 7% sequentially. The increase was primarily driven by the strong performance of the long-form dramas. From advertising revenue decreased by 7% sequentially to RMB4.3 billion, primarily due to macro headwinds and seasonality. Accounting distribution revenue reached RMB28.7 million, up 55% sequentially, driven by more common titles distributed during the quarter. Other revenues increased by 24% sequentially to RMB830.9 million, primarily driven by the growth of certain business lines. Moving on to costs and expenses.

Content cost was RMB3.8 billion, up 10% sequentially, driven by higher number of premium dramas launched during the quarter. Total operating expenses were RMB1.4 billion, up 8% sequentially, primarily driven by higher marketing spending. Turning to profit and cash flow. Our non-GAAP operating income was RMB458.5 million, up 13% on a sequential basis. The non-GAAP operating margin was 6%. The net cash provided by operating activities totaled RMB339 million, positive for 12 contractual quarters. As of the end of the first quarter, we had cash, cash equivalents, restricted cash, short-term investments and long-term restricted cash included in the prepayments and other assets, the total of RMB5.7 billion. In addition, the company had a loan of USD522.5 million to PAG, recorded amounts due from other parties.

When reviewing our financial performance, the result of our efforts to optimize the capital structure are very clear. Over the past 2 years, we have onetime the scope through a serious initiative to lower our debt levels, optimize repayment schedules and make our debt restructure more manageable. Notably, the outstanding principal balance of our convertible bond has sharply declined, dropping from RMB2.9 billion at the end of first quarter back in 2023 to RMB1.17 billion this year. And of the current outstanding balance, the rate RMB522.5 million, as we mentioned earlier, were resolved through equipment loan arrangements with the. As we continue to optimize that debt structure, we have also achieved a substantial reduction in net interest expense, which has declined from RMB223 million to RMB155 million in the first quarter of this year decreased by over 30% year-over-year.

For detailed financial performance and data, please refer to our press release on our IR website. Now we will open the floor for Q&A.

Operator: [Operator Instructions]. Your first question is from Xueqing Zhang from CICC. Please go ahead.

Xueqing Zhang: [Foreign Language]. Thanks for taking my question. My question about micro dramas. Gong mentioned some operational updates on micro dramas in your prepared remarks. Could management elaborate a little more on the latest developments of micro dramas and outline the key focus points for its future development? Thank you.

Yu Gong: [Foreign Language].

Chang You: [Interpreted] our CEO, Mr. Gong is answering this question. First of all, the users have gradually developed the habit of watching micro dramas on IT. We now have over 15,000 micro dramas titles with free content and a member-exclusive content about tax. Our mobile apps have also developed very tenanted positioning. The main IT app focuses on members who are for free model, primarily using paid micro dramas, while the IT light app primarily focuses on free micro dramas supported by advertising. [Foreign Language]. This development, as I mentioned earlier, have chosen data growth in both user time spend and user base for micrograms, while significantly enhancing the user stickiness. So, when we compare the April to December of last year, the number of heavy micro dramas users are IT, which are users will spend 80% of their time watching micro drama has increased about 3 times.

[Foreign Language]. We just step into the micro drama field for not so long and then just started our original production and seeing some impressive proper for example, a recently released original micro drama called China capable sporting, ranks first in IT’s micro drama busing time for several competitive consecutive weeks and also successfully entered the EDX top 10 list, which is well renowned list in the micro drama field. So, amount the acquired top-tier titles, for example, like My Sweet Home a and Please Come into My Heart to worldwide each achieved revenue-sharing milestone of over RMB 1 million within a week, and this progress reflecting the high user recognition and appreciation of high-property in micro dramas. [Foreign Language].

I would like to share with everyone. For example, the content cost for each micro drama on average cost less than RMB1 million. And the top-tier titles usually will be less than RMB2 million per title. [Foreign Language]. So as such, within the week, the revenue share dollar RMB reached 1 million is actually a very sizable and on income. [Foreign Language]. Going forward, there are two areas we’re focusing on. First is to have more and better-quality micro dramas, and second, to invest more on user acquisition. User form. [Foreign Language]. In addition, we’ll try more ways to monetize the growing traffic, for example, advertising and also commercial.

Operator: Thank you. The next question is from Vicky Wei from Citi. Please go ahead.

Vicky Wei: [Foreign Language]. Thanks management for taking my question. Will management share some color about the change of loan video content strategy and the rationale behind it? Thank you.

Chang You: Thank you. I will invite our Chief Content Officer, Mr. Xiaohui, to answer this question.

Xianghua Yang: [Foreign Language]. First of all, long-form video are the cornerstone of IT’s content ecosystem and our commitment to this remains unwavering. [Foreign Language]. Dramas are at the core of long-form videos. So, to better cater to involving user preferences, our future drama strategy will focus on two key areas. First of all, releasing high-quality shorter episode premium dramas and second, producing more high-quality short dramas with each episode lasting 5 minutes to 20 minutes. [Foreign Language]. Going forward, the total number of drama titles will increase, accompanied by enhanced content quality and greater diversity. This approach will not only improve the flexibility and stability of content settling, but will also reduce reliance on individual titles and effectively mitigate risk.

Operator: Thank you. The next question is from Maggie Ye from CLSA. Please go ahead.

Maggie Ye: [Foreign Language]. Would just please share more details on the latest of our overseas business such as membership and content distribution as well? From a financial perspective, what is the current situation of the overseas business in terms of revenue and profit contribution? And how should we expect from — what shall we expect from overseas in the next 1 years to 3 years?

Yu Gong: [Foreign Language]. We started our overseas business in the second half of 2019. And after that, we experienced 3 years of COVID. So, there were some difficulties in terms of getting head count and also trouble them between Mainland China and overseas. So, the development were actually quite slower than expectation. But after COVID, in the recent 2 years, the business has been going through a very rapid development phase. But however, we do have some restrictions in terms of the financial resources, so there is some limitations to the development. [Foreign Language]. In addition to what I mentioned in the opening remarks that we experienced very rapid growth in terms of the annual revenue growth and also subscriber account, et cetera.

So, there are some very important progress we made very importantly that we kind of figure out the right content mix for each region, overseas. And also, what can we do from the content mix to drive user growth and also to drive our revenue performance. [Foreign Language]. In addition to that, we also take out how we can really operate in each region, for example, how we can promote our content to acquire a better user growth and also in terms of the user growth, how we can improve that as well. [Foreign Language]. In terms of the content mix for our overseas business, the Chinese content actually accounts for about half of the content and the other half are a company. [Foreign Language]. Based on the data that we collected, the Chinese video content actually devalued that are increasing in the global, which is very beneficial to our overuse business growth.

[Foreign Language]. Right now, currently, the revenue contribution from the overseas market is still at a relatively low percentage, but it also depends on the future investment into the overseas business, limited to, for example, the scale of our financial support and also the financing source. So, these are the areas where we look out for the overseas business.

Jun Wang: [Foreign Language]. As the CFO just added to our CEO’s comments. So, we really took from the past few years are really valuable revenue growth, as well as the content mix as well as the operating takeaways from each market, and these are the key takeaways in the past few years. Of course, these are under a very disciplined investment cycle that we did over the past few years as well. And from the management accounting perspective, the overseas business are profitable in the past couple of years. And in the future going forward, of course, maintaining our profitability it’s important. However, it doesn’t have to be a meaningful amount. What we want is to invest, take that profit and invest into the business. Hopefully, it will drive greater growth opportunities in the future.

Operator: There are no further questions at this time. I’ll now hand back to management for closing remarks.

Chang You: Thank you, everyone, for participating on the call today. And if you have any questions, don’t hesitate to contact us. Thank you, and see you next quarter.

Yu Gong: Thank you.

Jun Wang: Thank you.

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.