Good day, everyone, and welcome to NetEase Fourth Quarter and Full-Year 2018 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to IR Director, Margaret Shi. Please go ahead.

Thank you, operator. Please note, the discussion today will contain forward-looking statements relating to future performance of the Company and are intended to qualify for the Safe Harbor from liability, as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the Company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect NetEase's business and financial results is included in certain filings of the Company with the Securities and Exchange Commission, including its Annual Report on Form 20-F. The Company does not undertake any obligation to updated forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the 2018 fourth quarter and full-year financial results news release issued earlier today. As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on NetEase corporate website at ir.netease.com. Joining us today on the call from NetEase's Senior Management is Mr. William Ding, Chief Executive Officer; Mr. Charles Yang, Chief Financial Officer; and Mr. Hilton Huang, Co-President of NetEase Games. I will now turn the call over to Mr. Yang, who will read the prepared remarks on behalf of Mr. Ding.

Thank you, Margaret. Happy Chinese New Year, and thank you, everyone, for participating in today's call. Before we begin, I would like to remind everyone that all percentages are based on renminbi. With that said, I will deliver opening remarks on William's behalf. 2018 was an exciting year for us. We ended the year with record total annual net revenues of RMB67 billion, a 24% increase from 2017. Our strong performance was driven by a diverse portfolio of online games as well as healthy growth in our e-commerce, advertising services and other Internet product and service offerings. Our online games business remains the core of our strategy. The fourth quarter marked our third consecutive quarter exceeding RMB10 billion in online games net revenues. In the fourth quarter, our online games revenue reached RMB11 billion, a 38% increase compared with the same period last year. Our continued success in online games is underpinned by our commitment and vision to having a positive impact on the online games industry. Our ability to deliver best-in-class quality games with an emphasis on in-house R&D and NetEase IP empowered by unique corporate culture and the right training mechanisms and infrastructure to nurture talent. All of which we have spent over two decades investing in. 2018 was a fruitful year for us in terms of our online games' genre diversification initiatives. In addition to our legacy titles that's been that case the popularity. We are continuously adding new titles and creating new IP that we hope will going to the same longevity. Throughout 2018 we launched a number of highly successful games covering a wide spectrum of categories with chart-topping titles such as Chu Liu Xiang, Identity V, QwQ, Justice, Butterfly Sword, Ancient Nocturne and in the fourth quarter Night Falls: Survival. Night Falls: Survival has been the top performer on China's iOS downloads chart things it's released in November. This is a cooperative survival role playing game. Game set against the doomsday background. We have players rebuilds their living habitat and restore civilization with other survivors after the apocalypse. It has attracted a large fan base with a high degree of innovation that combined the MMORPG, Sandbox and shooting game play features all-in-one game. Night Falls: Survival has stayed consistently at the top of China's iOS grossing charts ranking number three in terms of total grossing games for the month of November and December according to App Annie. This game is now also available in Hong Kong, Macau and Taiwan. While we continue to dominate the MMO genre, many of our new titles are in brand-new categories that we have either recently entered or pioneered. Our ability to break into new territories has helped us capture users that reach beyond our traditional MMO game players. As a result, our user base has grown rapidly spending across different emergent demographics including younger, more casual and more female users. Turning to our legacy titles. The market is doing all of the longevity of our flagship franchises. After over full 15 years of operation on PC and more than three years on mobile, our attic Fantasy Westward Journey and Westward Journey Online sagas are still growing. We continue to supply this large and sustainable user base with interesting content. During the fourth quarter, we launched content updates for our Fantasy Westward Journey and New Westward Journey Online series on both PC-client and mobile platforms. Tianxia III also celebrated its 10th year anniversary with a new expansion pack at the end of November delivering encouraging sequential quarterly revenue growth in the fourth quarter. Some of the titles we launched in more recent years such as Onmyoji have also entered a steady stage of operation. Through the introduction of new content, Onmyoji climbed back to the number one spot on the iOS grossing charts twice in the fourth quarter, two years after it first became a market sensation in 2016. Invincible, an SLG game we launched over three years ago has been growing steadily year-over-year, both in terms of revenue and user numbers since its launch. Other titles such as Onmyoji Arena, a multiplayer online battle arena game which we released in early 2018 has also begun to show similar healthy trends. 2018 was also a milestone year for our international expansion. Net revenues from our international games accounted for more than 10% of our total game net revenues for two consecutive quarters now. In Japan Knives Out has become a household name among young gamers. It has remained one of Japan's leading grossing games since March, 2018. It has also been ranked as China's top grossing mobile game in overseas market for five consecutive months from August to December, 2018 according to Sensor Tower. During 2018 as well as in recent months, we brought a number of other distinctive new titles to Asian markets, including Rules of Survival, Identity V and QwQ, each of which opened doors for us in their respective market. Going global offers an excellent opportunity for us to promote Chinese culture as well as our original IP and best-in-class production quality markets worldwide. We see huge potential to further build our brand and bring our games to players outside of China, particularly in mainstream western market. For example, we plan to bring our popular hit Night Falls: Survival to Japan and U.S. in the first half of 2019. We are now working with other world renowned game developers, not only to bring their flagship titles to China, but also how it transformed some of their most important titles into mobile games. Most significantly, we renewed our 11-year partnership with Blizzard Entertainment in mainland China, extending our publishing agreement until January 2023. And as we previously announced, we are co-developing the highly anticipated new mobile game Diablo Immortal, with Blizzard. Our world-class R&D capabilities, particularly in the mobile arena offered us an excellent opportunity to appeal to a global audience. We plan to continue to invest in global talent and IP to further this momentum. For example, we recently closed a deal with Codemasters, a UK game studio and made minority investment in Quantic Dream, a French game studio, as well as Second Dinner, the U.S. studio founded by ex-Blizzard veterans. We have a number of strong titles in our pipeline, including Fantasy Westward Journey 3D, Xuanyuan Sword, Ages of Isle and Pokémon Quest. Just to name a few. We will continue to introduce thrilling new games that maintain the high level of integrity, innovation, and excellence, upon which our users rely. Our ability to create unique content has been a driving force in NetEase success over the last 20 years. This is historically prevalent across our offerings, including our line games NetEase News and NetEase e-mail services for our next phase of investment. We again look for areas where our content creation abilities can stand out, succeed, and have strong profit growth potential, e-commerce, online education and music are three sectors that fit these criteria and will be the focus of our next phase of strategic growth. For Kaola, we are increasingly encouraged by the government favorable policies toward cross-border e-commerce, raising the cross-border duty free quota per transaction and raising the duty free annual quota per individual, incentivize customers to buy more products across a wider range of categories. We are continuously collaborating with more international brands to raise these companies brand profiles in China. For example, Abbott, a global maternity and baby products manufacturer is one of our more recent partners. Through our strategic agreement, Kaola will be one of the first to sell Abbott's high-end baby formula in China. In the fourth quarter, we also held a NetEase Kaola Super Brands Day event whereby participating brands were allotted targeted promotional resources on our platform. Many of the internationally renowned brands experienced rapid sales growth based on Kaola's support, including British high-street brand [Cattle], American sports equipment brand, Under Armour, well known European organic baby food brand, Little Freddie and U.S. baby food brand, Mead Johnson. For Yanxuan, we continue to enhance the efficiency of our supply chain, establishing new workflow progresses in order to work more closely with quality designers and train our premier suppliers to ensure a high caliber product design and craftsmanship. In December 2018 and January 2019, we opened our very first brick-and-mortar Yanxuan store and our flagship Kaola's store respectively. These pilot stores offer customers an integrated online to offline shopping experience where our customers can see and try our product feed person in joining greater convenience located in located in Hangzhou's busiest business district, the stores generated strong interest and demand from tourists and visitors to Hangzhou proving to be an effective marketing tool as we work to further scale our e-commerce offerings. In addition, education is a large and important area of focus for us. Our influence and ridge in the online education arena grew substantially in 2018. We have great confidence in the continued growth of the space and we believe our strong background in internet and AI technology provides us with an advantage in delivering a superb user experience in online education. In 2018, gross billing from Youdao online courses more than doubled from the prior year, making this vertical the largest contributor for Youdao. We introduced a dual teacher mode to provide a better studying experience in which students are equipped with one lecturer and one assistant counselor for each online session course. This teaching mode proved to be popular with users, yielding higher renewal rates for some of our K12 courses. While our online education offerings currently cover both K12 education and higher education, we expect our K12 offerings to be a bigger gross driver going forward. In 2018 and early 2019, we launched several educational apps supported by AI technology, all tailored toward K-12 users making studying more personalized and targeted. These apps include Youdao Mathematics, Youdao Verbal English, Youdao Homework, which contained after school tutorials for children Youdao Reading, which helps children develop positive reading habits and Youdao Children's dictionary. We believe like this all our businesses, our dedication to ensuring a positive user experience and creating differentiated and unique content is what will set us apart and allow us to succeed in the online education space in the longer run. For Music, we are receiving more recognition for NetEase Cloud Music, especially among the critical younger generation demographic. With over 600 million users our NetEase Cloud Music was China's most downloaded free music app on iOS in the fourth quarter according to App Annie. China's digital music market is thriving and we continue to provide our growing community with a differentiated and personalized user experience into 2018. The number of paying subscribers more than doubled from the prior year and the sales of digital albums on our NetEase Cloud Music platforms experienced robust growth year-over-year. We completed around the financing for NetEase Cloud Music in November, 2018 and rocking complimentary business resources and stakeholders to help ensure a healthy growth outlook for our online music platform as we move through the year online games where remained a backbone of our operations both domestically and overseas. We are proud of our in-house production capabilities and we are excited to take our products abroad and wing over global players with our innovative and proprietary content. At the same time, we will take an even more focused and concentrated approach with our investments in non-games segments, namely e-commerce, online education, and music. Our relentless drive to create premium content has paved the way for our success and our investments in carefully chosen new areas will allow us to stand the test of time in China's rapidly evolving internet industry. These will continue to be the foundation for our next exciting stage of growth. This concludes William's remarks. I will now provide a brief review of our fourth quarter and full-year 2018 financial results. Given the limited time on today's call, I will be presenting some abbreviated financial highlights. We encourage you to read through our press release issued earlier today for further details. We finished the year with a new revenue record both on an annual basis and on a quarterly basis. Net revenues for the year with RMB67.2 billion or US$9.8 billion representing a 24% increase year-over-year. Net revenue was for the fourth quarter of 2018 gaming at RMB19.8 billion or US$ 2.9 billion representing a 36% increase year-over-year and an 18% increase quarter-over-quarter. Net revenues from online games grew for the fourth consecutive quarter reaching RMB11 billion representing a 6% increase quarter-over-quarter and 38% year-over-year. The sequential increase was driven by the launch of Night Falls: Survival and Ancient Nocturne and yearly increase was primarily driven by the launch of Knives Out, Chu Liu Xiang and Identity V. Mobile games accounted for approximately 70% of net revenues from our online games in the fourth quarter and for the 2018 full-year. Our e-commerce business continues to demonstrate robust growth in 2018 with total net revenues increased by 65% year-over-year to RMB19.2 billion. For the fourth quarter net revenues from e-commerce were up 50% quarter-over-quarter and 44% year-over-year to RMB6.7 billion. Net revenues from our advertising services business we're also up by 4% year-over-year in 2018 yielding RMB2.5 billion for the full-year. For the fourth quarter net revenues from advertising services were RMB761 million representing a gross of 18% quarter-over-quarter and 3% year-over-year. The top performing verticals were auto mobile, real estate and Internet services sectors. Total net revenues from our innovative businesses and other segments were RMB5.2 billion for the year, increase of 40% year-over-year. Net revenues from innovative businesses and others were RMB1.4 billion for the fourth quarter of 2018 which was relatively flat quarter-over-quarter, and up 14% year-over-year. As you may have noticed, we renamed our email and other segments to innovative businesses and others with our heightened focus on developing key incubated businesses, we believe this name were to reflect the nature of this segment's revenue compensation. The main components within this segment has not dramatically changed, and as a reminder include live video streaming, cloud music, online education and certain other cloud application services among others. Gross margin was 38.6% in the fourth quarter compared with 44.8% in the preceding quarter and 39.3% a year ago. Gross margin for our online games services for the fourth quarter of 2018 was 62.8%, which is largely stable. As a reminder, our gross margin for games typically fluctuates quarter-to-quarter within a narrowband based on the revenue mix of mobile PC self-developed and licensed games. Gross margin for our ecommerce segment was 4.5% in the fourth quarter of 2018. The quarter-over-quarter and year-over-year decreases were due to larger scale ecommerce promotion and discounts during the promotional season. On a full-year basis, gross margin for the segment was 8.0% compared to 10.3% last year. During the fourth quarter, we incurred RMB5.4 billion in operating expenses. The year-over-year increase was mainly due to increased R&D mostly related to online games as well as increased shipping and handling costs related to the growing scale of our ecommerce business. The increasing R&D is a testament to our commitment to investing in best-in-class R&D infrastructure, talent and product. While we continue to grow, we take a disciplined view of our spending staying within a well-controlled range. Selling and marketing expenses as a percentage of net revenue consistently came down from the first quarter 2018 coming in as 12.1% in the fourth quarter compared with 14% in the previous quarter and 16.4% in the fourth quarter of 2017. Ecommerce related shipping and handling costs as a percentage of ecommerce net revenues was 8.6% in the fourth quarter. On the full-year basis, shipping and handling costs as a percentage of revenue, ecommerce revenue was 8.7% in 2018 compared to 10.1% last year. Operating income for the fourth quarter of 2018 increased by 57% year-over-year to RMB2.0 billion. The effective tax rate for the fourth quarter of 2018 was 34% compared to 34% and 18% for the preceding quarter and the fourth quarter of 2017 respectively. Our effective tax rate was 28% for the full-year 2018 compared to 17% for 2017. The year-over-year increase in the effective tax rate for the fourth quarter and for the full-year were due to higher operating losses incurred by some of our non-game businesses. As we have discussed on our prior calls due to the increase in the scale of some of our loss making business units, we expect the effective tax rates to increase further in 2019. Non-GAAP net income attributable to our shareholders for the fourth quarter of 2018 totaled RMB2.4 billion, or US$343 million representing an increase of 4% quarter-over-quarter and 26% year-over-year. Non-GAAP net income attributable to our shareholders for the full-year 2018 totaled RMB8.7 billion, or US$1.3 billion compared to RMB12.8 billion in 2017. Our non-GAAP diluted earnings per ADS were RMB18.33, or US$2.66. For the fourth quarter of 2018, non-GAAP diluted earnings per ADS were RMB66.68, or US$9.70 for the full-year 2018. Our cash position remains strong. As of December 31, 2018 our total cash and cash equivalents, current and non-current time deposits and short-term investment balance totaled RMB50.1 billion compared with RMB43.2 billion as of December 31, 2017. For the fourth quarter of 2018, we plan to pay a dividend of $0.48 per ADS representing 25% of the net income attributable to our shareholders. As of November 15, 2018 our share purchase program for up to US$2 billion. We had repurchased approximately 4.6 million ADS for approximately US$1.2 billion. On November 14, 2018 our Board announced the approval of a new share repurchase program for up to US$1 billion of our outstanding ADS for the next 12 months beginning on November 16, 2018. No shares were repurchased under this new plan as of December 31, 2018. Thank you for your attention. We would like now to open the call to your questions. Operator, please go ahead to Q&A.

Thank you. [Operator Instructions] We'll go first to Thomas Chong with Credit Suisse.

Hi, good morning. Thanks management for taking my questions. My first question is about our investment approach on ecommerce, education, and music business. I just want to get a sense of why we choose 2019 to be the year to step up the investments across these areas. Are we seeing any new trend or industry trend that we see there is a lot of potential, and given the fact that the tax rate maybe higher on the losses, how should we think about the earnings growth or the margin trend that we should expect? And my second question is about the gaming regulations, in particular, the suspension for the new license applications. Just want to see if any color on that. And my final question is about our ecommerce business, can management talk about any view on our synergies to be expected with our strategic partner, if there's any? Thank you.

Thanks Thomas. I will translate your question one-by-one. [Foreign Language] Thomas, the first question, William would like to first remind that it has been years for NetEase to be exploring into ecommerce, online education, music. For instance, for our online education in particular for Youdao, we have almost a decade of experience nurturing into this vertical. Now we are seeing the increased sophistication of AI technology as well as a much higher level of user acceptance to education format online. That's why we think we have a huge potential market as well as the readiness and maturity of this market. It is time for us to be very focused, a making a bigger impact in online education. Music and games are in essence a content driven business and we are confident of our content creation, differentiation capability for e-commerce, again for both Kaola and Yanxuan. We've been investing for years and this is definitely an area that NetEase is going to continue to invest. [Foreign Language] For your second question, any update on gaming regulation? We also notice there are market news and rumors, yesterday talking about, latched game suspensions. We would like to say that, we do not see that, some provincial and local regulators have modified the format of material submissions. But we do not interpret that as a shutdown of new game approvals. [Foreign Language] For e-commerce, first of all, we do not make comment or response to any ungrounded market rumors. But as a mentality, NetEase is always very open minded to embrace stakeholders, strategic partners, business partners that can bring synergy, and wing-wing to our e-commerce segment as well as many of our other segments.

[Operator Instructions] We'll go next to Eddie Leung with Merrill Lynch.

Hey, good morning, guys. Just actually a very quick question on the gross margin of your e-commerce business, remember you guys, especially for example, like Charles mentioned that there would be a - hopefully a target on stabilizing the gross margin of the e-commerce business. So just wondering if you could provide some outlook on that front, given the fourth quarter fluctuation in a gross margin? Thank you.

Thank you, Eddie. I will take your question directly. For our e-commerce, as you have notice that for Q4 gross margin was lower than prior quarters as well as Q4 of last year. But at the same time, I hope that you can also notice that, a substantial improvement in us, lowering our inventory, which means in Q4, we have engaged in larger-scale promotional events to optimize our inventory structure. Going forward in 2019 and forward, it is always a very prudent strategy for NetEase to balance topline GMV revenue growth, as well as a margin profile. For now, we expect that overall e-commerce segment in 2019 and forward can still have a very robust topline growth, at the same time with a relatively stable GP margin over the full-year. But of course quarter-over-quarter, there might be fluctuation that is just typical to e-commerce seasonality.

We'll go next to Alicia Yap with Citigroup

Hi, good morning, William, Charles, Margaret and Brandi. Thanks for taking my questions. I wanted to ask could management comment how many titles that NetEase have submitted to while still waiting for approval. And if let's say China license continues to hold up longer, if the new games is ready with NetEase actually decided to launch those new schemes to overseas market first, even though China market are not yet ready to launch. Follow-up on these Charles, your questions on the, I mean, your answer on to the gross margin for e-commerce, you say stable for the full-year. Do you mean these 8% on 2018 will be the trend for 2019 and going forward? Thank you.

Okay. Alicia, I'll translate your first question and I'll take your second question directly. [Foreign Language] So Alicia, first part of your question, we have over 10 titles that has already been submitted in the approval pipeline. And as your second part of the game relation question, yes, for overseas market it is not restricted by the approval, by the domestic approval. So there are games for instance that we have already started testing and trial in overseas market for us we see that as two pillars of further growing our game segment in 2019. And for your second question our e-commerce margin, yes for us we always strive to seek a discipline balance between topline growth and margin profile. It is also our intention to maintain e-commerce gross profit margin in the neighborhoods similar to 2018 full year that is in the high single-digit area. But of course, this is not an easy battle and it requires a lot of effort and hard work from our business unit.

Again, please limit yourself to one question. We'll go next to Natalie Wu with CICC.

Hi, good morning, William, Charles, and Margaret. Thanks for taking my question. Firstly, very quickly, can you give us some color on the region breakdown for your overseas game revenue? Because it's been there shown in the couple of last quarters. And also the margin profiles there, any difference versus the domestic market. And secondary you mentioned about the online education endeavor. Also, the Youdao's revenue has been double last year. I just wondering, can you share with us any color of the contribution from the K-12 business versus the higher education? And under which line to you recognize that revenue. And also in the future, just wondering, will Youdao be the major business unit for your online education endeavor or if there will be any synergy with other business lines should we anticipate or it is just the to operate independently for Youdao. Thank you.

Okay. Thanks Natalie. I'll translate the questions. [Foreign Language] Okay. So Natalie, I'll provide a brief and summarize translation for the answers. Firstly, for the overseas games contribution for now it is mainly coming from Japan, contributed by Knives Out's performance. And as I just mentioned in the earnings call, our next focus is to further tap into mainstream Western market, hopefully, by more and more titles. In terms of margin profile, it's largely the same between domestic games and offshore games. But of course, in domestic games given the scale, we do enjoy better economy of scale, so margins are slightly higher, but there is really no significant differences between games, whether it's overseas or in domestic market. For online education, William has provided a detailed explanation just now in Mandarin. So to summarize, first of all, Youdao has now over a decade of operation, accumulating a sizeable user base. We first started as a study tool, Youdao Dictionary, and there is a high degree of overlap with the current focused K-12 online courses in terms of users. In addition, given that NetEase is a controlling shareholder of Youdao, there's also significant overlaps between the users of our email services, music, for instance, with online courses, whether being student themselves or parents of those students. And we do see kind of a coordinated asset in promoting online education by utilizing resources from our matrix of products. And more recently, driven by the AI technology, Youdao has also been introducing AI-empowered hardwares, which is also being very well received in the market. So all in all for our online education endeavor, we will be mainly focused on online education, which will mitigate and avoid many concerns around offline education that the market is being concerned about.

And we'll go next to Alex Poon with Morgan Stanley.

Hi, William. Hi, Charles. Hi, Margaret. Congratulations on the great results. I have questions regarding game business. In the last two quarters you mentioned, RMB10 billion is the online game revenue run rates. And this quarter you have surpassed RMB11 billion. So can we say RMB11 billion is your new base, new benchmark, we can reference to, especially you have a very strong pipeline of in the coming year? And the second question regarding games is, on the user acquisition side, we're seeing a lot of promotion in short video platforms to get for game business. Did you see this channel as lower user acquisition costs for game business structurally that this can improve your overall game return in future? And lastly, can you talk a little bit about, Diablo Immortal's status? And also Eclipse Isle is missing in the pipeline in your press release. I'm wondering why is that not in your press release? Thank you very much.

Sorry Alex, which game that you are referring to that's missing?

[Foreign Language]

Okay. Thanks, Alex. I'll translate to your questions to William. [Foreign Language] So Alex, I will answer your question. Firstly, as you know, we do not provide guidance revenue or profit. But as a general trend, like I have commented in last quarters that we are very confident about a solid foundation of our game revenues. Going forward, I think it is encouraging to see that we have delivered three quarters that extending above RMB10 billion. We are extremely happy to see that number has surpassed RMB11 billion. But like I said, it is a solid foundation or the future incremental increase will be supported by our continuous effort of launching new and successful games in the pipeline. For your question on user acquisition, NetEase given our scale and track record in upgrading online games. We have a diversified source of new user acquisitions among which short video live streaming is becoming an increasingly important source of new. Whether the cost is lower, it all depends, but on the average blended basis, it does seem short video is a very cost competitive and cost efficient manner for us to acquire new users. Diablo Immortal, we are a codeveloper on that game together with Blizzard. As to the exact launch timetable I would encourage the markets to direct the question directly to Activision blizzard. From a codevelopers perspective, the game development is pretty much ready. Of course there is always space for us to optimize and enhance. But it is not any concern that game development side will call us any potential delay. As your last bit of questions specific about our pipelines we did announce several exciting new games that in our earnings release in the pipeline. As you know, that we have over 50 studios on our NetEase games platform and there are numerous new games of different stages in our R&D and potential launch pipeline. And we are very, very confident about the robust game pipeline for 2019.

We'll go next to Alex Yao with JP Morgan.

[Foreign Language] Thank you, management for taking my question? I have a couple of pressures on music. First of all how do you think about the competition in trying to online music industry? And then secondly, regarding monetization, what are our strategies to improve the music monetization including both the pure music streaming operation and the potentially would you be considering adding the - my broadcasting feature to music streaming service to include the monetization? Thank you.

[Foreign Language] Alex, for the benefits of everyone in the call, I'll provide summarized translations for William's answer. So first of all about your positioning and competitive landscape, we recognized the fact that we are a relatively speaking a latecomer into online music segment. However, we are highly convinced that China's online music markets have huge potential, and after years of competition it appears now that TME and NetEase Cloud Music are the two clear leaders. And as a latecomer, we are a little bit a disadvantages in terms of copyright, et cetera. However, as a latecomer, especially with a deep insight and trying to understand the users need. We do have differentiated advantages as well comparing to competitive, especially in terms of user experience and providing trends that represents innovation, which links also very relevantly to how to think about potential monetization. It is actually for the whole industry, it is in a trial mode whether it is by paying users, advertising, livestreaming or even potentially some other new and innovative format. It is all possible. Some of the formats of innovation, a monetization has already been proven either by us or by our competitors. But we fundamentally believe there will also be other very interesting format that we can potentially think about music, music user monetization, because after all we think this huge market potential is underpinned by music content and we believe after these many years of development online music, this whole format is becoming now a new habit that is highly receptive by Chinese internet users. And uniquely - as a unique differentiation to many other type of format music content is a content that can be enjoyed repeatedly, either in different variations, by different singers, in different settings, and also there's no language boundary. So all-in-all, we think NetEase Cloud Music will remain as a pioneer and the innovative leader in terms of providing differentiated music content to our users.

At this time, I will hand the call back over to Margaret Shi for any additional or closing remarks.

Thank you once again for joining us today. If you have any further questions, please feel free to contact us or TPG Investor Relations. Have a great day. Thank you.

Thank you, everyone.

That does conclude today's conference. We thank you for your participation.