TME - Earnings call transcript Q4 2023 | Tencent Music Entertainment Group

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Millicent T.

Good evening, good morning, and welcome to Tencent Music Entertainment Group's Fourth Quarter and Full Year 2023 Earnings Conference Call. I'm Millicent [indiscernible], Head of IR at TME. We announced our quarterly financial results today before the U.S. market opened. An earnings release is now available on our IR website and via newswire services. Mr. hear you'll Today, our and Pang, Executive Shun Mr. Chairman; Kar will overview updates. of Liang, our company an who CEO, business Ross our share strategies and And then Mrs. open will results Shirley, our the we CFO, questions. call our for discuss before financial

pleased with release most and there to are over continue, reconciled company SEC. earnings session. our release, measures we all will measures in With comparable make Shun? discuss that we harbor company's Executive call to time, Please Shun, to statements. a is Kar I'm which to participants earnings be muted. filings And I of our non-IFRS which turn to Before remarks, the IFRS management's the call safe more you under note and TME, statements in forward-looking At advised Kar be recorded. today's the today's After applies thoroughly call this Chairman please explained as Q&A refer reported that today, the are being will that, the

Kar Shun Pang

Hello, Millicent. you transition call XXXX everyone, thank you, Thank our artificial TME. marked at for today. our joining and

to record XXX producer and and user In growth particular, XXXX. These added users strengths year. As Notably, dedicated growth ARPPU year, RMBXX.X experience. by headwinds from of full year-over-year up RMBXXX contributed over platform from growth entire engines. rose users XX.X year-over-year in net was growth. our and anchoring and X.X Entering the results leadership, music quarter growth Paying also million in solid Such recently revenue strong avenues, subscriber the subscribers to year. industry. music subscriber XXXX, fourth line faster-than-expected hit accelerating development performance profit content the XXXX, paying quarter a first high-quality the million of driving and driven for content seeing platform drove compelling business testament our top entertainment to propelling dual social value XXXX, a in remain throughout and These the XX% music our to and our momentum prosperity our in subscribers lift subscription are consistent for we the in [indiscernible] online respectively. ecosystem, mitigate quarter. million we million, milestone in while music the in by the the and across the full million We powerful spend,

aspects Now of growth. efforts to our this development these building I'd share robust content like sustainable

labels, an of First, edge by leveraging domestic we deepening competitive selection and and record reinforced ever-growing partnerships music. with our with international consistently copyright

of platform. million we As tracks music on XXX audio by XXXX, a had end over the and our result,

In users. addition, self and co-produced our among increasing content offerings, further differentiated our popularity

and Lastly, and relationships us our label partners the rich diverse industry and of content opportunities refine capture content empowered with across value. foundation to music

release renewed appeal, recently Let on fast our growing as you coverage examples. album its in partnership concrete [indiscernible] a Group, through formats. all the Universal ongoing in me our Atmos quality music recorded high-definition walk upgrade platform version, to and [indiscernible] well UMG we trucks Dolby first week in On topped as we Music content to new bring streaming XXXX with and this catalog users at multiyear [indiscernible] with notable some of October. access

song-guessing and a promoted engagement customized a on of series further success capitalized also fan interactive We the with contests.

music Chinese cooperation In various Legend across albums film, Records, and services. content addition, Phoenix, with leadership across We and users. the our better to us enhanced for we of renewed allowing them physical renowned [indiscernible] Rock releases, [indiscernible] label attract with appeal and Pop, record artist-related song genre, and the collaboration further headstart deepening retain [indiscernible],

collaborative and content differentiated on creation. Next, in-house offerings through

resources we leveraged prosperity. offering of wealth For to our our multi-facet mid- its to enrich and content, long-term music promote

platform. our musician accumulate with strategic comprehensive songs million music XXXX, careers. the programs creativity of and partners, had on musicians music year nurtured across over we To contributed X [indiscernible] Tencent their their broadening effectively over music we and our other artists. support, providing collaborations in unlocked of By assets multiple training XXX,XXX are genres, As [channels] different

artists, career support. through their boosted For mature tailor their popularity these and we more advanced the increasingly

For we profile assisted [indiscernible] strengthening EP with relationships. example, this fan-artist the quarter, greatly production release, rising Jazz and her her singer and

Our in-house to grow and strength. from collaborative content strength continue to

during had XX in case a Spring As Group Media point, Festival China we songs Gala. showcased XXXX

generated in massive and greatly user song, on the one us, quickly our producers pushing national performance Such -- sale Light influence. She, [indiscernible] evaluating engagement Bathing our shows Our was platform standout. of has averaging

performed top number X our diverse on business performer strong XXXX. over streams and of formats on hosted growing performances not up the our through artist event in value house scaled In [indiscernible], our offline popular fourth hosted March of city song, This [indiscernible]. of by year. self-produced as innovation. and is live We tools, hit our user by example [indiscernible] [indiscernible] song a to quarter, electronic strategic X billion in we but covered music tour Last least, off-line platforms partner notable worldwide live this went totaling performance festivals content through maximizing [indiscernible], cost a Capitalizing the music events, meet DJ Another Chinese demand. on resurgence we China. viral

formats. the line turn, ticket fan online XXs, XXs our influence. and diversifying boosted a access various management, which interactive merchandise K-Pop tour, merged launch industry content-related quarter, sales fans entertainment collaborated facilitated activities, of During as in the behaviorals we artist's such to merchandise, and of services with for to fourth offerings high In our we unique encompassing off-line in performance

growth. merchandise artist a year-over-year recorded robust As from result, revenue

In agencies, economic Moving government music promote to responsibility. a conducted fourth events on local we with development to cultural collaboration series social quarter, to minority ethnic and of in regions. continued the in our commitment

growth festival, economy help to tourism. partnered we rural performances leveraging example, industries, the are maximized organize Shenzhen, initiatives Music societal its of to come. brought the music In years increased off-line across For only but conclusion, the with the we impact industry music for in E&T rising to the not Tencent music about reach rejuvenate with also positive geographically, Charity the expanded These XXXX value. its excited

engines [indiscernible] platform us underpinned online opportunities by to will cyclical dual and powerful Our more XXXX capture multi-faceted relatively music's in nature enable beyond. and content

like Now I over go development. Ross, Ross for color platform turn the our please to more ahead. call to on would

Liang Zhu

you, Kar everyone. Hello, Thank Shun.

now on execution year Let's music growth and focus resulted in a gains. of efficiency solid

users. [indiscernible] all Our platform's to journeys in dedication achieving enhanced into content were music translating strength this [indiscernible] and crucial our the and for success innovation into

I Now like X users' prioritized we enhance on areas elaborate to to would experience.

strong users' and skins players, individualized This First, included industry-leading effects, privileges. additional expanded song more selections, features. new reached quality we more interactive

Atmos most of use immersive and more hosted quality closer we library, sense Currently, deepens listening experiences promoting service mobile, opening. our offering hours users online more Atmos [indiscernible] fine-artist Dolby for the is comprehensive enabling music star, Millions the music higher music on our are and cases. our For XX signed MV PC example, we dedicated a a platform, in-car premium experience. China's of Furthermore, Christmas within Dolby up across largest the [indiscernible] for of single, event new community. registration [JCOs] event available

millions over also this users. engagement. we further for recorded single total features, of XXX to of streams activities million an to tens tailored this We AI of have from feature and Thanks boost a user launched voice

across users players. customized last PC user with mobile and Music connections year, and in music deepened QQ experiences. offering upgrades significant on through major interfaces launched we December Second, multi-device upgrade a

the Chinese reflects Year's an This user's of a bonds of user personalized activity. discovery we and report important built from users unique mutual They of that facial with introduced with and users As connected review emotionally [indiscernible]. New us that scale. part music annual feature Tens on songs Lunar to at moments report favorite captured comprehensive QQ captures how we music [indiscernible] Music this when offerings, annual journey. stream each millions joined his have highlight storage

services. We enhanced in-car also music entertainment

but intelligent for closed For example, maintained QQ added our retention. in our infrastructure [indiscernible] and More least, recently smart content content role consumption, Music, Auto]. leadership continued local in-car conversion interface the and newly vital app greater Music environment. play technology users we bringing a recommendations especially our with to improving XD Last recommendations. not cabin discovery. in a offerings, and upgraded Furthermore, distribution [indiscernible] library, promotion, Tesla, Kugou with performance to its drove renewed optimizing all a partnership user more accurate coverage better recently effectively in-car music in we [Li a

the both Music We quarter, another are QQ music in that of fourth from Kugou Music recorded share record the recommendations. streams to pleased and high share

Finally, AI.

experience while We foster continue applications to efficiency. improving to enhance expand music AIGC artists user and creation

as into intelligence and music AIGC experience integrated creation and and ] as personalized streaming and we increasing socializing, [ creators. side, users for creating music seen well product and the On

faster discovery or It's Melancon compensation promos specializing enhancing rhythm QQ and with Music, Furthermore, additional supporting feature life. creation have AI by personal music their Venus enables using made example, listening ] genres, artists different [indiscernible] music original we in details. For music more AI to clips. [ together virtual

an integrated thing pay song [indiscernible] we and are that the Initial WeSing. for into function results Lastly, AI the creation as Kugou of this to enables willing users and increasingly suggest easy it languages. function

AIGC side, advertising better our [indiscernible] and make users. On convert target the operations using we to effective, efficient us are a more and to

RMs we They future. to more leverage identify most to promote with the gains achieve that new will distribute analyze content To to in sum help and songs, leveraging continue songs. to better up, and We audio users. are characteristics also resonates technology us efficiency

users music music further Our that, range our serving us user for call compelling financials. will With more cases. experiences to of for will CFO, our dive of of inspire across to turn millions the entertainment over into dedication and Shirley, seamlessly deep a deliver a broader passion hundreds I

Min Hu

everyone. financial Thank to now results. to you, turn Ross, and greetings will our I

in year-over-year our subscription XXXX results management in Our reflected the operational year for strong for music year. with throughout effective monetization services efficient accelerating and success revenues the growth financial

IFRS and X.X and respectively, XX%, music net a RMB revenue on and by of was were social online largely a primarily services faster-than-expected services respectively, year-over-year, billion, X.X profit revenues XXXX, mitigated up delivered social others. profit which XX% down the to growth, fourth others. RMB basis. revenues total X.X quarter and due billion In decline billion, X% from net entertainment antenna by revenue Our service in of RMB and year-over-year our decline non-IFRS the

supplementary music revenues into billion basis. sequentially. an surge business sales. deeper This XX% RMB ad by was online in year-over-year our and which X% XXXX increase on rise expansion Delving the a of X X.X increased RMB XX% performance revenues driven a subscription in strong QX. related the Our for a year-over-year music subscription advertising increase to Music music and is QX by reached subscription by billion, our merchandise

monthly of Our representing million, ARPPU XXX.X rose net allowed a refined enhancing The The user adds up online year-over-year music the quarterly by by X.X and number XX.X paying increase online expanded RMB music by XX% ARPPU. monthly operation XX% with to marking million, X% to users our million to base user growth more quarter us individualized success growth expand industry-leading record. is providers of paying users. paying attributable year-over-year interactive The effects, enriched taking on features of enticement our for selections, and new and in continued base as content features offerings, to such quality largely the product interactive and enhance was the segment's skins as such [indiscernible]. of another players, which sound member our in-car sequentially,

Our quarter strong advertising improved performance as a and year-over-year by significantly. suite this growth our also formats. diversified sequentially, Advertise-supported, and advertising rate advertising innovating had supported delivered product entrance revenue strong

[alignment] generated to a increase in higher demand double new the Additionally, and contributed revenues. for [indiscernible] advertising advertising sequential a sales e-commerce

quarters. XX% were revenues measures certain year-over-year. we RMB in compliance and risk adjustments Social control X.X interactive billion, more enticements other service and This the functions stringent by and was streaming to past down in implemented mainly as procedures channel several live and of due couple services

service innovate membership's have in entertainment We for quarter. and seen advertising and this continue to revenues social [indiscernible] growth revenues

sequentially, QX Our X.X to gross year-over-year X.X move health revenues monthly well of to ARPPU for with growth user own us and points marking content higher model. as have XX.X%, increase points base an an enabled together as our advertising increasing stood margin ramping percentage margin up in increase a of at percentage of

the managed in relationships the using have our These collectively labels and resulted gross built increase ROI win-win we efficiently efforts have and costs more of Additionally, margin content year-over-year. with artists approach.

year. X.X to under compared XXX billion, expenses. RMB on million, period of of to last the XX.X% fourth down expenses revenues Moving In quarter by the RMB our X% total same year-over-year. XXXX, were operating of XX.X% representing in with Selling marketing they amounted

continue continue with increased areas for to spend Our we curtailed did marketing year-over-year, our XXXX. audio We employee-related down while long-term fees RMB driven were ROI by General promotion towards XXXX, to is promote associated strategy partially expenses related own on will acquisition prospects. strategically and channel service promotions to channel budget we we rapidly, focused, expenses live as in to music for with primarily these grow recur allocated X% content incurred administrative QX not streaming expenses, because billion, growth lower our expense areas. but expenses expenses by in X such QX and [Lay's]

effective the compared by the Our related earnings XX.X% to accrual was to subsidiaries tax tax to for XX.X% PRC our rate increase to of be QX XXXX. same official entities. XXXX period attributed was withholding limited primarily This of to in

were respectively. For net company RMB attributable Non-IFRS our the X.X non-price RMB net RMB QX and billion profit equity the equity XXXX, holders and billion, were and profit RMB X.X holders net billion X.X X.X company profit the to of net and attributable to billion. of profit

RMB XX% diluted year-over-year. These X, robust share operating and program. a financial our or ADS results our the enhanced performance, at increased X.XX, demonstrated Our positive per XX% diluted earnings record to ADS up quarter RMB high Non-IFRS repurchase this from year-over-year. impact up earnings efficiency reached

as As balance share the deposits from of had XX.X the billion March September were Under combined impacted the of December as repurchased This of changes approximately balance also in combined of at exchange million RMB which RMB USD total was the fourth XX, XXXX were USD million sheet and by cash of a balances quarter. as with in XXXX, of market the of cash, compared XX, USD consideration XX for repurchase billion we term in XXXX, announced million, cash our XXXX. to RMB different rate repurchased XX open program XXX date. XX.X ADS December equivalents

briefly other up in music driven I'll growth year-over-year. down revenues was and year increase revenues from online performance XX.X supplemented our music XXXX. by strong were XX% services by year-over-year. billion, Revenues services. billion, discuss by service XX.X Next, full for in Total from revenues were X% music advertising RMB by The subscription RMB growth

were XX% entertainment ARPPU. RMB service risk social procedures functions Our monthly both music by by revenue year-over-year company's to driven up in growth subscription implemented profit efficient level focused listing to and were achieved down of more and holders to highest of billion promotional non-IFRS streaming live due and adjustments several as certain and year-over-year, from active and more incurred in by to billion, stringent XX.X service paid X.X users billion, the we declined X.X profitability billion, reduced Revenues XX% control discussed In measures down of marketing RMB related RMB by net by for audio primarily X.X% the couple Selling XXXX expenses the was X were our of in XXXX attributable earlier. expenses Total company by and RMB Kong respectively. to XXXX. down General history. Gross X.X attributable by past largely Net acquisition operating expenses expenses year-over-year Non-IFRS secondary expenses our in RMB quarters. billion, and was year-over-year, net was [Lay's] and we X.X the were margin including expenses, net the to RMB XX.X%, company XXXX X.X in company's profit to year-over-year. billion, reasons the in RMB administration in to respectively. and RMB [indiscernible], related billion, profit of employee-related X.X up year-over-year, due XXXX billion XX% enhancements equity and X% due profit holders strategies. equity in due Hong

conclude will with outlook on remarks XXXX. some our I Finally, for

excited. are We

about dedicated are our music across the industry excited and We music ecosystem. remains our the driving growth to growth of

growth our such will extra. tools merchandise, while customized focus effective operational of suite opportunity to concerts, exploring continue efficiency expanding artist, as and and on new We monetization intention

well invest Additionally, continue products as we to AIGC. such technologies, and content as production new as and content original high-quality in will

about long-term confident our health for on remain concludes of industry growth our music returns our and investment are high-quality company. We the the We prepared focused providing This remarks. shareholders.

ready now open questions. are for We call to the

Millicent T.

you, [Operator instructions]. Thank Shirley.

of from Alex your Chinese, Stanley. ask you the If Morgan English. repeat line in question in comes first the question And Poon from please

Chun Poon

Congratulations share about XXXX strong growth particularly music quarter regarding expectation. My our some you is on and revenue first question a color, the segment. very Can quarter.

Kar Shun Pang

growth behind I in growth. million has due And monthly And believe reason accelerated the which us. of music fourth revenue quarter's The basically this is foundation that industry. is for have nature questions. our deal XXXX, and XX% subscription your year's in growth. year-over-year a the for to the already, efficient year a new milestone the the and the strong our to music platform execution Alex, think strong subscribers very consistently total content We a revenue business XXX and the from really lay online engine TME's music strategy countercyclical has of total you, performance very delivered Thank reached subscriptions

are that and will about to operations our users forward. business we optimistic believe and the We industry's expertise, the of future drive center continue

And we all-in-one coverage industry-leading point We to experience popular technology users. a we content power music to and cetera. our the are festivals, will and view, provide continue will to from the concerts et user audio build also committed of platform. the provide view, new of performances the of best and for the best of live like and know-how a formats of music use some other songs point From

we continuing core share. we're to holistic will part stable to serving I confident growth subscription nutshell, will for a and better with merchandise the side, to music the solid users part from driving are maintain social in focused the on revenue relatively as advertising be a our explore grow services our this primary music new a artist online the business as that business. the ecosystem, force, while opportunities And of So year, and think in serving entertainment this

Millicent T.

from Yap coming from Alicia question next And Citigroup.

Yik Wah Yap

and terms questions. those that newly curious geographic that quickly if can management the any song also can share for they quarter. converted the would X the Any upcoming revenue if second user strategies terms library on be And in a helpful. the update to profile in congrats in adoption the you the solid question cities, is very for terms One XX audio the tiers, also group rate the just expectations on user to quick the little tend bit on membership, very location, so age trends. elaborate and have of I of then color Anything you prefer? past of for long-form months. can is And and

Liang Zhu

user Thanks in our as much. for XXX base presentation. the I already than question. Actually, very you million Thank your more mentioned is

source user demographic also profile user the is all But also the the the also it the effective. the user China. largest and between X it the are to the make And going among same and Tier they fully XX later long still group user active especially eye and China we we're to their years this eye leverage tap. we're to And aged very still and the the strategy as our capacity music subscription of allocation majority ROC we long cities, audio on XX cities in allocation relative user Music. in at activity the think with market. and may long we we active in is on base is our to one audio now, is say current are more QQ with distributed active going geographically, of group still is most the user we platform long here popular our active X we're regarding out and Tier of So the can still keep of We're of is profile where monetization how also an to user can tier time, Music demographic rate keep Well, most see the in and our very Google your our groups order user, most potential of find the to content first the question same the our a -- from that and because integrated audio, have in audio young to is operations, the the also in Well, strategy I our user be who the we're population have. regarding going the users as of demographic old. structure China. more going -- Well, an in still the focused to

We, We we the transformation. our be XXXX accelerate that penetration are, audio long its the also also generally content very noticed longform the of like year market the XXXX or it The for into very time, novels we at that expectation. a is because result the the to are popular indeed, application. speaking a for and the we at the audio, same in-car loan important clearly for are the going of call year than the performance same time, would better audio in-car

in we performance on XXXX, that efficiency great the our and -- our commercial also upon based can its audio music hope long So improvement distribution continue audio platform.

Millicent T.

the next The question comes Lincoln line you. Thank Sachs. of Goldman from Kong from

Lincoln Kong

numbers on quarter. from Congrats

So the my side. gross margin the margins, question especially on is

gross will of costs points. in be more what We targets the on self-produced margin XXX fourth of than elaborate we're the -- Could minimum under about gross our XXXX, leverage Q-on-Q content key the or mix accelerating have a thinking for drivers business margin this And increasing for content? medium-term further margin music of operating reasons as that? will and growth basis guarantee are context? or terms seen be What when quarter what ceiling terms ARPPU in gross expansion expansion a for [indiscernible] in or basis, from

Min Hu

on the QX. and costs, XX.X% win-win impact manage growth variable gross relationships the our our music have content the [indiscernible] first robust content, our monthly and and we third, artists. the up X.X% user build can of impact advertising follows: with have Yes, And subscription growth, piece both a margin labels positive year-over-year. base revenues up the margin. is the also which has gross on factors sales to regularly gross revenues increased gross fourth, margin. growth, our margin. in paying benefit And as increased significant focused content by we ramped of main QX in on And And have see been own ROC the And gradually we on is higher

faster Our will gross will XXXX. revenues be for QX we increasing lower -- margin to the online keep compared, and But in increased growth with ratio also subscription was XXXX, And net than advertising gross margin our in the expect the content compared than of piece our revenue expect to ratio cost. QX from revenue revenue the have revenue. music

we margin QX be think gross So that keep increasing in will XXXX. the

Millicent T.

from line The of next question comes the Fang Wei from Mizuho.

Wei Fang

Congrats have on ARPPU question. the related I print.

at very up. So delivered guys think paying XX% user believe also the looking peer our growth, So music consumers growth. trajectory, maintained finished with that, But year-over-year your happily and positive like growth your right? looks it I year You are a ARPPU largest solid paying despite expansion, a I

behind? was XXXX? So your can help to elaborate continued if fair just And is assume wondering techniques I management it on momentum into

Kar Shun Pang

Yes.

expansion. subscore in the I revenue the also and with think flexibility approach balancing holistic ARPPU adopted grow view [ for a between we to the ARPU, subscription ] the have

we So I promotion during in start [indiscernible] think QX a strong that ] year. is XXXX. impact [ partially of And the subscore have the because on the

is And in XXXX think the slightly be think quarter so should remaining overall, trend expected I but the marginal fluctuation upwards. be quarters for I ARPPU to

that a more ensure wisely we also that and that also will So between manage have of value they monitor do that we right ] and the [indiscernible], future. I very think in balance number in to years you're subscore the right [ music music of think full see the the that it now are levels ARPPU willing I China expansion. good But of and to believe we pay

Millicent T.

[indiscernible]. Lei Bank America The next from Zhang of question comes from

Lei Zhang

Congrats on questions [indiscernible] here. Two quarter.

good you and think cash trend. margin I pretty First, flow have

And consider slightly any we do the we future? in user about decline. secondly, in saw it's QX, of trend the Q So returns shareholder long

the we So trend how XXXX? look should for user at

Kar Shun Pang

Okay.

that it. that I we doing buyback to share million think this a achieved and $XXX we and for share last the XXXX, current under have, will plan continue think really have buybacks, for already progress in that QX good I we doing -- especially this in pro-actively the we the have in

And so maybe about. Ross talks

Liang Zhu

further the to the much. regarding say you because But And the students opens, QX short-form in the IoT PC, can see of to business. improved. the very can of the a eyes channel say from steady analytics, same ago channels, the in-car same we at years end, will some the reasons besides trend At XXXX, maintain the regarding same the trying that few the from the very time, say at of as to leaving the to at can from data emerging operation, our the opportunities say traditional we're and we actually are question. festival from the are the majority also you school the active according highly to PC our your user, they on and our also you are days the At low the quite of of spring to to and users, active, as those user Where also IoT, trend actually, XXXX, active practice, school especially Still, mobile end. some maintain Well, stable. can us we we be users. same them actually, also and begin P roll we're in also a key including also the the reason that we remain we to mobile MAX the be And in and say channels where regarding very indeed reduced is we Thank beginning reason and that XXXX, the going that promotion. keeping the time, but regarding stability time, same to also explore like I'd continue China. the because system, also and the where respond impact time, new there, back and a would the omnichannel year still base end end, impacted the to to versions and also growth, new going and by our that we another out of we is further downsized windows including marketing that -- like this can to for have the we expenses, channel China lose

sell that in the seems you're during a them to going people MPU reason. that's Festival, reason So Spring see Festival slightly QX apps, of to so due Spring the XXXX, music decreased

as Music, are the continue regarding We Google and a in version have are update to of to we QQ following the improve we're to Music. also going going quarters performance major

I XXXX, believe strategy So our also improvement. going an ROI-based compared do to with marketing have

channel the the new going our to We back are also to platform. audio more to project, the returning including of engagement the channel attention pay user and

So we're to expect also in improvement. the upcoming the going quarters, MPU

Kar Shun Pang

looking response besides buyback, In first the question, the Okay. are proactively share well. dividend possibilities as into also we to your

working improve the So future. the and we be plans the in we'll would shareholders' then to equity benefits detailed on like

Millicent T.

next comes CICC, the Zhang. of question Xueqing from The line

Xueqing Zhang

on quarter. question about congratulations My the Also is AIGC. strong

As you AIGC been the in TME has prepared mentioned many using remarks, in aspects.

a that, AI So the in elaborate you leverage products how AI contribute And more empower management bit retention? your how does business? can the conversion to and subscriber

Liang Zhu

very Thank much. you

application more seeing into we're focused We and integrated on development low monitoring other Because recommendations socializing. it models going to somewhat have from and creations be closely as language and music large as latest language companies, model the use been case. of the well different

all, more to case, I application our large new of brand language actually, So more attractive first make the to like with experience. we to user X product you. the share appealing provide have to Well, parts would use a regarding model and leverage

reason the our is version. that in latest So

listen We also together updated functionality.

and they they same into through also and in to product their that is language large Avatars.And to the this dialogue improve choose Avatar, between going music QQ will be and more pack Music, their and at able be profile actually content. and will they going the model user the the in mood user the Music, recommended another the QQ and leverage able consume conversation also fit emotions we're then the really a are find Well to So time, to small our the pets. to

chats things very they companion have interesting So users. the going continue the to to our are of some to improve to

enabled tools effective to we that the ] for The can I'm model in recently, to separation the how vanes music have talk the creators. can creation is leverage do content. We to large [ going point already we second provide creation the about say to the function improve efficiency Well, we language functions.

composition it separate vocals directly entire sound, which of from speaking, generally popular the musicians. among is the the can very So

Avatars the ], AIGC money been their those to generate also regarding a we the materials within allocating functionalities commercial produced as conversion same applying a rates. compositions leverage market, language also for the promotional Well, a boost also and different cool create very AI-enabled addition, willing ]. find other at as with to or after sounds we the [ at functions materials. tools. also before. the after because those through preferred AI-based music launched those In same can In find huge some also users, words, time, according that Well, the actually [indiscernible], crowd to preferred regarding customer find composition out sounds actually a through good acquisition, also with to of [ own growth we has the We have enablement, go it recommendations that well their compared can we out promising helped are style. model, they improvement the pay large to have time, their very Well process has we user the

help performance technology going an do by Sonar of industry product also to is further the making So product. soon We're and and our generally eye keep as adopted sure speaking, our believe they benefiting possible. latest AIGC including on improve be could we our and development, other to as latest also the

Millicent T.

question Jefferies. Thomas from And from the next comes Chong

Thomas Chong

set very Music question have results. on of regarding connectors our ]. Congratulations a [ solid a I

better QX should think Given our How coming about is trend add performance report we million long about the that should the $X.X the are subs than run, net expectation. in seeing and number? think how into over music street we we And solid QX, XXXX? the

Unknown Executive

product happy to Thanks for into of we we mature. can you I service they a to question. because say and high-quality provide user and product our years and those think content trying access we marketing more stepping library get XXXX, well-extended high-quality product us. service to RMC pay also And our are customers and keep user potential eye now very with Well, those our can will strategy. do users on to and further more market becoming for year the platform the and profit. your is to are and going education to the that improve and In product after hope retain the And we're with our high also the now of season and

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Liang Zhu

keep it going an TV also the experience experience also improve development going to the us I is expand overall We're subscription other say operating also have further make growth what operation help a in revenue. and who for sure to them, Well, users. manage call are to importantly, their near users. I users should high-operating robust to and including we eye and more business. them the But We -- future, key. in in can on channels, super the should steady the and car to that do by well we're prioritize the have power also the for of music we're Those users going the

Millicent T.

conference of Kar I Thank end turn Shun to you. over We're for approaching closing will call. the the now remarks.

Kar Shun Pang

Okay. Thank you, everyone, for joining us today.

please goodbye. speaking to you so Thank quarter. you This again much, concludes the to Investor any today's looks free company you have If questions, contact forward feel next Relations Team. and with call, TME's and further

Tencent Music Entertainment (TME) 19 Mar 242023 Q4 Earnings call transcript