Ladies and gentlemen, thank you for standing by and welcome to Tencent Holdings Limited 2020 Fourth Quarter and Annual Results Announcement Conference Call. Well, at this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Ms. Wendy Huang from Tencent Investor Relations. Thank you. Please go ahead.

Thank you, operator. Good evening. Welcome to our 2020 fourth quarter and annual results conference call. I'm Wendy Huang from Tencent IR team. Before we start the presentation, we would like to remind you that it includes forward-looking statements, which are underlined by a number of risks and uncertainties and may not be realized in the 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-IFRS 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 risk factors and non-IFRS measures, please refer to our disclosure documents on the IR section of our website. Let me now introduce the management team on the call tonight. Our Chairman and CEO, Pony Ma, will kick off with a short overview including ESG initiatives. President, Martin Lau, will discuss strategy review. Chief Strategy Officer, James Mitchell, will speak to business review and the Chief Financial Officer, John Lo, will conclude with financial discussion before we open the floor for questions. I will now turn the call over to Pony.

Okay, thank you. Good evening everyone. Thank you for joining us. 2020 was unprecedented year with many challenges. Having said that, we have delivered solid results. We believe our low cost operating and financial results testify to our focus on user value and technology innovation. Let me walk you through some of our key achievements. In Social with strengthening Weixin's value proposition for users and enterprises, our new feature, Video Accounts enabled public sharing of informative and educational content in video format. Mini Programs continued to deepen penetration in more user cases with annual transaction volume more than doubling year-on-year. For QQ we increased stickiness among young users by enriching shared experience and catering to their entertainment and eLearning needs. In games, our worldwide revenue grew 36% year-on-year with increasing contribution from international markets. We reinforced our leadership across Mobile and PC by expanding user bases for major games and launching successful new games. In content, we extend IP value of course literally literature, animate, games and long form video to create unique and appealing content. We became clear #1 in China video subscription market. In advertising, we integrated advertising platforms, strengthening Tencent's own properties as well as Mobile ad network preferred choices or advertisers. In FinTech services, payment user engage and commercial payment volume increased healthily. We will continue to work closely with the regulators and industry partners to deliver complaint FinTech products, while prioritizing risk management over scale. In business services, Tencent Meeting has become the largest standalone app for cloud conferencing in China. Innovations such as our customized Star Lake server solution and self developed T-block data center technology enhance our cloud services performance and cost efficiency. Now let me go through the headline numbers for the fourth quarter. Total revenue was RMB 134 billion up 26% year-on-year and 7% quarter-on-quarter. Gross profit was RMB 59 billion, up 28% year-on-year and 4% quarter-on-quarter. Non-IFRS operating profit was RMB 38 billion, up 26% year-on-year and stable quarter-on-quarter. Non-IFRS net profit attributable to equity holders were RMB 33 billion, up 30% year-on-year and 3% quarter-on-quarter. Moving to key services. In social, combined MAU of Weixin and WeChat further rose to 1.23 billion. Smart devices MAU of QQ was 595 million. Martin and James will speak to each of our other key services later. In 2020, we continued to implement various initiatives around our mission of Tech for Good. As the world navigates through COVID-19, technology play a more significant role in restoring normal life and business activity. We provide users with convenient access to healthcare, education and public services in our products and technology. We help enterprise clients to maintain business continuity with various tools and products. Mini Programs and Weixin Pay facilitated consumer spending during the lockdown, and expedited digitalization of offline retailers and brands after that. For charities, we have built an efficient online fundraising platform and utilized technology to assist their digital upgrade. In 2020, our flagship event, 99 Giving Day engaged over 18 million users and 10,000 charities, raising RMB3 billion in three days. For inclusion, we are bridging the digital device for the elderly and the disadvantaged. Weixin Relative Card enable senior users to enjoy the benefits of digital payments without hassles. And image to speech in QQ helps visually impaired users interact with friends. We are also facilitating a rural virtualization with WeCounty initiative. For other ESG commitment, we are moving towards carbon neutrality by leveraging AI, big data and cloud computing. We adhere to privacy by design and deploy advanced security technologies to safeguard users’ data. To advocate the digital wellbeing for teenage users in China, we continuously upgrade our Healthy Gameplay System. Looking forward, we will continue to integrate the social responsibility into our operations, products, and services, creating long-term value for all stakeholders. I will now invite Martin to discuss strategy review.

Thank you, Pony and good evening and good morning to everybody. In this section, I will discuss our strategic investment in innovation which we believe is the main driver of our business performance in the past and for the future. With a focus on user experience, we pursue continuous innovation to enhance our platforms. We invest in incremental innovation to enrich existing product experiences and also invest in transformative innovation to create new products to certain new user needs. Many of these innovations have taken years of patient investment to yield results. In Communication and Social for example, we started with Mobile Chat and added Social Networking, Official Accounts, Payments, Mini Programs over the years. At the present time, we are incubating Video Accounts as a new innovation. In the area of games, we created new and exciting titles internally and through partnerships, as well as continuously upgrade our game-tech. In SaaS, we identified this emerging opportunity in China when we announced our strategic upgrade to the industrial Internet in 2018. Over the past year we achieved breakout growth in productivity and communications software. In HealthTech we are utilizing our AI Mini Programs and communication tools to solve industry pain points. In ecosystem we support innovative companies via capital investment and business partnerships to better serve users and enterprises. For the rest of this section I will discuss how innovation has driven each one of these areas and how it will continue to drive our sustainable long term growth. Let's first start with Weixin Video Accounts which represent our recent innovation in the Communications and Social space. Utilization of content for easy consumption is a key global trend. We saw significant increase in uploads and sharing of short videos within Weixin Moments and chats. Hence Video Accounts was created as a separate ID-based short film content creation platform within Weixin. Video Accounts enable video uploads and sharing as well as live streaming in a public audience. Through aggregating content providers digital assets within Weixin such as Official Accounts and Mini Programs, Video Accounts help reinforce the branding and facilitate users engagement and transactions. In addition, the unique strength of our Video Accounts linking public domain to private domain, which provides an unparalleled channel for businesses to acquire and manage their own customers. Video accounts is attracting increasing number of high-quality content providers who generate both informative as well as educational and entertainment content. We recommend content to users based on social, interest graph and algorithm which can diversify the mix of users content consumption. Turning to games, during the year 2020, we launched several new and exciting titles and made breakthrough in new technology applications, such as gaming and AI and cloud gaming. For new games we released Valorant on PC for the international markets, as well as Moonlight Blade Mobile and Call of Duty Mobile in China. Each game offers unique experience by innovating in character abilities, environmental design gameplays and controls, and thereby achieving best in class performance. Valorant, a team based tactical shooter, which Riot Games spent over six years to develop, was the most successful in new PC game internationally. In China, Moonlight Blade Mobile was the best performing new MMORPG for the year and was supported by our proprietary game engine [indiscernible] to 10 years of dedicated development. Call of Duty Mobile, the highest DAU game launched in 2020 in China is a high-quality complement to the franchise console and PC versions. For existing titles we are continuously innovating games to refresh user experience. For example, Honor of Kings is an early adopter of next-generation rendering and high dynamic range imaging technologies in China, which enhances visual effects and makes animation more realistic, detailed and natural. And Honour of Kings was the top grossing mobile game in China for the fourth consecutive year and worldwide for the second consecutive year. We also tested game AI Wukong in Honour of Kings which attracted over 50 million player participants within four days of trial. Wukong is the first AI agent able to play full mobile game with deep reinforcement learning, and it will be applied to more game genres should enhance the PvE experience. In cloud gaming, we are the first mover to launch platforms and games providing high quality in-game experience across different devices, among which START platform is cooperating with leading TV manufacturers to offer MMO games on smart TV. XianYou platform offers more than 100 mobile games including Honor of Kings and Peacekeeper Elite to play even on low end phones. Moving on to communication and productivity SaaS, we achieved breakout growth in 2020, especially for WeCom, Tencent Meeting, and Tencent Docs. We strengthened interoperability between WeCom and Weixin allowed increasing number of retailers, service providers, and teachers to connect to over 400 million users. This also boosted the WeCom's customer base to 5.5 million enterprises. We are upholding the open strategy and introduced multiple cooperation model to wrap up the growth partnerships with OA application vendors in order to better sign up enterprises clients together. Besides, by leveraging synergies with Tencent Cloud sales force, WeCom successfully increased penetration K-12 education market. In view of growing needs for virtual meetings, we launched Tencent Meeting in 2020 which accumulated over 100 million users and has become the most used standalone app for cloud conferencing in China. During the year we launched enterprise version for key accounts and enhanced e-meeting capabilities, delivering superior experience for enterprise customers. We developed new solutions, rooms and connector in order to expand Tencent Meeting compatibility with the client's existing devices, saving costs for them and facilitating adoption for us. Our signature productivity solution Tencent Docs is the first mover in China to provide online solutions that efficiency generate tables based on during collaborated data entry. During the year we continued to add new features such as AI supported optical character and speech recognition input to enhance user experience and productivity. Through extensive integration with other software such as QQ, QQ Browser and other SaaS products, Tencent Docs expanded use cases and recorded over 100 million monthly active users in 2020 more than double or quadrupled year-on-year. Next on Health Tech, our product metrics includes Tencent Health, Tencent Medipedia and Health Code, providing innovative solutions to digitize offline healthcare services and benefit the entire industry. Tencent Health, and all in one entry point for online healthcare services has added more COVID-19 related services such as appointment for testing and vaccination. Total active users exceed 400 million. We also included medical insurance e-certificate and electronic health card within Tencent Health. Users can bundle medical insurance e-certificates with their social basic medical insurance accounts to conduct mobile payment in more than 10,000 hospitals, 200,000 pharmacies across 200 plus cities. Our electronic health card serves as a health information management tool for users and their families and now is available online in more than 2000 hospitals. Tencent Medipedia, a reliable medical information source, expanded the number of medical terms to over 120,000 leading in China. We utilized AI technology to enhance medical experts efficiency in reviewing content. We enriched content formats from text, picture to short film and live streaming. Tencent Medipedia content is distributed via cell phones and third party platforms attracting over 7 billion page views and video views in the year 2020. Health Code is an easy entry point for users to get their e-pass automatically based on health information they filled in. During the pandemic, Health Code facilitated people's efficient movement in and out of public areas nationwide. Within the year, Health Code set a billion users with over 65 billion total visits becoming the most used ePass for verifying health and travel status in China. Finally, complimentary to our investment in innovation to drive our core businesses, investment in ecosystem is also our strategic focus through investments we support innovation for our partners and investees, which ultimately together better serve users and enterprises. In consumer Internet, we identify investments, which capture emerging opportunities arising from technological advancements, and user behavior changes. User value and product experiences are top priorities for us. Our key investment areas include content games, FinTech services, ecommerce, auto and education. In industrial Internet, we seek to build close relationships with value chain players to support the evolution of various industries. Leveraging our technology strength, we assist digital upgrade in sectors such as education, healthcare, transportation, and retail. In that process, our communication and social services can also connect users with more services in convenient and efficient manner. Our investment principles are to invest in high quality management teams and best in class companies which have deep industry knowhow and core competence in their respective fields. We aim to support the investees innovation while enabling them to grow and operate independently. Through our investments we do not only nurture, nurture the growth of startups, but also create synergies that are value added to users. An additional benefit of our investment strategy is that we can then focus our internal resources, deep developers, people and bandwidth on driving innovation within our core businesses. This two-pronged strategy has been pivotal in driving sustainable development for the company and the industry as a whole. Now with that, I'll pass to James to talk about our business review.

Thank you, Martin. For the fourth quarter of 2020, our total revenue grew 26% year-on-year. VAS represented 50% of our revenue within which online games were 29% and social networks 21%. Online Advertising was 18% and FinTech and business services represented 29% of our revenue. For Value-Added Services, segment revenue was RMB 67 billion for the fourth quarter, up 28% year-on-year and down 12% quarter-on-quarter. Social network revenue was RMB 28 billion representing 27% year-on-year growth, primarily driven by live streaming services and in-game item sales. Sequentially, revenue growth from digital content services was offset by a revenue decline from in-game item sales. Total VAS subscription accounts grew 22% year-on-year to 219 million subscriptions. Our video subscriptions increased 17% year-on-year to 123 million subscriptions. We strengthened our market leadership through self commissioned animated series, deepened -- deeper cooperation with channel partners, and then expanded OTT user base. Our music subscriptions grew 40% year-on-year to 56 million subscriptions benefiting from improved user retention and operable strategy. Our online games revenue increased 29% year-on-year to RMB 39 billion driven by more smartphone game players and a higher paying user ratio. Revenue decreased 6% quarter-on-quarter due to normalized user activity and seasonality. For smartphone games total revenue grew 41% year-on-year to RMB 27 [ph] billion reflecting robust growth from in-house titles including Peacekeeper Elite, Honor of Kings and PUBG Mobile, as well as our new massively multiplayer role playing game, Moonlight Blade Mobile. The PC client games revenue decreased 1% year-on-year to RMB 10 billion as softness of Dungeon & Fighter offset growth from League of Legends and from Valorant. Focusing on Weixin, Martin has already discussed our Video Account strategy and product, but I will touch briefly on live streaming and video accounts which facilitates real-time one too many interactions. Content creators and brands can use live streaming to engage with users via red packets, co-hosting, and audience dial in. Additionally, Weixin launched the startups feature, allowing users to share their current emotions and thoughts through pictures or videos and connect with likeminded friends, and animated emojis enabled users to express themselves more vividly online. Moving to QQ, we focused on enhancing interactive experiences within vertical communities. A content oriented communities we introduce the hashtag feature and trending topics within Mini Worlds which resonated the Generation Z set users and increased Mini World data user engagement. For game communities we launch joint promotions and celebrity eSports competitions for games such as Honor of Kings and Call of Duty Mobile. Users can discuss game related topics within interest groups in Mini Programs, while obtaining endgame incentives. For learning communities, we partnered with educational institutions to offer quiz challenges and question and answer services, fostering a vibrant study environment. Looking at our game activities within China, in battle arena games, Honor of Kings released its biggest ever update in January with new heroes, skins and user interface. We upgraded the game's rendering technology to enhanced visual effects with minimal performance overhead. For shooting games, Call of Duty Mobile attracts hardcore players with its fast paced and competitive FPS experience. For role playing games, Aurora Studio extended the Moonlight Blade IP from PC to mobile, and the mobile game ranks the top grossing massively multiplayer role playing game on iOS during the fourth quarter. By the end of 2020, we have distributed over a million switch consoles in China. Pony mentioned that Healthy Gameplay System which helps parents manage younger users in-game play time and spending. During the fourth quarter players aged under 18 years old accounted for 6% of game gross received and players aged under 16 were 3.2%. Internationally our game revenue rose 43% year-on-year to RMB 9.8 billion. The League of Legends World Championship Finals attracted over 45 million teaching current users, a record high viewership for eSports. League of Legends mobile version of Wild Rift is further expanded the League of Legends franchise user base. PUBG Mobile ranked as the most popular smartphone game by monthly active users for the second consecutive year, and its flagship tournament was the most viewed eSports competition among all mobile games. We're increasingly seeking to create games with global appeal. By collaborating with renowned console game and animate IPs, we can bring our new mobile games to wider global attention and we're investing in PC and console studios that are leaders in emerging platforms [indiscernible] future nurture fan bases to our platforms. Moving to online advertising, our advertising revenue was RMB 25 billion in the fourth quarter up 22% year-on-year and up 15% quarter-on-quarter. We experienced increased demand in the education sector, ecommerce platforms and fast moving consumer goods advertisers. Also related ad revenue benefited from a domestic car sales recovery and from consolidation of Bitauto. Our social and others advertising revenue was RMB 20 billion, up 25% year-on-year and 15% quarter-on-quarter, driven primarily by Moments in our mobile ad network. Moments revenue maintain growth as we enabled performance oriented advertisers to link their ads with their mini programs, so boosting their transactions and sales conversion. By offering customized channel advertising solutions on mobile ad network will attract more ad spend, especially from external game companies and internet services. In-game ad revenue on mobile ad network more than doubled year-on-year. Our media advertising revenue for the quarter was RMB 4 billion up 8% year-on-year and 19% quarter-on-quarter, reflecting increased video ad revenue and music app monetization. Looking at FinTech and Business Services, revenue was RMB 38 billion in the fourth quarter up 29% year-on-year and up 16% quarter-on-quarter. Within FinTech services, revenue grew year-on-year and quarter-on-quarter as our payments and wealth management services were increasingly adopted by consumers and merchants. Total payment volume grew healthily year-on-year, driven by more daily active consumers and higher payment frequency and verticals including retail, public services and groceries. Payment commercial take rates are generally stable. For our wealth management business aggregated customer assets grew robustly year-on-year and looking forward, we'll focus on Investor Education and helping users to identify quality products selected by our independent research team. Within Business Services, we expanded our customer base in key verticals and increased our platforms of service revenue robustly, contributing to a faster year-on-year revenue growth rate in the fourth quarter compared to the third quarter. We also deployed more on-premises projects during the period. The infrastructure as a service, we developed our Star Lake SA3 service architecture powered by the latest generation AMD EPYC processors. This new architecture provides better AI, security storage and network capabilities with lower energy consumption in comps and Tencent cloud services cost efficiency. Software as a Service Tencent using enterprise version penetrated key accounts in the energy, healthcare and education sectors. Our conference room solutions, Tencent Meeting Rooms and then Connector, facilitate high quality real-time communication and are compatible with customers existing audio/visual equipment. And with that, I'll pass to John.

Thank you, James. Hello everyone. For the fourth quarter of 2020, total revenue was RMB 133.7 billion, an increase of 26% year-on-year or 7% quarter-on-quarter. Gross profit was RMB 58.9 billion, up 28% year-on-year or 4% quarter-on-quarter. Net other gains was RMB 32.9 billion, this mainly comprised on IFRS adjusted items representing increased valuations of certain investees in social media, ecommerce and online game verticals, as well as net gains on them disposal of certain investees. Operating profit was RMB 63.7 billion, up 123% year-on-year or 45% quarter-on-quarter. Net finance costs were RMB 2.3 billion, down 19% year-on-year or up 16% quarter-on-quarter. The year-on-year decrease reflected lower interest expense as a result of reduced average cost of funds, Q-on-Q increase was mainly driven by foreign exchange losses. Share of profit of associates and joint ventures was RMB 1.6 billion compared to share of losses for fourth quarter 2019. The year-on-year difference mainly reflected non-IFRS adjusted items of certain associates and improved performance. So then e-commerce and online games associates. On a non-IFRS basis share profit was RMB 2.7 billion for the quarter versus RMB 1.3 billion a year ago. Income tax expense was RMB 3.7 billion and effective tax rate was 5.9% for the quarter. IFRS net profit attributable to equity holders was RMB 59.3 billion, up 175% year-on-year or 54% quarter-on-quarter. For the full year of 2020, total revenue was RMB 482.1 billion, up 28%. Gross profit was RMB 221.5 billion, up 32%. Operating profit was RMB 184.2 billion, up 55%. IFRS net profit attributable to equity holders was RMB 159.8 billion, up 71% and effective tax rate for the year was 11.1%. Now I'll share with you our non-IFRS financial figures. For the fourth quarter operating profit was RMB 38.1 billion, up 26% year-on-year or flattish quarter-on-quarter. Net profit attributable to equity holders was RMB 33.2 billion, up 30% year-on-year or 3% quarter-on-quarter. For the full year of 2020, operating profit was RMB 149.4 billion, up 30%. Net profit attributable to equity holders was RMB 122.7 billion, up 30%. Moving on to segment gross margins, gross margin for value-added services was 51.5%, up 1.4 percentage points year-on-year or down 1.1 percentage points quarter-on-quarter. On a year-on-year basis, we continue to benefit from revenue growth of higher margin self developed smartphone games, sequentially margin decrease was primarily driven by revenue mix shift from high margin PC client games to lower margin digital content services. Gross Margin for online advertising was 53.3% down 1 percentage point year-on-year or 2.4 percentage points quarter-on-quarter. Year-on-year decrease was due to higher revenue contributions for mobile and network business which carries lower margin. Sequentially margin increase reflected lower related content costs due to delays of sports event broadcast. Gross Margin for FinTech and Business Services was 28.5%, up slightly year-on-year and quarter-on-quarter. For the full year of 2020, VAS gross margin increased 1.1 percentage points to 54.1%. Over online advertising gross margin increased 2.4 percentage points to 51.4%. Gross Margin for FinTech and Business Services increased 1.1 percentage points to 28.3%. On operating expenses, selling and marketing expenses were RMB 10 billion, up 49% year-on-year or 12% quarter-on-quarter as a percentage of revenues. Selling and marketing expenses represented 7.5% for the quarter. Both quarter-on-quarter and year-on-year increase reflected greater marketing spend on online games, business services, and digital content services, including those associated with consolidation impact of Bitauto and HUYA. G&A expenses were RMB 19.8 billion, up 24% year-on-year and 15% quarter-on-quarter, mainly reflected greater R&D and sales force. Within G&A R&D expenses was RMB 11.2 billion up 26% year-on-year or 13% quarter-on-quarter. G&A and R&D represented 14.8% and 8.4% of revenues respectively. As of quarter end, we had approximately 86,000 employees up 37% year-on-year or 11% quarter-over-quarter. For the full year of 2020, selling and marketing expense was RMB 33.8 billion up 58% represented 7% of revenues. The increased primarily reflected greater marketing spend for online games and recent consolidations, as well as marketing spend to support long term strategic initiatives including short term video, crowd based healthcare solutions, online education and remote work. Our R&D expense was RMB 39 billion up 28% and represented 8.1% of revenues. G&A expenses excluding R&D was RMB 28.6 billion up 24% and represented 5.9% of revenues. For the fourth quarter 2020, gross margin was 44% and largely stable year-on-year or down 1.2 percentage points quarter-on-quarter. Sequential decrease reflected lower VAS gross margin compared to the previous quarter. Non-IFRS operating margin was 28.5%, largely stable year-on-year or down 1.9 percentage points quarter-on-quarter. Non-IFRS net margin was 25.8% largely stable year-on-year and quarter-on-quarter. For the full year 2020, gross margin was 46%, up 1.6 percentage points, non-IFRS operating margin and net margin were 31% and 26.3% respectively. Both remain broadly stable. Let's move on to earnings per share and annual dividends. For 2020, on IFRS basis, basic EPS was RMB 16.844 and diluted EPS was RMB 16.523. Non-IFRS basic EPS was RMB 12.934 and EPS was RMB 12.689. Subject to the approval of the shareholders at the AGM to be held on 20 of May, 2021, we are proposing an annual dividend of HK$ 1.6 per share payable to shareholders on the 7th of June, 2021. This represents an increase of 33.3% from last year. Finally, total CapEx was RMB 9.7 billion down 43% year-on-year or up to 11% quarter-on-quarter. Operating CapEx increased by 13% year-on-year to RMB 8 billion as we continue to ramp up the investment in servers and network equipment to open our business growth. Nonoperating CapEx decrease 83% year-on-year to RMB 1.6 billion mainly due to higher base in fourth quarter 2019 for office land purchase. Free cash flow was RMB 27.7 billion, down 11% year-on-year or down 2% quarter-on-quarter. Net cash position was at RMB 11.1 billion which increased sequentially due to free cash flow generation and foreign exchange effects partially offset by net cash outflow for M&A activities. Fair value of our shareholdings and listed investees, excluding subsidiaries was approximately RMB 1.2 trillion or US$ 185 billion at the end of the year. Thank you. We'll now open the floor for questions.

Operator, we will take one main question and one follow-up question each time please, invite the first question. Thank you. Operator?

[Operator Instructions] Thank you. Your first question comes from Robin Zhu from Bernstein. Please go ahead.

Thank you. Thanks for the opportunity to ask the question. Could I ask two questions? Firstly, could management give some examples of how you plan to accelerate the growth in Video Accounts in terms of, for example, number of creators, depth of video content and user engagement? And if you had any quantitative targets, for example, time spent or users by the end of 2021? Second question, if I looked at the deferred revenue balance, it seems to imply that cash game billings showed a quite a meaningful deceleration in Q4 despite the launch of Call of Duty. I just wanted to get your thoughts on why that was, if anything one off happened and your expectations for growth in the first half of ‘21 and if you had any color on the launches, like the for example, D&F or League of Legends, what your expectations are? Thank you.

Okay, I’ll take your first question. In terms of video accounts, I think you have actually hit on the important points, which is you need to have double flying, you need to have more content. And as such, you actually sort of need to attract more content developers as well as help them to be more active on our platform. And at the same time, you actually need to have more viewership, right? And they actually serve as -- so mutually reinforcing. Now, in terms of how do we actually sort of keep on increasing the amount of content and on that front, the key thing is, we actually already have got a very good set of content creators and these content creators, part of them are actually new creators, and they are converted from our Official Accounts. In the past, they have been writing articles, and now they convert themselves into content creators on the video side. There are new creators as well who come in and at the same time we have seen existing content creators from other platforms also join us. And the main reason that they actually join us is because of the fact that there's the distinction that our platform provides, which is essentially the ability for them to build their private domain viewership. So in other platforms, when you have a content, you actually sort of new subjects yourself to help remake recommendation and after that, you basically lose your viewership and then the next content, you actually sort of build up again. But in our platform, we actually have a very strong set of tools and connections so that you can actually convert the public domain traffic into private domain and at the same time a lot of the existing OA content creators, we actually provide a lot of touch points for them to connect their video accounts with other assets, such as Official Accounts, live streaming and Mini Programs. So basically, one key objective and initiative we're doing is, keep on increasing these touch points and providing the tools so that there is much better connection between the public domain and private domain, so that we create a very unique platform for these content providers. And then on the viewership side, we would continue to improve the algorithmic recommendation, which is very important. And at the same time, as you can see, we're actually providing pretty unique content on our platform. These are content not just for entertainment purposes, but also for educational as well as informational purposes and a lot of the content providers are first time short video creators. And these are all unique supplies, which would help us do attract the users. And finally, when we actually provide content, we not only use the rhythmic recommendation, but we also have social signals, which actually help the viewer to see a different kind of world. And with all these together, we felt we can on one end increase on the supply, on the other hand we can increase on the consumption. And they were self reinforcing themselves over time. I can say the Video Accounts in terms of both users as well as the user time have been increasing pretty healthily, but we're not in a position to talk about specific numbers yet.

Robin, thank you for that second question as well around game billing. So you have correctly observed that both the game billings and the game revenue declined quarter-on-quarter in the fourth quarter. And then there's three points perhaps to make around that. One is that, as you know, for China the work from home period was very pronounced in the first half of last year and then relaxed as people returned to offices in the second half of last year. So that tended to boost the billings in the first half of last year. And then because we convert our billings into reported revenue with a time lag that promote through into lower recorded revenue in the fourth quarter of last year. So that's just sort of natural online to the work from home period benefit at least in China. We haven't seen that yet internationally. The second point is that for us the fourth quarter is historic here low season for game billings. Now, you didn't see that every year in our history, usually gives you onetime events. So for example, if you look at the fourth quarter of 2019, you didn't see the normal seasonal decline in billings, in part because we consolidate it Supercell which added many billions of Renminbi to our deferred revenue, moving from 3Q ‘19 to 4Q’19. But at this period, we didn't have any sort of unusual benefits, and so the usual seasonality became more apparent. And in certain finally, the seasonality was more pronounced than a normal year, this year because of the late Chinese New Year. So for some of our biggest games in China, we began running our Chinese New Year activities around 30 days before the Chinese New Year holiday itself, and the 2019 to 2020 period, that meant the activities commenced in late December and so we had the deferred revenue on our balance sheet as of December 31 versus for 2020 going into 2021, the activities commenced in January, so they only came onto our balance sheet in the first quarter. You also asked about the output for the first half. As you know, we don't provide guidance. I think if you look back at the first half of 2020, then the work from home conditions resulted in higher game revenues and would otherwise have been the case and lower revenue, some of our other activities in particular payments in FinTech. So, all else equal this year we're back in a work from office mode, which we seem to be, and I think it would be not to expect those two trends to temporarily reverse, but that's very much a short term phenomenon. People who focused on the next quarter, if you're focused on the next several years, I think the more important takeaway is that the work from home period really expanded the audience for games and expanded the social acceptability of spending money within games, which positions the game industry alongside several other industries were active in such as online education and healthcare, sustained multiyear growth as we once we've worked through the slightly tougher comparisons in the first half of this year. So I hope that answers both parts of your question.

Thank you. Your next question comes from Alicia Yap from Citigroup. Please ask your question.

Hi, thank you. Good evening management. Thanks for taking my questions. Congrats on the solid set of results. I have two questions. First question is, as we see increasing overlap of Internet service among all these internet companies in China. So in addition to user, which is the core assets, for most of these companies, the proprietary content, and also the content IP is actually seems to be the key differentiated asset. So actually, Tencent do have both of these users, and also content. Could management share your thoughts on how Tencent could further capitalize on these various digital entertainment content portfolio that you have to enhance the user experience and also further expand the monetization potential? And then the second question is roughly, very quickly on the Tencent Cloud. I'm just curious to see what are some of the key challenges that the Tencent Cloud is facing when trying to penetrate to the different enterprises? Is that related to the lack of the IT talent at this enterprise or is it the IT budget constraint, or is it related to the vertical solutions that are available? And how Tencent actually helps to support these enterprise to further adopt the cloud service? Thank you.

Alicia, pass that on to the first question. So, I consider the time that the general trend for value to migrate from traffic towards content and that's something that we're very aware of, and really, the past decade, we've been investing aggressively in swimming upstream to get closer to the content. And then you can see that in our game business where we move from being a distributor to a publisher and most recently to primarily a video centric game business. You can see that in music where we increasingly have upstream label coverage in China as well as the states and global leaders such as Universal Music and Warner Music. You can see that rates video and literature. So that's a trend that we really embrace and we think that will validate the strategy we've been embarked on for the past decade. And one interesting thought experiment is, if you look at the world of traditional video linear entertainment, then while there are many excellent companies competing in this space, one company, Disney has pretty consistently enjoyed upside that is sparked with its organically developed IP such as Frozen and also with acquired IP sections, as [indiscernible], Star Wars. And there are many reasons, but I think one key reason is that Disney has an unparalleled ability to not only provide the linear video entertainment, but also to provide an interactive experience in the form of its theme parks, really deepens the engagement between the users and the IP because they're actually interacting as opposed to passively consuming. Now, of course, the bottleneck to that business model is that theme parks are expensive and rare and only a limited number of consumers can enjoy them at any point in time, versus we're in a world where we're providing interactive entertainment experiences through our games, which are universally available, very cheaply, inexpensively available to users. But what we see is increasingly that the games, the same role as impact word in terms of deepening the engagement between that the user and the IP and then heightening the users appetite to consume the IP and other linear formats. And so if you look, for example, that our intellectual property sold [indiscernible] and diluted, then that's kind of literature novel is also being evolved into a comic book, into an animated TV series, into a live action TV series, and into a card based mobile game, all of which are successful, and each, which feeds the genuine interest in the IP and drives it to a higher level than would otherwise be the case.

Okay, I'll take the second question with respect to the key challenges that Tencent Cloud is facing in penetrating enterprises. Right, I would say the number one challenge is really the business reason for them to adopt cloud solutions, and that is actually sort of you know a lot of times the most important question. They may give you the fact that, oh you may be expensive, they may give you, oh there's no time and all these other reasons. But the fundamental reason is, okay, what is the key business proposition before converting themselves into a cloud service? And I think the evolution of the mobile Internet has really sort of continuously provide this kind of key reason, the key business proposition, because when the customers of the businesses get online, and increasingly engaged online, then the businesses have to go online, right. And the businesses, when the businesses go online their suppliers have to go online. So there's a chain reaction that's happening, initially, pretty slowly, but now with increasing speed, especially it's accelerated by the pandemic, right? In the past, when retailers look at new comers, it's a nice to have, it's an additional business, but during the pandemic, they realize it's actually a must have. So by having the business proposition for them to move online and to adopt cloud solutions, I think that's number one. Number two is really the inertia and especially more on the organizational inertia. All the businesses have their existing practices, and suddenly you say, oh and you have to move online. Yes, it's more efficient, yet it's more cost effective over time. But it involves the change of behavior of a lot of internal procedures and people's behavior. And I think, in order to overcome that, the number one reason has to be very strong. And at the same time, when we actually can create examples, and role models, through which a certain case have been created within an industry, then it's much easier to replicate that case in other clients. So that's exactly what we're doing right and we're trying to create the role models and then trying to make them into a more common set of solution and then populate it to other players within the industry. And the third one is about IT resources within those enterprises. And that's the reason why we have been working with a lot of ISDs and system integrators so that they can actually help the companies. Once they have the key reason and value proposition to move online and at the same time, they have a clear blueprint to do that and then the IT resources actually, they can find in the third party world. And, I think that's addressing one set of issues. The other set is about Tencent Cloud in particular. As a challenger, I think we are we do face many challenges and we are tackling them one-by-one. The first one being just building relationship with the enterprises, that's not easy and we have been making good traction in the year of 2018, 2019, especially after our organization upgrades, but it was actually interrupted during the pandemic, because during the pandemic, it's very hard to build new relationships. And even though you have signed up new contracts, it's hard to implement. So that's the reason why our cloud growth was a little bit impacted in the first half and the third quarter of last year. But then, as the world returned to normal, we have seen that the relationships and the implementing projects are back on track and as a result, our growth rate in the fourth quarter on the cloud business is much stronger now. And the other thing that's just sort of continuously building up our technology so that our product is actually competitive, of course, it's competitive and that's the reason why we've invested in a lot of the new technologies, such as AMD servers, such as our T-block architecture, so that we can make our solutions cost competitive. And I would say finally right now, Tencent has got a lot of fast solutions on the communications and productivity side, which are market leading. And in the future, when we can actually connect our cloud service with these SaaS solutions, I think that's the time when we can really leverage our competitive advantage and overcome a lot of these challenges. I hope that answers your question.

Thank you. Our next question comes from Han Joon Kim from Macquarie. Please ask your question.

Great, thank you very much management for your time today. I do have first one is just touching upon I think the relationship with, I think Alibaba on type of deals that I think media has talked about. And please correct me if I'm wrong, I think it's, we've probably not had too much engagement with them, I think since 2016. So should we just view this as something in isolation or kind of I'm sure we see that there's more room for collaboration with other ecosystems out there in China? And how do we think kind of the shifting dynamics in that kind of scenario, where on one hand I guess we have to kind of make sure we protect our user kind of experience and the integrity of the experience within WeChat, while also kind of thinking about how we remained open platform and in collaboration with other ecosystems out there? And then the second question I want to touch upon is in regards to your investment into Rakuten. Mikitani San did host a call and I think, he kind of elaborate that he would want to work with you guys a little bit more deeply even in areas, I think, like games. So I mean, and for you guys is it more of a passive role if they want something like games or are you happy to kind of give it to them? Or is that kind of more strictly minded initiative where we kind of see the ability to export some of our key kind of resources and services to other geographies? Thank you.

So in terms of the first question, without going into a lot of details, I would say our general principle is that we are open in nature. We have an open platform which encourage organic cooperation with other platforms, but at the same time as a platform manager, where we actually need to look after the user experience, as well as protect our users privacy with a lot of focus, so there's a deal responsibility there, and our responsibility for the users is actually much higher. And as a result, we actually have to protect our users experience and in a lot of cases, prevent spamming, especially encouraged spamming of our users, and if we actually sort of see violation of user privacy we would actually sort of step in and we stop the service. And that principle actually extends not only to third parties, but also to our investee companies and sometimes our own services. If we see our own services actually spamming users in unscrupulous way, we actually sort of put in penalties too. And finally, I think the relationship with any large company has to be mutually constructive. So, I think, these are sort of the principles that we adhere to when we look at these relationships on the industry end. Now in terms of our investment in the international market, right, yes, I would say, I would refer you to on the particular case of Rakuten, and I will refer to the press release, as well as what Mickey said, I think, this is a company, which is a champion, local champion in Japan. It is very innovative and it also has a very strong franchise in the area of e-commerce and FinTech and emerging in the telecom space and we are very honored to be able to work with them and we felt that by working with them, we can actually sort of help to download some of the knowhow that we have. We can help them with their capital. At the same time they are very competent company who can operate very independently, and we felt we can actually help them to operate even more competitively in the local market, as well as internationally. And in terms of thinking about working with international partners, I think that the approach is very similar. We look for very competent management teams and passionate entrepreneurs. We look for companies, which has very strong presence within the local market, where they have good support by the government, they have good report with the consumers in the market. And what we do is that we provide our resources, basically knowhow as well as some capital, and maybe in some cases some access to the Chinese market. And by and large, these companies, with some help from us would be able to perform in a brilliant way in penetrating their local market and sometimes in the international market. And by engaging in these kind of partnerships, we felt that it helps us to get access to exciting markets, exciting teams, exciting products around the world.

Thank you. Our next question comes from Gary Yu from Morgan Stanley. Please ask your question.

Hi, thank you for the opportunity to ask questions. I have two questions from my side. The first one is on FinTech. Correct me if I'm wrong, I think majority of Tencent Credit business is being conducted under the WeBank subsidiary. I just wanted to check the new kind of FinTech regulation on forming financial holding company, how does it affect the way Tencent conducts credit business in the future, if at all and how does it affect our revenue financially? And the second question is related to Video Accounts. Just a followup question on the unique feature from content and also diverted traffic between kind of private domain and public domain, given these unique feature compared to other short form video platform, do we expect the future kind of monetization opportunity, also be a lot more different compared to what we've seen out there in other platforms in the form of advertising, ecommerce, live streaming? Are we expecting, more kind of different form of monetization opportunities going forward? And if that's the case, what kind of timing are we looking at in terms of monetization? Thank you.

Yes, on WeBank, it's an affiliate and the vast, vast, vast majority of our loan business is actually conducted through WeBank. And WeBank is a licensed bank subjected to the more -- much more stringent banking regulation measures of CBIRC as opposed to the micro loan license. And whether, there's a lot of nuances in your question, right? So maybe I'll just try to answer it in full. There is the question of what is the impact of financial holding company right now and I would say financial holding company, as a concept is an important concept put forth by the regulators in managing the risk within the financial system. And we have been paying very close attention to the relevant development. And, we would be completely compliant when it's required to. But from our understanding, the financial coding company in itself is neutral in nature. It does involve organizational change, but it doesn't really impact the businesses. What impacted real FinTech businesses are really the regulations that have been gradually put in place to regulate loan [ph] practices. And if you look at what happened in the past few months, there have been a number of regulations that have been put in place. But I have to say, because of the way that we conduct our FinTech business and that the loan business, which is, I would say there are a few principles that we have continuously emphasized in terms of our approach to FinTech businesses. And I would like to reiterate them once again. Number one is we operate in strict compliance with rules and regulations and that's both in form as well as in substance. We are very prudent in our risk management. We have been, have always been optimizing for quality and risk management rather than pursuing scale. And we focus on products and services that benefits consumers and merchants and we also emphasize cooperation with financial institutions, as opposed to disruption. So with that in mind and especially in the compliance point, as well as the focus on risk management, and the fact that we have been very self restrained in terms of pursuing scale of our loan business. So when you look at some of the key regulations that have been put in place, in the past few months, including a 30% self funding ratio, including no loans to students, including trend down on high interest rates, including max loan size of RMB 200,000, each and every single one of them, we have been compliant even before these regulations come around. And I hope this actually sort of shows that for our FinTech business, we have been prudent all along the way, and as a result, we actually sort of less affected by all these regulations. And the way right now, we actually sort of embrace these regulations and we'll be completely compliant whatever regulations that will be coming in place, because we felt that with new regulations with these more healthy regulations, at the end of the day the entire industry will be healthier, and it will be sustainable for longer term growth. And then, in terms of just the Video Accounts, right, I would say monetization is probably sort of too far a question for us to answer at this point in time. We have always seen when we get users, when we get user engagement, over time there is going to be monetization. But number one, at this point in time, we are very focused on building the ecosystem of content providers, as well as the viewership and we prioritize the users experience over any monetization. And number two, even when monetization comes around, the practice of Tencent has always been much more self restrained in terms of monetization. It will only come on a gradual basis. So I think that's the answer on your question.

Your next question comes from Eddie Leung from Bank of America. Please go ahead.

Good evening. Thank you for taking my questions. It is a pretty straightforward question, but perhaps are quite cordoned. Just wonder, given the recent determining antitrust regulation, what are some of the things that Tencent can do to stay competitive in the industry, while still able to address the concern of the regulators? And then just a follow-up question on the Weixin ecosystem, any target or strategic goal for Weixin transaction ecosystem in 2021, for example any more new initiatives to facilitate the commercialization of your merchants and service providers? Thank you.

Okay, well, in terms of the first question, right, I would say, there are more and more focus on government regulations. And I think, this is something which, to be honest, right now, it's actually quite natural, I think, in the past, we actually have talked about this view and this is, we want to reiterate it, which is, as companies become large, and as Internet services become more and more a part of people's life, then companies need to be much more responsible, both to the users, to the government, to society, and socially, right, yes this is just something that needs to be done and to some extent, it signifies the importance of the industry that we operate. And in order to navigate this, I think it's a boring answer right now, this is basically sort of doing some, a lot of the things that we have been doing, but with very strong focus on communication with the government and compliance. So if you look at the operating principles of Tencent, we have always emphasized that we would be fully compliant with rules and regulations. And now I think it's important for us to understand even more about what the government is concerned about what the society is concerned about, and be even more compliant. Maybe even sort of with a futuristic approach, so you anticipate what is needed, and then try to be sort of even more compliant in the businesses in anticipation of any rules and regulations change. We want to focus on user value and innovation. I think this is essentially what answers your question. The ultimate competitiveness actually comes from you providing more and more user value, and you come up with exciting and innovative products that deliver more user value, not only to the users, but also to industry partners. And when that's done, then I think it also complies with what the government, what the society, what the users expect of you. We are very self restrained in terms of monetization and our business practices. And I think a lot of people comment that oh there is one way that you can actually sort of turbocharge your revenue. I think we sometimes get criticism on being too, much in self control, but that's something that we'll continue to do and we think it's going to be beneficial for us in the current environment. We embrace open platform and we provide our open platform to a lot of industry partners and help them to grow. We embrace competition, but in a fair way. We embrace fair competition, even within our own company, because we think that fair competition actually makes the teams better and when the teams are better, they provide good products and innovation that create a lot of user value. And finally, we engage in partnerships while respecting our partners' independence and this has been our principal in our investments, in our business partnerships and we'll continue with that. So with all these existing practices and we continue to put through our efforts in exercising them. I think, over time, we would be able to comply with the rules and regulations and also present ourselves as healthy for us in the industry and also fulfill the expectation of the society as a whole. So the second question is about which, oh the Weixin CMB, I don't think we have any target. The Weixin CMB has been increasing and I think the reason is because of the fact that more and more merchants, as well as service providers look at online as important. And the importance was especially heightened during the pandemic. In the past they look at online as an additional channel, now they look at online as any dispensable channel. The second one is more and more companies and ecommerce players and service players now value private domain more and more. In the past, they -- when they look at online they said is it an additional channel, it's okay for them to host their users on the public domain. And over time, when they feel that online is an indispensable part of their future, then they want to engage with their users like the way that they engage with their users in their shops, right. So the private domain is becoming more and more important, and Mini Programs actually allow them to engage with their users in a private domain. And now, we have also added a lot of tools for them to engage with these users right. That's the third reason we have had Official Accounts, we have had Weixin Payment, but now we are adding Mini shops, we're adding Video Accounts, we’re adding live streaming, and a lot of these tools actually helping them to manage their customers online on the private domain better and better. And with all these factors, and with also a continuous education processes, and the establishment of role models within the industries, the ecosystem of Mini Programs is getting more and more vibrant, and we’re very happy to see that.

Operator, we will take two more questions. Thank you.

Certainly. Your next question comes from John Choi from Daiwa Capital Markets. Please go ahead.

Thank you for taking my question. I have two questions. First of all I think on the online games, international part, as you mentioned you guys will continue to collaborate with we know in the console and gaming animates going forward. So will this be another strategy for both the domestic and international market? And just quickly a follow-up also on that is in terms of the investment, it seems like you guys are stepping up more on the PC and console Studio. So could you kind of, I mean share your thoughts on whether you're going to be more serious in these two genres going forward? And a quick follow up is on your online advertising. Given that some verticals such as online education has been seeing such challenges, what are the trends that you're seeing, despite all the changes in the industry? Thank you.

So on the game question, yes we absolutely, in the future [ph] work with intellectual property to create games that we think resonate both internationally as well as in China. And, yes we have been very active investing in studios that are active on console and PC. But, we've also been very active investing in studios that focus on mobile. And in reality, our mental framework is not, if we want to invest in a certain number of console studios, a certain number of PC studios, a certain number of mobile studios, as we want to invest in the best or the future best studios within each genre of games. And, sometimes that genre of games is particularly well developed in China, in which case the best studio will often not always, but often the mobile centric. Some times that studio might be in Japan or the United States where the best studios are often console centric. And quite often for the sort of smaller decent genres, the best studios are in Europe, where they'll typically be PC centric. But our view is that over time, it's becoming easier to cross platforms and so we're much less interested in, whether a studio has mobile or console or PC expertise as much more interested in whether it has simulation expertise or cloud game expertise or role playing expertise that can move across different hardware platforms over time. So that's on the game front. And then on the advertising side, I mean, I think any time you look at the advertising market, the short term is always murky, because it's sensitive to GDP growth, which is unknown at the moment as it always is. It's sensitive to regulatory changes. I mean, right now we have some uncertainty globally around the impact of Apple's IDFA changes, so that in China that will be mitigated by the fact that Apple is on the teams advantage of mobile traffic. It's also sensitive to changes within specific advertiser industries. So, for example in China, it's possible without the rules around advertising by the education industry, which will have some negative impact on the advertising industry as a whole. So I think at any point in time, in the next few months, where advertising always look cloudy and confusing, over the longer term advertising is a function of GDP growth and so if you're an optimist, and you believe that economies tend to grow over time, which we do, in advertising, we tend to grow over time. And I think what you can see very clearly from 2020 is that, whatever the advertising industry growth rate, for a number of reasons we tend to outgrow the industry, because we have more activity, more traffic, more tools, more resources, that’s monetization in the industry in aggregate. So in good times, like 2019, and in bad times, like 2020 we tended to outgrow the whole advertising industry and over the long term, we think advertising is a growth industry in and of itself.

Thank you. Your last question comes from William Packer from Exane BNP Paribas. Please go ahead.

Hi, management. Many thanks for taking my questions and congrats on the strong numbers. Last quarter on this call, you gave some helpful initial perspectives of the draft announcement regarding antitrust and platform rules. Could you provide an updated view now that we've had a bit more information so that will be helpful? And is it still right to think that your video games and digital entertainment businesses are not likely to be a focus? And then as a followup in terms of acquisitions, both stakes and larger deals, should we expect the pace of your investing to change as new systems of oversight are established? Thank you.

So perhaps I'll start with the second question. For better or worse, the pace of our investing activity has been relatively unusually intense during the past six months. And that's not because of regulation, that's just because COVID has provided a glimpse of the future, particularly for industries like in game, education, healthcare, and especially as far as service. And, we've really utilize that glimpse into the future to step up our support for independent companies in those spaces, particularly enterprise Software as a Service in China. So historically, the great vast majority, over 95%, 99% of our investments and minority investments rather than mergers or outright acquisitions, and that will remain true going forward. And for that very vast majority, then a different antitrust regime will not be believe, impact that the desirability of us investing in and supporting startups and helping them to grow into bigger, better companies over time. So we remain active investors, both internationally as well as especially in China.

In terms of the last question, I would say because the gaming and the entertainment business is by nature, much more competitive. And there are many more players in the market and it's essentially a free for all competition. So, it's less revenue for the antitrust regulations. And in terms of what we should be doing, I would refer you back to the answer that I provided to Eddie, which is we will continue with our focus on compliance as well as our business practices and work very closely with the regulators and navigators.

Thank you. Thank you, operator. We are closing the Call now. If you wish to check out our press release and other financial information, please visit the IR section of our company website at www.tencent.com. The replay of this webcast will also be available soon. Thank you and see you next quarter.

Thank you, ladies and gentlemen, this does conclude our conference for today. Thank you for participating. You may all disconnect.