Catherine Chan – IR Pony Ma – Chairman and CEO Martin Lau – President James Mitchell – Chief Strategy Officer John Lo – CFO

Dick Wei – Credit Suisse Eddie Leung – Merrill Lynch Chi Tsang – HSBC Philip Wan – Morgan Stanley Alan Hellawell – Deutsche Bank Cynthia Meng – Jefferies Alex Yao – JPMorgan Alicia Yap – Barclays Wendy Huang – Standard Chartered Bank

Thank you for standing by and welcome to Tencent Holdings Limited 2014 Third Quarter Results Announcements Conference Call. [Operator Instructions] I must advise you that this conference is being recorded today. I would now like to hand the conference over to your host today, Ms. Catherine Chan from Tencent. Please go ahead, Ms. Chan.

Thank you, operator. Good evening. Welcome to our analyst conference call for the third quarter of 2014. I’m Catherine Chan from the IR team of Tencent. Before we start the presentation, we would like remind you that it includes forward-looking statements which are underlined by a number of risks and uncertainties that may not be realized in future for various reasons. Information about general market conditions is coming from a variety of sources outside of Tencent. This presentation also contains some unaudited non-GAAP financial measures that should be considered in addition to, but not as a substitute for measures of the company’s financial performance prepared in accordance with IFRS. For a detailed discussion of the risk factors and our non-GAAP measures please refer to our disclosure documents downloadable on www.tencent.com/ir. Now let me introduce the management team on the call tonight. We have our Chairman and CEO Pony Ma; President Martin Lau; Chief Strategy Officer James Mitchell; and Chief Financial Officer John Lo. Pony will kick off with a short overview, Martin will discuss the strategic highlights, James will speak to business review, and John will go through the financials before we take your questions. I’ll now turn the call over to Pony.

Thank you, Catherine. Good evening, everyone. Thank you for joining us. In the third quarter of 2014, we achieved another quarter of solid growth in our platform, revenue and earnings. Our online advertising business grew significantly year-over-year due to performance, advertising on our social platforms. On our advanced businesses, we have retained our leadership in online games and we put to life subscription products, it has the mobile privilege. We have sharply increased market share of our AdFlow in Dungbao [ph] of key and growth for the mobile ecosystem we are building. Looking forward we will depend our partnerships with particular leaders and continue to invest in our people for about end platforms. Now let me highlight the financial results for you. Total revenue was RMB19.8 billion, up 28% year on year. Excluding eCommerce transactions, total revenue grew at 47% year-on-year. Value added services revenue was RMB16 billion, up 38% year-on-year, of which social network revenue was RMB4.6 billion, up 47% year-on-year and online games revenue was RMB11.3 billion, up 34% year-on-year. Online advertising revenue was RMB2.4 billion, up 26% year-on-year and eCommerce transactions revenue was about RMB500 million, down 81% year-on-year. Non-GAAP operating profit was RMB8.3 billion, up 55% year-on-year. Non-GAAP net profit attributable to shareholders was RMB6.4 billion, up 47% year-on-year. Moving onto our key online platforms, we achieved strong year-on-year growth in mobile usage and activities on our social platforms. Total MAU for QQ was 820 million, within which Smart devices MAU grew 36% year-on-year to 542 million. QQ PCU increased 22% year-on-year to 217 million. Weixin and WeChat achieved a combined MAU of 468 million, up 39% year-on-year. Total MAU for Qzone was 629 million, of which Smart devices MAU rose 26% year-on-year to 506 million. Our online games platform continued to lead the market on PC and on mobile. Our integrated media platforms grew traffic at healthy rates. Our portal, QQ.com, mobile news App, and new squad even combined the largest online news platform in China by 1 billion users. Our video platform grew users and different engagement on both TV and mobile with total daily video views up about 150% year-on-year. With that I conclude my session and I invite Martin to share with you our strategic highlights.

Thank you, Pony, and good evening everybody. In addition to our leading social and media platforms which Pony talked about, we have been building out other internet platforms that serve our users, as well as our ecosystem finders. These include our security platform and our application distribution platform, both of which are cleared by encouraging free download over the past year and I will like to discuss little bit with you. For online securities our piece of security software exceeds solid growth due to continuous improvement in overall performance. Monthly active users of PC manager reached a 128 million in September, up 42% year-on-year. This is significantly positive, especially conserving relatively flat overall market. PC manager currently is still in second largest piece of security platform and has been gaining market share on a consistent basis. In May we released a major upgrade with new security engine and improved user interface, and in top accolades from international rating agencies in terms of virus protection and removal. In addition to comprehensive security features, our PC manager is differentiated in the way that it provides enhanced security protection for QQ accounts, game accounts, as well as online payment. On the mobile front, our position is considerably stronger than on PC. In the past year mobile managers activated installations through 92% year-over-year to 585 million as it continues to gain market share. We believe our mobile security platform will play an increasingly important role as mobile ecosystem continues to proliferate as end-users conduct more and more valuable activities on their Smart phones. In the regards, we have applied an open approach in working with other partners. As a result more and more handset manufacturers who choose to ponder with us and putting in-store either with security aps or security modules in their phones. Most party Android applications stores in China also adopt our mobile security module to scan aps on their platforms. Another important mobile platform is our application-distribution platform. In the past year, our Android App Store YingYongBao has grown significantly in an organic way. Average daily applications downloads more than tripled over the last year and a peak daily downloads reached over 100 million last month. According to Intel Desk YingYongBao’s market share jumped from 8% to 24% within the last 20 months. Among order downloads within YingYongBao, over two-thirds are third-party apps, and approximately 80% are non-games which shows that YingYongBao’s downloads as percentages of the overall market rather than just tension on apps. Seeing that increasing traffic and greater brand recognition of YingYongBao, developers increasingly choose to publish apps through YingYongBao, as of the end of September, the app store has published over 1.2 million apps, up 10 times since the beginning of this year. We believe YingYongBao is very important platform that extends our franchise over the mobile internet. It is an important gateway for our users to access third-party apps, and also it’s a centralized entry point for accumulating natural download traffic. However, been able to drive the phenomenal growth of YingYongBao, first of all, we have many large MAU applications that generates app downloads traffic, and YingYongBao serves as a central repository of this download. This way users who have download experience with us will know how to come back for more apps. We also offer better user experience with faster downloading speed, compressing technology, added security, and as well as personalization for users based on their own needs as well as what their friends have downloaded. Over the long term, with the review one can generate a lot of tangible value to us. It can generate revenue through revenue sharing with games that would distribute within the platform. It can also generate advertising revenue on top of its own traffic, as well as promoting our app network to apps that distribute. In addition, this traffic is also valuable to our strategic and business partners. Overall we believe YingYongBao will continue to extend our ecosystem over the mobile internet. So with that I will ask James to talk about the business review.

Thank you, Martin and good evening. And the third quarter of 2014, our total revenue grew 28% year-on-year, excluding eCommerce transactions total revenues grew 47% year-on-year. VAS generated 82% of our revenue, of which online games contributed 58% and social networks 24%. Online advertising represented 12%. For value-added services, segment revenue was RMB16 billion, up 38% year-on-year and 2% quarter-on-quarter. Social network revenue was RMB4.7 billion, up 47% year-on-year and up 2% quarter-on-quarter. The year-on-year increase was driven by sales of items on mobile platforms and nu multi-subscription packages. In the third quarter we revitalized growth in our subscription revenue by improved mobile privileges. Online game revenue was RMB11.3 billion, up 34% year-on-year and up 2% quarter-on-quarter. Following the explosive growth of our smartphone fun games revenue from under RMB100 million per quarter to over RMB2 billion per quarter in just twelve 12 months. Our smartphone game revenue dipped sequentially due to delays and upgrades. The PC client games, the market continue to grow in a moderate pace and we increased our market share. Looking onto the close – the smartphone games instated with mobile QQ innovation game centers, revenue was approximately RMB2.6 billion. Third quarter revenue was lower than we initially expected as amended implementation of new software development kit which adds guest access options to our games turned out to be unexpectedly time consuming. Implementing the few SDK across our game portfolio temporarily prevented us from producing major upgrades on iOS and also due to synchronization requirements cost platforms on Android which in turn delayed our sales of such items. For example, we released 8 upgrades for our game in new speed every day on iOS in the first six months of 2014 but zero upgrades between July and mid-October. By the end of October we have largely inscribed the guest log-ins, our upgrade pack released sketches dispatch them [ph] on regular cadence and about 98% of our smartphone game users continue to log-in with their Weixin QQ accounts. So we feel we have resolved this issue and are moving forward. Notwithstanding the guest log-in disruption we remained the leading smartphone game publishing during the quarter. We also executed on the broader mobile game initiatives we highlighted last quarter, specifically we increased our app store market share and we published the most popular license games in China with Mobi-Maple [ph] achieving first place in China’s iOS App Store in August, Candy Crush saw during September, and Fruit Ninja in October. Shifting to PC client games, for advanced casual games, average concurrent users grew 16% year-on-year to 7.7 million, robust performance of users in new sports games benefited growth in users and revenue, both year-on-year and quarter-on-quarter. Our market share increased to see that at new genres of games have deepened our penetration within existing genres. For example, license title FIFA Online 3 became the number one sports title in China soon after our launch in June; and our self-developed shooting game, Assault Fire, which recently introduced to expense mode, has become the number two shooting game in China behind our license titled CrossFire. We look forward to expanding the shooting genre further with the launch of Call of Duty Online. The massively multiplayer online games averaged in current user accounts were 1.7 million, down 20% year-on-year. Revenue grew modestly but year-on-year and quarter-on-quarter as Dungeon & Fighter entered its sixth year of operation with focusing on its core players as we see some live used D&F which is the time spent on D&F as they abdicate more of that time to our advanced casual games. We’re preparing to launch several actions ball playing games such as Monster Hunter Online in order to revitalize this category. Turning to our social network products, mobile continued to drive user growth in insurrection, the mobile QQ our location-based groups expanded rapidly in terms of both the number of groups and the size per group helped by new features and by local offline activities. We inscribed more live selling options enabling users to easily access shopping, discover restaurant deals and monitored that help inside the QQ wrap. QQ Wallet expanded its user basis as we added new payment scenarios. For Weixin, the volume of mass users increased significantly with the growth of users groups and official accounts. To help users find information more easily, we enabled integrated in-out search for contact, chat records, official accounts, and related content pages. We introduced a short video featuring and allowing users to record and share video content in chats. Looking at online advertising, segment revenue was RMB2.4 billion, up 76% year-on-year and up 18% sequentially. Price using LG [ph] consolidated search in eCommerce marketplace revenues, total advertising revenue grew 91% year-on-year. Brand advertising revenue was RMB1.5 billion, which was up 85% year-on-year and up 11% quarter-on-quarter due to some fast run video views and increased contribution from mobile. The people work up events in Voice of China preprogramed substantially contributed to our third quarter revenue and costs. Our Top5 advertiser industries were food and beverage, ultimate deals, snowcap, online services and consumer electronics. Performance advertising revenue was RMB917 million, up 93% year-on-year and up 32% quarter-on-quarter, key feature from buying increased revenue from mobile Qzone advertising and initial contributions from advertising on official accounts in Weixin. Mobile represents approximately 45% of our performance advertising revenue this quarter, up from about 30% last quarter. Given our traffic leadership, log-in relationship with users and range of inventory types, together with the proven scale of other performance advertising solutions in China and internationally, we believe this performance advertising business has substantial scope for multi-year growth. Our eCommerce consistent with the strategic transaction of our eCommerce businesses in transfer of traffic to jv.com, our eCommerce transaction revenue declined sharply to RMB459 million, which was down 81% year-on-year and down 65% quarter-on-quarter. During the third quarter we began migration at Yixun from our principal model where we report TMB as revenue to a hybrid principal marketplace model by report the commissions this revenue. The different accounting treatment naturally results in a substantial decline in revenue although not in gross profit. And with that I’ll pass it over to John to walk you through the financials.

Thank you, James. Hello everyone. For the third quarter of 2014, our total revenue was RMB19.8 billion, up 28% year-on-year. Total revenue were flat sequentially, mainly due to decline in eCommerce revenue as we executed the related strategy transition. Gross profit was RMB12.6 billion, up 49% year-on-year. Operating profit was RMB7.5 billion, 56% year-on-year. Net profit attributable to shareholders was RMB5.7 billion, up 46% year-on-year. The diluted EPS was RMB0.605 for the quarter. On non-GAAP basis operating profit was RMB8.3 billion up 55% year-on-year and 7% quarter-on-quarter, mainly due to revenue growth in past and advertising businesses combined with reduced operating expenses related to search in eCommerce businesses. Non-GAAP net profit attributable to shareholders was RMB6.4 billion, up 47% year-on-year and 10% quarter-on-quarter. Non-GAAP diluted EPS was RMB0.688 for the quarter. Let’s turn to segment gross margin. Gross margin for VAS was 67% up 2 percentage points year-on-year or down 3 percentage points quarter-on-quarter. The year-on-year improvement was primarily due to revenue growth of PC client gains and smartphone games. The sequential dip reflected – reduced smartphone games revenue and increased content cost. Gross margin for online advertising was 52%, stable year-on-year, and up 7 percentage points quarter-on-quarter, as positive seasonality offset increased costs including those relating to world of China’s tree [ph]. Gross margin for eCommerce transactions was up 25%, was edging 25%, up 19 percentage points year-on-year and up from minus 7% last quarter, the improved gross margin from issuing gradually moving to marketplace model. Moving to operating expenses, selling and marketing expenses was RMB1.9 billion, up 30% year-on-year and down 3% quarter-on-quarter. The year-to-year increase primarily due to an increase in diving spending on products and platforms such as online games and online media. The sequential decrease primarily reflected loss of few many expenses, or our principal eCommerce transactions and lower subsidies for booking taxi rides. G&A expense was RMB3.8 billion, up 45% year-on-year or 10% quarter-on-quarter. This was primarily driven by increases in R&D expense and that cost included other G&A. R&D expense was RMB2 billion, up 15% year-on-year and 8% quarter-on-quarter. As a percentage of quarterly revenue, selling and marketing expense was 10% and G&A 19%. R&D represented 10% of quarterly revenue. Share-based compensation was 4% of quarterly revenue. At the quarter end, we have approximately 26,000 and 3% year-on-year, up 5% quarter-on-quarter. As year-to-year decline was mainly due to headcount shift away from our eCommerce businesses which was partly offset by new hires. Quarter-on-quarter, the increase was due to annual recruitment of university graduates to support business growth. Now let’s look at the margin ratios for the third quarter. Gross margin was 63.8%, up 2.2 percentage points from the second quarter, mainly driven by big shift from low margin eCommerce business and growth on advertising revenues. Excluding eCommerce transactions revenue and costs, gross margin would be 64.7%, down 1.9 percentage points from the second quarter, primarily due to a decrease in stocks growth margin. Non-GAAP operating margin was 41.7%, up 2.8 percentage points from the second quarter, mainly as a result of improved gross margin which was partly offset by an increase in G&A expense, excluding eCommerce transactions revenue and cost, it would be 42.1% when compared with that of last quarter. Non-GAAP net margin was 32.7%, up 2.9 percentage points from the first quarter mainly as a result of improved operating margin. Excluding eCommerce transactions revenue and costs it would 32.9%, roughly stable with last quarter. For the third quarter, total CapEx was RMB1.1 billion, down 35% year-on-year or up 16% quarter-on-quarter. Operating CapEx was RMB600 million, down 39% year-on-year and up 3% quarter-on-quarter. Non-operating CapEx was RMB460 million, down 28% year-on-year or up 37% quarter-on-quarter. Free cash flow was RMB7 billion, up 69% year-on-year and 10% quarter-on-quarter. At quarter end, net cash position was RMB21.3 billion, down 5% quarter-on-quarter, mainly due to strategic investment, particularly in mobile gaming developers and O2O service providers to support business growth which was partly offset by free cash flow generated during the third quarter. This year, the market value of our listed associates and available for sales financial efforts were RMB65 billion at that quarter end. This concludes our presentation. Thank you.

Thank you, John. Operator, we shall open the floor for questions now and we’ll like to remind each of our – when you raise questions [indiscernible].

Thank you. We will now begin the question-and-answer session. (Operator Instructions). The first question comes from the line of Dick Wei from Credit Suisse. Please ask your question. Dick Wei – Credit Suisse: Hi, good evening. Thanks for taking my questions. First question is on mobile games, I wonder if it’s possible to give some more color for the mobile games during the third quarter, for example, some of the game is penetration or ARPU or post engagement trend, I’m keeping this like an upgrade and how do we get more confidence out looking to the fourth quarter or into next year for some of this gamers to come back in or increased engagement. And also, if you just look at kind of gross revenue, we were taking out EP workers portion, I’m wondering what’s the trend you like if you can share in the third quarter. Thank you.

Dick, I’m sure it’s quite a few questions Dick, but it’s an important topic, so let’s try and address as many of them as we can. I think in terms of engagement, as you would expect the delays on shift the upgrades would have had some impacts on the growth rate if engagement but by the end of October we had implemented the software development kit that we needed to implement. Our games now largely have to get slog in punch analysis, announce the results, the pace of our expansion equity since this were time to normal and that’s what threw into engagement and other bad trick. So overall, our big picture view is, first of all this industry has grown explosively quickly and we’re very happy to participate in the growth, notwithstanding the temporary blip we experienced in the third quarter. Fourth quarter, overall we feel that when we spoke to you three months ago we identified several priorities beyond revenue maps migration [ph] from that about getting business including and proving our app store market share, including our launch in successful license games and we feel with Television, both of those objectives as well as enhancing the underlying mobile game infrastructure as well as retaining our clear industry leadership.

In terms of the ARPU for the mobile games, it’s between 100 to 110 for the quarter, we – that’s on a portfolio basis. Dick Wei – Credit Suisse: Okay, great. I mean, I’m going to ask another question regarding the monetization pace for WeChat having given the – I think we have the well penetrated Intel’s smartphone penetration for our WeChat. I wonder what do you think about as directing the pace of monetization beyond what we have games and small portion of advertising official account, even looking to 2015. Thanks.

I think this year we have really, a lot of very big revenue opportunity with mobile games. I think as we look at our platforms, we look at the long term potential of the platform rather than just few quarters for one or two years. I think with that in mind, we will monetize on the right rhythm I would say and clearly, if you look at what could be therefore for WeChat and Mobile QQ that there is the mobile game opportunity, there is advertising opportunity which sort of near verifully you’ve looked at comparable outside of China that’s essentially a 100% of the comparable revenue. And in support to very big market capital, we are also barely seeing and now pretending to you like that in China because the performance based advertising in China is also a proven a market with multiple market players in there. But we want to use a step-by-step approach in terms of dealing out the revenue opportunity, and when we look at that, right now, we don’t necessarily take into locate but advertising as one stream we also look at the entire eagle system which would include the available job of payment system. One there is sufficient number of people who have payment within our user base then advertising become much more effective. We look at the equal systems of advertising in there, and as a result we have invested a large number of protocol category leaders, and in overtime when we step-by-step obtain these category leaders and the entire value change at as they represent [ph] our ecosystem then your revenue opportunity will be even bigger. So I think we are building our piece, infrastructures, step-by-step and to some extent because after the fact that we unlocked a very big opportunity within mobile games. And that’s sort of – to some extent beyond our recent new expectation. We could afford to slowdown the other monetization under that but a lot of the basic infrastructure is being viewed out and as you can see we are testing out a lot of the monetization infrastructure is being viewed out and as you can see we are testing our a little bit, the monetization infrastructure, without dialing the intensive hub because we want to do it in the step-by-step. Once we have enough of this leverage build out them we can turn on monetization as we want. Dick Wei – Credit Suisse: Okay, great. Thanks for the detailed explanation. Thanks John and

Send somebody John – Dick Wei – Credit Suisse: Great. Thanks for the detail explanation, some might on John and subject.

Thank you, Dick, Next question.

Thank you. The next question comes from the line of Eddie Leung from Merrill Lynch. Please ask your question. Eddie Leung – Merrill Lynch: Just on the out of twelve pick, the typical buy is more color on the pull grants of lifestyle paid services as well as your online thing because we have head some news report, potentially some major programs or milestone by the end of this year. And then just for housekeeping, could you give us an update of the Apple of your PC dates. Thanks.

So Eddie, what do you mean by lifestyle payment, I don’t quite understand. Eddie Leung – Merrill Lynch: Sorry, your lifestyle services as far as your mobile payment.

Okay, in terms of our mobile payment the number of users have been actually going quite nicely and as you can see we have leveraged the same infrastructure of our mobile payments to power two different mobile payment solutions; one is Weixin payment which has been growing, and we also have launched the Mobile QQ Wallet which leverages the same mobile payment infrastructure and that has also been growing very nicely and there is sort of new – there is an overlap actually between the two payments loop just that you these two solutions have their own use base and together they represent pretty strong growth of our payment solution. And in terms of the lifestyle services, I think you know, it’s a story of continuous growth we have incorporated, if you think about in the beginning, we have incorporated DP brochure, we have also just incorporated 5, 8 lifestyle services within our Q2 App. So with the addition of these lifestyle services, we are able to provide our users with a better user experience and at the same time we are able to create payment instances to drive our payment solution adoption and overtime we believe these merchants can also be very important advertisers in our platform. So I think the whole ecosystem growth I think is on a consistent basis. Now in terms of the bank, we have got good progress in terms of the formation of the management team, we have their very solid management team already build out, and we have passed a couple of milestones as set by the regulator. And I think the progress is ongoing and is actually quite smooth.

And in terms of the outwall passage John has talked about the PC came up. For MOG, that range from 270 to 390, and for unscheduled gains it ranges from 100 to 120 per quarter. Eddie Leung – Merrill Lynch: Thank you, Martin and John.

Thank you, Eddie. Next question please.

Next question comes from the line of Chi Tsang from HSBC. Please ask your question. Chi Tsang – HSBC: Good evening, thanks a lot for taking my question. I just had two questions. I was wondering if you could walk us through sort of the pumps should we be thinking about advertising on WeChat over the next sort of quarters or months in terms of products, and in terms of what you think might appetizer adoption. I think secondly, my question is about frozen marketing. Looks like there has been it would be at a pretty low on a year-on-year basis, I wondering if you can talk about how we should be thinking about those marketing of third quarter and upcoming fourth quarter. Thank you.

I think in terms of the WeChat advertising, I actually talked pretty extensively in the first question, I don’t have much to add, I would say that there is a pretty big opportunity, we are doing all the steps to prepare ourselves to it and we’re not in a rush to do it but at the same time we will continue to push ahead with it. In terms of self-marketing, maybe Jon can talk a lot. I would say sort of fourth quarter is typically a stronger season for sales and marketing right because it’s year-end, and we want to make sure that there are lot of business units which want to lease their marketing budgets to year end, and there is also the traditional Chinese Holidays which are conducive for cleaning out marketing program. So, typically it’s actually coffees and heavy season during the year.

And at the end, same time we have less improvement causing to the descaling of value converse businesses. Chi Tsang – HSBC: Okay. I was wondering in terms of our WeChat, what’s your view on advertising and the moment page. Thanks.

There is a potential but I think we – when we start experimenting with it, we’ll let you know. Chi Tsang – HSBC: Okay, thank you.

Thank you, Chi. Our next question please.

Next question comes from the line of Philip Wan from Morgan Stanley. Please ask your question. Philip Wan – Morgan Stanley: Hi, thank you for taking my question. My question is about Mobile QQ and WeChat. Could you share with us the user overlap and also going forward how would you like the two different platform to position heading our mobile F&F service in China?

Well if you look at the Mobile QQ and WeChat, what I would like to highlight is the issue of them is sort of a very significant trend. Even if you pan out the PC portion, Mobile QQ is in excess of RMB500 million in terms of MAU and Weixin and WeChat how did you gather is September more than 450 million MAU. And there is some overlap between the two because if you just do a natural addition, right now it’s more than the total internet population in China. So I think we don’t actually disclose the actual overlap but you can almost like do the map yourself and you’re not going to be far off into overall overlap between the two. What I would like to say is that with respect to both Mobile QQ and WeChat, the two of them are growing actually at a very healthy and consistent pace. The year-on-year growth of Mobile QQ is 36% whereas the year-on-year growth of Weixin and WeChat is 39%. So the two of them are almost like going on the same pace and doing quite fast which suggest that both of them are very healthy. And what I would say is, Weixin is a – on a relative basis have more exposure on sort of the first year and higher end users who have not – and moment show users you users who have not been using QQ in the past. Whereas QQ is actually were strong in single digit and third tier cities. And also QQ has got a PC component then as a results is actually used quite a bit in the office by my colleague workers. And at the same time QQ is act very population our and specialist, one first time internet users. Philip Wan – Morgan Stanley: Thank you.

So you have a follow-up question. Philip Wan – Morgan Stanley: Right, so my question is advertising business. It seems like this quarter your Q4 performance based advertising has been a driver and I just wanted to ask if you could share with us any operating metrics that come for the advertising price, conversion rates, how would that compare to on the PC platform, that would be very helpful. Thank you.

I briefly mentioned last quarter that the conversion rate on Mobile QQ is multiple times higher than the conversion rate on PC Qzone that comment last quarter would still hold true today. The pricing is not identical to PC Qzone, it’s moderately higher primarily because most of the advertisers who advertise on PC Qzone but also want to advertise on Mobile Qzone but as an additional kind of advertisers in the form of app developers who find this as very powerful medium for distributing and storing their apps. So they had some extra big intention. But in general we feel that the pricing of Guangdong [ph], whether PC or at Mobile is substantially lower than that of the comparable performance advertising medium at China, and that’s the fundamental reason why we would see very healthy advertiser demand for Guangdong [ph]. Philip Wan – Morgan Stanley: Alright, thanks for the comment.

Thank you for the questions. The next question comes from the line of Alan Hellawell from Deutsche Bank. Please ask your question. Alan Hellawell – Deutsche Bank: Good evening, thank you very much. First question would be, basically could you involve our estimates, how much P&B and eCommerce get to transact on your mobile platforms with JV and alike. But also what seems to be a widening array of very creative, an informal mean of selling items on the platform.

In eCommerce we don’t disclose the actual numbers but I would say two points; number one is in terms of – we have always said for eCommerce right we would like to create two different experiences, the first one is a centralized entry point for market where sort of you can find any product that you want to find and that’s the entry points of our shopping channel within Weixin and within Mobile QQ. And I would say due to the hard work between the two teams, the JV team and our teams, there is a continuous increase in terms of the sell through in those entry points, that’s sort of, on our centralized eCommerce. In addition to that, we would like to catalyze the growth of the decentralized eCommerce within our ecosystem, basically different merchants they would be able to form relationship either themselves or through a third-party platform like JVs, open platform in order to transact directly with the users. And with that we actually have seen a pretty encouraging signs of results and we’re seeing a pretty encouraging trend of growth of decentralized eCommerce. I think these are the two points I would say with respect to eCommerce within our social network. Alan Hellawell – Deutsche Bank: Thanks. And my second question would – we hope to return the YingYongBao. I’d love to get a sense as to how much revenue you generate by cooperating games through YingYongBao? And actually more general question, how do we book revenues in third-party gains across that Tencent Mobile signatures?

In terms of YingYongBao, right now it’s generating not a large revenue because as you can see in our strategy description, in YingYongBao number one, the growth has been actually quite steep in the past year. And as a result the most important thing for us to focus on is actually getting the infrastructure up and running. Getting our market share up and at the same time getting some of the product differentiation up, so we actually did very little in terms of monetization. But overtime as sort of, YingYongBao has got very significant traffic and clearly the app store is a very effective way of distributing games and other apps, and particularly with the games there is clear revenue model than overtime we would be able to benefit from the publishing of third-party gains, and that would in YingYongBao will become another important platform for us in terms of distribution of the games, in addition to our game center within Mobile QQ and Weixin. In relation to the booking of revenue for mobile games, actually we – at this point in time we booked based on net basis, i.e., we net off the – that caused the games the revenue and however, we are in the middle, we’re visiting whether you know third-party mobile games were booked on a gross basis and anywhere this point in time the revenue generated for third-party stopped that significant. So YingYongBao [ph] has a material change. Alan Hellawell – Deutsche Bank: Thanks. And very quickly, I think one of the powerful tools that YingYongBao rise to the dominance of the very stable economic terms, you guys offered to the third-party app developers. Are there methods that you’re able to pull, like do you offer revenue share to your operator partners or are there any other tools that might account for the third-party in terms of rise in market share?

No, I don’t think there is favorable commercial terms is actually key driver of YingYongBao’s growth. As we discussed in the prepared remarks, the growth of YingYongBao is really because of the fact that in the past we have a lot of app platforms which do generate app downloads, but they are scattered around within many different halves, and what we did with YingYongBao is actually create a centralized focal point so that all these downloads will be aggregated within the central point and the result of it is, when the users have gone through one downloading experience, they know that they can actually keep coming back to more downloads with YingYongBao, and that’s actually sort of, one of the key reason why YingYongBao has picked up its market share very nicely. The other one is, of course, we have actually put in a lot of pretty differentiated functionalities and features within YingYongBao, we can download apps faster, we can actually download apps with less traffic, mobile traffic, and we have better security, we have better recommendation, and as a whole, as a better product it actually helps YingYongBao to pick the market share. These are the two main reasons.

Next question please.

Next question comes from the line of Cynthia Meng from Jefferies. Please ask your question. Cynthia Meng – Jefferies: Thank you management, I have – I would like to get some more color on the milestones on target for mobile payments membership development as they affiliate companies such as JV and gaming will also benefit from the expanded campaign user base. If management could give some more color on the membership development momentum that would be great. Thank you.

Yes, I would say the momentum has been strong and it has become stronger after the Mobile QQ Wallet has been introduced because Web2 platforms basically sort of pushing for mobile payment. And it has also been stronger after web incorporated more partners into the mobile payment ecosystem. So now we would like to give you these two directional comments. Cynthia Meng – Jefferies: Thanks. Can I also ask a follow-up question on the mobile game pipeline. Should we expect that the next quarter or next year mobile game launch to be somewhat stable at somewhat stable pace, maybe four games into deals per month and if management can talk about some major genres involved, that would be great. Thank you.

I think chance of the pace of game launches if you look back over the last 12 months there has been games acceleration from maybe two games per month in the earlier month to four or more games per month today. So we’re pretty happy with that gentle acceleration curve. In terms of genres spent, we’ve been quite thoughtful about identifying what are the genres that can’t be popular in China, what established, what is the genres that are popular worldwide, that’s well established, and what are the genres that are not popular in China today but we think it should be popular in the near future based on trends we see elsewhere in the world and we’re relatively disciplined about trying to bring our users the broader range of genres. That’s also kind of derivative question which you maybe wanting about as well which is the mix of in casual games that attracts a large number of users, mid-core games that typically attract a small amount of users but have higher revenue potential. And if you look back at our philosophy you will see that we started off with a number of fairly cash self-developed games, then we subsequently laid on a few in a more mid-core self-developed games; in the third quarter we published a number of very successful licensed casual games and going forward you should expect us to publish a number of licensed mid-core games as we continue to build forward but – it’s an interesting space, we have very, very clear market leader in terms of users but even with that clear market leadership in terms of users what we see is that’s certain in sub categories like in a running games where we basically own the categories, we created the category, those in China, but other substantial categories where we really have minimal presence. So we think with the right products and the right execution, we can continue to grow the market and starting to grow our presence. Cynthia Meng – Jefferies: That’s great, thank you very much.

Thank you, Cynthia. Next question please.

Next question comes from the line of Alex Yao from JPMorgan. Please ask your question. Alex Yao – JPMorgan: Hi, good evening everyone and thank you for taking my question, just follow-up on the previous question. Can you probably little bit on the mobile game growth all through the next few quarters for China’s overall mobile gaming market, what could be the key driver in 2015 and why we would drive your mobile game revenue growth in 2015? Thank you.

Yes, I think for the China market as a whole, one driver will just be increased penetration of smartphones, so we’ll be at diminishing grade. And then the second driver will be increased conversion of free users to paying users. The third driver will be increased ARPU and that will probably manifest itself through a user shift from the casual game side towards to more mid-core games. So if you look at the ARPU figures John just quoted, you can see that there is a very wide gap today still between our mobile game ARPU versus our PC real playing [ph] game ARPU with our PC advanced casual game ARPU somewhere in the middle. So anyhow, we think that for the industry as a whole, it’s still relatively only growth stage, particularly in terms of the mix shift from casual to more mid-core games, but we’re ready to make complain [ph] in that assessment because we do a lot of work in terms of what’s happened in Japan, what’s happened in Korea, what’s happening in the U.S. and in Europe, and what’s interesting is we can see in all of those markets overtime; A, there has been a shift towards in a more mid-core games; B, that shift towards mid-core games is in hunts monetization, and C, interests simply Top10 mid-core game actually has pretty good longevity and if you look at the bigger stock in a mid-core games in Japan, in Korea, and the U.S., that have actually typically been at the top of the respective tables but 12 to 24 months. So I think when we look at the industry while that choose to be ups and downs on along the way on a week-by-week or month-by-month basis therefore trends for the industry fields are comfortable. And then in the position we’re coming into the industry is we have – as I mentioned, my father got his share of users, but we’re relatively under monetized in terms of our revenue share versus our user share and would be certainly have the expertise on PC games to do mid-core, if you look at our major PC game titles that mostly in a mid-core, even hard-core likely presence, and so if we can transfer that expertise of mid-core games from PC to mobile and boost our monetization then we think we’re in quite a comfortable position. Alex Yao – JPMorgan: Got it. The second question is about the video business, can you talk about video business outlook, particularly your content strategy for 2015. Thank you.

Yes, our content strategy is to continue to be aggressive, what we think is once a serious participant in the online video industry and the online video industry is growing at the revenue growth rate it’s growing then anyone almost has no choice but to be compatible with different terms of going out there and not going to go in a high profile content. Like our peers, we are also doing some experiments in turn with content where we actually play a role in the production process or in the execution process, but I emphasized that we don’t see that in a pattern as a cost inflation, that’s more about just broadening the range of content available to our users and continuing to grow on our own. As Pony mentioned in the opening remarks, our online video views increased by about 150% year-on-year in third quarter which we assume is substantially better than the industry and we would like to continue growing our online video use healthy rate and one way of doing that is by continuing to invest in content. There is other things we are doing as well in terms of optimizing our traffic flows internally so that we market the right content to the right users and those users who enjoy one piece of content on video platform, how can we notify them and bring them back for other pieces of content but both – we certainly intend to continue to be aggressive in terms of purchasing content. Alex Yao – JPMorgan: Thank you very much.

Thank you very much, Alex. Next question please. And operator, in terms of time we will take our last three questions please.

Certainly. The next question comes from the line of Alicia Yap from Barclays. Please ask your question. Alicia Yap – Barclays: Hi, good evening everyone, thanks for taking my questions. My question is related to mobile games. So specifically management comment what is the split of your smartphone games revenue that come from iOS versus the Android, and in related to that, is there any way you could foresee the issues that you were facing under iOS requirement that could help you manage or predict the situation better. And if you look back, could this issue be avoided at all, and would that happen again, and in fact, your future expansion upgrade on the iOS.

Hi, this is John. I’ll try to answer at least nine of those questions. Okay, we’re just past by mid 12:00 and you can kind of come back at me again, it takes me on those. So I think that the first question with regard to iOS as a percentage of game revenue, if you look at the mobile phone industry in China, I think the iOS is a team’s proportionate smartphone in China but it’s been widely estimated the iOS users who have spent two to three times as much than users on looking through items and so forth. So that will give you some sense to breakdown iOS as suppose as Android. Now if the premise of the question was that’s fully in turn flows during to how you think about what happened to our smartphone game revenue in the third quarter, I just sort of say that premise is not quite right because while the specific log-in requirements with the iOS ecosystem, we also synchronize our operating tax between iOS and Android, so if something happens that means we can’t really shift upgrade pack for game on iOS than we won’t really upgrade packs for Android either and so iOS is ready in order to ensure consistency of user experience. So the issues we alluded to in the third quarter apply to both iOS and Android together, not just the one operating system. So I think that was the first couple of questions you asked. And then your subsequent question, whether this can be avoided in the future. So we think that this was a learning experience, iOS having curated environments and that can be great for consumers, probably else you need to cooperate with the curator, and iOS has a guideline and during this process what we came to better understand the nature of those guidelines we developed medical activity, what looked with iOS in terms of management those guys are always going forward. So why it would be optimistic for me to say that they will never be unexpected guidelines in future we need to comply with. I think the issue this time around, it was not that there was an unexpected guidelines but it took us an extended period to figure out how to comply with the guideline but it’s now the lines of communication much clearer and we are planned in closing processes such that going forward we can come to a much quicker accommodation of what our partners would like us to be doing. Alicia Yap – Barclays: Great, understood. And then my second question is on the YingYongBao, right. So how should we think about the revenue contribution in the future given that I think the smartphone shipment growth has been decelerating a little bit. So total – it seems like the total apps download per user also has been seeing some slowdown in the market. So what is your view on the future potential of these revenue coming from the YingYongBao? Thank you.

Well I think in terms of YingYongBao – number one, our YingYongBao market share has actually grown very significantly and there is a very large volume of downloads, and as I said earlier, we have not really monetized the downloads that much, so I think that is sort of new potential for monetizing these downloads which could be unleashed in the next few quarters. Secondly, I think it is true that people are in general downloading fewer apps as a result of newer incumbent apps has got a stronger staying power to some extent but the situation is actually difference from category apps to category apps. For example, if you’re talking about game apps then I think just looking at our user behavior there is still quite strong demand looking for new games and I think newer depths, knew exactly what new will be conducive to the monetization of YingYongBao overtime. And thirdly, I will say in YingYongBao’s monetization is not just sort of new games but also there is some advertising aspect as I said, there is also set of equal system aspect which is if we are able to deliver downloads to different partners then it’s more likely for our app partners to adopt different infrastructure interest from us including our app network, including our payment solution, right. So I think the value of YingYongBao is suited just beyond pure game operation. Alicia Yap – Barclays: I see, understood. Thank you so much.

Thank you, Alicia. Next question please.

Thank you. The next question comes from the line Erica Kunverken from UBS. Please ask your question.

Good evening management. My first question is about your international strategy, I’m just wondering if you can just update us on the overall pace of growing your international base for WeChat users, and what kind of investments have you allocated to that in the third quarter? The second question is about the gross margin, just about a sequential decline in the gross margin on an ex-eCommerce basis, I’m just wondering if you can just elaborate a little bit more on that and how much did you spend on the video content? Thank you.

I think on the international side we’ve mentioned in prior quarters that there are certain markets that were proving hospitable to our international expansion thinking about the WeChat application and we would continue to focus on those markets and so we’ve been doing that and we’ve also launched a couple of other apps in those markets actually. And then there is other markets, especially the western world markets where advertising is more expensive and less effective, one way it was proving harder to make headway and so during the third quarter we’ve reduced about sales and marketing support for international activities given that strategic shift, maybe I’ll pass to John on this.

In relation to the dividend margin, the gross margin, ex-eCommerce, the reason for driving this is; number one, we have less smart phone games revenue in this quarter and number two, we have increased content cost in particular in relation to provision of games incentives for some licensed game content. I think next question?

Great, thank you.

Thank you.

Thank you. The next question comes from Wendy Huang from Standard Chartered Bank. Please ask your question. Wendy Huang – Standard Chartered Bank: Thank you. I have two quick questions, one is, given that there is so many partners on Tencent ecosystem, do you have an ambition to build your third-party product service platform similar to Amazons AWS in the U.S. and [indiscernible] in China? And secondly, regarding your comment about mobile game earlier, so you mentioned that the net mobile game revenue split between the social network key and again has not materially changed, does that mean it still like one to two relationship? And also can you provide gross bidding down between the mobile consortium and awaiting in as raise in-house gain versus third-party gain. Thank you.

Well, in terms of the Cloud service, I think you’re spot on, we are actually offering the Cloud service to – not just our partners, to our partners but also to the wider app community. We believe that it is a way for us to engage with app developers, it’s a contribution to the app ecosystem but also at the same time it help us to establish closer relationship with potential partners that could be our partner on YingYongBao, it could be partner on our advertising platform, it could be a partner with our other payment services. So that’s an important part of our overall offering to our partners. And right now we are the number two player in the market and it has grown very significantly, maybe it’s at some point of time you want – when we get to the right time we may give you an update in our strategies action in our presentation but this is indeed a business that we are incubating which has grown to a pretty significant size already.

In relation to the booking of mobile games revenue and those platforms and online games, I think the state would be somewhat like two versus three. I hope you can relate the in-house license games we have mentioned that the majority of the revenue in both Q2 and Q3, and from in-house games. So when we launched the number of successful license games during Q3 but they tends to be of more casual nature of revenue maximization nature. In terms of the revenue split between Weixin and Mobile QQ’s game publishing platforms we haven’t discussed beyond saying that there are actually both by substantial and they bring us different uses and other uses in some extent enjoy different games so the people are trying Weixin tend to enjoy fighter plane games whereas the people playing QQ might enjoy racing games for example but the two of them are both substantial contributors within that aggregate smartphone game ticket that we disclosed. Wendy Huang – Standard Chartered Bank: But which one is bigger at the moment, and is there any users who have difference on Mobile QQ and Weixin platform in terms of the mobile game they play?

I think we haven’t discussed which is bigger and you should think of them as being very roughly somewhat similar in size rather than one being dramatically larger than the other. In terms of use of behavior, there are some clear differences, one difference as I alluded to is what kinds of gains people like and maybe the guys who have Weixin already own cars and so it’s quite interesting for them to play a racing track game. Another difference is that in general, the conversion rate of users at the chat platform to users of games or players of games is higher on QQ than it is on Weixin, and we think that’s primarily because the QQ team had a decade’s experience moving people from chat to games on PC whereas it’s a lower conversion rate on Weixin and we’re looking at ways to enhance the conversion rate from people chat into people playing games on Weixin that we think would be quite effective. Wendy Huang – Standard Chartered Bank: Thank you.

Thank you, Wendy. And I think operator we’re winding up the call now. If you wish to check our press release and our financial information, please visit our corporate website at www.tencent.com/ir. An instant replay of this webcast we’ll provide shortly. Thank you and see you next quarter.

That does conclude our conference for today. Thank you for participating Tencent Holdings Limited 2014 third quarter results announcement conference call. You may now disconnect.