Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Kuaishou Technology second quarter and interim twenty twenty-four financial results conference call. Please note that English simultaneous interpretation will be provided for management's prepared remarks. This English line will be in listen-only mode. I will now turn the call over to Mr. Matthew Jiang, VP of Capital Market and Investor Relations at Kuaishou Technology. Thank you, operator. Good evening, and good morning to everyone. Welcome to our second quarter and interim twenty twenty-four financial results conference call. Joining us today are Mr. Cheng Yixiao, Co-founder, Chairman, and CEO; Mr. Jin Bing, Chief Financial Officer. Before we start, please note that today's discussion may contain forward-looking statements, which involve a number of risks and uncertainties. Actual results and outcomes may differ from those discussed. The company does not undertake any obligation to update any forward-looking information except as required by law. For all important information about this call, including forward-looking statements, please refer to the company's public information or the second quarter and interim twenty twenty-four results announcement ended June thirtieth, twenty twenty-four, issued earlier today. During today's call, management will also discuss certain non-IFRS financial measures. These are provided for additional information and should not replace IFRS-based financial results. For a definition of non-IFRS financial measures and a reconciliation of IFRS to non-IFRS financial results and related risk factors, please refer to our second quarter and interim twenty twenty-four results announcement. For today's call, management will use Chinese as the main language. A third-party interpreter will provide simultaneous English interpretation in the prepared remarks session and a consecutive interpretation during the Q&A session. Please note that English interpretation is for convenience purposes only. In the case of any discrepancy, management statements in their original language will prevail. Lastly, unless otherwise stated, all currency units mentioned are in RMB. Now, I'll hand the call over to Yixiao. Hello, everyone. Welcome to Kuaishou's second quarter 2024 earnings conference call. In the second quarter, our total revenue grew by 11.6% year over year to CNY 31 billion, with both online marketing services and other services, including e-commerce, achieving year-over-year growth of over 20%. In terms of profitability, we set a quarterly record with our gross margin topping 55%. Adjusted net profit reached CNY 4.7 billion, with a margin of 15.1%, both hitting new highs. Despite ongoing challenges from a competitive external environment, our industry-leading AI technology, vibrant user and content ecosystem, healthy and sustainable commercial ecosystem, and efficient organizational synergy have all contributed to strong operating and financial results. As an AI-driven tech company, we've built an infrastructure that supports the training and inference of large models with trillions of parameters. Based on this infrastructure, we have developed industry-leading AI metrics, including Kwai LLMs, large video generation models, and recommendation models, all of which we've integrated into our business operations. Notably, in Q2, we made considerable strides in large visual generation models, launching and testing our large video generation model, Kling AI, which gained broad acceptance among domestic and global users. We have since expanded it to full beta testing globally, enhanced the model's capabilities, and introduced a membership program offering exclusive features. As of today, over 1 million users have tested Kling AI, creating over 10 million videos. We also officially open-sourced our text-to-image model, Kolors, to foster a collaborative, robust text model ecosystem. Our AI metrics is now seamlessly embedded across various business scenarios, supporting content creation, content understanding, and recommendations, and user interactions. In the first half of the year, nearly 20 thousand merchants utilized our AI metrics to optimize their operations on the Kuaishou platform, and our marketing clients' average daily spending with AI-infused marketing material reached CNY 20 million in June this year, demonstrating the significant potential for our large models and commercial scenarios. Next, I'll discuss our key business development in Q2. First, user growth and ecosystem construction. In Q2, the average DAUs and MAUs on the Kuaishou app reached 395 million and 692 million, representing year-over-year increases of 5.1% and 2.7%, respectively. The average daily time spent per DAU on the Kuaishou app was 122 minutes. We achieved accelerated growth in user traffic, with total user time spent on Kuaishou app increasing by 9.5% year over year. We also deepened our strategy for high-quality growth, improving our traffic allocation mechanism, and creating more app opening scenarios to enhance user experiences while boosting revenue generation. We also enriched the community atmosphere and significantly improved the user long-term retention by optimizing measures such as hot comments ranking and introducing more interaction features, achieving high-quality growth in DAUs. Additionally, we improved the ROI of user retention costs through refined operating strategies across various business scenarios. We cultivated a vibrant, diverse content creation ecosystem, supporting exceptional content creators by refining our traffic algorithms. In Q2, active creators with over 100,000 followers grew nearly 10% year over year, and their short video posts increased over 40%. Daily short video uploads on Kuaishou exceeded 14 million. We used the tailored vertical operation strategy to deliver premium content showcasing our unique ethos. In sports, we focus on creating native content the public enjoys. As the rights-holding broadcaster for the Paris 2024 Olympics, to align with the Olympic themes, we launched the Kuaishou Village Olympics with the traditional and rural sports, blending athletic competition with the rural culture. This attracted over 135,000 live spectators, 520 million online viewers, and 6.4 billion impressions, highlighting recreational sports charm. As a pioneer and leader in short play industry, we launched nearly 50 Kuaishou Xingmang short plays in Q2, with 12 surpassing 100 million views. Supported by our Kling AI, we premiered the legendary Mirrors of Mountains and Seas, China's first original AIGC fantasy short play, attracting over 15 million views in two weeks, demonstrating our large model's potential in creating deep, meaningful content. For our search business in Q2, we continued to optimize our search after watching feature and introduced a single column format for displaying search results. This enhanced the user experience and have further unlocked the commercialization potential. As a result, our revenue from search marketing services and GMV from search-induced e-commerce grew rapidly in Q2. Our search user penetration rate also improved further, with MAUs for Kuaishou Search reaching nearly 500 million in Q2, and daily searches increasing by over 20% year over year. Second, online marketing services. In Q2, despite the ongoing economic pressures and softer consumer sentiment, our revenue from online marketing services outperformed the industry, growing 22.1% year over year to 17.5 billion RMB and accounting for 56.5% of our total revenue, further boosting our market share. Our growth was fueled by enhanced smart marketing solutions and deeper sales funnel conversion paths for our marketing clients, which led to higher bids. Additionally, our advanced algorithm supported greater exploration of demographic interests and improvements in matching efficiency, significantly boosting the number of effective users with online marketing potential. Revenue from our external marketing services grew notably in Q2, with the year-over-year growth surpassing that of Q1, especially in media information, e-commerce, and local services. For paid short plays and media information, we improved the user experience by refining native sales funnels and increasing paying users through smart subsidies. This drove rapid growth in paid short plays marketing placement, with the daily marketing spending more than doubling year over year, accounting for a high single-digit percentage of total external marketing service revenue. For smart placement in Q2, the penetration of our external marketing product, Universal Auto X, or UAX, increased across industries, with the UAX marketing spending over 30% of our overall external marketing spending. We also provided marketing clients with efficient customer acquisition tools, including a native private message sales funnel. Spending through this funnel grew more than twofold quarter over quarter. Revenue from our in-closed-loop marketing services grew robustly in Q2, driven by improvements in smart placement strategies and capabilities. Merchants using our omni-platform marketing solution or smart hosting product accounted for 40% of in-closed-loop marketing spending. For small and medium-sized merchants, we boosted marketing placement during promotional events with a simplified auto placement product combination. This enhanced their stability and efficiency, increasing their spending by 60% year over year in Q2. In brand marketing, we partnered with the fashion media to launch an initiative combining Eastern aesthetics, trendy culture, intangible cultural heritage, and Hanfu art, attracting leading brands in cosmetics, food and beverage, apparel, and 3C products. Major brands like Tmall renewed sponsorships for our Kuaishou Xingmang short plays, resulting in over twenty-fold revenue growth year over year for marketing sponsorship of Kuaishou Xingmang short plays in Q2. Third, our e-commerce business. Despite a short-term slowdown in consumer demand and heightened competition in domestic e-commerce, the accelerated restructuring of e-commerce fundamentals will continue to drive an increase in e-commerce share of retail sales. Lower-tier markets with the largest population and greatest growth potential are emerging as mainstream markets. Amid these trends, we will focus on helping customers discover affordable, quality products that fit their needs through trustworthy streamers and content. We remain committed to fostering a sustainable, healthy KOL ecosystem while advancing our multifaceted omni-domain operations for brands and merchants in software-operated, live streaming, shelf-based e-commerce, and short video e-commerce. In Q2, our e-commerce GMV grew by 15% year over year to 305.3 billion RMB. On the demand side, e-commerce monthly active paying users increased by 14.1% year over year to 131 million in Q2. And our MAU penetration rate in reached a new high of 18.9%. Our user-centric strategy, coupled with a focused approach on tapping specific industries, empowers us to swiftly capture and respond to faster evolving consumer preferences. Significantly, especially, we remain focused on iterating initiatives for acquiring new users, as well as growing active users, expanding our user reach through product and subsidy measures that encourage repeated engagement. We also enhance the user shopping experience by streamlining marketing processes and facilitating a use first and pay later purchase option. Supply side, monthly active merchants grew over 50% year-over-year in Q2, driven by our support for new merchants' cold starts, growth, and sustained operations, and by empowering existing merchants with omni-domain operations. Our Set Sail Initiative offers up to 100 billion RMB in traffic resources to new merchants, with the Uplift Initiative helping them scale post cold start. In Q2, these initiatives covered all new merchants, providing product menus, operational guidance, and tailored traffic support. We also enhanced the merchants' overall omni-domain operating capabilities with follower growth and content integration. For KOL strategies, we recommend high-quality merchandise to KOLs internally, and use external facilitators to help mid-tier KOLs select merchandise, targeting recommendations based on follower profiles. We also use AI marketing and operation tools to enrich KOL marketing strategies, simplify operations, encourage user interactions, and enhance platform's capabilities in matching KOLs with products. For brand merchants, we prioritize the Trade-in, Trade-out Program, membership operations, and the big brand, big subsidy channel to attract diverse brand offerings. During the 618 Shopping Festival, GMV from consumer electronics brands and household items grew over 83% year over year. E-commerce GMV from pan-shelf-based scenarios in Q2 exceeded the overall platform, making up over 25% of total GMV. Orders during the 618 Shopping Festival rose 65% year over year, driving e-commerce growth. In our shopping mall segment, daily active merchants and paying users increased by over 50% and 70%, respectively, in Q2. User engagement, measured by product cart views and product searches, surged, highlighting a growing consumer trend to browse and search products in the Kuaishou Shopping Mall. The introduction of our large models has also improved our ability to identify user purchasing intentions, driving a more than 80% year-over-year increase in search-induced e-commerce GMV in Q2. In addition, we launched a sales hosting solution for Kuaishou Shopping Mall that integrate our platform's omni-domain traffic and offer a commission-based and price-based hosting, aiming to lower merchants' operational barriers and provide merchants with predictable sales channels. Moreover, our short-video e-commerce GMV continued to grow rapidly in Q2, with a year-over-year increase of nearly 7%. Merchants leverage short videos to attract users before live streaming and extend the product sales cycles, enhancing the synergy between short videos and live streaming scenarios. Next, our live streaming business. Revenue from our live streaming business was CNY 9.3 billion in Q2, declining less quarter over quarter. We continue to iterate our refined operating approach to bolster a healthy and positive live streaming ecosystem. On the supply side, we established regional teams dedicated to recruiting high-quality talent agencies through targeted industry promotions and offline presentations. We also supported leading talent agencies through policies and project guidance, leading to a nearly 50% increase in the number of partnering talent agencies and a 60% growth in the number of talent agency-managed streamers by the end of Q2 year over year. Meanwhile, we continue to promote emerging streaming features such as multi-host live streaming and the Grand Stage, significantly attracting more talent agencies and streamers, driving core growth in our live streaming business. We're committed to enriching premium content, attracting mid-tier streamers, enhancing interactive live streaming features, and encouraging streamers to produce high-quality content, thereby promoting more reasons for app opening. As the official short video partner for CrossFire and King Pro League, we have effectively boosted the visibility of these events by leveraging our short video plus live streaming plus community ecosystem. In late June, Kuaishou was also named the strategic short video and live streaming platform for the 2024 Esports World Cup in Saudi Arabia, attracting more quality users across various verticals through innovative crossover efforts. Underscoring how live streaming plus services can empower traditional industries, we continue to scale up our recruitment and real estate transaction services with rapid growth in both the number of users we serve and the transaction volume. In Q2, daily average number of resume submissions on Kuai Hire increased by more than 130%, and the matching rate grew by over 150% year over year. Daily lead generation on our Ideal Housing also expanded by ninefold compared to the same period last year. Finally, on our overseas business progress. In Q2, we continued to deepen our presence in key overseas markets through targeted content offerings, operations, and marketing efforts, and our ROI-driven growth strategies. We've been refining operations in traditional marketing channels and exploring new growth revenue avenues. These initiatives drove steady growth in average DAUs in key overseas markets, including Brazil and Indonesia. Notably, DAUs in Brazil rose by 15.4% year over year and also improved quarter over quarter. Regarding content operation overseas, we continue to engage more high-quality content creators across verticals like film, news, comedy, and sports, enhancing content diversity, quality, and the health of our community-based ecosystem. Meanwhile, we optimized the algorithms, enhanced traffic mechanisms, and diverse monetization channels have gradually strengthened the positive flywheel effect of content production, consumption, and monetization for creators. Average daily time spent per DAU in key overseas markets increased by 5% year-over-year to nearly 80 minutes in Q2. In terms of monetization capability, our overseas revenue increased by 141.4% year-over-year to CNY 1.1 billion in Q2, thanks to our targeted monetization strategies implemented across different countries. Our overseas online marketing team actively expanded our client base across multiple industries by optimizing product capabilities and involving online marketing experiences. As a result, online marketing revenue from our overseas business increased by over 200% year-over-year, and continued to grow quarter over quarter. Leveraging our traffic and advantage in countries like Brazil and Indonesia, this has become an important marketing channel for Chinese companies expanding overseas and for local brands. With improved overseas monetization efficiency, we gained further operating leverage, gradually reducing the negative impact on the company's profitability. In Q2, operating loss from overseas business was CNY 277 million, with a 64.5% decrease year-over-year. Reflecting on the first half of the year, despite numerous external challenges, we firmly executed our high-quality growth strategy. We continued to refine our traffic allocation mechanism and focus on enhancing user content and product experience while balancing revenue efficiency. This approach has cultivated healthier and more sustainable content and a commercial ecosystem, leading to a satisfying financial result. Looking ahead to the second half of the year, we will capitalize on our deep technological expertise to further explore how AI can enhance existing business areas and create a new one, while striving to achieve significant breakthroughs in new business areas, creating more value for our users, partners, and shareholders. This concludes my remarks. Thank you. Next, our CFO, Jin Bing, will discuss the company's financial performance for Q2 2024. Thank you, Yixiao. Hello, everyone. In the second quarter of 2024, we made significant advancements in our AI infrastructure, enhancing quality and efficiency across our platform. We focused on high-quality user growth, bringing our users exceptional experiences that reinforce our user ecosystem. Meanwhile, by deepening the application of, large model technologies, we've consolidated a steady growth momentum across our core business segments, including online marketing services and e-commerce, further energizing our commercial ecosystem. Through our proactive strategies to enhance quality and efficiency, we saw further improvements. Our group's operating efficiency and ongoing breakthroughs in profitability. Adjusted net profit reached 4.7 billion CNY in Q2, with an adjusted net margin of 15.1%, both recording historic high. Now, let's have a closer look at our Q2 financial performance. Our revenues grew by 11.6% year-over-year to CNY 31 billion, mainly driven by growth in online marketing services and e-commerce business. Online marketing services revenue increased by 22.1% to CNY 17.5 billion from CNY 14.3 billion in Q2 last year, and accounted for 56.5% of total revenues. Growth was primarily driven by our optimized smart marketing solutions. Meanwhile, by leveraging industry-leading large models and enhanced algorithms, we gained deeper insights into user needs, offering end-to-end efficiency and enhancement for our clients. These efforts have significantly elevated the user experience, enabling our marketing clients to convert sales more actively and efficiently. This led to a significant increase in the number of marketing clients and a corresponding surge in marketing spending. Revenue from our services, other services, including e-commerce, reached 4.2 billion CNY in Q2, up 21.3% from 3.4 billion CNY in the same period last year, mainly driven by the increase in e-commerce GMV, which boosted e-commerce commission income. We continue to advance our diversified omni-domain operation strategy, actively empowering both new and existing merchants, leading to a notable year-over-year growth in the number of monthly active merchants. We also strengthened the Kuaishou ecosystem and enriched our product supply by effectively capturing consumer demand and refining our operating strategies to expand our user reach. We consistently enhanced the user shopping experience, driving ongoing growth in monthly active paying users. Our live streaming revenue was 9.3 billion CNY, a decrease of 6.7% from 10 billion in Q2 last year. Despite industry challenges, we responded proactively, committed to building a healthy live streaming ecosystem by optimizing talent agency management, enriching our diverse and high-quality live streaming content, and enhancing the interactive experience between streamers and followers. We ensured sustainable and positive development of our live streaming ecosystem. In Q2, our cost of revenues remained stable at 13.8 billion RMB and accounted for 44.7% of total revenues. Gross profit grew by 23% year-over-year to 17.1 billion RMB. Gross margin was 55.3%, an increase of 5.1 and 0.5 percentage points year-over-year and quarter over quarter, respectively. Both gross profit and gross margin reached historic highs. Moving to expenses. Selling and marketing expenses increased by 16.3% year-over-year to 10 billion, accounting for 32.4% of total revenues. Growth was mainly due to increased spending on business promotions, including e-commerce business. Research and development expenses were 2.8 billion RMB, decreasing by 11.11% year over year. R&D accounted for 9.1% of total revenues, dropping from 11.4% in Q2 last year. Administrative expenses decreased by 16.2% year- over- year to 790 million RMB, accounting for 2.6% of total revenues, down from 3.4% in the same period last year. The reduction in R&D and administrative expenses was mainly due to lower employee benefit expenses, including related to share-based compensation expenses. Group level net profit for Q2 rose by 169% year over year to 4 billion RMB, a significant improvement from 1.5 billion RMB in Q2 last year. Group level adjusted net profit rose by 73.7% year over year to CNY 4.7 billion, with an adjusted net margin of 15.1%. These adjusted figures reached record highs. Our balance sheet remains robust, with cash and cash equivalents, time deposits, restricted cash and wealth management product of CNY 77.7 billion as of June 30. Through our enhanced monetization capabilities and efficient working capital management, we generated a positive operating net cash flow of CNY 7.6 billion in Q2. Looking ahead, we'll continue to explore diverse monetization channels and new avenues for profit growth, leveraging technological innovation to drive efficient business growth and enhance operating efficiency, therefore, boost the company's long-term sustainable profitability. This concludes our prepared remarks. Operator, please now open the call for questions. 谢谢，提醒各位，如果您需要提问。谢谢。提醒一下，如果您需要提问，请按星字键，再按井字键，再按一字键，如果需要撤回您的问题，请按井字键，请先用中文提出您的问题，再将您的问题翻译成英文。As a reminder, to ask a question, please press star one and wait for your name to be announced。第一道问题来自高盛的Lincoln Kong。The first question comes from Lincoln Kong from Goldman Sachs. Please go ahead，请提问。 谢谢顾灵感，谢谢易少总接受我的提问。那我是想问公司在AI这方面的一个发展，那可不可以请公司介绍一下在AI大模型这边最新的进展，那包括接下来的一些发展策略，尤其是可灵大模型现在也很受欢迎，那之后的这个商业化变现的一些规划，可不可以给我们分享一下？Thank you very much for taking my question. My question is about the AI. What is the company's latest progress in AI large language model? What are the upcoming strategies, especially the commercialization, monetization plan, in this field, particularly on Kling AI. Thank you. 对你的问题，我们在去年启动了新的AI战略，并制定了清晰的战略目标，确保在未来AI技术突破中保持国内行业的领先地位，结合并赋能现有的业务场景，同时力争通过颠覆性的技术创新带来业务的领先优势，改变市场格局。那在过去的一年多时间里啊，我们一步步稳扎稳打，不断取得阶段性成果，在此持续优化基础大模型各方性能的同时，加强了大模型在内容生产和理解、内容推荐、电商和线上营销等各类业务场景的应用。 Thanks for your question. We kicked off our new AI strategy last year with clearly defined strategic goals. We aim to maintain our industry leading position in China in the upcoming global AI breakthroughs, leveraging these technologies to empower our existing business operations. At the same time, we aim to secure our competitive edge through groundbreaking innovations that have the potential to transform market dynamic. Over the past year, we've made steady progress achieving one milestone after another, while continuously optimizing the performance of our foundation large models on all fronts. We kept strengthening their applications across various business scenarios, including content creation and understanding, content recommendation, e-commerce and online marketing, and more. 2024年第二季度，我们在AIGC领域呢，取得了里程碑式的突破。在视觉生成大模型方面，我们的自研视频生成大模型可灵，开放内测后，受到了国内外用户的广泛好评啊。那可灵呢，采用3D时空联合注意力机制，能够更好地建模复杂的时空运动，以真实世界物理规则为基准生成视频，展现出了电影级别的画质与动态效果，能够模拟大幅度的运动，物理运动，打破了传统的视频生成技术的局限。那近期呢，我们也向全球的用户推出了会员付费体系，升级模型效果，给用户带来更好的体验，也在探索用户付费模式方面取得了积极的进展。其次，我们的1750亿规模Kwai大语言模型，也实现了在中文场景下综合性能超过GPT-4.0的目标。... 我们的多模态大语言模型也在视频内容的理解方面达到了GPT-4V的水平，为之后应用场景能力的扩展打下了坚实基础。此外，近期我们的文生图大模型Kolors也宣布正式开源。作为最懂中文的文生图模型，Kolors经过多个版本的迭代，其综合性能超过了Midjourney V5。 In Q2 2024, we achieved milestone breakthroughs in AIGC. Regarding video generation large models, our self-developed large video generation model Kling was widely acclaimed by users both domestically and internationally following its beta testing. Kling incorporates a 3D spatial temporal joint attention mechanism to better model complex spatial temporal movement. By adhering to real-world physical principles, Kling produces videos that exhibit cinematic image quality and dynamic effects that stimulate lifelike physical movement with large motion, and break the limitations of traditional video generation technologies. We recently introduced a subscription-based membership for our global users, and upgraded Kling's performance to provide a better user experience, while also making positive strides in exploring user payment models. Secondly, in Q2, our 175-billion-parameter KwaiYii LLM outperformed GPT-4.0 in Chinese language scenarios. Our multi-model LLM has also matched the capabilities of GPT-4V in video content comprehension, providing a strong foundation for expanding future application capabilities. In addition, we recently officially open-sourced our text-to-image large model Kolors. As the most proficient Chinese text-to-image model, Kolors overall performance has surpassed Midjourney version five following several upgrades. 因为重要的是呢，我们更加关注大模型在商业化场景的应用。那基于快领大模型构建的视频和直播脚本生成、广告线索客服，叠加数字人的技术，助力商业化广告主低成本生成高质量的视频和直播内容，提升线索转化效率。2024年上半年，有近两万商家在快手平台借助大模型能力实现了智能化经营，而AIGC营销素材在今年六月的日均消耗也达到了两千万，展现了大模型在商业场景中的巨大潜力。 Particularly significant was our enhanced focus on deploying large models in commercial ambition scenarios. Leveraging our KwaiYii large model, we have developed video script generation, live streaming script generation, and advertising lead customer service, all integrated with digital human technology. These advancements enable advertisers to produce high-quality video and live streaming content affordably, thereby improving lead conversion efficiency. In the first half of 2024, nearly 20,000 merchants on the Kwai Show platform leveraged our large model capabilities for intelligent operations, and average daily spending with AIGC marketing materials reached CNY 20 million in June this year, showcasing the enormous commercial potential of large models. 最后呢，我再简单讲一下接下来的AI领域的发展策略。在大语言模型方面，我们将侧重研发更适配业务场景的专项语言模型，大规模降低模型的推理成本。在视觉生成模型方面呢，我们将继续升级可灵大模型，带来模型性能的进一步提升，以保持行业的领先地位。而在可灵的商业化变现方面呢，我们除了加强极光会员付费的全球运营外，也将探索更多与B端合作变现的可能性，力争尽快实现可观的商业化变现规模。此外，我们还期待大模型带来的商业化，推荐算法效率的显著提升，给线上营销服务收入的增长带来更强劲的支撑。总之，我们将坚定地执行AI战略，在赋能现有业务场景的同时，努力创造新的业务变现模式，为集团贡献更多的价值。 Lastly, let me briefly talk about our upcoming AI development strategies. With respect to large language models, we will focus on developing and training specialized language models that are better suited to specific business scenarios, significantly reducing the model's overall inference costs on a large scale. In terms of video generation models, we will continue to enhance Kling large model to further improve its performance and maintain our industry-leading position. Speaking of Kling's monetization, in addition to strengthening the global operations for our membership programs, we will also explore more B2B monetization possibilities, aiming for significant gains in the near future. Moreover, we anticipate that large models will greatly enhance the efficiency of our commercial recommendation algorithm, providing strong support for our online marketing services growth. In conclusion, we are committed to executing our AI strategy, empowering existing business narratives, and striving to create new monetization models to deliver greater value to the group. Thank you, operator. Next question, please. 下一道问题来自Jefferies的Thomas Chung。The next question comes from Thomas Chung from Jefferies. Please ask your question。请提问。 晚上好，谢谢管理层接受我的提问。我的问题是电商方面的，在激烈的行业竞争中，我们电商如何从供给侧，特别是中小商家提升增长动力，如何展望下半年电商的策略？Thanks, management, for taking my questions. My question is about our e-commerce business. In the face of intense industry competition, how can Kuaishou e-commerce division take growth momentum from the supply side, especially mid- and small-size merchants? What is Kuaishou e-commerce strategy in the second half of the year? Thank you。对你的问题啊，那从供给侧来讲，随着快手电商的快速发展，我们看到呢，越来越多新商家来到快手，也有越来越多的成熟商家在快手中成长起来。2024年第二季度，月均动销商家数同比增长超过50%，主要得益于我们大力推进新商家的冷启、成长与长效经营，同时赋能老商家，帮助老商家实现全域的经营。 Thanks for your question. On the supply side, with the rapid development of Kuaishou e-commerce, more and more new merchants have joined us, and our existing merchants continue to grow. In Q2 of 2024, the number of average monthly active merchants grew by more than 50% year over year, primarily due to our concerted efforts in new merchants, cold starts, growth, and sustained operations, in addition to empowering existing merchants to tap into omni-domain operations. 通过高达千亿微微的起航计划，我们对于新入驻商家提供了100%的流量冷启的保证。当优质商家成长到一定的水平时，我们还会通过扶摇计划继续投入超过700亿微微的流量，通过大厂呢进一步提升商家的GMV规模，帮助商家获得经营上的突破。同时呢，我们还通过斗金计划，新商家在首销90天内达成对应GMV门槛的情况下，将享有叠加对头和磁力金牛的投流补贴激励，保持新商家在前期经营中的信心，并实打实地通过平台给予商家确定性的流量支持。 Through the Uplift Initiative, with up to 100 million, 1 billion, 100 billion video view traffic resources, we guarantee 100% of newly onboarded merchants in traffic from their cold start. As quality merchants reach certain milestones, we further support their growth with over 70 billion video view traffic resources through our Uplift Initiative, driving GMV through large-scale promotional events to help merchants make operational breakthroughs. Meanwhile, new merchants meeting the GMV thresholds within their first 90 days can receive compounded rebates through our Doujin Initiative, ensuring that they maintain confidence in their initial operations and receive substantial traffic support from the platforms. 关于下半年的电商策略呢，经过二季度六一八大促的市场洗礼，我们感受到无论电商平台还是商家都面临着国内消费者短期需求放缓的挑战。且在流量红利减弱的大环境中，电商业务需要在内容和商业效率上实现更好的平衡。而作为内容电商平台的主要参与者，我们认为直播电商平台更擅长从商家政策、数据能力、营销能力等各方面赋能商家个性化经营，提供多样性的商品选择，从而吸引消费者探索非确定性的电商需求，激发购买行为。 Moving on to our e-commerce strategy for the second half of the year. After the 618 Shopping Festival in Q2, we realized that both domestic e-commerce platforms and merchants are facing challenges with the temporary slowdown in consumer demand in the e-commerce market. As traffic benefits diminish across the board, e-commerce business need to better balance content and commercial efficiency. As a major player in content-driven e-commerce, we believe that live streaming platforms are more effective at helping merchants tailor their operations and offer a wide variety of products through smart policies, data insights, and marketing strategies. This not only attracts consumers by encouraging them to explore new shopping opportunities, but also stimulates purchase decisions. 因此啊，展望下半年，我们会稳住和大力发展内容电商、社交电商的基本盘，聚焦直播间和短视频的核心价值，充分发挥内容场在电商用户拉新促活中的主要作用。同时呢，在货架上更多地做用户提品，长期稳步建设泛货架场景。我们将会加强建设长期健康的达人生态，充分发挥头部达人及大厂直播的核心优势，同步加强中腰部达人的培育和运营，共同构建用户在直播间的低价心智，推动直播间大厂做出规模，提升直播间的资源转化效率。我们也会提升内容场在大促中的爆发力，更加重视内容场的大促玩法和运营机制。... 包括直播前通过短视频引流直播间，直播后通过短视频将爆品返场等模式，让消费者在全平台全场景都能买到低价好物。货架方面，除了增加GMV规模以外，我们会着力加强商品供给和商品丰富度，升级搜索匹配效率。通过运营和算法的同步努力，不断提升货架场的用户体验和补贴效率，逐步建立起用户主动使用货架场景的性质。相信通过这些策略，我们可以不断挖掘七亿快手老铁用户的电商需求，保持快手电商业务在行业中的差异化优势和独特价值。 As we look to the second half of the year, we will cement and vigorously develop our foundational strength in content e-commerce and social e-commerce, focus on the core value of live streaming and short video, and fully leverage the primary role of content-based scenarios in attracting and activating e-commerce users. In shelf-based scenarios, we aim to enhance user purchasing frequency and steadily develop a broader pan-shelf based e-commerce environment. We will also fortify the development of long-term healthy KOL ecosystem, thoroughly harnessing the key advantages of leading KOLs and larger scale live streaming events, while enhancing the cultivation and operation of mid-tier KOLs. We will work with KOLs to jointly build users mentality for great deals in live streaming, promote the scale of large live streaming events, and improve live streaming resource conversion efficiency. We will also boost the impact of content during major promotions by focusing on key features and operational strategies. This includes using short videos to drive traffic to live streams before they start, and reintroducing blockbuster product through short videos afterward. Our goal is to ensure consumers can find great deals across the platform and in every e-commerce scenario. For shelf-based e-commerce, in addition to increasing GMV, we will focus on strengthening merchandise supply and variety, as well as upgrading search and match efficiency. Through coordinated efforts in operations and algorithms, we will persistently improve the user experience and subsidy efficiency, and shelf-based e-commerce that cultivates a proactive user mindset for shelf-based e-commerce. We believe that through these strategies, we can continue to tap into the e-commerce needs of the 700 million MAUs on Kuaishou, and maintain the differentiation and unique value of Kuaishou's e-commerce business in the industry. Thank you. Next question, please, operator. 下一道问题又来自UBS的Felix Liu。The next question comes from Felix Liu of UBS。Please ask your question， 请 提 问 。 谢谢管理层接受我的提问，我的问题是关于公司的在线营销业务。我们在线营销业务在上半年取得了，不错的增长，请问管理层下半年，我们在线营销业务增长的机会点会在哪些方向？Thank you management for taking my question. My question is on your online marketing business. In the first half, your online marketing business achieved a strong growth. For looking into the second half, what are the major growth opportunities for this segment? Thank you. 谢谢你的问题。那在上半年呢，我们通过行业细化的运营，并借助大模型能力，为线上营销客户提供智能营销解决方案。同时，我们通过更新链路的转化，使得上半年的线上营销服务收入实现了约25%的同比增长，持续提升市场份额。那展望下半年呢，我们将继续借助智能营销产品优化和算法提升，通过内容经营、电商经营和本地经营，赋能各行业的线上营销客户在快手平台做长效经营，同时借助双十一等重大营销节点，实现经营的进一步突破。 Thanks for your question. In the first half of this year, we provided intelligent marketing solutions to our marketing clients through refined industry operations and large models. We offered deeper sales funnel conversion pathways for our clients, resulting in a year-over-year increase of about 25% in our revenue from online marketing services in the first half of the year, and consistently gaining market share. In the second half of the year, we will optimize our intelligent marketing products and algorithms to continue empowering diverse industry clients sustained operations on Kuaishou through content operations, e-commerce operations, and local service operations. We will also leverage major marketing events such as the Double Eleven, to realize further operational breakthroughs. 在内容经营方面呢，短剧啊，小说、小游戏等具备内容属性的行业，与快手呢作为内容平台的属性自然地适配，能够做到内容和营销的共荣共生，具备较大的发展空间。以短剧为例呢，今年上半年我们为付费短剧打造了原生链路，用户在快手APP内就能完成付费和观看短剧，不仅能提升用户的内容消费体验，还能提升营销客户的投流及经营转化效率。二季度，快手付费短剧投流客户环比增长超过了300%。... 投流短剧集数环比增长超过了30%。而这种基于原生链路的内容经营模式和产品能力，也已经逐步复制到了小说、小游戏等行业，预计下半年会带来可观的营销投放增量。 In terms of content operations, industries with the content attributes such as short plays, novels, and mini games, naturally align with the Kuaishou as a common platform. This synergy enables the successful integration of content creation and the marketing, opening up significant growth opportunities. Short plays, for example, in the first half of the year, we've built a native sales funnel for paid short plays, allowing users to complete payment and watch short plays directly within the Kuaishou app. This not only enhanced the content consumption experience for users, but also improved the ad placement and conversion efficiency for our marketing clients. In Q2, 2024, the number of active marketing clients for Kuaishou's paid short plays more than tripled, with the number of active short plays with ad placements by over 30%, both on a quarter-over-quarter basis. This kind of operation model and native sales funnel capability have also been replicated in novels, mini games, and other industries, and are expected to bring significant incremental marketing placements in the second half of the year. 电商经营方面呢，我们在内循环商家的短视频引流直播间和外循环商家的直接投放等领域仍有较大的增量空间。在内循环方面，二季度我们的短视频引流直播间的营销投放消耗同比增长了超过45%。接下来，我们将从产研能力优化和流量支持等角度，提升短视频引流直播间的投放效果和转化效率，为营销消耗提供增量空间。在外循环商家的直投上，过去半年，通过直投开展经营的商家留存率有显著的提升。未来我们将优化包括支付在内的产品链路，改善用户体验，提升付费转化，满足商家的多元化经营需求。 Regarding e-commerce, operations will still have tremendous room for growth in areas such as short videos, driving traffic to live streaming rooms for in-closed-loop merchants, and Direct Placement as replacement for external merchants. In terms of in-closed-loop marketing services in Q2 2024, our marketing spending on driving traffic to live streaming rooms through short video soared by over 45% year over year. Our next step will be continuously to improve the associated advertising performance and conversion efficiency by optimizing production and research capabilities and solidifying policy support, providing incremental growth for marketing spending. In terms of Direct Placement as replacement for external merchants, there has been a significant increase in the retention rate of merchants operating through Direct Placement as replacement in the past six months. In the future, we will improve the user experience and increase the conversion rate of payments by optimizing the product chain, including payment process, to meet the diverse business needs of merchants with more policy incentives. 在本地经营方面呢，在疫后 or 消费消费结构转型的大背景下，我们观察到七亿快手用户对本地生活活服务的巨大需求，也为本地生经营的商家带来了新的增量。那第二季度呢？本地商家的营销投放消耗同比增长超过了60%，其中法律咨询服务和家居装修服务的行业需求旺盛。下半年，我们认为借助UAX数字人直播和站内原生私信等产品能力，还将继续大幅提升本地生活商家的获客效率，也会带来营销投放的进一步增长。 As for local operations, with the overall transformation of the consumption mix, we have observed a huge demand for local services from our seven hundred million Kuaishou users, which has also brought new business upside to our local services merchants. In Q2, the marketing spending of local services merchants rose by more than 60% year over year, and demand from industries like legal counseling and home decoration was very strong. We plan to leverage our product capabilities of the UAX, digital human live streaming, and in-app native private messaging to significantly improve the customer acquisition efficiency of local services merchants, leading to further increase in their marketing placements. 总之呢，我们将在行业精细化运营、智能营销产品迭代和算法优化等方面持续发力，为客户带来更好的营销投放转化。我们也对今年实现线上营销服务收入同比增速持续超过行业保持信心。 In summary, we will continue to zero in on refined industry operations, intelligent marketing, product iteration, and algorithm optimization to elevate marketing placement and conversion for our clients. We also remain confident that our online marketing services revenue will outperform the industry's year-over-year growth rate. Thank you, operator. Next question, please. 下一道问题又来自Citi的Brian Gong。The next question comes from the line of Brian Gong from Citi. Please ask your question, 请提问。 Thanks, management, for taking my question. My question is I want to ask again about the local services side. We see that Kuaishou and Meituan recently renewed this new strategic cooperation agreement. I want to ask what the company's positioning for the local services business is now, uh, and its goals. Also, please share the latest progress. Thank you. ...So we noticed that Kuaishou and Meituan have recently renewed their, you know, the strategic cooperation by signing a new agreement. How does Kuaishou position the local service business, and what are the goals? Also, could you please share the business latest update? Thank you. Thanks for your question. The strategic partnership between Kuaishou and Meituan was first announced at the Ecosystem Development Conference in December 2021. After nearly three years of concerted efforts, both parties believe that the cooperation has exceeded expectations. In June this year, Meituan Merchants GMV on Kuaishou skyrocketed by more than 38 times, with order volume soaring by more than tenfold, both on a year-over-year basis. Based on this, we have recently renewed the partnership with a new three-year strategic cooperation agreement, further strengthening the scope and depth of our cooperation. First, our cooperation scope will extend to cover 10,000 stores in 100 cities nationwide. Second, our cooperation will deepen as Meituan broaden its supply to Kuaishou from group buying to more marketing formats, including vouchers, membership, merchandise, and flash sales. Going forward, this may further expand to general in-store business and hotel and travel business, among other categories. We believe that by leveraging Meituan's supply advantages, we can quickly widen the merchant and product coverage of Kuaishou's local services, providing a richer, more compelling local services experience for Kuaishou's users. Thanks for your question. The strategic partnership between Kuaishou and Meituan was first announced at the Ecosystem Development Conference in December 2021. After nearly three years of concerted efforts, both parties believe that the cooperation has exceeded expectations. In June this year, Meituan Merchants GMV on Kuaishou skyrocketed by more than 38 times, with order volume soaring by more than tenfold, both on a year-over-year basis. Based on this, we have recently renewed the partnership with a new three-year strategic cooperation agreement, further strengthening the scope and depth of our cooperation. First, our cooperation scope will extend to cover 10,000 stores in 100 cities nationwide. Second, our cooperation will deepen as Meituan broaden its supply to Kuaishou from group buying to more marketing formats, including vouchers, membership, merchandise, and flash sales. Going forward, this may further expand to general in-store business and hotel and travel business, among other categories. We believe that by leveraging Meituan's supply advantages, we can quickly widen the merchant and product coverage of Kuaishou's local services, providing a richer, more compelling local services experience for Kuaishou's users. With our recent business update in mind, I would like to discuss the positioning and goals of local services. This market is huge, yet fragmented, with a low online penetration and plenty of room for growth. We aim to use Kuaishou's large user base in lower-tier markets to find our unique positioning, based on our value proposition to users and merchants. For users, we provide precise local goods and services recommendation that meets users' personal needs, tailored to their preferences for relevant and local content. Meanwhile, we strengthen the user's mentality for value-for-money shopping through refining operation capabilities and the Kuaishou Merchants joint subsidy strategy, satisfying users' local consumption needs across various scenarios. This was original aspiration for the local services business and has never changed. We're happy to observe a growing trend among users consuming local services on Kuaishou. In Q2, average paying users of local services continued to grow steadily, up 37% compared with Q1....our favorable policies and strategic traffic distribution, we guide them to produce high-quality local services content. In Q2, the GPM of short video and live streaming recommendations rose by 42% and 37% from Q1, respectively, propelling rapid growth in platform GMV. 整体来说呢，我们的目标是在提高补贴效率，控制亏损规模的前提下，稳扎稳打，做好本地生活活业务，以更好地满足用户需求为核心，赋能商家，最终为平台实现用户和商业价值。 Overall, our goal is to make steady, solid progress in our local services business while improving subsidy efficiency and managing costs effectively, thereby better meeting users' needs, empowering merchants, and ultimately creating both user and commercial value for the platform. Thank you. Operator. Last question, please. 下一道问题又来自CICC的张雪晴。The next question comes from Xueqing Zhang of CICC. Please ask your question. 请提问。 Good evening, management, and thanks for taking my question. My question is about the outlook for medium- to long-term profitability. I saw that the company achieved an adjusted net profit of RMB 4.7 billion in this quarter, and the corresponding adjusted net profit margin is 15.1%. I would like management to share what the company's medium- to long-term achievable profitability looks like, and whether our recent investments in AI will impact the company's profitability. Thank you. My question regards on your profitability outlook. We noticed that the company's adjusted net profit was CNY 4.7 billion this quarter, and adjusted net margin was 15.1%. Give us start off with the company's potential for profitability in the mid to long term. And how will recent AI investment impact this? Thank you. 谢谢你的问题。公司自2023年第一季度实现经调整净利润转正以后，已经连续六个季度经调整净利润绝对值和经调整净利润率逐季上涨，这反映了我们在经营效率和盈利能力上的持续提升。那么本季度我们实现经调整净利润是CNY 4.7 billion，经调整净利润率15.1%，提前一年实现了经调整净利润率达到15%的目标。 Thanks for your question. Since we've achieved a positive adjusted net profit in Q1 2023, we have seen six consecutive quarters of growth in both adjusted net profit and adjusted net margin. This reflects our ongoing improvements in operating efficiency and profitability. In Q2, our adjusted net profit amounted to CNY 4.7 billion, with adjusted net margin of 15.1%. This represents that we've reached our goal of a 15% adjusted net margin one year ahead of schedule. 那么以上的财务结果得益于我们收入结构的不断优化，高毛利的线上营销服务占比，以及电商业务占比提升，分层成本的有效控制和优化，以及通过技术创新手段不断提升服务器和带宽的使用效率等。以上措施使得本季度的毛利率超过55%，创单季度的新高。同时，销售费用占收比率方面，我们通过执行高质量的增长策略，在用户增长和维持成本整体较为平稳的前提下，实现了用户流量的稳健增长。但是短期看，我们在包括电商、商业化、本地生活活等在内的相关业务推广投入会有一定程度增加，以进一步强化用户心智，为驱动收入和电商GMV增长打下更好的基础。研发费用占收比率方面，我们在AI上也会有一定的增量投入，但是占收比影响较小。中长期，我们认为随着收入结构的改善以及运营效率的进一步提升，包括海外业务、本地生活等新业务的逐步减亏及盈利，我们有信心实现经调整净利润率20%的中期目标。 These strong financial results can be attributed to three key factors: firstly, we continue to optimize revenue mix by increasing the proportion of higher margin services like online marketing services and e-commerce. Secondly, we effectively controlled and improved revenue sharing costs. And finally, we heightened the utilization efficiency of servers and bandwidth through technological innovations. These efforts further boosted our gross margin to a quarterly record high of over 55% in Q2. In terms of our selling and marketing expense to revenue ratio, our high quality growth strategy has enabled us to achieve steady user growth, while maintaining largely stable costs for user acquisition and maintenance. Although in the short term, we will be increasing promotional spending, we aim to deepen users mind share in e-commerce, advertising and local services, and drive the growth of the revenue and e-commerce GMV. Additionally, we will continue to invest incrementally in AI, while limiting the impact on our R&D expense to revenue ratio to a minimum. Our revenue mix and operational efficiency continue to improve. We are confident in achieving our midterm target of 20% adjusted net margin, driven by gradual loss reductions or profits from our overseas businesses, local services, and other new initiatives. 另外，关于整体AI投入对利润率的影响，短期来看，我们在AI大模型上的投入不会给集团的盈利能力带来明显影响。从长期来看，AI也能通过赋能现有业务和创新的业务场景，不断提升AI相关投资对公司业务发展的价值。 Regarding our AI investments, while they may not have a significant impact on our profitability in the short term, their long-term value creation is substantial. These improved investments will empower our existing business and foster innovation, creating new business opportunities and driving sustainable growth. 总之，提质增效是公司的长期战略机制，公司 在未来每一个战略决策的制定和实施过程中，都会包含相关的考量。而AI战略又赋予了我们在扩大收入增长和提质增效上更多的可能，带给我们更多信心，以实现长期盈利能力的不断改善和提升。 In conclusion, our commitment to enhancing quality and efficiency is deeply embedded in our long-term strategy, guiding every decision we make and implement. Our AI strategy plays a pivotal role in this endeavor, opening up new avenues for driving revenue growth and improving quality and efficiency, giving us greater confidence in achieving sustainable long-term profitability. Thank you. That's the end of the Q&A session. Back to you, operator. 今天的问答环节到此结束，现在有请Matthew做总结性发言。 Thank you, operator. 感谢大家今天的参与，如果您有更多问题，欢迎随时与快手的资本市场及投资者关系团队取得联系。谢谢大家！ Thank you once again for joining us today. If you have any further questions, please contact our capital market and at any time. Thank you.